Land and Environment Court New South Wales Medium Neutral Citation: Hopkins v Quinn (No 2) [2018] NSWLEC 187 Hearing dates: 1 November 2018 Date of orders: 16 November 2018 Decision date: 16 November 2018 Jurisdiction: Class 4 Before: Moore J Decision: (1) The Respondents are to pay the Applicant's costs up to 26 April 2018 on an ordinary basis as agreed or assessed; (2) The Applicant is to pay the Respondents' costs from 27 April to 8 August 2018 on an ordinary basis as agreed or assessed; and (3) The Applicant is to pay the Respondents' costs of the costs hearing on an indemnity basis. Catchwords: COSTS - reason to depart from "costs follow the event" on hearing - offers made - none effectual - costs to be on ordinary basis - finding in substantive judgment of "tipping point" on issues - appropriate to apportion costs - costs orders made concerning substantive hearing on apportioned basis COSTS - costs of costs hearing - view put in substantive proceedings as to proposed costs outcome - position accepted by respondent - position challenged by applicant - position advanced by applicant entirely without merit - appropriate to make special costs orders for costs hearing - applicant to pay respondents' costs of costs hearing on an indemnity basis Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(1) Legal Profession Uniform Law Application Act 2014 (NSW) Uniform Civil Procedure Rules 2005, r 42.1 Cases Cited: Brown v Randwick City Council (2011) 183 LGERA 382; (2011) NSWLEC 172 Calderbank v Calderbank [1975] 3 WLR 586 Hopkins v Quinn [2016] NSWLEC 163 Hopkins v Quinn [2017] NSWLEC 31 Hopkins v Quinn [2018] NSWLEC 117 Hopkins v Quinn (No 2) [2017] NSWLEC 76 Hopkins v Quinn (No 3) [2017] NSWLEC 101 James v Surf Road Nominees (No 2) [2005] NSWCA 296 Sze Tu v Lowe (No 2) [2015] NSWCA 91 Category: Costs Parties: John Hopkins (Applicant) David Quinn (First Respondent) Maria Quinn (Second Respondent) Representation: Counsel: Mr N Eastman, barrister (Applicant) Mr G Stapleton, barrister (Respondents) Solicitors: Hones Lawyers (Applicant) Sattler & Associates (Respondents) File Number(s): 360273 of 2017 Publication restriction: No TABLE OF CONTENTS Introduction A contest on costs The general framework for costs considerations Introduction Apportionment Unaccepted offers Costs in the first Class 4 proceedings The offers by Mr Hopkins to the Quinns Introduction The common element in all of Mr Hopkins' offers Mr Hopkins' first offer of 12 January 2018 Mr Hopkins' second offer of 12 January 2018 Mr Hopkins' third offer of 12 January 2018 Mr Hopkins' offer of 1 May 2018 Mr Hopkins' "offer" of 10 May 2018 The Quinns' offers to Mr Hopkins Introduction The Quinns' offer of 8 February 2018 The Quinns' offer of 25 May 2018 The costs of the costs hearing Orders Annexure A Annexure B JUDGMENT Introduction 1. This decision is about the costs of a long-running dispute between neighbours. Prior to this decision, I have already had to give five earlier decisions arising out of activities associated with additions or alterations to the Quinns' property when part of the associated construction activities intruded onto the adjacent property to the south owned by Mrs Hopkins. 2. Mr Hopkins took exception to these intrusions and, on 23 March 2016, commenced the first Class 4 proceedings to remedy or restrain those breaches. Those proceedings required me to give, over a period of some nine months, a series of decisions that, it was then hoped, would result in all of the issues of concern to Mr Hopkins being resolved. 3. Those decisions were: 1. Hopkins v Quinn [2016] NSWLEC 163 2. Hopkins v Quinn [2017] NSWLEC 31 3. Hopkins v Quinn (No 2) [2017] NSWLEC 76 4. Hopkins v Quinn (No 3) [2017] NSWLEC 101 1. Alas, my optimism that all had been finalised was sadly misplaced! 2. On 28 November 2017, Mr Hopkins commenced fresh Class 4 proceedings against the Quinns. These proceedings arose out of what Mr Hopkins regarded as breaches of, or inadequacies in, the activities undertaken by Mr and Mrs Quinn to comply with the final orders I had made in the first Class 4 proceedings. These new proceedings were heard by me on 3 July 2018. On 8 August 2018, I delivered my determination in the second Class 4 proceedings and published my reasons for making orders disposing of all aspects of them, save costs (Hopkins v Quinn [2018] NSWLEC 117). The terms of the orders that I made in those proceedings, at [103], were: (1) The Summons is dismissed; and (2) Unless a party notifies my Associate by 4.30 pm on Wednesday 5 September 2018 that some other order for costs is proposed by that party, the Respondents are to pay the Applicant's costs up to and including 26 April 2018, as agreed or assessed, and, from 27 April 2018, the Applicant is to pay the Respondents' costs, as agreed or assessed. 