When will a walk away offer be held to be a genuine Offer of Compromise?

Hearse & Anor v Staunton & Ors [2011] NSWSC 1065  

Judgment date: 12 September 2011

Hall J: 

12The provisions of UCPR Part 20 Rule 26 are concerned with written offers by a party to another to compromise any claim in the proceedings either in whole or in part on specified terms: Rule 20.26(1). An offer must be exclusive of costs, except where it states that it is a verdict for the defendant and that the parties are to bear their own costs: Rule 20.26(2).

13In order to be a valid offer under Part 20 of the UCPR, the offer must be a valid offer, that is, the form and terms of the offer must be in accordance with the Rules. There is no issue in these proceedings as to the form and terms of the offer, other than the question as to whether it constituted a genuine Offer of Compromise. The commentary in the UCPR [20.26.10] states that the Offer of Compromise procedure is not intended to be utilised simply as a statutory demand whose rejection would automatically entail the payment of costs on an indemnity basis. To be an Offer of Compromise under the Rule, some real element of compromise must be involved in the offer: Tickell v Trifleska Pty Limited (1990) 25 NSWLR 353; Hobartville Stud Pty Limited v Union Insurance Co Limited (1991) 25 NSWLR 358 (both cases concerned offers of compromise made by the plaintiffs).

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26It may be accepted that the costs incurred by the time the offer was made on 7 April 2010 would not have been insubstantial. Had the offer been accepted, there would have been a real benefit to the plaintiffs having regard to the costs incurred. In other words, the Offer of Compromise made on behalf of the third, fourth and fifth defendants was not one made on the basis of a capitulation with no real benefit to the plaintiffs. There are no "exceptional circumstances" , as discussed above, that would operate against making the order sought. In my assessment, the defendants are entitled to an indemnity costs order from the date specified for acceptance of the Offer.

Putting a hold on pre-litigation dispute resolution requirements in NSW

On 8 September 2011 the NSW Parliament passed the Courts and Other Legislation Further Amendment Bill 2011.  The purpose of the Bill is to postpone the pre-litigation dispute resolution requirements set out in Part 2A of the Civil Procedure Act 2005 by 18 months.  Part 2A of the Civil Procedure Act was to apply to proceedings commenced on or after 1 October 2011 and imposes on parties to certain types of civil disputes an obligation to resolve the dispute, or narrow the issues in dispute, prior to the commencement of proceedings. The Bill now awaits assent or proclamation.

As safe as houses - a look at homeowners' liability

Bader v Jelic [2011] NSWCA 255

Judgment date: 31 August 2011

Macfarlan JA (Young JA and Sackville AJA agreeing):

43. The following oft-quoted observations that Gleeson CJ made in Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166 are pertinent to the present case:

"There is no such thing as absolute safety. All residential premises contain hazards to their occupants and to visitors. Most dwelling houses could be made safer, if safety were the only consideration. The fact that a house could be made safer does not mean it is dangerous or defective. Safety standards imposed by legislation or regulation recognise a need to balance safety with other factors, including cost, convenience, aesthetics and practicality. The standards in force at the time of the lease reflect this. They did not require thicker or tougher glass to be put into the door that caused the injury unless, for some reason, the glass had to be replaced. That, it is true, is merely the way the standards were framed, and it does not pre-empt the common law. But it reflects common sense" (at [23]).

When failing to take precautions against a risk of harm will amount to breach of duty

Mungis (No 2) Pty Limited v Still [2011] NSWCA 261

Judgment date: 6 September 2011

Sackville AJA (Basten JA and Macfarlan JA agreeing):

51. The duty of care arises under the general law. However, a court cannot make a finding of breach of duty for failing to take precautions against a risk of harm unless the three pre-conditions set out in s 5B(1) of the Civil Liability Act are satisfied: Roads and Traffic Authority (NSW) v Refrigerated Roadways Pty Ltd [2009] NSWCA 263, 53 MVR 502, at [173], per Campbell JA (with whom McColl JA and Sackville AJA agreed).

52. Section 5B provides as follows:

"(1) A person is not negligent in failing to take precautions against in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if care were not taken,

(b) the likely seriousness of the harm,

(c) the burden of taking precautions to avoid the risk of harm,

(d) the social utility of the activity that creates the risk of harm."