Balnaves v Smith [2012] QSC 408

SUPREME COURT OF QUEENSLAND CITATION: Balnaves v Smith [2012] QSC 408 PARTIES: NEIL RICHARD BALNAVES (Plaintiff) V NEIL CLIFFORD SMITH (First Defendant) AND ACN 060 759 382 PTY LTD (Second Defendant) FILE NO/S: BS1391/2005 DIVISION: Trial PROCEEDING: Trial ORIGINATING COURT: Brisbane DELIVERED ON: 14 December 2012 DELIVERED AT: Brisbane HEARING DATE: 18 July 2012 and 7 November 2012 JUDGE: Byrne SJA ORDER: CATCHWORDS: PROCEDURE – OFFER TO SETTLE – COSTS - Where defendant made formal offer to settle in accordance with Chapter 9, Part 5 of the Uniform Civil Procedure Rules – where offer more favourable to plaintiff than judgment – where plaintiff alleges that the inclusion of non-monetary terms in offer means that it is not a valid offer to settle under Chapter 9, Part 5 of the Uniform Civil Procedure Rules – where offer to settle contains a requirement of confidentiality – where offer to settle contains the requirement for consent discontinuance – where offer to settle extends to matters which are not the subject of the claims in the proceedings Uniform Civil Procedure Rules 1999, r5, 307, 308A, 353, 354, 355, 358, 360, 361, 365 A J Lucas Drillings Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) [2010] VSCA 128, cited A L Powell Holdings Pty Ltd v Dick [2012] QCA 254, cited -- 1 of 11 -- 2 Armstrong v Mitchell-Smith and Allianz Australia Insurance Limited (No 2) [2012] QSC 370, cited Australian Medical Innovations Pty Ltd v GO Medical Industries Pty Ltd, Supreme Court of Western Australia (Wallwork J), 22 April 1996, BC9601613, cited Balnaves v Smith & Anor [2012] QSC 192, cited Cameron v Nominal Defendant [2001] 1 QdR 476, cited Charlotte Dawson v ACP Publishing Pty Ltd [2007] NSWSC 542, cited Coombes v Roads and Traffic Authority (No 2) [2007] NSWCA 70, cited Dover Beach Pty Ltd v Geftine Pty Ltd [2008] VSCA 248, cited Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 322, cited Godin v Godin [2004] WASCA 186, cited Hodgson v Canadian Newspapers Co (2003) 65 OR (3d) 626; 228 DLR (4th) 732; 2003 CanLII 44877, cited Hunger Project v Council on Mind Abuse (COMA) Inc. (1995) 22 OR (3d) 29; 121 DLR (4th) 734; 1995 CanLII 7390, cited KGRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516, cited Partridge v Hobart City Council (No 2) [2011] TASSC 35, cited Preti v Sahara Tours Pty Ltd [2008] NTCA 2, cited Reuter v Fraser Estate 2000 Carswell Ont 3670, (2000) 143 O.A.C. 388 (Div. Ct.), cited Rooney (Litigation Guardian of) v Gray 53 OR (3d) 685, 198 DLR (4th) 1; 2001 CanLII 24064, followed Stewart v Canadian Broadcasting Corp 1997 OTC Lexis 4182; 38 OTC 345; 1997 CanLII 12324, cited Taske v Occupational & Medical Innovations Ltd [2007] QSC 147, not followed The Uniting Church v Takacs (No 2) [2008] NSWCA 172, cited Timms v Clift [1998] 2 QdR 100, applied Waxman v Waxman (Trustee of), 2003 CanLII 32907, cited White v Director of Housing [2003] VSC 124, not followed Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17, cited Uttinger v Baycity New Zealand Ltd [2008] NZCA 330; (2008) 19 PRNZ 54, cited Ritchie’s Uniform Civil Procedure NSW, [42.13.12] Williams Civil Procedure Victoria, I 26.02.35 Williams Civil Procedure Victoria, I 26.02.30 COUNSEL: S Given for the Plaintiff G Diehm SC and C Harding for the Defendants -- 2 of 11 -- 3 SOLICITORS: MacGillivrays Solicitors for the Plaintiff Cantwell Lawyers for the Defendants [1] In September 2008, the defendants served the plaintiff with a document headed “Offer to Settle” in these terms: “TAKE NOTICE that the abovenamed First and Second Defendants (“the Defendants”) hereby offer to pay to the Plaintiff the sum of $300,000.00 plus costs and outlays to the date of this offer to be assessed on the standard basis in accordance with the Supreme Court Scale. This offer is made in accordance with the provisions of Chapter 9, Part 5 of the Uniform Civil Procedure Rules 1999 (Queensland). This offer is made on the following terms as regards the Defendants, their insurers and agents: (a) that payment is made without prejudice and without any admission as to any entitlement of the Plaintiff to any moneys and without admission that the Plaintiff was not solely to blame for the collision of 23 February 2002 which is the subject of these proceedings (“the collision”) and without any admission of any negligence or breach of duty by the Defendants; (b) that, otherwise as required by law, the terms of this offer and the terms of any settlement consequent upon the acceptance of this offer be kept confidential; (c) that these proceedings be discontinued by consent within 14 days of payment of the settlement monies specified herein. This offer is made without prejudice to the obligations of the Plaintiff to indemnify the Defendants or contribute to any damages awarded in favour of Garry Malone (“Malone”) against the Defendants in or arising out of the claim for damages by Malone consequent upon injuries which he sustained in the collision (“the Malone proceedings”) and without prejudice to the liability of the Plaintiff arising out of the injuries to Malone at the suit of the Defendants in these proceedings, and without prejudice to the contention and issue in the Malone proceedings that the Plaintiff was responsible for the injuries to Malone and without prejudice to the Defendants in these proceedings‟ contention and issue in the Malone proceedings that the Defendants in these proceedings were not negligent and are not liable for any injuries‟ loss or damage suffered by Malone. This offer is open for acceptance for fourteen (14) days from the date of service, but shall then lapse. Acceptance of this offer may be effected by serving a written Notice of Acceptance on the undersigned solicitors for the Defendant. The offer is herein an offer to settle the Plaintiff‟s claim against the Defendants.” -- 3 of 11 -- 4 [2] The monetary amount the defendants offered under that proposal (“2008 offer”) exceeds the judgment sum awarded on the plaintiff‟s claim for damages1. [3] Nonetheless, the plaintiff resists an order pursuant to r. 361(2)(b) of the Uniform Civil Procedure Rules (“UCPR”) to pay the defendants‟ costs incurred after service of the offer. A non-compliant offer? [4] The plaintiff contends that the inclusion of the “terms” in paragraphs (a), (b) and (c) and the provision concerning Mr Malone2 mean that the 2008 offer is not an “offer to settle” that attracts the operation of Part 5 of Chapter 9 (“Part 5”) of the UCPR3. [5] The 2008 offer is said not to satisfy the requirements of an “offer to settle” because of the confidentiality condition, the requirement for consent discontinuance and that it was “without prejudice” to issues in proceedings involving Mr Malone. [6] The idea that the 2008 offer did not conform with Part 5 because of the inclusion of those non-monetary terms is founded on remarks of Moynihan SJA in Taske v Occupational & Medical Innovations Ltd4. [7] In Taske, the plaintiff had claimed damages for wrongful dismissal. The defendant offered to compromise that claim for an amount that exceeded the compensation awarded by the judgment. That offer, however, was expressed to be conditional upon discontinuance of the proceeding, release of the defendant from all claims, including claims in respect of an employee‟s share ownership plan and other claims pursued in separate defamation proceedings, and the compromise being kept confidential. [8] Moynihan SJA regarded the offer as not complying with the procedural requirements of Part 5 because, he said, “it extended beyond the claims in the proceeding”5. This may refer only to the release in respect of claims other than those pursued in the proceeding. But I shall assume, favourably to the plaintiff, that his Honour was intending also to convey that the discontinuance and the requirement that any compromise resulting from acceptance of the offer be kept confidential rendered the offer non-compliant. [9] Moynihan SJA gave no reason for his view that an offer to settle does not conform with Part 5 if it extends to the resolution of disputes beyond those raised in the 1 Balnaves v Smith & Anor [2012] QSC 192. 2 A passenger in the plaintiff‟s boat when both men were injured. 