1. With respect to the question of costs arising out of the second Class 4 proceedings, I observed, at [89] to [102]: Costs 89 I have earlier set out the basis upon which Mr Hopkins commenced these proceedings. 90 It is clear that, at the time of doing so, there was functional deficiency in the works as being implemented arising out of the orders made in the earlier proceedings. There was also, at that time, potential uncertainty as to the finalised adequacy of the drainage works to be constructed along the passageway between Mrs Hopkins' wall and the Quinns' residence. 91 As can be seen from the terms of orders (7) and (8) of the orders made as a consequence of my final orders decision, a regime had been established whereby Dr Martens would supervise the implementation of the works required by those orders (including making adjusting directions as and when required). 92 Under the circumstances, I am satisfied that there was sufficient basis to warrant Mr Hopkins commencing these additional proceedings. 93 In this context, it is unnecessary to refer to any details of the timeline of what has arisen in these proceedings until we get to 26 April 2018. It is on that date that Mr Hopkins, and those advising him, were in receipt of proper and adequate technical certification that all of the potential technical issues which gave rise to these proceedings had been resolved and that no matters of merit remained in dispute between Mr Hopkins and the Quinns arising out of the earlier litigation or these proceedings. 94 It was at that time that these proceedings should have been brought to a close. 95 Although the question of functional adequacy remained alive until 26 April 2018, that was no longer the position from that date onward. The certification made available on 26 April 2018 made it clear that, even had there been a significant incursion of the agricultural drainage pipe into Mrs Hopkins' property, that could have had no functional impact on Mrs Hopkins' quiet enjoyment of her property or on her property itself. 96 However, as the photographs taken by Mr Hopkins (folios 77 and 78) demonstrate, Mr Hopkins was aware, at that time, that the process of filling around, and concrete capping over, the agricultural drainage pipe could only possibly occasion, in a locational sense, a minor incursion into Mrs Hopkins' property. 97 After 26 April 2018, Mr Hopkins had no valid basis upon which to maintain the proceedings. All functional issues had been resolved and any possible incursions onto Mrs Hopkins' property (incursions being pursued by Mr Hopkins and not Mrs Hopkins, as earlier explained) were trifling. 98 There is, at the present time, no evidence before me as to what steps, if any, were undertaken by either Mr Hopkins or the Quinns, from 27 April 2018, to bring these proceedings to a conclusion without requiring a further contested court hearing. 99 As a consequence, given the position which applied up till that date is the only one about which I can have certainty and the absence of information as to what might have occurred between the parties between 27 April 2018 and the conclusion of the contested court hearing, it is not appropriate for me to make costs orders in these proceedings at this time. 100 It is, however, in the interests of finalisation of the proceedings, appropriate that I indicate what is my current intention as to the making of costs orders and to provide both parties, if they wish to do so, the opportunity to explain to me why some alternative costs order should be made. 101 I propose to allow the parties 28 days to consider whether they wish to be heard on the question of costs and, if they so advise my Associate, I will set the matter down for a further short costs hearing at 9.00 am (limit 55 minutes) after seeking mutually convenient dates from the parties. 102 However, if neither party notifies my Associate that they wish to be heard on the question of costs prior to the expiry of that 28-day period, I propose to order that the Respondents are to pay the Applicant's costs up to 26 April 2018, as agreed or assessed, and that, from 27 April 2018, the Applicant is to pay the Respondents' costs, as agreed or assessed. A contest on costs 1. Mr Stapleton, counsel appearing for the Quinns since the commencement of the first Class 4 proceedings, indicated an initial acceptance of the costs resolution of the second Class 4 proceedings in the fashion I had proposed in my decision on the substantive issues. 2. However, as was the right reserved to him, as noted above, Mr Hopkins declined to accept this proposed outcome. Although Mr Hopkins was prepared to have the issue addressed by written submissions, this was not acceptable to the Quinns. This resulted in the necessity for a further hearing on the question of costs of the second Class 4 proceedings. This half-day hearing was held on 1 November 2018. 