Quinn v Bryant (No 2) [2021] NSWDC 809

District Court New South Wales

Medium Neutral Citation: Quinn v Bryant (No 2) [2021] NSWDC 809 Hearing dates: On the papers Date of orders: 7 December 2021 Decision date: 07 December 2021 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) The plaintiff's application is refused. (2) The orders of the Court made on 13 September 2021 are confirmed. Catchwords: COSTS - party/party - offer of compromise - Calderbank offer - whether compliant with the rules - reasonable time - whether to "order otherwise" Legislation Cited: Uniform Civil Procedure Rules 2005, r 20.26, r 42.14, r 42.35 Cases Cited: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 Quinn v Bryant [2021] NSWDC 570 Category: Costs Parties: Terence Quinn (plaintiff) Susan Bryant (defendant) Representation: Counsel: Mr P Wallis (plaintiff) Mr A Moutasallem (defendant)

Solicitors: Pryor Tzannes & Wallis (plaintiff) Hancock Alldis & Roskov (defendant) File Number(s): 2019/298560 Publication restriction: None

Judgment 1. Terence Quinn obtained judgment on 13 September 2021 in the sum of $108,853.10 against the defendant, Susan Bryant. [1] The Court ordered that the defendant pay the plaintiff's costs of the proceedings, with liberty to apply within 14 days in respect of the costs order. 2. On 17 September 2021 Mr Quinn applied to vary the costs order seeking indemnity costs on and from 3 February 2021, on the basis of an offer of compromise. Ms Bryant opposed the order sought and sought an alternative variation, that she pay 60% of the plaintiff's costs. 3. Mr Quinn's purported offer of compromise dated 2 February 2021 was sent by his solicitor to Ms Bryant's solicitor, Mr Frazis, and was in the following terms: "WITHOUT PREJUDICE SAVE AS TO COSTS Dear Mr Frazis RE: TERRY QUINN V SUSAN BRYANT – DISTRICT COURT PROCEEDINGS CASE NO. 2019/00298560 We refer to the above matter. Our client Terence Quinn makes the following Offer of Compromise to settle his claim against Susan Bryant in the above proceedings, being: - Judgment in favour of the Plaintiff, Terence Quinn in the amount of $55,000 plus costs as agreed or assessed. This Offer is made in accordance with the Uniform Civil Procedure Rules, Regulation 20.26. This Offer is open until 4:00pm Tuesday 16 February 2021. This Offer is also made in accordance with the principles stated in Calderbank v Calderbank [1975] 2 All ER 333. Yours faithfully Pryor Tzannes & Wallis". 1. As the judgment was no less favourable to Mr Quinn than the terms of the offer, r 42.14 of the Uniform Civil Procedure Rules 2005 would ordinarily be applicable to justify the varied order sought by Mr Quinn. 2. Ms Bryant opposes the order on the basis that: 1. the offer did not comply with UCPR 20.26; and 2. judgment was entered in favour of the plaintiff on a basis different from the pleaded case, and therefore rejection of the offer was not unreasonable. [2] 1. Ms Bryant submits that the offer was not compliant because UCPR 20.26, in the circumstances, required that the "closing date for acceptance of an offer" be "such date as is reasonable", and in this case, the date was said not to be reasonable. 2. The offer made on 2 February 2021 was open until 4pm on 16 February 2021. Fourteen days was said to be not reasonable given a trial date of 24 February 2021, because "[t]he offer was too late in the litigation and provided insufficient time for acceptance for it to have complied with UCPR 20.26(5)(b)". [3] 3. An offer before trial is never "too late". Rule 42.14(2)(b) contemplates an offer being made after the first day of trial having cost consequences, so it must follow that there is no general prohibition on late offers before trial. The "too late" argument is rejected. 4. Is 14 days expiring a week before trial an insufficient time for acceptance? I do not think it is. The rules contemplate an offer remaining open for 28 days if made 2 months or more before the hearing, but this period shortens as the hearing date approaches, due both to the assumed familiarity of the parties with the issues in the case and because the impending trial date requires an expeditious consideration of offers. In this case, 14 days gave the parties sufficient time to consider the offer, and also allowed time for the parties to engage in necessary preparation for trial in the event the offer was not accepted. Far from being an unreasonable time, I consider a period of 14 days, expiring a week before trial, as generally an appropriate period for an offer made 3 weeks before a trial. 5. Accordingly, there is no non-compliance with UCPR 20.26 on the basis of the period of time the offer was open for acceptance. 