KS and XT v Calvary Health Care Act trading as Calvary Hospital and Dr Andrew Foote (No 2)
[2018] ACTSC 131
•18 May 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | KS and XT v Calvary Health Care ACT trading as Calvary Hospital and Dr Andrew Foote (No 2) |
Citation: | [2018] ACTSC 131 |
Hearing Date: | On the papers |
DecisionDate: | 18 May 2018 |
Before: | Burns J |
Decision: | See [11] and [21] |
Catchwords: | PROCEDURE – Costs – costs between the plaintiffs and the defendants – whether there should be an order otherwise than that the defendants pay the plaintiffs’ costs of the proceedings assessed on a solicitor and client basis for the whole of the proceedings – costs between the first and second defendants – Notice Claiming Contribution or Indemnity – Offer of Compromise – whether Part 2.10 of the Court Procedures Rules 2006 (ACT) applies |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 20, 1001, 1002, 1010, Pt 2.10 |
Parties: | KS (First Plaintiff) XT (Second Plaintiff) Calvary Health Care ACT trading as Calvary Hospital (First Defendant) Dr Andrew Foote (Second Defendant) |
Representation: | Counsel Mr I Roberts SC with Mr Ingram (First and Second Plaintiffs) Ms K Burke (First Defendant) Ms K Oldfield (Second Defendant) |
| Solicitors Commins Hendriks (First and Second Plaintiffs) Sneddon Hall and Gallop (First Defendant) Ken Cush and Associates (Second Defendant) | |
File Numbers: | SC 6 of 2014; SC 7 of 2014 |
Burns J:
On 5 April 2018, in proceedings SC 6 of 2014 I ordered that there be judgment for the plaintiff (KS) in the sum of $669,518.15 of which the first defendant was liable for 30 per cent and the second defendant was liable for 70 per cent.
On the same day I gave judgment for the plaintiff (XT) in the sum of $220,373.00 in proceedings SC 7 of 2014, of which the first defendant was liable for 30 per cent and the second defendant was liable for 70 per cent.
I directed the parties to each of the proceedings to file and serve written submissions on costs within 21 days. Each of the parties complied with that direction.
Costs between the Plaintiffs and the Defendants
Each of the plaintiffs seeks one of two alternative orders. The plaintiffs’ primary position is that I should make an order pursuant to the provisions of rule 1010(2)(a) of the Court Procedures Rules 2006 (ACT) (the CPR) that the defendants pay the plaintiffs’ costs of the proceedings, such costs to be assessed on a solicitor and client basis for the whole of the proceedings. Alternatively, each plaintiff seeks an order that the defendants pay their costs of the proceedings, and that their costs incurred in relation to the issues of breach of duty and the causation of the death of their child which were incurred after 19 December 2016 be assessed on a solicitor and client basis.
Rule 1010 of the CPR provides:
1010 Offer not accepted and judgment no less favourable to plaintiff
(1) This rule applies if an offer is made by the plaintiff in relation to a claim, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in relation to the claim—
(a) if the claim is a personal injury claim—assessed on a solicitor and client basis for the whole of the proceeding; or
(b) in any other case—
(i) assessed on a party and party basis up to the time when the costs are to be assessed on a solicitor and client basis under subparagraph (ii); and
(ii) assessed on a solicitor and client basis—
(A) if the offer was made before the first day of the trial—from the day the period for acceptance of the offer ends; and
(B) if the offer was made on or after the first day of the trial—at and from 11 am on the day after the offer was made.
As I understand it, the essential facts are not in dispute. On 27 September 2017 each plaintiff served on each defendant an Offer of Compromise made in accordance with Part 2.10 of the CPR. KS offered to resolve her action against the defendants for a judgment in her favour in the sum of $500,000.00. In his offer, XT offered to resolve his claim for a judgment in his favour in the sum of $100,000.00. Each plaintiff obtained a judgment at trial no less favourable to him or her than the terms of the offer. Each of these offers were expressed to remain open for acceptance until 5 pm on Friday, 29 September 2017. This was the last business day before the commencement of the trial on 3 October 2017, Monday 2 October 2017 being a public holiday.
The first defendant accepts that by operation of rule 1010(2)(a) the plaintiffs are entitled to the primary costs orders that they seek.
