Duvall v Godfrey Virtue & Co (a firm)
[2001] WASCA 163
•4 APRIL 2001
DUVALL -v- GODFREY VIRTUE & CO (A FIRM) [2001] WASCA 163
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 163 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:161/1997 | 19 MARCH 2001 | |
| Coram: | WALLWORK J MURRAY J ANDERSON J | 4/04/01 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Special costs order made | ||
| PDF Version |
| Parties: | DAVID DUVALL GODFREY VIRTUE & CO (A FIRM) |
Catchwords: | Practice and procedure Costs Variation of award of damages Award less than offer to settle made before appeal heard Whether special order as to costs should be made |
Legislation: | Nil |
Case References: | Calderbank v Calderbank [1976] Fam LR 93 Dobb v Hacket (1993) 10 WAR 532 Duvall v Godfrey Virtue & Co (A Firm) (No 1) [2001] WASCA 105 Hendrie v Rusli (No 2) [2000] WASCA 420 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : DUVALL -v- GODFREY VIRTUE & CO (A FIRM) [2001] WASCA 163 CORAM : WALLWORK J
- MURRAY J
ANDERSON J
DECISION : 23 MAY 2001 FILE NO/S : FUL 161 of 1997 BETWEEN : DAVID DUVALL
- Appellant (Plaintiff)
AND
GODFREY VIRTUE & CO (A FIRM)
Respondent (Defendant)
Catchwords:
Practice and procedure - Costs - Variation of award of damages - Award less than offer to settle made before appeal heard - Whether special order as to costs should be made
Legislation:
Nil
(Page 2)
Result:
Special costs order made
Representation:
Counsel:
Appellant (Plaintiff) : In person
Respondent (Defendant) : Mr G R Hancy
Solicitors:
Appellant (Plaintiff) : In person
Respondent (Defendant) : Phillips Fox
Case(s) referred to in judgment(s):
Calderbank v Calderbank [1976] Fam LR 93
Dobb v Hacket (1993) 10 WAR 532
Duvall v Godfrey Virtue & Co (A Firm) (No 1) [2001] WASCA 105
Hendrie v Rusli (No 2) [2000] WASCA 420
Case(s) also cited:
Nil
(Page 3)
1 JUDGMENT OF THE COURT: On 4 April 2001 this Court allowed an appeal and increased the award of damages to the appellant from the sum of $20,000 to the sum of $30,000. In the course of giving that judgment: Duvall v Godfrey Virtue & Co (A Firm) (No 1) [2001] WASCA 105, Murray J, with whom Wallwork J agreed, in expressing the conclusion that his Honour would allow the appeal to the extent necessary to increase the award as set out above, added the observation, "to which should be added interest calculated in the manner adopted by the trial Judge."
2 The subject matter of the appeal concerned the adequacy of the award of damages for a stress-related illness and for loss of creditworthiness and damage to reputation. It was the first element of the award, to which the trial Judge had allocated the sum of $5,000, which the Full Court by a majority, Anderson J dissenting, increased from $5,000 to $15,000.
3 The argument of the appeal involved no consideration of the question of interest, the rate to be applied or the manner of its calculation. In fact, the appeal papers contained a supplementary judgment by the trial Judge delivered on 24 September 1997, in which his Honour addressed the question of interest and costs, ordered the respondent to pay the appellant's costs of trial and awarded interest, but not upon that component of the award which was general damages for stress and stress-related illness.
4 It follows that to add to the new judgment amount, interest calculated in the manner adopted by the trial Judge, will not increase the sum awarded by way of interest on the judgment amount. It follows that the first two final orders which this Court should make to determine the appeal are that it should be allowed and that the sum of $30,000 should be substituted for the sum of $20,000 in the relevant orders made by the trial Judge on 27 September 1997, those being the orders numbered 1 and 3.
5 Upon the publication of the Court's reasons on 4 April 2001 the respondent moved for orders that, although the respondent should pay the appellant's costs up to a nominated date in April 2000, thereafter the appellant should pay the respondent's costs of the appeal to be taxed. The application for such a special costs order was made as a result of the respondent having made to the appellant by letter, after the appeal was instituted, an informal offer of compromise which is often known as a Calderbank offer after the decision which first recognised its efficacy: Calderbank v Calderbank [1976] Fam LR 93.
(Page 4)
6 In Dobb v Hacket (1993) 10 WAR 532 at 540 Murray J discussed the making of such an informal offer of compromise and its effect upon the exercise of the court's discretion as to costs at first instance. It was said that the court will consider it to be conducive to the proper administration of justice that to unreasonably refuse such an offer will result in a costs penalty. Of course, if, as in this case, the litigant who would suffer that penalty appears in person without the benefit of legal representation, that circumstance will cause the court to examine the facts carefully and only to move to make a special order as to costs in a case where it is thought reasonable to do so having regard to all the facts, including the fact of the litigant's lack of legal representation. Nonetheless, such a special order may be made in such a case.
