Dougan v Trustees of the Marist Brothers (Ruling)
[2025] VCC 1663
•17 November 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| INSTITUTIONAL LIABILITY LIST |
Case No. CI-24-04099
| MICHAEL DOUGAN | Plaintiff |
| v | |
| TRUSTEES OF THE MARIST BROTHERS | Defendant |
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JUDGE: | HER HONONOUR JUDGE K L BOURKE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 November 2025 | |
DATE OF RULING: | 17 November 2025 | |
CASE MAY BE CITED AS: | Dougan v Trustees of the Marist Brothers (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1663 | |
RULING
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Subject:INSTITUTIONAL LIABILITY
Catchwords: Towards Healing payment – setoff – offer of compromise
Legislation Cited: Limitation of Actions Act1958 (Vic), s27QE(2); County Court Civil Procedure Rules2018, r63A.16; r26.08(3), r28(2) and (3); Civil Procedure Act, s22 and s23
Cases Cited:Lonergan v Trustees of The Sisters of Saint Joseph & Anor [2021] VSC 651; O’Connor v Comensoli [2022] VSC 313; Steen v Trustees of the Diocese of Tasmania [2024] TASSC 3; DZY (a pseudonym) v Trustees of the Christian Brothers (2025) 422 ALR 372; Browne v Dunn [1893] 6 R 67; TJ (a pseudonym) v The Bishop of the Roman Catholic Diocese of Wagga Wagga [2023] VSC 704; Haines v Bendall (1991) 172 CLR 60; Lewis v The Australian Capital Territory (2020) 271 CLR 192; Comensoli v WQA (a pseudonym) [2024] VSCA 104; National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569; Footscray Football Club Limited v Kneale [2024] VSCA 314; Simonovski and Anor v Bendigo Bank (No 2) [2003] VSC 139; DP (a pseudonym) v Bird (Costs Ruling) [2022] VSC 58
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L B R Allan with Ms N Vallins | Slater & Gordon |
| For the Defendant | Mr J C Plunkett | Carroll & O’Dea Lawyers |
HER HONOUR:
1The plaintiff brought this proceeding against the defendant claiming damages for injuries suffered as a result of sexual abuse by a Marist brother at St Paul’s, Traralgon, in 1975 when aged 15 (“the abuse”).
2By its Amended Defence dated 20 March 2025, the defendant admitted the abuse.
3On 29 October 2025, a jury awarded the plaintiff $320,659 in damages (pain and suffering damages $300,000, medical and like expenses $20,659). No allowance was made by the jury for past or future economic loss claimed.
4At the conclusion of a “Towards Healing” process, there was a deed of release dated 7 June 2016 (“the prior deed”) which provided for payment to the plaintiff of $122,500 inclusive of legal costs and disbursements. The parties agreed that, after reduction of legal costs and disbursements, the plaintiff received a net sum of $107,251 (“the prior settlement sum”).
5On 16 July 2024, the plaintiff commenced further proceedings against the defendant in relation to the abuse that was the subject of the prior deed.
6On 30 July 2025, the defendant’s solicitors emailed the plaintiff’s solicitors, confirming the defendant’s instructions to consent to the setting aside of the prior deed, save to the extent that the defendant be entitled to financial credit for the prior settlement sum, and conditional upon the parties’ costs arising from the deed set aside application being costs in the proceeding.[1]
[1]Paragraph 11 of Mr Harrison’s affidavit sworn on 7 November 2025 (“Mr Harrison’s affidavit”)
7This matter came before the Court on 10 November 2025 on the application of the plaintiff that the damages awarded by the jury on 29 October 2025 should not be reduced by the prior settlement sum.
8Section 27QE of the Limitation of Actions Act 1958 (Vic) (“the LAA”) provides:
“Court’s powers – previously settled causes of action
(1) On an application under section 27QD or otherwise in a proceeding on an action referred to in section 27QA(2), the court, if satisfied that it is just and reasonable to do so—
(a) may make an order setting aside the settlement agreement and any judgment or order giving effect to the settlement of the previously settled cause of action, whether wholly or in part; and
(b) may make any other order that it considers appropriate in the circumstances.
