Cave v ACT
[2017] ACTSC 34
•22 February 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Cave v ACT |
Citation: | [2017] ACTSC 34 |
Hearing Dates: | 6 - 13 February 2017 |
DecisionDate: | 22 February 2017 |
Before: | Burns J |
Decision: | See [18] |
Catchwords: | CIVIL PROCEEDINGS – Pleadings – offers of compromise – personal injury claim – offer not accepted and judgment no less favourable to plaintiff – special costs order – proceedings be paid on a solicitor and client basis – costs assessed on a party/party basis. |
Legislation Cited: | Court Procedures Rules 2006 (ACT) r 1010 |
Cases Cited: | Bullock v London General Omnibus Co [1907] 1 KB 264 |
Parties: | Stacey Louise Cave (Plaintiff) Australian Capital Territory (First Defendant) Dr Colin J Andrews (Second Defendant) Dr Brenda Tait (Third Defendant) |
Representation: | Counsel Mr D Campbell SC with Mr D Hirsch (Plaintiff) Mr D Higgs SC with Mr E Pike (First Defendant) Mr J M Morris SC with Mr B Kelleher (Second Defendant) Mr M Fordham SC with Mr C P O’Neill (Third Defendant) |
| Solicitors elringtons lawyers (Plaintiff) ACT Government Solicitor (First Defendant) Ken Cush & Associates (Second Defendant) Avant (Third Defendant) | |
File Number: | SC 425 of 2014 |
BURNS J:
These proceedings, being a claim for damages based upon negligence by the defendants, were settled on Friday, 10 February 2017. This was the fifth day of an estimated 20 day hearing. On the following Monday, 13 February 2017, at the request of the parties I entered judgment of the plaintiff against the defendants in the sum of $12 million. The only remaining issue is that of costs.
Each of the defendants had served Notices of Contribution on the other defendants. As part of the settlement of the claim it was agreed that the first defendant would pay $3 million towards the judgment sum and each of the second and third defendants would contribute $4.5 million.
On or about 28 October 2016, the plaintiff made a formal offer to each of the defendants to compromise her claim by entry of judgment for her in the sum of $11,425,399.00 plus costs as agreed or assessed. That offer was expressed to be open for acceptance for a period of 28 days from the date of service of the offer. The offer was not accepted by any of the defendants.
The amount for which the plaintiff’s claim has now been settled is greater than the amount that the plaintiff offered to accept by way of compromise. The plaintiff now seeks a special costs order that her costs of the proceedings be paid on a solicitor and client basis. This application is based upon r 1010 of the Court Procedures Rules 2006 (ACT). That rule relevantly provides that in a personal injury claim where a plaintiff obtains a judgment greater than an amount for which the plaintiff offered to compromise the proceedings, unless the court otherwise orders, the plaintiff is entitled to costs assessed on a solicitor and client basis for the whole of the proceedings.
The first defendant accepted that the plaintiff was entitled to the special costs order that she sought. The third defendant effectively did not oppose such an order, but sought a special costs order against the first and second defendants, a matter to which I will return in a moment. The second defendant opposed the plaintiff’s application for a special costs order on the basis that the plaintiff’s case on the issue of causation had changed in an amendment to the plaintiff’s claim made on or about 8 February 2017 in that the plaintiff amended paragraph 60(d) of the claim to allege that the second defendant had been negligent by failing, on or after 1 July 2011, to change or have caused the third defendant to have changed the plaintiff’s medication so as to afford the plaintiff a Deseril holiday. This was important, the second defendant submitted, because during the taking of concurrent evidence from medical experts on 10 February 2017 the question was asked whether the plaintiff would have suffered the symptoms that led her to attending the Canberra Hospital on 3 or 9 October 2011 if a Deseril holiday had been taken in early July 2011, with a resumption of that medication in August 2011. Each of the medical experts agreed on the balance of probabilities that she would not have developed those symptoms. The second defendant submitted that the issue of the absence of a Deseril holiday in the period from 1 July 2011 until October 2011 had not been pleaded until the plaintiff amended her claim on or about 8 February 2017.
I do not accept the second defendant’s submission. The plaintiff’s claim always raised, at paragraph 60(a), the allegation that the second defendant had breached his duty of care to the plaintiff by failing to ensure that she undertook a Deseril holiday “since taking over her specialist neurological management in October 2007”. At paragraph 63 of her claim, the plaintiff then asserted, on the question of causation, that if the second defendant had ensured the plaintiff had taken a Deseril holiday the hypoxic brain injury she sustained in October 2011 would have been avoided. The failure of the second defendant to ensure that the plaintiff took a Deseril holiday during the entire period of his management of her, from October 2007 until October 2011, was always an issue and it was always asserted that the failure throughout that period to ensure that the plaintiff took a Deseril holiday was causally related to the plaintiff’s injury.
A second submission made by the second defendant was that the issues of causation in this case were of such complexity that a special costs order should not be made in favour of the plaintiff. This was not a submission embraced by either the first or third defendants and in my opinion should not be accepted.
I am satisfied that the plaintiff is entitled to the special costs order which she seeks under r 1010, being an order that costs be assessed on a solicitor and client basis.
The first defendant submitted that each of the defendants should be ordered to pay the plaintiff’s costs, when assessed on a solicitor and client basis, in proportion with their relative contributions to the judgment sum. The first defendant would be required to pay 25 per cent of the plaintiff’s costs of the proceedings assessed on a solicitor and client basis, and each of the second and third defendants would be required to pay 37.5 per cent.
The first defendant submitted as its primary position that no special costs orders should be made between the defendants, but if this primary submission was not accepted the first defendant would seek an order for indemnity costs against the second defendant based upon his late admissions of breach.