3. This costs hearing was preceded by: * written submissions on behalf of Mr Hopkins (filed on 14 September 2018); * written submissions on behalf of the Quinns (filed on 28 September 2018); and * written submissions in reply on behalf of Mr Hopkins (filed on 12 October 2018). 1. As well as these written submissions, affidavit evidence on the question of costs with which I am now dealing was filed and served. That requiring consideration comprised: * An affidavit of Mr Hopkins, dated 13 September 2018 and filed on 14 September 2018. This affidavit, including its attachments, ran to 51 pages; * A second affidavit from Mr Hopkins deposed and filed on 12 October 2018. This affidavit, including Annexures, ran to 55 pages; and * An affidavit deposed by Mr Quinn and dated 28 September 2018. This affidavit, including its attachments, ran to 40 pages. 1. Self-evidently, from the fact that I have now prepared this judgment, a costs hearing has now occurred. It has become my hope that the hearing and this resultant decision might, now, dispose of this neighbourhood dispute, lest it run the risk of passing into legend like the famous feuds of the Montagues and the Capulets or the Hatfields and the McCoys! The general framework for costs considerations Introduction 1. In the ordinary course of civil litigation, costs are expected to "follow the event" (r 42.1 of the Uniform Civil Procedure Rules 2005 (the UCPR)). In Sze Tu v Lowe (No 2) [2015] NSWCA 91, Gleeson JA (Meagher and Barrett JJA concurring) wrote, at [39]: How "the event" should be defined will depend upon the nature of the litigation. Generally the "event" refers to the event of the claim and may be understood as referring to the practical result of a particular claim. 1. However, this is not an immutable position, as is made clear by the terms of s 98(1) of the Civil Procedure Act 2005 (NSW) (the Civil Procedure Act), a provision in the following terms: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. Apportionment 1. In addition, where there are a number of matters in dispute between the parties and differing litigation outcomes arise, so that a moving party may be successful on some matters in contention but unsuccessful on others, circumstances may arise where it is appropriate to undertake differential apportionment of costs to reflect the mixed nature of the outcomes achieved in particular proceedings (Brown v Randwick City Council (2011) 183 LGERA 382; James v Surf Road Nominees (No 2) [2005] NSWCA 296). 2. It is clear that the discretion given by s 98 of the Civil Procedure Act extends not only to apportionment by having regard to how the various issues in the proceedings have fallen, but also to consideration as to whether some temporally related differentiation might be appropriate. In these proceedings, such a temporal differentiation is appropriate. 3. In my decision of 8 August 2018, I explained (see [93] to [97] of my 8 August 2018 decision earlier quoted) why there was a pivotal point in time as at 26 April 2018 when certification was provided by Dr Martens that the drainage system that had been the subject of significant controversy in both the first Class 4 proceedings and in these proceedings was fully functional. For those reasons, Mr Hopkins' determination to continue his quest for judicial intervention after that date was misplaced. 4. It is that occurrence that warrants an apportionment of costs as explained in the extract of my judgement of 8 August 2018. Unaccepted offers 1. Further, there are also circumstances where it is possible that the financial basis upon which costs are ordered to fall may be varied as a consequence of a party making an offer of compromise (whether an offer pursuant to r 20.26 of the UCPR or on what is described as a Calderbank basis (Calderbank v Calderbank [1975] 3 WLR 586)) and the offer of compromise is either expressly rejected or expires through the effluxion of time by non‑acceptance prior to the end of a nominated period of time (or by a nominated date). Costs in the first Class 4 proceedings 1. Mr Stapleton tendered a copy of the itemised bill of costs rendered by Mr Hopkins' legal advisers, as a consequence of my final costs decision (Hopkins v Quinn (No 2) [2017] NSWLEC 76) on the outcome of the earlier Class 4 proceedings. This became Exhibit 1 in these costs proceedings. Exhibit 1 disclosed that the costs and disbursements invoiced to Mr Hopkins for the first Class 1 proceedings totalled $422,210.98. 2. Mr Stapleton also tendered a copy of the costs determination made by the costs assessor pursuant to ss 70 and 78 of the Legal Profession Uniform Law Application Act 2014 (NSW). This became Exhibit 2. The costs assessment determination reduced the amount, shown as invoiced in Exhibit 1, from $422,210.98 to $268,762.00. 