WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 5)

[2025] NSWSC 1093

Supreme Court

New South Wales

Medium Neutral Citation:

WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 5) [2025] NSWSC 1093

Hearing dates:

24 September 2025

Date of orders:

24 September 2025

Decision date:

24 September 2025

Jurisdiction:

Common Law

Before:

Chen J

Decision:

(1) In WJT (2022/00262159) and WXC3 (2023/00108744):

(a) Order the first defendant’s application for indemnity costs be dismissed.

(b) Order the first defendant pay the second defendant’s costs of and incidental to that application.

(2) In GAC (2023/00185560):

(a) Vary order 2 made on 10 September 2025 and instead order the plaintiff pay the second defendant’s costs of the proceedings on the ordinary basis up to and including 9 May 2025 and, thereafter, on an indemnity basis.

Catchwords:

COSTS – offer of compromise not accepted – whether offers of compromise were “real and genuine” – whether significant costs were incurred

Legislation Cited:

Law Reform (Miscellaneous Provisions) Act 1946 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bird v DP (a pseudonym) [2024] HCA 41; (2024) 98 ALJR 1349

Calderbank v Calderbank [1976] Fam 93; [1975] 3 WLR 586

Chalik v Chalik [2025] NSWCA 136

Curtis v Harden Shire Council (No 2) [2015] NSWCA 45

Fabre v Lui (No 2) [2015] NSWCA 312

Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391

Prospect Resources Ltd v Molyneux [2015] NSWCA 171

Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368

South Eastern Sydney Area Health Service & Anor v King [2006] NSWCA 2

WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 4) [2025] NSWSC 1017

Category:

Costs

Parties:

WXC3; GAC; WJT (plaintiffs)
Trustees of the Marist Brothers (first defendant)
Trustees of the Roman Catholic Church for the Diocese of Parramatta (second defendant)

Representation:

Counsel:
E Anderson (plaintiffs)
R O’Donnell (first defendant)
J Whealing (second defendant)

Solicitors:
Koffels (plaintiffs)
Carroll & O’Dea Lawyers (first defendant)
Makinson d’Apice Lawyers (second defendant)

File Number(s):

2023/00108744 (WXC3)
2023/00185560 (GAC)
2022/00262159 (WJT)

Publication restriction:

Pursuant to s 8(1)(e) of the Court Suppression and Non-Publication Orders Act 2010 (NSW), the publication of any names of the children referred to in the evidence given is prohibited.

Pursuant to s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW), the disclosure by publication or otherwise of any information as to the name and identify of the plaintiffs, except as may be necessary, is prohibited.

JUDGMENT EX TEMPORE

Introduction

1. On 10 September 2025, I delivered my reasons for judgment and made various orders, including orders for costs: WJT v Trustees of the Marist Brothers; WXC3 v Trustees of the Marist Brothers; GAC v Trustees of the Marist Brothers (No 4) [2025] NSWSC 1017 (‘WJT’). In relation to the costs orders made, I granted the parties liberty to apply to vary them.

2. The first and second defendants have exercised that liberty. They each seek a special costs order based upon the non-acceptance of offers of compromise.

3. In WJT and WXC3, the first defendant seeks an order that, from a nominated date, the second defendant pay its costs of the second defendant’s failed cross-claim on an indemnity basis. The first defendant read the affidavit of Martin Slattery sworn 12 September 2025 (‘Slattery affidavit’) in support of the orders it sought. The second defendant, who opposes the first defendant’s application, did not read any evidence in support of its position.

4. In GAC, the second defendant seeks an order that, from a nominated date, the plaintiff pay its costs of, and incidental to, his failed claim for damages against it on an indemnity basis. The second defendant read the affidavit of Jacqueline Waugh sworn 12 September 2025 (‘Waugh affidavit’) in support of the order it sought. GAC did not, ultimately, oppose the second defendant’s application.

WJT and WXC3: the first defendant’s application

Introduction

5. In WJT and WXC3, the first defendant served upon the second defendant two offers of compromise made pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’). The first was on 21 May 2025 (‘the first offer’). The second was on 6 June 2025 (‘the second offer’). Each offer was in the same terms – namely, that judgment be entered in its favour on the second cross-claim with no order as to costs and that the offer was open for 7 days (Slattery affidavit, pp 6, 8).

