Lewis v Doyle (No 2)

1. [1]

   On 18 February 2022 I gave judgment for the plaintiff against the defendant in the sum of $1,353,850.00: Lewis v Doyle [2022] NSWSC 92. The plaintiff indicated that he would be seeking a costs order other than the usual order that the defendant paid the plaintiff’s costs. Such an application has now been made, and the parties have agreed that I should determine the application on the papers without a further hearing.

2. [2]

   The plaintiff seeks that the defendant pay costs on an ordinary basis up to one of three dates when offers of compromise were served by the plaintiff, and thereafter that the defendant pay the plaintiff’s costs on an indemnity basis. In addition, the plaintiff seeks a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

3. [3]

   The defendant, in his submissions, does not appear to oppose the making of an order for indemnity costs from the date of one of the offers of compromise (although he does not identify which is the appropriate one), but appears to oppose a gross sum costs order being made, while conceding that such an order was made against the same defendant in other proceedings involving similar issues: Miles v Doyle (No 3) [2021] NSWSC 1524.

4. [4]

   The plaintiff first instructed his solicitors, Carroll & O’Dea, in about March 2015. Carroll & O’Dea were retained on the basis of a conditional costs agreement, meaning that the retainer was conducted on a no win - no fee basis.

5. [5]

   On 15 October 2015, Mr Kelvin Andrews of counsel was briefed and retained by the solicitors, also on a conditional basis, that is, that unless the plaintiff was successful, Mr Andrews’ fees would not be payable.

6. [6]

   On 17 November 2016, a claims summary and schedule of damages was first served on the defendant. The schedule of damages was updated on 5 February 2018 and served on the defendant.

7. [7]

   Two reports were obtained from a psychiatrist retained by the plaintiff, Dr John Baker, dated 19 July 2015 and 30 January 2018. The defendant obtained a report from a psychiatrist, Dr Alex Apler, dated 11 July 2017.

8. [8]

   On 14 February 2018, an informal settlement conference took place in an attempt to resolve the matter prior to the commencement of the proceedings. Settlement was not achieved.

9. [9]

   On 29 June 2018, the plaintiff commenced proceedings by the filing of a statement of claim and a statement of particulars.

10. [10]

    On 2 July 2018, an offer of compromise was served by the plaintiff indicating that the plaintiff would accept judgment in the sum of $350,000.00. The offer was not accepted.

11. [11]

    On 2 November 2018, a defence was filed which did not admit or deny that the assaults occurred. The defence admitted an allegation that the defendant had been convicted of assaults against the plaintiff.

12. [12]

    On 5 June 2019, a mediation took place before the Honourable Ian Callinan QC as mediator. The mediation was unsuccessful.

13. [13]

    On 25 June 2019, the plaintiff forwarded a further offer of compromise, which indicated that the plaintiff would accept judgment in the sum of $630,000.00. The offer of compromise was not accepted.

14. [14]

    On 20 February 2020, the plaintiff’s evidentiary statement was served, and at various dates in February 2020 statements of other young men, to be relied on as tendency statements, were served.

15. [15]

    On 29 March 2021, the plaintiff served a further offer of compromise, which indicated that the plaintiff would accept judgment in the sum of $570,000.00. That offer was rejected.

16. [16]

    On 26 July 2021, an amended statement of claim was served. Relevantly, some amendments were made to the particulars of the sexual assaults in terms of what occurred on three occasions, and one further occasion was added.

Indemnity costs

1. [17]

   One consideration in determining whether indemnity costs should flow from a refusal to accept an offer of compromise is that it was unreasonable for the offeree not to have accepted the offer. Justice Garling discussed this matter in Young v Hones (No 3) [2014] NSWSC 499 where he said at [36]:

2. [18]

   The plaintiff submits that indemnity costs ought to be ordered from the date of the first offer of compromise on 2 July 2018. The factors put forward to justify such an order are said to be these:

3. [19]

   As noted above, no submissions were made on behalf of the defendant against the making of an order for indemnity costs. For that reason, it must be assumed that the defendant does not actively oppose indemnity costs being awarded. Nevertheless, I consider that the Court needs to be satisfied that it was not unreasonable for the defendant to have rejected the offer of compromise, for an indemnity costs order to follow from that offer.

4. [20]

   In my opinion, the refusal of this first offer was not unreasonable. Offers of compromise are designed to facilitate the settlement of proceedings. Proceedings had only commenced some three days prior to the offer being made. It may be accepted that there was some psychiatric evidence of the effects of the assaults on the plaintiff, and particulars of damages had been served. However, the plaintiff had not served his evidentiary statement, nor the expert report in relation to his claim for economic loss.

