Costs Order Based on Offer of Compromise in NSW Court of Appeal Case

The Court of Appeal overturned a District Court judgment and ordered specific costs arrangements based on an offer of compromise made by the defendant. The judgment was entered in favour of the plaintiff in the sum of $7,517.25, and the costs were ordered accordingly.

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: [COMPANY] v [NAME] (No 2) [2019] NSWCA 131 Hearing dates: On the papers Decision date: 06 June 2019 Before: Meagher JA; Gleeson JA; Leeming JA Decision:

1. In lieu of the judgment of the District Court entered on 19 October 2018, which was set aside by this Court's order of 6 May 2019, enter judgment in favour of the plaintiff in the sum of $7,517.25.

2. Set aside the order of the District Court as to costs made on 19 October 2018, and in lieu thereof: (a) order the defendant to pay the plaintiff's costs up to and including 23 June 2016, and (b) order the plaintiff to pay the defendant's costs on an indemnity basis after 23 June 2016.

3. Order the respondent to pay the appellant's costs of the appeal.

4. The respondent be granted a certificate under the [NAME]). Catchwords: COSTS – offer of compromise – defendant's offer better than that obtained by plaintiff – special costs order made Legislation Cited: [NAME]) Uniform Civil Procedure Rules 2005, rr 20.26, 42.13A, 42.15 Cases Cited: Officeworks Ltd v Christopher [2019] NSWCA 96 Category: Costs Parties: [NAME] (Appellant) [COMPANY] (Respondent) Representation: Counsel: [redacted] [NAME] (Respondent)

Solicitors: [redacted] [NAME] (Respondent) File Number(s): 2018/347254 Publication restriction: None Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: None Date of Decision: 19 October 2018 Before: Maiden DCJ File Number(s): 2015/223966

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment 1. THE COURT: On 6 May 2019, this Court allowed an appeal from the District Court and set aside the judgment entered in favour of [NAME] on 19 October 2018: Officeworks Ltd v Christopher [2019] NSWCA 96. [ADDRESS] relevantly made directions for the parties to provide further submissions as to the amount of the judgment to which [NAME] is entitled, and costs. That has occurred, by submissions filed 20 and 31 May 2019.

2. It is common ground that [NAME] is entitled to judgment in the sum of $7,517.25. It is also common ground that [NAME] should be ordered to pay [NAME]' costs in this Court, but that she should be granted a certificate under the [NAME]). The only dispute is as to the costs at first instance. 3. [NAME] submits that liability having been in dispute at trial, she should be entitled to a favourable costs order at first instance. [NAME] accepts that [NAME] is prima facie entitled to her costs at first instance, but relies upon an offer of compromise dated 23 June 2016, expressed to be open for acceptance by 5pm on Monday 27 June 2016, in the amount of $10,000. [NAME] submits that the judgment to which [NAME] is entitled is "no more favourable to the plaintiff than the terms of the offer", such that in accordance with UCPR r 42.15(2) it is entitled to an order for costs on an indemnity basis from the day after the offer.

4. The first question is whether the offer was one which complied with the rules. Rule 20.26(5) provides that the closing date for acceptance of an offer in a case such as this, made within two months of the hearing, "is to be such date as is reasonable in the circumstances". [NAME] submits that the offer was made shortly prior to the commencement of the hearing, on Wednesday 29 June 2016, well after the service of all relevant evidence. Bearing in mind that those advising [NAME] had the Friday, the weekend and the Monday before a trial which was to start on Wednesday to consider the offer, the closing date for acceptance was reasonable in the circumstances.

5. The rules reflect the public policy of encouraging settlement of litigation. [NAME] accepted the offer, she would have enjoyed a judgment in a larger amount than she ultimately obtained, as well as a cost order in her favour, in accordance with r 42.13A(2). No reason has been suggested to "order otherwise" so as to displace the operation of the rules, and we cannot see any proper basis for taking that course.

Accordingly, while [NAME] should be ordered to pay [NAME]'s costs at first instance until 23 June 2016, [NAME] should be ordered to pay [NAME]' costs at first instance, on an indemnity basis, after 23 June 2016.

6. For those reasons, the Court's orders are:

2. Set aside the order of the District Court as to costs made on 19 October 2018, and in lieu thereof: 1. order the defendant to pay the plaintiff's costs up to and including 23 June 2016, and 2. order the plaintiff to pay the defendant's costs on an indemnity basis after 23 June 2016.

1. Order the respondent to pay the appellant's costs of the appeal.

2. The respondent be granted a certificate under the [NAME]).

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