Pike v Coles Supermarkets Australia Pty Ltd; Pike v Solomon

1. [1]

   HIS HONOUR: By a Statement of Claim filed 5 September 2017, Jacqueline Pike (“the plaintiff”) commenced negligence proceedings (Matter No. 2017/269748) against Coles Supermarkets Australia Pty Ltd (“Coles”) (“the Coles proceedings”). The Coles proceedings arose from a fall by the plaintiff (“the incident”) that occurred in a car park on 20 January 2015 outside a supermarket operated by Coles (“the supermarket”).

2. [2]

   The supermarket and car park were located within the Cambridge Gardens Shopping Centre at Boomerang Place, Cambridge Park in the State of New South Wales (“the shopping centre”). After undertaking shopping for groceries at supermarket, the plaintiff returned to her car situated in the car park adjacent to the shopping centre. Whilst transferring her groceries into her vehicle the plaintiff stepped back from her vehicle onto an uncapped drainage pipe, falling backwards and landing on her “bottom”.

3. [3]

   The registered owners of the shopping centre were Isaac Solomon, Elizabeth Oxman and Sara Cooper (the first, the second and the third defendants, and collectively, “the Owners”). By a Statement of Claim filed 24 April 2018, the plaintiff commenced further negligence proceedings (Matter No. 2018/129793) against the Owners (“the Solomon proceedings”). The Coles and Solomon proceedings were heard together (“the Pike proceedings”). It may be noted that a proceeding commenced against XL Retail Services Pty Ltd (Matter No. 2018/15993) was discontinued.

4. [4]

   Both Coles and the Owners filed cross-claims against each other in their respective proceedings (“the cross-claims”). A central issue in the cross-claims was control of the relevant area. Particular regard was had to the terms of the lease under which Coles occupied, at least, the supermarket premises and had some responsibilities with respect to the car park.

5. [5]

   As at the time of the Pike proceedings, both Coles and the Owners were jointly represented. Hereinafter, Coles and the Owners shall be collectively referred to as “the defendants”.

6. [6]

   In Pike v Coles Supermarkets Australia Pty Ltd; Pike v Solomon [2021] NSWSC 1492 (“Pike No 1”), the Court found that Coles was liable in negligence for any injuries, loss or damages occasioned to the plaintiff arising from her fall at the car park outside thesupermarket on 20 January 2015. The Owners were not found to be liable in negligence with respect to the incident. No issue of contributory negligence arose in the Pike proceedings and by virtue of the arrangements between the defendants, the cross-claims fell away. The Court made determinations as to each head of damage contested in the proceedings.

7. [7]

   At the point of publication of Pike No 1, the amount of Medicare charges remained unsolved. The defendants were directed to bring in short minutes of order after a discussion with the plaintiff, as well as Medicare charges and any issues raised as to costs.

8. [8]

   On 19 February 2022 the following orders were made in the Coles proceedings:

9. [9]

   On 19 January 2022 the following orders were made in the Solomon Proceedings:

10. [10]

    The question of costs was argued on 18 February 2022 and the defendant was directed to provide a supplementary note by 4pm 25 February 2022. The plaintiff was directed to provide a note in reply by no later than 7 days after the receipt of the defendant’s note. I reserved my decision following the receipt of these notes.

11. [11]

    This is my judgment as to the issue of costs.

THE LEGISLATION AND RULES

1. [12]

   The powers of the Court as to costs are set out in s 98 of the Civil Procedure Act 2005 (NSW) (“Civil Procedure Act”) in the following terms:

2. [13]

   Part 42 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) sets out the rules with respect to costs. Rule 42.1 is extracted below:

3. [14]

   Rules 20.25, 20.26, 20.27, 42.15 and 42.14A of the UCPR relevantly provide:

4. [15]

   Reliance was placed by the Owners on r 42.15A which was introduced on 8 December 2006 and is in the following terms:

5. [16]

   Coles relied upon r 42.34. Rule 42.34 is in the following terms:

6. [17]

   Before turning to the question of costs in the context of the issues raised on the present application, I will address the general principles associated with costs orders.

RELEVANT PRINCIPLES

1. [18]

   The general principles, with respect to costs orders, were set out in Moseley v AB (No 2) [2017] NSWSC 1812 at [65]-[79], extracted below:

2. [19]

   In Ackerman v Morgan [2019] NSWSC 1250, this Court considered provisions of the r 42.15A relating to Offers of Compromise at [64] and [65], as follows:

3. [20]

   The same approach is generally applicable with respect to the operation of r 42.15 (noting that r 42.15 and 42.15A (“the costs rules”) apply to differing outcomes in the proceedings).

4. [21]

   Any requirement to establish exceptional circumstances should not be understood as placing a gloss on the language of the costs rules where they respectively use the expression “unless the Court orders otherwise”, but rather as emphasising the weight to be accorded to the presumption otherwise contained within the costs rules.

5. [22]

   In Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 (“Perisher Blue”) Gleeson JA and Tobias AJA stated at [28], [33] – [38]:

6. [23]

   In broad terms, the costs rules are intended to indicate that there must be a good reason to oust the effect of the rules rather than equating exceptional circumstances to that which is extraordinary or rare.

