Allen v Chadwick (No 2) - [2014] SASCFC 130

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
ALLEN v CHADWICK (No 2)
[2014] SASCFC 130
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Nicholson)
24 November 2014
TORTS - NEGLIGENCE - ROAD ACCIDENT CASES - LIABILITY OF DRIVERS OF VEHICLES - GENERALLY
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE - OFFER OF COMPROMISE MADE
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
On 16 September 2014, the Court delivered judgment in this matter allowing both the appeal in part and the cross-appeal in part. The matter was stood over to allow the parties to provide calculations of the final judgment sum to be awarded, consistent with the reasons of the Court on appeal and also to provide written submissions concerning the costs of the trial, insofar as the Judge’s orders might need to be varied, and the costs of the appeal. An unsolicited submission was also received from the appellant concerning an asserted failure by the Court to deal with a contention on the appeal that the Judge had wrongly relied on hourly rates inclusive of Goods and Services Tax in connection with his calculation of the personal care component of the award for future care.
Whether the Judge erred in calculating the personal care component of the respondent’s damages award based upon an hourly rate inclusive of GST, where the appellant relied on a legislated GST exemption for the provision of “home care” provided for under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Whether the Judge erred in finding that the respondent was entitled to her costs of the whole action on a solicitor-client basis but reduced by 15 per cent to allow for time spent in litigating aspects of the damages claim which the Judge found to be based on exaggerated and false evidence, where, prior to the commencement of trial, the respondent had made a liability offer pursuant to which she offered to accept 74.9 per cent of damages as assessed and an assessment of damages offer in the amount of $3,250,000.00 and where the award made by the Judge was in terms more favourable to the respondent than the liability offer, but less favourable than the assessment of damages offer. Whether an order should be made in favour of the respondent as to the costs of the appeal, where the end result of the appeal was that the respondent ultimately succeeded on all questions concerning liability and had the judgment sum increased by more than $400,000.00.
Held (per Gray and Nicholson JJ) (Kourakis CJ agreeing in part):
1. No basis has been established by the appellant that would justify disturbing the Judge’s assessment for the future care component of the damages award.
2. As a consequence and by agreement, judgment is to be entered in favour of the respondent for $1,803,903.36, inclusive of interest, which judgment, subject to hearing further from the parties, is to take effect as of 19 November 2012.
3. The order for costs of the trial made by the Judge is confirmed.
4. The appellant is to pay the respondent’s costs of the appeal and the cross-appeal on a party-party basis.
A New Tax System (Goods and Services Tax) Act 1999 (Cth) s 38.30; Aged Care Act 1997 (Cth) s 45.3; Quality of Care Principles 2014 (Cth) Schedule 1, Part 2.1; Supreme Court (Civil) Rules 2006 r 187, r 188, referred to.
Calderbank v Calderbank [1976] Fam 93; Cretazzo v Lombardi (1975) 13 SASR 4; Thompson v Thompson (1974) 8 SASR 394; Shaw v Jarldorn (1999) 76 SASR 28; Whitehead v Maas (1991) 56 SASR 362; Hillier v Sheather (1995) 36 NSWLR 414; Pirrotta v Citibank (1998) 72 SASR 259; Morris v McEwen (2005) 92 SASR 281; H v G [2005] SASC 344; ND v Dighton (No 2) [2012] SASCFC 97, considered.

ALLEN v CHADWICK (No 2)
[2014] SASCFC 130
Full Court: Kourakis CJ, Gray and Nicholson JJ

KOURAKIS CJ: I would join in the orders proposed by Gray and Nicholson JJ, save for order (iv).
Order (iv) confirms the Judge’s order awarding Ms Chadwick her costs of action on a solicitor/client basis, but subject to a 15 per cent deduction for the costs of defending her exaggerated injury claims. It is the first element of the cost order with which I would interfere. In my view, there was good reason to make a different order to the one prescribed by 6SCR 188(6)(b)(ii) that Ms Chadwick have the whole of her costs of action on a solicitor/client basis.
