Hughes v. Grogan & Anor - [2007] QSC 78

SUPREME COURT OF QUEENSLAND

CITATION:

Hughes v Grogan & Anor [2007] QSC 078

PARTIES:

SAMANTHA DEBORAH HUGHES
(plaintiff)
v
SAMMIE-JO GROGAN
(first defendant)
SUNCORP METWAY INSURANCE LIMITED
(ABN 83 075 695 966)
(second defendant)

FILE NO/S:

BS 6327/05

DIVISION:

Trial Division

PROCEEDING:

Civil Trial

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON:

3 April 2007

DELIVERED AT:

Brisbane

HEARING DATE:

6 and 7 November 2006

JUDGE:

Lyons J

ORDER:

The second defendant pay the plaintiff’s costs to be calculated on the indemnity basis.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – where plaintiff made offer of settlement – where offer not accepted – where court awarded
damages no less favourable than offer of settlement – whether second defendant should be ordered to pay indemnity costs

Motor Accident Insurance Act 1994, s 51C
Uniform Civil Procedure Rules 1999, r 360

Castro v Hillery & Ors [2002] QCA 359 (cited).
Fail v Hutton & Suncorp [2003] QSC 291 (cited).
Ibbs v Woodrow & QBE [2002] QCA 298 (followed).
McChesney v Singh & Ors [2004] QCA 217 (applied).
Morgan v Johnson (1998) 44 NSWLR 578 (applied).
Morrison v Hudson & Allianz Australia Insurance Limited [2006] QCA 170 (discussed).

COUNSEL:

S Williams QC with P Feely for the plaintiff
M Grant-Taylor SC with R Green for the second defendant

SOLICITORS:

McInnes Wilson Lawyers for the plaintiff
Jensen McConaghy Solicitors for the second defendant

LYONS J:

Facts

This matter was heard on 6 and 7 November 2006 and Reasons for Judgment were delivered on 22 February 2007. The reasons indicated that judgment was awarded for the plaintiff against the second defendant in the amount of $405,031.13. Final orders were not made pending written submissions as to costs and consideration of the plaintiff’s capacity to manage the proposed judgment sum.

The written submissions indicated that the parties had exchanged offers as to settlement with the highest offer being a mandatory final offer by the plaintiff in the amount of $315,000 plus costs in April 2005 and a formal offer of $250,000 plus costs on 2 March 2006. The second defendant had offered $170,000 plus costs on 26 April 2005 and had made a formal offer of $200,000 plus costs 14 September 2005.

The Legislation

Section 51C of the Motor Accident Insurance Act provides for the exchange of mandatory final offers at Compulsory Conferences and s 51C(10) provides that where relevant the Court must have regard to the mandatory final offers in making a decision about costs.

Rule 360 of the Uniform Civil Procedure Rules (the “UCPR”) provides, relevantly:

“360 Costs if offer to settle by plaintiff
(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 must order the defendant to pay the plaintiff’s costs
calculated on the indemnity basis unless the defendant shows
another order…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] QSC 78
Decision Date: 3 April 2007

CaseChat Overview and Summary

In the matter of Hughes versus Grogan and another, the plaintiff sought an order for costs on an indemnity basis from the second defendant. The plaintiff had previously made an offer of settlement to the defendants which was not accepted. The court subsequently awarded the plaintiff damages that were no less favourable than the settlement offer. The primary issue for the court was whether the second defendant should be ordered to pay indemnity costs.

The court considered the legal principles surrounding indemnity costs, which are typically awarded when a party has acted vexatiously, unreasonably or without proper cause. In this case, the court found that the second defendant had not acted unreasonably or without proper cause. However, the court also recognised that the second defendant had not accepted the plaintiff’s settlement offer, which was no less favourable than the eventual award of damages. The court determined that the second defendant’s refusal to accept the settlement offer was unreasonable, and therefore justified an order for indemnity costs.

In conclusion, the court held that the second defendant should be ordered to pay the plaintiff’s costs on an indemnity basis. The court emphasised that this order was not intended to punish the second defendant, but rather to ensure that the plaintiff was not left to bear the costs of a litigation process that could have been avoided if the second defendant had accepted the reasonable settlement offer. The court also noted that the order for indemnity costs was not intended to deter parties from making reasonable settlement offers in the future, but rather to encourage parties to consider such offers seriously and in good faith.

Orders

Orders of the court

The second defendant pay the plaintiff’s costs to be calculated on the indemnity basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Hughes v Grogan & Anor [2007] QSC 078
PARTIES:	SAMANTHA DEBORAH HUGHES (plaintiff) v SAMMIE-JO GROGAN (first defendant) SUNCORP METWAY INSURANCE LIMITED (ABN 83 075 695 966) (second defendant)
FILE NO/S:	BS 6327/05
DIVISION:	Trial Division
PROCEEDING:	Civil Trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	3 April 2007
DELIVERED AT:	Brisbane
HEARING DATE:	6 and 7 November 2006
JUDGE:	Lyons J
ORDER:	The second defendant pay the plaintiff’s costs to be calculated on the indemnity basis.
CATCHWORDS:	PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – where plaintiff made offer of settlement – where offer not accepted – where court awarded damages no less favourable than offer of settlement – whether second defendant should be ordered to pay indemnity costs Motor Accident Insurance Act 1994, s 51C Uniform Civil Procedure Rules 1999, r 360 Castro v Hillery & Ors [2002] QCA 359 (cited). Fail v Hutton & Suncorp [2003] QSC 291 (cited). Ibbs v Woodrow & QBE [2002] QCA 298 (followed). McChesney v Singh & Ors [2004] QCA 217 (applied). Morgan v Johnson (1998) 44 NSWLR 578 (applied). Morrison v Hudson & Allianz Australia Insurance Limited [2006] QCA 170 (discussed).
COUNSEL:	S Williams QC with P Feely for the plaintiff M Grant-Taylor SC with R Green for the second defendant
SOLICITORS:	McInnes Wilson Lawyers for the plaintiff Jensen McConaghy Solicitors for the second defendant