Supreme Court New South Wales Medium Neutral Citation: George v Webb & ors [2012] NSWSC 86 Hearing dates: 7 February 2012 Decision date: 07 February 2012 Jurisdiction: Equity Division Before: Ward J Decision: Amendment to order for interest previously made under the slip rule. Costs orders made. Catchwords: PRACTICE AND PROCEDURE - operation of slip rule - Uniform Civil Procedure Rules 2005 (NSW) rule 36.17 - whether amendment to the date from which interest calculated falls within the operation of the slip rule - HELD - not within scope of slip rule PRACTICE AND PROCEDURE - reopening of hearing - whether interests of justice require reopening of issue - where no suggestion that material previously unavailable - HELD - proper basis for reopening hearing after judgment not established COSTS - offer of compromise - whether genuine element of compromise where offer of compromise by plaintiff gave up claim to interest on the principal sum claimed - HELD -offer involving genuine element of compromise and not derisory nor mere offer for defendant to surrender - order for indemnity costs granted COSTS - Calderbank offers - basis for special costs sanctions being whether offeree's failure to accept offer in all the circumstances warrants departure from ordinary rule as to costs - where Calderbank offer by plaintiff gave up claim to both interest and costs - had issue arisen finding would have been that it was unreasonable for defendants to reject offer Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120 Barnes v Addy (1874) LR 9 Ch App 244 Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12 Bennette v Cohen (No 2) [2009] NSWCA 162 Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 Calderbank v Calderbank [1975] 3 WLR 586 Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790 Commonwealth of Australia v Gretton [2008] NSWCA 117 Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153 DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555 East West Airlines Limited v Turner (No 2) [2010] NSWCA 159 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 Falkner v Bourke (1990) 19 NSWLR 574 Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 Hillier v Sheather (1995) 36 NSWLR 414 Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 Hungerfords v Walker (1989) 171 CLR 125 In re Swire; Mellor v Swire (1885) 30 ChD 239 Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642 Lahoud v Lahoud [2011] NSWCA 405 Leichhardt Municipal Council v Green [2004] NSWCA 341 Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 Meister v Hutchinson [1987] 10 NSWLR 525 Morgan v Johnson (1998) 44 NSWLR 578 Multicom Engineering Pty Ltd v Federal Airports Corporations (1996) 138 ALR 425 Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520; [1985] 1 All ER 520; [1985] 1 Lloyd's Rep 189 Newmont Yandal Operations Pty Ltd v J. Aron Corporation and the Goldman Sachs Group Inc & 3 ors [2007] NSWCA 195; (2007) 70 NSWLR 411 Old v McInnes and Hodgkinson [2011] NSWCA 410 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Re Scott & Alvarez Contract [1895] 1 Ch 594 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Rosebanner Pty Ltd v Ausgrid [2011] NSWCA 150 Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609 Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 SMEC Testing Services Pty Ltd v Campbelltown City Council [2002] NSWCA 323 South Eastern Area Health Service v King [2006] NSWCA 2 Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446 The Uniting Church v Takacs (No 2) [2008] NSWCA 172 Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 Urban Transport Authority of New South Wales v Nweiser (1991) 28 NSWLR 471 Victorian Workcover Authority v Esso Australia Ltd [2001] HCA 53; 207 CLR 520 Texts Cited: Ritchie's Uniform Civil Procedure NSW Category: Costs Parties: Jane Anne George (Plaintiff) Lewis James Webb (First Defendant/First Cross-Claimant) Dennis Patrick Grogan (Second Defendant/Second Cross-Claimant) Martin Geoffrey Burke (Third Defendant/Cross-Defendant) Representation: Counsel E T Finnane (Plaintiff) I Griscti (First and Second Defendants) Solicitors Uther Webster & Evans (Plaintiff) Gilchrist Connell (First and Second Defendants/Cross-claimants) M Mazonne (Solicitor) Diamond Conway (Third Defendant/Cross-defendant) File Number(s): 09/291563 Judgment 1HER HONOUR : These proceedings came before me for hearing last year in relation to a claim by the plaintiff, Mrs Jane George, seeking orders for the recovery of moneys disbursed out of a trust account maintained by a firm of solicitors (Grogan Webb) otherwise than for the purpose for which she contended that those moneys were to be paid. 2For the reasons set out in my judgment last year, I was of the view that the sum of $150,000 paid into the trust account of Grogan Webb on 13 October 2008 was held on trust for Mrs George, that being an express trust that it was to be used for the purpose of funding a particular acquisition (the proposed acquisition of certain of the assets of the Elderslie/Allco HIT companies) and that Grogan Webb breached that trust by paying out the $150,000 for purposes other than the funding of the Elderslie/Allco HIT acquisition (notwithstanding that they did so on the basis of directions from the third defendant, Mr Burke, and that they had been authorised to disburse funds on his directions). 3I held that Grogan Webb were liable to restore to Mrs George the fund of $150,000 plus interest (which had been quantified by the plaintiff's solicitors as at 28 November 2011 at $41,953.77 on the basis of interest at the RBA cash rate + 4% pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from October 2008 to the date of judgment) by way of equitable compensation for breach of trust. 4Had it been necessary so to determine I would have held that there had been a breach of a duty of care in relation to the trust fund in view of the failure by Grogan Webb to make any enquiry of Mrs George as to the payment out of the funds on the giving by Mr Burke of directions for the payment of moneys for purposes so obviously outside the purposes of the Elderslie/Allco HIT acquisition (including outstanding school fees or legal fees referable to other unrelated matters). 5I found Mr Burke liable, under both limbs of Barnes v Addy (1874) LR 9 Ch App 244 , as an accessory to the breach of trust by Grogan Webb, for the repayment of the funds knowingly received by him or paid out for his benefit at his direction and having thereby knowingly assisted in a breach of trust. 6On the cross-claim, I held that Mr Burke was liable to indemnify Grogan Webb, in respect of all of the liability that Grogan Webb had to Mrs George, by way of damages for misleading and deceptive conduct in breach of the Fair Trading Act (the partner at Grogan Webb having acted on the direction to pay, and having read the email authorisation from Mr George, in reliance on Mr Burke's earlier representation that the funds were his). 