Chajka & Chajka v Preston (No 2) - [2005] SADC 71

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CHAJKA & CHAJKA v PRESTON (No 2)
Reasons for Decision of His Honour Judge Kitchen
30 June 2005
PROCEDURE - COSTS
Plaintiff's failure to give R6A.02 (the ninety day) notice - no prejudice to defendant by that failure - applying Stewart v Jacobsen plaintiff's costs reduced by 10%
District Court Rule 6A; Stewart v Jacobsen (2000) 209 LSJS 174, applied.

CHAJKA & CHAJKA v PRESTON (No 2)
[2005] SADC 71

On 12 May 2005, judgment was entered for the plaintiffs against the defendant for damages (in the case of the second plaintiff for loss of consortium) arising out of a motor vehicle collision which occurred on 15 May 2000.
After hearing submissions, orders for costs were made in favour of the plaintiffs against the defendant. In making the order for costs, the issue of the effect of DCR 6A.02 (the ninety day rule) on the question of costs was overlooked. I have now heard submissions whether the plaintiffs should be deprived of the whole or part of their costs.
DCR 6A relevantly provides:
6A.02 (1)     At least 90 days before commencing an action the plaintiff is to post or send to the defendants at their last known address a notice of the proposed claim with sufficient detail so that the defendants have a reasonable opportunity to make an offer to settle the claim before it is commenced.
(2)     Where the claim is for any unliquidated amount the notice is to state the sum which the plaintiff will accept in satisfaction of such unliquidated claim or why, with brief reasons, such sum cannot be stated.
…
6A.05     The Court may deprive a plaintiff who does not comply with Rule 6A of the whole or part of the costs of the action.
6A.06 (1)     Within 60 days of receipt of any notice under Rule 6A.02 the defendants or their insurers are to post or send to its sender a response to it and copies of any relevant reports from any expert on which they intend to rely unless such reports have already been supplied.
…
6A.09     The summons or other originating process is to include an endorsement stating that a claim has been notified in accordance with Rule 6A, or that no such claim has been notified as the plaintiff believes that there are good grounds to relieve the plaintiff of the consequences of failing to make such a notification, or for such other reason as may be briefly stated in the endorsement.
The originating proceeding was issued on 13 March 2001 by the first plaintiff only; the second plaintiff was added as a party on 22 September 2002. I will refer to the first plaintiff as “the plaintiff”.
In the Statement of Claim the plaintiff pleaded:
9.Notice before action in accordance with Rule 6A has not been given because there are good grounds to relieve the plaintiff of the consequences of failing to make such notification and they are that the insurer is refusing to make interim payments of medical and associated expenses and so the plaintiff is seeking a declaratory judgment and interim assessment of her damages and for the final assessment of her damages to be adjourned until her injuries have stabilised.
The application for a declaratory judgment and interim assessment of damages is in paragraph 7 of the Statement of Claim.
In the filed defence, the defendant’s response to the matter of Rule 6A was
“5. The plaintiff has failed to submit, at least 90 days before the institution of these proceedings to the defendant’s insurer a detailed claim in writing together with copies of supporting documents which set out the nature and extent of the plaintiff’s injuries and residual disabilities and her claim for economic loss as known to her at that time. The defendant therefore seeks an order that the plaintiff is not entitled to recover her costs of this action. Further, the defendant pleads that the allegations made by the plaintiff at paragraph 8 of the Statement of Claim do not constitute proper grounds for the plaintiff’s failure to comply with Rule 6A.” Paragraph 8 of the Statement of Claim was subsequently re‑numbered 9.
In the first sentence, the defendant appears to be appealing to the words of Rule 101.01, that is the plaintiff’s failure to submit a detailed claim, with supporting documents, setting out the nature and extent of her injuries, and the residual disabilities known to her at the time of the claim, rather than (as Rule 6A.02 is cast) her failure to send notice of the proposed claim with sufficient detail so that the defendant had a reasonable opportunity to make an offer to settle the claim before it was commenced.
Before the proceedings were issued the following events had occurred:
·On 6 July 2000 the plaintiff wrote to the Transport Accident Commission (TAC) (the defendant resided in Victoria and was driving a Victorian registered car at the date of the collision) referring to the collision, providing details of her and the defendant’s name and particulars, and forwarding a copy of the police report concerning the collision; she stated the nature of her injuries to be a whiplash and soft tissue which she claimed had prevented her from returning to work. She enquired, “What needs to be done next?”
·On 27 July 2000 TAC Law Pty Ltd (TAC Law) replied and requested that the plaintiff complete and return the compensation claim form enclosed with the letter. That was not done; instead, on 21 September 2000 the plaintiff’s solicitors replied to the letter identifying medical practitioners the plaintiff had seen, or was to see, and stating that medical reports would be provided if required. An admission of liability was also sought.