A claim is an assertion that a court should determine a justiciable issue in a particular way.[1] An offer pursuant to 6SCR 187 may be made in relation to one or more of the claims made in an action. Ms Chadwick’s offer on liability was made in relation to her claim that Mr Allen was wholly responsible in law for the causation of her injuries. It was an offer as to principal relief, in the sense that it was not a costs offer. Generally speaking, there is little, if any, reason to include within the costs penalty for unmeritoriously bringing or defending one, of a multiplicity of claims in an action, the costs of the other claims which have been properly prosecuted or defended. Indeed, the other claims may have been the subject of different offers with the result that 6SCR 188(6) would prescribe inconsistent results.
[1] Supreme Court Civil Rules 2006, rule 30(2).
In this particular case, it appears unjust to order that Mr Allen pay Ms Chadwick’s solicitor/client costs on the damages issue when that issue would have been litigated in the same way even if the offer on liability had been accepted. I would limit the award of solicitor/client costs to the question of liability and apply the 15 per cent reduction to the party/party costs of the action on the question of damages.
GRAY AND NICHOLSON JJ
On 16 September 2014, the Court delivered judgment in this matter allowing both the appeal in part and the cross-appeal in part.[2] In the result, the judgment appealed from was set aside for the purpose of adjusting upwards the amount of damages to be ordered in favour of Ms Chadwick, the respondent and cross-appellant. The matter was stood over to enable the parties to provide calculations of the final judgment sum to be awarded, consistent with the reasons of the Court on appeal, and also to provide written submissions concerning the costs of the appeal and the costs of the trial, insofar as the Judge’s orders might need to be varied. The Court has now received and considered submissions in respect to those issues.
[2] Allen v Chadwick [2014] SASCFC 100. While the joint judgment of Gray and Nicholson JJ and the judgment of Kourakis CJ differed on one aspect concerning liability, the Court was unanimous with respect to the damages assessment.
In addition, an unsolicited submission was received from Mr Allen, the appellant and cross-respondent, concerning an asserted failure by this Court to deal with Mr Allen’s contention on the appeal that the Judge had wrongly relied on hourly rates inclusive of Goods and Services Tax, rather than exclusive of GST, in connection with his calculation of the personal care component of the award for future care. Ms Chadwick, in a brief written response, has submitted, inter alia, that the unsolicited submission should not be received or acted upon but, if it were to be, Ms Chadwick would like the opportunity to respond more fully. For the reasons that follow, we do not see any need to revisit this aspect of the appeal.
The GST Issue
It was Mr Allen’s submission that the personal care component of the future care award, as determined by the Judge, should have been based on hourly rates exclusive of GST. If accepted, this, it was said, should have led to a reduction of this component as awarded by the Judge and left undisturbed on appeal. In this respect, Mr Allen relied on a legislated GST exemption for the provision of “home care” provided for under the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
Mr Allen relied on the same submission at first instance with respect to both the component of the award for past gratuitous care provided by Ms Chadwick’s daughter, Hope, and the component of the award for future personal care. In rejecting the submission in relation to the past gratuitous care component, the Judge relied on authority which his Honour understood to be to the effect that, prima facie, the commercial rate for the services in question was to be applied. His Honour observed:[3]
The next question becomes at what rate? The appropriate commercial rate is $38.17, inclusive of GST and $34.70 exclusive of GST.
…
It follows then from the strength of the authorities that the commercial rate of $38.17 is prima facie to be applied. However the plaintiff proposes the damages award be invested with the Public Trustee because of the vulnerability of the plaintiff, given that she is likely to be entrusted with a relatively large sum of money. The plaintiff also proposes that any award for gratuitous services supplied by Hope be set aside for the benefit of Hope. Whilst there is no power to make such an order, the court can indicate that such a course of action would be entirely appropriate.
If the award of damages is to be managed by the Public Trustee, it appears that medical services rendered to the plaintiff will be GST exempt, whereas nursing services are not. The position of the defendant is that the lower rate free of the GST component is applicable, because it will be GST free in the hands of the Public Trustee.
That submission is further grounded in the exemption of ‘community care’[4] from GST, as defined in s38.30 of the New Tax System (Goods and Services Tax) Act 1999 (Cth), having the meaning ascribed to it in s45.3 of the Aged Care Act 1997 (Cth).
