Bova v Locke

[2005] NSWCA 226

CITATION:	BOVA v LOCKE [2005] NSWCA 226
HEARING DATE(S):	28/06/05
JUDGMENT DATE:	28 June 2005
JUDGMENT OF:	Mason P at 1; Giles JA at 33; Tobias JA at 34
DECISION:	Appeal dismissed with costs.

CATCHWORDS:	NEGLIGENCE - personal injury - damages assessment challenged on appeal - general damages - future economic loss (ND)
PARTIES:	Colin BOVA & Anor Peter LOCKE
FILE NUMBER(S):	CA 40598/04
COUNSEL:	Appellant: I Wales SC Respondent: M B Williams SC/ R O'Keefe
SOLICITORS:	Appellant: David Ian Brown Respondent: Charlton Shearman Read

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC 20259/01
LOWER COURT JUDICIAL OFFICER:	Kirby J

CA 40598/04

MASON P
GILES JA
TOBIAS JA

Tuesday 28 June 2005

Colin BOVA & Anor v Peter LOCKE

JUDGMENT

1 MASON P: In January 2000 the respondent was a medical practitioner working in the Emergency Department of Canterbury Hospital. His wife was admitted to Liverpool Hospital on 24 January 2000 and gave birth to twins. She developed the life threatening complication of untreated pre-eclampsia, the leading perinatal cause of maternal morbidity, and she suffered from fitting, cerebral haemorrhage and a fractured left femur requiring surgery. These conditions were the result of what became the admitted negligence of the two appellants. The respondent witnessed these events at Liverpool Hospital and found himself required to intervene in very dramatic circumstances to treat and resuscitate his wife. Inevitably, given the sequelae of her own injuries, the respondent has been faced daily with his wife’s own situation and reminders that it brings to him. In consequence of these events the respondent developed a psychiatric injury which the trial judge found to be permanent.

2 The damages trial spanned ten days over various dates in late 2003 and early 2004. Kirby J delivered a closely reasoned, reserved judgment (Locke v Bova & Anor [2004] NSWSC 534). Damages calculated in accordance with his Honour’s reasons totalled $782,978.48. The assessment was according to common law principles.

3 The grounds pressed in this appeal challenged the assessment with respect to general damages and future economic loss. No error of legal principle was suggested nor, with isolated exceptions, were the findings of primary fact put in issue in the appeal. In fact, the appeal re-agitated key issues that were squarely addressed by the learned trial judge and decided adversely to the appellant on the facts. In reaching his conclusions, the trial judge had the advantage of seeing the witnesses, most importantly the respondent himself. It is also salutary to remind oneself that:

The need for appellate caution in reversing a trial judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Reynan said, ‘la verite et dans une nuance’), of which time and language do not permit exact expression, but which may play an important part in a judge’s overall evaluation.”

4 I was quoting from the speech of Lord Hoffman in Biogen Inc v Medeva plc (1997) RPC 1 at 45. It is a passage that has been cited on a number of occasions including by this Court in Williams v The Minister Aboriginal Land Rights Act 1983 [2000] NSWCA 255.

5 The principles governing an appellate challenge to the assessment of damages based upon the sheer size of the award as distinct from specific error are well known and are not in issue in the appeal.

6 Having heard the appellants’ submissions I am left entirely unpersuaded as to any dispositive error in the Court below. Kirby J’s reasons are so clear and compelling in addressing the very matters that were agitated in this Court that I am tempted to allow them to speak for themselves. I certainly am content to adopt them. It is nevertheless appropriate that I should acknowledge and briefly address the main arguments that were advanced on the appellants’ behalf in challenging the judgment below.

7 The first ground of appeal contended that the general damages award of $225,000 was excessive in the sense that it was a figure outside of a proper range of sound judgment on the facts. There were, as I perceive it, two broad arms in the challenge. The first was the submission that the figure was out of proportion to awards generally made to plaintiffs who suffer severe disabling and permanent physical injury. In that regard, we were referred to some instances of awards made in favour of severely disabled plaintiffs younger in age than the present respondent whose injuries are lifelong but more on the physical side of matters.

