Bucic v Arnej Pty Ltd (No 2)
[2019] VSC 394
•17 June 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PERSONAL INJURIES LIST
S CI 2015 05539
| MARIN BUCIC | Plaintiff |
| v | |
| ARNEJ PTY LTD | Defendant |
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JUDGE: | ZAMMIT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 May 2019 |
DATE OF RULING: | 17 June 2019 |
CASE MAY BE CITED AS: | Bucic v Arnej Pty Ltd (No 2) |
MEDIUM NEUTRAL CITATION: | [2019] VSC 394 |
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PRACTICE AND PROCEDURE – Interest – Delay in prosecuting case – Delay attributable to plaintiff’s legal representatives – Whether good cause shown to limit period of statutory interest – Interest awarded from date of issue – Supreme Court Act 1986 s 60; Penalty Interest Rates Act 1983 s 2.
DAMAGES – Interest – Whether allowable in respect of gratuitous services – Whether gratuitous services are ‘liabilities which do not carry interest’ – Griffiths v Kerkemeyer (1977) 139 CLR 161 considered – Supreme Court Act 1986 s 60(3)(a).
COSTS – Judgment for plaintiff – Whether costs should be awarded on standard or indemnity basis – Offer of compromise on the day fixed for trial – Costs ordered on indemnity basis – Supreme Court (General Civil Procedure) Rules 2015 r 26.08.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J B Richards QC with Mr D Dealehr | Carbone Lawyers |
| For the Defendant | Mr S A Smith SC | Moray & Agnew |
HER HONOUR:
Introduction
This ruling assumes familiarity with my principal reasons for judgment in this proceeding delivered on 20 May 2019.[1] I there found the defendant liable under Part IIA of the Wrongs Act 1958 for the injuries sustained by the plaintiff on 30 October 2007. I allowed damages in the sum of $1,043,000, with general damages of $300,000, and special damages of $743,000.
[1]Bucic v Arnej Pty Ltd [2019] VSC 330 (‘Principal Reasons’).
The damages I awarded the plaintiff may be summarised as follows:
| Past | Future | Total | |
| General damages[2] | $150,000 | $150,000 | $300,000 |
| Economic loss | $250,000 | $225,000 | $475,000 |
| Gratuitous care | $125,000 | $110,000 | $235,000 |
| Medical expenses | $8,000 | $25,000 | $33,000 |
| $533,000 | $510,000 | $1,043,000 |
[2]I allowed a global amount of $300,000 for general damages. However, the purposes of allowing interest, I consider it appropriate to divide that sum into two equal halves to represent past and future.
This ruling addresses three questions agitated by the parties. The first is whether I should allow damages in the nature of interest and, if so, from when. The second is whether I should exercise my discretion to refuse to allow damages in the nature of interest on any of the heads of damage set out above. The third is whether, in conformity with the rule that costs follow the event, the defendant should pay the plaintiff’s costs on a standard or on an indemnity basis.
For the reasons that follow, I will allow interest on $533,000 (past damages) from 26 October 2015 (the date of the writ) until 20 May 2019, and will ask the parties to bring in the new calculations. I will also order that the defendant pay the plaintiff’s costs, including any reserved costs, on an indemnity to be taxed in default of agreement.
Procedural history
The following procedural history has been reconstructed from the court file on its face. It is by no means intended to be exhaustive; I have only included events relevant to this ruling.
On 30 October 2007 the plaintiff sustained injury in the circumstances described in my Principal Reasons.
On 26 October 2015 the plaintiff’s former solicitors, Simon Legal, filed a writ and statement of claim in this proceeding. On 10 November 2015 the defendant filed a notice of appearance and a notice requiring a jury.
On 11 December 2015 I made orders granting the plaintiff leave to file and serve an amended writ and statement of claim and fixing the matter for trial on 14 November 2016 before judge and jury on an estimate of 10 days. I ordered that the parties were to mediate the matter on or before 31 August 2016.
