Kenneally v Pouras & Ors

The case of Kenneally v Pouras & Ors involved an infant plaintiff, Michaela Claire Kenneally, who sought damages from the defendants, Dr Pouras and the Women's and Children's Health (WCH). The dispute centred around the settlement of the claim partway through the trial and the subsequent application for costs. The Supreme Court of South Australia was tasked with determining the legal issues regarding the nature of the court's discretion in awarding costs, whether the settlement implied the plaintiff had established liability to benefit from a Rules of Court offer, and the relevance of the plaintiff's funding arrangements for the litigation in the award of costs. Additionally, the court had to consider whether the defendants' conduct during settlement negotiations was unreasonable.

The court found that the plaintiff's offer to accept 95% of her damages as assessed, plus her costs of action, was effective and could attract the operation of Rule 41 of the Supreme Court Rules 1987. The defendants' submissions that the offer was ineffective due to the absence of contributory negligence allegations or because it did not address the defendants individually were rejected. The court emphasised the importance of the settlement regime established by Rules 40 and 41, which encourages sensible negotiations and provides sanctions for unreasonable refusals or failures to accept reasonable offers. The court also highlighted that the plaintiff's failure to file a Rule 41 offer concerning quantum, despite being advised it was open to her, weakened her claim for solicitor/client costs.

In conclusion, the court determined that the plaintiff's offer to accept a significant percentage of her damages did not establish liability in her favour. The court further found that the disparity between the plaintiff's initial settlement offer and the final settlement amount, along with her failure to take advantage of the court-provided mechanisms for protecting against the costs consequences of unreasonable settlement conduct, did not justify an order for indemnity or solicitor/client costs. The court's discretion was exercised in a manner that did not favour the plaintiff in this case.