Coleman v Bicknell (No. 2)[2022] QDC 38

DISTRICT COURT OF QUEENSLAND

1. [1]
   By written reasons delivered 3 December 2021, I ordered the claim brought by Mr Coleman be dismissed and the counterclaim brought by Mr and Mrs Bicknell against Mr Coleman and his son (Mr Coleman Jnr) be dismissed.^[1] I ordered that subject to any contrary submissions from the parties, there would be no order as to costs.^[2]  
2. [2]
   Contrary submissions have been received from each of the parties.  
3. [3]
   The plaintiff and the second defendant by counterclaim (being the Colemans) seek an order that their costs of the claim and counterclaim from 25 August 2021 be paid on the indemnity basis, or alternatively the standard basis.  They do so because they submit the Bicknells unreasonably and imprudently failed to accept an offer made on 25 August 2021 marked “without prejudice save as to costs” and expressed to be “in accordance with the principles in Calderbank v Calderbank”.  The Bicknells oppose the application and instead seek an order for costs incurred by them for what they say is due to Mr Coleman Snr’s late disclosure of wind chime footage pertaining to his claim.

Should the Colemans be entitled to costs?

4. [4]
   The trial of this matter occurred over three days commencing 1 September 2021, with a further hearing for submissions on 17 September 2021.  Shortly prior to the commencement of the trial, namely on 25 August 2021, the Colemans offered to pay the Bicknells as costs, $1.00 in respect of the claim and $1.00 in respect of the counterclaim.  Had that offer been accepted, the Bicknells would have fared more favourably given the result achieved after a three day trial because they would have received $2.00, instead of nothing.  Clearly, they would have not been required to engage their own lawyers to defend the claim and pursue their own counterclaim.  
5. [5]
   It has been conceded on behalf of the Colemans that the proceeding was at a late stage when the offer was made and, because the trial was pending, only two business days were given for the Bicknells to consider their offer.  However, it was submitted the broader context ought to be considered.  Relevantly, the Colemans’ offer stated that it was made “having regard to the matters raised by [the trial judge] at this morning’s mention [after a pre-trial mention in anticipation of the trial]”.  It was submitted by the Colemans that the reference to “having regard to the matters raised by [the trial judge] at this morning’s mention [after a pre-trial mention in anticipation of the trial]” was a reference to the court’s suggestion at the pre-trial mention that the parties might well end up in exactly the situation they are (that is that both the claim and counterclaim be dismissed) so they ought to seriously look at settlement.  In that context, it was submitted the Bicknells’ failure to accept the plainly reasonable offer must be seen as unreasonable and imprudent, notwithstanding the late stage of the proceeding and the relatively short time given to consider the offer.  The Colemans were, it was submitted, able to take in the court’s intimation, and to act on it promptly.  It was suggested that there was no reason at all for the Bicknells not to have done the same and it must have been as evident to them as it was (as evidenced by the terms of the offer) to the Colemans that the “game was not worth the candle” and that the proceedings should not have gone to trial.  Further, and in any event, by only seeking costs from the date of the offer, the late stage of the proceedings was taken into account.  The extent of the compromise offered by the Colemans was large, and by it, the plaintiff gave up the entirety of his claim and there was also an offer, albeit modest, to contribute to the Bicknells’ costs.  It was submitted by the Colemans that given the level of animosity between the parties, the offer by the Colemans should be viewed as a significant compromise.

6. [6]
   The Bicknells have submitted that the offer relied upon by the Colemans was not a genuine offer of compromise and does not carry the consequences of a Calderbank letter.  Otherwise, the offer does not engage UCPR Chapter 9, Part 5 and accordingly rule 361 does not apply.  It was submitted that the usual offer as to costs is that costs follow the event and, in this case, neither party was successful.  It was highlighted on behalf of the Bicknells that the only circumstances that the Colemans can point to in support of the application, is the refusal of an offer made by the Colemans put on the basis that both parties walk away from their respective claims and the Colemans pay the Bicknells $1.00 in respect of the costs of each of the claim and counterclaim.  The Bicknells have submitted that the parties’ rejection of an offer does not automatically lead to a favourable costs order where the result was less favourable to the offeree than the offer.  It must be shown that in all the circumstances it was unreasonable to have rejected the offer.^[3] Having regard to the factors that inform the reasonableness of a party’s rejection of an offer:

   1. (a)
      the Bicknells’ decision not to accept the offer cannot be classified as manifestly or plainly unreasonable because the offer is not a compromise in the true sense.  It is plain that rather than pursuing a genuine settlement, the offer was designed to induce the Bicknells to abandon their counterclaim or otherwise suffer costs consequences;
   2. (b)
      the offer was open for a notably brief period;
   3. (c)
      the element of compromise in the offer was negligible;
   4. (d)
      until judgment, there was no way that either party could have known that all of the witnesses would be found lacking in credit or how the numerous conflicts between them might be decided.
7. [7]
   It was submitted the offer made in the case of Calderbank v Calderbank was on offer of a real compromise for a consideration of real value. The offer made by the Colemans was essentially a walkaway offer with the smallest possible sum offered in respect of costs. I was directed that there are a number of authorities supporting the proposition that an offer to discontinue on the basis each party bear their own costs is not a genuine offer.^[4] For instance, the Supreme Court of New South Wales in McKerlie v State of New South Wales(No. 2) held that a walk-away offer did not carry with it the consequences of a Calderbank letter.  Dunford J expressed the view that an offer in relation only to costs was not really a genuine offer of compromise.  The Bicknells submitted that there is a negligible difference between the offers discussed in McKerlie (and like cases) and the offer made here, such that the Colemans’ offer ought to be viewed in the same manner.

