Marsh v Transport Accident Commission (Costs)
[2020] VSC 283
•22 May 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2019 04833
| KEANE ADAM MARSH | Appellant |
| v | |
| TRANSPORT ACCIDENT COMMISSION | Respondent |
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JUDGE: | Niall JA |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 22 May 2020 |
CASE MAY BE CITED AS: | Marsh v Transport Accident Commission (Costs) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 283 |
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COSTS – Offer made by appellant lacked necessary certainty – Not an offer of compromise pursuant to Supreme Court (General Civil Procedure) Rules 2015 Order 26 – Respondent to pay appellant’s costs of appeal on a standard basis – Court declined to award indemnity costs pursuant to Supreme Court (General Civil Procedure) Rules 2015 r 26.08(2).
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr A D Clements QC with Ms S Gold | Robinson Gill Lawyers |
| For the Respondent | Mr C P Young SC with Ms C L Alden | Solicitor for the Transport Accident Commission |
HIS HONOUR:
Introduction
This proceeding, an appeal on a question of law pursuant to s 148 of the VictorianCivil and Administrative Tribunal Act 1998 (the ‘VCAT Act’), concerned whether the appellant was a ‘full-time student’ at the time of his mother’s death on 6 December 2015 in a motor vehicle accident. The Tribunal affirmed the decision of the respondent that the appellant was not entitled to certain benefits under s 59 of the Transport Accident Act 1986 (the ‘Act’).
On 1 May 2020, I published reasons stating that I would grant leave to appeal, allow the appeal and set aside the decision of the Tribunal dated 24 September 2019. In addition, I would set aside the decision of the respondent dated 8 March 2016 to deny the appellant benefits under s 59 of the Act and substitute for that decision one which provides that the appellant was a ‘dependent child’ for the purposes of that provision at the time of his mother’s death.
The parties have now filed draft orders that they submit should be made consequent upon my reasons. With the exception of costs, the orders are in an agreed form and I shall make them.
These reasons address the question of costs.
Background
On 21 November 2019, the appellant’s solicitor sent an email to the respondent, attaching an offer of compromise, which stated that: ‘the Plaintiff offers to compromise this proceeding by $87,500.00 plus costs.’
The offer stated that it was served in accordance with Part 2 of Order 26 of the Supreme Court Rules and remained open for 14 days.
The respondent responded by email on 3 December 2019 by way of a letter dated 2 December 2019. The respondent questioned the validity of the offer, noting that the orders sought in the notice of appeal did not seek monetary relief and the offer did not say anything about how the proceeding should be dealt with if the respondent accepted the offer. In those circumstances, so the respondent said, it was difficult for it to consider the offer and the offer was rejected.
Appellant’s submissions
On the basis of the offer of compromise, the appellant seeks his costs of this proceeding on a standard basis until 25 November 2019, and on an indemnity basis thereafter.
The appellant says that he obtained judgment on terms ‘no less favourable’ than the offer of compromise. He submits that the offer of compromise complied with the requirements of an Order 26 offer under r 26.02 of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’) in that it:
(a) was an offer to settle all claims in the proceeding for a certain monetary sum;
(b) was made in writing and in accordance with rr 27.02 to 27.04 (regarding the form of court documents);
(c) contained a statement to the effect that it was served in accordance with Order 26 of the Rules;
(d) stated the costs position that it was an offer ‘plus costs’; and
(e) was held open for 14 days.
He acknowledges that the proceeding was not, in form, a claim for monetary relief, but contends that this should not prevent the application of the rules concerning offers of compromise where the substantive outcome can be readily compared with the compromise that was offered. He says that the offer was for a monetary sum ($87,500.00 plus costs) which is less than the lump sum death benefit ($175,240.00), to which the appellant is entitled as a dependent child pursuant to s 59 of the Act.
The appellant relies on r 26.08(2), which provides that unless the Court orders otherwise, the appellant shall be entitled to an order for his costs in respect of the claim before 11 am on the second business day after the order was served taxed on the ordinary basis and for his costs thereafter taxed on an indemnity basis.
The appellant submits that there is no reason for the Court to exercise its discretion to make an order contrary to the usual regime as set out in Order 26. Even if the Court is not satisfied that the offer made was validly made under Order 26, the fact and terms of the offer is a matter it may take into account in exercising its discretion to award costs.[1] The appellant submits that the respondent’s refusal to accept the offer was unreasonable in all of the circumstances.[2]
[1]Rosa v Galbally and O’Bryan [No 3] [2013] VSCA 159.
[2]Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority [No 2] (2005) 13 VR 435; [2005] VSCA 298.
Respondent’s submissions
The respondent submits that the appellant is entitled to his costs on a standard basis. The respondent says that the appellant’s ‘offer of compromise’ does not entitle the appellant to costs on any other basis and the Court should not make an order for indemnity costs.
First, the respondent contends that the offer was not made in respect of a ‘claim’ in a ‘proceeding’ as required by r 26.02(1) because at the time the offer was received there was an application for leave to appeal, not a proceeding, and there was no ‘claim’ against the respondent. The Tribunal had determined the claim. There was nothing for the respondent to compromise.
The respondent relies on Grbavac v Hart, in which Tadgell JA determined that an ‘offer of compromise’ pending an appeal was not an offer in respect of a claim because the claim ceased to have any independent existence after the appellant obtained a verdict and judgment in respect of it.[3] The respondent says that r 26.02 had no operation because the offer of compromise procedure was not available pending the hearing and determination of the appeal.