8 The second broad attack was the submission that the trial judge’s findings and evaluation referrable to general damages failed to recognise the very high likelihood of improvement over time. Those are the words in para 4 of the appellants’ outline of submissions.

9 In my view, it cannot be said that the award failed in this respect. His Honour addressed general damages at J 101 to 118. He made reference to the principal medical evidence as to the present diagnosis. This was not a matter in dispute. There was a condition of post traumatic stress disorder with an accompaniment of major depression. The former condition was in partial remission at the time of trial. The latter had substantially lifted, although as his Honour remarked in para 102:

Dr Locke remains subdued, nonetheless significant symptoms remain and are disabling. Dr Locke is anxious, he still suffers from flashbacks which may occur during the day or night. His sleep is disturbed, he has lost his confidence, he is irritable, his memory and concentration are poor, he is given to tears, he lacks interest in things that once gave him pleasure.

10 These findings addressed in a way that I do not understand to be in serious challenge the condition as it presented itself at the time of trial, both to the judge and to the respondent’s treating doctors, most notably Dr Galambos, a consultant psychiatrist. His Honour made reference to the written and oral evidence of Dr Galambos and found a degree of corroboration from the written evidence of Dr Brown, a specialist engaged by the appellants whose medical reports were not challenged.

11 At paras 113 to 117 his Honour addressed the likely future situation. It is unnecessary to set out the passage. The learned judge recognised that some improvement could be expected. He concluded nevertheless (at J116) that:

To a significant degree, the changes which are now apparent will remain. Those changes have now been evident for almost five years. Dr Locke will need to learn to live within his limitations. Those limitations include a vulnerability to depression. Dr Locke is still on anti-depressant medication.

12 Senior counsel for the appellants submitted that these findings understated the evidence of the experts, Dr Galambos in particular, as to the likely future prognosis, particularly when it is borne in mind that the probability (as accepted by his Honour) is that the respondent will abandon his preferred career of being an emergency medical practitioner. The submission was that when one looked at the medical evidence as a whole (and we were taken to particular passages in the reports and the oral evidence) one gets a picture of a condition that has a positive long term prognosis notwithstanding the acknowledgement of a risk of relapse into a more serious medical condition given certain stimuli.

13 His Honour’s conclusion on the topic of general damages is set out in para 118 where he said:

The profound effect of these disabilities upon Dr Locke in the past and the likely effect in the future call in my view for significant general damages. Although Dr Locke is able bodied he is a different man. His life, including his relationship with his family and wife, is a different life without the promise that it once held. I believe the appropriate sum is $225,000.

14 I am ready to acknowledge that this is appears to be a high figure, but more is required before this Court would be justified in overturning it. I have already indicated the reasons behind the principle of restraint in appellate matters generally. When one applies them to an appeal against a damages assessment of the nature of a common law assessment for general damages then it must be recognised that the appellant has to be able to persuade this Court that it is in a position where it can overturn the judgment below. I am not persuaded.

15 I cannot accept that when the judge assessed general damages he overlooked or compartmentalised the view reached elsewhere in his reasons to the effect that the respondent would probably not continue in the field of emergency medicine. That seems to me to be a clear given throughout this part of the judgment. The evidence showed that the respondent had not yet come to a subjective realisation that he probably was unable to continue in that chosen field without significant risk to his health. The judge concluded that the probability was that he would be forced out of this field and that finding, if it is challenged, was not strongly challenged by the appellant. It is certainly one with which I would agree.

