Chadwick v Allen (No 3) - [2013] SADC 66

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CHADWICK v ALLEN (No 3)
[2013] SADC 66
Judgment of His Honour Judge Tilmouth
22 May 2013
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT - MEASURE OF DAMAGES - PERSONAL INJURIES - GENERAL PRINCIPLES
The plaintiff filed offers to settle a claim for damages for personal injuries expressed in monetary and percentage terms, both of which the defendant did not accept. The plaintiff recovered judgment on more favourable terms than her percentage offer.
Held 1: The plaintiff is entitled to a presumptive order for the whole costs of action on a solicitor/client basis pursuant to Rule 6R188(6)(b) of the District Court Rules.
2. Given the strength of the adverse findings of credit against the plaintiff it is appropriate to reduce that entitlement by 15 per cent.
3. There is no sufficient reason to depart from the default position that the defendant is not entitled to any costs.
Motor Vehicles Act 1959 (SA) s 124AC; District Court (Civil) Rules 2006 (SA) Rule 6R 187, R 6R 188(6); Civil Liability Act 1936 (SA) s 47, s 47(3)(b), s 49(1)(b)(ii); Specsavers Pty Ltd v The Optical Superstore Pty Ltd (2012) 208 FCR 78; Whitehead v Maas (1991) 56 SASR 362; Latoudis v Casey (1990) 170 CLR 534; Ruddock v Vadaris (No 2) (2001) 115 FCR 229; Shaw v Jarldorn (1999) 76 SASR 28; Hospital v Fischer (No 2) (1992) 27 NSWLR 721; Miller v Hannagan (1989) 154 LSJS 385; Cretazzo v Lombardi (1975) 13 SASR 4; Oshlack v Richmond River Council (1998) 193 CLR 72; Robbins v Hardboard (1994) 62 SASR 362; AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, referred to.
Dighton v The Nominal Defendant (No 4) [2012] SADC 24; EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd (1993) 26 IPR 261; Chadwick v Allen [2012] SADC 105; Chadwick v Allen (No 2) [2012] SADC 155, applied.

CHADWICK v ALLEN (No 3)
[2013] SADC 66
The proceedings

In reasons published on 28 August 2012, judgment was given in favour of plaintiff in the underlying proceedings claiming damages for personal injury, reduced by 25 per cent.[1] Certain preliminary findings were also made in relation to damages at that time.
[1] Chadwick v Allen [2012] SADC 105, hereinafter ‘the primary judgment’
Subsequently, on 19 November 2012, judgment was entered for the plaintiff in the sum of $1,206,349.09, after the reduction for contributory negligence and to account for payments made under s 124AC of the Motor Vehicles Act 1959 (SA) and other interim payments made before judgment.[2] This third judgment deals with the question of costs of the proceedings.
[2] Chadwick v Allen (No.2) [2012] SADC 155
Filed offers
The plaintiff filed an offer pursuant to Rule 6R 187 of the District Court (Civil) Rules 2006 on 12 October 2011 to settle for 74.9 per cent of the plaintiff’s damages to be assessed, or alternatively for the payment to her of $3.25 m, plus ‘her costs of action to be agreed or taxed’. The plaintiff achieved marginally more than the percentage offer and about one third of the offer in dollar terms.
For its part, the defendant filed an offer to settle on 22 August 2011 at $350,000. This was based on a gross assessment of $1.634 m, before apportionment, interim payments and the s 124AC credit. He filed an additional offer on 30 September 2011 to settle for 37.5 per cent of the plaintiff’s damages.
The trial was set down for ‘urgent determination’ by a Master of this Court. It commenced on 7 November 2011 and the evidence closed on 15 February 2012. There were short procedural hearings in February and March 2012. Oral submissions were taken on 13, 14 and 15 March and 27 April 2012. In all the trial took 66 days, produced a transcript of 5,169 pages, not to mention numerous volumes of Exhibits and dense expert reports.