From correspondence annexed to the court file I can see that on 29 September 2016 the solicitors for the defendant, Moray & Agnew, advised the Court as follows:
(a) the parties had not yet mediated the case;
(b) the plaintiff, on 23 September 2016, had served prescribed information under s 28LW of the Wrongs Act 1958 and the defendant intended to refer the plaintiff to a medical panel;
(c) the parties were seeking to establish a new interlocutory timetable by consent;
(d) the plaintiff’s claim was statute barred and, as such, would require an extension of time application (although no application was then on foot);
(e) the defendant required leave to join a third party to the proceeding and would be making an application in that regard;
(f) and, as such, the parties would be seeking to vacate the trial date.
On 6 October 2016 the Court advised the parties by email that a summons with attached affidavit would be required to vacate the trial date. Nevertheless, if consent minutes were obtained, the Court would be prepared to dispense with the formalities and make the orders on the papers.
On 17 October 2016 the solicitors for the defendant advised by email that they had been unable to obtain consent from the plaintiff’s solicitors to the minutes provided. As such they would be issuing a summons and attached affidavit to agitate the abovementioned matters.
On 21 October 2016 Ierodiaconou AsJ made orders vacating the trial date and listing the proceeding for further directions on 3 February 2017. The defendants were given leave to issue third party proceedings against C&N Scaffolding Hire Pty Ltd. Costs were reserved. It was noted in ‘Other Matters’ that the plaintiff would be making an application for an extension of time under the Limitation of Actions Act 1958 (‘extension application’) forthwith.
On 8 November 2016 the plaintiff filed a summons seeking a hearing date for the extension application. Further correspondence passed between the parties complaining of non-compliance with orders. On 17 November 2016 Ware JR made orders adjourning the plaintiff’s extension application until 2 December 2016. In ‘Other Matters’ it was noted that the plaintiff had been asked to file an affidavit in support by 9 November 2016 but the material had not been forthcoming. The Court sent an email to parties, that same day, explaining that it had decided to take this step of its own motion.
On 2 December 2016 the parties attended a directions hearing at the request of the Court. On 9 December 2016 Ware JR made orders adjourning the plaintiff’s extension application for a second time until 17 February 2017. Costs were reserved. In ‘Other Matters’ it was noted that the affidavits filed by the solicitor for the plaintiff in support of the application were late and inadequate.
After another flurry of affidavits and correspondence, the matter was brought back into the directions list, Ware JR making orders on 17 February 2017. The plaintiff’s extension application was adjourned for a third time until 4 April 2017.
On 1 March 2017, on the Court’s own motion, the parties were informed via email that, due to judicial unavailability, the plaintiff’s extension application had been adjourned until 20 April 2017. On 28 March 2017 Ierodiaconou AsJ made orders by consent varying the interlocutory timetable. The hearing date for the plaintiff’s extension application was otherwise confirmed.
On 7 April 2017 Ierodiaconou AsJ made orders, on the Court’s own motion, that the plaintiff’s extension application be adjourned until 16 May 2017. A new interlocutory timetable was put in place including the filing of affidavits and submissions. The plaintiff was ordered to pay the costs of the defendant and the third party.
On 28 April 2017 Ierodiaconou AsJ made orders. Under ‘Other Matters’ it was recorded:
A. The plaintiff’s solicitor was given a judicial warning on 7 April 2017 concerning repeated failure to comply with orders. The plaintiff had not filed material in accordance with orders made 9 December 2016, 17 February 2017 and 28 March 2017. There has been wilful disregard of the orders made on 7 April 2017. This caused loss of time to the Court and to the parties. The limitations hearing that was initially listed on 17 February 2017, then adjourned to 4 April 2017 and then to 20 April 2017, must be adjourned again as a result of the delay. There has been no satisfactory explanation by the plaintiff’s solicitor save that there is voluminous material to copy and he is a sole practitioner. In the circumstances it is appropriate to make indemnity costs-orders and a self-executing order.
B.The plaintiff’s solicitor is in breach of the obligations in s 25 of the Civil Procedure Act 2010 to act promptly and minimise delay. In the circumstances it is appropriate to order that the costs be paid by him personally pursuant to ss 28 and 29 of the Act.
The plaintiff’s solicitor was ordered to pay the defendant and the third party’s costs on an indemnity basis. The plaintiff’s extension application was adjourned until 19 May 2017.
