Hudson v NRG Victory Australia Limited - [2002] WADC 161

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: HUDSON -v- NRG VICTORY AUSTRALIA LIMITED [2002] WADC 161

CORAM: WILLIAMS DCJ

HEARD: 1 MAY 2002 & 27 JUNE 2002

DELIVERED : Delivered Extemporaneously on 27 JUNE 2002 typed from tape and edited by Trial Judge

FILE NO/S: CIV 2211 of 2000

BETWEEN: GEOFFREY RONALD HUDSON
Plaintiff
AND
NRG VICTORY AUSTRALIA LIMITED (002 971 477)
Defendant

Catchwords:

Procedure - Costs - Plaintiff seeking order pursuant to O 24A of the Rules of the Supreme Court of Western Australia that defendant do pay plaintiff's costs on an indemnity basis

Legislation:

Rules of the Supreme Court of Western Australia, O 24A

Result:

Plaintiff entitled to order for costs on indemnity basis

Representation:

Counsel:

Plaintiff: Ms T J Laslett
Defendant: Mr A J Gabrielson

Solicitors:

Plaintiff: Friedman Lurie Singh
Defendant: Deacons

Case(s) referred to in judgment(s):

Forbes Services Memorial Club Ltd v Hodge, unreported; SCt of NSW; CA 40184/93; 8 March 1995
Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353

Case(s) also cited:

Nil

WILLIAMS DCJ: This is a notice of motion on the part of the plaintiff to amend the judgment pursuant to O 21 r 10 of the Supreme Court. Judgment was entered by me on 1 May 2002 in the following terms:
(1)there be judgment for the plaintiff against the defendant in the sum of $80,000;
(2)there be liberty to both parties to apply in relation to interest;
(3)the defendant do pay the plaintiff's costs of the action to be taxed.
The notice of motion seeks to amend the judgment by deleting par 3 therefrom and substituting the following therefore:
3(a) the defendant do pay the plaintiff's party and party costs of the action up to 28 May 2001 including all reserved costs;
(b)the defendant do pay the plaintiff's costs of the action from 29 May 2001 on an indemnity basis.
The judgment has not been extracted in this matter and I am of the view that I am able to deal with the notice of motion pursuant to O 21 r 10.
The facts are that on 29 May 2001 solicitors for the plaintiff forwarded a letter to the defendant's solicitors enclosing a notice of offer to compromise on behalf of the plaintiff pursuant to O 24A of the Rules of the Supreme Court.
The notice was in the following terms:
"(1)This notice of offer to compromise is served in accordance with Order 24A of the Rules of the Supreme Court 1971.
(2)The plaintiff offers to compromise the action herein on the following terms:
2.1payment by the defendant to the plaintiff in the sum of $79,999 all inclusive except as provided below;
2.2 legal costs and disbursements to be taxed."
By letter dated 31 May 2001, solicitors for the defendant acknowledged receipt of the O 24A offer of compromise.
Although the offer to compromise was for a figure of $1 less than the amount of the judgment in the sum of $80,000, the parties have since agreed that interest due on the claim prior to judgment amounts to a sum of slightly in excess of $12,500. On that basis, the offer constituted an offer to compromise the action on the basis that the plaintiff reduces his claim by slightly in excess of $12,500.
The parties are agreed on those figures and additionally agree that constitutes an offer to settle for a sum being approximately 85 per cent of the amount claimed.
Counsel have referred me to a number of authorities dealing with provisions similar to O 24A of the Rules of the Supreme Court. I refer firstly to Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 where at 355 Rogers said as follows:
"It must be clear that the inducement which that basis of costs assessment held out was designed so as to ensure that the actual offers made were fair and reasonable and reflected, not the best result that the plaintiff could hope to obtain if everything fell its way but, rather, a realistic assessment of what, in the circumstances, represented a fair and proper compromise."
and further:
"What the court is invited to do is to determine whether, in the totality of the circumstances, the offer by the plaintiff represented any element of compromise or whether it was merely, yet another, formally stated demand for payment designed simply to trigger the entitlement to payment of costs on an indemnity basis."
I was also referred to Forbes Services Memorial Club Ltd v Hodge, unreported; SCt of NSW; CA 40184/93; 8 March 1995, an unreported decision of the New South Wales Court of Appeal. In that case the respondent in the District Court had obtained a judgment in the sum of $30,129.24. In the appeal proceedings the respondent offered to compromise the appeal in the sum of $30,000.
Kirby P at par 44 noted that the offer was to accept an amount which was only $129.24 less than the total that the respondent was entitled to receive under the judgment. He also noted that there was a further element of compromise in that at the date the offer was made the costs, such as the costs of the briefs on hearing of the appeal, would not have been incurred.
The appellant opposed the award of indemnity costs on the basis that there was no true element of compromise.
Kirby P said in par 46 that for the operation of the rule it would appear that the principle contemplates that so long as there is some actual offer of compromise short of the full amount payable under the order under appeal the rule will apply. He considered that the prospects of the respondent losing the judgment, which she had secured, were not very large. It was therefore reasonable that the respondent should make an offer of compromise which reflected that assessment. The respondent was a woman of modest means. His Honour noted that the offer of compromise was doubtless made with a view to ensuring that she would be protected against those costs which are not recoverable on a party and party basis.
His Honour noted that the making of offers of compromise had become part of the prudent conduct of litigation in contemporary circumstances. His Honour noted that having regard to the fact that the offer made did constitute an agreement to accept something less than was the respondent's then right at law that it was appropriate that indemnity costs for which the rule provided should apply.
The question for me to decide therefore is in the totality of the circumstances whether the offer by the plaintiff represented any element of compromise or whether it was merely yet another formally stated demand for payment designed simply to trigger the entitlement to the payment of costs on an indemnity basis.
At the time of commencing his action the medical view was that the plaintiff would be unable to work again in the type of employment with which he had experience. In my view the offer made did constitute an agreement to accept something less than was the plaintiff's then right at law.
The plaintiff sued for a sum of $80,000 and obtained a judgment in that sum. In my view an offer to reduce the amount by a figure of 15 per cent and thus save both parties the costs of an action was a reasonable offer and there should be an order in the plaintiff's favour in terms of the notice of motion.