The rules of Court
The consequences of the failure of a defendant to accept offers such as that made by the plaintiff in this case, are dealt with by Rule 6R 188(6) of the District Court (Civil) Rules as follows:-
Rule 6R 188—Consequences of filing offer of settlement in Court
(6)If a formal offer of settlement so far as it relates to principal relief is not accepted by the party to whom the offer is made and the Court determines the relevant action or claim on terms (as to principal relief) that are no more favourable to the party than the terms of the offer, then, subject to the Court's order to the contrary—
(a) the party to whom the offer was made is not to be entitled to costs referable to the period falling after the relevant date; and
(b) the party that made the offer—
(i)if a defendant—is entitled to costs referable to the period falling after the relevant date; and
(ii)if a plaintiff—is entitled to the whole of the party's costs of action on a solicitor/client basis and the defendant is not entitled to any costs not otherwise ordered.
Accordingly the plaintiff submits that she is entitled to the whole cost of the action on a solicitor/client basis and that the defendant should not be entitled to any costs. Whereas the defendant contends that the Court should order ‘otherwise’ pursuant to Rule 6R 188(6)(b)(ii). The submission for the defendant centers upon adverse findings of credit made against the plaintiff and the time spent in making good those matters supporting those adverse findings. Hence the defendant contends that the circumstances justify an exemptive order, or alternatively an order reducing the plaintiff’s entitlement to solicitor/client costs, or in the further alternative for a portion of such costs on something less than a whole of action or solicitor/client basis, or both.
Findings made in the primary judgment
Stated in simple terms the cause of action in negligence arose when the plaintiff was thrown from the rear seat of a car in which she was a passenger. She suffered injuries resulting in paraplegia. By trials end she had formulated her claim expressed in round sums of between $3.425 m and $4.02 m, including future care of between $2.163 m and $2.2 m.
A major issue in the trial was whether she entered the vehicle knowing the driver was intoxicated, thereby attracting a mandatory statutory reduction on account of contributory negligence of 50 per cent under s 47 of the Civil Liability Act 1936 (SA). The Court found in her favour on that issue on the basis that she could not reasonably be expected to have avoided the risk entailed in entering the vehicle, within the meaning of s 47(3)(b) thereof.[3] A second issue on which she failed related to the failure to wear a seatbelt. The court found that she did not come within the exception provided for in s 49(1)(b)(ii) of the Civil Liability Act because she was ‘not in the passenger compartment at the time of the accident’.[4] In addition it was found that she did not engage the rear passenger seatbelt ‘due to impatience and impetuosity’, rather than because of driving conditions or malfunction.[5]
[3]    Primary judgment at [135]-[145]
[4]    Primary judgment at [171]
[5]    Primary judgment at [170]
Credibility findings
More to the point so far as her reliability as a witness was concerned, the Court found the plaintiff was a:[6]
… demonstrably and unsatisfactory witness in relation to a number of key issues… so important that they reflect more widely upon her reliability and credibility as a witness of truth in general
[6] Primary judgment at [48]
Her claim that she was unable to transfer to and from her wheelchair without assistance was also rejected because:[7]
… she has lied profusely about her ability to transfer in order to enhance her damages claim.
[7] Primary judgment at [63]
The capacity or incapacity to transfer independently was a fundamental issue because of its substantial impact upon the likely award of damages, especially for future care. Her case was mounted on the basis of the need for complete 24 hour care. In the result the court allowed considerably less than that.[8] This translated into an assessment of $1.77 m (in round figures) before reductions.[9]
[8] Primary judgment at [244]-[248]
[9] Primary judgment at [98(4)]
Another significant topic on which the plaintiff was shown to be untruthful was in relation to her ability to toilet herself. It is unnecessary to go into the details, except to point out that the ultimate finding was that her ‘evidence on this topic could only be regarded as pure fabrication’ such that ‘it infects her reliability as a witness of truth comprehensively’.[10] Once again this subject had the capacity to impinge upon the extent of the award for future care in particular.
[10] Primary judgment at [70].
