Harradine v Bishop (No 2) No. DCCIV-99-1198

HARRADINE V BISHOP (NO. 2)
[2003] SADC 133
Judge Kitchen
Civil

This is a contested application by the plaintiff that pursuant to District Court Rule 41.04 the defendant pay the whole of the plaintiff’s costs of action to be taxed as between solicitor and client.
The plaintiff’s action against the defendant was for damages for personal injury he suffered in a motor vehicle accident which occurred on 20 September 1996. The action came on for trial. Both the defendant’s alleged liability for negligence and the quantum of the plaintiff’s damages were in issue.
On 30^thJuly 2003 the court found that the defendant was negligent and, after apportionment for the plaintiff’s contributory negligence and deducting amounts already paid by, or on behalf of, the defendant, judgment was entered for the plaintiff against the defendant in the sum of $208,252.95. .
Before trial the plaintiff, pursuant to District Court Rule 41.01(1), lodged a notice dated 4 April 2002 offering to accept $250,000 plus costs in satisfaction of the defendant’s claim. The defendant did not accept that offer.
After trial, but before judgment, the defendant paid a further sum in respect of hospital or other treatment the plaintiff had obtained before trial and which was unpaid at the date of the plaintiff’s offer. In the result the parties are agreed that by the judgment the plaintiff bettered the offer made to the defendant in April 2002.
District Court Rule 41.04 relevantly provides:
“Where a defendant has not accepted a plaintiff’s offer made pursuant to this rule and the sum recovered … is equal to or greater than that contained in the plaintiff’s offer, the court, unless it thinks proper to order otherwise, shall order the defendant to pay the whole of the plaintiff’s costs of action to be taxed as between solicitor and client.”
The defendant submits that the court should order otherwise on the grounds:
1.That the plaintiff at trial, by consent, amended his Statement of Claim to seek as a head of damages a Beck v Farrelly award for gratuitous services provided to him by the plaintiff’s parents during a period of about six months following the plaintiff’s initial discharge from the hospital he was taken to for treatment immediately after the accident the subject of his claim. The court’s assessment of the plaintiff’s damages included $2,500 attributed to the claim for a Beck v Farrelly award.
2.That the plaintiff at trial, and for the first time, produced to the defendant a report by Mr Foreman, a vascular surgeon, and sought leave to adduce evidence from Mr Foreman as part of the plaintiff’s case. Mr Foreman’s report is dated 26^th June 2001, some eighteen months before the date of trial. Counsel for the plaintiff informed the court that Mr Foreman required payment of his fees, in and about the preparation of his report, before releasing it; that request was not complied with and the report was not obtained until the trial was underway. Ultimately the defendant consented to Mr Foreman’s report being admitted and did not require Mr Foreman to attend for cross-examination. At paragraph 102 of the court’s reasons for judgment Mr Foreman’s opinion is summarised.
“Mr Foreman’s opinion is that the plaintiff “has basically lost the peroneal and posterior tibial arteries around the area of the trauma … retaining only one vessel, the anterior tibial, which has significant stenosis at the end of the proximal third” that could lead to significant problems in the plaintiff’s lower leg should he develop any minor hardening of the arteries as he becomes older.”
That opinion, which I accepted, was a matter taken into account, with many others, in assessing the plaintiff’s damages both for non-economic loss and for economic impairment.
In Shaw v Jarldon (1999) 76 SASR 28 (SA Full Court) Doyle CJ wrote (at page 29):
“The power to “order otherwise” confers upon the court an unfettered discretion. But it is a discretion which if exercised is exercised to displace what will otherwise be the required effect of rule 41.04, which is that the defendant pay the whole of the plaintiff’s costs of action as between solicitor and client. In other words, it will be proper for the court to order otherwise only if, in the exercise of that wide discretion, there is good reason to order that the rule is not to have its usual effect.”