…
The fact that such services might prove to be GST exempt is beside the point. The authorities demonstrate the commercial rate applies. The insurer payments were allocated to such things as ‘community care’, ‘medical’ or ‘nursing’ services supplied at the market rate, but the services rendered by Hope hardly amounted to any of these kinds of services. No case referred to by counsel have reduced an award otherwise appropriate on this basis. At this point of the calculation then, it is proposed to begin with the hourly figure of $38.17. This base figure yields an award of $26,722.50[5] based on 40 minutes per day over a period of 150 weeks.
[3]    Chadwick v Allen (No 2) [2012] SADC 155, [8]-[12].
[4]    After the judgment in Chadwick v Allen (No 2) [2012] SADC 155 was handed down, section 38.30 was amended so as to refer to “home care” instead of “community care”. Aside from that change in terminology, the terms of the provision remain unchanged.
[5]    The award for gratuitous services provided by the daughter, Hope, was very substantially reduced on appeal. Any further variation, were Mr Allen’s GST argument to be accepted, would be de minimis.
The Judge proceeded to reject the submission with respect to the award for future personal care on the same basis:[6]
Once again, the rate applicable based upon the current costs of the plaintiff’s care provider is $38.17 per hour. There are additional rates for 12 hours after 8.00pm at night and on weekends and public holidays. The parties should therefore recalculate what is an appropriate amount in light of these findings.
The defendant also made a submission that the rate applied should be reduced by a GST component, but that is rejected for the same reasons as it was under the rubric of past gratuitous services.
[6] Chadwick v Allen (No 2) [2012] SADC 155, [23]-[24].
Mr Allen, on appeal, contended that the Judge misunderstood and misstated his position as being that the provision of future personal care “will be GST free in the hands of the Public Trustee”, whereas the argument advanced was that the law does not allow a provider of care to charge GST for personal care. It was his submission that the Judge failed to address this specific issue; that is, whether by law GST was chargeable in respect of future paid care provided commercially.
The judgment under appeal did not expressly resolve the issue of whether the GST exemption would apply with respect to future care services to be enjoyed by Ms Chadwick. The Judge saw this as beside the point because, on his view of the authorities,[7] the “commercial rate” was to be applied in any event. However, none of the authorities relied on considered the question whether the “commercial rate” was to be applied on a GST exclusive or a GST inclusive basis and none considered the exemption created by the Act.
[7] Van Gervan v Fenton (1992) 175 CLR 327; Baldwin v Lisicic [1993] NSWCA 18; Terry v Leventeris (2011) 109 SASR 358 were referred to.
Mr Allen submitted that future personal care, if provided to Ms Chadwick, falls within the supply of home care as defined under the A New Tax System (Goods and Services Tax) Act and, as such, will be exempt from the requirement to pay GST. Subsection 38.30(3) provides:
A supply of home care is GST-free if the supply is of services:
(a) that are provided to one or more aged or disabled people; and
(b)that are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles.
The notion of home care is defined, by way of reference to section 45.3 of the Aged Care Act 1997 (Cth) as “care consisting of a package of personal care services and other personal assistance provided to a person who is not being provided with residential care.”
In order for a supply of home care to be GST-exempt, section 38.30(3)(b) of the Act further requires that it be of a kind identified by the Quality of Care Principles 2014 (Cth) as daily living activities assistance. That particular kind of care is defined as follows:[8]
[8] See Quality of Care Principles 2014 (Cth) Schedule 1, Part 2.1.
Daily living activities assistance
Personal assistance, including individual attention, individual supervision, and physical assistance, with the following:
(a)bathing, showering, personal hygiene and grooming;
(b)maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management;
(c) eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary);
(d) dressing, undressing, and using dressing aids;
(e) moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids;
(f) communication, including to address difficulties arising from impaired hearing, sight or speech, or lack of common language (including fitting sensory communication aids), and checking hearing aid batteries and cleaning spectacles.
Excludes hairdressing.
No authority has been drawn or come to our attention that expressly deals with the GST exemption relied on by Mr Allen in the context of an assessment of damages for future personal care services.
