Bogle v Kasan  NSWSC 295
|Judgment date:||8 March 2013|
|Jurisdiction:||Supreme Court of NSW, Common Law1|
- Where a party makes a Calderbank offer, the usual order that costs follow the event may still be made if it was not unreasonable for the party to reject the offer.
- The interests of tutors may be taken into account by a court when considering whether the settlement should be approved pursuant to s 76 of the Civil Procedure Act 2005 (NSW).
This claim relates to injuries received by the plaintiff at birth. The defendant was the obstetrician who had the care of the mother of the plaintiff at the time.
The matter was initially unlitigated. In March, May and August 2011, the plaintiff served three expert reports in relation to liability and quantum.
On 29 November 2011, the plaintiff served a schedule of damages on the defendant.
On 30 November 2011, the defendant made an offer of $500,000 plus costs. This offer was set out in a letter which stated that the offer remained open until 1 February 2012 and was made pursuant to the principles in Calderbank v Calderbank2 .
On 15 December 2011, the plaintiff filed a Statement of Claim, and on 5 March 2012 the plaintiff served a Statement of Particulars.
The defendant admitted breach of duty of care on 25 January 2012, and causation on 7 August 2012.
On 13 August 2012, the defendant served evidence from a Rehabilitation Physician, which queried whether all of the plaintiff's alleged disabilities were caused by the birth-related condition, or whether they were as a result of other factors.
In a report dated 10 October 2012, the plaintiff's expert did not disagree with the defendant's expert in relation to whether his condition was a result of other factors.
On 21 December 2012, the plaintiff served an Offer of Compromise in the sum of $495,000 plus costs. The defendant accepted the offer of compromise but did not agree to pay the plaintiff's costs.
At the approval hearing, the following two issues remained for determination by Justice Button:
- Whether the usual approach of costs following the event should be varied in this case pursuant to s 98 of the Civil Procedure Act 2005 (NSW), in light of the defendant's Calderbank offer which was made many months before settlement.
- Whether the settlement should be approved pursuant to s 76 of the Civil Procedure Act 2005 (NSW).
In relation to the first issue, the defendant's counsel submitted that the costs order should be that the defendant pay the plaintiff's costs on the ordinary basis up until 30 November 2011 (the date of the Calderbank offer), and that the plaintiff pay the defendant's costs after that date on the ordinary basis, or in the alternative, that the parties pay their own costs after 30 November 2011.
Justice Button referred to the decision of Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2)3 and considered that there were two central issues in determining whether the plaintiff should only be awarded costs up until 30 November 2011. The first issue was whether the offer was a genuine one. This was not contested. The second issue was whether the plaintiff's refusal of the Calderbank offer was unreasonable at the time.
Justice Button noted that the defendant's offer was made prior to the commencement of proceedings, and prior to the service of its expert evidence. His Honour further said that the report of Dr Dalton, and subsequent evidence, caused the tutor and her advisers to reassess the degree to which the disabilities of the plaintiff could all be laid at the feet of the defendant.
Although it was arguable that one of the plaintiff's earlier experts alluded to this issue, his Honour considered that the plaintiff could not be criticised for not pursing that issue at an early stage without the benefit of Dr Dalton's report. He noted that "the exigencies of litigation mean that it is often not easy to make decisions quickly".
Overall, Justice Button was not persuaded that, at the time at which the plaintiff rejected the offer contained in the letter, it was unreasonable to do so. Accordingly, his Honour did not deviate from the usual order that the defendant pay the plaintiff's costs.
Justice Button then turned to the question of whether he was satisfied that the settlement was beneficial to the interests of the incapacitated plaintiff under in accordance with s 76 of the Civil Procedure Act 2005 (NSW).
In light of his determination regarding the appropriate order as to costs, his Honour considered the terms of settlement were beneficial to the interests of the plaintiff. In reaching this decision, his Honour took into consideration the wishes of the tutor to resolve the matter on this basis.
Whilst Calderbank offers are useful in unlitigated matters, this case highlights the difficulty a party faces in seeking an order that deviates from the usual order that costs follow the event.
This case also highlights the importance of the timing of Calderbank offers and in particular, the need to serve Calderbank offers once evidence has been served. In this case, the defendant served a Calderbank offer prior to the service of its evidence. This allowed the plaintiff to successfully argue that it was not unreasonable for him to not accept the offer.
1 Button J
2 (1975) 3 WLR 586
3  NSWCA 344
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