Cemo v Min of Education and State of Queensland
[1998] QSC 148
•28 July 1998
IN THE SUPREME COURT
OF QUEENSLAND
Brisbane No. 10910 of 1997
Before Mr Justice Ambrose
[Cemo v. Min of Education and State of Queensland]
BETWEEN:
ANGELA CEMO
Plaintiff
AND:
THE MINISTER OF EDUCATION FOR QUEENSLAND
First Defendant
AND:
STATE OF QUEENSLAND
Second Defendant
CATCHWORDS: NEGLIGENCE - personal injuries - damages - offer to settle - case appraisal - application to give effect to the case appraiser’s decision - orders for costs - Supreme Court Rules 1900 - Supreme Court ofQueensland Act 1991 - Courts Legislation Amendment Act 1995 - District Court Rules (1968)
Counsel: Mrs S. Brooks for the plaintiff
Mr M. Green for the defendants
Solicitors: Delaney & Delaney for the plaintiff
Crown Solicitor for the defendants
Hearing date: 25.6.98
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered the 28th day of July 1998
This is an application by a plaintiff pursuant to s.100R(1) of the Supreme Court of Queensland Act 1991 as amended by the Courts Legislation Amendment Act 1995 “for an order giving effect to” a case appraiser’s decision. A Certificate of Determination pursuant to s.100(P) of that Act was filed on 7 May 1997.
The applicant instituted proceedings in the District Court of Queensland for damages for negligence against both defendants in respect of personal injuries she suffered on 26 May 1992. The District Court Plaint was filed on 24 May 1995.
After close of pleadings, the defendants made an offer to settle the plaintiff’s claim in the sum of $50,000.00 clear of any refund to WorkCover Queensland plus the plaintiff’s costs of and incidental to the action to be taxed.
The formal offer included the usual notation “This offer to settle is open for acceptance for a period of fourteen days from the date of service”. The offer was made in accordance with Part IX of the District Court Rules (1968) as amended.
That formal offer was not accepted and subsequently the plaintiff procured a transfer of her District Court action into the Supreme Court of Queensland on the basis that the assessment of damages might exceed the jurisdiction of the District Courts.
On 18 March 1998 Byrne J ordered that the parties engage in a case appraisal.
Under paragraph 6 of that order it was agreed between all parties that the first and second defendants should pay the costs of the appraisal.
Liability was not in issue on the appraisal.
The case appraiser’s determination was made on 7 May 1998 and on that day he filed his Certificate pursuant to R.S.C. O.99 r.29.
No party in the action elected to go to trial pursuant to R.S.C. 0. 99 r. 30. Under s.100 R.(1) of the 1991 Act (as amended in 1995) the plaintiff may now bring this application to give effect to the case appraiser’s decision.
The relevant part of the case appraiser’s decision is contained in paragraphs 71 and 72 of it.
In paragraph 71 it is provided -
“My assessment of the plaintiff’s damages clear of the WorkCover statutory benefits refund is $20,527.02".
Paragraph 72 of the decision reads -
“72.Pursuant to O.99 r.27 I must include a decision on costs. This matter was commenced in the District Court. It was transferred to the Supreme Court by order of Byrne J on 6 November 1997. Costs of the application to transfer were to be costs in the cause. In my view, the plaintiff should recover her costs of the action, but to be taxed on the District Court scale applicable to matters where less than $50,000.00 is recovered”.
It seems clear that the appraiser had no power to make an order for costs. He simply was required by statute to decide what order for costs ought be made. However his jurisdiction/power to decide that issue was limited to the power of this Court under R.S.C. O. 99 r. 22(1). That power is conferred by R.S.C. O. 26 r. 2.
The appraiser was never informed that an offer had been made by the defendants to the plaintiff under O.26 and he obviously paid no attention to the terms of O.26 r. 9(2) or gave consideration to whether “in the circumstances” the plaintiff had shown that she should get the benefit of the costs decision he made which differed from that within the general contemplation of O.26 r.9(2).
Had he been so informed, it is perhaps on the cards that he would have tailored his decision on costs to be conditional upon his decision on the quantum of damages being for a sum greater than the offer made.
Upon the plaintiff’s application to obtain judgment in accordance with the appraiser’s decision on damages and costs, she was met with the contention by the respondents that in fact in all the circumstances the rules required that judgment be entered not to give full force and effect to the decision of the appraiser but rather in effect only to enter judgment in respect of his assessment of damages. It was said that s.100R of the 1991 Act, and particularly subsection 3, enables a Court in the situation which I have described to “make any order it considers appropriate in the circumstances”. It was said that in the circumstances as I have outlined them, “it would be appropriate to give judgment for the sum of $20,527.02 plus the WorkCover statutory benefits refund and to order pursuant to O.26 that the plaintiff recover her costs to be taxed up until the service upon her of the offer on 18 September 1997 and that thereafter the costs of the defendants (including presumably the costs of this application) be paid by the plaintiff”.
