Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd & 2 ors (Costs) [2008] NSWSC 512

New South Wales Supreme Court

CITATION : Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd & 2 ors (Costs) [2008] NSWSC 512

HEARING DATE(S) : 4 April 2008 JURISDICTION : Equity Division Expedition List

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 4 April 2008

DECISION : Indemnity costs refused.

CATCHWORDS : COSTS – indemnity costs – offer of compromise – where Calderbank offer made otherwise than in compliance with rules – where plaintiff betters offer – where offer open only for short period.

LEGISLATION CITED : Uniform Civil Procedure Rules, r 20.26

CATEGORY : Consequential orders

CASES CITED : Calderbank v Calderbank [1976] Fam 93

Lawfund Australia Pty Ltd (plaintiff/cross defendant) PARTIES : Lawfund Leasing Pty Ltd (first defendant) Deborah Ward (second defendant/cross claimant) A-Ward Finance Pty Ltd (third defendant)

FILE NUMBER(S) : SC 6973/04

COUNSEL : Mr L S Einstein (plaintiff/cross defendant) Mr M B Evans (defendants/cross claimant)

SOLICITORS : TressCox Lawyers (plaintiff/cross defendant) M J Woods & Co (defendants/cross claimant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

BRERETON J

Friday 4 April 2008

6973/04 Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd (Costs) JUDGMENT (ex tempore) 1 HIS HONOUR: Where a party wishes to put its opponent at risk as to indemnity costs in consequence of non-acceptance of an offer which it might be said to be better at trial, the primary procedure is provided by Uniform Civil Procedure Rules, Pt 20, which by r 20.26 provides for the making of offers to which certain conditions apply, including as to the time for which they are to be left open, and to which certain costs consequences attach, under rules 42.14 and 42.15. In some cases, even though those rules are not strictly complied with, the Court may, as a matter of discretion, act on what are commonly called Calderbank letters, but the requirements of the rules provide a strong guide as to what ought be required of an offeror if the offer is to have the relevant consequences. If Calderbank offers were to be treated as giving rise to the same consequences as offers made in compliance with the rules, then there is no point in having the rules and the protections which they afford. 2 The first offer made by the plaintiff in this case contained a term (clause 3) which required indemnities to be given by the defendants, and which did not form part of the final relief granted. Moreover, that offer was not expressed to be "without prejudice except as to costs", nor did it mention any costs consequences, nor did it claim to be a Calderbank offer. 3 The second offer, of 28 June 2006, was expressed to be open for a period of 24 hours only, although it was extended the following day for another 24 hours. The rules require that to have the benefit of the consequences under the rules, an offer made at that stage must be open for not less than 28 days. 4 The third offer is not relied on as triggering any liability for indemnity costs. 5 The fourth offer was made on 18 December 2006, and was expressed to remain open until Thursday 21 December. It is true that in January, having received a communication directly from Ms Ward seeking further time, the plaintiff's solicitors inquired whether a further extension was sought and indicated that, if so, they would need to seek instructions on the matter. That does not alter the position that the offer was expressed to be open only for three days, immediately before Christmas. 6 Even if the second and fourth offers are properly to be construed as offers to the effect that the claim and the cross-claim be dismissed in return for the payments which they propose, I am not prepared to make an indemnity order on the basis of those offers, when they were left open for so short a time as they were. To do so would simply be to authorise a general dispensation from r 20.26, which ordinarily requires strict compliance if the costs consequences are to be attracted. 7 In Short Minutes of Order B I amend paragraph 2 by deleting the words "pursuant to s 1317E(1) of the Corporations Act". I amend paragraph 3 by deleting the words "pursuant to s 1317E(1) of the Corporations Act". I will insert in paragraph 10, after "orders that" the words "save insofar as any special costs order otherwise provides". I will add to paragraph 10 "excluding the costs of and incidental to the application for indemnity costs". I make orders in accordance with those Short Minutes of Order initialled by me, dated this day and placed with the papers, as so amended. 8 I adjourn the proceedings for directions in respect of the inquiry to Friday 16 May 2008 at 10:00am to follow the Expedition List that day before me. **********