The plaintiff’s evidence on both topics was discredited substantially because of the combined evidence of four carers who attested to her ability to transfer and to attend to her own toileting needs, supported by some 800 hours of surveillance evidence relating to transfers. The carer evidence is fully summarized in the primary judgment.[11] The plaintiff’s evidence on those topics also conflicted with that of the occupational therapist Mr Campanella.[12]
[11] Primary judgment at [56]-[63]
[12] Primary judgment at [52]-[54]
Solicitor/client costs
The dual objectives lying behind Rule 6R 188 are to encourage parties to make and accept reasonable offers and to promote the prompt and economic disposition of litigation, thus reducing the number of cases proceeding to trial: Maitland Hospital v Fischer (No. 2),[13] Shaw v Jarldorn[14] and Miller v Hannagan.[15]Moreover as French CJ observed in AON Risk Services Australia Ltd v Australian National University:
It is recognized by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
[13] (1992) 27 NSWLR 721 at 725
[14] (1999) 76 SASR 28 at 29.
[15] (1989) 154 LSJS 385 at 390.
The Rule and its predecessors have long been interpreted as having penal consequences, so as to encourage defendants to accept offers: Whitehead v Maas.[16]
[16] (1991) 56 SASR 362 at 367
The current rule, once invoked, renders solicitor/client costs of the whole action the primary rule rather than the exception, subject only in the case of plaintiff offers to ‘the Court’s order to the contrary’. The practical purpose of Rule 6R 188(6) is therefore to erect a presumptive or default position rather than a bare discretionary entitlement to costs.[17]
[17] Compare Specsavers Pty Ltd v The Optical Superstore Pty Ltd (2012) 208 FCR 78 at [21]
Should there be an order to the contrary?
In a table produced to the Court, the defendant has attempted to isolate from a detailed examination of the transcript on a day-by-day basis, the percentage of time spent on issues related to the plaintiff’s credit. The analysis suggests that of some 4610 pages of evidence, 2661 pages contain evidence relating to what is described as the plaintiff’s ‘misconduct’.
This analysis however fails to appreciate that much of the evidence touching upon the plaintiff’s credibility was relevant in other respects and hence would have to be adduced in any event. To begin with the evidence of the carers and Mr Campanella was highly relevant to various heads of damage, both pre and past judgment. In a case such as this surveillance film was always likely to be taken. It was in and of itself indecisive of the plaintiff’s transfer capacities. Furthermore it was not likely to be exposed to the various expert witnesses – as it eventually was – until after the plaintiff had been cross-examined on it: Robbins v Hardboard.[18] The psychiatric evidence went to damages as well and it was capable of throwing light on the plaintiff’s decision to enter the car and her frame of mind when she did. The technical evidence relating to the seat belt was relevant for the same reason.
[18] (1994) 62 SASR 229 at 237
On the other hand there can be no denying that some portion of the time taken during the trial can be exclusively related to the plaintiff’s persistent denial that she was unable to transfer in the face of a large body of evidence to the contrary and as going to her denial that she was able to toilet herself, although the latter topic of itself took relatively little time to pursue.
The defendant’s monetary offer to settle was less than one-third of the ultimate monetary award. The percentage offer was all but one-half of the award for 75 per cent of the plaintiff’s damages. The plaintiff therefore exceeded both offers by relatively large margins. The latter offer was made on the basis of a ’25 per cent reduction for the seatbelt and 60 per cent reduction in respect to alcohol … as the closest concession that could be made to 75 per cent’.[19] The reference to ‘alcohol’ in the transcript just quoted was a reference to the s 47 Civil Liability Act 1936 (SA) issue. Even had she failed on that issue she still would have bettered the monetary offer.[20]
[19] Transcript 1 May 2013 p 3.34-41
[20] Transcript 1 May 2013 p 4.35-5.8
It may be accepted that this was a difficult and complex piece of litigation and that it was not necessarily a straightforward exercise for the defendant to formulate an offer. But the fact of the matter is that the defence stood firm on the intoxication issue, giving no ground or making no concession at all. Nor was the defence prepared to pay a premium so to speak, so as to hedge against losing on the major ‘alcohol’ issue. It was, on the other hand on solid ground by refusing to budge on the seatbelt question because the plaintiff was never in a position to satisfy the exception under s 49(1)(b)(ii) of the Civil Liability Act.
On the basis of the case law cited in the primary judgment, the defendant ran an unpromising position on the ‘no duty/no breach’ limb of the case.[21] Given the disparity between the defendant’s quantum and liability offers and the final judgment on liability and damages award with respect thereto, there is simply no firm basis upon which to deprive the plaintiff of the prima facie position she is entitled to under Rule 6 R 188(b)(ii) District Court (Civil) Rules. The plain fact of the matter is that the plaintiff has succeeded on terms more favourable than her percentage offer thus triggering the operation of the rule. To hold otherwise would be to reduce the rule to one of little utility in point of its stated objectives, so that the plaintiff is entitled to a presumptive order for costs on a solicitor/client basis of the whole action.