(2) In hearing and determining any action to which this Division applies on a previously settled cause of action, the court, if satisfied that it is just and reasonable to do so—
(a) when awarding damages in relation to the action, may take into account any consideration (whether monetary or nonmonetary) paid, payable or given or to be given under—
(i) a settlement agreement set aside under this section; or
(ii) any other agreement related to the settlement that has been set aside under this section; and
(b) when awarding costs in relation to the action, may take into account any amounts paid or payable as costs under—
(i)a settlement agreement set aside under this section; or
(ii) any other agreement related to the settlement that has been set aside under this section.”
Case law
9There have been a number of cases where the Court has considered whether it is just and reasonable to take into account a prior payment under s27QE(2)(a)(i) of the LAA or the equivalent interstate legislation.
10In Lonergan v Trustees of The Sisters of Saint Joseph & Anor,[2] Keogh J declined to offset an earlier payment made of $28,000 in about November 2000 against the award of damages of $650,000 in Supreme Court proceedings.
[2][2021] VSC 651 (“Lonergan”)
11Keogh J concluded that it was neither just nor reasonable to take account of the amount paid under the settlement agreement by setting it off against damages assessed in the proceeding because;
“First, the Diocese obtained the real benefit of Mr Lonergan maintaining the confidentiality of the first settlement, yet Bishop Connors breached that term of the agreement when he communicated details of the settlement to Mr Lonergan’s cousin. Second, the compensation paid to Mr Lonergan under the settlement was very modest because of the legal barriers to prosecution of a claim against the defendants that he faced at the time. Third, the defendants have had the considerable benefit of protection by those barriers from a claim for adequate compensation for decades. Fourth, as I have already observed, Mr Lonergan is disadvantaged by the lapse of time since past loss was suffered and the effects of inflation, compounded by the unavailability of interest from the date of the cause of action.”[3]
[3] Lonergan at paragraph [217]
12In O’Connor v Comensoli,[4] the prior settlement sum of $139,353 ($8,000 of which was for legal fees) was offset against the overall damages award of $1,908,647.
[4][2022] VSC 313 (“O’Connor”) at paragraph [590]
13As Keogh J stated:
“While the Melbourne Response payments were described as ex gratia compensation they were clearly made to O’Connor in respect of the abuse by Gannon. Further, the deed released the defendant and others from any cause of action, and O’Connor agreed that he would bring no action and make no claim for damages, in relation to the abuse. The effect of the deed was to settle O’Connor’s cause of action in respect of the abuse. Accordingly, s 27QE of the Limitations Act applies.
If it is just and reasonable to do so, I may take into account the compensation paid to O’Connor through the Melbourne Response when awarding damages.[5]
The payments to O’Connor via the Melbourne Response, while they fall well short of the damages assessed, were objectively significant, and in that sense represented real compensation to O’Connor for the abuse. O’Connor has had the benefit of the first payment for about 12 years, and the second payment for about five years. These features, and the absence of any disentitling conduct by the defendant, make it just and reasonable to take into account the Melbourne Response payments when awarding damages.
O’Connor paid about $8,000 for legal representation on his Melbourne Response application. Having regard to his significant mental ill health, the complex issues he was required to consider, it was reasonable, and probably necessary, that O’Connor be legally represented.
I conclude that the award of damages to O’Connor should be reduced by the Melbourne Response payments net of legal fees. The amount to be deducted from the assessment of damages is $131,353.”[6]
[5] Section s27QE(2) of the LAA
[6] O’Connor at paragraphs [586]-[592]
14In the Tasmanian decision of Steen v Trustees of the Diocese of Tasmania,[7] the Court found it was not just and reasonable to offset a prior settlement sum of $34,000 ($29,690 after legal costs) from the ultimate damages award of $2.936 million.
[7][2024] TASSC 3 (“Steen”)
15Brett J stated:[8]
“I am satisfied in this case that the full amount paid under the deed does relate to the child abuse to which the cause of action relates. However, I am not satisfied that it is just and reasonable to take that payment into account in respect of the calculation of the award of damages. My reasons for this are because the defendant did not contribute at all to that payment, and the defendant's conduct in utilising that fact in an effort to reduce the amount of the settlement. At least part of that money was utilised by the plaintiff to provide himself with some psychological therapy, in a context in which he had been offered no assistance at all by the defendant, despite the defendant being well aware of its default arising from prior knowledge of Daniels' propensity. Further, the conduct of the defendant since the abuse, and the compounding effect that has had on the lifelong impact suffered by the plaintiff, means that it is, in my view, not just and equitable, to effectively give the defendant the benefit of this payment. Accordingly, the payment will not be taken into account in the award of damages in this case.”