5. [21]

   The submission that the evidence regarding the allegations of abuse had been tested through the criminal process is apt to mislead. The conviction of the defendant for the offences did not prove the evidentiary aspects of the allegations made in the civil proceedings, by virtue of s 91 of the Evidence Act 1995 (NSW). As it became apparent from the defence ultimately filed, the defendant accepted the convictions, but put in issue the proof of the particulars in the statement of claim.

6. [22]

   It is difficult to understand the submission that the failure of the defendant by 2 July 2018 to have served any evidence on the question of whether the assaults occurred, favours a conclusion that it was unreasonable for the defendant to reject the offer. When the proceedings had only commenced three days prior to the service of the offer of compromise, it could not reasonably be expected that any evidence would have been forthcoming from the defendant.

7. [23]

   By the time of service of the second offer of compromise on 25 June 2019, matters had advanced considerably. Pleadings had closed more than seven months earlier, and a formal mediation had taken place. Sufficient details of the allegations and how the sexual assaults took place would have been available to the defendant by the time of the second offer of compromise. The economic loss report had been served. Further, the fact that the defendant seemingly agreed to, and took part in, a mediation is a strong factor supporting the unreasonableness of the defendant in rejecting the second offer of compromise.

8. [24]

   In the circumstances, the plaintiff is entitled to costs on the ordinary basis up to and including 25 June 2019, and thereafter on an indemnity basis.

Gross sum costs order

1. [25]

   In Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213, Giles JA said of the earlier equivalent provision to s 98(4) (Part 52A r 6(2) Supreme Court Rules 1970 (NSW)):

2. [26]

   In Hamod v State of New South Wales [2011] NSWCA 375 Beazley JA (with whom Giles and Whealy JJA agreed) said:

3. [27]

   In Bobb v Wombat Securities Pty Ltd (No 2) [2013] NSWSC 863, Beech-Jones J said:

4. [28]

   In my opinion, a gross sum costs order should be made for these reasons:

5. [29]

   The plaintiff’s costs up to 25 June 2019 total $53,001.85, with counsel’s fees totalling $19,885.00 and disbursements totalling $12,547.69.

6. [30]

   The plaintiff’s costs from 26 June 2019 total $133,386.55. Counsel’s fees for Mr Kelvin Andrews total $47,930.00 and for Mr Ryan Brown $48,180. Disbursements total $55,663.17. I consider that the hourly rates charged by the partner and the employed solicitor of $520.00 and $330.00 respectively are reasonable for the nature of the proceedings.

7. [31]

   I consider that Mr Brown’s fees for the hearing are excessive. Seven and a half days are charged for a hearing that lasted four days. Even if a cancellation fee for one day was allowed on the basis that the matter was fixed for five days (as Mr Andrews has charged), there can be no justification for fees for two and half extra days. I will reduce Mr Brown’s fees for present purposes by $10,500.00 This reduces the total of costs and disbursements for the period from 26 June 2019 to $274,659.72, and the total for both periods to $360,094.26. Counsel’s fees are otherwise reasonable as to the hourly rates charged, and for the work done.

8. [32]

   When assessing the costs for the purpose of making a gross sum order a broad brush approach may be taken: Zepinic v Chateau Constructions (Aust) Ltd (No. 2) [2014] NSWCA 99 at [31] and [38]; Hamod v New South Wales (No 13) [2009] NSWSC 756 at [31]; see also Hamod at [819]-[820] and Young v Hones (No. 3) at [28]-[30].

9. [33]

   Although, as I noted in the principal judgment, the hearing was conducted with considerable economy, and Mr Hall for the defendant can take much of the credit for that, the defendant’s approach in putting the plaintiff to proof of all of the allegations notwithstanding his convictions in respect of most of the incidents identified by the plaintiff, undoubtedly resulted in far more costs being incurred than would otherwise have been necessary or warranted.

10. [34]

    In my opinion, the plaintiff’s solicitors were entirely justified in briefing a second much more junior counsel to assist Mr Andrews in the preparation of the case. There is likely to have been some saving of costs in that regard, given the difference in hourly rates charged. I do not consider that it was unreasonable for both Mr Andrews and Mr Brown to appear at the hearing. I have already adjusted counsel’s fees for the hearing itself. I disagree with Mr Hall’s submission that it is unlikely that senior counsel would have been certified for the trial, notwithstanding that Mr Hall conducted the defence of the proceedings himself.

11. [35]

    The total of the costs and disbursements is $360,093.60. Having regard to the fact that costs are recoverable by the plaintiff on the ordinary basis until 25 June 2019 and thereafter on an indemnity basis, I consider that the total figure should be discounted by 30%, producing a figure of $252,065.52

12. [36]

    Mr Hall opposed any amount being added for the costs of the present application. In the circumstances where the defendant opposed a gross sum costs order, I consider that I should allow a modest sum to the plaintiff for the costs of the present application, to bring the total to a figure of $255,000.

13. [37]

    Accordingly, I make the following order: