Supreme Court New South Wales Medium Neutral Citation: Dream Developments Pty Limited v Samuel Whitney (No 2) [2012] NSWSC 339 Hearing dates: 13 July 2011 Decision date: 31 May 2012 Before: Adams J Decision: 1.Motion dismissed with costs. 2.The defendant to pay the plaintiff's costs in the Local Court as agreed or assessed on an ordinary basis up to 15 April 2010 and thereafter on an indemnity basis. 3.The matter is adjourned for the parties to make submissions in due course as to the appropriate order in relation to the appeal. 4.I give leave to the parties to apply on seven days' notice. Catchwords: COSTS - offers of compromise - Calderbank offers. Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: Old v McInnes and Hodgkinson [2011] NSWCA 410 Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586 Category: Costs Parties: Dream Developments Pty Limited (Plaintiff) Samuel Whitney (Defendant) Representation: R Bell (Plaintiff) B Illkovski (Defendant) Bay Legal (Plaintiff) Carroll & O'Dea Lawyers (Defendant) File Number(s): 2010/412999 Judgment 1On 23 February 2012 I upheld the appeal of Dream Developments from a judgment in the local court and quashed the order as to costs. I made the additional orders as follows - (i) within seven days of the date of this judgment the parties are to file minutes of agreed orders as to all costs, if they do not agree, written submissions on the appropriate orders, and; (ii) the defendant is to pay the costs of the summons (unless the party files written submissions as to costs of the summons within seven days of the date of this judgment). 2The decision of the Court of Appeal in Old v McInnes and Hodgkinson [2011] NSWCA 410 (Old) was delivered after argument had been completed and before my judgment was delivered. A copy of this decision was made available to me on 22 February 2012 by counsel for the plaintiff pursuant to Rules 31 and 33 of the NSW Barristers Rules (although, as it happened, it had come to my attention independently). The defendant did not then seek to make further submissions in reliance on the decision. 3Following my judgment (which discussed Old briefly) the defendant, on 9 March 2012, filed a Notice of Motion under UCPR Pt 36 r 15(1) to set aside the orders previously made and seeking orders dismissing summons and costs. As I understand it, the defendant contends that the decision in Old is binding authority on point against the case propounded by the plaintiff and accepted by me in the appeal. In addition to discussing the effect of Old, counsel for the defendant also took issue with my view about common expressions used in connection with offers as to costs, referring to the terms of UCPR 42.13A(2). 4With respect to Old it is I think sufficient to say that the offer was markedly different to that which was made in this case. In Old the defendant's offer to compromise involved two payments: first, the payment of a specified sum; and in addition, payment of the plaintiff's costs as assessed as agreed. The extent to which the specified amount was a compromised payment could not be separately considered from the value of the offer to pay the costs. In the present case, the offer was cast in terms that made it clear that there was no offer that involved any compromise on the question of costs. 5As to the use of the phrase as to the payment of costs as assessed or agreed in the offer, my reference to common expressions was by way of a possible explanation for a reference to costs which were not, as it were, on the table. The terms of the Rules are not significant in this respect. 6I am doubtful whether there is a proper basis for the motion but, at all events, it is dismissed with costs. 7The defendant seeks an order in relation to its cross-claim that each party pay its own costs. This is not a matter that is before me. The Application for Leave to Appeal, as I understand it, concerns only the order for costs made on the plaintiff's claim. Accordingly, I decline to make the order. 8The defendant also makes extensive reference to the correspondence passing between the parties prior to the hearing in the Local Court. In addition, facts are alleged as to the reasons particular offers were made and as to timing. No notice can be taken of such explanations which amount to mere assertions by counsel. None of the matters to which reference is made can appropriately be reagitated at this time, having regard to my conclusion as to the character of the offer of the plaintiff with its consequential effect on the order for costs to follow. 9Lastly, the defendant refers again to the terms of the Maximum Costs Order under Practice Note 2. Again this is matter outside the grant of leave to make further submissions. At all events, the contention overlooks the terms of paragraph 7.1 - The Practice Note does not affect the power of the Court to exercise its discretion to depart from the orders specified herein or make orders for indemnity costs in appropriate cases. 10In my view the appropriate order as to costs of the proceedings in the Local Court is that the defendant pay the plaintiff's costs as agreed or assessed on an ordinary basis up to 15 April 2010 and thereafter on an indemnity basis. 11I come now to the question of costs payable in this Court. On 14 January 2011, the plaintiff's solicitors wrote to the defendant's solicitors with an offer to settle the appeal on the basis that the appeal be dismissed on terms that, in lieu of the amount of costs awarded below, the respondent is to pay the plaintiff's Local Court costs in the sum of $30,000 and, in relation to the appeal, the respondent to pay the plaintiff's costs in the amount of either $3000 or (at the respondent's choice) is the one half of the appellant's costs on appeal as assessed or agreed. The letter made it clear that it would be relied on as a Calderbank offer. The offer is expressed as open to 28 February 2010, but this, I think, an error for 28 February 2011. 12On the same date (14 January 2011) the plaintiff offered, for the purposes of the Appeal, to set off the orders made in the Local Court so that the sum payable is $13,000. This was also expressed to be a Calderbank offer. 13On 4 February 2011, the plaintiff solicitors wrote to the defendant's solicitors offering to settle the appeal on the basis that the appeal be dismissed conditional upon the defendant paying, in addition to the costs ordered by the Magistrate to be paid, the plaintiff's Local Court costs in the sum of $20,000 and the plaintiff's costs of the appeal in the amount of either $5,000 or (at the respondent's choice) one half of the plaintiff's costs on appeal as assessed or agreed. Again, this is said to be a Calderbank offer. 14As the plaintiff indicates, it is difficult to assess the significance of these offers until the costs in the Local Court have been assessed or agreed. So far as the costs here are concerned, the offer to accept one half of the costs assessed or agreed establishes, I think, that the offer was more advantageous to the defendant than otherwise would have been the case. However, as the offers are rolled, I do not think that they can be separately considered. 15Accordingly, the matter is adjourned for the parties to make submissions in due course as to the appropriate order in relation to the appeal. A timetable cannot be set for obvious reasons. However, I give leave to the parties to apply on seven days' notice. ********** 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: 01 June 2012