7The matter came back before me on 7 February for final orders as to costs. On that occasion, after considering the submissions of the parties, I made orders and indicated that I would publish short reasons in due course. These are those reasons. Issues 8Although the matter had been listed on 7 February simply for argument on costs, further issues were raised in relation to the interest component of the orders that were made last year in this matter. In particular, Counsel for the plaintiff (Mr Finanne) sought an amendment to the order for interest under the slip rule. It was accepted by the parties that there was a mathematical error in the interest calculations handed up to me during the course of the initial hearing (which I had then adopted in the orders made). The amendment so sought was to reduce the interest from an amount in the order of $41,000 to the amount of $39,422.36. There was no objection in principle to such an amendment being made. However, Mr Mazzone, the solicitor for Mr Burke, raised a more fundamental issue in relation to the order that had been made for interest, maintaining that there should be an amendment to the interest as ordered so as to calculate interest from a later date than had been claimed by the plaintiff. 9As to costs, the plaintiff sought indemnity costs orders for the period following service on the respective defendants of identical Offers of Compromise (at which time Calderbank offers to the same effect were also made), an application resisted by the defendants; and Grogan Webb sought an order that Mr Burke pay their costs of the cross-claim and indemnify them for the costs orders payable to the plaintiff. 10Therefore, before me on 7 February were the following issues: (i) whether the order made for the payment of interest to judgment on the sum awarded to the plaintiff by way of equitable compensation for breach of trust should be amended in order to calculate interest from a later date (namely, the date on which demand was first made for the moneys by the plaintiff - 24 February 2009) than the date from which interest had been calculated for the purpose of the order made (that being the date by which the last of the moneys had been paid out of the trust fund in breach of trust); and, anterior to that question, whether this was a matter that could be dealt with under the slip rule or whether it required the hearing to be re-opened for that purpose and, if so, whether leave should be granted for this to occur; and (ii) what costs orders should be made consequent upon the determination of the substantive proceedings (both as between the plaintiff and the defendants and on the cross- claim between the respective defendants). 11In summary, on 7 February I amended the order that I had made on 20 December 2011 in relation to interest, under the slip rule, so as to reduce the amount of interest to $39,422.36 (being interest from 22 October 2008 when the cause of action for breach of trust was complete); I ordered that the defendants pay the costs of the plaintiff on a party/party basis up to and including 20 September 2011 and on an indemnity basis from and including 21 September 2011; and I further ordered that the third defendant indemnify the first and second defendants for the indemnity costs orders made against them in favour of the plaintiff and pay the costs of the cross-claim. I set out below my reasons for the orders I made in relation to those particular issues. (i) Interest 12Under s 100 of the Civil Procedure Act 2005 (NSW), in proceedings for the recovery of money the Court has power to include interest in the amount for which judgment is given, such interest to be calculated at such rate as the Court thinks fit on the whole or any part of the money and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. As the cases referred to in Ritchie's commentary on this provision make clear, the purpose of the discretion to award interest under this section is to permit the proper compensation of the successful plaintiff for the practical loss it has suffered and that generally a successful plaintiff who obtains a money judgment will be entitled to an award of interest (indeed in Falkner v Bourke (1990) 19 NSWLR 574 it was suggested that this would almost invariably be the case). 13As noted in Lahoud v Lahoud [2011] NSWCA 405, the expression "proceedings for the recovery of money" or its equivalent has been described by the High Court in Victorian Workcover Authority v Esso Australia Ltd [2001] HCA 53; 207 CLR 520 at [41]-[42] as a composite expression embracing any proceedings in which a claim for money is made. (Although the plurality there went on to suggest that an order for the payment of equitable compensation may be an example of a situation that does not answer the description of a proceeding "for the recovery of debt or damages", noting that in those circumstances the operation of the general law is preserved, the expression in the Uniform Civil Procedure Rules is not limited (as was the case under the equivalent provision being considered in the Esso case) to proceedings for the recovery of debt or damages but extends generally to proceedings for the recovery of money. The present proceedings were clearly for the recovery by Mrs George of money.) I also note in passing that the power to award interest in equity was more extensive than that which exercised at common law and, where there was a defaulting trustee or fiduciary it was suggested that unless the misconduct involved only a minor or technical breach a successful party should be entitled to compound interest (see Hungerfords v Walker (1989) 171 CLR 125 at 148). 14The factual background to the dispute is set out in my earlier judgment and I do not propose to repeat that here, save as is relevant to the issues now raised. In the proceedings, Mrs George had sought the recovery of the sum of $150,000 that had been paid into the Grogan Webb trust account and interest on that sum. The interest was calculated from 22 October 2008, that being the date by which the $150,000 sum had been fully expended (though the bulk of the payments out occurred on 14 October 2008, the day after the money was received into the solicitors' trust account). No trust account receipt was issued to Mrs George for the moneys, nor was there any trust account statement provided as to the disbursement of the moneys out of the account. 15It seems that the first enquiry by or on behalf of Mrs George as to the funds occurred in January 2009 when her husband sent an email to the first defendant referring to the deposit of $150,000 made by his wife into the trust account and, inter alia, asking for confirmation as to the receipt of the funds and as to the interest accruing. Pausing there, this is consistent with a belief on the part of Mr George (who in this transaction was acting on behalf of his wife) that his wife had an entitlement to interest earned on the funds in the trust account. There was no response to that request. 16On 24 February 2009, a direction was sent to Grogan Webb for the payment to a third party of a portion of the funds that had been deposited by Mrs George. By that stage, however, none of the funds remained in the solicitors' trust account. 17The basis on which Mr Mazzone submitted that s 100 interest should be awarded only for the period from 24 February 2009 was that this was when the first request for repayment of the moneys in question was made. Counsel for the first and second defendants (Mr Griscti), quite fairly conceding that no issue was raised as to this during argument before me at the hearing, similarly maintained that in order properly to compensate the plaintiff for the practical loss she suffered interest should be calculated only from the date on which the return of the money was first requested. 