Of course, Ms Chadwick may choose not to spend this or any portion of her damages award on future personal care services. A court in making a once and for all assessment cannot control this. However, such a prospective need has been identified and a component of the damages award has been assessed on the assumption that such services will be required and paid for. Nevertheless, while it may prove to be the case that some or all future personal care services rendered to Ms Chadwick will fall within the ambit of the GST exemption, it also may prove to be the case that some or all such services obtained by Ms Chadwick will not.
Furthermore, the damages award has allowed for Ms Chadwick’s future personal care on a daily basis for the remainder of her adult life, another estimated 50 years or so. It ought not be assumed that the exemption afforded by section 38.30 of the A New Tax System (Goods and Services Tax) Act will continue to operate or be in the same terms throughout that time. It is not to be assumed that care provided to Ms Chadwick on a day to day basis over that period necessarily will be of a nature that falls within any exemption of this type in force from time to time.
The Judge was correct to “begin” his assessment under this heading with, that is, base it on, the GST inclusive rate. The present and continuing availability of the exemption and its relevance, if any, to Ms Chadwick’s circumstances, is no more than a contingency to be considered when coming to a final assessment of the damages sum to be awarded. This Court has concluded that the final assessment in the amount of $1,077,361.00 for Ms Chadwick’s future care and assistance over a period expected to be in excess of 50 years was open on the evidence before the Judge and should not be interfered with. That final assessment was made up of a number of components and involved, in part, discretionary considerations and allowance for future contingencies. The potential applicability of an exemption in the nature of that under section 38.30 is but one such future contingency.
On appeal, the joint judgment expressly eschewed any attempt at precise recalculation of the component parts of the final assessment of damages. Given the substantial size of the aspect of the award now under consideration, the observations in the joint judgment concerning the lack of utility attaching to overly precise calculations, and the inability to predict with any certainty the current and ongoing applicability to Ms Chadwick’s position of the GST exemption in its present form, as discussed earlier, only minimal, if any, weight can be given to this contingency. We repeat what was said in the joint judgment:[9]
On the appeal, the submissions of both parties in substance amounted to little more than an attempt to reargue the matters ventilated at trial. Having reviewed the evidence, we do not consider that it has been established by either party that the Judge erred in his findings of fact. Given those findings, we do not consider that the allowance, something in excess of $1,000,000.00, was inappropriate. We consider the precise calculation of the Judge of $1,077,361.00 to be artificial in the extreme, and we would have rounded the figure. However, in the circumstances, we would not interfere with the Judge’s assessment in this respect.
[9] Allen v Chadwick [2014] SASCFC 100, [220] (Gray and Nicholson JJ with whose reasons in this respect Kourakis CJ agreed).
As indicated in the joint judgment, nothing has been put that would justify disturbing the Judge’s assessment of this component of Ms Chadwick’s damages. In the circumstances, there is no need to hear further from Ms Chadwick on this issue.
Final Calculation of the Judgment Sum
Given that no adjustment on account of the GST issue is called for, the parties have agreed that, as a consequence of this Court’s reasons on appeal, judgment should be entered in favour of Ms Chadwick for $1,803,903.36 inclusive of interest.[10]
[10] This amount is in addition to interim payments of $67,000.00 and payments of $339,476.12 pursuant to s124AC of the Motor Vehicles Act 1959 already paid.
Costs of the Trial
Following the trial, the Judge made an order that Ms Chadwick was entitled to her costs of the whole action on a solicitor-client basis, but reduced by 15 per cent. The 15 per cent reduction was intended to allow for, inter alia, time spent in litigating aspects of Ms Chadwick’s damages claim which the Judge found to be based on exaggerated and false evidence.