16 One of the points that his Honour was making and which underpins the assessment of general damages, was the comparison between the buoyant, confident and competent personality that preceded the damage to the respondent’s psyche and the “different man” he had become in consequence of the negligence. The very fact that the events in the hospital had forever knocked him off the pedestal of expectation was part and parcel of his Honour’s assessment. It was something that was mentioned at several stages in this particular part of the judgment. If one couples with that the probability of the respondent being driven by his medical condition from his chosen field and adds to it the evidence that the respondent seems to have been a determined and not necessarily very flexible personality as regards the area in medicine to which he was devoted, one can see that the impact of the illness and its continuing consequences has yet to be worked out. It is also quite apparent that it is a condition that will continue to impact upon the respondent’s psyche as he contemplates and revisits in his anger and distress the circumstances that brought him to that situation.

17 It is certainly true that the respondent is in a different situation to that of a young person whose life of physical enjoyment is destroyed by an accident rendering him or her a quadriplegic. I have been concerned in my own thinking to guard against any risk of applying different standards to different classes of plaintiff where differentiation is not called for. But I remain of the position that I am not persuaded that the trial judge erred in the conclusion he reached with reference to this particular plaintiff in light of the medical evidence about the lifelong impact of the injury that he suffered.

18 I turn to the challenge to the award for future economic loss. As his Honour pointed out, damages for this head require a comparison to be made between the amount which the plaintiff would probably have earned but for injury and the amount he is now capable of earning. The appellant challenged his Honour’s assessment with respect to the top and bottom lines of this formula.

19 The trial judge concluded on the probabilities that but for the injury the respondent would have embarked upon the training necessary to become a specialist practitioner in emergency medicine. He concluded that the probability was that the respondent would have commenced the five year course about a year after the birth of the twins, which were the last planned children in the family, completing it by the end of 2005. In other words his Honour proceeded on the basis that earnings as a specialist would begin on 1 January 2006. His Honour held that the probability that the respondent would have the capacity to complete the course and start by that date to be a seventy-five per cent probability. On these findings there would be a working life as an emergency specialist of eighteen years to retirement age of sixty-five. His Honour applied the conventional fifteen per cent reduction for vicissitudes.

20 One factual challenge that was raised concerned the judge’s conclusion about the probability of the respondent starting and finishing the course on the dates I have indicated to the percentage probability that I have indicated. In my view the findings were well open to his Honour. The respondent had the demonstrated skill and experience and indeed passion in the particular area of medicine. He had made statements as to his intention to pursue that field to Dr Sammut not long before the birth of the twins. He had given unchallenged evidence-in-chief that his intention prior to the events of January 2000 with respect to his future career was, “I’d always wanted to become a specialist either in emergency or anaesthetist work”.

21 There was some debate at trial as to the likelihood of the respondent having embarked upon the course in the timeframe that his Honour found, namely commencement in about 2001. The issue had not been explored in evidence for the reason, I would conclude, that the respondent was never challenged in his general statements as to his intention. One argument that was raised was that if the respondent had been so keen to embark on this speciality why had he not done so in the five years prior to the birth of the twins. The trial judge answered this with reasoning at para 136 that I find persuasive. I do not accept the submission of the appellant that his Honour engaged in “sheer speculation”. It is true that the matter had not been addressed by the respondent in those terms but that is explicable, in my view, from the fact that the issue had not really been opened up in cross-examination.

22 The next particular area of challenge in this field related to the findings at paras 157 and 158 to the effect that the earnings would have been about $200,000 per annum gross throughout the working life of the respondent as a specialist, ie the eighteen years from 2006 to 2024 when he turned sixty-five. His Honour said this in para 157:

The earnings of a specialist in emergency medicine were stated by Dr Sammut to be $180,000 per annum gross (T151) [Blue 455]. Dr Raftos, who practised as a specialist, provided his taxation returns. For the year ended 30 June 2003 his gross earnings were $258,550. The plaintiff submitted that the figure suggested by Dr Sammut and the earnings of Dr Raftos should be averaged. However, Dr Raftos is a senior and experienced specialist. His earnings reflect that serniority. Nonetheless, the award (Ex M) suggested progression through grades and seniority. Indeed, the upper limit may exceed the current earnings of Dr Raftos. I think it reasonable to assume that, had Dr Locke qualified as a specialist, and worked in that capacity until the age of 65, he would have earned about $200,000 per annum gross throughout.