·On 28 September 2000 TAC Law wrote to the plaintiff’s solicitors in response to the letter dated 21 September 2000 stating that liability was not considered to be in issue and requesting various (and detailed) information concerning the plaintiff’s history “in order that consideration may be given to the settlement of this matter”. The requested information was not provided. In November 2000 the plaintiff’s solicitors sent to TAC Law a copy of the report of Mr Lehonde Hoare dated 2 November 2000 and two reports by Dr John Meegan dated 2 and 14 November respectively. On 28 November 2000 TAC Law acknowledged receipt of the reports and, in effect, requested complete particulars of the claim for the Commission’s consideration.
·On 19 January 2001 the plaintiff’s solicitors wrote to TAC Law reporting that the plaintiff had not returned to work because of her injuries, and requesting an “interim payment to the plaintiff in respect of the earnings she has lost as a result of this accident”. Pay slips, and group certificates for the years 1999 and 2000, were enclosed with the letter, which also reported that the plaintiff had paid for physiotherapy and hydrotherapy treatment from her own pocket.
·By a letter dated 16 February 2001 TAC Law replied that no advance payment would be made, but details of out-of-pocket expenses and economic loss were requested “for consideration”. The plaintiff’s solicitors did not receive that letter until 14 March 2001, the day after these proceedings had been issued. On 30 March 2001 the plaintiff’s solicitors wrote to TAC Law forwarding a copy of an affidavit of loss so that the Commission “may better understand (the plaintiff’s) out-of-pocket expenses and economic loss to date.” The letter stated that unless the Commission was prepared to pay the out-of-pocket expenses and the income loss to date, and undertake to meet in the future her like expenses and losses pending the finalisation of her claim, the plaintiff would proceed with an application for a declaratory judgment and an interim assessment of damages.
·On the day proceedings were issued the plaintiff’s solicitors wrote to TAC Law to inform them of that step and that a declaratory judgment with an interim award had been sought.
Rule 6A was introduced to commence on 3 September 2000. Its forerunner was Rule 101.01 which was in different terms: relevantly it provided that in any action seeking damages for personal injury, the Court may:
… order that the plaintiff shall not recover costs or shall recover part only of the costs if the plaintiff has failed to submit, at least 90 days before the institution of the proceedings, to the defendant’s insurer, if he is aware of such insurer, or, if he is not so aware, to the defendant, a detailed claim in writing together with copies of supporting documents including medical reports which set out the nature and extent of the plaintiff’s injuries and residual disabilities as known to the plaintiff at that time.
The Full Court considered that rule in Stewart v Jacobsen (2000) 209 LSJS 174 where the trial judge had deprived the plaintiff of 10% of her costs for a failure to comply with the rule, in circumstances where the trial judge found that some seventeen months before commencing her proceedings “(the plaintiff’s) condition had stabilised sufficiently so that a claim for her damages could have been formulated and pursued”. Nyland J, with whom Doyle CJ and Debelle J agreed, wrote at p 194:
The purpose of the 90 day Rule is to ensure the litigants take all such proper steps to address the relevant issues prior to the issue of proceedings. The rule is designed to encourage an exchange of information at an early stage in the hope that parties can resolve matters by negotiation and discussion rather than by litigation. As the trial judge said, if the defendant was able to show any prejudice from the plaintiff’s default, the consequences would be greater. True it is that in this case the subsequent history of the matter established that the action would not have resolved even if notice had been given and therefore there was no prejudice to the defendant. This could, however, be said of any matter which ultimately proceeds to trial. If the lack of prejudice demonstrated in the course of proceedings was sufficient to avoid the application of the rule there would be little incentive to parties to address the issues at an early date and the operation of the rule would be severely curtailed. … It is clear that the making of an order with respect to costs is a discretionary matter. In considering the exercise of the discretion it is necessary to have regard to the practical consequences of the failure to comply with the rule. That includes the prejudice or lack of prejudice to a defendant. This was a matter clearly taken into account by the judge. He expressly stated that the reduction of costs was limited to 10% as a result of the lack of prejudice to the defendant. As the judge said, it is not for the plaintiff to decide whether there is any point in complying with the rule.
In my view, these and the other observations concerning the purpose of the ninety day notice apply equally to Rule 6A.
Although the plaintiff’s Statement of Claim was cast on the basis that the plaintiff had not complied with Rule 6A it is submitted there had been partial compliance in that before the proceedings were issued sufficient detail of her proposed claim, to enable the defendant a reasonable opportunity to settle it, had been provided in the letters, medical reports and documents sent to the defendant.