On 5 June 2017 Ierodiaconou AsJ made further orders. Under ‘Other Matters’ it was recorded:
A. The Court is not satisfied that the plaintiff’s solicitor has provided an adequate explanation for failing to comply with orders made on 28 April 2017 (‘the orders’). The orders required the plaintiff to file and serve an outline of submissions and any affidavit he intends to rely upon by 19 May 2017. The plaintiff’s solicitor referred to a potential privilege issue that he says arises from documents first requested by the defendant on 30 March 2017 (and later the subject of the Notice to Produce dated 30 May 2017) as a reason for non-compliance with the order. Given that he says he first became aware of the issue on 30 March 2017, he should have been on notice as to these issues prior to the orders being made for the filing of submissions and affidavit material. The plaintiff’s solicitor also referred to the Notice to Attend for Cross-Examination dated 30 May 2017, which he says he received on 31 May 2017. This post-dates the date in the orders by which submissions and affidavit material were to be filed. The plaintiff’s solicitor is in breach of s 25 of the Civil Procedure Act 2010 (‘the CPA’) to use reasonable endeavours to act promptly and minimise delay. In addition to delay, a further consequence is the causing of unnecessary costs for all parties by reasons of the hearing today. This is in breach of s 24 of the CPA. The Other Matters part of the orders describe a history of non-compliance with orders. In all the circumstances, it is appropriate to make an indemnity costs order against the plaintiff’s solicitor pursuant to s 29 of the CPA.
B.The plaintiff’s solicitor submits that he needs to obtain legal advice concerning the Notice to Attend for Cross-Examination dated 30 May 2017. It gives notice that the defendant wishes to cross-examine him. He says he needs to obtain legal advice about legal professional privilege in respect of documents sought in the defendant’s Notice to Produce dated 30 May 2017. The plaintiff’s legal representatives are therefore not in a position to say when the outline of submissions (or affidavit material) can be filed and served in respect of the plaintiff’s application to extend leave under s 23A of the Limitation of Actions Act 1958. The application is listed for hearing on 19 June 2017. Given the plaintiff’s position, the application date will be vacated. A directions hearing will be listed. Orders will be made to facilitate the ventilation of all procedural matters at the next directions hearing.
C. If the plaintiff wishes to oppose the Defendant’s Notice to Produce dated 30 May 2017, the plaintiff’s legal representatives should correspond with the defendant’s legal representatives prior to 14 June 2017 outlining the reasons for opposing the Notice. Such correspondence should then be annexed to an affidavit filed and sworn by the plaintiff’s solicitor.
D. Mr Dealehr appeared today to represent the plaintiff and the plaintiff’s solicitor, Mr Simon, represented himself. Mr Simon relied upon an affidavit filed in this Court this day and sworn 4 June 2017.
The plaintiff’s solicitor was once again ordered to pay the defendant and the third party’s costs on an indemnity basis. The plaintiff’s extension application was vacated. The plaintiff’s solicitor was ordered to file and serve an affidavit by 14 June 2017 deposing as to when the plaintiff would be in a position to file and serve submissions and affidavits in relation to his extension application.
On 16 June 2017 Ierodiaconou AsJ made orders, for the third time, requiring the plaintiff’s solicitor to pay the costs of the defendant and the third party on an indemnity basis. The plaintiff’s extension application was adjourned until 4 August 2017 and a new interlocutory timetable was set down. The reasons for ordering costs against the plaintiff’s solicitor were the same as before.
From this time on the plaintiff was represented by Arnold Thomas & Becker rather than Simon Legal.
On 4 August 2017 the plaintiff’s extension application was heard by Ierodiaconou AsJ. On 7 September 2017 her Honour granted the plaintiff an extension of time in which to bring proceedings for negligence under s 27K of the Limitation of Actions Act 1958. The question of costs was reserved.
On 4 October 2017, after reviewing written submissions, Ierodiaconou AsJ ordered that the plaintiff pay the defendant and the third party’s costs of, and incidental to, the extension application. Her Honour annexed reasons for her ruling in which she stated that the plaintiff had ‘obtained an indulgence of the Court’ and so would be required to pay costs. This did not include, however, the earlier costs ordered against the plaintiff’s solicitor.
That same day Ierodiaconou AsJ made orders by consent fixing the matter for trial on 12 November 2018 before a judge and jury on a 10-day estimate. Her Honour ordered that the parties attend a mediation on or before 3 July 2018.