23 Later in para 158 his Honour said this:

In respect of what I have called the top line of the calculations, therefore, the following principles should be applied:
• First, the earnings as a specialist would not begin until 1 January 2006. Before that date Dr Locke’s earnings should be calculated by reference to his earnings as a career medical officer, as set out above.
• Secondly, for the same reasons, the calculation of the likely earnings to age 65 at the higher rate must reflect the postponement.
• Thirdly, the comparison is between Dr Locke’s probable earnings as a specialist (averaging $200,000 per annum gross to the age of 65 as a broad brush figure), and the earnings he would have achieved as a career medical officer (including overtime). On my estimate he had a 75 percent chance of reaching the higher figure. That difference represents the top line of the calculation, that is, what he would have earned but for injury. I am conscious of the fact that the $200,000 estimate to some extent incorporates increases which would have accrued during his time as a specialist, as he became more senior. Comparing that sum to his present earnings as a career medical officer to some degree inflates the difference. Nonetheless, the figures stated are conservative and, given the nature of the estimate, the calculation upon that basis is, I believe, reasonable.

24 These passages reveal that the $200,000 figure emerged from a complex but sufficiently disclosed process of evaluative reasoning. I certainly reject the submission lightly advanced to the effect that the judgment is defective for want of exposure of necessary reasoning process.

25 The nature of the function as a specialist in emergency medicine means that the only employment is at hospitals. Dr Raftos’ career showed that if one was determined and qualified enough one could get employment at more than one hospital. There were award rates put into evidence and these certainly corroborated the evidence, which I think was unchallenged, of Dr Sammut to the effect that his present gross earnings were in the vicinity of $180,000 per annum (Black 151). His Honour’s remarks in J 157 indicate that he had some regard to the earnings of Dr Raftos. They indicate equally clearly that he was not unaware of the comparisons between Dr Raftos and the respondent as regards present seniority and experience.

26 There is a reference in para 157 to Dr Raftos’ gross earnings being $258,550. The appellants submitted that this involved a misreading of the portion of the income tax return that was put into evidence. The submission is correct but not much turns on the matter because the tax return clearly shows salary and wages in excess of $230,000 as at 2003. The return may also indicate additional income of $19,000 which may be related to medical practice. I am content to accept the appellants’ submission that that portion of the returned income was not shown to be so related. What is clear is that Dr Sammut’s experience showed that the capacity of a suitably qualified practitioner to earn a salary in excess of Level 1 Senior in the tables of staff specialist’s salaries that were put into evidence. Whether this is a product of the fact that he was able to work at two hospitals or a product of access to overtime or indicative of the fact that specialist emergency practitioners could progress at least to Level 2 of the table of salaried medical officers is not clear. But what is clear is that Dr Raftos’ career indicated some capacity to earn more than the figure referred to by Dr Sammut as his current salary. His Honour also had regard to the fact that he was dealing with an eighteen year period of work commencing still in the future, 1 January 2006, with capacity to progress through “grades and seniority” (J 157).

27 I am not persuaded that there was any error in the assessment of $200,000 per annum gross as the relevant figure. I have already indicated that various discounts were applied to that to bring about the calculation of damages that was awarded under this head of damages.

28 The other part of the equation concerned the assessment of the value of the residual earning capacity of the respondent. This involved his Honour addressing the likely progression of the respondent’s career either within medicine or without, having regard to the impact of the medical condition upon the respondent’s capacity. His Honour considered a number of issues in the relevant portion of the reasons and I am content particularly in this area to adopt his reasons in total.