6. The second defendant did not respond to either offer.

7. The first defendant’s argument is that it should secure an order for indemnity costs. Specifically, the first defendant argues that, through the two offers of compromise, it had offered to resolve the cross-claim on terms and, by the orders made on 10 September 2025, obtained orders on that claim no less favourable to it than the terms of the offers it had made.

8. The second defendant opposes the costs order sought. In short, it argues that the offers were not “real and genuine”; that is, they involved “no genuine compromise”. Accordingly, it submits that the costs orders made in favour of the first defendant on 10 September 2025 should not be disturbed.

9. The parties accepted that the application made by the first defendant in each matter rests upon identical facts and circumstances. Accordingly, it is only necessary to deal with the application in one matter, with the result carrying over to the other.

Short statement of facts and chronology

10. To contextualise the offers and the arguments for and against making a special costs order, the relevant background facts will be briefly outlined. They are drawn from the principal judgment and, to the extent required, the facts in WXC3.

11. On 11 October 2024, the matter was listed for hearing commencing 2 June 2025.

12. On 3 April 2025, the second defendant filed a cross-claim against the first defendant seeking contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (‘2XC’).

13. By the 2XC, the second defendant alleged that it was entitled to contribution from the first defendant in two ways:

1. first, the second defendant alleged that whilst it owned the school, it was “jointly operated and/or administered” with the first defendant and, largely to the same end, that the care, control and management of the school was “shared” with the first defendant: 2XC at [4(a)], [4(b)]; and

2. secondly, it alleged that the first defendant was “vicariously liable for the actions of Mr Hawkins”: 2XC at [7(b)].

14. Two matters should relevantly be noted about what was alleged in the 2XC. The first is that, given the second defendant employed Mr Hawkins, the decision in Bird v DP (a pseudonym) [2024] HCA 41; (2024) 98 ALJR 1349 foreclosed any argument that vicarious liability could arise in anyone other than the second defendant. The second is that, despite the 2XC being subsequently amended on multiple occasions, the centrepiece of the second defendant’s argument against the first defendant remained its “joint operation” argument: WJT at [445]-[547].

15. The first defendant served the first offer on 21 May 2025. It lapsed on 28 May 2025.

16. The trial commenced on 2 June 2025.

17. The first defendant served the second offer on 6 June 2025. It lapsed on 13 June 2025.

18. On 11 June 2025, the plaintiff compromised his claim against the first defendant but continued with his claim against the second defendant. Thus, even after these events and the agreement that no judgment be entered to preserve the second defendant’s entitlement to pursue its claim for contribution (as to which see WJT at [10]), the second offer remained open to be accepted.

19. On 19 June 2025, the second defendant filed in Court, without objection, an amended second cross-claim (‘A2XC’). By that cross-claim, the second defendant alleged that it was entitled to contribution from the first defendant in three ways:

1. first, that whilst it owned the school, it was “jointly operated and/or administered” with the first defendant and that the care, control and management of the school was “shared” with the first defendant: A2XC at [4(a)], [4(b)], [5(a)];

2. secondly, that the first defendant was “liable for the acts and/or omissions of its appointed [p]rincipals and deputy [p]rincipals, and other religious Brothers appointed to positions at the school”: A2XC at [5(b)]; and

3. thirdly, the first defendant “exercise[d] control over Mr Hawkins” (A2XC at [5(c)]), which amounted to a claim that the first defendant was “vicariously liable for the actions of Mr Hawkins”: A2XC at [7(b)].

20. It should be noted that, whilst the first defendant was a party to proceedings brought by the plaintiff, the first defendant was not required to file a defence to the claim: r 9.11 of the UCPR.

21. Upon the plaintiff resolving his claim against the first defendant, an order was made for the first defendant to file a defence to the A2XC. By that defence, the first defendant denied it was liable to make contribution.

