Friend v Rye
[2001] QSC 12
•7 February 2001
SUPREME COURT OF QUEENSLAND
CITATION: Friend v Rye [2001] QSC 012 PARTIES: LYNDA KAYE FRIEND (formerly JAMES)
(plaintiff)
v
BARBARA RYE
(defendant)FILE NO/S: S2021 of 2000 DIVISION: Trial Division DELIVERED ON: 7 February 2001 DELIVERED AT: Brisbane HEARING DATE: 7 December 2000 and written submissions JUDGE: White J ORDER: The defendant to pay the plaintiff’s costs of and incidental to the proceeding to be assessed on an indemnity basis on the appropriate District Court scale. CATCHWORDS: ADJUSTMENT OF QUANTUM CALCULATIONS - costs - offer of settlement in 1994 - certainty. COUNSEL: Mr Grant-Taylor SC for the plaintiff
PV Ambrose SC for the defendantSOLICITORS: Cranston McEachern for the plaintiff
Quinlan Miller and Treston for the defendant
WHITE J: This is an action for damages for personal injury arising out of a motor vehicle accident.
Reasons for decision and proposed findings on quantum were given on 7 December 2000. Counsel were given an opportunity to peruse the calculations and make submissions, if necessary, about them. Counsel were also to make submissions in writing on costs. They have done so in respect of each matter.
Calculations
Mr M Grant-Taylor SC for the plaintiff, has submitted that certain of the calculations require modification. Mr PV Ambrose SC for the defendant, does not challenge those re-calculations. Three areas have been identified as requiring change. They are:
(i) the calculation of interest on past loss of wages from the Sundowner Hotel Motel;
(ii) the calculation of the past loss of the employer’s contributions to the plaintiff’s superannuation and the interest thereon;
(iii) the total amount of the special damages.
(i) Interest on wages from the Sundowner Hotel
I accept that the appropriate rate of interest in respect of this loss which occurred about four and a half years ago is ten percent per annum rather than five percent. The interest then amounts to $2,554.80 and not the amount of $1,440 which I had allowed in my calculations by the application of a rate of five percent.
Past Loss Of The Employer’s Contribution To Superannuation
The calculation for this loss overlooked that the plaintiff had suffered $7,710 by way of economic loss in her employment as a para-legal. Accordingly the total amount of economic loss to which six percent should have been applied is $12,710 and not merely $5,000 from the Sundowner Hotel. The loss from this source is $762.60 rather than $300 as set out in the reasons. That greater amount is allowed.
The rate of interest on that loss should be ten percent and not five percent and results in an amount of $389.65 rather than the sum of $95.50 provided for in the reasons.
Special damages
I accept that there was an arithmetical error in adding up the amounts of special damages attributable to both the back and the neck injury. The amount should be $61,712.01 rather than the amount which appears in the reasons of $61,312.01.
In summary the table which appears at page 21 of the principle reasons handed down on the 7 December 2000 should be amended with the amendments being shaded. Consequential amendments have been made to the text.
Description Neck
$
Back
and Neck
$
Pain and Suffering and loss of amenities 25,000.00 65,000.00 Interest at 2% per annum for 6½ years on 1/2 and 1/3 respectively 506.48 579.51 Special damages 3,122.45 61,712.01 Interest at 5% per annum for 6½ years on $1,894 (neck); on $9,136.84 (both) 615.55 2,969.47 Past loss of wages from Sundowner 5,000.00 19,550.00 Interest 2,554.80 5,757.00 Past loss of wages as paralegal 7,710.00 23,128.52 Past loss of employers superannuation contribution at 6% of lost income 762.60 2,553.00 Interest at 5% 389.65 752.00 Loss of future earning capacity 35,000.00 238,790.00 Loss of future employer superannuation contributions 2,625.00 17,909.00 Past care 9,500.00 38,000.00 Interest at 5% per annum for 6½ years 3,807.50 12,350.00 Future care 35,630.00 89,070.00 Future equipment Nil 18,762.00 Future medication etc 1,000.00 5,000.00 Fox v Wood 2,040.89 6,122.67 TOTAL:
$135,264.92
$608,005.18
Accordingly the judgment sum for the plaintiff against the defendant is $135,264.92.
