Emma Donnellan v Jessica Adeline Hartmann
[2013] ACTSC 107
•13 June 2013
EMMA DONNELLAN v JESSICA ADELINE HARTMANN
[2013] ACTSC 107 (13 June 2013)
COSTS – action for damages for personal injury – liability admitted – Calderbank offer by plaintiff – plaintiff recovering greater amount at trial – discretion to make costs order on basis more favourable to plaintiff exercised – defendant ordered to pay plaintiff’s costs as between solicitor and client subsequent to expiry of Calderbank offer
Court Procedures Rules 2006 (ACT) rr 21,1728
Quirk v Bawden (1992) 112 ACTR 1
No. SC 192 of 2009
Judge: Master Harper
Supreme Court of the ACT
Date: 13 June 2013
IN THE SUPREME COURT OF THE )
) No. SC 192 of 2009
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: EMMA DONNELLAN
Plaintiff
AND: JESSICA ADELINE
HARTMANN
Defendant
ORDER
Judge: Master Harper
Date: 13 June 2013
Place: Canberra
THE COURT ORDERS THAT:
the defendant pay the plaintiff’s costs up to and including 16 July 2009 as between party and party.
the defendant pay the plaintiff’s costs subsequent to 16 July 2009 as between solicitor and client.
In this action for damages for personal injury, on 21 January 2013 I directed the entry of judgment for the plaintiff for $154,703.16.
Counsel for the plaintiff seeks an order that the defendant pay the plaintiff’s costs of the action (including all reserved costs) and that those costs be assessed as between solicitor and client. In the alternative, the plaintiff seeks an order for costs up to 16 July 2009 as between party and party, and thereafter as between solicitor and client.
Senior counsel for the defendant does not oppose an order that the defendant pay the plaintiff’s costs of the action as between party and party, but submits that the plaintiff should be ordered to pay the reserved costs of the adjournment of the proceedings on 21 July 2010.
The plaintiff’s claim arose out of a motor vehicle collision in July 2007. By the time of trial liability had been admitted. The hearing commenced on 20 July 2010 and occupied that day and part of the next day. It was then adjourned, and did not resume until 8 August 2011 when it ran for a further two days.
Proceedings were commenced in February 2009. Prior to that, there had been correspondence between the plaintiff’s solicitors and the defendant’s third-party insurer. I have been provided with correspondence between solicitor and insurer, and between solicitors, said to be relevant to the questions of costs to be decided, but I do not have all of the correspondence which passed between them.
By letter of 30 January 2008 the insurer offered to settle the claim for $24,771.16 plus costs. On 12 September 2008 the plaintiff’s solicitors rejected either that offer or a subsequent one, and offered to settle for $90,000.00 plus costs “clear of payments made”. The intended effect of those words is unclear to me. The plaintiff had been injured in circumstances entitling her to workers’ compensation. The workers’ compensation insurer had paid benefits of some $4,000.00 but it does not appear that the third-party insurer had made any payments. In any event, the offer was not accepted. Further negotiations took place. In February 2009 the plaintiff offered to settle for $85,000.00 plus costs, said to be a final offer. Shortly afterwards solicitors came into the matter acting for the defendant. In March 2009 the solicitors for the defendant submitted to the solicitors for the plaintiff a certificate of readiness. In June 2009 the plaintiff’s solicitors served some medical reports and a statement of particulars, and shortly afterwards, by letter dated 19 June 2009, made a Calderbank offer of $125,000.00 plus costs, the offer being open until 16 July 2009. The offer was not accepted within that time. After its lapse, the plaintiff’s solicitors continued to provide to the defendant’s solicitors further documentation including employment records and tax returns.
Further Calderbank offers were exchanged in the period leading up to trial. In January 2010 the defendant offered $100,000.00 plus costs. The following month the plaintiff offered to accept $140,000.00 plus costs. This seems to have been the range separating the parties by the time of trial.
Well after the action had been certified on both sides as ready for trial, and indeed after a hearing date had been fixed, the plaintiff’s solicitors qualified an orthopaedic surgeon, Dr Searle, to provide a report, which was served on 4 May 2010. Dr Searle’s report was tendered at trial without objection. He was not required to give oral evidence. I accepted his opinion that the plaintiff’s symptoms were likely to progress gradually as she aged, and that a pre-accident degenerative condition would probably deteriorate more rapidly than if the car accident had not happened, having an effect on her employability in the long term.
There were in evidence reports by a number of medical specialists. Only two doctors gave oral evidence, the plaintiff’s general practitioner and a psychiatrist, Dr Diamond. Senior counsel for the defendant submits that my acceptance of Dr Searle’s opinion formed the basis for my assessment of general damages and loss of earning capacity. In those circumstances, Calderbank offers made on the plaintiff’s behalf prior to service of Dr Searle’s report should not be given effect.
I am not persuaded that this analysis is correct. I have reviewed my reasons for judgment. It seems to me that the figures I arrived at for the various components of damages were based upon a consideration of the whole of the evidence, including the expert evidence. It is not appropriate, or really possible, to attempt an exercise of calculating the components of an award of damages I might have arrived at if the evidence of a particular witness had not been given, or a particular medical report had not been tendered.