29 One criticism that was raised against the conclusions of the judge stemmed from his Honour’s acceptance of the evidence that there was a possibility that the respondent would cease to work in the medical field altogether. This does seem to have been something of a late arrival in the proceedings but the evidence was there, in my opinion. His Honour was clearly entitled to conclude as he did that the respondent stood at some threshold in his life, a threshold that on the probabilities was going to drive him from the one area of medical practice in which he had thus far found fulfilment and passion. There was evidence from Dr Galambos as to the possibility that, faced with that situation, the respondent might leave medical practice. Indeed Dr Galambos expressed that as a “good chance” of happening. There was some debate before us as to whether his Honour misinterpreted the report of Dr Brown who referred to the possibility of the respondent “gaining some form of non-medical work”. I think there is some ambiguity about the report, but whether or not his Honour misconstrued it (and I am not sure that he did) I do not see that as having contributed to any error. The evidence that his Honour had justified him in concluding that there was, in his words, “a high chance, falling short of a probability” that the respondent would leave medicine.

30 In valuing the residual earning capacity his Honour considered the most probable career path to be that of general practice given the evidence that such a career would be unlikely to present the respondent with emergency situations that could be stressors for a recurrence of his condition. There was evidence that general medical practice could earn at present rates between $80,000 and $120,000 per annum gross. The appellants were critical of his Honour for taking the bottom end of that figure, but I think that that criticism proceeds on a misreading of the reasons as a whole. In the first place his Honour, for reasons stated in para 183 of the judgment, stated that it was likely that the respondent would be employed in general practice rather than enter into partnership. This would limit his potential and his earnings.

31 But the more significant matter is that at paras 191 and 192 his Honour factored in two matters of some significance as to residual earning capacity. The first was the chance that the respondent would leave medicine altogether with the implication, I do not think this was in dispute, that his likely earnings would be less than the $80,000 to $120,000 figure that had been posited for general practice. The second was that the $80,000 per annum gross figure took account of the possibility of periods of incapacity where periodically the respondent’s post traumatic stress symptoms may flare and become disabling or he may suffer from depression. I see no error in this approach to the matter or in the conclusions that his Honour reached.

32 Having addressed what I perceive to be the main challenges to his Honour’s reasons and indicated why the judgment as a whole and its conclusions stand in my opinion, I propose that the appeal be dismissed with costs.

33 GILES JA: I agree with the reasons given by the President and with the orders proposed.

34 TOBIAS JA: I also agree.

35 MASON P: The order of the Court will be as indicated.

36 WILLIAMS: Your Honour I’m sensitive of the time. There is an application for indemnity costs. I wonder if I might hand up documentation at least in that regard, leaving it to your Honours--

37 MASON P: Are you able to just describe what the issue is that now arises?

38 WILLIAMS: The issue is that there is an application for indemnity costs in respect of the Court below and before your Honours based on a series of offers of compromise and Calderbank offers, all of which had resulted in favour of the respondent.

39 MASON P: The Calderbank offers at first instance, why haven’t they passed into history and why weren’t they matters which should have been raised with Kirby J in the costs order he made?

40 WILLIAMS: We sought to have leave reserved in respect of indemnity costs in the lower court pending the outcome of this appeal because the agitation of them might have been rendered nugatory if the appeal were upheld. It seems now that your Honours are seized of the entire case and it’s economical that but one application be made.

41 MASON P: I understand that now, so you ask us to exercise the first instance discretion in a discreet way.

42 WILLIAMS: Yes.

43 MASON P: And was there a fresh offer made on appeal?

44 WILLIAMS: Yes.

45 MASON P: Is there likely to be any agreement? Are you in a position to meet it at this stage Mr Wales?

46 WALES: Your Honour I certainly can’t meet the issue of costs below. I note that at red 93 the orders that give effect to his Honour’s judgment expressly reserve the question of indemnity costs and we would want to call evidence because as I understand the submission that he made the offer was made at a fairly early stage in the proceedings and before amended particulars in many ways changed quite substantially the battleground between the parties so that that really is a matter for evidence if we can’t agree, and I don’t think we will agree on that, it should be a matter for the primary judge to deal with in my submission.