Under R.S.C. O.99 r.27(2) it is provided -
“(2)A case appraiser’s decision under rule 26(1) must include a decision on costs in the dispute”.
Under O.99 r.22 it is provided -
“(1)The case appraiser for a referred dispute has the power of the Supreme Court to decide the issues in dispute in the referred dispute.
(2)However, the case appraiser -
(a)may only give a decision that could have been given in the dispute if it had been decided by the Court --”.
Under O.99 r.27 it is provided -
“27(1) In a referred dispute, a case appraiser has the same power to award costs in the dispute the Supreme Court would have had if it had heard and decided the dispute.
(2)The case appraiser’s decision under r.26(1) must include a decision on costs in the dispute.”
O.99 r.30 provides -
“3(1) A party who is dissatisfied with a case appraiser’s decision may elect to have the dispute go to trial in the ordinary way by filing an election in Form 522 with the Registrar.
(2)The election must be filed within twenty eight days after the case appraiser’s Certificate is filed in the Registry.
(3)If an election is filed -
(a)the case appraiser’s decision ceases to have effect other than as provided by rule 31; and
(b)the dispute must be decided in the Supreme Court as if it had never been referred to the case appraiser.”
O.99 r.31 then provides -
“31(1) In this rule - “challenger” means a party who filed an election under rule 30.
(2)If the Supreme Court’s decision in the dispute is not more favourable overall to a challenger than the case appraiser’s decision in the dispute was to the challenger, the costs of the action and the case appraisal must be awarded against the challenger.
(3)However, the Court may make another order about costs if the Court considers there are special circumstances.
(4)If all parties are challengers, the case appraiser’s decision has no effect on the awarding of costs.”
It is clear that the offer made under O.26 r.2 expired and was incapable of acceptance long before the matter in dispute was referred to case appraisal; it had lapsed pursuant to O.26 r.4(2). Under O.26 r.6(2) it is provided -
“(2)Where an offer to settle is not accepted, no communication in respect of the offer shall be made to the Court at the trial or hearing until all questions of liability and the relief to be granted, except costs, have been determined.”
O.26 r.9 (2) provides -
“(2)Where the defendant makes an offer to settle which is not accepted by the plaintiff and the plaintiff obtains a judgment which is not more favourable to the plaintiff than the offer to settle the Court shall order the defendant to pay the plaintiff’s costs, fixed on a party/party basis, up to and including the day of service of the offer to settle and order the plaintiff to pay the defendant’s costs, fixed on a party/party basis, after the day of service of the offer to settle, unless the plaintiff shows that another order for costs is proper in the circumstances.”
O.26 r.9(4) requires the Court to disregard interest when considering the amount recovered for damages against the offer made under O.26.
For the defendants it is contended in essence that the ADR process in which the parties engaged was in the nature of “an interlocutory step” being taken between the issue of the Plaint and the making of this application for judgment on the basis of the appraisal. It is contended that the provisions of O.26 and those of O.99 ought be regarded as standing together; that approach it is said is supported by the terms of s.100R of the 1991 Act which provides -
“100R.(1) A party may apply to the Supreme Court for an order giving effect to a case appraiser’s decision after the time prescribed under the rules for electing to trial has passed.
(2)However, a party may apply for the order before the time mentioned in (1) if all parties agree.
(3)The Court may make any order it considers appropriate in the circumstances.”
It is to s.100 R(3) which the defendants refer as requiring that only part of the appraiser’s decision be given effect - that part assessing damages - and that the part relating to costs be disregarded and judgment not be given for costs because it would be “inappropriate in the circumstances” to do so having regard to the making of the offer to settle under O.26.
The problem I have with this approach is that there was only one decision given by the case appraiser and not two. That decision had two parts to it -
(1) an assessment of damages; and
(2) an order with respect to costs.
Neither party elected to go to trial and run the risks of being subjected to the costs order that might follow depending on the outcome of the trial. The plaintiff in particular elected not to run those risks inherent in going to Court should she not recover as large an award as the appraiser had decided was appropriate; of course had she elected to go to Court she would have run the risk also of the consequences of her non-acceptance of the O.26 offer should she recover less than that offer.
In my view, in deciding whether or not to elect to accept the appraiser’s decision, the plaintiff must have been influenced by the evaluation which the appraiser made of her evidence and the medical evidence called to support and oppose her case and as well by the fact that there had been an offer made in the sum of $50,000.00 which was more than double the assessment upon which the appraiser decided.
In my view, it would be a most unsatisfactory result if a party were to elect to accept the whole of the decision of an appraiser only to find when coming to enter judgment to give effect to it in this Court that party was bound by the election made not to go to trial and yet was unable to enter judgment to give effect to the whole of the decision but only to part of it.