The second defendant concedes that the plaintiffs are entitled to costs on a basis other than a party and party assessment, but submits that I should exercise my discretion under rule 1010(2)(a) to make a more restricted order on the following bases:
(a)the Offers of Compromise served on 27 September 2017 were open for less than 48 hours, after proceedings had been on foot for more than three years;
(b)the proceedings were originally commenced in January 2014 but at that time did not include any particularised claim for the economic loss for either plaintiff. On 29 July 2016 Amended Statements of Claim were filed, adding 12 new particulars of negligence, including the breaches that were the subject of evidence given by Dr Edozien on behalf of the plaintiffs. The Amended Statements of Claim also added economic loss claims for both plaintiffs, the first plaintiff’s claim being that of a lost opportunity to practice as a general practitioner. On 13 October 2016 the plaintiff served Offers of Compromise for sums which were not exceeded at trial. On 19 December 2016, the plaintiffs served Calderbank offers in relation to liability. The first plaintiff served evidence of GP salaries in support of her claim to economic loss for the first time on 29 September 2017. The second defendant submitted that the proceedings upon which the plaintiffs were ultimately successful were those filed in July 2016; and
(c)the documentary evidence of GP salaries that was ultimately utilised by the Court to formulate the future economic loss award was not served until 6:06 pm on 29 September 2017, the last business day before the trial commenced and an hour after the Offer of Compromise had expired.
The second defendant submits that an appropriate award of costs would be to award the plaintiffs costs assessed on a party and party basis up to 19 December 2016 (the date the plaintiffs served Calderbank offers in relation to liability) and on a solicitor and client basis thereafter. In the alternative, he submits that an appropriate order would be to award the plaintiffs costs assessed on a party and party basis up to 29 July 2016 (the date the Amended Statements of Claim were filed) and on a solicitor and client basis thereafter.
It is common ground between the parties that the proceedings were personal injury proceedings as between the plaintiffs and the defendants. In my opinion there is no cogent reason for me to order otherwise than that the defendants pay the plaintiffs’ costs of the proceedings assessed on a solicitor and client basis for the whole of the proceedings. In assessing KS’s damages for the loss of opportunity of practising as a general practitioner, I utilised figures in documents prepared by the Australian Bureau of Statistics. These documents are public documents, and were at all times available to the second defendant. In addition, the filing of the Amended Statements of Claim in 2016 resulted in no change in the approach of the second defendant to the proceedings. The second defendant denied liability throughout the proceedings, except for making some concessions as to breach of duty on Day 5 of the hearing. None of the matters to which the second defendant refers in the history of the proceedings had any bearing upon the approach taken by him to the proceedings. Whilst the offers of compromise were open to the second defendant for only two days, this was at a time immediately prior to the commencement of the hearing, when it would be expected that the second defendant and his legal representatives would be intimately acquainted with the evidence and the issues. I am satisfied that the period during which the offers remained open was reasonable.
I order that the defendants pay the plaintiffs’ costs of the proceedings as assessed on a solicitor and client basis for the whole of the proceedings. The appropriate order is that the defendants should bear responsibility for those costs in the proportion of their liability for the judgment sums, so that the first defendant is liable to pay 30 per cent and the second defendant 70 per cent.
Costs Between the First and Second Defendants
Each of the defendants served a Notice Claiming Contribution or Indemnity pursuant to rule 319 on the other defendant.
The first defendant submitted that rule 1010(2)(a) applies to its Notice, which claimed contribution or indemnity from the second defendant. It submitted that it is a party claiming relief, and accordingly falls within the meaning of “plaintiff” as prescribed by rule 20(1)(a) of the CPR. This rule provides:
20 Meaning of plaintiff and defendant
(1) For a proceeding (other than an application in the proceeding or a proceeding on a counterclaim or third-party notice)—
(a) a reference in these rules to the plaintiff is a reference to the party claiming relief; and
(b) a reference in these rules to the defendant is a reference to the party against whom relief is sought or who otherwise responds to the originating process.
The first defendant submitted that as its Notice was filed in proceedings that were in the nature of a claim for damages for personal injuries, the proceedings between the first and second defendants fall within the description of personal injury proceedings and thus rule 1010(2)(a) applies, and not rule 1010(2)(b). I note that the term “personal injury claim” is not defined in the CPR.