18Mr Finanne, however, contended that the cause of action was complete when the breach of trust occurred and that this was when the money was paid out of the trust account. At that point, it was submitted, Grogan Webb (having wrongly paid out the money) should immediately have alerted Mrs George to the payment out and repaid those moneys. 19Further, it was submitted by Mr Finanne that the submission made on 7 February for the first time in relation to interest by Mr Mazzone was not properly to be considered as an application under the slip rule but, rather, was an application to reopen the hearing (unsupported by any evidence). 20I accept Mr Finanne's submission that the application by Mr Mazzone was not an application within the operation of the slip rule. While the slip rule clearly covers the mathematical error in the calculation by the plaintiff's legal representatives as to the initial interest calculations, on which the orders I made late last year were based, it does not lend itself to an application made by defendants who (having either not considered or not chosen to argue the point during the trial - when they were clearly on notice of the date from which the interest calculations were made) now wish after judgment to contend that interest should be calculated from the happening of a different event (on the basis that this is the limit of what is necessary properly to compensate the plaintiff). That seems to me to be an attempt to re-open the hearing (and would then potentially give rise to the possibility of further evidence from the plaintiff as to what the plaintiff would have done had she been made aware of the payment out of the moneys at the time that payment occurred and the losses suffered by reference to loss of use of the moneys over that period). 21The "slip rule" is contained in rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW). In Newmont Yandal Operations Pty Ltd v J. Aron Corporation and the Goldman Sachs Group Inc & 3 ors [2007] NSWCA 195; (2007) 70 NSWLR 411, the Court of Appeal observed (at [117]) that caution must be exercised in the application of case law from the past or from other jurisdictions when construing the slip rule in other contexts. 22In Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446, McHugh JA (as his Honour then was) (at 449) said in relation to the slip rule and the inherent jurisdiction of the Court to correct accidental slips or omissions: The Courts of Common Law and the Court of Chancery had inherent power to correct any clerical mistake or error in a judgment or order if it was the result of an accidental slip or omission: Lawrie v Lees (1881) 7 App Cas 19 at 34-35. This power was an exception to the general principle that a party is bound by a judgment or order once it has been drawn up unless he can set it aside: Kinch v Walcott [1929] AC 482. But although the principle of the slip rule is clear enough in conception, its application in practice has often proved difficult. The dividing line between a mistake or error which is the result of an accidental slip or omission and a mistake or error which is the product of a deliberate decision has often been difficult to draw. The difficulty became much greater when it was decided that an error might be the result of an accidental slip or omission even though, because of the inadvertence of the party's legal representative, the point was not raised at the hearing of the action: cf L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 at 594-595. 23In Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520, at 530; [1985] 1 All ER 520; [1985] 1 Lloyd's Rep 189, Donaldson MR said that: It is the distinction between having second thoughts or intentions and correcting an award of judgment to give true effect of first thoughts or intentions which creates the problem. Neither an arbitrator nor a judge can make any claim to infallibility. If he assesses the evidence wrongly or misconstrues or misappreciates the law, the resulting award or judgment will be erroneous but it cannot be corrected ... The remedy is to appeal, if a right of appeal exists. The skilled arbitrator or judge may be tempted to describe this as accidental slip, but this is a natural form of self-exculpation. It is not an accidental slip. It is an intended decision which the arbitrator or judge later accepts as having been erroneous. 24In Newmont Yandal , the Court of Appeal considered (at [60]) that the inherent jurisdiction of the court permitted the correction of orders the legal consequences of which were unforeseen or contrary to those intended, applying Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642; In re Swire; Mellor v Swire (1885) 30 ChD 239. What is not contemplated by the slip rule, however, is the exercise afresh of a discretion which was originally considered by the decision-maker in relation to the particular issue. 25In Storey & Keers , (at 453) McHugh JA said that the rationale of the slip rule requires that an omission or mistake should not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or as a matter upon which a real difference of opinion might exist. 26In Newmont Yandal , Spigelman CJ noted (at [23]) that there was a more limited body of authority on what constitutes an 'error' and what is a permissible 'correction' for the purposes of the court's inherent jurisdiction to correct errors (which, though reflected, in the UCPR slip rule, was said to be not necessarily confined by the terminology of that rule) than as to the 'accidental' nature of a slip or omission. His Honour emphasised that, by reason of the insertion of the overriding objective into the Civil Procedure Act , words such as 'error' and 'correct' in the slip rule should not be given a narrow interpretation (at [25]) and that, in considering whether there had been an error falling within the slip rule or capable of correction within the inherent jurisdiction of the court, the relevant intention was the objective intention of the decision-maker at the time the original orders were made. 27In the present case, unlike the mathematical error in the calculations that was not appreciated until after the orders had been made, there was no 'slip' in relation to the date from which interest was claimed. In the pleadings, a claim was clearly made for interest. Calculations were provided during the trial showing the interest as being claimed from 22 October 2008. There was no suggestion at the trial or when orders were made at the time judgment was handed down that this was an inappropriate date or that the proper compensation of the plaintiff did not require interest so to be calculated. 28Therefore, for me to entertain the application now made by Mr Mazzone for the interest order to be amended by reference to the date from which it was to be calculated would be tantamount to re-opening the hearing on this issue (though I note that no such application was formally made when the matter was before me on 7 February). It seemed to me that no proper basis was shown for that issue to be re-opened after judgment. Ritchie's commentary notes that the fundamental principle to be applied in determining whether to grant an application for leave to reopen is whether the interests of justice are better served by allowing or rejecting the applications (the authors citing for that proposition Urban Transport Authority of New South Wales v Nweiser (1991) 28 NSWLR 471). (In that regard, I note that the import of the change sought to be made to the date from which interest is to be calculated, if my arithmetic is correct, would be in the order of around $675 - something that leads me to conclude that the costs of a further attendance in court to argue the point would not be likely to have been commercially in the interests of any of the parties.) 