On 16 July 2018 the parties attended mediation but the matter did not resolve.
On 17 August 2018 the plaintiff’s then solicitors, Arnold Thomas & Becker, applied for leave to cease acting. On 24 August 2018 Mr Dealehr of Counsel appeared and advised the Court that new solicitors had been retained. On 28 August 2018 a notice of appearance was filed indicating that Simon Legal were once again acting for the plaintiff.
On 17 October 2018 a further notice of change of practitioner was filed with the Court. It indicated that the plaintiff had dismissed Simon Legal and retained Carbone Lawyers. On 26 October 2018 Clayton JR made orders granting the defendant substituted service on one of its medico-legal witnesses and confirming the trial date of 12 November 2018. Costs were in the proceeding.
On 7 November 2018 the Court emailed the parties to advise that no judge would likely be available on 12 November 2018 and that, if the parties wished, they could attend a judicial mediation on 19 November 2018. The matter was mediated on 19 November 2018 but did not resolve. Accordingly, on 27 November 2017, Clayton JR made orders relisting the matter for trial on 18 February 2019.
On 18 February 2019 I made orders by consent that the proceeding as between the defendant and the third party be dismissed with no order as to costs.
Legal principles
Section 24 of the Supreme Court Act 1986 (‘the Act’) gives the Court a broad discretion in relation to the awarding of costs. This discretion must be exercised in accordance with O 63 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). What is more, it must be ‘exercised judicially’,[3] which is to say it must be exercised taking into account all relevant considerations and ignoring all irrelevant considerations.[4]
[3]Puddy v Borg [1973] VR 626, 628.
[4]Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, 442 [25], citing House v The King (1936) 55 CLR 499, 505.
As is often said, the usual order as to costs is that ‘costs follow the event’, meaning the successful party in litigation is entitled to an award of costs in its favour.[5] The ‘event’ referred to is success in the action or on discrete issues.[6] The central principle that underlies the exercise of the discretion is that the Court awards costs not to punish the unsuccessful party but to ‘indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.’[7]
[5]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 (McHugh J) (‘Oshlack’). See also Lutar v Carley [2017] VSC 366 [17] (McMillan J).
[6]Re The Minister for Immigration and Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622, 624–5 (McHugh J) (‘Lai Qin’).
[7]Latoudis v Casey (1990) 170 CLR 534, 543 (Mason CJ). See also Anstee v Jennings (1935) VLR 144, 148; Cilli v Abbott (1981) 53 FLR 108; Kelly v Noumenon Pty Ltd (1988) 47 SASR 182, 184.
Order 26 of the Rules governs the exercise of the discretion in circumstances where an offer of compromise has not been accepted prior to the Court entering judgment. Relevantly, r 26.08(2) provides:
Where an offer of compromise is made by a plaintiff and not accepted by the defendant, and the plaintiff obtains a judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall be entitled—
(a) if the claim of the plaintiff is for damages for or arising out of death or bodily injury, to an order against the defendant for the plaintiff's costs in respect of the claim taxed on an indemnity basis.
The learned authors of Civil Procedure Victoria observe that a plaintiff who is successful at trial in equalling or bettering an offer of compromise (satisfying the requirements of the Rules) which was not accepted by the defendant is entitled to an order for costs on a ‘special basis’.[8] Unlike in a Calderbank situation, r 26.08 creates a regulatory presumption in favour of the party making the offer of compromise, which will only be displaced if the Court ‘otherwise orders’.[9] A finding that the refusal of the offer was reasonable will not, without more, displace the presumption.[10]
[8]D L Bailey and J K Arthur, Civil Procedure Victoria (LexisNexis Butterworths, 2000) 3611 [I 26.08 6].
[9]See Blackman v Gant (No 2) [2010] VSC 246.
[10]IFTC Broking Services Ltd v Commissioner of Taxation (2010) 268 ALR 1.
Interest in a proceeding for debt or damages is governed by the Act. Section 60(1) relevantly provides:
The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.