For such a breach of the rule, it is submitted that there should be no deduction from the plaintiff’s costs, the defendant not having shown that it suffered any prejudice by the plaintiff’s failure to strictly comply with the time limit.
Following the issuing of the plaintiff’s proceedings, the following events occurred, or steps were taken
·On 15 May 2001 the defendant filed an appearance, after being personally served with the proceedings.
·In June 2001 a copy of a further report by Dr Meegan dated 27 April 2001 and a report by Ms Trankalis, an occupational therapist, dated 25 May 2001 and her account, were sent to the defendant’s solicitors; reimbursement of the account was sought.
·On 3 July 2001, the plaintiff was notified of an appointment, in August 2001, made by the defendant’s solicitors for the plaintiff to be examined by Dr Robin Williams.
·On 27 July 2001, the plaintiff filed an application and a supporting affidavit seeking an order that her proceedings for a declaratory judgment and interim assessment be listed for trial. It was served on the defendant.
·On 9 August 2001, the defendant filed a Defence.
·On 17 August 2001, the plaintiff’s application was referred to a listing conference on 29 November 2001.
·On 8 November 2001, a certificate of readiness for trial was filed, signed by both sides. It appears the trial was listed for 17 June 2002.
·On 21 May 2002, the defendant filed an offer to consent to judgment in the sum of $70,000.
·On 24 May 2002, the plaintiff elected to proceed for the final determination of her action.
·On 3 June 2002, the plaintiff sent to the defendant “for consideration” a claim for $527,014.27, itemised under nine separate heads of general damages, plus special damages, costs and disbursements.
·On 7 June 2002, the plaintiff applied to vacate the trial date because of the non-availability of an expert witness and counsel. The application was granted.
Upon receipt of the letter dated 19 January 2001 the Transport Accident Commission (TAC) had been provided with information consisting of
·the identity of the plaintiff, when where and the circumstances in which the accident had occurred, the nature and extent of the plaintiff’s symptoms (as reported in the medical reports), and diagnosis of the plaintiff’s injuries
·that to the date of the medical reports the plaintiff’s injuries had precluded her from her work (the type and nature of which, as a nurse, was canvassed in the medical reports); that one medical reporter (Dr Hoare) judged it inappropriate to “attempt any final prognosis” until a review in six months from 2 November 2000, and another medical reporter (Dr Meegan) proffered only a “hopeful” prognosis for the resolution of the plaintiff’s symptoms, with treatment, in three to six months from 2 November 2000, with a graded return to work over that time.
·particulars of the plaintiff’s income as a nurse for the two financial years ended 30 June 2000.
·that the plaintiff had out-of-pocket expenses for physiotherapy and hydrotherapy treatment, but not the quantum of them.
·that the plaintiff sought sympathetic consideration of her request for interim payment of the earnings “she has lost as a result” of the accident.
This information went some way toward being sufficient detail of the plaintiff’s claim if the claim, in the plaintiff’s contemplation, was for an interim assessment of her damages. However, not only had the plaintiff not informed TAC that her claim was so limited, but also in my opinion there was insufficient detail for TAC to have a reasonable opportunity to make an offer to settle such a claim; at the very least, as well as medical and expert reports, the detail which could satisfy the description “sufficient” for the purposes of Rule 6A must, in my opinion, include, in a personal injuries case, particulars of the nature of those required by Rule 46.15, insofar as the information had not already been provided and the quantum of the damages the subject of the claim. A piecemeal approach is not to be encouraged, rather in my view an intended plaintiff should prepare a notice particularly for the purposes of Rule 6A.02 and identify it as such so that the defendant well knows that the timeframe prescribed in Rule 6A.06 begins to run from his receipt of the notice.
The plaintiff did provide Rule 46.15 particulars, but that was on 30 March 2001 after the proceedings were issued. The letter of that date belatedly identified the claim the plaintiff was making at that time.
I find that the plaintiff failed to comply with Rule 6A by both insufficiently detailing her claim and, as to such detail as she did provide, sending it to TAC less than 90 days before commencing her proceedings.
The defendant contends that it was prejudiced by the plaintiff’s failure to comply with Rule 6A; the submission is that it has not been shown that the plaintiff’s condition was still unstable in March 2001, therefore the plaintiff was able to fully formulate her claim by a notice complying with Rule 6A.02 which TAC could have considered, and possibly compromised with the plaintiff, at a time when TAC did not have evidence upon the basis of which it later vigorously contested the plaintiff’s action on the issues of causation and the nature and extent of the injuries the plaintiff claimed to have sustained.