[3][1997] 1 VR 154, 158 (Tadgell JA), 155 (Winneke P), 162–3 (Hayne JA) (‘Grbavac’).
Alternatively, the respondent submits that the offer was invalid under r 26 because:
(a) the terms of the offer were ambiguous and uncertain:[4]
[4]See Grbavac [1997] 1 VR 154, 160-1 (Tadgell JA), 155 (Winneke P); Primus Telecommunications Pty Ltd v CCP Australian Airships Ltd [No 2] [2003] VSC 141, [6] (Habersberger J); MT Associates Pty Ltd v Aqua-Max Pty Ltd [No 3] [2000] VSC 163, [56] (Gillard J).
(i) it does not indicate with precision what the appellant was seeking to compromise or how the issues were to be adjudicated or the appeal to be disposed of;
(ii) it does not state whether the sum of $87,500.00 was to be deducted from the appellant’s asserted entitlement pursuant to s 59 of the Act or paid by the respondent, ie it was unclear whether the appellant was to have any benefits pursuant to s 59; and
(iii) the phrase ‘plus costs’ was vague.
The respondent submits that the offer was not capable of being accepted by the respondent because it was ambiguous and uncertain. Further negotiation between the parties was required. The respondent notes that the appellant did not respond to its letter dated 2 December 2019.
Consideration
Order 26.02 provides that a party may ‘in respect of any claim in a proceeding’, serve an offer of compromise. ‘Proceeding’ is defined in r 1.13 to mean any matter in the Court commenced by writ or originating motion or as otherwise provided by or under any Act or the Rules. In my opinion, an application brought under s 148 of the VCAT Act is a ‘proceeding’.
The term ‘claim’ is of indeterminate meaning and will take its meaning from the context in which it appears. In Grbavac, Tadgell JA held, in the context of an action for damages in negligence for personal injury, that the claim was the cause of action.[5]
[5]Grbavac [1997] 1 VR 154, 158.
Rule 26.08 deals with the costs consequences when the offer of compromise has not been accepted at the time of verdict or judgment. That rule provides for indemnity costs in certain situations and, in terms of timing, differentiates between proceedings for damages arising from death or bodily injury[6] and other claims.[7] The Rules also provides for the timing of payment where the offer is one providing for payment of a ‘specified sum’.[8] Generally, although not always, the offer will entail a payment of money and reflect a claim for an amount of money as damages or compensation.
[6]Rules, r 26.08(2)(a).
[7]Ibid r 26.08(2)(b).
[8]Ibid r 26.03.1.
In the present context, I shall proceed on the basis that the claim was embodied in the contention that the Tribunal had erred in respect of the question of law identified, with the consequence that the decision should be set aside, a favourable decision substituted or the matter remitted to the Tribunal for further consideration.
The appellant offered to compromise the proceeding in return for a payment of $87,500.00 plus costs. Presumably, from the appellant’s perspective, the compromise would be effected by terminating his appeal. Whether this would be done by discontinuing the proceeding or by obtaining an order for its dismissal is not stated. Although those two options are not synonymous, the practical effect of either step would be to conclude the appellant’s challenge to the order of the Tribunal and leave it unaffected. The result would be that the appellant would not be a dependent child for the purposes of s 59 of the Act and not entitled to any benefits as a result of the transport accident in which his mother died.
In those circumstances, any payment made on the offer of compromise would not appear to be a payment authorised by or contemplated by the Act.
In circumstances where the only issue in this Court was whether there was an error arsing on a question of law, and this Court has no primary jurisdiction to determine claims for compensation under the Act, there is a difficulty in reducing the outcome of the appeal to a monetary figure. True it is that success in this Court has opened up the way to compensation but the Court was not asked, nor could it have been, to order that the respondent pay compensation to the appellant.
Faced with the appellant’s offer to accept a payment in return for him discontinuing the appeal on a question of law, the respondent was justifiably concerned to address the basis on which the payment was sought. The appellant did not satisfactorily address those matters in correspondence.
In my view, the relationship between the payment, the claim in this proceeding and the broader claim for compensation in the Tribunal did not appear from the terms of the offer and was to an extent unclear. Further, there is some uncertainty in relation to the ambit of the costs component, in circumstances where costs were incurred both in the Tribunal and in this Court.
Ultimately, I consider that the necessary certainty as to the nature of the payment and costs was missing, with the effect that it was not an offer of compromise within the meaning of Order 26 of the Rules. Even if it was, I would decline to give effect to it. It failed to leave the respondent in no reasonable doubt as to the nature and extent of what was being offered and for the same reason it cannot stand as a Calderbank offer.[9]
[9]See, eg, Prior v Lansdowne Press Pty Ltd [1977] VR 65, 76 (Gowans J); Veeken v Rosella Foods Pty Ltd [1978] VR 71; Dajak v Riebe [1985] VR 561, 568 (Gray J).
Conclusion
I am not persuaded that this Court should order the respondent to pay the appellant’s costs on an indemnity basis. In the circumstances, I will make an order that the respondent pay the appellant's costs of this proceeding on a standard basis, with costs to be assessed by the Costs Court in default of agreement. The other orders agreed to by the parties will also be made.
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