29Where such an application is made after judgment has been handed down it has been said ( Re Scott & Alvarez Contract [1895] 1 Ch 594) that the application should generally be based on material not previously available. That is not the case here. It would seem at the highest that there was simply no advertence on the part of the defendants to the issue as to the date from which interest was being claimed (it being apparent from the calculations provided as to the relevant date for which the plaintiff contended). 30Having regard to my finding that Grogan Webb had held the funds deposited in the trust account on trust for the plaintiff for a specific purpose, they had a liability to account for those moneys. It is highly unlikely that if Mrs George had been informed on 14 October 2008 that the moneys had been disbursed to meet (inter alia) outstanding school fees for Mr Burke's children she would not immediately have demanded the return to her of the moneys at that stage. There was certainly evidence of attempts to obtain confirmation from the solicitors in January as to the receipt of and earning of interest of those funds (which, if responded to, would have alerted the plaintiff prior to 24 February 2009 of the disbursement of the moneys for purposes other than the acquisition for which they had been paid into the account). By disbursing the moneys otherwise than for the purposes for which they were to be used, Grogan Webb were in breach of trust and from that time the plaintiff lost the ability to have recourse to her funds and to use those moneys, as well as the ability to earn any interest thereon. Therefore, I am by no means persuaded that the date from which a practical loss was suffered was the date on which return of the funds was first demanded. 31In any event, I was not satisfied that a proper basis for the re-opening of the question as to the interest claimed by the plaintiff had been established by the defendants and hence I did not accede to the application by Mr Mazzone. I therefore simply amended the interest order to correct the mathematical error in the calculations. (ii) Costs 32It was accepted by the parties that the plaintiff should be awarded costs because of the principle that costs follow the event. The question before me was as to whether some of those costs should be on an indemnity basis. 33These proceedings were commenced against the first and second defendants by way of Statement of Claim filed on 7 December 2009. On 11 June 2010, following the filing of their defence on 12 March 2010, the first and second defendants filed their cross-claim joining Mr Burke to the proceedings. Following various interlocutory steps, the Amended Statement of Claim was filed in March 2011. 34By letters dated 20 September 2011, the solicitors acting for the plaintiff served on the respective defendants a Notice of Offer of Compromise, offering to compromise the plaintiff's claim against the defendants by accepting the sum of $150,000 in full and final settlement of the proceedings, which offer was expressed to be made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules and open for acceptance for 28 days. 35By separate letters on the same date, the plaintiff's solicitors made an offer separate and additional to the Offer of Compromise, offering to settle the proceedings by acceptance of the sum of $150,000 inclusive of costs and interest. That offer was expressed to be made in accordance with the principles in Calderbank v Calderbank [1975] 3 WLR 586, as applied in Meister v Hutchinson [1987] 10 NSWLR 525 and Multicom Engineering Pty Ltd v Federal Airports Corporations (1996) 138 ALR 425. The offer was open for acceptance until 19 October 2011. The letter noted that Senior Counsel had been briefed to appear at the hearing and advised the amount estimated for his fees in relation to preparation and appearance at the hearing. By the time the offers were made the proceedings must have been in an advanced state of preparation with the trial to commence 3 months hence. As at the date of the respective settlement offers, interest on the sum claimed (calculated at the rate of 8.75%pa from October 2008) would have been roughly $38,325 meaning that at that stage the total claim was around $188,325. 36Neither of those offers was accepted. (I note further that there is no suggestion that the defendants required clarification of any aspect of the respective offers.) Offers of Compromise 37Rule 42.14 of the Uniform Civil Procedure Rules deals with the position where an offer of compromise is made by a plaintiff in accordance with the rules (and not accepted by the defendant) and the outcome of the proceedings is that the plaintiff obtains an order or judgment "no less favourable to the plaintiff than the terms of the offer". Relevantly, rule 42.14(2) provides that: (2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim: (a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and (b) 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 ... 38In the present case, the ultimate outcome of the proceedings was less favourable to the defendants than the offers of compromise since the judgment included interest on the sum of $150,000 (in an amount now determined as being just under $40,000), whereas the offers of compromise gave up any amount in respect of interest. 39In Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at [725], the Court of Appeal said that the special costs rules were expected to apply "in the ordinary case"; in Morgan v Johnson (1998) 44 NSWLR 578 (at [581]-[582]), it was said that the Rules confer a " prima facie " entitlement to special costs orders in those circumstances. Other cases say that "compelling" or "exceptional" circumstances would be required to justify a departure from the special costs rules ( Hillier v Sheather (1995) 36 NSWLR 414 at 422(B-E) per Kirby P; South Eastern Area Health Service v King [2006] NSWCA 2 at [83] per Hunt AJA; and Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 at [35]-[37] per Basten JA; see generally the discussion in Ritchie's commentary at [20.27.15]). 40In Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 , Spigelman CJ, Beazley, McColl JJA said at [15]: ... Rules 42.14, 42.15 and 42.15A ... provide that, when the relevant costs rule is engaged, a party is entitled to indemnity costs from a specified time (usually one day after an offer of compromise is made), "unless the court orders otherwise".... The relevant provisions of these rules do not specify that exceptional circumstances or the avoidance of substantial injustice must be established before the court will make a different order to the prima facie order for which the rules provide and, in our opinion, the rule should not be so construed. Rather, the discretion is one that has to be exercised having regard to all the circumstances of the case. 41In Rosebanner Pty Ltd v Ausgrid [2011] NSWCA 150, the Court of Appeal confirmed that the rationale of the rules in relation to offers of compromise, as described in Morgan v Johnson , has significant force. 