47 MASON P: What about the costs of this Court?

48 WALES: I’m happy to deal with that issue now.

49 MASON P: Is there opposition to the indemnity costs in this Court?

50 WALES: Yes. As I understand my friend’s outline it’s contended, and I’m sure there’s no dispute about this, that on 7 April there was an offer of compromise - well perhaps my friend could provide a copy of the offer of compromise.

51 WILLIAMS: It’s an annexure to an affidavit that covers both the lower court and this Court’s--

52 MASON P: We are minded to send you back to Kirby J for the trial costs in view of what Mr Wales foreshadowed but we’ll deal with the costs in this Court.

53 WILLIAMS: I’m just thinking of that defamation case involving a jouherd(?) of the Tresiste(?) game who succeeded on appeal and--

54 MASON P: Ettingshausen.

55 WILLIAMS: Yes, which I suppose we would be at liberty to argue here once Kirby J had made a decision.

56 MASON P: The general approach we have adopted is to keep the two compartments separate and if there’s to be an application for indemnity costs in the appeal we’ve generally said that it’s appropriate to make a fresh settlement offer during the pendency of the appeal. Now did that happen here?

57 WILLIAMS: Yes.

58 WALES: Perhaps my friend can hand up a copy of the offer of compromise of 7 April 2005. It’s an annexure to the affidavit.

59 WILLIAMS: I don’t wish to burden your Honours unnecessarily but I can hand up three copies of the skeletal chronology of the offers and the pertinent offers to this Court are to be found as annexures to this affidavit of which there are three copies.

60 WALES: It’s about p 5 of the bundle of documents, the affidavit. As I understand all that we’re looking at is the document which is at p 5 of the bundle, it’s not numbered but the fifth page, which is the offer of compromise of 7 April 2005, that’s what I’m addressing on and what was offered was an agreement, although it says the first and second defendants it’s only - I’m so sorry, they offered $700,000 which of course is an improvement on our position but we pay costs incurred prior to 13 November 2002 and from 13 November 2002 the Supreme Court proceedings on an indemnity basis and para 4 speaks for itself, that would apply in any event. So the problem with this offer of compromise is firstly that in a way which was impermissible caught up the question of the costs below and it’s a matter for Kirby J whether there is or ought to be indemnity costs below, especially costs from November 2002 when there will be an issue between the parties as to a change in the nature of the case and the appropriateness of any earlier offer of compromise.

61 MASON P: So you’re saying it is not clear that the judgment we’ve just given betters this offer of compromise?

62 WALES: Indeed. There’s simply an impermissible mixture of the two issues and it’s not even clear to me with respect that even if one could do the sums and work out whether there was any advantage that that would be a relevant issue. We are entitled to agitate before Kirby J the question of the appropriate costs and there will be an outcome of that application. It’s simply quite inappropriate to confuse that issue with the question of the settlement of these proceedings.

63 MASON P: Is there any way that this Court could appoint Kirby J our delegate to exercise the application to award indemnity costs in this Court which sounds like it’s a fairly mechanical exercise once you work out what happens in the Court below or are you proposing that we defer entertaining this application until we see what happens below?

64 WALES: My primary submission is neither, that you should simply deal with the matter on the footing that what was involved was an endeavour - although it says the action a compromise of the appeal and they were the only pending proceedings and it’s incumbent on the respondent to show that in the events which occurred we ought to have accepted the offer and that remains simply unclear and even if, as I say, one came back after Kirby J’s determination it would be unclear whether we had done better or worse than the overall position that was adopted, put forward in this offer of compromise.