7. [24]

   Without fettering the discretion residing within the costs rules, I consider that the question of reasonableness of not accepting an offer is a relevant consideration (see Mendonca v Tonna (No 3) [2020] NSWCA 332, (per Bell P (as the Chief Justice then was), Meagher and Payne JJA agreeing).

8. [25]

   The stage of the proceedings at which the offer is made and the information available to the party to whom the offer is directed will also be relevant in this respect, so too, will the duration given for the consideration of the offer (see Perisher Blue at [16], [17], 18]. The latter consideration calls for attention to be given to r 20.26(5).

9. [26]

   I discussed the operation of r 42.34 in Jabber v Gade [2022] NSWSC 998 at [62] as follows:

RELEVANT FINDINGS PIKE NO 1

1. [27]

   I shall provide extracts of the judgment relevant to the determination of the costs issues:

EVIDENCE ON COSTS

1. [28]

   The plaintiff relied upon the affidavit of Rachel Cracknell of 28 January 2022.

2. [29]

   The defendants relied upon the affidavit of Mark Andrew Siebold of 11 February 2022.

SUBMISSIONS OF THE PARTIES

1. [30]

   In summary, the plaintiff’s written and oral submissions as to costs are as follows:

   1. (1)

      The defendant’s case on costs is predicated upon four Offers of Compromise variously made by the defendants. It was the plaintiff’s initial contention that the first two offers made on behalf of the Owners cannot be relied upon since they suggested that Coles was liable for the damaged pipe that was the cause of the plaintiff’s injuries. However, Coles never conceded liability.

   2. (2)

      The offer conveyed on 28 August 2020 (“the third offer”) does not comply with the UCPR to trigger a right to indemnity costs because the plaintiff beat that offer. The Court can put this offer to one side.

   3. (3)

      The offer conveyed on 19 October 2020 (“the fourth offer”) was made in accordance with the UCPR and should not be the basis of any variation of the usual cost’s orders.

   4. (4)

      The Owner’s offered to resolve the case against them by way of a verdict in their favour in an offer made on 28 September 2018 (“the first offer”") which was re-opened on 2 April 2019 (“the second offer”).

   5. (5)

      However, in the letter from the solicitors of the Owners dated 28 September 2018, on page 2, the Owners admitted that they were the registered owners of the premises and asserted that Coles was the occupier of the premises. It was further asserted that Coles had the care, control, and management of the premises. It was said, therefore, that Coles was liable, and the plaintiff should discontinue against the Owners.

   6. (6)

      The difficulty with that assertion is that Coles did not admit liability. The offending drain was, on one view of it, a capital works expenditure item that would normally be expected to be covered by the owner of the premises. If that was found by the Court to have been the case and the plaintiff had discontinued against the Owners, then there would have been no verdict in favour of the plaintiff.

   7. (7)

      Had Coles conceded that they were responsible for the safety of persons using the carpark and therefore the plaintiff’s injuries, then the plaintiff could have been satisfied that she was not going to, as it were, “fall between two stools.”

   8. (8)

      Coles should pay the Owners costs because they never conceded that they were the correct defendant, leaving the plaintiff the task of having to work out who was liable. The defendants were in the best position to know who was liable. The plaintiff submitted that it is hardly just that the defendants, who knew who was liable, should “hide behind a screen and say, well, you decide, we are not going to tell you”. It could be done by way of a “Bullock” or a “Sanderson” order, but ultimately, the costs should be paid directly by Coles to the Owners.

   9. (9)

      The reference to “Bullock” and “Sanderson” orders is a reference to the respective cases in which the English Court of Appeal made such orders: Bullock v London General Omnibus Company [1907] 1KB 264 and Sanderson v Blyth Theatre Co [2003] 2KB 533 and subsequent authorities in which Courts have exercised a discretion to make orders of that type.

   10. (10)

       UCPR r 20.26(5)(a) provides that the closing date for acceptance of an offer is, where the offer is made more than 2 months before the date for commencement of the hearing, to be no less than 28 days after the date on which the offer was made.

   11. (11)

       The fourth offer allowed only 2 and a half days for acceptance. The hearing commenced on 27 October 2020. This was 8 days after the fourth offer was made.

   12. (12)

       UCPR r 20.26(5)(b) provides that in those circumstances the closing date for the acceptance of the offer is such a date as is reasonable in the circumstances.

   13. (13)

       To allow only two days for acceptance of the offer in a case involving senior and junior counsel who, along with their instructing solicitor, is naturally required to give some advice about the offer, is unreasonably short. Senior counsel for the plaintiff submitted they were not able to turn their mind to it until the third day, Wednesday, due to personal considerations. The plaintiff submitted that the need to prioritise more urgent work by lawyers generally is no doubt a reason why the general rule is that the offer should be open for 28 days if made more than 28 days prior to the hearing. To leave the offer open for less than 3 days “smacks of an attempt merely to trigger a costs sanction rather than a genuine attempt to reach a negotiated settlement”.