3 The 2008 offer is not alleged to be non-compliant on the basis that some of its terms could not have been incorporated into a judgment under r. 358(4) or r. 365; cf The Uniting Church v Takacs (No 2) [2008] NSWCA 172, [8]; Williams’ Civil Procedure Victoria, I 26.02.35. In these circumstances, it is unnecessary to decide whether, most unlikely though it would seem (see the cases cited in footnotes 27, 28 and 32), the UCPR impliedly confine the terms that may be included in a compliant offer to settle to those that may be expressed in a judgment (which is not the position under similar rules in Ontario: Hunger Project v Council on Mind Abuse (C.O.M.A) Inc. (1995) 22 OR (3d) 29; 121 DLR (4th) 734; 1995 CanLII 7390; Waxman v Waxman (Trustee of), 2003 CanLII 32907 [73]- [76]). 4 [2007] QSC 147. 5 Para [17]. -- 4 of 11 -- 5 litigation6 or relates to such ancillary matters as notifying the Registry that the case has been finalised and securing assurances concerning confidentiality. And the proposition is not easily reconciled with either the text or the objects of the UCPR. [10] Part 5 specifies the requirements of a compliant offer to settle. [11] Rule 354 stipulates the time within which the offer is to be served. Rule 355 deals with one aspect of content: it requires that the offer specify “a period, ending not less than 14 days after…service of the offer, during which the offer is open for acceptance…”. Rule 353 prescribes the rest of the formalities. These are: “(1) A party to a proceeding may serve on another party to the proceeding an offer to settle 1 or more of the claims in the proceeding on the condition specified in the offer to settle. (2) … (3) An offer to settle must be in writing and must contain a statement that it is made under this part.” [12] An offer capable of triggering adverse costs consequences for the offeree7 must, as r. 353(1) states, offer to settle “one or more of the claims in the proceeding…”. But r. 353(1) does not, in terms at any rate, preclude the inclusion of a condition for the resolution of other contests between the parties. [13] More generally, the broadly expressed provision in r. 353(1) that the offer may be “on the conditions specified in it” - without restriction - is at odds with the notion that an offer which extends beyond the claims in the proceeding is not an “offer to settle”. And no such limitation on the range of compliant proposals is suggested by the content of any other rule. [14] In short, nothing in the language of the UCPR indicates that an offer is non- compliant if it includes a term that extends “beyond the claims in the proceeding”. [15] Nor is the restrictive approach in Taske required by the apparent objectives8 of the Part 5 regime: in particular, encouragement of early compromise. [16] Inventive ideas advanced as a “condition specified in the offer…” might well enhance the prospects of compromise of one or more of the claims in the proceeding. And an offer to compromise a claim that has been litigated might sensibly include a proposal that a party abandon other demands. As a Canadian judge wrote in considering the Ontario analogue to Part 5: “Consequently, there is substantial scope for innovative offers which incorporate the interests of the litigants rather than reflect the rigidity of rights and remedies. The rules permit such offers…because frequently, untold motivations and interests beyond legal rights and 6 If Moynihan SJA‟s approach were correct, its application here would not render the 2008 offer non- compliant. This offer does advert to the preservation of rights in the separate Malone proceedings. It does not, however, purport to affect them. 7 Under r. 360 (plaintiff‟s offer) and r. 361 (defendant‟s offer). 8 See Cameron v Nominal Defendant [2001] 1 QdR 476, 478-479; Partridge v Hobart City Council (No 2) [2011] TASSC 35, [38]-[39]. -- 5 of 11 -- 6 remedies and outside the borders of the pleadings fuel litigation. In order to secure timely, cost effective finalization of lawsuits, the rules permit the issues as seen by the people in conflict to play a significant part in settlement offers…”9 [17] Of course, conditions of an offer to settle “that extended beyond the claims in the proceeding” could complicate things. Uncertainty might be generated about the meaning or effect of the offer. Problematic complexities might be avoided were the permissible conditions constrained as Taske envisages10. But that is not a sufficient reason to imply into Part 5 the Taske restrictions. [18] Part 5 already provides a11 substantial incentive to avoid complicating an offer to settle unduly. [19] To gain the