As to whether the plaintiff’s injuries had stabilised to an extent where her claim could have been fully formulated by a date 90 days before, or even by the time, the proceedings were issued, Dr Hoare in November 2000 considered that a further period of up to six months was required before a prognosis could be made. Concerning the possible compromise of the plaintiff’s claim, were it to have been in sufficient detail, before TAC’s investigations revealed material upon which it subsequently defended the claim, the letter dated 28 September 2000 in which TAC Law indicated that liability was not an issue, also pointedly observed “the very minor nature of this collision”, foreshadowing in my view the stance that TAC thereafter maintained.
I am not persuaded that the defendant has demonstrated prejudice.
I do not accept the defendant’s submission that the word “claim” in Rule 6A.02 means the entire cause, or causes, of action upon which the claimant will, or may, proceed. In my opinion the rule is wide enough to encompass a situation where a claimant, alleging personal injury, contemplates proceedings in which a declaratory judgment upon liability and an interim assessment of damages is sought; in such a case the claimant must cast the notice, for the purposes of Rule 6A.02, in appropriately sufficient detail so that the intended defendant has reasonable opportunity to make an offer to settle.
The plaintiff contends she should be relieved from the consequences of failing to give sufficient and timely notice of her claim before issuing proceedings, on the ground that
·her proceedings were commenced at a time her injuries had not stabilised.
·the purpose of Rule 6A is not only to encourage resolution, before prosecution, of a claim, but also to avoid or minimise the costs of proceedings.
·at the time the Defence was filed the defendant had been provided with further reports, by Dr Meegan and Ms Trankalis, and the plaintiff’s affidavit of loss yet the defendant made no offer to settle the plaintiff’s claim until May 2002.
In those circumstances, it is submitted, not only did the defendant suffer no prejudice by the failure to give notice, but also no savings of costs were likely to have occurred by the giving of notice, and it can be inferred from the material before the Court that the plaintiff believed the consequences of her injuries had not stabilised so she commenced proceedings when there was no response to her request for payment of past economic loss.
In my view, although there was medical opinion that her condition had not stabilised, in the sense that a prognosis was not proffered, such a fact did not obviate the need for, or preclude the plaintiff from preparing, a Rule 6A.02 notice; the rule expressly contemplates that in the case of a claim for any unliquidated amount the claimant may decline to specify what he or she will accept, but in that event the claimant is required to state brief reasons why it is not specified. If a claimant’s injuries have not stabilised, that can be asserted in the notice as a reason for not quantifying an unliquidated claim.

In my opinion the circumstances of the plaintiff’s case were not such that a notice complying with Rule 6A.02 could not have been given.
Counsel for the plaintiff submitted that the facts in Stewart’s case, which warranted a reduction of costs by 10%, were so different from the present case that to adopt the quantum of the reduction of costs in that case would be inappropriate.
In Stewart’s case there had been insufficiently explained delays before the institution of proceedings, and delays thereafter, but as to the failure to comply with the 90 day notice rule the only explanation before the trial judge was that the plaintiff had left it to her solicitor to do whatever was necessary. Two months after issuing her proceedings the plaintiff formulated a claim to the defendant which did not result in settlement. It does not appear in the trial judge’s judgment what, if any, communications had passed between the parties, their advisers or the defendant’s insurer before the proceedings were issued.
Here the plaintiff had progressively provided to the defendant’s insurer some information concerning her claim, before proceedings were issued, upon which she relied in requesting the payment of her past loss of income. Were the plaintiff to have received TAC Laws’ letter, dated 16 February 2001, a few days after that date the response to it may have been in terms of the letter to TAC Law dated 30 March 2001. Instead the plaintiff launched her proceedings having received no response to her request for past lost income. In the Statement of Claim the plaintiff asserted that no Rule 6A notice had been given because the insurer “is refusing to make interim payments of medical and associated expenses…”; a claim for such expenses had not expressly been made in the letter dated 19 January 2001.
The letter dated 30 March 2001 from the plaintiff’s solicitors made clear the extent of the claim which the plaintiff wished to pursue concerning interim payments. The information that had been provided to TAC before the proceedings were issued was in my view inadequate material upon which TAC could consider settling the plaintiff’s claim, and that would have been the case even if Rule 46.15 particulars had also been provided.
In my view that which the plaintiff provided to the defendant’s insurer, before she instituted her proceedings, is not to be categorised as “a sufficient equivalent” (see CP (Adelaide) & Ors v Hartford (Holdings) & Anor (No.10) (2002) 221 LSJS 124, 131) of compliance with Rule 6A.02.
In my opinion there are no grounds upon which to relieve the plaintiff from the consequences of her failure to comply with DCR6A.02 having regard to the purpose of that rule as identified by the Full Court in Stewart’s case.
There will be an order that pursuant to DCR6A.05 the costs of action of the first plaintiff be reduced by ten percent.