   14. (14)

       In those two days, all parties would have been required to be available for the offer to be considered by the plaintiff’s lawyers and then advice considered by her. There is no reason why at least a week could not have been given for the acceptance. By the time the offer was made, preparation for the hearing would be well advanced and little could be lost to the defendant in allowing 7 days to consider, and advise on, the offer.

   15. (15)

       The allowance of two days for the fourth offer, similarly to the 11 days allowed for the third offer, was unreasonable and against the spirit and terms of the relevant rule.

   16. (16)

       UCPR r 43.34 provides that, if damages are awarded below $500,000 then the plaintiff should show why a costs order should be made. The plaintiff submitted that the defendant served the fourth offer for $500,000 plus costs eight days before the hearing, which suggested that they considered there was a possibility the plaintiff could achieve damages more than $500,000. It is disingenuous for the defendants to, in hindsight, argue that the plaintiff would never have been awarded $500,000, considering their own actions suggested it was a possibility. In these circumstances, no order should be made in accordance with the rule in relation to costs because both parties believed there was a possibility that the damages could exceed $500,000.

   17. (17)

       The fourth offer for $500,000 was open for two and a half days which is not a reasonable time in the circumstances. While the plaintiff did not request more time to consider the offer, it is not up to the plaintiff to contact the defendants and make their offer comply with the UCPR.

   18. (18)

       The plaintiff seeks orders that Coles pays the plaintiff’s costs on an ordinary basis and that insofar as the the Owners are concerned, Coles pay those defendant’s costs as well.

2. [31]

   In summary, the defendant’s submissions are as follows:

   1. (1)

      A judgment has been entered in favour of the Owners and as such they are entitled to an order for costs, those costs following the event: see UCPR r 42.1. The plaintiff makes no submission to the contrary and there is no reason why costs should not follow the event.

   2. (2)

      With respect to indemnity costs, two Offers of Compromise were served by the Owners on 28 September 2018 and 21 April 2019. Both offered judgments in favour of the Owners, with the Owners to pay their own costs. Neither offer was accepted.

   3. (3)

      The facts are squarely in accordance with UCPR r 42.15A(1) and the Owners are entitled to a costs order in accordance with r 42.15A(2). There is no substance to the plaintiff’s submission that, in effect, it was reasonable to reject these offers because another defendant, Coles, did not admit liability. It was for the plaintiff to assess the case on liability against the Owners on its own merits, in light of the terms of the offers and any accompanying information.

   4. (4)

      The Owners submit that in the Solomon proceedings the orders of the Court should be:

   5. (5)

      The question is whether the Court should be satisfied that bringing proceedings in this Court was warranted. In light of the terms of UCPR 42.34(2), “will not ordinarily be made”, the onus is on the plaintiff to establish that the Court proceedings were warranted.

   6. (6)

      The facts suggest otherwise. Despite the plaintiff’s Schedule of Damages, the plaintiff’s damages were less than half the jurisdictional limit of the District Court of $750,000, and even well below the $500,000 threshold provided in UCPR r 42.34(1). Importantly, less the amounts already paid by Coles, the plaintiff obtained a sum of about $201,000.

   7. (7)

      It is clear that the plaintiff recovered significantly less than $500,000 in proceedings in this Court and so the operation of r 42.34(1) is triggered and the onus under the rule falls squarely on the plaintiff to justify why a costs order in her favour is nevertheless warranted.

   8. (8)

      Coles submitted that the evident reason the proceedings were in this Court was because the plaintiff misled her expert medical practitioners and her legal representatives as to the extent of her disabilities and incapacity. Had she been truthful the proceedings should and would have remained in the District Court. The plaintiff, presumably upon advice given to her based upon her own misleading instructions, elected to proceed to this Court.

   9. (9)

      Whether or not the plaintiff misled her medical practitioners or her lawyers, she clearly put forward her case on the basis of severe physical disability and that case was not accepted. This went to her credit in the proceedings and is why the case was assessed at so much less than what was claimed.

   10. (10)

       The purpose if the rule is based upon the efficiency of the court system of NSW, to ensure proceedings are prosecuted in the correct jurisdiction, and to discourage proceedings in the wrong jurisdiction.

   11. (11)

       If the rule does not apply in this matter, it is difficult to envisage any circumstances when it will apply.

   12. (12)

       Coles therefore submitted the appropriate order is that each party pay their own costs.

   13. (13)

       Regarding the plaintiff’s submission that the fourth offer was made for the amount of $500,000 shortly before the trial, the defendant’s submitted that this was a last-ditch attempt to settle the matter, despite the plaintiff’s high claims, before the trial. The defendants submitted that this should not be against the defendants in an assessment of whether or not the plaintiff has satisfied her onus under the rule.

   14. (14)

       The defendants submitted that the third offer for $350,000 plus costs was made eight weeks before the trial and that they were putting to one side that Offer of Compromise for the purposes of r 42.34(1).