It may well be the case that the defendants did not attempt to put the terms of the offer for settlement before the case appraiser on the basis that it was not permissible to do that until judgment in the action had been pronounced. The case appraiser of course had no power to make an order or give a judgment. That does not mean to say however that a submission could not have been made to the appraiser on behalf of the defendants that any decision made on costs ought be conditional upon the effect of any offer which may have been made under O.26 or its District Court equivalent. This was not a case in which liability was in issue before the appraiser (Vide O.26 r. 6(2)); in my view it is unfortunate that he was not informed that an O.26 offer had been made so that he could so frame his decision on costs as to permit an order for costs to be made to give effect to the O.26 offer. Had that been done the plaintiff could then have decided whether to make her election under O.99 r.3 with full knowledge of the consequences of accepting the whole of the decision of the case appraiser.
Had that course been taken, the plaintiff in deciding whether to elect to take the matter to trial, would have been capable of making a proper assessment as to what the costs of the defendants might be which she would or might have to pay should she accept the case appraiser’s decision.
In my view, it would be a very unsatisfactory state of affairs indeed if in a case of this sort when making an election, whether or not to accept the case appraiser’s decision a plaintiff was unable to assume that judgment might be entered to enforce the very decision that was made with respect both to damages and to costs by the appraiser.
In my view it would be unjust to the plaintiff to make an order under s.100R(1) of the kind sought by the respondents because to do so would result in a much less beneficial outcome for the plaintiff than a judgment pronounced to give effect to the whole of the decision of the case appraiser.
The respondents could of course, if dissatisfied with the decision on costs, have elected to go to trial; however they did not do so but instead seek to argue on the plaintiff’s application for an order to give effect to the appraisal what they may have argued had they elected to go to trial. In my view whatever the extent of the power given by s.100R(3) it would be inappropriate to accede to the contention of the defendants; to do so would be to contradict the scheme of the Act and Rules which enables parties to an appraisal either to accept the whole decision or elect to go to trial and accept the consequences of O.99 r.31(2) if they are not more successful on trial than they were on appraisal.
Although perhaps it was due to the failure of the respondents to inform the case appraiser that an O.26 offer had been made which led him to arrive at his decision relating to costs, it would be undesirable upon the facts of this case if they were deprived by their oversight of any right given to them by their timely O.26 offer.
I am given a wide discretion under s.100R(3) to make “any order considered appropriate in the circumstances”.
In this case in the absence of special circumstances, it is undesirable that the general effect of R.S.C. 0.26 r.9(2) should be circumvented. On the other hand it is undesirable that there be a departure from the substantive effect of the statutory provisions and rules relating to ADR, the policy of which in my view is to make the decision of the case appraiser final between the parties unless one or more of them elect to go to trial. In my view it is not the policy of the ADR process to allow one or more parties to the appraisal to accept part only of the decision of a case appraiser on all matters debated before him and then upon a party’s application to obtain a judgment or order of this Court to enforce the decision to attempt to embark upon a reconsideration of matters that were or ought to have been advanced upon the appraisal by the parties.
On the facts of this case it seems clear that no party before the appraiser raised the fact that an O.26 offer had been made on 18 September 1997. Whether this was done deliberately or by oversight does not emerge. I would infer that more probably than not it was simply an oversight on the part of the defendants. Perhaps upon the evidence given at the appraisal it was not then within their contemplation that the appraisal would be for a sum less than the O.26 offer. However, it would be unprofitable to speculate on the reasons for the failure to advise the case appraiser of the existence of an O.26 offer.
In my view it is clear that the respondents’ O.26 offer of $50,000 plus costs would significantly exceed in value the judgment which the plaintiff seeks to enter to enforce the whole of the decision of the case appraiser.
I have been referred to no authority touching on the matters canvassed on this application. With some reservation therefore, I make the following orders:-
I decline to make an order in the terms sought by the plaintiff;
I decline to make an order in the terms sought by the defendants;
Pursuant to O.90 r.6 I order that the time within which each of the parties may elect pursuant to O.99 r.30(2) to have the dispute go to trial be enlarged for a period of fourteen days from the date of this order.
If no party elects to go to trial, it seems to me that the plaintiff may then renew her application for an order giving the full effect to the decision of the case appraiser - i.e. for the damages assessed plus costs.
As presently advised it is my view that upon such an order being made it will then be open to the respondents to seek an order under O.26 r.9(2) that they recover from the plaintiff their party and party costs incurred since the date of their O.26 offer on 18 September 1997; those costs would arguably include the costs of this application.
It will then be open to the plaintiff to argue if she so desires, upon available material that “another order for costs is proper in the circumstances”.
I adjourn the further consideration of the plaintiff’s application to a date to be fixed. It may be brought on for hearing by any party to it upon fourteen day’s notice to the other parties.
I reserve the costs of the application to date.
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