Costs
The plaintiff made an offer to settle her claim against the defendant by a written offer dated 14 February 1995 purportedly in accordance with Part IX of the then District Court Rules. The offer was for
“1.Payment by the Defendant to the Plaintiff of the sum of $10,000.00 exclusive of any refunds to the Department of Social Security, Health Insurance Commission, Workers’ Compensation Board of Queensland; and
2.Payment by the Defendant of the Plaintiff’s costs of and incidental to the action to be agreed or taxed.
The offer shall be open for a period of fourteen (14) days after which time the offer shall then lapse. The offer can be accepted by the Defendant’s Solicitors sending written acceptance to the Plaintiff’s Solicitors at the abovementioned address.”
By virtue of s 118B(2)(b)(v) of the Supreme Court Act (1991) (as amended in 1985) the District Court Rules 1968 expired on 30 June 1999. This means that those rules lapsed and ceased to have effect on that date, Acts Interpretation Act 1954, ss 18 and 36. Section 118 of the Supreme Court Act 1991 provides for future rules of court governing the practice and procedure of the Supreme, District and Magistrates Courts. They are known as the Uniform Civil Procedure Rules (“UCPR”) which commenced on 1 July 1999, UCPR r 2 and Acts Interpretation Act 1954, s 15B.
By virtue of s 135 of the Supreme Court Act 1991, the UCPR applied “to the next step or application in a proceeding pending in the Supreme Court, District Court or a Magistrates Court that can reasonably be taken in compliance with those rules.” By s (2) if a difficulty arises in the application of the UCPR to a particular proceeding the court may make an order which it considers appropriate to resolve the difficulty.
By r 678 of the UCPR, Chapter 17 Part 2 of the UCPR is to be applied to costs payable or to be assessed by order of the court. Rule 689 preserves the rule that the costs of a proceeding are in the discretion of the court but follow the event unless the court considers another order more appropriate or another rule otherwise provides. The ordinary rule is that costs are to be assessed on a standard basis which equates to the former party and party costs under the previous rules, rr 703, 743. The court may order costs to be assessed on an indemnity basis, previously solicitor and client costs, rr 703, 743. Rule 704(2), without limiting the power of the court to order indemnity costs, includes circumstances not here relevant in which indemnity costs may be ordered if the court orders the payment of costs.
Chapter 9 Part 4 of the UCPR concerns offers to settle but only those offers made pursuant to that Part, r 352. Accordingly, the UCPR do not apply to the offer to settle made on the 14 February 1995.
Although no rule of court now expressly applies to the offer of settlement, the appropriate approach is to consider the offer in the light of both the previous and present rules since it is clear that no new regime about offers of settlement and costs was intended to come into operation on the 1 July 1999.
Rule 118(1) of the former District Court Rules concerns an offer made by a plaintiff. It provides:
“Where the plaintiff makes an offer to settle which is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle the court shall order the defendant to pay the plaintiff’s costs fixed on the solicitor and client basis, unless the defendant shows that another order for costs is proper in the circumstances.”
By r 113(1) of the District Court Rules an offer must remain open not less than 14 days after the day of service of the offer.
Rule 360 of the UCPR is in almost identical terms. It provides:
“(1) If -
(a)the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle; and
(b)the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer,
the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances.”
The plaintiff satisfies both rules in that she has obtained a judgment more favourable than the offer to settle.
Offers of settlement are to be construed like any contractual offer. Its terms must be reasonably certain, Duncan & Weller v Mendelson [1989] VR 386 at 400. The defendant submits that the plaintiff’s offer of the 14 February 1995 was insufficiently certain to constitute an offer capable of acceptance. Alternatively it is submitted that the time within which the offer was capable of acceptance was illusory in that there was insufficient time for the defendant to make the necessary inquiries as to the quantum of the Workers’ Compensation, Social Security and Health Commission refunds.