benefit of the Part 5 regime, the offer must, in a phrase, better the judgment: a plaintiff needs to show that the judgment was “no less favourable”12, a defendant, that it “not more favourable to the plaintiff”13, than the offer. [20] To be effective for that purpose, the offer must permit fairly ready comparison between the nature and extent of the advantages (and any disadvantages) arising from the judgment with the situation that would have been obtained had the offer been accepted. As the contest will be about costs only, the assessment of the ramifications of the offer should not involve prolonged examination of documents or costly exploration of other information. The UCPR are to be applied with the objective of avoiding undue expense14. Determining a contest about costs should not increase them substantially.15 [21] So an offer to settle should be clear in its terms16. And its effect should be capable of prompt, comparatively inexpensive, assessment – by the recipient, and, where a judicial evaluation needs to be made of the relative benefits and burdens of offer and judgment, by the court. [22] Difficulty in comparing offer and judgment may well jeopardize the chances of showing that the former was more advantageous to the offeree than the latter17. That reality will encourage clarity in the description of the benefits the offeree will derive by acceptance of the offer. For the Part 5 scheme to work, there is no need to 9 Hunger Project at [20] per J Macdonald J. 10 cf Australian Medical Innovations Pty Ltd v GO Medical Industries Pty Ltd, Supreme Court of Western Australia (Wallwork J), 22 April 1996, BC9601613. 11 There may be more than one incentive to clarity and certainty. Rules 360(1)(d) and 361(2) empower the court to make a different order for costs than that which otherwise obtains where the offeree does not better the offer by the judgment. The more the complications arising from the offer, the greater the prospect that the court may order a departure from the ordinary costs consequences: Godin v Godin [2004] WASCA 186, [37]-[38]; cf Preti v Sahara Tours Pty Ltd [2008] NTCA 2, [46]-[49]. 12 r. 360(1)(a). 13 r. 361(1)(a). 14 r. 5(1). 15 cf in the context of Calderbank offers, Elite Protective Personnel Pty Ltd & Anor v Salmon [2007] NSWCA 322, [111]-[112]; [144]. 16 Dover Beach Pty Ltd v Geftine Pty Ltd [2008] VSCA 248, [118]. 17 cf Williams Civil Procedure, Victoria I 26.02.30; A J Lucas Drillings Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) [2010] VSCA 128, [31]-[33], where the court refrained from ruling on whether the uncertainty also affected validity as an “offer of compromise”; and Armstrong v Mitchell-Smith and Allianz Australia Insurance Limited (No 2) [2012] QSC 370, [10]-[13]. -- 6 of 11 -- 7 interpret rules that prescribe just a handful of formal requirements as impliedly invalidating an offer that incorporates proposals that extend “beyond the claims in the proceeding”. [23] The Taske restriction on the range of compliant offers is not only unnecessary to the proper functioning of the Part 5 scheme. It is also inimical to the apparent objective of promoting settlement of every kind of litigious dispute. But the approach in Taske is not without support in another State. [24] In White v Director of Housing18 a defendant‟s offer of compromise was accompanied by a letter informing the plaintiff‟s solicitors that the offer “is made on the basis that your client signs a release incorporating a confidentiality clause”. Gillard J, who regarded the conditions in the letter as part of the offer, held that the proposal did not comply with the Victorian rules because of the inclusion of those conditions, saying:19 “In my opinion, although the defendant has purported to make the offer pursuant to Part 2 of Order 26, the imposition of terms relating to a release and to confidentiality took the offer outside Order 26. That conclusion follows because the purpose of Order 26 is to put the opposing litigant at risk in relation to costs and certain consequences may follow if a party refuses to accept an offer, depending on the outcome. The Rules provide what is to happen and if the offer does not enable the Rules to operate, then the offer is not within the Rules. That is the position here. Rules 16.08-26.10 (inclusive) deal with the cost consequences resulting from a failure to accept the offer. It is trite to observe that the terms of the offer must be clear, precise, certain and capable of acceptance so that if a party fails to accept the offer, the Court is in a position to give effect to the Rules relating to a failure to accept, where the offeree obtains a judgment less favourable than the terms of the offer. In my opinion, there is no way that a court could evaluate in money terms, the terms imposed by the defendant in the present offer of compromise, namely, release and confidentiality. Because it is not possible for the Rules to operate in relation to the offer of compromise, in my opinion, despite what the defendant purported to do, the offer of compromise is not one within the provisions of Order 26 of the Rules. Of course, that does not mean that the offer could not be accepted in accordance with its terms. Clearly, it could have been accepted. It follows that the Rules do not apply to the offer.”20 [25] That may conform with Taske. Nonetheless, in my opinion, an offer may be rules- compliant even if its terms create such problems in evaluating its worth that it proves to be ineffective in engaging the special Part 5 costs regime. [26] Judicial opinion in Ontario21 accords with the interpretation of Part 5 that seems to me preferable. 18 [2003] VSC 124. 19 At paras [17] – [19]. 20 The value of the confidentiality provision may not have been as difficult to appraise as Gillard J supposed: Stewart v Canadian Broadcasting Corp 1997 OTC Lexis 4182; 38 OTC 345; 1997 CanLII 12324. -- 7 of 11 -- 8 [27] In Rooney (Litigation Guardian of) v Gray22, the Ontario Court of Appeal was concerned with an offer to settle that had sought party and party costs to the date of the offer and solicitor and client costs thereafter. Laskin JA, with whom Rosenberg JA agreed, said23: “A provision for ongoing solicitor-and-client costs is, in some measure, uncertain…This “uncertainty” should not invalidate rule 49 offers…[I]n evaluating a rule 49 offer any “uncertainty” that arises from a provision for costs should only be relevant in deciding whether the party relying on the offer has met its burden of proof under rule 49.10(3). In other words, uncertainty or lack of clarity in an offer may prevent a party from showing that the judgment it obtained was “as favourable as the terms of the offer to settle, or more or less favourable, as the case may be…” I do not think the court should interpret rule 49 in a way that limits the creativity of the bar in fashioning offers to settle. A party wishing to make its offer more, or less, attractive by including a provision for ongoing solicitor-and-client costs should be free to do so... The purpose of rule 49 is to encourage parties to make reasonable offers to settle and to facilitate the early settlement of litigation. Holding that a rule 49 offer cannot include a provision ongoing solicitor-and-client costs does not promote the purpose of the rule…”. [28] An offer may be a valid Part 5 “offer to settle” even though it is ineffacious. [29] The contention that the 2008 offer is not a compliant “offer to settle” because its terms “extended beyond the claims in the proceeding” fails. Offer and judgment comparison [30] Taske is also invoked to support a contention that the 2008 offer was “not more favourable to the plaintiff” than the judgment. [31] Taske involved two defendants‟ offers to settle. One has already been described. The other was, as Moynihan SJA‟s reasons record it24, “conditional on the execution of a deed of settlement and release in terms to be agreed by the parties”. That condition, his Honour thought, would not “be part of any judgment in the action and so the offers are not more favourable than the judgment”25. [32] The plaintiff contends that the references to the Malone proceedings, confidentiality of any resulting compromise and discontinuance by consent could not have been part of any judgment in the proceeding and that, applying Moynihan SJA‟s approach in Taske, the 2008 offer could not be better for the plaintiff than the judgment. 21 The Ontario rules were the source of Part 5. 22 53 OR (3d) 685, 198 DLR (4th) 1; 2001 CanLII 24064. 23 At paras [44] – [47]. 24 Para [15]. 