The language of s 60(1) is mandatory in the sense that the Court must allow interest unless good cause is shown to the contrary. The section further mandates that the Court must not fix a rate higher than that fixed under s 2 of the Penalty Interest Rates Act 1983 (‘Rates Act’). There is no suggestion, however, that the Court cannot fix a rate lesser than that fixed by the Rates Act. The qualifier ‘unless good cause is shown to the contrary’ also operates on the phrase ‘from the commencement of the proceeding to the date of the judgment’. This suggests a further presumption, namely that interest will usually run from the commencement of proceedings, whether by writ, originating motion or otherwise.
The scope of s 60(1) is, however, modified by the operation of s 60(3). Section 60(3) provides as follows:
If the damages awarded by the Court or jury include or if the Court in its absolute discretion determines that the damages awarded include any amount for—
(a) compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest;
(b) compensation for loss or damage to be incurred or suffered after the date of the award; or
(c) exemplary or punitive damages—
the Court must not allow interest in respect of any amount so included or in respect of so much of the award as in its opinion represents any such damages.
The language of the provision is once again mandatory in the sense that the Court must not allow interest if, in its absolute discretion, it determines that any of the damages awarded fall into the categories described in subsections (a) to (c). These subsections act as carve outs; in respect of liabilities incurred which do not carry interest as against the person claiming interest; in respect of loss or damage to be incurred or suffered after the date of the award (i.e. the judgment); and in respect of exemplary or punitive damages. The third of these categories does not presently concern us.
The purpose of awarding interest is to compensate a plaintiff from being kept out of their money, not because they have been unable to invest it, but because they have they have been deprived of its use.[11] The purpose of interest is not to punish the defendant for having been slow to settle the plaintiff’s claim; although it may be the case that it has a secondary purpose insofar as it encourages the early resolution of litigation.[12] The presumption is that interest will be allowed from the date upon which the proceeding was commenced.[13] The judgment debtor bears the onus of showing that there is ‘good cause’ to the contrary.[14] Delay on the part of a plaintiff in prosecuting proceedings will not normally constitute ‘good cause’ for reducing the time period on which interest will be allowed. The relevant factor, in the circumstances of the case, will be whether the delay has caused prejudice to the defendant.[15]
[11]Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382, 396; Hartley Poynton Ltd v Ali (2005) 11 VR 568 [103].
[12]Neuchatel Swiss General Insurance Co Ltd v Vlasons Shipping Inc [2001] VSCA 25; Grincelis v House (2001) 201 CLR 31, 328–9.
[13]Tankard v Chafer [2005] VSC 171 [77].
[14]Ruby v Marsh [1975] VR 191, 193.
[15]Kalenik v Apostolidis (No 2) [2009] VSC 410 [23]. See also Deutsch v Deutsch (No 3) [2014] VSC 494.
As Gillard J observed in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3):
in practice delay is rarely a justifiable basis for refusing interest for any period because of the self-evident observation that that the defendants have had the use of the money since the commencement of the proceeding.[16]
The rationale for the exercise of the discretion where ‘good cause’ to the contrary has been shown was explained by Gowans J in Ruby v Marsh:
As I see it, such discretion as is conferred is not intended to be directed to penalizing the plaintiff, but to alleviating the defendant in a proper case. He may be able to show that he has been disadvantaged in some way by the plaintiff’s conduct, for example, by showing that he had ceased to have the use of the money by paying it in cash into court, and that the plaintiff had then delayed the progress and hearing of the action for a prolonged period during which he did not have the benefit of the money. But in general the defendant will not establish that he has been disadvantaged by showing that he has had the use of the money for longer that he should have been allowed to keep it. He would need to show collateral effects of the delay to his disadvantage.[17]
[16][2003] VSC 244 [51].
[17][1975] VR 191, 193 (emphasis added).
Submissions
For the plaintiff
Counsel for the plaintiff submitted that the plaintiff is entitled, pursuant to s 60 of the Act, to damages in the nature of interest, from the date of issue, at the rate fixed by the Rates Act. He submitted that interest should be allowed on the principal of $1,043,000, at 9.5% from June 2015 and 10% from February 2017, for a total of $365,721.52. Counsel submitted that, as this proceeding falls outside the scope of the Accident Compensation Act 1985, the plaintiff is entitled to interest on the whole judgment debt save for the portion that relates to future economic loss.