[8] Steen at paragraph [331]
16The High Court in DZY,[9] while considering s27QE(1) only, stated that “just and reasonable” are words of wide import and the Court will apply broad principles and take account of any relevant factors in determining the test in applications to set aside prior deeds.
[9]DZY (a pseudonym) v Trustees of the Christian Brothers (2025) 422 ALR 372 at paragraph [25] (“DZY”)
Plaintiff’s submissions
17In the circumstances of this proceeding, the Court should exercise its discretion under s27QE(2) of the LAA to not offset any of the amount of the prior settlement sum paid under the Towards Healing scheme.
18In the alternative, any offset should be limited to no more than $15,000, representing a fair amount when considering the numerous parties protected by the prior deed, the contribution of the Marist Brothers to that deed, the reparative intent of the prior payment, the extent to which the prior payment covered items which are not compensable in the present proceedings, the payments made by the plaintiff for counselling and the conduct of the defendant.
19If the Court accepts that submission, it was submitted then it will not be required to consider the effect of the defendant’s two offers of compromise since the verdict achieved by the plaintiff after offsetting will be more favourable than the amount offered in each offer (even without allowance for interest)
20Counsel for the plaintiff confirmed that what was sought was that the prior settlement sum be added to the jury verdict, making a total award of $427,659 – a figure which exceeded the defendant’s two offers of compromise.[10]
[10]Transcript 1-2
21The plaintiff relied on Lonergan, where Keogh J held a setoff was not just and reasonable.
22O’Connor was distinguished from the present case on the basis that the earlier payment was made under a different scheme to Towards Healing, being the Melbourne Response with different objectives, the former having a greater focus on compensation and the latter claiming to have more of a pastoral focus.
23Relevant to this application, in Steen, it was not just and reasonable to take the prior payment into account in respect of the calculation of the award of damages because the plaintiff utilised some of that settlement to provide himself with psychological therapy, and because of the conduct of the defendant since the abuse and the compounding effect that had on the lifelong impact suffered by the plaintiff meant it was not just and equitable to give the defendant the benefit of the payment.
24Further, the Court’s discretion should be exercised, not taking into account the prior settlement sum by reason of:
(a) the nature of the Towards Healing process and payment;
(b) the fact that the Towards Healing payment protected three separate releasees (each of varying sizes) from future liability;
(c) the defendant’s conduct in that process and in the course of the present proceedings and its impact on the plaintiff;
(d) the benefit the defendant has gained from the prior payment to date.
25The Towards Healing process was a scheme set up by the Church in order to resolve liability for child abuse within a legal landscape, where there were very limited opportunities for victims to seek justice and compensation.
26Towards Healing is not, and was never intended to be, a scheme for providing compensation to victims. Rather, its principal aim was, and is, to provide pastoral care.[11]
[11]See Truth Justice and Healing Council, Submission to Royal Commission into Institutional Responses to Child Sexual Abuse
27The plaintiff’s experience of Towards Healing was also criticised on the basis it did not align with the Towards Healing Procedures as it did not provide healing.
28Further, the settlement offered to the plaintiff did not reflect a litigation process or even a pre-litigation process. The calculation of reparations to him under the protocol was entirely opaque. It was governed by the grace and favour of the Church without the benefit of the compensatory principles that underpin legal proceedings. Indeed, the evidence referred to the facilitator was dictated by the protocol itself. This was a church-controlled process submitted to in good faith by the plaintiff, but which did not meet his needs as a victim of child sexual abuse.
29While there were three nominated releasee parties in the deed, the actual contribution from the Marist Brothers, being the present defendant, was not revealed. Further, it was unclear from the deed which portion of the payment was related to the apology from Towards Healing and/or the Marist Brothers, which portion to the counselling expenses and which to the Certificate IV requested by the plaintiff.