22. The second defendant ultimately relied upon a further amended second cross-claim filed on 31 July 2025 (‘FA2XC’). That cross-claim involved its “joint operation” argument as well as an attempt to revise and refine the second way in which contribution was sought in the A2XC, essentially by relying upon the principles of agency. The first defendant filed a defence to the FA2XC on 5 August 2025 and it maintained that it was not liable to make contribution.

23. The FA2XC was dismissed by order made on 10 September 2025: WJT at [569].

Offers of compromise: the UCPR

24. The first and second offers were expressed to be made pursuant to r 20.26 of the UCPR. Given that no issue has arisen about compliance with the requirements of that rule, it is unnecessary to refer further to it, other than to note that it is permissible, under r 20.26(3)(a) of the UCPR, for a defendant to make an offer of compromise proposing judgment be entered in its favour with no order as to costs.

25. The parties accepted that the entitlement to an order for indemnity costs, when an offer is made in this situation, is conferred by r 42.15A of the UCPR:

42.15A    Where offer not accepted and judgment no less favourable to defendant

(1)  This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.

(2)  Unless the court orders otherwise—

(a)  the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and

(b)  the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis—

(i)  if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii)  if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.

26. Two matters should be noted about the operation of this rule. First, there is a prima facie entitlement to indemnity costs upon engagement of r 42.15A(1) of the UCPR – namely, an offer of compromise is made by a defendant but not accepted by the plaintiff and the defendant obtains judgment on the claim no less favourable to the defendant than the terms of the offer: Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [40] (‘Leach’); Chalik v Chalik [2025] NSWCA 136 at [136] (‘Chalik’). Secondly, though the Court retains the discretion to otherwise order (r 42.15A(2)), the onus (here) is upon the second defendant to demonstrate to the Court that indemnity costs should not be ordered: South Eastern Sydney Area Health Service & Anor v King [2006] NSWCA 2 at [83]; Leach at [29], [45]; Chalik at [136].

Consideration: whether indemnity costs should be ordered

27. Based upon r 42.15A, the first defendant is, subject to the Court otherwise ordering, entitled to payment of its costs in respect of the claim on the ordinary basis up to the day following the day on which the offer was made, and thereafter on an indemnity basis.

28. The first defendant relies upon the offers of compromise made, arguing that, by the orders made by the Court dismissing the FA2XC, it has obtained an order or judgment “no less favourable…than the terms of the offer”, with the result that it is entitled to orders in accordance with r 42.15A(2).

29. The second defendant, however, argues that the offers were not “real and genuine offer[s]” as they involved “no genuine compromise” (second defendant’s submissions at [9]-[10], [14]). Alternatively, the second defendant argues that, if indemnity costs are ordered, it should be based upon the second offer, not the first.

30. It should be noted that the second defendant did not submit that the offers were non-compliant with the UCPR. Nor did the second defendant argue that, in some way, the first defendant succeeded in a case that was distinctly different to that which they sought to compromise by the service of the offers of compromise or that they were unable to properly assess the offers because of a lack of material to enable that to occur. Finally, there was also no issue about whether the offer was properly served nor whether the ensuing dismissal of the FA2XC was less favourable to the second defendant than the offers.

31. Rather, the second defendant confined its opposition to the orders sought by the first defendant to the ground that the offers did not represent a true compromise or “a genuine offer of compromise”, with the result that the Court should refuse the application for indemnity costs.

32. In relation to this argument, it has been held that “whilst this terminology is not entirely apposite”, it is “serviceable”: Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25]. It is important to recognise, however, that to characterise an offer “by reference to epithets such as ‘real’ or ‘genuine’ adds little to the requirement of compromise, and may imply (wrongly) that an enquiry is to be made about the subjective intentions of the offeror”: Fabre v Lui (No 2) [2015] NSWCA 312 at [6] (‘Fabre’). The critical question is whether, objectively, there has been compromise, in the sense of the offeror offering to forgo something of substance: Fabre at [6]-[7]. Whether there is compromise is largely a matter of impression: Prospect Resources Ltd v Molyneux [2015] NSWCA 171 at [94].