3. [32]

   The defendants contested that the third offer was in breach of r 20.26(5)(a) of the UCPR, contending that, as the offer was served on 28 August 2020, it could be open for less than 28 days because the date of the offer was less than two months before the hearing.

   1. (1)

      The plaintiff complained that the fourth offer, made close to trial, was not left open for a reasonable period.

   2. (2)

      The offer was served by email at 9.51am on Monday 19 October. It was open until 5pm on Wednesday 21 October 2020. This is the better part of three days for acceptance. At the time it was served there were six business days until the hearing.

   3. (3)

      The plaintiff complained that there was not enough time to get instructions within the acceptance period. There is no evidence that the plaintiff had difficulty getting advice or giving instruction. For example, there is no evidence that Senior and Junior counsel were unavailable to give advice during that period. In view of her evidence as to her limited work as set out in her evidentiary statement the plaintiff could reasonably expect that she had plenty of time on her hands to confer with her legal representatives. One could also reasonably expect that the plaintiff and her legal representations were conferring during that period, a week out from hearing in accordance with the usual practice.

   4. (4)

      The defendants submitted that the Court would be more inclined to infer that the offer was rejected, not because it was not around or open for long enough time, but because it was for far less than the plaintiff herself was claiming.

   5. (5)

      Importantly, the plaintiff did not request more time to consider the offer.

   6. (6)

      Again, the plaintiff was awarded damages less than the offer sum, and there is no other reason to order otherwise than indemnity costs in favour of the defendant offeror. If indemnity costs are not awarded to the defendant on the basis of an early offer, indemnity costs should be ordered from the date of this offer.

   7. (7)

      Further to its evidence and submissions that the fourth offer was open for a period “reasonable in the circumstances” under UCPR r 20.26(5)(b), Coles submitted that the relevant principles are helpfully addressed in Gray v Hobson (No 2) [2018] NSWCA 131 (“Gray”), at [3]-[8].

   8. (8)

      Applying those principles, and consistent with the outcome in Gray, a matter of closely similar facts, the parties should have had a “clear perception of the strengths and weaknesses of their positions”, they would have been “armed with sufficient information to make a reasoned judgment of the offer”, significant costs would have been accruing on a daily basis, the plaintiff had not sought any extension of time to consider the offer, the period was reasonable in the circumstances, and Coles is entitled to indemnity costs from the day after the offer was made.

4. [33]

   It is not disputed that the Owners are prima facie entitled to an order that the plaintiff pay their costs of the proceedings. There is a possibility that some of these costs be paid on an indemnity basis as a result of Offers of Compromise served on the plaintiff.

5. [34]

   The plaintiff however, sought a further order that those costs be borne by Coles, either by way of indemnifying the plaintiff, a Bullock order, or by direct payment, a Sanderson order. These orders are opposed.

6. [35]

   Such orders may be appropriate where the claiming party has acted reasonably in suing the party against which it was unsuccessful, and there has been some conduct of the unsuccessful party that makes it just that that unsuccessful party pay the costs of the successful party, thereby encouraging the unsuccessful party to sue or maintain the action against the successful defendant: Gould v Vaggelas (1985) 157 CLR 215 at 229, 230; Johnsons Tyne Foundry Pty Limited v Maffra Corporation (1948) 77 CLR 544 at 572; Great Lakes Shire Council v Dederer [2006] NSWCA 336.

7. [36]

   Here, there was no conduct of Coles which caused or encouraged the plaintiff to sue the Owners. The plaintiff sued the Owners from the start, and moreover, in entirely separate proceedings.

8. [37]

   Simply denying liability could only constitute conduct encouraging a plaintiff to sue another defendant where the cases were truly dependant on each other, and in the alternative: Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179 at 128; Lackersteen v Jones (No 2) (1988) 93 FLR 442 at 449; Nominal Defendant v Swift [2007] NSWCA 56 at [99]; ACQ Pty Limited v Cook (No 2) [2008] NSWCA 306 at [36] - [43]. That could not be said here – the plaintiff was made aware of the terms of the lease and contractual allocation of responsibilities as between Coles and the Owners in clear terms by the letter from the Owners’ solicitors of 28 September 2018. The general denial of liability by Coles, which included challenging matters such as the time the risk existed for causation arguments, did not in any way suggest or support a conclusion that the Owners had breached some duty as occupier.

9. [38]

   Ultimately, the plaintiff’s case against the Owners was without merit. It was unreasonable for the plaintiff to have caused the Owners to incur costs, particularly after their letter of 28 September 2018. Coles should not be ordered to pay any part of the plaintiff’s liability in costs to the Owners.

10. [39]

    If such an order were to be made, the appropriate order would be a Bullock order. A Sanderson order is for the protection and benefit of the Owners, as it removes their onus to pursue the plaintiff for fulfilment of the costs order, but they have not sought such an order.

11. [40]

    The plaintiff responded to the defendant’s supplementary submissions on costs on 3 March 2022. In summary, the reply submitted as to Bullock/Sanderson orders was as follows:

    1. (1)

       It was said in the defendant’s supplementary submissions that there was no conduct of Coles which caused or encouraged the plaintiff to sue the Owners. However, those submissions misunderstand the positions taken by the various defendants.