[21] Primary judgment at [172]-[182]
Is any other costs order appropriate?
This is however not the end of the enquiry, for as mentioned earlier the defendant seeks an order reducing a portion of the plaintiff’s costs, or alternatively, on some lesser bases.
There are three consequences of the non-acceptance of a plaintiff’s filed offer under Rule 6R 188(6)(b)(ii). First, the plaintiff becomes entitled to the ‘whole… costs of action’. Second, the plaintiff becomes entitled to such costs on a ‘solicitor/client basis’ and third a defendant, is not entitled to any costs. All these alternatives are subject to a wider discretion to order to the contrary, conferred by the words ‘not otherwise ordered’. It follows that any such order must necessarily relate to something less than full solicitor/client costs or something less than the cost of the whole action, making an order on a particular issue or subject in favour of a defendant or indeed a combination of all three.
In Dighton v The Nominal Defendant (No. 4),[22] Rule 6R 188(6)(b) was construed as vesting a:[23]
… secondary discretion to make specific orders in favour of the defendant, even though an order may have been made against a defendant under Rule 6R 188(6)(b).
This view is supported by the comments of King CJ in Whitehead v Maas[24] and by Perry J in Shaw v Jarldorn.[25]Neither party took issue with this construction of Rule 6R 188(6) in these proceedings.
[22] [2012] SADC 24
[23] Above at [29]
[24] (1991) 56 SASR 362, 367
[25] (1999) 76 SASR 28, 37
Nevertheless, it is important to bear in mind that as a general consideration a successful party has the reasonable expectation of obtaining an order for costs, quite apart from specific rules relating to filed offers: Latoudis v Casey,[26] Ruddock v Vadaris (No 2).[27]As against that there are circumstances in which it becomes appropriate and reasonable for a plaintiff to bear the expense of a portion of a claim or of an issue in a claim, on which the plaintiff has failed, as in Cretazzo v Lombardy.[28] As McHugh J pointed out in Oshlack v Richmond River Council,[29] a successful party will be disentitled to an order for costs if its conduct justifies that course.
[26] (1990) 170 CLR 534, 557, 569
[27] (2001) 115 FCR 229, [9] and [11]
[28] (1975) 13 SASR 4, 12
[29] (1998) 193 CLR 72, [69]
In assessing the matter, it is not possible, desirable or necessary to be as precise as a defendant contends, or to analyze the transcript day-by-day, line-by-line, for the reasons articulated earlier. The present exercise does not require mathematical precision: Cretazzo v Lombardy.[30] It is one to be based on impression and evaluation and by producing a result which best reflects the interest of justice in the entire circumstances of the case: EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd.[31] As Gleeson CJ once observed in relation to costs, ‘there is a limit to the extent to which the wheels of justice can grind fine’: Forsyth v Deputy Commissioner of Taxation.[32]
[30] Above at 14 and 16
[31] [2011] FCA FC 92, [9]
[32] (2006) HCA Trans 521 (27 September 2006)
Doing the best one can in the circumstances, I consider 15 per cent of the time taken at trial can be sensibly attributed to evidence solely related to the credit-worthiness of the plaintiff. Given the strength of the negative findings in relation to that question and the undeniable time spent on attacking her veracity particularly related to the central issue of transfers, it is appropriate and reasonable therefore to allow her the entire costs of the trial reduced by 15 per cent to reflect that important consideration.
On the other hand as the greater proportion of the evidence would have been led anyway and on the basis the surveillance evidence was always likely to be adduced, together with its indecisive nature, it is inappropriate to depart from the default position that the defendant is not entitled to any costs. The late provision by the plaintiff of the reports of Doctors Raeside and Marshall was a consequence of her ongoing treatment and the exigencies of a long trial set down for urgent hearing.
Costs
For the above reasons there will be an order that the plaintiff have 85 per cent of her costs of action to be agreed or taxed on a solicitor/client basis.