Curtis v The Queen Elizabeth Hospital - [2008] SADC 48

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CURTIS v THE QUEEN ELIZABETH HOSPITAL
[2008] SADC 48
Reasons for Decision of Her Honour Judge McIntyre
30 April 2008
PROCEDURE - COSTS
Plaintiff seeks solicitor/client costs relying on Calderbank letter - consideration of discretion in relation to costs - plaintiff awarded party/party 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%.
Expert evidence - findings that evidence fundamentally flawed - plaintiff deprived of costs of and incidental to this evidence.
District Court Rules 1987; R6A, referred to.
Morris v McEwen & Anor [2005] SASC 284; Chajka v Preston (No.2) [2005] SADC 71; Stewart v Jacobson (2000) 209 LSJS 174; Cretazzo v Lombardi (1975) 13 SASR 4,16, applied.
Forlyle Pty Ltd v Tiver & Anor [2007] SASC 464; Calderbank v Calderbank [1975] 3 WLR 586, 597; Flinders Diamonds Ltd v Tiger International Resources Inc. & Ors (No.2) [2006] SASC 180, paragraph 16; Pirotta v City Bank Ltd (1998) 72 SASR 259, considered.

CURTIS v THE QUEEN ELIZABETH HOSPITAL
[2008] SADC 48

On 7 March 2008 judgment was entered for the plaintiff against the defendant for damages arising out of medical treatment at the defendant’s Emergency Department on 29 December 1999.
The parties have raised a number of issues relating to the question of costs. The plaintiff seeks costs on a solicitor/client basis following a Calderbank letter served on the defendant’s solicitors on 1 February 2008.
The defendant resists this order and contends that the plaintiff should be awarded costs on a party/party basis subject to some qualifications. The defendant seeks an order that the plaintiff not be entitled to the cost of and incidental to the evidence of Mr Magor and further seeks that the plaintiff’s costs be reduced for non compliance with Rule 6A of the District Court Rules 1987.
Plaintiff’s Application
The plaintiff has succeeded in her action and in the ordinary course of events she is entitled to party/party costs to be taxed or agreed [1]. The Plaintiff seeks solicitor/client costs on the basis of a letter dated 1 February 2008. This letter was sent to the plaintiff’s solicitors by facsimile on the same date at 11.44 am. The letter contained an offer stated to be made pursuant to principles established in Calderbank v Calderbank[2] and indicated that the plaintiff would accept the sum of $225,000 including interest, plus special damages and costs, in full settlement of her claim. The offer remained open for acceptance until 10.00 am on Monday 4 February 2008.
[1] Forlyle Pty Ltd v Tiver & Anor [2007] SASC 464
[2] [1975] 3 WLR 586, 597
At the outset it must be noted that the offer is somewhat higher than the award of damages. The difference appears to be $2,800 - special damages having been agreed between the parties to be $346.65.
The plaintiff did not make an offer under Rule 41 of the District Court Rules 1987. Indeed the plaintiff could not make such an offer as offers under Rule 41[3] are required to be lodged at least 21 days prior to trial. The Calderbank letter was served on Friday 1 February 2008 and the trial commenced on Monday 4 February 2008.
[3] District Court Rules 1987
I further note that the offer would not have complied with Rule 41.01[4] as it did not include “a stated amount”. It was a stated amount plus an amount for special damages. Whilst I note that special damages were agreed during the course of the trial they were not apparently agreed at the time of the making of the offer. Accordingly, had the offer been lodged under Rule 41[5] it would have been ineffective as it was not capable of specific quantification so that a judgment based on any acceptance of it could be effected through administrative action of the registrar[6].
[4] Ibid
[5] Ibid
[6] Flinders Diamonds Ltd v Tiger International Resources Inc. & Ors (No.2) [2006] SASC 180, para 16
The Calderbank offer is still a relevant consideration[7]. The making of the Calderbank offer is a factor in the exercise of the general discretion in relation to costs[8].
[7] Morris v McEwen & Anor [2005] SASC 284
[8] Pirrotta v City Bank Ltd (1998) 72 SASR 259
Having considered the factors in this case I see no reason to depart from the usual order that the plaintiff be awarded her party/party costs of this action.
I do not consider she is entitled to costs on a solicitor/client basis.
The offer was made late on the Friday morning preceding the commencement of the trial on a Monday morning. The offer was expressed to expire on Monday 4 February 2008 at 10.00 am. I do not consider that this gave the defendant sufficient time to seek legal advice and to consider the plaintiff’s offer.
The offer was not for a stated sum. At the time it was made, special damages had not been agreed. The offer was therefore somewhat uncertain. In order for judgment to be entered on the basis of this offer there would, of necessity, been further discussion between the parties to agree special damages.
The plaintiff did not better the offer. Had the offer been made under Rule 41[9] the plaintiff would not have been entitled to solicitor/client costs.
[9] Ibid
Further, the onus is on the plaintiff to show the defendant’s conduct in not accepting the offer was unreasonable or imprudent[10]. She has not done so. First the offer was made so late that the defendant did not have adequate time to properly consider it. Second, the express basis on which the offer was made was a report of Professor Newall dated 22 January 2008. It was reasonable of the defendant to test this evidence. It was non-compliant with the rules as to the time for service of expert reports. The plaintiff required leave under Rule 38.01(7)[11] in order to lead this evidence. The evidence if able to be lead was also inconsistent, in some respects, with other medical evidence. Third, there were live issues between the parties concerning various aspects of the evidence such that it was not unreasonable of the defendant to proceed to trial.
[10] Pirrotta v City Bank Ltd (1998) 72 SASR 259; Waller & Waller v FMC & Burns (No. 4) [2004] SADC 73
[11] Ibid
Failure to comply with Rule 6A