and at pages 30-31:
“The court decides whether to order otherwise by reference to the offer as made and when made by the plaintiff. Difficulty experienced by the defendant in assessing the plaintiff’s offer is simply a usual aspect of litigation. That is not to say that earlier events will always be irrelevant. Something might have happened which means that when the offer is made the defendant could not be expected to make a proper assessment of the offer. Like Perry J I incline to the view that only something such as a breach of the rules, affecting disclosure of information, would be relevant on this basis. Ordinarily the court will assess things at the time of the offer without regard to what has happened earlier. Likewise, events that occur after the offer is made will be of limited weight, unless they demonstrate that the amount of the judgment that the plaintiff ultimately recovers was materially affected by subsequent events that the defendant could not reasonably have anticipated … Putting it bluntly, once a plaintiff makes an offer that attracts the operation of rule 41, the defendant who does not accept that offer accepts the risk of (the) plaintiff bettering the offer, and obtaining an order for the whole of the costs of action as between solicitor and client. Having regard to the purpose of the rule and the manner in which it operates, it will only be in limited circumstances that a defendant will be able to demonstrate that it is proper for the court to order that the plaintiff should not recover costs as between solicitor and client.
I emphasise, however, that the power to order otherwise is not conditional upon the defendant establishing any criterion identified by the rule, and accordingly it is unwise to attempt to be categorical about the circumstances that will justify the making of such an order.”
Perry J noted that the predecessor to Rule 41.04 was Rule 41.05 which provided:
“If the judge is of opinion that the defendant’s refusal of, or lack of reply to, the plaintiff’s notice was in all the circumstances unreasonable, he may order the defendant to pay the plaintiff’s costs of action to be taxed as between solicitor and client.”
That Rule had been examined in Whitehead v Maas (1991) 56 SASR 362. Perry J wrote (in Shaw’s case) at page 34:
“In addressing the construction of the rule in its present form, the fact that any reference to the reasonableness of the defendant’s failure to accept the offer has disappeared must mean that that is not a consideration which is now relevant to the exercise. But matters which might have gone to the question of reasonableness under the old rule may nonetheless be taken into account in the exercise of the discretion. For example, if there has been a material non-disclosure by a plaintiff of matters relevant to consideration of the offer by the defendant, that may be taken into account. But I would limit the inquiry by the court as to that aspect of the matter to address only the material which a plaintiff is, by virtue of the rules, obliged to disclose, such as expert reports which must be disclosed pursuant to rule 38, unless there has been a voluntary disclosure by the plaintiff of other material which turns out to be misleading.
It seems to me that the rule in its present form is likely to have an even narrower scope than the operation accorded its predecessor in Whitehead v Maas. The circumstances which are most likely to arise and which might justify relieving a defendant from the obligation to pay solicitor and client costs, will be those where there is such a significant change in the manner in which the plaintiff’s case is presented at the trial, or the manner in which the evidence emerges at the trial, that it might fairly be said that the full dimensions of the plaintiff’s entitlement could not possibly have been foreseen before the hearing commenced.
Another circumstance which might give rise to an application of the discretion in favour of the defendant is if the plaintiff substantially amends his or her case at the trial, or at least after the period within which the defendant might have accepted the offer has expired.
But the fact that the defendant is caught by surprise by some development at the trial, standing alone, would not ordinarily be sufficient, as it is symptomatic of litigation that the course taken by a trial will often by unpredictable. It will only be in an extreme case that such considerations would avail the defendant. It is not necessary or appropriate, in the context of argument as to the application of the rule, for the court to embark on a nice comparison between the material discovered before trial, and the evidence as it emerged at the hearing. In considering their response to an offer, defendants must allow for the fact that the course of evidence may turn significantly and unexpectedly against them at the trial. That is an ordinary hazard of litigation which no properly advised defendant should fail to allow for.”
In relation to the defendant’s submission concerning the amendment to the Statement of Claim to seek a Beck v Farrelly award, it is not disputed that in particulars provided by the plaintiff on 21^st March 2000 pursuant to DCR 46.15 the plaintiff attested, inter alia,
“From the day of the accident, I lost all of my independence. At that time I felt that I was running my own life. However, since that time I was forced to go back and seek the assistance of my parents and friends. My parents looked after me until my injuries had stabilised to a sufficient degree to give me some mobility”.
By the date of the plaintiff’s offer in April 2002, the defendant (I infer) had been provided with copies of the reports by the plaintiff’s treating surgeon Mr Ingman including the report dated 19^th July 1999 in which the nature and extent of the plaintiff’s injuries and the treatment of them were summarised. The report noted that on 20^th May 1997 “(the plaintiff) was feeling better and was taking full weight on his leg and he had no pain except for some discomfort in his knee”.