42There are particular requirements with which an offer of compromise must comply in order to bring the matter within the operation of the special costs rules. In particular, rule 20.26(2) provides that an offer must be exclusive of costs "except where it states that it is a verdict for the defendant and that the parties are to bear their own costs". It is not suggested that the offers in the present case did not comply with this requirement. 43It is well recognised that an offer of compromise must, however, involve "a real and genuine element of compromise" ( Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375; Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; Leichhardt Municipal Council v Green [2004] NSWCA 341). In this regard, Mr Mazzone contended that the Offers of Compromise in this case lacked the necessary element of compromise, relying on what was said in Regency Media at [28]-[32]. Reference was made to what was said in The Uniting Church v Takacs (No 2) [2008] NSWCA 172 at [30]-[33] and Bennette v Cohen (No 2) [2009] NSWCA 162 at [40]-[41] for the proposition that, absent an element of compromise, the Court may find that the offer is not a genuine offer of compromise. 44Mr Mazzone submitted that what must be considered is whether the offer represented or formed part of a genuine attempt to reach a negotiated settlement ( Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12 at [19]) and that an offer designed "merely to trigger any costs sanctions" will not be regarded as an offer of compromise (citing Bennette v Cohen at [40]-[41]). 45In Regency Media , an offer of compromise was served by the defendants offering to settle a claim in the order of $600,000 by payment of the sum of $10,000. The offer was made at an early stage of the proceedings. At [31] - [33], the Court of Appeal said: An offer which is in substance an invitation to surrender can result in the successful triggering of the indemnity costs mechanisms under the rules. (See r 20.26(2); Leichhardt Municipal Council supra at [36]-[37], [40].) However, as Basten JA suggests in Robb Evans supra at [20], the claim or defence would have to approach something of the character of being frivolous or vexatious for that to be the case. (See also Hancock v Arnold supra at [17].) If it were otherwise, the public policy to encourage settlement would rarely be served, in an all or nothing case . These proceedings were not of that character, as indicated by the success which the respondent had at first instance. (my emphasis) The normal order for costs, even in a clear case, is that each party bears its own costs without full indemnity. If a derisory offer, of the kind made in these proceedings, could result in an order for indemnity costs, then it is likely that many, perhaps most, contract interpretation disputes would result in an indemnity costs order, if the formality of an offer in accordance with the rules had been made at an early stage. If the appellant were to succeed in the present case, it is quite likely that such an offer would accompany most statements of claim as a matter of commercial practice. The purpose of the special order - to encourage settlement - would no longer be served. An order for indemnity costs could, in our opinion, become the normal order in many commercial disputes. It is often the case that the result of an interpretation issue appears quite clear in retrospect. However, an offer of compromise must be assessed, in large part, at the time it was made. (See most recently Hancock v Arnold supra at [23].) Whether what was offered was a relevant compromise, and whether its rejection was reasonable should not be assessed with the benefit of 20:20 hindsight. 46Mr Mazzone submitted that the offer to resolve the matter on the basis that the defendants pay the sum of $150,000 excluding costs was not a genuine offer of compromise but, rather, amounted to an offer to surrender in the sense considered in Regency Media . (In relation to the question of costs, in order to accord with the rules the offer of compromise was required to be made exclusive of costs, so the fact that acceptance would have carried a cost consequence for the defendants means that absent the interest component this would in effect be an offer requiring capitulation by the defendants. Of course it would have been possible at the same time to have made a separate offer in relation to those costs.) Basten JA in Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [22] noted that: Whether or not the offer involved a genuine compromise must be assessed by reference to the rule pursuant to which the offer was made. That rule refers to an offer to compromise a claim in proceedings on specified terms. Subject to an exception in the case of judgment for the defendant on the basis that each party bear its own costs, the offer must be exclusive of costs: r 20.26(2). Consistently with that approach, the costs consequences are measured by reference to the order or judgment "on the claim concerned": r 42.15(1). The fact that a party which failed to accept an offer incurs costs in pursuing litigation to a result which is less favourable to it than the offer, is not a factor which is material to determining whether the offer itself was a genuine offer of compromise for the purposes of r 20.26. 47There have been cases in which consideration has been given to the question whether an offer of compromise requiring a capitulation to the offeror's position involves a real and genuine element of compromise. Where an offer is in substance a demand for payment of the full amount claimed, or a formal offer "designed simply to trigger the entitlement to indemnity costs", or requires dismissal of the claim, then the necessary element of compromise may be said to be lacking (see Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 355; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368; Shorten v David Hurst Constructions Pty Ltd [2008] NSWSC 609 at [6]). 48However, the submission that this offer contemplated an outright surrender by the defendants to the plaintiff's position fails to take into account that the plaintiff's claim was one that included a claim for interest. As noted earlier, as at the time the offer was made that interest would have been in the order of $38,325 making a total claim of around $2,000 less than the claim ultimately determined at the hearing. (By the time of judgment the total claim was worth almost $190,000). In that context, it was submitted by Mr Finnane that there was a genuine element of compromise in the offers (namely the giving up of an entitlement to a not insubstantial sum by way of interest). 49Mr Finanne noted that in Regency Media , the Court of Appeal referred to the decision in Robb Evans . There, the offer made by the defendant was to pay $2,000 plus costs, in respect of a claim for in excess of $800,000. Mr Finanne submitted that in both Regency Media and Robb Evans it was understandable that the offers were regarded as derisory but it is submitted (and I agree) that the same cannot be said in the present case. 50Mr Finnane noted that the offers in the present case represented a compromise somewhere in the order of 20% and referred to Anderson Group Pty Ltd v Tynan Motors Pty Ltd per Basten JA at [5] and [12] as supporting the proposition that this is of sufficient discount to amount to a genuine compromise. In that case, Basten JA noted that the first of the offers that had been made (taking into account the total claim including interest) involved an element of compromise in the order of 20% of the claim, later describing that (at [9]) as a "significant element of compromise". (His Honour there considered that, notwithstanding that it should be inferred that the respondent would have valued its chance of successfully defending the litigation at a higher level than did the appellant, "the offer involved a genuine element of compromise" and the failure to accept the offer warranted a departure from the ordinary rule as to costs.) 