3. The next relevant piece of information I have concerning costs is the only information I have concerning costs in these second Class 4 proceedings, which relates to Mr Hopkins' costs as at 4 April 2018. This information, contained in an e-mail from Mr Hones to Mr Clarke (the solicitor employed by Mr Hones and having day-to-day carriage of the matter) and Mr Sattler, disclosed that Mr Hopkins' costs, as at the date of the e-mail, were about $42,000 (excluding counsel fees). This e-mail was in evidence at Annexure K of the affidavit of Mr Hopkins sworn 12 October 2018. 4. The limited utility of this information concerning costs is dealt with in my discussion of the offer made by the Quinns to Mr Hopkins on 25 May 2018. The offers by Mr Hopkins to the Quinns Introduction 1. Mr Hopkins made a series of offers (including some that were described as "cascading offers") to the Quinns seeking to draw the proceedings to a conclusion. Those offers commenced to be made in January 2018, with the final of the offers being made on 1 May 2018. A total of five offers were made. None of them was accepted by the Quinns. 2. The terms of each of the offers, and the date upon which it was made, together with the reason for its expiry, are set out in a table reproduced as Annexure A to this decision. Annexure A also notes the source of the information concerning each offer. It is necessary to address each of these offers. 3. It is also clear that the three offers made by Mr Hopkins on 12 January 2018 were intended to be separate offers open for individual acceptance and were not to be regarded as some form of accumulating package. This is clear from the letter from Mr Hopkins' lawyers that forwarded the three offers of 12 January 2018 to Mr Sattler, solicitor for the Quinns. In this regard, the letter relevantly said: In the hope of avoiding further costs, our client is prepared to settle these proceedings by way of a cascading set of offers of compromise. Accordingly we enclose three offers of compromise: (a) An offer of compromise in relation to the whole of our client's claim ("First Offer"); (b) An offer of compromise permitting the retention of the PVC drainage pipe and agricultural drainage line and the creation of a second easement ("Second Offer"); and (c) An offer of compromise in relation to prayers (3) and (4) of the Summons ("Third Offer"). We intend for these offers to be able to be accepted until 5.00 pm on 9 February 2018. Your clients may accept either the First Offer, the Second Offer or the Third Offer. 1. Mr Hopkins' written submissions in reply, at (13) and (14), claim that Offers 2 and 3 should have been accepted jointly, as this would have been dispositive of the proceedings. However, it is clear from the "either/or" proposition contained in Mr Clarke's letter of 12 January 2018 that acceptance was limited to a single offer. On page 1 of that letter, the offers are described as "cascading". On page 2 of the letter, Mr Clarke wrote: Your clients may accept either the First Offer, the Second Offer or the Third Offer [emphasis added by me]. 1. These terms expressly exclude the offers being able to be accepted in combination and the suggestion that this might have been possible cannot be sustained in light of the terms by which they were transmitted to Mr Sattler. 2. It therefore follows that my consideration of these offers, and the extent to which any of them might provide a foundation to depart from making any costs order in Mr Hopkins' favour on an ordinary basis, as agreed or assessed, needs to be undertaken having regard to the terms of each of the particular offers in isolation. The common element in all of Mr Hopkins' offers 1. As can be seen from the terms of each of the offers made by Mr Hopkins, as set out in Annexure A, the first term was: (1) Verdict in favour of the Applicant in these proceedings. 1. As can earlier be seen from the terms of the orders made on 8 August 2018, reproduced above at [5], the proceedings were dismissed rather than there being a verdict in favour of Mr Hopkins. 2. Whilst this proposed order might be regarded as formulaic, nonetheless, it proposed a positive outcome for the disposition of the proceedings in a fashion favourable to Mr Hopkins. 3. Mr Stapleton submitted, correctly in my view, that Mr Hopkins' failure to obtain a verdict in his favour in any fashion meant that this element of each of his offers rendered each offer containing that proposed order ineffectual, as the outcome actually achieved by Mr Hopkins was less favourable than that which was proposed in an offer containing this term. 4. This, in itself, is sufficient to draw the conclusion that, with respect to all offers made by Mr Hopkins, they were ineffectual for the purposes of providing a foundation to the making of any costs order, to the extent appropriate, in Mr Hopkins' favour, other than requiring costs be on an ordinary basis as agreed or assessed. 