Liu v Cooper (No 2) [2018] NSWSC 262

Supreme Court New South Wales

Medium Neutral Citation: Liu v Cooper (No 2) [2018] NSWSC 262 Hearing dates: On the papers Date of orders: 06 March 2018 Decision date: 06 March 2018 Jurisdiction: Common Law Before: Wilson J Decision: (1) Mr Liu is to pay Mr Cooper's costs of the proceedings, on an ordinary basis, to 29 August 2016, and on an indemnity basis from 30 August 2016. (2) Mr Liu is to pay Mr Cooper's costs with respect to this application on an ordinary basis. Catchwords: COMMON LAW – CIVIL – appeal from a decision of the Local Court – orders made in favour of defendant – application for indemnity costs – no point of principle Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Calderbank v Calderbank [1975] 3 WLR 586 Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 Category: Costs Parties: Dejiang Liu (Plaintiff) Barry Cooper (Defendant) Representation: Counsel: Mr MK Condon SC (Plaintiff) Dr AL Connolly (Defendant)

Solicitors: Juris Cor Group Pty Ltd (Plaintiff) Court Solicitors & Barristers (Defendant) File Number(s): 2016/00228670 Publication restriction: None

Judgment 1. HER HONOUR: On 2 November 2017, the Court made orders dismissing a summons filed by Mr Dejiang Liu, appealing against a decision of the Local Court that had been made in favour of Mr Barry Cooper on 1 July 2016. Mr Liu had been the defendant to action taken against him in the Local Court by Mr Cooper, and also the cross-claimant seeking orders against Mr Cooper. 2. Having dismissed Mr Liu's summons before this Court, an order for costs was made against him, subject to any application by Mr Cooper for indemnity costs. Such an application was received by the Court within the permitted timeframe. Mr Liu did not file any evidence or submissions in response to the application. 3. Mr Cooper has filed and relies upon an affidavit from his solicitor, Raoul Court, sworn on 7 November 2017. Annexed to Mr Court's affidavit are copies of correspondence sent on behalf of Mr Cooper to Mr Liu during the currency of the proceedings before the Local Court and this Court, seeking to settle the matter. 4. On 20 November 2015, when the matter was part-heard before the Local Court, with some evidence taken over one day and further evidence yet to be heard, Mr Cooper's legal representatives wrote to Mr Liu's solicitor, in an endeavour to settle the matter. The correspondence noted the likelihood that, particularly in view of concessions made by Mr Liu in his Local Court evidence, judgment was likely to go against him. Mr Cooper offered to settle on the basis that the amount of $12,000 he had sought from Mr Liu be paid (without interest), together with costs on an ordinary basis. Other costs, in obviating the need for the Local Court to further hear and adjudicate the claims, would have been saved. 5. Reference was made to Calderbank v Calderbank [1975] 3 WLR 586. 6. The offer was not taken up by Mr Liu and the Local Court action proceeded, ultimately to judgment and orders. 7. On 2 February 2016, after a second day of hearing in the Local Court, with the matter adjourned part-heard to 24 March 2016, further correspondence was sent to Mr Liu's then solicitor, offering settlement. The same offer was made as was advanced on 20 November 2015. Necessarily however, costs on an ordinary basis would have been somewhat higher than formerly, because a second hearing day had been held. This offer was also refused. 8. On 12 August 2016, after judgment had been handed down in the Local Court on 1 July 2016, and following a further order of the Local Court on 18 July 2016 as to monies payable, including costs, Mr Cooper's legal representatives again wrote to Mr Liu advising him of the nature of costs orders that would be sought should litigation in this Court proceed, with a result adverse to him. 9. On 30 August 2016, after the commencement of the appeal to this Court, Mr Cooper's legal representatives wrote to Mr Liu offering to settle the appeal proceedings on the basis that Mr Liu pay Mr Cooper $26,453.20, together with Mr Cooper's costs in defending the cross-claim in the Local Court. 10. Since judgment was awarded in Mr Cooper's favour in the Local Court in the sum of $31,453.20, and the costs order was not confined to those of the Local Court cross-claim, the offer was not ungenerous. 11. The correspondence referred to Calderbank v Calderbank, and advised Mr Liu that an application for costs on an indemnity basis could be made in the future, if litigation proceeded. The offer was not taken up by Mr Liu. 12. On 16 September 2016, Mr Cooper's legal representatives again wrote to Mr Liu, formally serving an Offer of Compromise pursuant to rule 20.26 of the Uniform Civil Procedure Rules 2005. 13. The compromise offer was not taken up by Mr Liu, and the matter proceeded before this Court. 14. As noted, judgment was in favour of Mr Cooper, and the outcome to him was substantially better than any of the offers made by him to Mr Liu. 15. For Mr Cooper to succeed in his claim for indemnity costs he must satisfy the Court that such an order is appropriate. In Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344, at [8], it was held that, "[…] there is no presumption that an offeree who does not accept an offer and does not obtain a judgment more favourable than the offer will necessarily pay indemnity costs from the date of the offer: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19] (Santow JA, Stein AJA agreeing); Jones v Bradley (No 2) [2003] NSWCA 258 at [6]-[9]; Ambulance Service of New South Wales v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 719 at [18]. The approach frequently adopted in this jurisdiction has been to ask two questions, namely whether - (a) there was a genuine offer of compromise, and (b) it was unreasonable for the offeree not to accept it." 1. There is no doubt that the offer made by Mr Cooper relevant to the proceedings before this Court involved a genuine element of compromise. Had the offer been accepted, Mr Cooper would have forgone monies that he was entitled to, pursuant to the orders of the Local Court. 2. In my opinion, it was unreasonable of Mr Liu not to accept the offer. It was made at a time when the issues were clear and his prospects should have been able to be fully assessed. Had the offer been accepted, the costs of the proceedings and much of the preparation for the hearing could have been avoided. 3. In these circumstances, it is appropriate to order that Mr Liu pay Mr Cooper's costs from 30 August 2016 on an indemnity basis. That order includes the costs of the interlocutory hearing before Fagan J on 11 December 2016. Costs of this application should also be borne by him.