New South Wales Supreme Court CITATION : Hollier v Sutcliffe (No 2) [2010] NSWSC 433 HEARING DATE(S) : 10 May 2010 JUDGMENT OF : R A Hulme J EX TEMPORE JUDGMENT DATE : 10 May 2010 DECISION : Plaintiff is to pay the defendant's costs of the proceedings on an ordinary basis up to and including 25 February 2008 and thereafter on an indemnity basis CATCHWORDS : PROCEDURE - costs - departing from the general rule - order for costs on an indemnity basis LEGISLATION CITED : Uniform Civil Procedure Rules 2005 Civil Procedure Act 2005 CASES CITED : Hollier v Sutcliffe [2010] NSWSC 279 Melchior & Ors v Sydney Adventist Hospital Limited & Anor (No. 2) [2009] NSWSC 65 PARTIES : Samantha Hollier (Plaintiff) Dr Rachel Sutcliffe (Defendant) FILE NUMBER(S) : SC 20002/08 COUNSEL : Ms E Magyar (Solicitor) for the plaintiff Mr G Gregg for the defendant SOLICITORS : CMC Lawyers Sparke Helmore IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION R A Hulme J 10 May 2010 20002/08 Samantha Hollier v Dr Rachel Sutcliffe JUDGMENT 1 HIS HONOUR: This is an application for a special order as to costs pursuant to r 42.15A of the Uniform Civil Procedure Rules 2005 (UCPR). 2 It is appropriate to briefly survey the history of the matter. The full history was set out in my primary judgment delivered on 23 April 2010. On 16 October 2006 the plaintiff attended upon the surgery of the defendant where, at her request, an Implanon contraceptive rod was implanted in her left upper arm. Subsequently she complained of pain which she attributed to the implantation procedure. 3 Proceedings were commenced by the plaintiff in the District Court of New South Wales on 4 September 2007 and transferred to this Court on 6 December 2007. The trial of the matter was before me on 16 – 24 November 2009 and, as I have indicated, I gave judgment on 23 April 2010: see Hollier v Sutcliffe [2010] NSWSC 297. Judgment was in terms of a verdict for the defendant with the plaintiff to pay the defendant's costs. Upon announcement of those orders Mr Gregg, counsel for the defendant, indicated that there had been a prior offer of compromise that would form the basis of an application he wished to make for a special order. 4 Section 98 of the Civil Procedure Act 2005 provides that, subject to the rules, costs are in the discretion of the Court and that the Court has full power to determine by whom, to whom and to what extent, costs are to be paid. The Court may order that the costs may be awarded on the ordinary basis or on an indemnity basis. 5 Rule 42.15A of the UCPR is in the following terms: (1) This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim concerned as favourable to the defendant, or more favourable to the defendant, than the terms of the offer. (2) Unless the court orders otherwise: (a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. 6 The applicable principles are usefully set out in the judgment of Hoeben J in Melchior & Ors v Sydney Adventist Hospital Limited & Anor (No. 2) [2009] NSWSC 65 at [14] – [15]. In essence, there is a prima facie entitlement to the successful defendant to a special order and it is a matter for the unsuccessful plaintiff to displace that entitlement. It is, in accordance with the principles referred to, a matter for the unsuccessful party to show there are exceptional circumstances warranting an exercise of the discretion not to order costs on an indemnity basis. 7 The foundation of the application is an offer of compromise made under cover of a letter of 25 February 2008, the offer being pursuant to r 20.26 of the UCPR. It had been preceded by a Calderbank letter sent to the solicitors for the plaintiff on 3 December 2007 in which it was conveyed, in essence, that the proceedings had no reasonable prospect of success. Substantial reasons were set out in that letter for that view and the content of that letter was, in effect, incorporated in the offer made on 25 February 2008. 8 The offer was expressed to be open for acceptance within a period of 28 days. It was specifically made in accordance with r 20.26 of the UCPR and it offered to compromise the plaintiff's claim in the following manner: 1. Verdict and judgment for the first defendant. 2. The parties to bear their own costs. 9 The plaintiff sought further time to consider the offer. The defendant's solicitors extended the time for acceptance to a date in April 2008. Ultimately the offer was not accepted. 10 A further offer, in the same terms, was made in September 2009 but it also was not accepted. 11 It is conceded on behalf of the plaintiff that the offer of 25 February 2008 was more favourable than the terms of the orders I ultimately made on 23 April 2010. However, it is contended that it was not a real offer of compromise but was, "an invitation to the plaintiff to surrender". 12 I am of the view that it was a genuine offer of compromise. I accept the submission of Mr Gregg that by the time of the making of the offer the defendant had incurred not insignificant costs in the marshalling of evidence, including expert medical evidence, and there was the very real prospect that substantial further costs would be incurred by the defendant if the matter was not compromised as proposed. The offer had the effect of the defendant foregoing the costs she had incurred to the date it was made. 13 I am not satisfied that there is any sufficient reason shown for the Court not to make the order sought and accordingly I make the following order: ORDER 14 Order 2 in the judgment of 23 April 2010 is varied. The plaintiff is to pay the defendant's costs of the proceedings on the ordinary basis up to and including 25 February 2008 and thereafter on an indemnity basis. ********** 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.