The second defendant agreed that, in the event the plaintiff was entitled to a special costs order, each of the defendants should contribute towards the plaintiff’s costs based upon the defendant’s relative contributions to the judgment. The second defendant also agreed that no special costs orders should be made between defendants.
The third defendant submitted that she should only be required to pay her proportion of the plaintiff’s costs assessed on a party/party basis up to 6 January 2017. This was based upon efforts made by the third defendant to settle the proceedings, including an offer made to the first and second defendants on 21 December 2016 to contribute $4.5 million towards a proposed settlement of the proceedings based upon the plaintiff’s proposed compromise of $11,425,000.00, together with costs in an equal proportion to her contribution to the judgment sum. This proposal was not accepted by the first or second defendants. The third defendant also made an individual offer to the plaintiff to settle the proceedings in December 2016 in the amount of $4.5 million plus costs of $382,500.00. This offer was not accepted by the plaintiff.
The third defendant submitted that three propositions arose from the above:
(a) the third defendant attempted to accept the plaintiff’s offer in an amount equal to her monetary contribution she has ultimately been required to pay by virtue of the settlement, and in fact in a greater proportion with regard to the plaintiff’s offer of $11,425,000.00;
(b) had the third defendant’s offer to the plaintiff or her contribution offer to the other defendants been accepted, she would have been significantly better off by avoiding considerable costs and the risk of an exposure to indemnity costs; and
(c) had the third defendant’s offer to the plaintiff and/or her contribution offer to the defendants been accepted, the plaintiff would have avoided the need to incur costs preparing for trial, and indeed the need for her and her mother to attend court and give evidence.
The third defendant accordingly sought the following orders:
(a) that she pay her proportion (37.5 per cent) of the plaintiff’s costs on a party/party basis up to the date of the expiration of her offer of 21 December 2016 (being 6 January 2017) to contribute $4.5 million towards a settlement of the plaintiff’s claim based upon the plaintiff’s offer of compromise of $11,425,000.00, together with costs in a similar proportion;
(b) to the extent that she is ordered to pay the plaintiff’s costs of the proceedings on a solicitor and client basis, the difference between the party/party costs and the solicitor and client costs be borne by the first and second defendants for the whole of the proceedings or, alternatively, from 6 January 2017;
(c) the first and second defendants pay the third defendant’s costs on the Notices of Contribution on an indemnity basis from 6 January 2017; and
(d) the plaintiff pay the third defendant’s costs of the proceedings on and from 6 January 2017, but those costs be borne by the first and second defendants in accordance with the principles in Bullock v London General Omnibus Co [1907] 1 KB 264.
I can see no basis for making the fourth order sought by the third defendant. The judgment which has been entered by consent is for a sum of $12 million against each of the defendants as joint tortfeasors. The fact that the third defendant was willing to settle for an amount which is equal to the amount that the defendants have agreed is her proper contribution to the judgment sum does not make the refusal of the plaintiff to accept the third defendant’s offer unreasonable.
It was submitted by the first and second defendants that the terms of the letter to the second defendant by the first and third defendants, of 8 February 2017 are inconsistent with the application for a special costs order by the third defendant. I am not satisfied that this is so. The letter of 8 February 2017 was an invitation by the first and third defendants to the second defendant for the second defendant to contribute $4.5 million towards a proposed settlement figure of $12 million. Insofar as that letter addressed the question of costs, it only did so by indicating that if the second defendant refused the invitation, and the first and third defendants were ultimately the subject of judgments no less favourable than the amounts they were then willing to pay, the first and third defendants would seek costs orders against the second defendant, including indemnity costs or Sanderson/Bullock orders. There is no express undertaking in this letter to the effect that the third defendant would not seek a special costs order against the other defendants if the second defendant accepted the invitation, and in any opinion no such agreement can be readily implied from the letter.
By her letters to the first and second defendants of 21 December 2016, the third defendant agreed to contribute to a settlement of the plaintiff’s claim in an amount equal to the amount which the defendants have now agreed is her proper contribution. If the third defendant’s offer had been accepted by the other defendants, the proceedings would have settled for a sum of $11,425,000.00 plus costs of which the third defendant would have paid $4.5 million plus costs in equal proportion. There would also have been a significant cost savings in preparation for trial and in the conduct of the trial. In my opinion the failure of the first and second defendants to accept this offer was unreasonable. I accept that the third defendant should not be required to pay costs on the same basis as the first and second defendants. Because of the unreasonable refusal of the first and second defendants to accept her offer, the third defendant is now exposed to payment of the plaintiff’s costs on a solicitor and client basis, as opposed to a party/party basis, for the whole of the proceedings. On the other hand, if the third defendant had wanted to protect her position regarding costs, she could have accepted the offer of compromise made by the plaintiff and then pursued contribution from the first and second defendants.
Conslusion
The appropriate costs orders in my opinion are:
a. the defendants are to pay the plaintiff’s costs of the proceedings as agreed or assessed on a solicitor and client basis;
b. the first defendant is to pay 25 per cent of the plaintiff’s costs as so assessed, and the second and third defendants are each to pay 37.5 per cent of the plaintiff’s costs as so assessed;
c. each of the first and second defendants are to pay to the third defendant 50 per cent of the third defendant’s share of the difference between the plaintiff’s costs assessed on a solicitor and client basis and the plaintiff’s costs assessed on a party/party basis from 6 January 2017; and
d. there be no orders for costs on the Notices of Contribution.
| I certify that the preceding eighteen [18] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns. Associate: Date: 22 February 2017 |
0
0
1