District Court New South Wales Medium Neutral Citation: Xiang v Ward (No 5) [2016] NSWDC 449 Hearing dates: 3 June 2016 Date of orders: 03 June 2016 Decision date: 03 June 2016 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) The defendant pay the plaintiff's costs of the proceedings. Catchwords: COSTS — party/party — application for indemnity costs — offers of compromise/Calderbank offers – avoiding service – multiple adjournments – alleged false statements – offer of compromise – not compliant with rules – Calderbank offer – no reference to Calderbank – no reference to reliance on offer on question of costs Legislation Cited: Uniform Civil Procedure Rules 2005, Pt 42 Cases Cited: Briginshaw v Briginshaw (1938) 60 CLR 336 Whitney v Dream Developments Pty Ltd [2013] NSWCA 188 Category: Costs Parties: Youfa Xiang - plaintiff Peter Luscombe Ward - defendant Representation: Counsel: Mr M W Young SC - plaintiff Mr M W E Maconachie - defendant Solicitors: Dixon Holmes Lawyers - plaintiff Cappello Rowe Lawyers - defendant File Number(s): 2013/304886 Publication restriction: None Judgment 1. The plaintiff, Mr Xiang, successfully sued for damages in these proceedings and seeks a special costs order on two bases. The first basis is that there should be an indemnity costs order for the whole of the proceedings by reason of three matters: 1. the defendant's conduct in avoiding service; 2. the multiple adjournments, up to eight, obtained by the defendant in the proceedings; and 3. the false statements made by Mr Ward, the defendant, in the course of the proceedings. 1. As to the first matter, the defendant, Mr Ward, lived on a rural property. His property entrance contained a locked farm gate about 250 metres from his house. During the period of attempted service, Mr Ward was caring for his wife disabled with Alzheimer's disease. He was contacted or attempted to be contacted by phone on several occasions and those phone calls went unanswered. Messages were left and not returned. Cards from the process servers were left in the gate but they did not cause Mr Ward to make any contact. 2. Mr Ward was sometimes absent from his property but also gave evidence that he was too busy to answer calls from unknown numbers. He gave no explanation for the unreturned messages and phone calls, nor any explanation for his failure to respond to any cards in the gate. In my view, Mr Ward cannot be said strictly to have been avoiding service by having the gate locked, but was engaging in conduct that made service difficult by his failure to return calls and respond to the cards. 3. The second matter concerns the adjournments. There are various defaults by Mr Ward in complying with directions. Some of those defaults resulted in costs orders. 4. The third matter related to false statements. This is a serious allegation made by the plaintiff. If Mr Ward misled the Court and gave false evidence in order to delay proceedings that is a weighty matter in relation to whether a special costs order should be made. 5. Two false statements are alleged. The first is that Mr Ward told the Court that money was not an issue in April 2015 when retaining a solicitor. Mr Ward swore a recent affidavit, read in this application, indicating that his problems in retaining a solicitor prior to March 2015 were in part because of the shortage of funds. There is no explanation in the affidavit for this change in financial position of Mr Ward. However, his affidavit refers to a sale of property at about the month of April 2015. So also does the transcript of what he said to the Court at that time. He said that the sale had not then settled. I also note that Mr Ward only had a short period of perhaps a day or so to prepare his affidavit. 6. Misleading the Court is a serious allegation. Bearing in mind the quality of evidence needed to satisfy the civil standard in accordance with the Briginshaw principle, [1] I am not comfortably satisfied that Mr Ward's financial position was at all times the same. Nor am I so satisfied that his statement that money was not a problem in April 2015 was inconsistent with his affidavit indicating that he had money problems before March 2015, or that in either case he made a knowingly false representation. 7. The second matter was that Mr Ward swore in the recent affidavit that he had retained a solicitor on 1 March 2015. There was an affidavit from his solicitor saying that he was retained on 1 March 2014, although this appears to be an error as the defendant, Mr Ward, had another solicitor at that time. In April 2015, Mr Ward said in the proceedings and gave evidence on oath that he had no solicitor and was preparing to retain one. 8. This inconsistency between Mr Ward's evidence in April 2015 and his recent affidavit about having a solicitor in March 2015 was not explained. I note that there was no notice of appearance filed by the solicitor until mid-May 2015, but it appears that either Mr Ward gave false evidence in April 2015, if his affidavit is correct, or he has made an error in his recent affidavit. He has not been cross-examined and he had only a day or so to prepare an affidavit. A notice of appearance in May indicates that he may have made a mistake. 9. In the circumstances, again I am not comfortably satisfied that Mr Ward has deliberately lied on oath. I take the view that it is more likely that his affidavit is mistaken. 10. Taking all these matters into account, I do not think they are sufficient of themselves to justify an indemnity costs order from the commencement of the proceedings. 11. The alternative or second basis for a special costs order relies upon an offer of compromise by Mr Xiang dated 22 February 2016. The offer was not accepted. The offer proposed that Mr Xiang would accept an amount $100,000 (or 20%) less than the principal amount of the claim. It forewent any interest. If accepted, Mr Xiang would have had no entitlement to claim indemnity costs. 12. In my view, this offer was a genuine and real compromise of the plaintiff's claim. It was not accepted by the defendant. The plaintiff obtained a better result in the judgment. 13. Mr Ward argued that the offer of compromise did not comply with the Rules. The offer was served slightly more than two months before the hearing. Under the rules the offer needed to provide for a period of 28 days for acceptance, but the period stated was a few days less than this. This non‑compliance is not disputed by Mr Xiang. In my view, it precludes the application of the normal indemnity costs provisions under Pt 42. 14. The plaintiff also relies on the non‑compliant offer of compromise as a Calderbank offer. But it is not said to be a Calderbank offer. It is not expressed to be without prejudice save as to costs. It does not indicate that it will be relied upon in any argument concerning costs. In short, there is really nothing in the correspondence to identify it as a Calderbank offer. 15. For these reasons, in accordance with Whitney v Dream Developments Pty Ltd [2013] NSWCA 188 at [42] to [43], the offer cannot be considered a Calderbank offer. Were it otherwise I would regard the period of more than three weeks as a reasonable period for acceptance and I would have been inclined to make an indemnity costs order from the date of the offer on the basis that a refusal to accept it was unreasonable, subject to one matter below. I also note that in Whitney at [43], correspondence regarding costs might still be relevant to the question of costs even if not a Calderbank offer. 16. The one reservation I have about ordering indemnity costs if the letter was construed as a Calderbank offer is that Mr Xiang pleaded nine misleading representations against Mr Ward in the proceedings and only one or two of them succeeded. This is not to suggest any abuse of process by Mr Xiang. But it does seem to me to be unjust that Mr Xiang should receive a special costs order in his favour in respect of issues where he has been unsuccessful. 17. Accordingly, notwithstanding the matters raised, some of which have some merit as I have indicated, no special costs order in favour of Mr Xiang should be ordered. The offer of compromise was non-compliant with the Rules and could not be regarded as a Calderbank offer. The defaults of Mr Ward of themselves do not justify such an order and the circumstance that he was successful on some issues militates against such an order. 18. The Court orders that the defendant pay the plaintiff's costs of the proceedings. ********** Endnote 1. Briginshaw v Briginshaw (1938) 60 CLR 336. 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: 11 June 2019