65 MASON P: What, because even if Kirby J awards indemnity costs from 13 November 2002 we still won’t know--

66 WALES: We still won’t know until there would have to be an assessment. One would have to know what the difference between ordinary costs and indemnity costs would be.

67 MASON P: No because we would just put his order to that effect - why would we need to know how it quantifies?

68 WALES: Perhaps I’m thinking aloud but his Honour below appropriately made an order for costs. The only issue outstanding is whether there should be for part of the period of the proceedings indemnity costs so that there will be an issue as - if his Honour does decide in favour of indemnity costs there will be an improvement in the position of the second plaintiff beyond the ordinary costs order but one won’t know what that improvement is going to be in dollar terms.

69 MASON P: Until?

70 WALES: One will never know unless there is both what used to be called a party party assessment of costs as well as the assessment of indemnity costs.

71 GILES JA: There would also need to be some regard to what the Court of Appeal proceedings costs to date on an indemnity basis were which would be a matter for evidence no doubt if it came to that.

72 WALES: And there is the difficulty too in remitting the whole matter back to Kirby J in that it is not with respect merely a mechanical exercise but there are questions of discretion involved. It would be open to this Court for example to say, if it were so minded, the appellant would have done better by accepting at least para (i) of the offer of compromise but as a matter of discretion given the issue raised by the appeal, given the proposition conceded in the course of the reasons for the judgment that the award was certainly properly characterised as high, given the existence of what appeared to be errors of fact in the reasons for judgment although explained or dealt with by this Court, it would be open to this Court to say as a matter of discretion that even though the figure that was confirmed was greater than $700,000 that nonetheless as a matter of discretion it’s appropriate simply to order costs on the usual footing.

73 MASON P: Mr Williams how are we going to know whether you’ve done better than the 7 April offer?

74 WILLIAMS: Unhappily by having the matter decided by Kirby J. It’s not a matter of quantification. One never knows when an offer is made, plus costs or plus indemnity costs, what the quantum thereof is at the time of the offer and in the end event the essential outcome must be that the successful respondent shouldn’t be shut out in the exercise of this Court’s discretion. What needs to be done is that it be determined whether the respondent gets indemnity costs below before it can be realised whether the offer of compromise which has been rejected in this Court will result in our being able to have our indemnity costs here. It’s not really a question of quantification, that doesn’t arise.

75 MASON P: Well then does it come to this, that you’ll have to go back to Kirby J sooner rather than later and then in light of what emerges from there if you still wish to apply for costs here you can file a motion supported by written submissions? Mr Wales can respond and hopefully we can deal the matter on the papers.

76 WILLIAMS: Yes.

77 WALES: Your Honour maybe this is what my friend is suggesting but obviously I can say nothing about costs. On the ordinary footing on this appeal we’ve lost and there must be an order for costs against us. It may be convenient simply to make that order without prejudice to the rights of the respondent to apply for a different order if it’s minded to do that.

78 GILES JA: Can I just ask this? Kirby J reserved the question of indemnity costs with liberty to apply. Was application made and an inter partes decision come to to leave it until after the appeal had been dealt with or did the respondent simply decide not to do anything for the reason you’ve indicated, not to do anything at that time?

79 WILLIAMS: The latter. The reservation of leave was merely precautionary against our being on record as having given up our rights in that regard.

80 GILES JA: It’s not a desirable course as the present circumstances have proved.

81 WILLIAMS: I’ve certainly been educated in the last ten minutes to that view your Honour, with respect.

82 MASON P: I think what we’ll do is we’ll return the papers. I will pronounce the orders as indicated and add an application reserving leave to apply for indemnity costs. I would urge that you just don’t let this matter disappear. Judges have a way of forgetting things or going into retirement and who knows what happens.

83 So the formal orders are:

1. Appeal dismissed with costs.

2. Reserve to the respondent liberty to apply for indemnity costs, such application to be dealt with on the papers if appropriate.

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