Prior to the commencement of the trial, Ms Chadwick had filed two offers to settle the matter pursuant to rules 187 and 188 of the Supreme Court (Civil) Rules 2006. One was a liability offer pursuant to which she offered to accept 74.9 per cent of damages as assessed and the other was an assessment of damages offer in the amount of $3,250,000.00. Her result at trial bettered the liability offer. She obtained 75 per cent of her damages as assessed and has now, following the appeal, been found entitled to 100 per cent. However, the damages as assessed at trial, and on appeal, have fallen well short of the damages offer. Notwithstanding this, the Judge held that she was entitled to her costs of the whole action on a solicitor-client basis, reduced by 15 per cent. The Judge said:[11]
The dual objectives lying behind Rule 6R 188 are to encourage parties to make and accept reasonable offers and to promote the prompt and economic disposition of litigation, thus reducing the number of cases proceeding to trial: Maitland Hospital v Fischer (No. 2),[12] Shaw v Jarldorn[13] and Miller v Hannagan.[14]Moreover as French CJ observed in AON Risk Services Australia Ltd v Australian National University:
It is recognized by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
The Rule and its predecessors have long been interpreted as having penal consequences, so as to encourage defendants to accept offers: Whitehead v Maas.[15]
The current rule, once invoked, renders solicitor/client costs of the whole action the primary rule rather than the exception, subject only in the case of plaintiff offers to ‘the Court’s order to the contrary’. The practical purpose of Rule 6R 188(6) is therefore to erect a presumptive or default position rather than a bare discretionary entitlement to costs.[16]
[11] Chadwick v Allen (No 3) [2013] SADC 66, [16]-[18].
[12] (1992) 27 NSWLR 721 at 725.
[13] (1999) 76 SASR 28 at 29.
[14] (1989) 154 LSJS 385 at 390.
[15] (1991) 56 SASR 362 at 367.
[16] Compare Specsavers Pty Ltd v The Optical Superstore Pty Ltd (2012) 208 FCR 78 at [21].
Mr Allen submitted that the Judge made three errors. It was submitted that:
-the Judge assumed that rule 188 warranted an order for solicitor-client costs for the whole of the action even where a plaintiff bettered only a liability offer but not a damages offer;
-the Judge assumed that Mr Allen’s surveillance evidence was always going to be called whereas, on Mr Allen’s case, it was only to be used in the event that, as it happened, Ms Chadwick gave false evidence; and
-the Judge underestimated the time at trial associated with Mr Chadwick’s exaggerated claims and false evidence when allowing a discount of only 15 per cent.
Mr Allen submitted that, for these reasons, the costs order made by the Judge was erroneous and should be set aside. According to Mr Allen, Ms Chadwick should have her costs of the proceedings with respect to liability issues on a solicitor-client basis pursuant to rule 188(6), but she should only recover her costs of the proceedings with respect to damages issues on a party-party basis and the latter should be reduced by one third. Mr Allen submits that Ms Chadwick should also be ordered to pay Mr Allen’s disbursements relating to the obtaining of surveillance video evidence and in calling carers to undermine her false and exaggerated evidence.[17]
[17] In these respects, Mr Allen relies upon Cretazzo v Lombardi (1975) 13 SASR 4, 14-15 (Bray CJ) and Thompson v Thompson (1974) 8 SASR 394, 396 (Hogarth J).
Ms Chadwick maintains that the Judge was correct to award solicitor-client costs for the whole of the action in accordance with rule 188(6) and that the result on appeal confirms and reinforces that entitlement. Ms Chadwick also has drawn this Court’s attention to a so called Calderbank letter.[18] The Calderbank offer was made on 25 January 2012, during a break in the trial and after the lengthy cross-examination of Ms Chadwick had concluded. The offer was to settle the proceedings for:
the sum of $1,780,086.00 after apportionment of liability in addition to amounts paid to date plus legal costs, disbursements, amounts owed to Medicare and outstanding special damages.
[18] Calderbank v Calderbank [1976] Fam 93.
As it happens, following Ms Chadwick’s success on appeal, the final damages award will exceed the amount of that offer. Ms Chadwick also points to the fact that Mr Allen’s failure to accept the Calderbank offer resulted in the trial proceeding for a further 34 days. Ms Chadwick submits that this unnecessary, as it now turns out, increase in trial time and costs to the parties would have outweighed, by far, any time taken up on the subject of the plaintiff’s credit and exaggerated and false evidence. Ms Chadwick submitted that she should now be entitled to an order that her costs of action be met on a solicitor-client basis without deduction.
Rule 188(6) provides:
If a formal offer of settlement so far as it relates to principal relief is not accepted by the party to whom the offer is made and the Court determines the relevant action or claim on terms (as to principal relief) that are no more favourable to the party than the terms of the offer, then, subject to the Court's order to the contrary—
(a)the party to whom the offer was made is not to be entitled to costs referable to the period falling after the relevant date; and
(b)the party that made the offer—
(i) if a defendant—is entitled to costs referable to the period falling after the relevant date; and
(ii) if a plaintiff—is entitled to the whole of the party's costs of action on a solicitor/client basis and the defendant is not entitled to any costs not otherwise ordered.