5. This difficulty was pointed out by Mr Sattler in his letter of 8 February 2018. 6. However, if I was to be wrong, in reaching this universally applicable conclusion with respect to Mr Hopkins' offers, I now turn to address the question of whether, setting aside the common term, any of the offers pressed on behalf of Mr Hopkins could have provided a basis for departing, in any applicable costs order, for costs to be on the ordinary basis as agreed or assessed. For the reasons that I explain, in the context of the detail of all of Mr Hopkins' offers, from and including the second offer made on 12 January 2018, each of these offers fails for other reasons. Mr Hopkins' first offer of 12 January 2018 1. During the course of the costs hearing, Mr Eastman, counsel for Mr Hopkins throughout these proceedings, advised me that this first offer of 12 January 2018 was not relied upon by Mr Hopkins for the purposes of this costs determination. Mr Hopkins' second offer of 12 January 2018 1. As can be seen from the terms of (2) of this offer (in Annexure A), the offer sought to compromise that part of Mr Hopkins' claim which was set out in his (5) and (6) of his Points of Claim filed 28 November 2017. 2. This offer also contained - in the chapeau to (3) - the following (taken from the document at page 5 of Document 1 attached to Mr Hopkins' second affidavit of 13 September 2018): The Applicant offers to compromise that part of the Applicant's [sic] on the following terms: 1. However, unlike the context of this wording, discussed below concerning (2) of the third offer of 12 January 2018, this defect should not be regarded as fatal in itself, given that (2) of this offer necessarily provided, by inference, the missing detail. The words in (2) were: (2) The offer relates to that part of the Applicant's claim set out in paragraphs [5]-[6] of the Points of Claim filed 28 November 2017. 1. However, (3)(b) proposed an easement for the purposes of permitting the PVC stormwater pipe, about which Mr Hopkins made complaint, to enable the pipe to remain. The pipe was, subsequently, relocated entirely within the Quinns' property. The proposed easement in (3)(b) was to be prepared at the cost of the Quinns. 2. It was also to be approved by Mr Hopkins. For the reasons I explained in my decision of 8 August 2018, at [61] to [62], Mrs Hopkins is the owner of the property at which Mr Hopkins resides. Mr Hopkins approving the terms of an easement would have no legal consequence whatsoever. Mr Hopkins, in making this offer in these terms, fundamentally demonstrated a misunderstanding of his relationship to the property in which he resides, and with respect to which he has litigated. There is nothing in the offer, or the letter transmitting this offer (Document 1 to Exhibit JH1 to Mr Hopkins' second affidavit of 13 September 2018), which undertakes that Mrs Hopkins would consent to the registration of the terms of such an easement. On this basis alone, this element of this offer is ineffectual. 3. In addition, (3)(d) of this offer proposed that the Quinns pay Mrs Hopkins $10,000 compensation for the granting of the proposed easement. No compensation was ordered to be paid to Mrs Hopkins as a consequence of the outcome of this second Class 4 proceedings. There is no possible basis upon which this offer (even assuming that the offer contained an effectual term concerning the easement, which it does not) could be regarded as proposing an outcome more beneficial to the Quinns than the substantive outcome which they have, in fact, obtained as a consequence of my decision of 8 August 2018. 4. This offer provides no foundation upon which to depart from any costs order in favour of Mr Hopkins being made on an ordinary basis as agreed or assessed. Mr Hopkins' third offer of 12 January 2018 1. This offer also contained (2) - a paragraph in the following terms (taken from the document at page 7 of Document 1 attached to Mr Hopkins' second affidavit of 13 September 2018): (2) The Applicant offers to compromise that part of the Applicant's [sic] on the following terms: 1. Unlike the second offer discussed above that specified the elements of Mr Hopkins' claim (in (2) of that offer - see Annexure A) that were the subject of the offer, this third offer contains no such defining term. It expressly fails to identify what is proposed to be compromised if the offer is accepted. This offer is thus rendered meaningless and requires no further consideration. 