For the defendant
Counsel for the defendant submitted that the Court should not allow interest on several components of the judgment debt. These were as follows:
(a) the portion of general damages that relates to future pain and suffering and loss of enjoyment of life by reason of s 60(3)(b) of the Act;
(b) the entire amount of Griffiths v Kerkemeyer (‘Griffiths’)[18] damages by reason of s 60(3)(a) of the Act (as these ‘do not create a liability on the part of the plaintiff to pay interest in respect of that amount’);[19]
[18](1977) 139 CLR 161.
[19]Transcript of Proceedings, Bucic v Arnej Pty Ltd (Supreme Court of Victoria, Zammit J, 22 May 2019) 3.13–15 (‘T’).
(c) the amount for future economic loss by reason of s 60(3)(b) of the Act; and
(d) the amount for future medical expenses s 60(3)(b) of the Act.
Counsel submitted that the usual practice, which I should adopt, was to divide the sum for general damages in half to represent past and future.
Counsel for the defendant secondly submitted that there is good cause not to allow interest for the whole three-and-a-half years. He submitted that the proceeding has suffered from inordinate delay and none of it is attributable to the defendant. He stated that the plaintiff was referred to a medical panel and, for a time, refused to attend. And he noted that plaintiff’s extension application was adjourned no less than three times because of shortcomings in the preparation by the plaintiff’s then solicitor. He submitted that, had the case been conducted expeditiously, it would have been concluded within a year or perhaps 15 months; whereas, for almost two and half years, it has been delayed through no fault of the defendant.
Counsel for the defendant thirdly submitted, again on the basis of inordinate delay, that the rate fixed should be lesser than that fixed by the Rates Act. He cited Bischof v Adams,[20] Clarke v Foodland Stores Pty Ltd[21] and Neuchatel Swiss General Insurance Co Ltd v Vlasons Shipping Inc[22] as authorities for the proposition that the Court has a discretion to award interest at a lesser rate. He submitted that this would be especially appropriate in relation to not only past general damages but the other heads of damage. Counsel indicated that, if I was against him on his second submission, he would press this third submission in the alternative.
Plaintiff’s reply
[20][1992] 2 VR 198.
[21][1993] 2 VR 382.
[22][2001] VSCA 25.
Counsel for the plaintiff, by way of reply, submitted that Griffiths damages are for a need that is created in respect of which the plaintiff’s loved ones are going to provide the support.[23] He submitted that the whole of the plaintiff’s loss, past and future, crystallises upon disablement. Counsel added that it is inherent in the Griffiths proposition that such damages are money paid to the plaintiff in lieu of money he would otherwise pay to providers.[24]
[23]T10.6.
[24]T10.17.
When I pressed him as to why the future component of gratuitous care damages would not be subject to the s 60(3)(b) carve out, counsel conceded that it would be fair to discount that portion of the damages, and he made the same concession with respect to future medical expenses.[25] He maintained, however, that Griffiths damages are not captured by the s 60(3)(a) carve out. And he submitted that, as for general damages, the Court should not divide the sum into two equal halves but rather make a division of one-third two-thirds. This would more accurately reflect the fact that the plaintiff is in his mid-60s and ‘has a long way to go’.[26]
[25]T11.9–15.
[26]T11.29.
Counsel for the plaintiff further submitted, insofar as this proceeding has been delayed, it was always under the supervision of the Court. Moreover, the delays in relation to the extension application were caused by the plaintiff’s solicitors, and so should not fall at the feet of the plaintiff. And, in any event, the reasoning of Hargrave J in Kalenic v Apostolidis (No 2)[27] should apply in this case; that is, the delay in this case did not cause the defendant any additional prejudice, and so there is no ‘good cause’ not to allow interest from the date of issue.
Counsel lastly submitted that the Court should order that the defendant pay the plaintiff’s costs on an indemnity basis. He relied on the fact that the plaintiff served an offer of compromise, on 14 September 2018, on the defendant in accordance with O26 of the Rules and that, at judgment, the amount was exceeded.
[27][2009] VSC 410.
Consideration
The starting point, as I have said, is that interest is presumed to run from the date of issue until the date of verdict of judgment. Is there ‘good cause’ to depart from this practice? True it is that there have been a number of significant delays in the prosecution of this matter. The procedural history reveals the following:
(a) From the date of issue in October 2015 to September 2016 very few interlocutory steps were contemplated by either party and by consent the parties sought to vacate the trial date of 14 November 2016. The 29 September 2016 orders confirm that mediation was not completed, the parties were seeking to establish a new interlocutory timetable, the defendant had not yet obtained leaved to join a third party and the plaintiff was yet to make his extension application.