DCR 46.04(1)(h) provides that in a case to which DCR 46.15 applies (that is an action in which the plaintiff claims damages for personal injury) it is not necessary for the plaintiff to plead special damages in his Statement of Claim. However voluntary assistance or services are classified as general damages: Griffiths v Kerkemeyer (1977) 139 CLR 162 at 179 per Stephen J. Therefore in my view it was necessary for the plaintiff, in his Statement of Claim, to plead as material fact the provision to him of voluntary assistance or services so that the defendant was not taken by surprise, and equally importantly, enable the defendant to make a more accurate assessment of the possible liability and to consider an offer of compromise.
The plaintiff gave evidence of the assistance or services his parents provided to him. The rules provide (46.04(4)) that “While having regard to the issues raised on the pleadings (the court) will not refuse to admit an item of evidence solely on the ground that it relates to facts or matters not expressly pleaded” unless, for example, “by reason of surprise, the course of the trial or for any other reason, it would otherwise be unfair to do so”.
Strictly it was probably not necessary for the plaintiff to amend his statement of claim to plead the provision of voluntary services to him, but the plaintiff made that application and leave to amend was granted, the defendant withdrawing his objection to the application. I think I can safely infer that the defendant was not “taken by surprise”, having been in possession of the rule 46.15 details and the report of Mr Ingman and that the defendant had sufficient information to consider the plaintiff’s offer within the time prescribed by the rule.
In my view, the circumstances do not demonstrate that the court should “order otherwise” pursuant to rule 41.04, on the ground that the plaintiff at trial advanced a case for a Beck v Farrelly award.
Turning to the defendant’s submission concerning the introduction of evidence by way of the report from Mr Foreman.
Rule 38.01 prescribes the obligation upon each party to deliver to the other of them “a full copy of every expert report in the party’s possession or power relating to any matter in issue in the action”.
The plaintiff frankly admitted that in relation to Mr Foreman’s report he was in breach of the rule. I infer, by that admission, the plaintiff acknowledges the report was in his possession or power such as to require him to deliver a copy of it to the defendant on or soon after the date of the report.
Rule 38.02 provides, in part:
“38.02Where a party fails to comply with any of the requirements of Rule 38.01 in respect of a report of an expert:
(1)…
(c)the trial Judge may award costs to the other parties or reduce costs otherwise to be awarded to the party in default;
(2)In action under subrules (1)(c) above the trial Judge may take into account:
…
(b)what effect the failure to comply may have had on the possibility of settling the action before trial.
In my opinion those provisions of rule 38.02 are relevant to the discretion to be exercised in relation to an order for costs under rule 41.04.
The prognosis by Mr Foreman concerning a possibility of some significant problems in the lower leg were the plaintiff to develop hardening of the arteries as he becomes older, contributed only a small part to my assessment of the plaintiff’s damages; the possible problems and their consequences are not identified, and when they might occur in the plaintiff’s lifetime is not indicated other than, I inferred, when he is man of advanced years. The court could do no more than take into account a possible contingency, the evidence in relation to which was insufficient to support other than a nominal component of the plaintiff’s damages.
Were the defendant to have identified, by reference to a filed offer or even an informal offer or perhaps an internal assessment by the defendant, that the failure of the plaintiff to comply with rule 38 had an effect upon the defendant’s ability to properly consider the plaintiff’s offer and the possibility of settlement before trial, at least in respect of the quantum of the plaintiff’s damages, the court would have been in a position to weigh whether or not the plaintiff’s failure did disadvantage the defendant in a material way. Nothing of that nature was submitted by the defendant.
Shaw’s case contemplates that a failure by a plaintiff to comply with rule 38.01 enlivens the discretion to make an ‘order otherwise’ under rule 41.04, but having regard to rule 38.02 I do not accept the defendant’s submission that the mere fact of such a failure should result in the plaintiff being deprived, or there should be a reduction, of the costs which usually follow where the plaintiff has equalled or bettered the plaintiff’s rule 41.01 offer.
There will be an order that the defendant pay the whole of the plaintiff’s costs of action to be taxed as between solicitor and client.

[2003] SADC 133

28 August 2003