25 Para [16]. -- 8 of 11 -- 9 [33] The proposition was argued as if it were self-evident that those conditions of the 2008 offer could not be incorporated into a judgment; and no authority was cited to sustain the contention. In view of the breadth of the Supreme Court‟s jurisdiction to grant injunctive and declaratory relief26, it may be doubted whether the proposition is correct. But even if it is, inclusion of a provision that could not form part of a judgment does not necessarily mean that the offer must be no more favourable to the plaintiff than the judgment. [34] In Timms v Clift27, the Court of Appeal was concerned with an earlier District Court rule that was, in material respects, the same as r. 361, stipulating that “where the plaintiff makes an offer to settle which is not accepted and the plaintiff obtains a judgment no less favourable than the offer to settle…”, the prescribed costs consequences follow. It was argued that the rule had no application as it could not be shown that the judgment was “no less favourable” than the offer because it “included a requirement that an apology be published, an element not quantifiable in monetary terms”28. [35] The Court29 held that the rule did not “exclude from consideration relief sought other than money claims”30. For example, if an action was brought relating to the winding up of a partnership, various terms of relief might be claimed, including declaratory relief; it would be a matter for the court‟s judgment as to whether, an offer to settle having been made, the effect of the judgment overall was “no less favourable” to the plaintiff and the offer. The award of damages obtained was higher than the sums sought in the offer to settle and, despite the presence of the request for an apology in the offer, the court concluded that “the result of the judgment, including „ample vindication‟31 of the plaintiff‟s position was more favourable than the offer”.32 [36] Timms v Clift33 shows that the mere inclusion of “terms that would not be a part of any judgment” does not mean that the offer cannot be more favourable than the judgment. The contention that the presence of the conditions mentioned compels the conclusion that the 2008 offer is not more favourable than the judgment is erroneous. Consent discontinuance 26 Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17, 22. 27 [1998] 2 QdR 100, applied in A L Powell Holdings Pty Ltd v Dick [2012] QCA 254, [70]-[71]. See also Ritchie’s Uniform Civil Procedure NSW, [42.13.12]. 28 At p. 107. In Ontario, a request for an apology does not take the offer outside an analogous rule: Hodgson v Canadian Newspapers Co (2003) 65 OR (3d) 626; 228 DLR (4th) 732; 2003 CanLII 44877. 29 Pincus and Davies JJA, Mackenzie J. 30 At p. 107. 31 At p. 108. 32 In Ontario, “The overall terms of the offer must be assessed against the judgment obtained to determine whether the judgment after trial is as favourable as the offer. The standard to be applied is one of equivalence with the judgment; it need not be identical”: Reuter v Fraser Estate 2000 Carswell Ont 3670; (2000) 143 O.A.C. 388 (Div. Ct.), [39] cf Partridge v Hobart City Council (No 2) [2011] TASSC 35, [48]-[50]; Coombes v Roads and Traffic Authority (No 2) [2007] NSWCA 70, [56]-[62]. 33 Not, it seems, cited in argument in Taske. -- 9 of 11 -- 10 [37] The question remains whether the judgment was in fact “not more favourable to the plaintiff” than the 2008 offer. [38] The plaintiff concedes that he could not have been disadvantaged by the Malone provision or by the (a) and (b) terms. The consent discontinuance term (c), however, is said to expose him to a burden such that the defendants have not proved that the 2008 offer bettered the judgment. They, it is argued, could have sought to recover their entire costs of the proceeding from the plaintiff, invoking r. 307(1)(a), which stipulates: “(1) A party who discontinues…is liable to pay – (a) the costs of the party to whom the discontinuance…relates up to the discontinuance…” [39] When the 2008 offer was made, the UCPR did not oblige the parties to inform the court when their litigation was compromised. That omission had inconvenient consequences. The Registry could not close the file without knowing that the case was at an end. And some lawyers did