30Also relevant to this issue was the defendant’s conduct in the present proceedings in circumstances where the perpetrator had pleaded guilty to the abuse in 2018, yet in its Defence of 18 September 2024, the defendant did not admit the allegation. During the trial, there was argument as to the extent of the defendant’s admission in its Amended Defence dated 20 March 2025, leading to a formal ruling that the admission included the particulars of the abuse.
31Further, the Court was required to remind the defendant’s counsel that there could be no cross-examination on the circumstances of the abuse, and then on day seven, counsel made application to withdraw the admission, which was refused by the Court.[12]
[12]No written ruling was made
32Continued reliance by the defendant on Dr Lee’s report was criticised as he had not been instructed the abuse was admitted and only during the trial did the defendant agree not to rely on the “false memory” part of his opinion.
33There were five days of prolonged and humiliating cross-examination, which was re-traumatising for the plaintiff, as were comments made by defendant’s counsel in addresses and counsel’s criticism of Senior Counsel’s opening address for the plaintiff.
34Further, there was a Browne v Dunn[13] point, that it was never squarely put to the plaintiff he was feigning symptoms for financial gain.
[13][1893] 6 R 67
35Also, the defendant had denied injury in its Defence, however, went to the jury, accepting the plaintiff should be awarded an amount for pain and suffering damages.
36The defendant had also obtained a benefit to the present date, being protection against any claim for common law damages or other compensation being made by the plaintiff for a number of years.
Defendant’s submissions
37These submissions addressed the issue whether the prior settlement sum should be deducted from the jury verdict of $320,695. The defendant did not address the plaintiff’s submission that the prior settlement sum should be added to the jury verdict and that, in those circumstances, the plaintiff’s damages exceeded the jury verdict and the offers of compromise did not apply.
38The prior settlement sum ought to be deducted from the jury verdict. To do otherwise would result in the plaintiff double dipping.
39The prior settlement sum was objectively significant.
40Existing Victorian case law, in particular O’Connor, appears to place considerable emphasis on whether the prior settlement was “objectively significant … in that sense represented real compensation … for the abuse”.[14]
[14]Submissions of the Defendant, dated 6 November 2025, paragraph 35
41In Lonergan, the Court had refused to offset a settlement sum, having described it as “very modest”, particularly when compared to the overall damages sum of $650,000, exclusive of interest.
42Steen was of little assistance as the adequacy of the original settlement sum did not appear to play any significant part in that decision. Further, in the present case, unlike in Steen, there was no award of exemplary damages and the defendant was responsible, albeit by its insurer, for the entirety of the settlement sum.[15]
[15]See paragraph 7 of Mr Harrison’s affidavit.
43There are also other reasons why the prior settlement sum should be deducted from the jury’s assessment.
44Senior Counsel for the plaintiff accepted that the prior settlement sum must be deducted from any damages award but is now seeking to resile from that unequivocally expressed opinion.
45The plaintiff’s solicitors have also accepted that the prior settlement sum forms part of the plaintiff’s total damages/compensation entitlement and must be deducted from the jury’s final damages award.
46The jury had already awarded fair and reasonable compensation.
47The assessment of damages is not a piecemeal enquiry. It is not appropriate for one decision-maker to assess damages and for another to assess whether it is just and reasonable to take into account the prior settlement sum. The matter should be considered together, as one invariably informs the other.
48If the plaintiff wished to argue that it was not just and reasonable to take into account the prior settlement sum, this matter should have been raised on day one of the trial so that submissions could have been made. It most certainly should not have been raised for the first time more than a week after the jury had reached its verdict.
49Whatever was said by the plaintiff about the role and function of Towards Healing, the fact is, there was a deed. The prior settlement sum was not paid as a form of restoration or as some form of pastoral care; rather, it was paid in consideration of the plaintiff releasing the defendant (and others) from future claims arising out of the abuse.
50None of the defendant’s conduct in the present proceeding can be properly characterised as anything other than perfectly fair, reasonable and legitimate.