The plaintiff concedes that she made no pre-action offer under Rule 6A[12]. Rule 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.05The Court may deprive a plaintiff who does not comply with Rule 6A of the whole or part of the costs of the action.
6A.09The 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.
[12] Ibid
The statement of claim did not contain an endorsement under Rule 6A.09[13]. The issue was first raised in the defence. In paragraph 10 of her reply the plaintiff stated as follows:
As to paragraph 12 of the defence, the plaintiff admits that no claim had been notified in accordance with Rule 6A of the District Court Rules, but further says that there are good grounds to relieve the plaintiff of the consequences of failing to make such notification, as follows:
(a)     at the time of the institution of proceedings, the extent of the damages likely to be     recovered by the plaintiff was not able to be quantified with any degree of certainty      inter alia by reason of the instability of the plaintiff’s medical condition;
(b)     had the proceedings not been instituted the plaintiff’s claim would have become      statute barred by Section 36 of the Limitations of Actions Act, 1936 (SA);
(c)     in any event, the failure to provide to the defendant a formulation of claim 90 days    prior to the commencement of this action has not been productive of any additional, legal and other costs over and above the legal and other costs that would    have otherwise been incurred had such formulation of claim been provided;
(d)     in the circumstances, it is appropriate that this Honourable Court in the exercise of its discretion award costs to the plaintiff.
[13] Ibid
The defendant concedes that it has not alleged any specific prejudice in consequence of the failure of the plaintiff to comply with Rule 6A[14]. I have however been referred to the decision of Chajka v Preston (No.2)[15] in which the plaintiff’s costs were reduced by 10% by reason of a failure to comply with Rule 6A[16] notwithstanding no specific prejudice was established by the defendant.
[14] Ibid
[15] [2005] SADC 71
[16] Ibid
The plaintiff did not specifically deal with the grounds outlined in paragraph 10 of the reply in the presentation of her case. There is however some evidence upon which I can rely in relation to each of the grounds.
In relation to paragraph 10(a), I accept the submission that significant medical evidence was obtained after proceedings were instituted. There was no explanation as to why this material was not obtained at an earlier date. There is no evidence upon which it can be said that the plaintiff’s medical condition was unstable at the time proceedings were issued. The diagnosis of complete hearing loss with a poor prognosis was made within 12 months after the plaintiff was discharged from hospital in January 2000. A lack of medical evidence may have caused some difficulties in the quantification of the plaintiff’s claim for damages but Rule 6A.02(2)[17] contemplates that a claimant may decline to specify an amount that he or she will accept providing brief reasons why an amount is not specified.
[17] Ibid
In relation to paragraph 10 (b) of the reply it is plain that the proceedings were issued shortly before the expiration of the limitation period. This does not however provide an explanation for the failure to comply with Rule 6A[18]. No evidence has been called to explain the failure to serve a notice in the 90 days prior to the issue of proceedings.
[18] Ibid
The matters outlined in paragraph 10 (c) of the Reply may well be correct however this does not in my view provide a ground upon which to relieve the plaintiff from the consequences of her failure to comply with Rule 6A[19]. In making that finding I have considered the remarks of the full Supreme Court in Stewart v Jacobson[20].
The purpose of the 90 day rule is to ensure that 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 were sufficient to avoid the application of the rule there would be little incentive to the parties to address the issues at an early date and the operation of the rule would be severely curtailed.[21]
[19] Ibid
[20] (2000) 209 LSJS 174
[21] Ibid, 194
In my opinion there are no grounds upon which to relieve the plaintiff from the consequences of her failure to comply with Rule 6A.02[22]. There will be an order that pursuant to Rule 6A.05[23] the costs of the action of the plaintiff be reduced by 10%.
[22] Ibid
[23] Ibid
Mr Magor’s reports
Mr Magor, a chartered accountant, gave evidence at trial. In addition Mr Magor provided three reports dated 5 October 2005, 11 September 2007 and 6 February 2008. The defendant applies to have the plaintiff deprived of the costs of and incidental to Mr Magor’s evidence on the basis of the findings[24]. The plaintiff opposes this on the basis that the fact this evidence was not accepted is not enough to deprive the plaintiff of her costs. The plaintiff referred to the judgment of Cretazzo v Lombardi[25]:
….but trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes or nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.
[24] Paragraphs 90-94 of Judgment
[25] (1975) 13 SASR 4, 16
This is not however a case where the plaintiff was unsuccessful on the issue to which Mr Magor’s evidence related. The issue being that of future economic loss. The point is that the evidence led from Mr Magor did not assist the court to determine that issue one way or the other. The plaintiff contended this situation was analogous to a matter where a party calls medical evidence but other medical evidence is preferred. I do not consider this to be the case. The evidence of Mr Magor was fundamentally flawed for the reasons outlined in the judgment and was never likely to be helpful to the court. Ultimately the decision on future economic loss was made on the basis of other material tendered by the plaintiff. I therefore consider that the defendant should not pay the cost of and associated with the reports and evidence of Mr Magor.
Conclusion
In conclusion I make the following orders as to costs:
1. I order that the plaintiff have her costs of action on a party/party basis to be agreed or taxed, such costs to be reduced by 10%.
2. I further order that the plaintiff is not to have the costs of and incidental to Mr Magor’s reports and evidence.