It was put by Ms Chadwick to, and accepted by, the Judge that this was a case where her offer as to liability was an offer of settlement relating to principal relief which was not accepted by Mr Allen in circumstances where the Court had determined the action in favour of Ms Chadwick on terms that were no more favourable to Mr Allen than the terms of the liability offer. It followed, according to the terms of rule 188(6), that Ms Chadwick, as plaintiff, has a prima facie entitlement to “the whole of [her] costs of action on a solicitor/client basis”. The Judge accepted this submission and held that this was, in effect, the “default position” established by the rule but subject, of course, to the discretion, always available, to depart from that default position.
Mr Allen conceded during the costs argument before the Judge that this was correct. Mr Allen did not argue against a finding that the “default position” had arisen notwithstanding that the offer by the plaintiff which had not been bettered was only the one expressed in terms of liability, and where the judgment sum ultimately awarded was significantly below the damages offer also filed by Ms Chadwick. During the costs argument before the Judge, Mr Allen argued only that the discretion to depart from the “default position” should be exercised in his favour.
The problem that confronts a party in the position of Mr Allen in these circumstances is that, even if he were to have accepted the liability offer, a trial still would need to proceed with respect to an assessment of damages. Those trial costs would be incurred in any event. On one view, it is unreasonable to impose a costs penalty on a person in Mr Allen’s position that embraces the costs of the whole action rather than a costs penalty only referrable to the costs of the liability aspect of the proceedings, bearing in mind that Mr Allen cannot be said to have imprudently failed to accept the damages offer. As against this, the approach taken by the Judge can be said to fall within the literal terms of the rule and, as is well recognised, the operation of the rule is intended to be penal in the sense described by the Judge as set out above.
Broadly, there are two approaches potentially available. The first is to construe the rule in the way that the Judge did but to resolve any problem such as that confronting Mr Allen - in being faced with a liability offer and a damages offer, only one of which was bettered by his opponent - as part of the consideration of how to exercise the discretion available to depart from the default position. The alternative approach is, as Mr Allen now contends, to construe the rule as only permitting the default position to operate with respect to the costs of the proceedings as to liability issues but leaving the costs of the proceedings with respect to damages issues to be dealt with in the usual way in the absence of an effective rules offer.
It is unnecessary to form a concluded view with respect to these two alternative approaches. We accept Ms Chadwick’s submission that Mr Allen should be held to his concession before the Judge and that it is not open to him to argue the question of construction of rule 188(6) at this late stage. Mr Allen, in his written submissions for the appeal itself, argued only that the discretion exercised by the Judge under rule 188(6) miscarried. The parties joined issue in this way both at the trial and on appeal. Mr Allen should not be permitted to raise this new issue after the delivery of judgment on the appeal.
Once the default position, a prima facie entitlement to solicitor-client costs pursuant to rule 188(6), arises, such an entitlement will not easily be displaced.[19] The purpose of rules of this nature is to encourage the acceptance of reasonable offers and to allow for the prompt and economic disposition of litigation. The rule is penal in its operation and intended to be so. A court will not readily depart from the position provided by the rules in this respect for to do so would diminish the effectiveness of the rule and detract from its purposes.[20]
[19] Shaw v Jarldorn (1999) 76 SASR 28, 34 (decided under an earlier version of the rule).
[20] Whitehead v Maas (1991) 56 SASR 362, 367; Hillier v Sheather (1995) 36 NSWLR 414, 422.
Mr Allen complains that the Judge’s discretion miscarried both in failing to limit the solicitor-client costs to the liability aspects of the trial only and by not reducing the costs order by more than 15 per cent. We have reviewed the Judge’s detailed reasons in support of the costs order that his Honour made.[21] The trial was lengthy – conducted over more than 66 sitting days – and gave rise to a number of difficult and complex issues of fact and law. We agree with the submission of Ms Chadwick that the Judge was in the best position to assess the impact of adverse credit findings made against Ms Chadwick upon the course of the trial. It also is to be noted that the deduction made by the Judge was 15 per cent of the costs of the entire action, not 15 per cent of just the trial, a not insignificant penalty.