The first offer

33. To recap: the 2XC was filed on 3 April 2025; the first offer was made on 21 May 2025 and lapsed on 28 May 2025; and the hearing commenced on 2 June 2025.

34. The second defendant argues that there is no basis to find that there is any compromise involved in the first offer. More particularly, it was argued that the element of compromise was absent because, given the terms of the first offer, the only compromise could be in relation to its legal costs. And, as to that matter, there was simply no evidence about what costs had been incurred in connection with the 2XC as at the date of the first offer and, thus, to be forgone.

35. Separately, the second defendant argued that it was not open to infer that the offer contained “something of substance” in relation to costs, given the circumstances that existed at the time the first offer was made (and, for that matter, during its currency): the plaintiff was pursuing his case against the first defendant and the only reasonable inference available in the circumstances is that the costs incurred by the first defendant – at the very least, the overwhelming majority of them – would be attributable to defending the claim, rather than to the 2XC.

36. In my view, the second defendant’s submissions should be accepted. There is no evidence that would enable me to find that there has been any particular amount of costs incurred on the 2XC and, in turn, to assess whether, by the foregoing of those costs, there has been compromise in the sense described in the authorities earlier referred to. To the extent any inference is open to be drawn about the amount of costs that might possibly have been incurred, it would only result in a similar finding. At best, the circumstances are such that only minimal costs are likely to have been incurred on the 2XC at the time of the first offer and during its currency.

37. In the end, I am satisfied that no significant costs were incurred by the first defendant on the 2XC as at the date of the first offer and that the first offer contained no element of compromise; that is, I am satisfied the first defendant was not “offering to forgo something of substance”: Fabre at [7]; Curtis v Harden Shire Council (No 2) [2015] NSWCA 45 at [17].

38. It follows, therefore, that I refuse the first defendant’s application for indemnity costs based upon the first offer.

The second offer

39. The second offer was made on 6 June 2025 and lapsed on 13 June 2025. On 11 June 2025, however, the plaintiff resolved his action against the first defendant but continued with his claim against the second defendant.

40. The second defendant advanced the same submissions that it did in relation to the first offer – namely, that there was no compromise involved in the offer made and no basis to find that something of substance was offered to be forgone.

41. In my view, for the reasons given in relation to the first offer, the application for indemnity costs based upon the second offer should be refused. For the second offer, I am satisfied that no significant costs were incurred on the 2XC at the time it was made and, thus, nothing of substance was offered to be forgone by it. I accept, as the second defendant submitted, that there was no element of compromise in the second offer.

42. These reasons also explain why, if the offers are to be considered as having been made pursuant to Calderbank v Calderbank [1976] Fam 93; [1975] 3 WLR 586, the same result follows.

43. Accordingly, the application for indemnity costs and the application to vary the costs order should be dismissed.

GAC: the second defendant’s application

44. As earlier noted, the second defendant sought a variation to the costs order, made in its favour on 10 September 2025, to provide for the payment of its costs on the ordinary basis up to and including 9 May 2025 and, thereafter, on an indemnity basis.

45. The second defendant seeks that order based upon the non-acceptance of an offer of compromise, made pursuant to r 20.26 of the UCPR, served by the defendants upon GAC on 9 May 2025 in the amount of $250,000 plus costs and the subsequent dismissal of GAC’s claim.

46. The offer of compromise, and related correspondence, is attached to the Waugh affidavit, upon which the second defendant relied.

47. The entitlement to an order for indemnity costs, when an offer is made in this situation, is conferred by r 42.15A of the UCPR (see [25] above).

48. In the circumstances outlined, including GAC’s stance, the order sought by the second defendant should be made.

Orders

49. For the above reasons, I make the following orders:

1. In WJT (2022/00262159) and WXC3 (2023/00108744):

1. Order the first defendant’s application for indemnity costs be dismissed.

2. Order the first defendant pay the second defendant’s costs of and incidental to that application.

2. In GAC (2023/00185560):

1. Vary order 2 made on 10 September 2025 and instead order the plaintiff pay the second defendant’s costs of the proceedings on the ordinary basis up to and including 9 May 2025 and, thereafter, on an indemnity basis.

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Decision last updated: 24 September 2025