    2. (2)

       The plaintiff had been made aware of the terms of the lease and contractual allocation of responsibility between Coles and the Owners in clear terms. However, the pleadings relied upon by the defendants did not reflect that. Neither set of defendants (Coles or the Owners) accepted that they had responsibility for the area. If the documents provided to the plaintiff were said to be so clear on their face as to who would be the responsible party, then that was not reflected in the pleadings by Coles, or anywhere else.

    3. (3)

       It was for this reason that the plaintiff had no choice but to continue on with proceedings against Coles and the Owners.

    4. (4)

       Further, the documents that were provided, as noted during the course of the hearing and in the previous submissions given on this issue by the plaintiff, did not identify with any particularly whether the hole into which the plaintiff fell had been created by the negligence of Coles or the Owners. Indeed, Coles’ case seemed to proceed on the basis that it could not even be said that there was previously a cover on the hole.

    5. (5)

       If Coles was aware of these things, namely that there was a cover on the hole previously, as the Court found, and that it was Coles’ responsibility to replace it, then the approach taken by Coles to this litigation is “somewhat bewildering”. That approach simply did not concede that there was ever a cover on the hole for which Coles was responsible and did not concede that Coles would, in the circumstances, have had the obligation to repair the hole and make it safe by putting in a new cover.

    6. (6)

       The plaintiff further observed that all of the defendants were represented at the hearing by one set of lawyers. Presumably, the various defendants came to an agreement as to who in fact was responsible for creating, maintaining and/or failing to repair the hole.

    7. (7)

       Such an agreement between the defendants was never communicated to the plaintiff.

    8. (8)

       It was for this reason that it cannot be said that the plaintiff’s case against the Owners was ‘without merit’. Nor can it be said that it was unreasonable for the plaintiff to have proceeded against the Owners. Coles was apparently at all times aware that it had responsibility for the hole. In those circumstances, a simple letter identifying that they had responsibility for the hole, without necessarily conceding that there was any negligence on the part of Coles, would have meant that the plaintiff then understood what Coles and the Owners clearly understood which was that Coles had the responsibility. Proceedings against the Owners could then have been discontinued.

    9. (9)

       In the defendant’s submissions it is said the appropriate order would be a Bullock order. The plaintiff does not agree. A Sanderson order means that the unsuccessful defendant pays the costs directly to the successful defendant instead of seeking to recover them from the plaintiff who in turn must recover them from Coles. Since all defendants are now represented by the same solicitor it is inefficient and unnecessary for the process to be prolongated by involving the plaintiff in it. Additionally, it means that the party paying and the party seeking costs can directly negotiate over them.

12. [41]

    Coles and the Owners both consider that the cross claim in each proceeding should be dealt with by final orders. Coles and the Owners, the only parties to the cross claims, propose that each cross claim be the subject of the following order:

CONSIDERATION

1. [42]

   The judgment of the Court in Pike No 1 concerned two sets of proceedings by which the plaintiff brought an action against Coles and the Owners respectively in negligence, essentially arising out of the same substratum of facts with respect to the incident giving rise to the claim.

2. [43]

   The Court determined that, in the Coles proceedings, there would be judgment for the plaintiff in the sum of about $360,000 and that Coles would have credit for monies paid resulting in a net sum paid to the plaintiff by Coles of about $201,364.

3. [44]

   The Court gave judgment to the Owner’s in the Solomon proceedings.

4. [45]

   Before the commencement of hearing of the proceedings, various Offers of Compromise were made by the defendants as follows:

   1. (1)

      On 28 September 2018, by a letter from Lucinda Lyons and Nicole Oglesby of Clyde & Co solicitors for the Owner’s to the solicitors for the plaintiff, the Owners conveyed, in the Solomon proceedings, the first offer in the form of Form 1 (Version 4) of r 20.26 of the UCPR to the plaintiff. The terms of the offer were of judgment in favour of the Owners, with each party to bear their own costs. The offer was open for acceptance for 28 days from the date the offer was made.

   2. (2)

      In the correspondence, the Owners admitted that they were the registered Owners of the premises, which premises they had leased to Coles (reference was made to a copy of the lease earlier forwarded to the plaintiff). It was asserted that Coles was the occupier of the premises at the time of the incident and had care, control, and management of the premises, including the carpark in which the incident occurred. The defendants stated they had no knowledge that the drainage cap was missing.

   3. (3)

      The solicitors for the Owners also stated, “It is the Defendant’s position that any liability for the Plaintiff’s incident should lie with Coles”.

   4. (4)

      The solicitor’s for the Owners stated that in the event that the Offer of Compromise was “formally defective”, then the Owners made a Calderbank Offer in the same terms as the first offer.

   5. (5)

      By a letter dated 2 April 2019 from the solicitors for the Owners the second offer was conveyed to the solicitors for the plaintiff. By that offer, the first offer (including the Calderbank offer).