8. [8]
   It is my view that the Bicknells should pay the Colemans’ costs.  They chose not to accept the offer.  The offer made by the Colemans demonstrated a genuine attempt at a compromise, done for the purpose of genuinely comprising the dispute between the parties.  The offer demonstrated complete capitulation in my view.^[5] It was not a token compromise because the claim was prepared to be abandoned by Mr Coleman Snr (and the defence of the counterclaim by the Colemans) despite the level of animosity clearly evident by all witnesses at the trial.  Genuineness is determined by “the characterisation of the offer” as an offer of compromise.^[6] The offer clearly offered a compromise “in the true sense”.  I accept as was submitted by the Colemans that the offer was not merely designed to induce the Bicknells to abandon their counterclaim, it was also offered to abandon Mr Coleman Snr’s claim and to pay some, albeit notional, costs of both the claim and counterclaim.  The Bicknells’ submission that “the element of compromise in the offer was negligible” cannot be sustained as it ignores the costs since the offer was made, including those of the trial which would have been wholly avoided.  Had this offer been accepted by the Bicknells, the need for a three day trial to entertain disputes between former warring neighbours would have been avoided.  This is amplified by the finding of credit that all parties engaged in discreditable conduct.
9. [9]
   Furthermore, I accept as was submitted on behalf of the Colemans that McKerlie and other cases relied upon by the Bicknells are distinguishable in that they all involve offers merely requiring the abandonment of the claim without costs consequences.  Here Mr Coleman Snr also offered to abandon his claim.  In my view, the situation is such that the Colemans are entitled to their costs.  Had a counterclaim not been pressed by the Bicknells, then the outcome for costs would have been different.  But there was a pursuit by the Bicknells of their counterclaim.
10. [10]
    I am however not compelled to order indemnity costs given the time within which the offer was made, the amount offered (absent of costs) and the offer was open until the business day prior to trial.  Such factors militate against the order for indemnity costs and it therefore, in my view, cannot be seen that the Bicknells not entirely unreasonably or imprudently acted or rather failed to act in exercising the option to accept the offer in those circumstances.^[7] Standard costs therefore apply from the date of the offer.

Should the Bicknells be entitled to costs given late disclosure?

11. [11]
    The submission was advanced on behalf of the Bicknells is that Mr Coleman Snr should pay indemnity costs fixed in the sum of $2,200 given his late disclosure of some 10 and

1. (a)
   half hours of wind chime footage.  That footage was sent to the Bicknells’ solicitors at 5.35pm on Thursday 26 August 2021 and the Bicknells’ solicitor spent some four hours reviewing part of the footage, at a rate of $500 per hour (excluding GST).  The basis for the application was that the conduct engaged was inconsistent with the obligations incumbent on all parties in relation to disclosure and more particularly UCPR rule 5.  This was in circumstances where from as early as February 2017, the Bicknells asked the Colemans to produce all footage recorded on their cameras on Mr Coleman Snr’s property.  There was also an explanation from the solicitors for the Colemans that “cameras only store data for a limited amount of time, after which old data is overridden with new data” and therefore the Colemans “do not have in their possession or control the [footage sought]”. The submission was made on behalf of the Bicknells that the documents disclosed were highly relevant to the proceedings and Mr Coleman was on notice from as early as February 2017 that the documents were discoverable and called for.  No explanation was offered by the Colemans with respect to the late disclosure or the incorrect assertion that the footage did not exist.  Such footage was sent after business hours, some three days before the commencement of the trial.  In the circumstances, it was submitted that it may be inferred that the late disclosure of excessive material (ultimately not relied upon) was demonstrable of a reckless disregard for the obligations of a party under the UCPR

12. [12]
    For Mr Coleman Snr, it was submitted that it was not intentional, but it was accepted that it was nevertheless in default of his disclosure obligations.  However, the answer to the Bicknells’ application is that no costs were incurred as a result of that default.  The material was (as the Bicknells submitted) “highly relevant” and ought to have been disclosed earlier.  If that had occurred, the Bicknells would have incurred (albeit at an earlier time) precisely the same costs in reviewing it as they ultimately did.  The costs sought are not “costs incurred by the late disclosure”, but merely ordinary costs of the action the amount sought is in excess of the scale costs for a solicitor and therefore are sought on an indemnity basis. 
13. [13]
    In my view, there is no basis to award any costs to the Bicknells given the costs order arising from this decision.  Despite being late and because of Colemans’ offer not having been acted upon, the footage was utilised and relevant for the trial of this matter.

Conclusion

14. [14]
    The order will therefore be that the defendants pay the plaintiff’s costs of and incidental to the claim and counterclaim from 25 August 2021, as well as the second defendant by counterclaim’s costs of and incidental to the claim and counterclaim from 25 August 2021 (including the costs of and incidental to the application for costs).