(b) From October 2016 to June 2017 the delay was largely caused by the plaintiff’s then solicitors, Simon Legal, not the plaintiff himself;
(c) In August 2018 the plaintiff’s new solicitors, Arnold Thomas & Becker, ceased to act.
(d) The 12 November 2018 trial date was vacated by the Court due to judicial unavailability and relisted for trial on 18 February 2019.
The defendant made some reference to delays in the medical panel’s assessment but there is no evidence before the Court on this issue and an assertion from the Bar table is not helpful.
In summary, while there were delays, they were not delays for which the plaintiff can or should be held directly responsible. Having reviewed the file, there is nothing to suggest the first period of delay was due to the plaintiff, rather it seems the inaction was caused by all parties. Finally, from the time Ierodiaconou AsJ granted the plaintiff an extension of time in which to bring proceedings, there is no evidence of any delay occasioned by the plaintiff.
Regrettably neither party prepared any chronology setting out the procedural history or provided any affidavit material or viva voce evidence in support of their costs submissions. As such, I was left piecing together a chronology solely from the court file, which has by its nature gaps in the explanations as to why there were delays. Having said that, the fact that the delays were to some extent caused by the plaintiff’s solicitors rather than the plaintiff himself, and the fact that the defendant had the use of the money and suffered no additional prejudice, dispenses with the notion that this amounts to ‘good cause’ to order otherwise. This is not the sort of case that falls into the category described by Gowans J in Ruby v Marsh.[28] I will therefore allow interest in the nature of damages for the entire period since the writ was filed.
[28]See [34] above.
The second question is whether I should fix a rate lesser than that fixed by the Rates Act. Again, for the same reasons given above, I see no reason why the plaintiff should not get the full advantage of the rate as fixed by the Rates Act. It was the defendant’s decision to put the plaintiff to his proof and, having lost at trial, it does not lie in the mouth of the defendant to complain of the plantiiff’s right to fair and reasonable compensation including damages in the nature of interest.
The third question is whether the amount for Griffiths damages is caught by the s 60(3)(a) carve out. I do not accept that it is. I agree with the plaintiff’s submission that gratuitous care damages are for a need that is created by the defendant’s negligence and that, as such, they are not ‘liabilities which do not carry interest’. The vice in the defendant’s submission is that these damages are not ‘liabilities’ in the first place. To quote from the reasons of Mason J in Griffiths:
The respondent’s relevant loss is his incapacity to look after himself as demonstrated by the need for nursing services and this loss is to be quantified by reference to the value or cost of providing those services.
…
Enough has been said in the cases which have been decided more recently to indicate that the old view, based on the proposition that a plaintiff is not entitled to recover from the defendant the services provided to him unless he can show that he is under a legal liability to pay for them, is no longer acceptable. It is now recognised that the true loss is the loss of capacity which occasions the need for the service.[29]
It strikes me as very much relevant that, in the passage just quoted, Mason J negates the proposition that gratuitous services have their basis in an identifiable legal liability and instead grounds them in a loss of capacity which gives rise to a need for services. Properly conceived, then, it is the need that is being valued and upon which I consider it entirely appropriate to allow interest.
[29](1977) 139 CLR 161, 192–3.
To be clear, however, I agree with the defendant that all of the amounts for future loss or injury, under each head of damage, are excluded by s 60(3)(b).
Lastly, as provided for by O26 of the Rules, I will order that the defendant pay the plaintiff’s cost on an indemnity basis. There is no reason not to do so in the circumstances and I accept what I have heard from the Bar table that an offer of compromise was correctly served and refused by the defendant.
Conclusion
I will allow interest from the date upon which the writ was issued in this proceeding until the date of judgment. I will fix the rate at the rate prescribed by the Rates Act. And, on the basis of the offer of compromise that was refused by the defendant, I will order costs on an indemnity basis, including any reserved costs, to be taxed in default of agreement.
I will ask counsel to bring in the new calculations for the purposes of making final orders in this proceeding.
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