| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : DRAY -v- COLLINS [2004] WADC 185 CORAM : CRISFORD DCJ HEARD : 6 SEPTEMBER 2004 DELIVERED : 16 SEPTEMBER 2004 FILE NO/S : CIV 2604 of 2002 BETWEEN : TAMELA LEE DRAY Plaintiff
AND
TROY ANTHONY COLLINS
Defendant
Catchwords: Costs - Offer of compromise - Judgment for sum less than offer - Discretion to vary operation of O 24A r 10(5)
Legislation: Rules of the Supreme Court (WA) O 24A r 10(5)
Result: Operation of O 24A r 10(5) varied insofar as it relates to the costs of the late introduction of expert opinion by the defendant
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Representation:
Counsel:
Plaintiff : Mr A S Stavrianou
Defendant : Ms K Wood
Solicitors:
Plaintiff : Stoddart & Co
Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Malliaros v Moralis [1991] 2 VR 501
Morgan v Johnson (1998) 44 NSWLR 578
Case(s) also cited:
Craig v Troy, unreported; SCt of WA; Library No 950549; 10 October 1995
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1 CRISFORD DCJ: This decision concerns the costs of the main action for which reasons for decision have been delivered. Submissions on costs were heard on 6 September 2004.
2 The plaintiff in this action sought an award of damages arising out of a motor vehicle accident which occurred on 23 October 2000. The plaintiff was awarded $44,129 although she had sought in excess of $100,000. 3 It has now been brought to my attention that on 30 October 2003 an offer of compromise, in accordance with the Rules of the Supreme Court O 24A, was made by the defendant in the sum of $50,000. The offer was not accepted by the plaintiff. 4 By O 24A r10(5) the position is that: "… unless the Court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was made, taxed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter, taxed on a party and party basis." 5 Firstly, the plaintiff seeks an exercise of the discretion for which r 10(5) provides. The position of the plaintiff is that the defendant should pay the whole of the costs of the action. The plaintiff says this is not the only order that could be made in the exercise of any discretion. The plaintiff submits that no order at all for costs could be made or that, as a further proposition, one of the parties could pay some but not all of the costs of the other party. 6 The defendant submits there is no reason to depart from the ordinary operation of O 24A r 10(5) insofar as it provides for the defendant to have its taxed costs from 30 October 2003. However, the defendant does say that the plaintiff should not be required to pay any costs after 30 October 2003 that relate to the late introduction by it of the expert opinion of a Barbara McLeod and the subsequent adjournment of the trial as a result of that late introduction. 7 Thus, both parties, to varying degrees, are seeking an exercise of the Court's discretion to vary the ordinary operation of the rule. 8 If the plaintiff is unsuccessful in her argument it is unlikely she would oppose the terms in which the defendant seeks the order be varied.
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Indeed, it is in line with her further proposition that some but not all costs be paid by one party. 9 In Morgan v Johnson (1998) 44 NSWLR 578 Mason C, with whom Sheller JA concurred, considered and extracted from a number of earlier decisions a number of principles in relation to Pt 19A r 25(6) of the District Court Rules (NSW) which, at the time relevant to that case, was in substantially identical terms to O 24A r 10(5). He also considered decisions on corresponding provisions in the Supreme Court Rules 1970 (NSW), see Pt 52 r 17(5) and Pt 52A r 22(6). The rules enunciated by Mason J at 581-582 include: "1. The purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest of the prompt and economical disposal of litigation. 2. The aim is to oblige the offeree to give serious thought to the risk involved in non-acceptance. 3. The prima facie consequence of non-acceptance will be that the rule will be enforced against the non-accepting party. This is because, from the time of non-acceptance 'notionally the real cause and occasion of the litigation is the attitude adopted by (the party) which has rejected the compromise'. As was observed in this respect by Gleeson CJ, Crisp and Clarke JJA agreeing, in New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 at 102 'discussion of the availability of the discretion, is done in the context of the recognition that in any ordinary case … the rule should be applied in its terms'. 4. Lying behind the rule is the common knowledge that 'litigation is inescapably chancy'. For this reason, the ordinary provision is expected to apply in the ordinary case. The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule. In this respect Mason P cited observations of Clarke JA in Houatchanthara v Vednarczyk, unreported; NSW Ct of Appeal; 14 October 1996 where at 2-3 his Honour said:
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'The rule lays down the general principle that should be applied, and the order provided for in that rule should only be departed from for proper reasons which, in general, only arises in an exceptional case. It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flows naturally from the risks of litigation … Where an offer is made by a defendant to a plaintiff, the latter is put on notice and unless he or she accepts that offer, there is a significant risk that the order provided for by the rule may follow. In declining to accept the offer, the plaintiff undertakes the risk and the consequences that flow naturally from that risk.' 5. The discretion to displace the rule is a judicial one, requiring the private and public purposes of the rule to be borne in mind. Reasons must be given for 'otherwise ordering'."