Senior counsel for the defendant also submits that the plaintiff should be ordered to pay the costs which I reserved on 21 July 2010.
On that date, counsel for the plaintiff sought an adjournment, having been informed by senior counsel for the defendant that he proposed to call oral evidence from a psychiatrist, Dr Smith, about the effect of the plaintiff’s drug and alcohol use on her earning capacity. A report by Dr Smith had been served but did not deal with this issue.
The plaintiff had not given evidence in chief about excessive alcohol or drug use, although she had given a history about this to a psychologist whose report had been served by the plaintiff’s solicitors. She was extensively cross-examined about this. Counsel for the plaintiff sought the adjournment in order to qualify a psychiatrist to respond to what he had been informed would be the evidence of Dr Smith about it. I granted the adjournment, referring to the objective set out in rule 21 of the Court Procedures Rules 2006 of achieving the just resolution of the real issues between the parties. I reserved the question of costs. I noted that, depending upon how strong Dr Smith’s second report was, the plaintiff might have a good argument that the plaintiff’s solicitors could have asked Dr Smith to deal with the issues in his earlier report, and that he might have been in a position to do so. In the event, on the resumption of the hearing Dr Smith did not give oral evidence. The plaintiff’s solicitors qualified another psychiatrist, Dr Diamond, who was cross-examined. In my reasons for judgment I said that I was not satisfied by Dr Smith’s reports, having considered Dr Diamond’s evidence, that in the absence of the motor accident the plaintiff’s cannabis use would more probably than not have led to an interference with her working capacity or her ability to perform household and personal tasks.
I am not now persuaded that the adjournment of the hearing on 21 July 2010 was made necessary by any conduct of the plaintiff, or any omission by her to do anything she should have done. The reserved costs of the adjournment should be costs in the cause. There is no need for me to make a specific order to that effect: rule 1728.
This leaves for determination the question of whether the plaintiff should have her costs of the action on a more favourable basis by reason of the defendant’s rejection of, or failure to accept, a Calderbank offer. The principles to be taken into account were spelt out by Higgins J, with whom Miles CJ and Gallop J agreed, in Quirk v Bawden (1992) 112 ACTR 1. The development of the Calderbank discretion has been described extra-judicially by Beazley JA of the NSW Court of Appeal in a paper, Calderbank Offers, delivered at a conference of the Australian Lawyers Alliance in March 2008. It is clear that a rejected, or unaccepted, Calderbank offer can enliven the exercise of a discretion to award costs on a more favourable basis than would otherwise follow. Settlement at an early stage in litigation is to be encouraged, and is beneficial to the parties, and more generally to the Court and the community at large.
I am not persuaded that the offer made by the plaintiff’s solicitors to the insurance company in September 2008 should have that effect. It is unclear to me precisely how much information the insurance company had about the claim at that time, but it is apparent that there was a great deal of material available to the parties by the time of trial which they did not have at that stage. To visit a costs penalty upon a future defendant on the basis of such a letter, not expressed in conventional Calderbank terms, and prior to the institution of proceedings, would set an undesirable precedent, placing insurers under unfair pressure to settle claims before being fully informed about them.
I take a different view about the letter of 19 June 2009. I regard as a significant factor the fact that the solicitors for the defendant had, in March 2009, prepared and submitted to the plaintiff’s solicitors a certificate of readiness, in which they certified that the action was ready for trial. The solicitors for the plaintiff signed the certificate, and it was filed on 15 April 2009. A listing hearing was conducted before a Deputy Registrar on 27 May 2009. The Deputy Registrar made some directions about further steps to be taken before a hearing date was fixed, and adjourned the listing hearing. It is clear that by the time of the offer of 19 June, a point had been reached where the parties were about to incur considerable costs by way of preparation for trial. This was an appropriate time for the plaintiff to submit a Calderbank offer to protect her position. The defendant’s solicitors do not appear to have sought an extension of time to respond to the offer, though they did ask for information as to how it was calculated. Nor did they ever seek to accept it out of time.
I am satisfied that the offer of 19 June 2009 represented a genuine attempt by the solicitors for the plaintiff to achieve a settlement of the action, and that it included an element of discount against the sum to which the plaintiff was, as it turned out, entitled, so that there was a character of compromise about it.
The making of the offer, and its rejection, should accordingly be reflected in the orders as to costs to be made. The plaintiff should have costs on a more favourable basis from the date when the offer expired.
The defendant should pay the plaintiff’s costs up to and including 16 July 2009 as between party and party, and subsequent to that date as between solicitor and client.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Master Harper.
Associate:
Date: 13 June 2013
Counsel for the plaintiff: Mr RP Clynes
Solicitor for the plaintiff: United Legal
Counsel for the defendant: Mr GA Stretton SC
Solicitor for the defendant: Sparke Helmore
Date of hearing: 18 April 2013
Date of decision: 13 June 2013
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