[21] Chadwick v Allen (No 3) [2013] SADC 66.
Ultimately, the Judge was called upon to exercise a discretion as to that which, at the end of what was a long and complex proceeding, would provide for a just outcome between the parties. Having reviewed the submissions of Mr Allen, both at the appeal proper and in writing following the delivery of the Court’s judgment in this matter, we are not satisfied that the Judge’s discretion miscarried. The costs order he made was open on the material before him.
Ms Chadwick contended that she should be entitled to her costs of trial on a solicitor-client basis without any deduction whatsoever because of Mr Allen’s failure to accept the Calderbank offer. However, given the complexity of the litigation, including the very difficult questions of fact and law concerning the applicability of the seatbelt deduction and the intoxicated driver deduction that were central to the dispute, and given the timing of the Calderbank offer and its lack of precision, we are not satisfied that the refusal of Mr Allen to accept the offer should be characterised as imprudent or unreasonable.[22] We reject Ms Chadwick’s contentions in reliance on the Calderbank letter.
[22] See generally, Pirrotta v Citibank (1998) 72 SASR 259; Morris v McEwen (2005) 92 SASR 281, [75]; H v G [2005] SASC 344, [246]-[259] and ND v Dighton (No 2) [2012] SASCFC 97, [8].
In the result, we would not disturb the order for costs made by the Judge at trial.
Costs of the Appeal
Ms Chadwick succeeded with her appeal as to liability. The Judge’s finding of contributory negligence on account of a failure to wear a seatbelt was reversed. This meant that her total damages award was no longer to be reduced by 25 per cent as otherwise mandated by statute. Ms Chadwick also successfully resisted Mr Allen’s appeal as to liability. She preserved the Judge’s finding that her damages were not to be reduced by 50 per cent, otherwise mandated by statute, for travelling in a vehicle, the driver of which she ought to have realised was intoxicated. Ms Chadwick failed in her cross-appeal to have some components of her damages award increased by relatively minor amounts in the overall scheme of things. Mr Allen succeeded in his appeal to have some components of Ms Chadwick’s damages award decreased by, in total, $181,500.00. However, he failed with respect to other aspects of his damages appeal.
The end result was that Ms Chadwick ultimately succeeded on all questions concerning liability and had the judgment sum increased by more than $400,000.00.
Mr Allen submitted that, in these circumstances, the parties must be regarded as having enjoyed mixed success on both the appeal and the cross-appeal and that there should be no order as to costs. Ms Chadwick submitted that the case is one where the costs of the appeal should be based on the overall outcome of the appeal and not upon “a strained and unrealistic attempt to unravel issues”. Ms Chadwick submits that she should have the costs of the appeal and cross-appeal.
We agree with the submission of Ms Chadwick. This is a case where Ms Chadwick, in an overall sense, was substantially successful on the appeal. We agree that it would be artificial to attempt to apportion costs according to particular issues won or lost. To hazard upon a percentage reduction of the overall costs of the appeal to take account of the fact that Ms Chadwick failed on some damages issues would not, in our view, meet the justice of the case. We would order that Mr Allen pay Ms Chadwick’s costs of the appeal and the cross-appeal on a party-party basis.
Orders
Subject to hearing further from the parties as to proposed order (iii) we would make the following orders.
(i)the appeal be allowed in part;
(ii)the cross-appeal be allowed in part;
(iii)the final judgment amount entered in the District Court in favour of Ms Chadwick be set aside and in lieu thereof there be judgment for Ms Chadwick as at 19 November 2012[23] in the amount of $1,803,903.36;
[23] The judgment sum we would order is to be in lieu of that finally ordered by the Judge on 19 November 2012, in Chadwick v Allen [2012] SADC 155, and, subject to hearing further from the parties, should take effect from that date.
(iv)the order of the District Court that Ms Chadwick is to have 85 per cent of her costs of action, to be agreed or taxed on a solicitor-client basis, be confirmed; and
(v)Mr Allen is to pay Ms Chadwick’s costs of the appeal and of the cross-appeal, to be agreed or taxed on a party-party basis.