Gin v Gin [1999] NSWCA 328

New South Wales Court of Appeal CITATION : Gin v Gin [1999] NSWCA 328 FILE NUMBER(S) : CA 40971/98 HEARING DATE(S) : 24 August 1999 JUDGMENT DATE : 24 August 1999

Ibrahim Gin PARTIES : v Havane Gin JUDGMENT OF : Mason P at 1; Meagher JA at 8; Giles JA at 9

LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : DC 3967/97 LOWER COURT JUDICIAL OFFICER : Herron DCJ

COUNSEL : C: C Egan O: No appearance SOLICITORS : C: Carroll & O'Dea, Sydney CATCHWORDS : COSTS - Unaccepted settlement offer - No point of principle. ACTS CITED : Arbitration (Civil Act) Act 1983 CASES CITED: Morgan v Johnson (1998) 44 NSWLR 578 Melville v Tadross [1999] NSWCA 162 DECISION : Leave to appeal granted; appeal upheld

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40971/98 DC 3967/97

MASON P MEAGHER JA GILES JA

Tuesday, 24 August 1999

Ibrahim GIN v Havane GIN

JUDGMENT

1 MASON P: The Court has been referred to evidence which establishes that the opponent was served with the material appearing in the white book. The opponent was called outside the court and did not appear. She had not in fact appeared on the earlier occasions when the matter was before Registrar Jupp. 2 The opponent was injured in a motor vehicle accident that occurred on 18 July 1994. She sued her husband, the claimant, in the District Court. Liability and quantum were at issue. In 1998 the matter was referred to arbitration pursuant to the Arbitration (Civil Action) Act 1983. The opponent was represented by counsel instructed by solicitors. In an award made on 31 August 1998, the opponent was awarded $224,696 plus costs. The opponent applied for a rehearing. 3 On 14 September 1998, the claimant served an offer of compromise in accordance with Part 19A of the District Court Rules. The sum offered was $224,696 plus costs, ie the sum that had been awarded in the arbitration. The offer was not accepted within the twenty-eight day period described by Pt 19A r3(4) of the District Court Rules or at all. The opponent applied for a rehearing and this took place on 4 and 6 November 1998 before Herron DCJ. The opponent represented herself and required an interpreter. Judgment was given on 27 November 1998. There was a verdict in favour of the plaintiff (opponent) for $212,498. The claimant sought a special order for costs in accordance with Pt 39A r 25(6) which deals with unaccepted offers of compromise. The claimant also relied in argument upon Pt 39A r 31(4) which deals with proceedings following an arbitration where the determination of the Court is not "substantially more favourable to the applicant [for the re-hearing] than is the determination of the arbitrator". 4 The learned trial judge initially refused to entertain the application, but it was patiently and firmly pressed by the client's legal representative, Mr Thompson. The application was first rejected for the following reason: "I think that in the circumstances where the plaintiff obviously was having some disputes with her solicitors and eventually represented herself before me at the hearing, that in the circumstances I would exercise a discretion not to make the order as asked by Mr Thompson and may I say quite frankly it seems to me a very clear case ... ." 5 Mr Thompson valiantly pressed on despite continuing hostile fire. He tendered a letter dated 14 September 1998 to the opponent from the solicitors who were then representing the opponent who had received the offer of compromise. The letter informed the opponent as to the risk involved in non-acceptance of the offer of compromise and it sought urgent instructions. His Honour was sceptical about how that letter got into the claimant's hands although he had been told that the opponent had served the document upon the claimant's solicitors together with other documents. (At that stage she was apparently unrepresented.) The claimant continued to press his Honour, reminding him of the terms of Practice Note 42 in the District Court, and as I have already indicated, Pt 39A r 31. 6 The learned judge remained unmoved. He concluded by ordering the claimant to pay the opponent's costs of the proceedings including the costs before the arbitrator. In my view, his Honour erred in law in his approach to the discretion to deal with the matter of costs. The principles relevant to the discretion in the predecessor to Pt 39A r 25(6) were discussed in Morgan v Johnson (1998) 44 NSWLR 578, especially at 581-2 in my judgment. 7 To the extent that his Honour gave reasons for displacing the clear terms of the two provisions in the Rules, they indicate that his Honour was influenced by the fact that the opponent was an unrepresented litigant. But that was not her status when the offer was communicated to her or when she invoked her right to seek a rehearing. Even without reference to the letter of 14 September 1998, one would presume that she had received advice about the risks inherent in rejecting the arbitral award and rejecting the offer. The correspondence which fell into the claimant's hands made it plain that she got that advice in abundance. As I stated in my judgment in Melville v Tadross [1999] NSWCA 162 (at pars 25 and 26), the critical point of time at which to take account of any difficulty stemming from the fact that a litigant was unrepresented is the time when the offer was made or the conduct embarked upon that led to the wasted costs. 8 In my view the following orders should be made: