Category Archives: Crime

This entry is both a postscript to my previous entry on 10 rules for making offers of compromise and a response to an inquiry I have gratefully received from a reader.

 

The question of how to deal with the issue of costs in making offers of compromise under rule 20.26 of the UCPR (NSW) has proved a vexing one. Up until a recent change to the rules, the relevant part of rule 20.26 read:

 

“…(2) An offer must be exclusive of costs…”

 

This wording has caused great trouble for practitioners. Does it mean that costs need to be dealt with separately or not at all? What’s more, I have also heard some experienced litigators say that when they are dealing with opponents that do not conduct litigation very often there is a fear that if they don’t say that costs are also payable as agreed or assessed, the offer risks being rejected for confusion.  

 

This may go some way to explaining why there are so many 20.26 offers in the ether which say the offeree should pay the offeror’s costs as agreed or assessed.  In Old v McInnes and Hodgkinson [2011] NSWCA 410 the NSW Court of Appeal (per McColl J) found that this kind of offer does not comply with the rule.

 

However, since Old there have been a number of decisions questioning the validity of that decision by questioning why a party should be denied an order for indemnity costs simply by re-stating the position in part 42 of the UCPRs, ie. if a 20.26 offer is accepted, under 43.13A an offeror would normally receive their costs on the ordinary basis.    

 

In a recent decision of the full Appeal Court in Whitney v Dream Developments Pty Ltd [2013] NSWCA 188 (25 June 2013) Bathurst CJ opined that this reasoning is not entirely apposite.

 

An offer in identical terms to that which was considered in Old was up for consideration in Whitney and the Chief Justice found that Old was correctly decided. He pointed out that to state the position with respect to costs in the offer sought to inappropriately dislodge the discretion contained in rule 43.13A(2)(b) which a court has regarding whether or not to order costs, albeit one which is rarely exercised.  

 

Therefore, Bathurst CJ said (with the other 4 judges agreeing):

 

 “[24]…The use of the phrase “exclusive of costs” suggests that what is intended is that a compliant offer will not deal with costs at all.” 

 

The matter would seem settled there. But wait… there is now the Uniform Civil Procedure Rules (Amendment No. 59) 2013. Effective from the date of its publication, being 7 June 2013 a compliant offer under 20.26:

 

“…(c) must not include an amount for costs and must not be expressed to be inclusive of costs” 

 

There is also a new rule 42.13A which has as its heading “Where offer accepted and no provision for costs”.

 

Where does this leave the court’s decision in Whitney? In my view it has changed things again. The new rule 20.26 seems to contemplate the mention of costs (ie- “plus costs as agreed or assessed”) just not a specific amount (see emphasis added above) or as having been included in the judgment amount. Indeed, by using the words “no provision for costs” new rule 43.13A also appears to be drafted in such a way as to envisage a situation whereby costs are included in the offer, ie. the rule simply wouldn’t apply.

 

However, until there is an appellate judicial opinion expressed on the new rule, I would still err on the side of caution and leave costs out of a 20.26 offer altogether. The new rule 42.13A will still get you the same result if the offer is accepted (ie. “plus costs as agreed or assessed”).  

 

If there is a concern about confusing your opponent and risking an ill-informed rejection of the offer, it can’t hurt to explain your own view of the law on this question in a (separate) cover letter.

 

Note: the amendment also includes a new Schedule 12 to the rules with a transitional provision to the effect that the amended rule will only apply to offers made after the publication date of the amending act. Therefore, Whitney remains authoritative for offers made before 7 June 2013.

 

Barristers are forced to read a lot of judgments, which can often be a pretty grueling exercise. But it also depends on whose opinion you are reading. Of course judges are not in the business of entertaining their audience but every so often a bit of colour can make all the difference and at least from my own perspective, is always encouraged. As a light aside to the usual hints and case notes I post here, I give you three of my favourites.

The first comes from the United States, where Chief Judge Kozinski of the United States Court of Appeals, Ninth Circuit ruled in favour of a Japanese whaling research organization against Paul Watson and the Sea Shepherd Organisation with which he is associated. The former sought an injunction to prevent Watson et al from continuing what were alleged to be piracy activities (in the name of protecting the whales). In his judgment Institute of Cetacean Research v Sea Shepherd Conservation Society 12-35266 His Honour opened his opinion with this:

“You don’t need a peg leg or an eye patch. When you ram ships; hurl glass containers of acid; drag metal-reinforced ropes in the water to damage propellers and rudders; launch smoke bombs and flares with hooks; and point high-powered lasers at other ships, you are, without a doubt, a pirate, no matter how high-minded you believe your purpose to be.”

Something more local comes from Justice Pembroke of the NSW Supreme Court, who maintains a sharp turn of phrase in all of his judgments. In an application brought by Channel 7 seeking to restrain its former employee James Warburton from going to work for the enemy, His Honour commenced his judgment in Seven Network (Operations) Limited & Ors v James Warburton (No 2) [2011] NSWSC 386 by saying:

“Mr Warburton is a highly skilled and talented television executive. At the Seven Network, he was the natural successor to David Leckie as chief executive officer. Like Caesar however, Mr Leckie was not ready to go.”

Who better than to have the final say than the inimitable Lord Denning who in the famous nuisance case, Miller v Jackson [1977] QB 966, said:

“In summertime village cricket is the delight of everyone. Nearly every village has its own cricket field where the young men play and the old men watch. In the village of Lintz in County Durham they have their own ground, where they have played these last 70 years. They tend it well. The wicket area is well rolled and mown. The outfield is kept short. It has a good club house for the players and seats for the onlookers. The village team play there on Saturdays and Sundays. They belong to a league, competing with the neighbouring villages. On other evenings after work they practise while the light lasts. Yet now after these 70 years a judge of the High Court has ordered that they must not play there any more. He has issued an injunction to stop them. He has done it at the instance of a newcomer who is no lover of cricket. This newcomer has built, or has had built for him, a house on the edge of the cricket ground which four years ago was a field where cattle grazed. The animals did not mind the cricket. But now this adjoining field has been turned into a housing estate. The newcomer bought one of the houses on the edge of the cricket ground. No doubt the open space was a selling point. Now he complains that when a batsman hits a six the ball has been known to land in his garden or on or near his house. His wife has got so upset about it that they always go out at week-ends. They do not go into the garden when cricket is being played. They say that this is intolerable. So they asked the judge to stop the cricket being played. And the judge, much against his will, has felt that he must order the cricket to be stopped: with the consequence, I suppose, that the Lintz Cricket Club will disappear. The cricket ground will be turned to some other use. I expect for more houses or a factory. The young men will turn to other things instead of cricket. The whole village will be much the poorer. And all this because of a newcomer who has just bought a house there next to the cricket ground.”

Hear, hear, jolly good show!!