   6. (6)

      The third offer was made on 28 August 2020, During the course of the proceedings Mr Turnbull SC contended that, irrespective of issue under r 20.26(5)(a) to which I have earlier referred, the offer could not attract the provisions of r 42.15 because the plaintiff had obtained judgment more favourable than the terms of the offer. No issue was raised by the defendants in that respect, noting the third offer being a joint position by the defendants. The submission by the plaintiff must be accepted or having regard to the terms of the offer and judgment for the plaintiff and in the Coles proceedings. Accordingly, the third offer may be put aside for the purposes of the balance of these considerations. I further note in that respect, as will be discussed below, that the Owners did not rely upon that offer in support of their contentions under r 42.15A, and Coles put aside the offer for the purposes of triggering r 42.34(1), save to the extent that the amount was identified as giving an indication of the defendant’s assessment of the case.

   7. (7)

      On 19 October 2020, the solicitors for the defendants forwarded the fourth offer in the Pike proceedings in the sum of $500,000 inclusive of payments made totalling $157,941.80. The sum consisted of medical expenses in the sum of $137,941.80 plus $20,000 as an advance on damages for non-economic loss. The offer was conveyed at 10am on 19 October 2020 and remained open until 5pm on 21 October 2020, a period of approximately two and a half days. The proceedings commenced on 27 October 2020; eight days after the making of the fourth offer.

   8. (8)

      It should be noted that the issues as to costs of the proceedings concerned the various Offers of Compromise and not various Calderbank Offers.

5. [46]

   Having regard to these preliminary assessments, and in the light of the foregoing statements of principle, I will now turn to consider the question of costs in the Solomon proceedings and the Coles proceedings respectively.

The Solomon Proceedings

1. [47]

   Judgement was entered in favour of the Owners and, in the result, they are entitled to an order for costs as costs following the event pursuant to r 42.1 of the UCPR.

2. [48]

   The Owners sought indemnity costs based upon the first and the second offers predicated upon the provisions of r 42.15A of the UCPR. The Owners sought ordinary costs from up to 28 September 2018 and indemnity costs thereafter.

3. [49]

   The first offer and the second offer were caught by the provisions of r 42.15A because the offers were made by a defendant but not accepted by the plaintiff and the defendant obtained a judgment on the claim no less favourable to the defendant than the terms of the offer.

4. [50]

   The plaintiff contended that the Court should order otherwise than provided for in r 42.15A(2)(b)(i) because, even though the communication from the Owners accompanying the Offers of Compromise attributed liability to Coles, and that the Owners were the registered owners of the premises, Coles had not, itself admitted liability.

5. [51]

   In my view, the Owners were correct to submit that it was not reasonable to reject (or to use the words of r 42.15A(1), “to not accept”), these offers because another defendant, namely Coles, did not admit liability.

6. [52]

   Subject to considerations which arise with respect to the making of a Bullock order or a Sanderson order, r 42.15A(2)(b)(i) provides that the unsuccessful Owners should have indemnity costs against the plaintiff from the making of the offer of 28 September 2018.

7. [53]

   However, I do not accept the submission of the defendants that the circumstances relied upon by the plaintiff in this respect do not warrant the making of a Bullock order or a Sanderson order.

8. [54]

   The defendants submitted that no conduct of Coles had caused or encouraged the plaintiff to sue the Owners and that the plaintiff had sued the Owners for the entirety of the proceedings. It was contended that simply denying liability could only constitute conduct encouraging a plaintiff to sue another defendant where the cases were truly dependant on each other and in the alternative. Here, the provision of the lease providing for a contractual allocation of responsibilities, as between Coles and the Owners, made clear the legal contractual allocation of responsibilities, notwithstanding the general denial of liability by Coles.

9. [55]

   Whilst it is true that the Owners had made the plaintiff aware of the terms of the lease and there was a distribution of liabilities thereunder, I accept the submission for the plaintiff that neither the pleadings of the defendants nor their conduct of the proceedings (at least until very late) made clear the delineation as to who was a responsible party. Both the Owners and Coles had responsibilities for the supermarket and the carpark. Ultimately both accepted they owed a duty of care to the plaintiff.

10. [56]

    Further, the drain hole which was the source of the incident could potentially have been a capital works expenditure of the Owners, notwithstanding the ultimate findings of the Court to the contrary. Notwithstanding senior counsel appearing at the matter for all defendants, no concession of liability was ever made by Coles relevant to these offers. Nor did the case for the defendants indicate whether the hole into which the plaintiff fell was created by the negligence of Coles or the Owners. The approach taken by Coles did not concede that there was a cover over the hole for which Coles was responsible and did not concede that Coles would, in the circumstances, have had an obligation to repair the hole and make it safe by putting over a new cover.

11. [57]

    Those circumstances create, in my view, a proper basis for the making of a Bullock order or a Sanderson order. The plaintiff did successfully bring proceedings against Coles. In my view, Coles, should indemnify the plaintiff for costs incurred in the proceedings, against the successful defendant, namely the Owners. At all relevant times for the purposes of r 14.15A, the allocation of responsibility between the defendants remained uncertain, making it a reasonable course for the plaintiff to proceed through to trial against the defendants.