51In TJ (a pseudonym) v The Bishop of the Roman Catholic Diocese of Wagga Wagga,[16] it was found that the fact the defendant did not admit the abuse, only to admit it six months later, did not further the parties’ obligations under the Civil Procedure Act 2010 (Vic).[17]
[16][2023] VSC 704
[17] Civil Procedure Act 2010 (Vic)
52While the plaintiff criticised the defendant for ostensibly seeking to withdraw an admission regarding the nature and extent of abuse, Senior Counsel for the plaintiff, on day two of the trial, conceded that the evidence will not be that the plaintiff can say the perpetrator actually touched his genitals.
53While the general nature of the cross-examination of the plaintiff was also criticised, a party is entitled to put forward its best case, and the jury evidently agreed the plaintiff was exaggerating the effects of the abuse. Indeed, while claiming in excess of $575,000 in damages for economic loss, the jury awarded him $nil.
54Also, twice during the proceeding, the defendant offered to resolve the plaintiff’s claim for more money than he was ultimately awarded by the jury.
55There is really no benefit the defendant obtained from the prior settlement sum.
56There was no merit in the argument the defendant ought not benefit from any payments it did not make, as Mr Harrison had deposed the defendant paid the entirety of the prior settlement sum in any event, albeit via its insurer, CCI.
57In those circumstances, it is just and reasonable to deduct the prior settlement sum from the jury’s award of damages.
Conclusion
58Judicial discretion under s27QE of the LAA must be exercised in accordance with law.
59The compensatory principle entitles the victim of a tort to no less and no more than “a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the … tort had not been committed”.[18]
[18] Haines v Bendall (1991) 172 CLR 60 at paragraph [1]
60As Gageler J said in Lewis v The Australian Capital Territory:[19]
“No threshold of ‘loss’ needs to be met before the counterfactual analysis mandated by the compensatory principle is applied. Whether, and if so to what extent, compensable damage - ‘loss or harm occurring in fact’ - has occurred is determined through the application of the same analysis. The outcome determines the entitlement of the victim of the tort to compensatory damages and sets the outer limit of the extent of that entitlement.”
(footnotes omitted.)
[19] (2020) 271 CLR 192 at paragraph [31]
61The plaintiff is entitled to fair and reasonable compensation for any injury suffered as a result of the abuse. The jury carried out its task in accordance with this principle, awarding a total of $320,659 in damages.
62The prior settlement sum cannot be added to the jury verdict – “the outer limit of the extent of the plaintiff’s entitlement” as the plaintiff seeks to do.
63The next issue is whether it is just and reasonable the Court take into account the prior settlement sum.
64A corollary of the settled principle Gageler J stated in Lewis is that an injured party cannot recover more than he or she has lost.
65As the Court of Appeal stated in Comensoli v WQA (a pseudonym):[20]
“The application of this principle would suggest that payments made to an injured plaintiff, which were paid for a condition that resulted from the claimed injuries, should be taken into account in the assessment of that plaintiff’s damages. Otherwise, such a plaintiff would recover more than he or she has lost or — to use the words of the defendants — the plaintiff would be double-dipping.”
[20][2024] VSCA 104 at paragraph [11]
66The prior settlement sum related to the abuse, the subject of this litigation, and should be taken into account in the assessment of damages. It is not an amount being conferred on the plaintiff independently of the existence of any right to damages.[21]
[21]National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 per Dixon CJ at 598
67In O’Connor, Keogh J set off the prior settlement sum in full, net of legal costs, and did not make any reduction or any allowance for monies that may have related to counselling or other expenses.
68Further, while the plaintiff argued the prior settlement sum was not compensation and was part of a pastoral process, the plaintiff signed a deed which released the defendant and others from any cause of action. The plaintiff agreed that he would bring no action and make no claim for damages in relation to the abuse. The effect of the deed was to settle the plaintiff’s cause of action in respect of the abuse.
69Any suggestion the prior settlement sum was not to be offset against any damages award was not raised by the plaintiff until well after the jury verdict.
70There was discussion with counsel during the trial on a number of occasions about the prior settlement sum and the offers of compromise which the defendant sought to be put before the jury in its consideration of the assessment of damages. As the assessment of damages was a matter for the jury alone, details of the prior settlement sum and the offers of compromise were withheld from the jury.
