Grant John Watkins v State Of Victoria and Nathan Adam Kaeser and Richard Thomas Lewis and Andrew Robert Falconer (No 2) and 2nd Respondent 3rd Respondent 4th Respondent

[2010] VSCA 148

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3893 of 2008

GRANT JOHN WATKINS

Appellant

v

STATE OF VICTORIA

and

NATHAN ADAM KAESER

and

RICHARD THOMAS LEWIS

and

ANDREW ROBERT FALCONER (NO 2)

1^st Respondent

2^nd Respondent

3^rd Respondent

4^th Respondent

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JUDGES	ASHLEY and MANDIE JJA and BEACH AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	11 June 2010
DATE OF JUDGMENT	23 June 2010
MEDIUM NEUTRAL CITATION	[2010] VSCA 148
JUDGMENT APPEALED FROM	Watkins v State of Victoria & Ors (Unreported, County Court of Victoria, Judge Robertson, 17 October 2008)

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CIVIL PROCEEDING – Interest – Costs.

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Appearances:	Counsel	Solicitors
For the Appellant	Mr P Priest QC with Mr T Wraight	Felipe Tellez
For the First Respondent	Mr O P Holdenson QC with Mr R I Gipp	Victorian Government Solicitor
For the Second Respondent	Mr J Ruskin QC with Mr E J Delany	Tony Hargraves & Partners

ASHLEY JA:

MANDIE JA:
BEACH AJA:

Introduction

1. On 11 June 2010, we delivered reasons in this matter which foreshadowed orders that the appeal be allowed, the orders of the trial judge made on 17 October 2008, 3 November 2008 and 17 November 2008 be set aside, and in lieu thereof there be judgment in respect of the five assaults the subject of the appeal as follows:

(a)First, fourth and fifth assaults (for which Victoria is solely liable):     $16,000.

(b)Second assault (for which Kaeser is solely liable):  $70,000.

(c)Third assault (for which Victoria and Kaeser are jointly liable):         $12,000.

1. We adjourned the further hearing of the appeal to allow the parties (the appellant, Victoria and Kaeser) to sort out the issues of interest and costs.  The parties have been unable to reach agreement in relation to these matters and, pursuant to leave granted to them, have filed written submissions setting out their clients’ respective positions.

Interest

1. In their written submissions, the parties set out various interest calculations which they contend should form the basis for orders in respect of interest to be made by this Court.  It is not necessary to set out the details of each calculation.  It is sufficient to say that the appellant’s calculation would have him entitled to interest in the sum of $29,255, Victoria’s calculation would see it liable in the sum of $1,352.23 (with Kaeser being liable in the additional sum of $3,311.64) , whilst Kaeser’s calculation would see him liable in the sum of $5,400 ($1,000 of this being a liability jointly with Victoria).

1. In this case, the writ was issued on 28 May 2007.  The judgment below was given on 17 October 2008.  Interest falls to be calculated in respect of a 17 month period from the date of issue to the date of judgment below and a 20 month period from the date of judgment below until the date of this judgment. 

1. The penalty interest rate between 28 May 2007 and the present has varied between 10% and 12%.  So far as the penalty interest rate is relevant, in our view, it is appropriate to proceed on the basis of an average rate of 11%.

1. We consider that the appropriate basis for calculating the interest in this case is as follows:

(a)The first, third, fourth and fifth assaults involved the assessment of damages for pain and suffering and loss of enjoyment of life.  In our view, the pertinent pain and suffering and loss of enjoyment of life was all, or almost all, in the past at the time when the writ was issued.

(b)In calculating interest in respect of the $70,000 for the second assault, $20,000 of this sum should be allocated to the future, $4,000 for past economic loss and $46,000 for past pain and suffering and loss of enjoyment of life. The $20,000 for the future represents in part future anticipated dental expenses, and in part damages for the longer term effects of psychiatric injury.

(c)Interest on damages for past pain and suffering and loss of enjoyment of life up to the date of judgment below should be calculated at the rate of 4% per annum.[1]  However, interest on past pain and suffering and loss of enjoyment of life between the date of judgment below and the present judgment should be calculated at the rate of 8%.[2]

[1]MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657.

[2]See State of Victoria v McIver (No 2) [2005] VSCA 126.