12. [58]

    This is not to suggest that the mere denial of liability by Coles is sufficient to attract the making of a Bullock order or a Sanderson order but rather the conduct of the unsuccessful defendant is in my view such as to make it fair to impose liability on it for the costs of the successful defendant because it caused or necessitated the plaintiff prosecuting its claims against both defendants.

13. [59]

    Where the claim against a successful defendant and the claim against an unsuccessful defendant exhibit a relevant connection or dependence it may be readily concluded that it was reasonable for the plaintiff to have brought the action, later in time, against the successful defendant. Otherwise, the plaintiff would hazard the risk of “falling between two stools” depending upon the ultimate findings of the Court: (see Popiovic v ACN 098054678 Pty Ltd [2012] VSC 612 at [14] per Kaye J).

14. [60]

    I do not consider the fact that of there being separate proceedings brought against the defendants to be a barrier to the making of a Bullock order or Sanderson order given the connections between the proceedings.

15. [61]

    I do not accept the submission of the defendants that there was absence a substantial connection between those actions as against the defendants. The causes of action are the same. There was a common factual substratum. For the reasons I have given, it was, therefore, reasonable for the plaintiff to bring the further proceedings against the defendant.

16. [62]

    This leaves open the question of the significance of the 19 October 2020 Offer of Compromise but as that offer was made jointly by the defendants, I will turn to that issue in the consideration of the Coles proceedings.

The Coles proceedings

1. [63]

   The provisions of r 42.34 are triggered in the Coles proceedings because the plaintiff obtained a judgment against Coles in an amount less than $500,000. Further, as the defendants correctly contended, the damages awarded to the plaintiff were significantly below the jurisdictional limit of the District Court.

2. [64]

   It follows that an onus falls upon the plaintiff to establish why a costs order in her favour should be warranted having regard to the provisions of r 42.34(2)(a).

3. [65]

   I have earlier discussed the principles applicable in that context. It is sufficient to note that in those circumstances, a costs order will not ordinarily be made in favour of the plaintiff, although, the court retained a discretion to nonetheless award costs. The submission of the defendants may also be accepted that the purpose of the rule is to ensure that proceedings are prosecuted in the correct jurisdiction to promote efficiency in the administration of justice in civil proceedings.

4. [66]

   In substance, the defendants contended that the matter only proceeded in this Court because the plaintiff had misled her medical practitioners and legal representatives as to the extent of her disabilities.

5. [67]

   I have earlier extracted my findings of credit adverse to the defendant in that respect.

6. [68]

   However, it does not follow, that the factual issues in the proceedings were not such, by their nature and complexity, as to warrant the proceedings being commenced in this Court.

7. [69]

   The Schedule of Damages recorded a claim of $1,650,068.86.

8. [70]

   I agree with the submissions advanced by senior counsel for the plaintiff that the Offer of Compromise made by the defendants on 19 October 2020 was demonstrative of the assessment made by the defendants as to damages shortly before the hearing of the plaintiff’s claims.

9. [71]

   I do not accept the submissions for the defendants that the true estimation of the defendants estimate of damages was the sum of $350,000 offered on 28 August 2020. That offer was made earlier in time and was actually elevated by the later offer. The defendants may describe the fourth offer as a “last ditched bid” to settle the proceedings, but it does not follow, as a matter of logic, that the $500,000 did not represent as genuine assessment of damages by the defendants. After all, the offer was made at a time when the defendants were well seized of the prospects of their case including, evidence which they intended to lead if a Marcus application they intended to bring, would be granted in the trial. That evidence was instrumental in the credit findings ultimately made by the Court.

10. [72]

    In the circumstances, I do not consider that the provisions of r 42.34 are a barrier to an award of costs in favour of the plaintiff as against Coles.

11. [73]

    As the plaintiff obtained a judgment on her claim against Coles no more favourable to the plaintiff that the terms of the offer of 19 October 2020 made by Coles then prima facie r 42.15(1) entitles Coles to an order that its costs at first instance incurred after the date of the offer would be assessed on an indemnity basis.

12. [74]

    The plaintiff’s sole response in that respect was that the time allowed to respond to the Offer of Compromise was not reasonable. In considering the question of reasonableness, the plaintiff primarily attached significance to the provisions of r 20.26(5)(b). In any event, as I have discussed, the question of reasonableness may arise for consideration under r 42.15(2) in considering whether the Court may order “otherwise”. Both considerations would seem to be available (see Gray).

13. [75]

    In Gray, the Court of Appeal considered, with respect to UCPR r 42.14 that the test applied by Basten JA in Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 (“Kooee Communications”) at [20] was applicable in considering the sufficiency of a period for which an offer had been made shortly before a hearing. In Kooee Communications, Basten JA stated at [20]:

14. [76]

    In reliance upon Gray, and having regard to what was contended to be a similar factual scenario as between Kooee Communications and this case, Coles contended that the period allowed for the 19 October 2020 Offer of Compromise was reasonable because the parties had a clear perception of the strengths and weaknesses of their positions and were armed with sufficient information to make a reasoned judgment of offer. It was further contended that significant costs would be accruing on a daily basis and that the plaintiff had not sought an extension of time to consider the offer.