51Further, reliance was placed by Mr Finanne on the fact that the offers of compromise were made to the defendants at a time when the hearing was less than three months away (in contrast to the position in Regency Media where the offers were made before the defence had been filed). 52In Regency Media , their Honours said at [29]: As is usually the case in proceedings turning on an issue of contractual interpretation, this was an all or nothing case. The claims did not involve a process of evaluation or assessment in which the end result could vary over a range. Either one party or the other party was correct. Whilst a marginal difference between the offer and the result may constitute a real and genuine offer of compromise in a personal injury context, that is not generally true in an all or nothing case. (See Anderson Group supra at [9]; Robb Evans supra at [18].) 53Here, Mr Mazzone submitted that this was an "all or nothing" case, turning on the construction of the email specifying the purpose for which the moneys were paid into the solicitor's trust account and authorising their disbursement in accordance with Mr Burke's directions. For reasons I discuss below, in terms of result it seems to me it cannot be said that this was an "all or nothing" case in the sense used in Regency Media . In any event, I do not consider that the offer was a derisory offer. It contained within it a clear element of compromise - the giving up of the claim for interest in a not insubstantial sum having regard to the principal sum claimed. 54Finally, I note that in Old v McInnes and Hodgkinson [2011] NSWCA 410, Beazley JA (dissenting in the result on the costs appeals there before the Court) noted at [6] that: Litigation is not a process for the faint hearted. It is a costly and time-consuming process and usually productive of stress, all of which, of their nature, have adverse effects upon those involved in the process. In some, if not most, cases that come before the courts, it is a necessary evil. However, the court processes are designed to encourage parties to engage in the litigation efficiently and with an eye to ensuring costs bear an appropriate relationship with the matter in dispute. Thus, the statutory injunction in the Civil Procedure Act 2005 , s 56, which is binding on the court, the legal practitioners and the parties alike, looks to the "just, quick and cheap" resolution of disputes. and at [28] that the court encourages the settlement of matters for reasons both of public policy and private interest. (Her Honour there noted at [29] the statement in Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153, by Megarry VC at 1383 that: Whether an offer is made "without prejudice" or "without prejudice save as to costs," the courts ought to enforce the terms on which the offer is made so as to encourage compromises and shorten litigation. The latter form of offer has the added advantage of preventing the offer from being inadmissible on costs, thereby assisting the court towards justice in making the order as to costs. 55I considered that the offers (made at an advanced stage of the proceedings) to settle the proceedings on the basis that the plaintiff would give up her claim for interest did involve a genuine element of compromise and were neither derisory nor were they no more than an offer to surrender. All offers of compromise, it might be inferred (consistent with the rationale underlying the rules which visit special cost consequences upon them), are made with the potential consequence in mind that they may trigger costs sanctions if they are not accepted. This cannot of itself be a basis for refusing to apply the special costs sanctions that attend to such offers (nor do I understand that to be what has been suggested by the Court of Appeal in those cases where the expression is used). The policy objectives underlying the costs provisions, as recognised by Beazley JA in the various judgments to which I have referred, are to encourage early settlement of proceedings and discourage wasteful costs. If that is achieved by a party taking into account the costs consequences that may follow from not accepting the offer, that does not suggest that the offer itself is any less a compromise on the part of the offeror. The real question in each case must be whether the offer so made amounts to a genuine compromise (even if it be made with the potential costs sanctions in mind). In this case I was satisfied that the offers of compromise did involve a genuine element of compromise. 56I was not satisfied that there was a reason to order otherwise than as provided for in the rules in circumstances where the outcome for the plaintiff was more favourable than the position had the defendants accepted her offer of compromise. I therefore ordered indemnity costs be paid from and including the day after the offers of compromise were made (and party/party costs for the period up to and including the date of the offers). Calderbank Offers 57By reason of the above conclusion it was not strictly necessary to consider the Calderbank offers. However, I noted that in my view they would also have supported the making of indemnity costs orders. 58The Calderbank offers were in effect more favourable to the defendants since they were expressed to be inclusive of costs and interest (the plaintiff thus being prepared to forego not only interest but also its costs to the date of acceptance of the offer). 59Beazley JA in Commonwealth of Australia v Gretton [2008] NSWCA 117 set out the principles relating to such offers and noted the public policy considerations that underpin the making of favourable costs orders where a Calderbank offer has been made, namely (as identified in Leichhardt Municipal Council v Green at [14]) the provision of an incentive for litigants to end their litigation as soon as possible and the discouragement of wasteful and unreasonable behaviour by litigants. 60Her Honour emphasised that the making of a Calderbank offer does not automatically result in a favourable costs order (notwithstanding that the ultimate judgment is more favourable to the party making the offer than the terms of the offer), the question being whether (as stated in SMEC Testing Services Pty Ltd v Campbelltown City Council at [37]) the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs. At [44]-[45], her Honour said: Two general 'rules' have emerged relating to Calderbank offers, namely, that to justify the making of an order for costs on an indemnity basis, the offer must be a genuine offer of compromise, which it is unreasonable for the appellant not to accept: Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [41]-[42]; Leichhardt Municipal Council v Green at [21]-[24], [36]. However, as this Court (Santow, Bryson JJA, Stein AJA) pointed out in Leichhardt Municipal Council v Green at [8], the 'common law principles' that have been developed in relation to costs "operate merely as guides to how the discretion might appropriately be exercised". The principles or rules to which I have just referred fall within that category. The discretion is to be exercised having regard to all the relevant circumstances in the case. The question that had been raised in Leichhardt Municipal Council v Green was whether there had been a genuine offer of compromise. As the Court said at [21]: "There is little appreciable difference between saying that an offer should not in the court's discretion attract costs sanctions in the circumstances and saying that an offer is not a genuine offer of compromise in the circumstances. Both depend upon a value judgment of the offer and the conduct of the parties in the circumstances of the claim." 