71At no time during the trial did Senior Counsel for the plaintiff indicate there was any issue about an offset of the prior settlement sum in the event of the jury awarding damages. Further, in discussions immediately after the verdict as to when final orders could be agreed upon, Senior Counsel for the plaintiff did not raise this issue.
72Pre-trial negotiations detailed in correspondence between the parties’ solicitors involved an offset of the prior settlement sum in the event of a damages award.
73The offers of compromise, including that by the plaintiff, referred specifically to “keep” and the prior settlement sum plus costs.
74In all the circumstances, it is not unreasonable not to offset the prior settlement sum as to do otherwise, the plaintiff would be receiving double compensation for the abuse.
75The amount of the prior settlement sum was subjectively significant – in the sense that it represented real compensation for the abuse.
76There was no disentitling behaviour on the part of the defendant during the trial. The issue before the jury was the nature and extent of the psychiatric injuries suffered by the plaintiff as a result of the abuse. Cross-examination legitimately and reasonably focussed on that issue in light of the defendant’s psychiatric evidence that the plaintiff was exaggerating the extent of his symptoms.
77I conclude that the award of damages by the jury ($320,659) should be reduced by the prior settlement sum. The amount to be deducted from the jury’s assessment is $107,251. Therefore, there will be judgment for the plaintiff in the sum of $213,408 plus interest.
78Clearly, I reject any argument that the prior settlement sum should be added to the jury verdict as the plaintiff submitted should be ordered.
Offers of compromise: The Court should otherwise order
79Rule 63A.16 of the County Court Civil Procedure Rules 2018 states:
“Where an offer of compromise is served and the offer has not been accepted at the time of verdict or judgment, liability for costs shall be determined in accordance with Rule 26.08.”
80Rule 26.08(3) of the County Court Civil Procedure Rules states:
“(3) Where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim to which the offer relates not more favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders—
(a) the plaintiff shall be entitled to an order against the defendant for the plaintiff's costs in respect of the claim before 11.00 a.m. on the second business day after the offer was served, taxed on the ordinarily applicable basis; and
(b) the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter taxed on the ordinarily applicable basis.”
81Rule 28(2) and (3) in addition to stating the orders for costs to which a party who served an offer of compromise is entitled in the events described, also gives the Court a discretion to order otherwise that is to refrain from penalising the other party in costs.
82Before the trial, three offers of compromise were made in this proceeding.
83The first was the defendant’s offer of compromise dated 20 August 2025, in which the defendant offered to compromise this proceeding on the basis that:
(a) payment is made to the plaintiff in the sum of $300,000, plus costs as agreed or assessed;
(b) this offer is made, plus retention of the previous settlement amount received by the plaintiff in the sum of $122,500.
84The second was the plaintiff’s offer of compromise dated 3 September 2025 which provided:
“1.The plaintiff offers to compromise this action by accepting the sum of $500,000 plus keep, plus standard costs and disbursements to be taxed in default of agreement.”
85The third was the defendant’s offer of compromise dated 23 September 2025, in which the defendant offered to compromise this proceeding on the basis that:
(a) payment is made to the plaintiff in the sum of $400,000 plus costs as agreed or assessed, minus the prior settlement received by the plaintiff in the order of $122,500;
(b) that offer was not being made without prejudice.
Plaintiff’s submissions
86The Court might “otherwise order” - thus refrain from penalising the plaintiff in costs- because of the defendant’s conduct of proceedings to the time that each of the offers were made, together with the plaintiff’s prior experience in the Towards Healing process, constitute compelling and exceptional circumstances.
87The nature of the proceedings also ought to be taken into account, that being a case of horrific abuse perpetrated on the plaintiff as a young boy – not a proceeding involving purely commercial interests.
88Further, the Court ought take into account the reasonableness of the plaintiff’s non-acceptance of the offer, citing the large jury verdicts in the two Supreme Court abuse proceedings heard last year.[22]
[22]TJ (a pseudonym) v The Bishop of the Roman Catholic Diocese of Wagga Wagga (supra) and Footscray Football Club Limited v Kneale [2024] VSCA 314
89This proceeding was an assessment and the plaintiff could quite reasonably expect he would have received an award under three heads of damage. The reasonableness of accepting or rejecting an offer of compromise is not to be judged through the prism of hindsight.