1. Calculating interest in this manner produces the following sums:

(a)For the first, fourth and fifth assaults:  $16,000 at 4% for 17 months and at 8% for 20 months – $3,040.

(b)For the second assault:  $46,000 at 4% for 17 months and at 8% for 20 months and $4,000 at 11% for 37 months – $10,095.

(c)For the third assault:  $12,000 at 4% for 17 months and at 8% for 20 months – $2,280.

1. It follows that the judgment for the appellant against Victoria for $28,000 will carry interest up to the date of this judgment in the sum of $5,320 and the judgment of $82,000 against Kaeser will carry interest in the sum of $12,375.  Further, of the amounts in respect of interest, Victoria and Kaeser’s liability in respect of $2,280 is joint and several.

Costs

1. In the proceeding below, the plaintiff filed and served an offer of compromise in the sum of $70,000 (‘the trial offer of compromise‘).  The trial offer of compromise was served approximately two months before the commencement of the trial.

1. In the appeal, the appellant filed and served an offer of compromise (‘the appeal offer of compromise‘) offering to compromise the appeal on terms that it be allowed and that there be judgment against the defendants in the sum of $35,000.  The appeal offer of compromise was served in January 2009, prior to the service of the summary, outlines of argument and lists of authorities.

1. The appellant seeks indemnity costs from Victoria and Kaeser on the basis that the appellant has, by the orders of this Court, done better than both the trial offer of compromise and the appeal offer of compromise.  In our view, there ought to be orders for indemnity costs made against Kaeser, but not against Victoria.  The judgment against Victoria is less than the amount the appellant sought in each of his offers of compromise.  Accordingly, there is no basis for awarding indemnity costs against Victoria.

1. The position is different with respect to Kaeser.  The judgment against Kaeser exceeds the amount sought in both the trial offer of compromise and the appeal offer of compromise.  No submission was made to us that either of the offers of compromise was not capable of being accepted by Kaeser.  In those circumstances, and where Kaeser has been found to have a liability greater to the plaintiff than the amounts the plaintiff was prepared to accept, we are of the view that Kaeser should pay indemnity costs.

1. In relation to the costs of the appeal, Kaeser submitted that it was not unreasonable for him to reject the appeal offer of compromise.[3]  The short answer to this submission is that, in our view, it was unreasonable for Kaeser not to accept the appeal offer of compromise.  The appellant made out his causes of action against Kaeser largely on Kaeser’s own evidence.  On any view, the appellant’s damages in respect of those causes of action must have exceeded $35,000.  There is no reason why the appellant should not have indemnity costs against Kaeser in respect of the appeal.

   [3]Cf Hazeldene’s Chicken Farm Pty Ltd v VWA (No. 2) (2005) 13 VR 435.

1. Finally, Victoria contends that there should be an apportionment of costs between it and Kaeser on the basis that it is only partly liable in respect of the judgment sums.  Victoria contends that “[t]o reflect the relative liability between the State and Kaeser, the State should be ordered to pay 25% and Kaeser should be ordered to pay 75% of the appellant’s costs”.  We reject this submission.  There is no basis in this case for apportioning costs in the way suggested.

1. Subject to hearing counsel upon matters of form, the orders which we would substitute for the costs orders made below are as follows:

(3)Order that the first and second defendants pay the plaintiff’s party/party costs including reserved costs to be taxed on County Court Scale D.  Certify for two counsel.  The fees for Senior Counsel are certified on a daily basis at $5,500 per day for 13 days’ hearing and four days’ preparation.  The fees for  Junior Counsel are certified on a daily basis at $2,750 per day comprising 13 hearing days and five days’ preparation.[4]

(4)In addition to the costs ordered in the previous paragraph, the second defendant pay the difference between the plaintiff’s indemnity costs and the costs referred to in the previous paragraph.

[4]The trial judge allowed four days’ preparation for defence counsel, Kaeser conceded four days’ preparation for Junior Counsel and the State conceded six days’ preparation for Junior Counsel.  In the circumstances, we think five days is appropriate.

1. So far as the costs of the appeal are concerned, we will order Victoria and Kaeser to pay the appellant’s party/party costs of the appeal, including reserved costs, and order Kaeser to pay an additional amount, being the difference between the appellant’s costs on an indemnity basis and the amount of the party/party costs.