New South Wales Court of Appeal CITATION : U'BRIEN v KASSOUF [1999] NSWCA 276 FILE NUMBER(S) : CA 40687/98 HEARING DATE(S) : 29 July 1999 (on the papers) JUDGMENT DATE : 29 July 1999 PARTIES : SUSAN U'BRIEN v ROBERT KASSOUF JUDGMENT OF : Mason P at 1; Sheller JA at 12; Fitzgerald JA at 13 LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : DC 73/95 LOWER COURT JUDICIAL OFFICER : Delaney DCJ COUNSEL : J D McDonald (Appellant) S P Groves (Solicitor) (Respondent) SOLICITORS : W R Harvey (Appellant) Lamrocks (Respondent) CATCHWORDS : Costs - settlement offer - no question of principle DECISION : Appeal upheld THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40687/98 MASON P SHELLER JA FITZGERALD JA Thursday 29 July 1999 SUSAN U'BRIEN v ROBERT KASSOUF JUDGMENT 1 MASON P: This is an application for leave to appeal in which the parties agreed that the issue of leave may be dealt with on the papers. Leave was granted. The parties have subsequently agreed that the appeal may be addressed in similar manner. Indeed the opponent has submitted to the orders of the Court, except as to costs. 2 The opponent was a front seat passenger in a motor vehicle driven by his father which was involved in an accident with a car driven by the claimant. The opponent sued in the District Court, filing his Statement of Claim in December 1995. On 16 December 1996 the claimant made a settlement offer expressed to be in accordance with Pt 19A r9 of the District Court Rules, offering settlement in the sum of $31,500 plus costs and disbursements. The offer was not accepted within its 28 day currency. 3 Until 18 October 1996 it was Pt 19A r9 which spelt out the consequences of non-acceptance of an offer. On that date, r9 was repealed and effectively replaced by Pt 39A r25. So far as presently relevant, r25 stood in the following form when the proceedings involved in this appeal were heard: (6) Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall … be entitled to an order against the defendant for the plaintiff's costs in respect of the claim up to and including the day the offer was made, assessed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter assessed on a party and party basis. 4 The matter came on for trial in August 1998 before his Honour Judge Delaney. 5 The primary judge found a verdict for the plaintiff in the sum of $29,700. The claimant then referred to the settlement offer. The judge asked counsel for the opponent what he had to say on the matter. The response was: Well all I can say your Honour is that costs are discretionary. Its very close, its within the 10 percent. There were very hotly contested issues obviously. We had no knowledge of photographic material and the like. 6 His Honour confirmed that the defendant was seeking costs from the date of the offer of compromise. He was reminded that the video evidence did not then exist and he was referred to this Court's decision in Houatchanthara v Bednarczyk (Court of Appeal unreported 14 October 1996). 7 The learned judge directed that the defendant pay the plaintiff's costs to be assessed or agreed up to 16 December 1996 and that, from that date, each party was to pay their own costs. His reasons were: In the course of my judgment, I clearly relied heavily on the view that I formed of the plaintiff following exhibit 9 the video recording. As a result of that recording, together with the other material that had come into existence since the date of this offer of compromise, I have come to the view that the plaintiff was not as disabled as the medical reports have suggested. In all the circumstances, I have decided …to direct that each party pay its own costs from the time of the offer of compromise up to the date of trial. That is the best I can do I think. 8 In the light of the principles discussed in Morgan v Johnson (1998) 44 NSWLR 578, I am of the view that his Honour's reasons do not support the conclusion displacing the operation of the relevant rule, Pt 19A r9 (costs follow the event). 9 There were issues as to liability and damages. But nothing marks the litigation as in any way out of the ordinary. The opponent's credibility in the witness box did not impress the trial judge, particularly in the light of some rather damning evidence based upon a video film of him taken in August 1997. This revealed a capacity to perform physical tasks considerably better than had been represented in the opponent's evidence. It is difficult to see how the surreptitious video recording of the opponent could be a factor in the opponent's favour. Nor the fact that the opponent may not have had access to the totality of his medical evidence at the time when the settlement offer was made to him. 10 In my view the following orders should be made: 1. Appeal upheld. 2. In lieu of the order for costs made on 17 August 1998 order that the defendant pay the plaintiff's costs in respect of the claim, assessed on a party and party basis, up to and including 16 December 1996 and that thereafter the plaintiff is to pay the defendant's costs in respect of the claim assessed on a party and party basis. 3. No order as to the costs of the appeal. 11 My reason for proposing that there be no order as to the costs of the appeal is that a small sum of money was involved in the appeal and the respondent has taken the maximum steps available to limit the costs of the appeal. 12 SHELLER JA: I agree with Mason P. 13 FITZGERALD JA: I agree with Mason P. ********* 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.