90When the first offer of compromise was made, the defendant had only obtained one report from Dr Lee, in which he opined the plaintiff had a fabricated memory of the abuse. The plaintiff was entitled to give little weight to this report, where the offender had pleaded guilty.
91The second offer of compromise was essentially the same as the first but put in a slightly different way and effectively offering a lower amount than the first.
92Further, there is no basis, if the defendant’s argument is successful, to order indemnity costs.
Defendant’s submissions
93The presumption as to liability for costs when an offer of compromise is not exceeded which arises under the Rule is not easily displaced.[23]
[23]Simonovski and Anor v Bendigo Bank (No 2) [2003] VSC 139
94What the plaintiff claims to be exceptional circumstances was really little more than a claim r26.08 ought not apply because he honestly thought he would receive a better outcome than the offer.
95Similarly unconvincing was the suggestion the nature of the proceeding also ought be taken into account – a proposition difficult to reconcile with the fact the plaintiff made his own offer of compromise.
96In DP (a pseudonym) v Bird (Costs Ruling),[24] a similar submission was made to the effect that r26.08 ought not to apply because the plaintiff was running a test case, was ultimately rejected by J Forrest J.
[24][2022] VSC 58 (“Bird”)
97Accordingly, the plaintiff’s arguments are far from compelling exceptional circumstances. This is little more than a run-of-the-mill injuries case in which the plaintiff chose to roll the dice of trial and unfortunately for him, he lost.
Indemnity costs
98Further, the expression “otherwise orders” is a double-edged sword – it also permits the Court to order that the party who served that offer be awarded costs on an indemnity basis.
99In circumstances where the plaintiff rejected not one, but two, offers of compromise, both of which were more favourable than the eventual verdict and in circumstances where the plaintiff is now seeking to completely resile from the position he plainly adopted in 2023, and explicitly adopted on day one of the trial to seek to make the defendant responsible for a two-week jury trial that was completely unavoidable, an order the plaintiff pay the defendant’s costs on an indemnity basis, was appropriate.
Conclusion
100I reject the plaintiff’s submission that there are circumstances in the present case where the Court should “otherwise order” that the plaintiff be penalised by his failure to obtain a verdict more favourable than the defendant’s offers of compromise.
101There are no special circumstances to displace the presumption as to liability for costs which arises under the Rule.
102There was no misconduct on the defendant’s part in the lead up to or in the conduct of the trial. In issue was the extent of the plaintiff’s loss and damage resulting from the abuse and the plaintiff was cross-examined accordingly.
103This was simply a case where the plaintiff thought he would obtain a better outcome than the defendant’s offers of compromise and unfortunately for him, he did not do so.
104I do not accept it was reasonable for the plaintiff not to accept the offers because plaintiffs in two totally different cases in the Supreme Court had received jury verdicts of millions of dollars. Further, there is no merit in the plaintiff’s argument that “the nature of the proceeding” ought also be taken into account particularly when he made his own offer of compromise.
105As J Forrest J said in Bird:
“The provisions of the Civil Procedure Act, in particular s22 and s23, make it abundantly clear that the Court’s overarching obligation is to encourage resolution and to narrow the issues. Mere parroting of the words ‘test case’ in no way displaces the responsibilities of the parties and their lawyers to work towards those objects.”[25]
[25]at paragraph [61]
106Further, in my view, the defendant has provided no satisfactory reason why the costs order in its favour should be on an indemnity basis, rather than on the usual standard basis.
107Accordingly, the costs orders will be in the terms of Order 26.08(3) (a) and (b), namely that the defendant pay the plaintiff’s costs on a standard basis, to be taxed in default of agreement up to 22 August 2025 and thereafter the plaintiff pay the defendant’s costs on standard basis to be taxed in default of agreement.
Interest
108The plaintiff also sought an order for interest in respect of pain and suffering damages and past medical and like expenses, calculated at 4 per cent.
109The defendant agreed the plaintiff is entitled to penalty interest on the award for past medical expenses and 4 per cent interest on the past component on the award for pain and suffering damages from the date of issue to the date of judgment.
110I will hear the parties submissions in relation to interest.
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