New South Wales Supreme Court CITATION : Charles Phillip Bird by his tutor Vredê Jane Bird v Campbelltown Anglican Schools Council [2007] NSWSC 1465 HEARING DATE(S) : 5/12/07, 6/12/07 JURISDICTION : Equity Division JUDGMENT OF : Einstein J EX TEMPORE JUDGMENT DATE : 12 December 2007 DECISION : Indemnity costs order not made CATCHWORDS : Costs - Mediations CASES CITED : Calderbank v Calderbank [1975] 3 All ER 333 Charles Phillip Bird by his tutor Jane Bird (First Plaintiff) PARTIES : Vredê Jane Bird (Second Plaintiff) Phillip Gordon Bird (Third Plaintiff) Campbelltown Anglican Schools Council (Defendant) FILE NUMBER(S) : SC 5105/07 COUNSEL : Mr I Davidson (Plaintiffs) Mr M White (Defendant) SOLICITORS : Emil Ford & Co (Plaintiffs) Minter Ellison (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Einstein J Wednesday 12 December 2007 ex tempore Revised 14 December 2007 5105/07 Charles Phillip Bird by his tutor Vredê Jane Bird v Campbelltown Anglican Schools Council JUDGMENT 1 In proceedings number 5105 of 2007 a reserved judgment was delivered on 7 December 2007. The proceedings are before the Court for the purpose of the Court taking in the cross-contentions as to costs. 2 Subject to unusual circumstances, the principled exercise of the discretion as to costs is generally that the loser pays the winner's costs. That general principle, of course, needs to be applied to the particular circumstances of the particular litigation. The Court has a clear discretion to be exercised in a principled fashion in relation to whether or not to make some other order. 3 The College seeks an order that the plaintiffs pay its costs on a party/party basis, save in respect of the actual hearing dates of 5 and 6 December 2007. In respect of the actual hearing dates of 5 and 6 December 2007, the College seeks an order that the plaintiffs pay its costs on an indemnity basis. 4 The basis upon which the College moves for the indemnity costs order is the sending by the College's solicitors, at approximately 6.35pm on 4 December 2007, of a Calderbank letter making a particular offer. That letter stated that the College was prepared to settle the matter on the basis of: i. the proceedings being dismissed with no order as to costs; ii. the plaintiffs executing a deed of release, releasing Campbelltown Anglican Schools Council and its current and former officers and employees from all claims arising out of the facts giving rise to the proceedings. 5 The offer was made without admission of liability. As the hearing was due to commence on the very next day, the letter made clear that the offer would remain open until 10am on 5 December 2007. The letter confirmed that if the offer was not accepted and if the plaintiffs did not achieve a more favourable outcome at the conclusion of the hearing, the College would rely on the letter for the question of costs in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333. 6 The plaintiffs did not accept that offer. 7 The case was heard and judgment was delivered very soon after the hearing. 8 The principled approach to dealing with a Calderbank letter is to assess whether or not the party to whom the letter was sent acted unreasonably in failing to accede to the letter and to give up the proceedings. An important parameter in relation to treating with a Calderbank letter, concerns the amount of time given by the party sending the letter to the opposing party to accept the offer. In this case the offer was given almost at the last conceivable time. I do not consider that it is appropriate to regard that offer in the particular circumstances as unreasonably rejected by the plaintiffs. 9 The only other matter which has drawn submissions from the Bar table particularly from the plaintiffs' side, is the contention that the usual order should not apply here because the College unreasonably refused to agree to a mediation. The evidence before the Court is that the parties did exchange correspondence from a relatively early time in which correspondence the plaintiffs sought to have what was referred to as a Christian mediation. The plaintiffs contend that the College acted unreasonably in failing to accept an invitation to participate in such a mediation. 10 There is before the Court some material which described the notion of a Christian mediation in terms that distinguished it in some respects from secular mediation. That material which passed between the parties included the paragraphs reading: "One of the major differences between a secular mediation and Christian mediation is that secular mediation tends to focus on cutting a deal and reaching a settlement, often through a process of drawn out positional bargaining that leaves the parties feeling that whilst a deal may have been reached, so much of the real underlying conflict, and indeed the wrong conduct of the other party, was left totally unaddressed. Christian mediation is different because it gives prime importance not just to resolution of substantive issues but also to the relational issues that normally are central to any conflict, issues of wrongful conduct, sin and justice are addressed as parties are encouraged to own their own harmful behaviour as well as address the wrongs of others. Negotiation of the substantive issues does normally take place but alongside the context of seeking to restore the relationship as well through the power of Christ working to soften hearts and allow reconciliation to occur." 11 The circumstances before the Court appear to show that following the decision of Justice Brereton to expedite the hearing of these proceedings very little, if anything, took place in relation to furthering the mediation notion. 12 In my view, notwithstanding the approaches which had been made to the College by the plaintiffs earlier in the piece [and the fact, even if it be shown, that the College never agreed to mediation] this should not alter the principled usual approach to the costs regime in the present case. 13 The issues raised in the proceedings, although unusual, clearly indicated [and the correspondence from the plaintiffs' solicitors to the defendant's solicitors which is now before the Court also makes quite clear], that the parties were considerably apart in their approach to what could be achieved. The letter from the plaintiffs' solicitors to the defendant's solicitors of 27 November 2007 indicated that the plaintiffs were prepared to discontinue the proceedings if: i. Charles was offered a place at the College for Year 11 in 2008; ii. the College principal acknowledged that the College did have an obligation to afford procedural fairness to its students when exercising discipline; iii. if the College acknowledged that the current College discipline policy was defective in that it did not provide for procedural fairness and that this would be rectified by the commencement of the 2008 school year. 14 The same letter required Mr Burns to apologise to Mr and Mrs Bird and to Charles for continuing to maintain that Charles had made gestures of masturbation in class on 22 March 2007. The same letter required the College to arrange for Mrs Murdoch to apologise to Mr and Mrs Bird and Charles for relying solely upon Mr Burns in her investigation of the alleged misconduct by Charles. The same letter required that the college pay the plaintiffs' reasonable costs, fees and expenses to date. 15 In the circumstances of that material, as well as the general genre of the type of proceedings which the plaintiffs commenced, it is clear that the parties were at arms length from one another in relation to what presumably each considered to be their legal rights. 16 At the end of the day the defendants have succeeded in the proceedings. For those reasons the principled exercise of the relevant discretion is to order that the plaintiffs pay the defendant's costs of the proceedings. 17 The orders of the Court are as follows: 1. The proceedings are dismissed. 2. The plaintiffs are to pay the defendant's costs of the proceedings on a party/party basis. 3. The plaintiffs are to reimburse the defendant for the costs of the external transcription of the proceedings in accordance with the order which was made before the proceedings commenced. 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