Gray v Wagga Wagga City Council (No 2) [2021] NSWDC 196

District Court New South Wales

Medium Neutral Citation: Gray v Wagga Wagga City Council (No 2) [2021] NSWDC 196 Hearing dates: In chambers Date of orders: 25 May 2021 Decision date: 25 May 2021 Jurisdiction: Civil Before: M Sidis ADCJ Decision: (1) The plaintiff is to pay the defendant's costs of the proceedings on an ordinary basis up to and including 11 February 2021 and on an indemnity basis thereafter. Catchwords: COSTS - offers of compromise made at separate times - deterrent effect - late production of documents not an exceptional circumstance. Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 20.26 and 42.15A Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333 Gray v Wagga Wagga City Council [2021] NSWDC 108 Hillier v Sheather (1995) 36 NSWLR 414 Leichhardt Municipal Council v Green [2004] NSWCA 341 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 South Eastern Sydney Area Health Service v King [2006] NSWCA 2 Vagg v McPhee (No 2) [2012] NSWSC 187 Category: Costs Parties: Plaintiff: Shannon Gray Defendant: Wagga Wagga City Council Representation: Counsel: Plaintiff: Mr C Hart Defendant: Ms J Chapman

Solicitors: Plaintiff: Slater and Gordon Lawyers Defendant: Moray & Agnew File Number(s): 2020/00072845 Publication restriction: Nil

Judgment 1. The plaintiff, Shannon Gray, claimed that she suffered injury at Wagga Wagga City Airport on 21 September 2017 when an automatically opening door in the arrivals area of the airport closed and struck her as she passed through an arrivals gate. She alleged breach by the defendant of its duty of care to her as occupier and controller of the airport. 2. On 7 April 2021 I published my reasons for dismissing the plaintiff's claim: Gray v Wagga Wagga City Council [2021] NSWDC 108. Order 3 provided for the parties to apply to put before the Court submissions concerning the appropriate order to be made for the payment of the costs of the proceedings. 3. I have now received submissions from each party concerning the consequences which are to follow from the service upon the plaintiff by the defendant of two offers of compromise under UCPR 20.26. The first of those offers was served on 3 April 2020; the second was served on 11 February 2021. The offers were expressed in identical terms that provided for: 1. Judgment for the defendant; and 2. No order as to costs. 1. The plaintiff did not accept either offer and the defendant secured an order in the proceedings that was no less favourable than the terms of the offers. 2. In its submissions the defendant sought an order for its costs on an ordinary basis up to 3 April 2020 and on an indemnity basis from 4 April 2020; or, alternatively, on an ordinary basis up to 11 February 2021 and on an indemnity basis from 12 February 2021. 3. The plaintiff did not dispute that the offers complied with the requirements of UCPR 20.26. It was submitted on her behalf that there were exceptional circumstances that warranted an order that each party pay its own costs. 4. The defendant's entitlement to indemnity costs is provided for in UCPR 42.15A which, relevantly, provides: 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-- 1. 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 2. 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-- 1. 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, … 1. The principles that apply to the exercise of discretion in determining issues raised of costs may be summarised as follows: 1. As a basic general rule, a successful party to litigation is entitled to an order for costs against the unsuccessful party. 2. Where an offer of settlement is made on the basis of Calderbank v Calderbank [1975] 3 All.ER 333, the onus is on the successful party to establish that the unsuccessful party acted unreasonably in failing to accept the offer. 3. Where an offer of compromise is made in accordance with UCPR 20.26, the onus is on the unsuccessful party to establish that the Court should not follow the procedure provided for in UCPR 42.15A: Vagg v McPhee (No 2) [2012] NSWSC 187. 4. Instances where, as a matter of justice, a departure from the Rule may be warranted are: 1. Litigation that involves public interest considerations: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; 2. The presence of exceptional circumstances: Vagg; South Eastern Sydney Area Health Service v King [2006] NSWCA 2. 1. The purpose of the rules relating to offers of compromise is to encourage early settlement of proceedings rather than to use those rules to deter a party from continuing proceedings that ostensibly have merit. 2. An offer to walk-away or one that requires complete capitulation can qualify as a genuine offer of compromise: Vagg; Leichhardt Municipal Council v Green [2004] NSWCA 341. 3. Circumstances that make it difficult to assess chance and risk at the time of receipt of the offer are insufficient to warrant departure from the Rule: Hillier v Sheather (1995) 36 NSWLR 414.