District Court New South Wales Medium Neutral Citation: Anderson v State of New South Wales (No. 2) and Perri v State of New South Wales [2022] NSWDC 456 Hearing dates: On the papers Date of orders: 07 October 2022 Decision date: 07 October 2022 Jurisdiction: Civil Before: Weber SC DCJ Decision: (1) That the plaintiffs pay the defendant's costs on an ordinary basis until and including 20 April 2022 (2) That the plaintiffs pay the defendant's costs on an indemnity basis thereafter Catchwords: COSTS - Party/Party – Costs awarded to defendant - Ordinary and Indemnity basis – Unreasonable rejection of offer Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), Pt 42.15A(2), r 20.26 Cases Cited: Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 Category: Procedural rulings Parties: Plaintiff in proceedings 2021/202184: Jade Michael Anderson Plaintiff in proceedings 2021/202174: Blade Perri Defendant: State of New South Wales Representation: Counsel: Plaintiffs: Mr A C Canceri Defendant: Mr A Williams Solicitors: Plaintiffs: Aussie Lawyers Defendant: Norton Rose Fulbright Australia File Number(s): 2021/202184; 2021/202174 Judgment 1. On 16 September 2022, I delivered judgment in these proceedings and announced my intention to make orders as follows: In each of the proceedings there be orders: (1) That there be judgment and verdict for the defendant against the plaintiff. (2) That the plaintiff pay the defendant's costs. 1. The defendant then foreshadowed an application to vary the proposed costs order, and I made further orders in Court on 16 September 2022 in the following terms: (3) That any party wishing to be heard on the issue of costs notify my associate of that fact on or before 4:00pm on 20 September 2022 ("Notification"). (4) That in the event of Notification, the notifying party shall file and serve any evidence and submissions on the issue of costs on or before 4:00pm on 23 September 2022. (5) That the non-notifying party file and serve any evidence and submissions which it wishes to make on the issue of costs on or before 4:00pm on 29 September 2022. (6) That the notifying party file and serve any submissions in reply on or before 4:00pm on 4 October 2022. (7) That the filing of the documents referred to in orders (4), (5), and (6) be effected by way of email transmission to my associate. (8) That any issue as to costs be decided on the papers. (9) That in the absence of Notification, the Court will order no order as to costs. 1. By submissions filed on 25 September 2022, the defendant sought to vary the proposed costs order, by seeking the following orders: 1. The plaintiff is to pay the costs and disbursements of the defendant on an ordinary basis until and including 20 April 2022; 2. The plaintiff is to pay the costs and disbursements of the defendant on an indemnity basis thereafter; and 3. In each case the costs and disbursements are to be paid as agreed or assessed. 1. As an alternate position, the defendant submitted that the proposed costs orders should be varied as follows: 1. The plaintiff is to pay the costs and disbursements of the defendant on an ordinary basis until and including 25 August 2022; 2. The plaintiff is to pay the costs and disbursements of the defendant on an indemnity basis thereafter; 3. In each case the costs and disbursements are to be paid as agreed or assessed. 1. The defendant sought these orders in the alternative, depending upon whether the plaintiffs raised objections to the form of the 20 April 2022 offer. In fact, they did not. The Offers 1. The defendant made two offers in each of these proceedings in substantially identical terms, the first was dated 20 April 2022 and the second was dated 25 August 2022. 2. The 20 April 2022 offer was in the following terms: "The defendant offers to compromise the whole of the proceeding on the following terms: 1. Judgment in favour of the plaintiff for $7,000. 2. This offer remains open for acceptance for 28 days. 3. This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW)." 1. The 25 August 2022 offer was as follows: "The defendant offers to compromise the whole of the proceeding on the following terms: 1. Judgment in favour of the plaintiff for $7,000. 2. This offer remains open for acceptance until 10.00 am on 29 August 2022. 3. This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW)." 1. Accompanying each of these offers was a Calderbank letter which offered to both plaintiffs the sum of $7,000, as well as the sum of $10,000 on account of costs. 2. The parties were in agreement that the offers made pursuant to the UCPR were more favourable to them than the litigated outcome, and as such that it was for them to persuade the Court to "otherwise" order (Pt 42.15A(2)). 3. The plaintiffs oppose the orders sought by the defendant. They correctly submit that the presumption in favour of indemnity costs can be displaced if their rejection of the offers were unreasonable: Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391, at [48]. 4. They submit that their rejection of the offers was not unreasonable, describing the offers as "token in character". They went on to submit that the offers were properly characterised as "insulting". 5. I do not agree with these submissions. The effect of the offers made pursuant to UCPR 20.26 is to make them offers on a "plus costs basis". 6. While these matters are always matters of impression, to my mind the rejection of the offers was unreasonable, given the nature of the case, and the problems which the plaintiffs obviously confronted with the defendant's Limitation Act defences. 7. The offers were significantly better than the litigated outcome, which involves an adverse costs order 8. Accordingly in my view it was unreasonable for the plaintiffs to have rejected the April 2022 offer, and it is appropriate for the plaintiffs to be ordered to pay the defendants costs on an indemnity basis from after 20 April 2022. Orders 1. In each matter I make the following orders 1. That the plaintiff pay the defendant's costs on an ordinary basis until and including 20 April 2022. 2. That the plaintiff pay the defendant's costs on an indemnity basis thereafter. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 October 2022