15. [77]

    It is true that there are similarities in the factual circumstances underpinning the decision in Gray. However, there are some significant points of distinction. Gray was concerned with an offer made in the context of an appeal, where the issues involved, and the likelihood of success might be more sharply defined than shortly before the commencement of a trial. Further, Gray concerned the operation of r 42.14 of the UCPR where an offer had been made by the plaintiff on the day of a mediation between the parties. The respondent to the proceedings had made his own Offer of Settlement.

16. [78]

    In this case, Mr Turnbull submitted that he was not able to turn his mind to the Offer of Compromise until after the closure of the offer. However, whilst I would not wish to cast doubt on the veracity of the statement made by senior counsel the weight that may be given to it may be affected by the absence of evidence to that effect.

17. [79]

    What may be taken into account, however, is that the offer was made not on the eve of the hearing as such, but early in the week before the hearing when it may be expected that counsel was not only attending to preparation for the trial, but other work, urgent or otherwise, occupying counsel and their instructing solicitors (even though it may be accepted that the plaintiff may have been more readily available).

18. [80]

    Mr Turnbull correctly submitted that the offer made was inconsistent with the intent of the rule which was generally designed to provide for an adequate time to consider Offers of Compromise made.

19. [81]

    The defendants also relied upon the failure by the plaintiff to ask for additional time to provide a response to the Offer of Compromise of 19 October 2020.

20. [82]

    In that respect, I consider the plaintiff to be correct in contending that the consideration of whether a period allowed, to consider an offer for the purposes of r 20.26(5)(b) is reasonable or not is to be judged against the terms of the offer itself. That is not to say however that the absence of a request for an extension of time for acceptance of an offer is not relevant to the exercise of the Courts discretion under r 42.15. Plainly, it is (see Gray at [7]); Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union (NSW Branch) (No 2) (2014) 88 NSWLR 471; [2014] NSWIC 3 at [38]). Just as Mr Turnbull for the plaintiff may submit that the defendant should have properly allowed seven days to consider the offer, so it may be said that the plaintiff may have requested the same.

21. [83]

    In my view, the balancing of these considerations should result in the conclusion that the time allowed to respond to the fourth offer provided by the defendants was not reasonable. In the circumstances of this matter, I consider that the absence of a reasonable time is sufficient to engage the provisions of r 42.15 which provide that the Court, in its discretion may order “otherwise”, such that the Court would not order indemnity costs in favour of the defendant from the date of the offer.

22. [84]

    It is not suggested that there is any disentitling conduct on the part of the plaintiff that would warrant the Court not make an order that costs will follow the event with respect to the Coles proceedings and in the circumstances, it is appropriate that an order for ordinary costs be made in those terms.

CONCLUSION

1. [85]

   The Court has concluded that by virtue of the operation of r 42.15A, the Owners should be entitled to an order as against the plaintiff for the Owner’s ordinary costs up to the making of the first offer and thereafter an order against the plaintiff for costs on an indemnity basis.

2. [86]

   However, I consider that, it is just in the circumstances, of these proceedings that a Bullock or Sanderson order should be made with respect to costs payable to the Owners from the unsuccessful defendant, Coles.

3. [87]

   The defendants contended that the Court should, if it was inclined to make a Bullock order or a Sanderson order, make a Bullock order as a Sanderson order was for the protection of the owners. The plaintiff opposed that course. In my view, it is appropriate that a Sanderson order be made, whereby Coles will pay the costs awarded to the Owners directly to the Owners instead of those costs being recovered from the plaintiff who must, in turn, recover them from Coles.

4. [88]

   This conclusion is reached on a number of bases. First, the defendants are represented by the same solicitor. Secondly, this is not a case where the unsuccessful defendant is insolvent or there are particular aspects of the costs awarded which make a Bullock order more appropriate. The making of the Sanderson order would result in the successful defendant negotiating directly with the unsuccessful defendant.

5. [89]

   It follows then that the general position favouring a Sanderson order applies in this case. The Sanderson order is less circuitous (see Babcock v Carr (1981) 127 DLR (3d) 77 at [87] (per Rutherford J) and represents a practice which should be adhered to wherever practicable to do so (see Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544 at [572] and Vance v Cheynes Beach Whaling Co [1996] WAR 16 at [24] (per D’Arcy J)).

6. [90]

   In respect of the Coles proceedings, Coles shall pay the ordinary costs of the plaintiff as agreed or in default as assessed.

7. [91]

   Neither party suggested the ultimate form of a Bullock order or a Sanderson order and accordingly it is appropriate that a direction be made that the plaintiff bring in Short Minutes of Order reflecting the terms of the decision after discussion with the defendants.

Direction

1. [92]

   The plaintiff shall bring in Short Minutes of Order reflecting this decision within 14 days of its publication.