2. If this conclusion is wrong and (2)(d) of the offer - referring to [7] to [12] of Mr Hopkins' claim for relief - is to be inferred as filling in the lacuna identified above, the offer is confined to only portion of the proceedings rather than to the whole. As Mr Hopkins ultimately failed entirely, this offer is also ineffectual on this basis. Mr Hopkins' offer of 1 May 2018 1. This offer also suffers from the defect that it proposed that resolution of matters was required to be dealt with by an easement (whether the creation of a separate easement or modification to the easement that had been ordered as a consequence of the first Class 4 proceedings but not yet finalised being irrelevant) as the cost of preparation of the new easement or the preparing new terms of the already ordered easement were required to be met by the Quinns. 2. This proposed element of this offer cannot be regarded as being more advantageous to the Quinns than the outcome achieved in my decision of 8 August 2018 dismissing the proceedings and declining to order any relief to Mr Hopkins. 3. This offer provides no foundation upon which to depart from any costs order in favour of Mr Hopkins. Mr Hopkins' "offer" of 10 May 2018 1. On 10 May 2018, Mr Hopkins' lawyers again wrote to Mr Sattler. The letter (Mr Quinn's affidavit at (35) to (37)) had two elements. The first was to express a concern that the Quinns had undertaken unlawful works not authorised by their development consent. The second was to make a further "offer" to the Quinns. The letter said, relevantly: So that all issues between the parties are finally resolved, we consider that your clients ought to resolve both this new matter and the current proceedings together and, in that regard, as expeditiously as possible. With that objective in mind we are instructed to put the following offer to your client: Your clients accept our offer of 1 May 2018 (which, to avoid doubt, is reopened by this offer). Your clients provide us with an undertaking that they will demolish the unlawful works or fill the subfloor area such that it is not capable of being used as a room or rooms, within seven days, and otherwise strictly adhere to the conditions of consent is required by order 15. Please note that this offer is only open to be accepted by 5.00 pm on 15 May 2018, after which time it will lapse. If it is not accepted within that time, it is also expressly withdrawn. 1. The letter continued by expressly putting the Quinns on notice that Mr Hopkins had instructed that a Notice of Motion be filed seeking interlocutory relief with respect to these new works and orders to amend the summons in these proceedings to add a prayer for relief seeking an order for demolition of the alleged unlawful works (and costs of such addition to the proceedings). 2. I have earlier explained why the first offer element of this new "offer" failed. It is unnecessary to consider the elements relating to the alleged unlawful works (save to note that the threat to seek to encompass such alleged unlawful works in the present proceedings did not give rise to any attempt to do so). 3. On 25 May 2018, Mr Sattler wrote to Mr Hones. This letter not only conveyed the Quinns' offer of that date (later discussed) but included the following concerning the 10 May 2018 "offer": As to your letter dated 10 May 2018 we consider that your attempt to use threats of further or amended court proceedings in order to force an outcome for your client in the current proceedings as highly inappropriate and a further abuse of process. 1. As to the merits of the asserted unlawful works, Mr Sattler's letter continued: The minor structural nonconformities relating to the alterations and additions to the Quinn dwelling mentioned in your letter are known to the certifier and our clients are working with Council to regularise these works. If an application is made to Council, no doubt your clients will be notified and will have the opportunity at that time to make submissions to the Council. Once regularised all built form on the subject land will be in compliance with the current court orders. 1. It is unnecessary for me to engage in any detail with this 10 May 2018 "offer". It is sufficient to note that the question of whether or not there were unlawful works (in the sense discussed in Mr Hopkins' lawyers' letter) is not a matter with which the present proceedings have ever needed to engage. This 10 May 2018 "offer" could, therefore, never be regarded as engaging any potential costs consequences in these proceedings. For this reason, it has not been incorporated in Annexure A. The Quinns' offers to Mr Hopkins Introduction 1. The Quinns made two offers to Mr Hopkins to seek to bring the proceedings to an end. The first of these offers was made on 8 February 2018, and the second on 25 May 2018. The terms of each of these offers is reproduced in Annexure B to this decision. The same details are provided for the offers made by the Quinns as have been set out for the offers made by Mr Hopkins. As with each of Mr Hopkins' offers, it is necessary to consider the terms proposed by the Quinns, in each offer, in seeking to bring the substantive Class 4 proceedings to an end. The Quinns' offer of 8 February 2018 1. As I understood the position advanced by Mr Stapleton, this offer was not strongly advanced, if at all, as a basis to vary the costs position I posited in my 8 August 2018 decision. 2. Whether or not that understanding was correct, it is clear that this offer cannot be regarded as proposing an outcome for Mr Hopkins more favourable than that which he achieved in the proceedings. This is because, assuming all of the antecedent conditions in (a) to (c) were satisfied during the five-week adjournment proposed in the offer, the proposal that there be no order as to costs at the expiry of the envisaged periods of time (which expiry would have been significantly prior to 26 April 2018 - this being the relevant market date for Mr Hopkins' costs entitlement for the reasons set out in my decision of 8 August 2018), Mr Hopkins will achieve a significant (but not total) costs order in his favour - including for his costs for the period prior to this offer. 3. This offer cannot not trigger any costs consequences for Mr Hopkins. The Quinns' offer of 25 May 2018 1. As Annexure B discloses, this offer had two components. The second of the components was that the proceedings be dismissed (an outcome achieved for the Quinns for the reasons explained in my 8 August 2018 decision). The first element, however, proposed that the Quinns pay to Mr Hopkins the sum of $25,000 on account of his costs. 2. As I have earlier set out, at [21], Mr Hopkins' costs, as at 4 April 2018, some 52 days prior to this offer, were already $17,000 higher than the amount of the costs already incurred by Mr Quinn. This sum was already known to Mr Sattler, by virtue of the e-mail which had been sent to him on 4 April 2018. 3. Whilst I acknowledge that the amount invoiced in Exhibit 1 was substantially reduced on assessment (by approximately 36.34%) (the assessment determination being Exhibit 2), there are a number of elements in Exhibit 2, where the costs assessor made the following comment concerning the servicing level that had been provided to Mr Hopkins during the first Class 4 proceedings. Set out below are but three examples (where the costs assessor wrote): Delegation 5.12 Overall I consider there should have been more delegation by the partner to the junior solicitor. For example it is neither fair nor reasonable for a partner to attend a return of subpoena. Such attendances have been allowed at a junior solicitor rate. Communications with client 5.13 On a party/party basis it is neither fair nor reasonable for the solicitor to report or communicate every single thing that happens in the matter to the client. Similarly a solicitor cannot claim for communications by an overly zealous client. This is over servicing. Reductions have been applied where there is over servicing. Instructing Counsel at the hearing 5.20 On a party/party basis it is neither fair nor reasonable for both the partner and employed solicitor to instruct Counsel at the hearing. I have only allowed the attendance of one solicitor. 1. However, for the purposes of my consideration in these costs proceedings, the only information relevant to this offer that is available to me are the raw aggregate costs' number in the e-mail of 4 April 2018 and the nominated amount offered by the Quinns on 25 May 2018. 2. I observe that the bill of costs invoiced, as disclosed in Exhibit 1, was dated 8 January 2018 and the cost assessor's determination was dated 5 July 2018. Both of these, particularly Exhibit 2, predate the information disclosed in the e‑mail giving Mr Hopkins' costs as at 4 April 2018. 3. As a consequence, given the significant difference between the amount offered by the Quinns and the amount known to have been incurred by Mr Hopkins prior to that offer being made, I am unable to conclude that the costs disclosed as having been incurred by Mr Hopkins would have been subject to the same extent of discounting as had been applied in the first Class 4 proceedings. 4. Even allowing for the fact that actual costs will ordinarily be reduced, on a rule-of-thumb basis, to approximately 70% when assessed on an ordinary basis, applying such a discount to the amount disclosed to Mr Sattler shows that Mr Hopkins' costs would have been greater on such a discounted basis than the amount offered by the Quinns. I certainly have no evidence to suggest that the servicing level of Mr Hopkins in these second Class 4 proceedings was infected in the fashion about which comment had been made in the costs assessment determination. 