Offers to settle involve the offeree balancing the benefits to be obtained by accepting the terms of the offer against the risk of proceeding to judgment after a hearing. Accordingly the benefits must be explicit or reasonably ascertainable, John Goss Projects Pty Ltd v Thiess Watkins White Constructions Limited (in liq) [1995] 2 Qd R 591 at 595; Duncan & Weller v Mendelson, supra, at 400. In most cases, a defendant in receipt of an offer will be concerned to know the quantum he or she must pay to bring the proceedings to an end, not least because the defendant needs to consider the likelihood of a more favourable result for the plaintiff at trial.
Mr Grant-Taylor submitted, in the face of the defendant’s submission that the offer in so far as it makes reference to “any refunds to the Department of Social Security, Health Insurance Commission, Workers’ Compensation Board of Queensland” was uncertain, that only one phone call was necessary to establish that amount. He submitted that because the plaintiff was at the date of the offer still in receipt of workers’ compensation weekly payments, there would be no refunds due to either the Department of Social Security or the Health Insurance Commission.
The defendant’s solicitors could readily have ascertained that the plaintiff was still in receipt of workers’ compensation payments as at the date of the offer. Her statement of loss and damage dated the 2 December 1994 (exhibit 29), that is, just over two months prior to the offer, claimed only medical expenses paid for by the Workers’ Compensation Board. Income losses related to her part-time work and she was described as continuing her full-time employment. The plaintiff’s claim was then a relatively simply one for the consequences of the whiplash type injury to her neck. Specifically under the heading (c) on page six of the statement of loss and damage which required “documents, if any, concerning the refund of Workers’ Compensation payment, Social Security benefits or any similar payments” to be listed, there is reference only to $740.20 received from the Workers’ Compensation Board.
By virtue of s 10.8 of the Workers’ Compensation Act 1990 (the relevant legislation) “an amount paid as compensation under [the] Act” in respect of an injury suffered by a worker creating a legal liability in some person to pay damages constitutes a first charge on any damages recoverable from that person. A defendant would therefore be concerned to know this amount. Communication with the Workers’ Compensation Board would have revealed what figure the Board had paid in respect of the injury the subject of the litigation. On 14 February 1995 the injury was confined to the neck and its sequelae.
It might be argued that by including a reference to Department of Social Security and Health Insurance Commission refunds the plaintiff impliedly indicated to the defendant that there were such refunds due and owing. The statement of loss and damage, as mentioned, included no such claim. In a different case an offer framed in this way may have been characterised as uncertain but each offer must be evaluated against its own facts and this was not such a case. It might also be argued (but was not) that the quantum of the plaintiff’s costs was uncertain until agreed or taxed. In my view, the offer was one which, at the time, was sufficiently certain for the defendant’s solicitors to have given appropriate advice to the client.
The offer did not state at what date the refunds should be calculated. Various dates are possible: the date the offer was dated, when it was received by the defendant’s solicitors, when the offer was accepted, or on the lapse of the 14 days. The offer read in the light of the District Court Rules suggests that the appropriate construction is that the calculation date was as at the date of the offer. This was the conclusion which McGill DCJ came to in Flanders v Small, unreported decision of the 30th November 2000 (No. 67 of 1999).
That the plaintiff’s action became more complex and the claim more extensive as the years passed cannot affect the approach to this offer. I have concluded that the offer was sufficiently certain as to be capable of acceptance and the time during which it was open was adequate for the defendant to make whatever inquiries were necessary to be satisfied that it would be provident or otherwise to accept it.
The defendant has not submitted otherwise that any other order is appropriate.
Accordingly the order as to costs is that the defendant pay the plaintiff’s costs of and incidental to the proceedings as agreed or failing agreement to be assessed on an indemnity basis on the appropriate District Court scale.
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