not tell the Registry that the contest had been resolved. [40] In 2010, that unsatisfactory state of affairs was remedied by the introduction of r. 308A. The new rule, headed, unfortunately perhaps, “Discontinuance…When Proceedings Settled”, requires the parties to notify the Registrar when a proceeding settles. [41] Before 2010, where litigation had been concluded by compromise, it was not uncommon for the more thoughtful lawyers to tell the Registry. With no form for that purpose prescribed by rule or practice direction, and presumably because a letter seemed too informal for the occasion, many solicitors chose a notice of discontinuance to inform the Registry that the litigation was at an end. [42] That procedure was frequently adopted in cases where all issues, including costs, had been finally resolved by consensus. Strictly, in such circumstances, the case was not discontinued: it was settled, with the contest resolved on terms that, in law, precluded relitigation of the claim34. Discontinuance works differently: it does not “operate as a release or an extinguishment of the claim or in any other way bar further proceedings” to enforce it35. [43] Although a notice of discontinuance functioned as a convenient way of letting the Registry know that a case was not proceeding, it was commonly employed in circumstances where, technically, that form was inappropriate, which is what the 2008 offer envisaged. [44] Acceptance of the 2008 offer would have resolved the disputes in the proceeding between the parties, including their costs entitlements, with the plaintiff to have the only right to costs. There would have been a consensus that “these proceedings be discontinued by consent”. But there would not have been a discontinuance in the 34 Except where the compromise was not implemented and the party seeking to litigate afresh was not restricted in remedy to suing upon the compromise. 35 KGRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516, 528; [2001] NSWCA 116 [39]; Charlotte Dawson v ACP Publishing Pty Ltd [2007] NSWSC 542, [22]. -- 10 of 11 -- 11 sense of that word in the UCPR. So acceptance would not have constituted the plaintiff “a party who discontinues” within r. 307(1)36. [45] If the 2008 offer had been accepted and the defendants had afterwards claimed costs in reliance on r. 307(1), they would have failed. [46] In any event, there was never a chance that the defendants would have made such a demand. Neither in this nor in any other case has the defendants‟ insurer claimed, or even foreshadowed an inclination to claim, for costs when it has compromised litigation on terms that required a plaintiff to attend to a consent discontinuance. [47] It is no surprise, therefore, that the plaintiff concedes that:  had he accepted the 2008 offer, there was but a “remote” prospect that the defendants would have sought costs;  quite apart from whether r. 307(1) was engaged by that offer, any such claim would have failed37. [48] The plaintiff‟s proposition comes to this: the 2008 offer was not better for him than the judgment because the consent discontinuance would have exposed him to the fanciful prospect that the defendants might have pursued a claim for costs which, if ever it had been litigated, would certainly have been defeated. [49] So insubstantial a potential is no disadvantage. [50] The judgment is not more favourable to the plaintiff than the 2008 offer. Disposition [51] It is common ground that the order to be made if the defendants have the benefit of the 2008 offer is that they pay the plaintiff‟s costs of and incidental to the proceedings, to be assessed on the standard basis, up to 12 September 2008, including any costs reserved within that period, and that the plaintiff pay the defendants‟ costs of and incidental to the proceedings, to be assessed on the standard basis, incurred on or after 13 September 2008, including any costs reserved after that date. 36 cf Uttinger v Baycity New Zealand Ltd [2008] NZCA 330; (2008) 19 PRNZ 54, [11]-[13]. 37 The compromise would have precluded such a claim either as a matter of its proper interpretation or because, on the evidence of experienced solicitors that has been adduced in this proceeding, a term to that effect would be implied by custom or usage. -- 11 of 11 --