Plaintiff's submissions 10 The plaintiff refers to late notice given by the defendant of its intention to apply to adduce the expert evidence of Barbara McLeod. Barbara McLeod was a registered nurse who was the managing director of Care-a-lot Home Health Services Pty Ltd. Her evidence related to nursing opportunities which had direct relevance to the issue of the future loss of earning capacity of the plaintiff. 11 An application was made by the defendant on 15 March 2004 to adduce the evidence of Barbara McLeod at the trial. The trial was due to start on 23 March 2004. The application was opposed given the attempt so late in the day to adduce this evidence. The application came before the District Court in chambers on 17 March 2004 and was adjourned until the morning of the trial. At that stage the evidence was allowed to be adduced. 12 The trial commenced but was adjourned some three days later to enable the plaintiff to obtain its own expert evidence in response to that of Barbara McLeod.
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13 It is to be noted that at a listing conference on 1 December 2003 both parties indicated that they were in a position to proceed and that the matter was ready for trial.
14 The plaintiff puts forward the proposition that at the time of the making of the offer on 30 October 2003 she had not been provided with a copy of the substance of the evidence of Barbara McLeod. Thus, the O 24A offer was made before she had the opportunity of making an informed assessment based on all the materials to be used in the proceedings. The plaintiff says that in those circumstances it was not unreasonable for her not to accept the offer. 15 As the plaintiff points out there was reliance in the judgment upon that evidence. It was evidence in relation to the issue of future economic loss which was the area most likely to be in contention in this case. 16 The offer of $50,000 was made some four months prior to the plaintiff being fully appraised of the nature of the defendant's case. The expert evidence called by the defendant was helpful to the question of any future economic loss. 17 That is to say it carried some weight. The pivotal evidence in support of the fact that the plaintiff was likely to be able to work full-time came from the expert medical opinion as to that ability. The evidence of Barbara McLeod simply showed that there were nursing opportunities that may be available to the plaintiff in an arena outside that of a hospital. The plaintiff herself gave evidence that nurses were in short supply. 18 The plaintiff did not suggest that this was an exceptional case. An offer of compromise can be made at any time and is simply that - an offer of compromise of what might otherwise be an outcome. 19 It appears to be accepted policy that underlying O 24A is the intention to encourage a party to whom a fair and reasonable offer of compromise has been made to accept it and bring the proceedings to an end, so freeing the Court from the time and resources taken by proceedings which are prolonged unnecessarily: Malliaros v Moralis [1991] 2 VR 501 at 505. 20 Having looked at the particular legal and factual issues raised by the plaintiff and having regard to the interests which the rule seeks to reflect I am not persuaded there is any justification in this case for displacing the normal operation of the rule in favour of granting the plaintiff all of her costs of the action.
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Defendant's submissions
21 The defendant puts forward, quite correctly, that one of the bases on which O 24A was introduced was on public policy grounds and is in the interests of sound judicial administration. It encourages a party to whom a fair and reasonable offer of compromise has been made to accept the offer and bring the proceedings to an end. 22 The defendant in my view made an appropriate concession that the plaintiff should not be required to pay the costs of the late introduction by it of expert evidence and the attendant adjournment as a result of that late introduction. 23 I am persuaded, in the circumstances of this case, that this consideration should effect the exercise of discretion concerning costs. It is a consideration that goes to effective case management in that the rules and practice directions need to be observed. If they are not then the party failing to comply should not benefit from its default. 24 Therefore in the exercise of my discretion the normal operation of O 24A r 10(5) will be varied in the manner for which the defendant contends. Therefore the defendant is to pay the plaintiff's costs to 30 October 2003. Thereafter, save and except as it relates to the consequences of the late introduction the evidence of Barbara McLeod (to include adjourning the trial) the plaintiff is to pay the defendant's costs. These costs are to be taxed on a party and party basis.
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