61Her Honour noted that the onus is on the party making a Calderbank offer to satisfy the court that it should exercise the costs discretion in its favour ( Evans Shire Council v Richardson (No 2) [2006] NSWCA 61). 62As Mr Mazzone noted, the question is whether it was unreasonable for the defendants not to accept the Calderbank offers. Reference was made to East West Airlines Limited v Turner (No 2) [2010] NSWCA 159, where the Court of Appeal confirmed that a Calderbank offer does not trigger an automatic order for indemnity of costs and again confirmed that the correct approach to such offers is as set out in SMEC per Giles JA at [37]: ... where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, [the making of a Calderbank offer] is a matter to which the Court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure. 63Was it unreasonable for the defendants not to accept the Calderbank offers in the present case? Mr Finnane submitted that it was unreasonable on the basis that the offers clearly represented a genuine offer of compromise (as the plaintiff was prepared to forego both costs, which it could be assumed would have been significant when the offer was made due to the advanced stage of the proceedings, and interest) and that by the time the offers were made the defendants knew precisely what the plaintiff's case was (and should have known that it was a very strong case). In that regard, Mr Finnane pointed to the strength of the following matters: the terms of the critical email from Mr George as to the purposes for which the funds in question were to be used (admittedly, an email on which the opposing parties placed emphasis on different parts - the defendants pointing to the express authority given to the solicitors to distribute the funds "at the direction of" Mr Burke); the fact that the Elderslie/AIlco HIT acquisition did not proceed; and the fact that the monies were used by Mr Burke, to the knowledge of Grogan Webb, for payment of debts clearly unconnected with the Elderslie/AIIco HIT acquisition. It was submitted that Mr Burke's case was inherently improbable (insofar as it involved a contention that the plaintiff intended the money to be Mr Burke's absolute property, regardless of whether he was able to deliver to the plaintiff any interest in the proposed new venture) and that there was an inconsistency between the proposition that the money was to be Mr Burke's absolute property and the method of payment into a solicitor's trust account for the stated purpose of the specified acquisition. 64Mr Mazzone submitted that it was not unreasonable for Mr Burke to have rejected the plaintiff's Calderbank offer for similar reasons to those put forward in relation to the offer of compromise, namely that there was not a genuine element of compromise. He submitted that this was an "all or nothing" case (perhaps somewhat inconsistently with the proposition that interest should have been assessed at a later date, since inherent in that proposition is the possibility of at least a marginally different outcome the prospect of which would need to have been evaluated or assessed), which turned on questions of credit. It was also said that it was not unreasonable for the defendants to fail to accept the plaintiff's Calderbank offer until it was apparent how each witness had acquitted him or herself in the witness box. (If that were to be the case, then any case turning on credit would arguably be one in which no Calderbank offer could reliably be made until mid-trial. That cannot be the case.) 65In response to this, Mr Finnane submitted that the suggestion that this was an "all or nothing case" (such as one involving an issue of contractual interpretation of a contract, as to which views might differ) was incorrect. It was submitted that the case involved a payment of money into and then out of the solicitors' trust account that had been instigated by Mr Burke and hence Mr Burke knew precisely what he had said and done and did not need to wait for the Court to explain it to him. Insofar as the case turned on questions of credit, Mr Finanne noted that it was Mr Burke's credit, or lack thereof, (not that of other witnesses) that was central and he submitted that Mr Burke did not need to wait to be cross examined to assess his own truthfulness. 66As to the suggestion that there was not a genuine element of compromise, I have considered that above. I also note that in Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790, Bergin J (as her Honour then was), accepted that the offer there made by the defendant was a genuine offer of compromise (although describing it as a "borderline" case), where the offer represented a payment that would have covered only a portion of the plaintiff's costs incurred up to that time. Her Honour noted that, in submissions, the plaintiff had there argued that the offer was, in reality, no more than an invitation to capitulate and had relied upon what was said by Bryson JA in Leichhardt at [59]: The respondent's case did not succeed but it was not a case which could not reasonably be argued ... The only element of compromise in the offer was as to costs: otherwise it was a call on the respondent to capitulate and give up: the element of compromise was slight and the respondent's ultimate lack of success does not to my mind demonstrate that the reasonable course for the respondent was to capitulate, nor does anything show that the respondent was delinquent with going on with the trial or in resisting the appeal. 67At [30], her Honour (in considering that submission, and the defendant's submission in response that Santow JA in the same case had recognised that a "walkaway" offer could, in a particular case, be a genuine offer, as could an offer which allowed only a small discount from 100% success be genuine and realistic depending on the circumstances of the case) noted (at [15]) that: An offer to pay only a portion of the plaintiff's costs at such a late stage of the proceedings may well present as equivalent to a requirement that the plaintiff capitulate. I am of the view that it is a borderline case but on balance, the fact that the defendant was willing at that time to give up - or compromise - what it saw as its strong position and pay $100,000 to the plaintiff persuades me that the offer was a genuine offer of compromise. 