7 In Hendrie v Rusli (No 2) [2000] WASCA 420; 21 December 2000 Murray J applied the same principle specifically in connection with the costs of a successful appeal, albeit a case where both parties were legally represented. At par [11] his Honour said:
"Ordinarily costs will follow the event unless for such a reason as the unreasonable refusal of an offer of compromise, the successful litigant should be deprived of his or her costs, in whole or in part, which may lead to no order as to costs being made or an order that, although successful, the litigant in question should not only bear his or her own costs, but should pay the costs of the unsuccessful party."
- It will be observed that it is just such an order which is sought by the respondent in this case.
8 Shortly after the appeal was instituted, the respondent's solicitors made, by letter dated 27 March 2000 headed "Without prejudice except as to costs" in the usual way, an offer to compromise the action the subject of the appeal by paying an additional $30,000 over and above the $20,000 awarded by the trial Judge for damages in this case. That sum was said to include interest in the manner awarded by the trial Judge on 25 September 1997 as to which, upon the $20,000 awarded, the sum of $18,800 had already been paid. It was explained that:
"If you accept this additional sum of $30,000, it means you would receive a total of $50,000 for damages, plus the interest of $18,800 which has already been paid to you."
- It was explained that the offer could be accepted for 28 days after receipt of the letter in full and final settlement of all the appellant's claims and the
(Page 5)
- appellant was told that if the offer was accepted he would be entitled to his costs in respect of the appeal up to and including the day the offer was accepted.
9 After all those matters were carefully explained, the letter concluded:
"We reserve the right to refer this letter to the Court in relation to the question of costs. By this we mean that if you reject the offer and the Court later finds that you were entitled to less than the amount of the offer set out in this letter, we will apply for the costs of the appeal after the date of this letter."
10 It is clear that the letter was received and the appellant replied to it promptly by letter dated 29 March 2000. That letter is not available to us. It is apparently the subject of a claim of privilege, although it may arguably not be a valid claim insofar as it bears upon the question raised in respect of the making of an order as to costs. However, the appellant asserts privilege and does not waive it. Nonetheless, something of its relevant content is available to us because the respondent's solicitors replied to it by letter dated 12 April 2000 again written "Without prejudice except as to costs".
11 That document expressed the understanding from the appellant's letter that he rejected the offer "because the amount of the offer is not enough". The letter of 12 April 2000 went on to clarify the offer made which was said to be open until 26 April 2000. We are told on affidavit that there was a further letter written by the appellant to the respondent's solicitors, for which again privilege is claimed, on 10 April 2000. We are told that it was delivered to the offices of the solicitors on 12 April 2000. In that way it appears to have crossed their reply of the same date to which it appears the appellant did not reply.
12 Both parties have lodged written outlines of submissions, as they were invited to do by the Court on 4 April. In addition, they have filed affidavits. Those documents were invited and accepted by the Court upon the basis that it would give consideration to them and determine whether upon that material it was prepared to decide the issue or whether it required to hear further oral submissions. We do not consider that we need to hear the parties again orally.
13 In his outline of submissions the appellant says, "I had offered to settle this action for the amount $35,000 which included the increase of damages." The respondent makes no reference to the making of such an offer, but the appellant's statement about it suggests that he made this
(Page 6)
- offer after instituting the appeal against the judgment of $20,000. If this was an offer to compromise the appeal by accepting the payment of a further $15,000, it is difficult to understand why he did not accept the respondent's offer of an extra $30,000. If, on the other hand, this was a counter-offer of $35,000, perhaps made in his letter of 29 March, the making of that counter-offer clearly imports rejection of the offer of $30,000 and elicited the response that that offer was renewed and held open until 28 April. The appellant's course would appear then to have been clear. He was faced with the stark choice to accept or reject that which he had been offered by the respondent.
14 The appellant says he thought the offer was "just a letter" and that he could reject it with impugnity because it was made without prejudice. Therefore, he thought, it could not be introduced into the appeal. But if that was genuinely his view, he ignored the fact that both letters were said to be without prejudice except as to costs and what that meant was carefully explained to him.
15 In truth it seems to us that the reason for his decision was better expressed in his observation that, "I would prefer the opinion of the Full Court". He says that he feels vindicated in having taken that decision as the Full Court has increased the judgment by 50 per cent. On that ground he says it was not unreasonable for him to proceed in that way.
16 In our view, however, that is not a sufficient justification for the rejection of the offer which greatly exceeded the increased award obtained by the judgment of the Full Court. The offer of compromise was carefully made and fully explained, both as to what would be paid if it was accepted and what the consequence of its rejection would be.
17 In our opinion the proper result in this case is that, although the appellant should have the costs incurred in prosecuting the appeal up to and including 26 April 2000, the final date upon which it was open to accept the offer, he should pay the respondent's costs of the appeal incurred after 26 April 2000. The Court so orders. In each case the costs are to be taxed if not agreed.
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