Holshandon Pty Ltd as Trustee of the Rankin Family Trust No. 1 v Eakin

[2014] NSWSC 1529

Supreme Court

New South Wales

Medium Neutral Citation:

Holshandon Pty Ltd as Trustee of the Rankin Family Trust No. 1 v Eakin [2014] NSWSC 1529

Hearing dates:

3 November 2014

Decision date:

03 November 2014

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. Judgment for the Third Plaintiff in the sum of $600,000 ("the Judgment Sum").

2. Defendants to pay the Third Plaintiff's costs in respect of her claim, as agreed or assessed on the ordinary basis up to 27 August 2014, subject to being offset by any costs order already made against the Third Plaintiff in the proceedings.

3. Judgment deemed to be entered on 24 September 2014.

Catchwords:

JUDGMENTS - offer of compromise - offer accepted - when payment pursuant to judgment is to be made - when interest runs on judgment - Social Security Act - notice precluding payment of compensation

Legislation Cited:

Social Security Act 1991 (Cth)
Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Category:

Interlocutory applications

Parties:

Holshandon Pty Limited as Trustee for Rankin Family Trust No. 1 (First Plaintiff)
David Geoffrey Rankin (Second Plaintiff)
Donna Susan Rankin (Third Plaintiff)
Holly Isabella Rankin (Fourth Plaintiff)
Leslie Andrew Eakin (First Defendant)
Eakins A1 Pools Pty Ltd (Second Defendant)
Benjamin Keighley (Third Defendant)
Insurance Australia Limited t/as NRMA Insurance (Fourth Defendant)
Owners Corporation of Strata Plan 76001 (Fifth Defendant)
QBE Insurance (Australia) Limited (Sixth Defendant)
Christopher Corcoran (Seventh Defendant)
Stowe Australia Pty Limited (Eighth Defendant)
Brandon Rory Koop (Ninth Defendant)

Representation:

Counsel:
D Toomey & K Oldfield (Plaintiffs)
S Donaldson SC & N Polin ( Defendants)
Solicitors:
Stacks/Forster Pty Limited (Plaintiffs)
Lee & Lyons (First, Second, Third, Fourth, Sixth, Seventh, Eighth and Ninth Defendants)
Curwood Lawyers (Fifth Defendant)

File Number(s):

2009/297481

Publication restriction:

Nil

Judgment

1. An Offer of Compromise was made by the Defendants in respect of the Third Plaintiff on 27 August 2014. The offer was accepted by letter from the Plaintiffs' solicitors of 24 September 2014. The Defendants' offer provided for the payment of money to the Third Plaintiff. Rule 20.26(8) UCPR states that unless the Notice of Offer otherwise provides an offer providing for the payment of money is taken to provide for the payment of that money or the doing of that act within 28 days after acceptance of the offer.

1. After the acceptance of the offer nothing further was heard from the Defendants. That led to the Plaintiffs' solicitor sending by e-mail on 16 October 2014 a proposed consent judgment. That consent judgment provided for payment by the Defendants to the Third Plaintiff of the amount stated in the Offer of Compromise.

1. The consent judgment also provided that the Defendants were to pay the Third Plaintiff's costs as agreed or assessed. That proposed costs order did not faithfully reflect what r 42.13A(2) provides in respect of costs. Pursuant to the rule the Plaintiff is entitled to an order for costs against the Defendant for the Plaintiff's costs assessed on the ordinary basis up to the time when the offer was made. That matter was pointed out by the Defendants who, on 17 October 2014, provided their own form of the consent judgment. They effectively incorporated rule 42.13A(2) but added some further terms to the proposed judgment which are now in dispute.

1. The two terms remaining in dispute are, first, an order that no interest should be payable until the Defendants have received a notice from Centrelink which enables them to pay the verdict and, secondly, a provision that terms not be disclosed except as required by law. It is clear that the provision for terms not to be disclosed was not included in the Offer of Compromise and there is no basis for it now being included in the consent judgment.

1. The position in relation to Centrelink appears to be that if Centrelink has issued a notice under s 1182 or s 1184 Social Security Act 1991 (Cth) a Defendant or insurer is not permitted to pay compensation until one of the events in s 1184D(2A) occurs. Section 1184D relevantly provides:

(2) If an insurer has been given a notice under section 1182 or

1184 in relation to the insurer's liability to indemnify a compensation payer, the insurer must not make any payment to the compensation payer in relation to that liability.

Penalty: Imprisonment for 12 months.

(2A) Subsection (2) does not apply if:

(a) in the case of a notice under section 1182 - the Secretary has given the insurer written notice that the notice under section 1182 is revoked; or

(b) in the case of a notice under section 1184 - the insurer has paid to the Commonwealth the amount specified in the notice; or

(c) the Secretary has given the insurer written permission to pay the amount.

1. These notices are forwarded to Defendants and insurers on notification of a claim. They are not provided to the Plaintiffs in the ordinary course of events. It seems to me, therefore, that the onus is on the Defendants in the present case to ensure that they are permitted to pay any verdict within the 28 days before interest commences to run.

1. I accept that there are practical difficulties in this case because in very recent times the solicitors now acting for all the Defendants have only commenced to act for all those Defendants as a result of a settlement sharing basis. The Defendants include a number of insurers, but also a number of other corporations who have until recently had their own legal representatives.

1. Nevertheless, the onus at all times is on those Defendants to ensure that they are entitled under the Social Security Act to pay the verdict within the time identified in r 20.26.

1. The problem of deciding when interest should be paid can be achieved in one of two ways. Either the date of entry of the judgment can be backdated so that interest simply commences to run twenty eight days after that date under s 101 of the Civil Procedure Act 2005 (NSW), or alternatively, an order under s 101 can be made providing that interest will run from a time other than twenty eight days after the entry of judgment. In the latter situation it could be ordered that interest runs from a date before judgment is entered.

1. I accept Mr Donaldson's submission that it is somewhat unsatisfactory to provide under s 101 that interest should be payable on a judgment which is not entered until some date after that interest commences to run. I think the better course is, following r 20.26(8), that I should direct that judgment is deemed to have been entered on the date that the Offer of Compromise was accepted, that is, 24 September. The result will be that interest will therefore commence to run under s 101 from 22 October 2014.

1. One other difference between the parties is that the Defendants, in proposed Order 2, provide that the order for costs is to be subject to being offset by any costs order already made against the Third Plaintiff in the proceedings. Mr Toomey for the Plaintiff accepts that all existing costs orders were to remain extant.

Accordingly, I will enter judgment for the Third Plaintiff in the sum of $600,000 and direct that that judgment should be deemed to be entered on 24 September 2014. I direct that the Defendants are to pay the Third Plaintiff's costs in respect of her claim, as agreed or assessed on the ordinary basis, up to 27 August 2014 subject to being offset by any costs order already made against the Third Plaintiff in the proceedings.

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Decision last updated: 07 November 2014