68As to the fact that the offers were made on an "inclusive of costs" basis (though this was not raised in argument before me) there has been some consideration as to whether such an offer is sufficiently certain to permit a conclusion that it was unreasonable of the offeree to reject the offer (see the line of authority, commencing with Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 considered by McColl JA in Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322). There does not, however, appear to be a definitive rule that precludes an all inclusive offer from being taken into consideration in this context (see DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555 (at [12]-[13]), per Allsop J (as his Honour then was)). 69In Elite, after considering the divergent lines of authority on this question, McColl JA came to the following conclusion (from [111]): The Smallacombe line of authority has been developed by experienced trial judges whose views, in my opinion, should be accorded great weight. The underlying premise of such cases rests in the proposition that an offeree cannot be said to have acted unreasonably in not accepting an offer expressed to be inclusive of costs, because the offeree does not have an adequate opportunity to consider the offer and because of the difficulties posed when a court comes to consider the reasonableness of the offeree's conduct in rejecting/not accepting it. In other words such an offer presents practical difficulties. First, the recipient of such an offer would not know the likely party and party costs to date on taxation or assessment: see Smallacombe (at 102); Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) . Secondly, in considering the reasonableness of the offer at the time the question of its costs consequences arose, it would be necessary to indulge in a taxation, or assessment, of costs: Associated Confectionery (at 351). The Court should not be required to postpone the decision as to the basis upon which costs should be awarded while awaiting the outcome of that exercise. Nor should it be required either to speculate as to what the outcome of an assessment might be, nor arbitrate on a dispute between the parties on this topic. In Smallacombe (at 102) Spender J opined that "all-in" offers "would not promote the finality of litigation, but fragment it", a proposition implicitly recognised by Cole J (as his Honour then was) in W Jeffreys Holdings Pty Ltd v Appleyard and Associates ( 1990) 10 BCL 298 when he said "[g]reat difficulty is encountered if offers are framed in Calderbank letters on an inclusive of costs basis. It leads to ex post facto and unsubstantiated estimates of what costs may have been at a given date". 70Although her Honour expressed the view expressed the view that Smallacombe provides sound reasons to discourage offerors from drafting Calderbank letters on an "all-in" basis, she concurred with the view that Smallacombe does not lay down a "definitive rule" that an "all-in" Calderbank offer can never be considered on the question of indemnity costs, observing that the Court cannot fetter the s 98 discretion by legal rules. 71In the present case, the all inclusive nature of the costs offer could not in my view have led to any uncertainty on the part of the defendants as to the reasonableness of the offer - what the offer meant was that, whatever the level of the plaintiff's costs to that date, they would not be borne by the defendants if they accepted the offer and nor would the plaintiff claim interest. 72I also note that insofar as the reasonableness of a party's rejection of an inclusive of costs Calderbank offer is referable to the difficulty the recipient has in determining the likely costs at the relevant time, in Elite at [143]-[144] Basten JA said that: If a party in receipt of an offer wishes to know how far the sum offered will go in meeting its costs up to that time, all it has to do is ask its lawyers. In an age where lawyers are required to provide advance estimates of their fees and in circumstances where commercial services are billed on a monthly basis, it is unrealistic to suggest that the recipient of an inclusive offer will be confused or otherwise unable to assess the financial risk of proceeding with litigation. In any event, the offeree is likely to be liable for legal fees exceeding the costs recoverable from the other party. Most litigants, in considering offers, will want to know from their own lawyers, how much they will receive in the hand. Of course, if the offer is not left open for a reasonable time, that might itself make non-acceptance a reasonable course. However, an offeree which is genuinely seeking to assess its position, might be advised to seek more time, if it thinks that is reasonably required. 73Had the issue arisen for determination I would have held that the Calderbank offers involved a genuine compromise and were unreasonably refused. 74An alternative argument was put by Mr Mazzone, namely that the Court should exercise its discretion and order costs on the ordinary basis in circumstances where the plaintiff had engaged the services of senior counsel to pursue a claim for $150,000. In that regard, any disproportion between the level of costs of retaining silk and the quantum of the claim (and I am not suggesting that there was any) is a matter that can be raised on an assessment of the costs. 75Accordingly, I determined that the order in relation to the plaintiff's costs should be on an indemnity basis from the day after the Offer of Compromise was made. 76The final issue was as to the costs position between the first and second defendants on the one hand and the third defendant. Mr Griscti sought an order (irrespective of the basis on which the costs were ultimately ordered in favour of the plaintiff) that Mr Burke indemnify Grogan Webb in respect of the latter's liability to pay the plaintiff's costs (commonly referred to as a Bullock order). Mr Mazzone opposed that on the basis that the plaintiff had succeeded against all the defendants and that there was noting in the conduct of Mr Burke that encouraged or affected the decision of Grogan Webb to defend the proceedings (submitting that the latter could have settled the case at any time). 77Mr Griscti submitted that the case was analogous to that of a stakeholder, his clients having acted as they were instructed by Mr Burke; and that at a practical level for them to have settled the claim against the plaintiff would have entailed the difficulty of them then proving against Mr Burke that this was loss suffered as a result of Mr Burke's misleading and deceptive conduct. 78There is of course a wide discretion as to costs (as recognised in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 ). In circumstances where the cross-claim itself sought to recover by way of damages any liability that the first and second defendants had to the plaintiff, and the exposure of the first and second defendants to the costs of the proceedings was caused by their reliance on Mr Burke's conduct in the first place (and where the defence of the claim made by the plaintiff against them depended to a large extent on Mr Burke's credit), I considered that the appropriate order was that the third defendant indemnify the first and second defendants for the amounts payable by them to the plaintiff for her costs. I further ordered that the third defendant pay the first and second defendants' costs of the cross-claim in accordance with the general principle that costs follow the event. ********** 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. Decision last updated: 17 February 2012