LAKE MACQUARIE CITY COUNCIL v HOLT [NO 2]

SHELLER JA : When the Court handed down judgment in this appeal on 3 September 2004, the question of costs was reserved to enable the parties to make submissions in light of the Court’s decision.

By letter dated 30 August 2002, the appellant, Lake Macquarie City Council, served on the respondent, Jason Holt, an offer of compromise pursuant to Part 19A of the District Court Rules . In summary, the proposal was that there be a verdict for the Council with each party to pay its own costs. That offer was rejected. By the decision of this Court, there is now a verdict and judgment for the Council with costs. The Council submitted that the offer represented a clear compromise in that the Council was fully prepared to bear its own costs in exchange for a verdict in its favour. The offer was not successful.

The Council having been wholly successful with respect to its appeal with a verdict entered in its favour, together with an order for costs, the respondent has done considerably worse than he would have done had he accepted the offer of compromise. It is submitted that the real cause and occasion of the ongoing litigation has been entirely the rejection of the Council’s offer of compromise. In those circumstances, it is submitted there is no reason why the Court ought not exercise its discretion to make an order that the respondent pay the Council’s costs from the time of the expiry of the Council’s offer of compromise, that is to say as from 27 September 2002 on an indemnity basis; see s148B(1)(c) of the District Court Act 1973.

The respondent has indicated that he does not wish to make any submissions. Accordingly, the order of the Court will be that the plaintiff will pay the costs of the defendant of the trial and of the appellant of the appeal from 27 September 2002 on an indemnity basis.

IPP JA: I agree with Sheller JA.

TOBIAS JA: I agree with Sheller JA.