5. In circumstances where the burden of proof falls on a party seeking to depart from what might be the conventional costs' assumption (doing so on the balance of probabilities), I cannot be satisfied that this offer made by the Quinns to Mr Hopkins would have been, with respect to Mr Hopkins' costs to the date of the offer (had the offer been accepted), more favourable than the outcome which I have determined is appropriate to apply from 27 April 2018. 6. It therefore follows that this offer by the Quinns does not provide a foundation to depart from a costs order in their favour for the relevant period on an ordinary basis as agreed or assessed. The costs of the costs hearing 1. On 22 August 2018, my Associate was notified by Mr Hopkins' legal representatives that Mr Hopkins wished to seek an alternative costs order to that which I had proposed. I have earlier outlined, between [7] and [11], the process which has subsequently unfolded, and why, on a proper consideration of the outcome of these proceedings and an analysis of (and the reasons for failure by) each of the offers and counter-offers, that which I proposed on 8 August 2018 at [103] remains the appropriate outcome to be confirmed as the outcome of the costs hearing. 2. Whilst Mr Stapleton had elected to require an opportunity to make submissions orally on the question of costs rather than having me deal with the issue on the basis of written submissions, that position was one not unreasonable for him to adopt in light of that which was revealed by the affidavit evidence on costs of Mr Hopkins and Mr Quinn (in particular, from the various documents that were annexed to the various affidavits). That material, for reasons I have earlier explained in some detail, did not provide any basis upon which it was appropriate for me to consider departing from my initially indicated position concerning the costs outcomes of these proceedings. 3. The consequence of that, in my view, is that the position put by Mr Stapleton initially (at least as his clients were concerned) of acceptance of my indicated outcome was entirely vindicated. Everything which happened thereafter (culminating in the hearing on 1 November 2018 and my giving this decision) arose from Mr Hopkins' decision to seek some alternative outcome. 4. My analysis of the various offers made on his behalf, and my conclusion that none of them, at any time, lead to an outcome more favourable to him than that which actually resulted from my decision of 8 August 2018 (and could never have done so) means that the continuation of the proceedings beyond the time when Mr Stapleton indicated that the Quinns would accept the proposed costs position was entirely futile. 5. As a consequence of Mr Hopkin's determination to pursue a different costs outcome to that which I had proposed (in circumstances when proper consideration of all of the offers made on his behalf to the Quinns could never provide any proper, rational basis for an alternative costs outcome to that which I proposed) means that it is appropriate, for the costs of the costs hearing, that I otherwise order pursuant to s 98(1)(c) of the Civil Procedure Act and require Mr Hopkins to pay the Quinns' costs of the costs proceedings on an indemnity basis. 6. On proper consideration of all of the material put in evidence leading to the outcome in my 8 August 2018 decision and confirmed by the absence of any proper foundation for pursuing an alternative costs outcome (as demonstrated by the various offers and other correspondence appended to the three affidavits that were read in these costs proceedings), seeking departure from the costs position foreshadowed in my 8 August 2018 decision was clearly entirely without merit, futile and doomed to failure from the start. 7. In reaching this conclusion, I should make it expressly clear that I am not, in any sense, seeking to punish Mr Hopkins for his election to pursue a different costs outcome than I have determined is appropriate but merely to ensure that the Quinns do not bear any cost of having to engage in an aspect of the overall proceedings that was futile. Orders 1. It follows from what I have set out that the orders of the Court are: 1. The Respondents are to pay the Applicant's costs up to 26 April 2018 on an ordinary basis as agreed or assessed; 2. The Applicant is to pay the Respondents' costs from 27 April to 8 August 2018 on an ordinary basis as agreed or assessed; and 3. The Applicant is to pay the Respondents' costs of the costs hearing on an indemnity basis. ******* Annexure A Annexure A (24.4 KB, pdf) Annexure B Annexure B (12.2 KB, pdf) 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: 16 November 2018