6. Ms Bryant conceded that the offer was a Calderbank offer, [4] but asserted that rejection of the offer was not unreasonable. This leaves unanswered the prima facie entitlement to an indemnity costs order under UCPR 42.14(2)(b) once the judgment is found to be no less favourable than a complying offer of compromise. 7. Ms Bryant referred to Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2). [5] This decision involved a Calderbank offer, but not an offer of compromise under the rules. [6] As the present offer is an offer under the rules, principles applicable to Calderbank offers are not strictly relevant. In particular, the need for proof of unreasonableness in the refusal of an offer is not required under the rules, or if it is, it is assumed where the not accepted complying offer is at least as favourable as the judgment. 8. Thus, the factors to which the defendant referred in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [7] are relevant only in this case to assessing whether the offer was a genuine compromise, and not so much to the reasonableness of the rejection. These factors are: "(a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed as at the date of the offer; (e) the clarity with which the terms of the offer were expressed; (f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree's rejecting it." [8] 1. None of those factors operate in favour of Ms Bryant in the present case. I have dealt with the first two factors above. Ms Bryant made no submission that the offer was not a genuine compromise. The offer plainly satisfied this description. Nor could there be any complaint about the clarity of the terms of the offer. There was no specific reference to indemnity costs, but the express reference to Calderbank and r 20.26, as well as the offer being titled "WITHOUT PREJUDICE SAVE AS TO COSTS" lead inescapably to the inference that the offer would be relied on for an indemnity costs order. 2. That leaves the prospects of success. It may be argued that Ms Bryant's prospects were as good as Mr Quinn's, which might be sufficient to establish a reasonable rejection of the offer and thus preclude an order under Calderbank principles. Save for one point, that does not assist Ms Bryant under the rules. 3. The Court has a discretion to "[order] otherwise" under r 42.14(2). But I am not persuaded that the ordinary entitlement of Mr Quinn under this rule should be displaced by a relatively even assessment of prospects when a substantial compromise is offered. 4. However, another factor is relevant to this question. Ms Bryant submitted that the judgment was given on a basis different from the judgment. The alleged difference between the pleading and the judgment arises from the circumstance that the plaintiff alleged a loan of monies whereas the defendant resisted the claim on the basis that the monies were provided as a gift. Some of the monies were found recoverable by Mr Quinn on the basis that although the monies were a gift, the gift was not absolute but conditional, and the condition was not fulfilled. [9] The issue about the failure of a conditional gift arose partway through the trial. The plaintiff did not raise this point in the letter containing the offer of compromise, nor at any time prior. If the plaintiff's success on this point is ignored, the judgment would have fallen short of the amount of the offer. [10] The absence of any reference to the point in the offer of compromise, and the matter arising after service, seem to me to be a proper reason to order otherwise than in accordance with the entitlement in r 42.14(2). 5. As Ms Bryant resisted the assertion of a conditional gift, earlier notice of the point may have made no difference to the result. But it likely would have narrowed the dispute, saving costs. 6. In these circumstances, although the offer was compliant with r 20.26, I am persuaded that no order for indemnity costs should be made. 7. If the offer is considered as a Calderbank offer, the result would not change. 8. Ms Bryant also argued that costs should be apportioned because she succeeded on some of the issues, namely that some of the monies were not loans. This issue was said to be "clearly dominant and separable". 9. I do not think it is "dominant and separable". The dominant issue, at least by the close of trial, was whether Mr Quinn was entitled to recovery of monies provided. In this he succeeded on all but one small loan. His recovery exceeded $40,000 even when his success in proving loans was alone considered, so UCPR 42.35 has no application. Even on the small loan on which Mr Quinn failed, he succeeded in proving the loan. 10. The plaintiff has been successful, and has not failed on any clearly dominant or separable issue, and therefore remains entitled to his costs.