At 4.55 pm on Friday 29 September 2017, the first defendant, pursuant to Part 2.10 of the CPR, served on the second defendant an Offer of Compromise offering to compromise the proceedings by the first defendant contributing 40 per cent in the proceedings brought by KS, in the event that the plaintiff succeeded. On the same day the same offer was made by the first defendant to the second defendant with regard to the proceedings commenced by XT. The period of time that the offers were open was expressed to be until 9:30 am on Tuesday, 3 October 2017. This was later extended until 2 pm on Tuesday, 3 October 2017. Neither offer was accepted, and at trial the first defendant achieved a more favourable result than that which was put in the offers made by it to the second defendant.
The first defendant submitted that by 29 September 2017 the second defendant had available all of the expert reports served by the plaintiff and the first defendant. This included a report by Dr Edozien which addressed issues raised by the second defendant’s experts. The first defendant submitted that the offers to contribute 40 per cent were reasonable and the court ought to be satisfied that rejection of the offers by the second defendant was unreasonable. It further submitted that the time for acceptance of the offers was reasonable in all the circumstances, as the second defendant by this stage had knowledge of the strength and weakness of his position, there was time to assess the reasonableness of the offers, the offers could be speedily assessed, and the second defendant knew that costs were continuing to be incurred.
The first defendant submitted that as against the second defendant, on the Notice of Contribution, the following order should be made:
(a)the second defendant is to pay the first defendant’s costs of the whole of the proceedings, on a solicitor/client basis, as agreed or assessed; and
(b)in doing so, the second defendant is to pay the first defendant’s 30 per cent portion of the plaintiff’s costs of the proceedings as agreed or so assessed.
The second defendant submitted that the first defendant’s offer had not been made in a “claim that is a personal injury claim” for the purposes of rule 1010, but did not elaborate on that submission. He further submitted that rule 1002 of the CPR applies to the first defendant’s offer of contribution of 29 September 2017. This rule provides, relevantly for the present purposes:
1002 Making offer
(1) A party may, by written notice, make an offer to another party to compromise any claim in proceedings, either in whole or in part, on stated terms.
(2) An offer under this rule must—
[…]
(d) state that the offer has been made in accordance with this part; and
(e) state the period of acceptance.
[…]
(5) The end of a period of acceptance for an offer—
(a) for an offer made 2 months or more before the date set down for the start of the trial—must be not less than 28 days after the day the offer is made; and
(b) in any other case—must be after a period that is reasonable in the circumstances.
[…]
The second defendant argues that as the offer was not made two months or more before the date set down for the start of the trial, rule 1002(5)(b) applies to require that the end of the period of acceptance of the offer “must be after a period that is reasonable in the circumstances”. The second defendant submits that this requirement was not satisfied by the offer made on 29 September 2017, and as such it did not constitute a valid offer of compromise in accordance with rule 1002(5)(b). The second defendant submitted that if the offers were found not to be valid offers, the appropriate orders for costs of the notices are as follows:
(a)as both notices of contribution were partially successful, there should be no order as to costs in relation to each of them;
(b)in the alternative, the second defendant should pay 70 per cent of the first defendant’s costs of its Notice of Contribution and the first defendant should pay 30 per cent of the second defendant’s costs of his Notice of Contribution.
Consideration
Looking at the scheme of Part 2.10 of the CPR it is apparent that an offer for the purposes of rule 1010 must be an offer of compromise under rule 1002: see rule 1001. The offer made by the first defendant was not made two months or more before the date set down for the start of the trial, so rule 1002(5)(b) applies requiring that the end of the period for acceptance of the offer “must be after a period that is reasonable in the circumstances”. The offer made by the first defendant was made at 4.55 pm on the last business day before the commencement of the trial. Even though the time for acceptance of the offer was ultimately extended from 9.30 am to 2 pm on the first day of the trial, in my opinion the period that was allowed for acceptance of the offer was not reasonable in the circumstances. As a consequence, the provisions of Part 2.10 of the CPR do not apply to the offer, including rule 1010.
In my opinion the appropriate costs order is that the second defendant is to pay 70 per cent of the first defendant’s costs of its Notice of Contribution and the first defendant is to pay 30 per cent of the second defendant’s costs of his Notice of Contribution, each to be assessed on a party and party basis.
| I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns Associate: Date: 18 May 2018 |
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