Martin v TAL Life Limited
[2015] VCC 1283
•18 September 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for publication |
AT MELBOURNE
COMMERCIAL DIVISION
EXPEDITED CASES LIST
Case No. CI-14-00438
| PETER JAMES MARTIN | Plaintiff |
| v. | |
| TAL LIFE LIMITED | Defendant |
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JUDGE: | His Honour Judge Anderson | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | Written submissions 28 August 2015 | |
DATE OF JUDGMENT: | 18 September 2015 | |
CASE MAY BE CITED AS: | Martin v. TAL Life Limited | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1283 | |
REASONS FOR JUDGMENT
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Catchwords: Costs – 1. Plaintiff’s “Calderbank offer” – Whether unreasonably refused by the defendant – 2. Plaintiff made late disclosure of a medical report – Defendant claiming consequential costs incurred.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J J Gleeson QC and Ms G F Gray | Corrs Chambers Westgarth |
| For the Defendant | Mr R Cavanagh SC and Mr D Christie | Turks Legal |
HIS HONOUR:
1The parties have made extensive written submissions on the question of costs. I have been asked to determine the outstanding issues “on the papers” without hearing oral submissions by the parties.
2The remaining questions for decision are whether:
a.the plaintiff should receive indemnity costs from 25 November 2014 as a result of what was said to be the defendant’s “unreasonable refusal” to accept the “Calderbank offer” constituted by the plaintiff’s solicitors’ letter dated 25 November 2014;
b.the plaintiff should suffer costs penalties as a result of the late disclosure of a further medical report of Dr David Joffe on 18 March 2015;
c.specific costs orders should be made to reflect the undertaking given by the plaintiff’s solicitors on 7 March 2014 that it would not seek certain costs as a consequence of the proceeding being commenced in a Victorian court rather than in New South Wales.
3I have determined these questions as follows:
a.The plaintiff should not receive indemnity costs. The plaintiff’s Calderbank offer was not unreasonably refused by the defendant, as the offer, insofar as it dealt with the defendant’s liability in respect of any future incapacity, was not more generous to the defendant than the decision of the Court.
b.As a result of the plaintiff’s late disclosure, on 18 March 2015, of the further medical report of Dr Joffe,
i.the defendant’s costs of Mr Haralambous to attend court on 18 March 2015 (of $3,102) and of rearranging the video link for Mr Haralambous (of $1,666.50) should be deducted from any amount the defendant must pay the plaintiff for his costs of the proceeding;
ii.the plaintiff will not receive any costs for the further medical report of Dr Joffe and will only receive 50% of the costs of his counsel and solicitors attending court on 27 March 2015.
c.The undertaking given by the plaintiff’s solicitors on 7 March 2014 that they would not claim certain costs that would be incurred as a result of the proceeding being issued in Victoria rather than New South Wales, should be reflected in specific orders of the Court.
4Accordingly, the costs orders which follow are proposed. On 18 September 2015, these reasons for decision will be handed down in open court and immediately emailed to the parties’ lawyers. The parties will have until 4pm on 24 September 2015 to make further submissions to the Court about the form of the orders. The Court will then make final orders as to costs.
5The costs orders proposed are as follows:
1The defendant must pay the plaintiff's costs of the proceeding, including any reserved costs, to be assessed by the Costs Court in default of agreement.
2Any assessment of costs by the Costs Court must have regard to the following further directions:
a.the costs are to be assessed on a party-party basis to 6 October 2014 and thereafter on a standard basis;
b.the plaintiff shall not be entitled to:
i.the costs of and associated with the written submissions dated 28 September 2015 and the affidavit of John William Fogarty sworn 28 August 2015;
ii.his own travel and accommodation costs relating to any attendances in Melbourne during the course of the proceeding and the trial, including any medical appointments;
iii.the travel and accommodation costs of interstate witnesses over and above that which might ordinarily have been incurred if the proceeding had been heard in New South Wales rather than in Victoria;
iv.any travel and accommodation costs of the plaintiff's lawyers which were incurred as a result of attendances from Melbourne on the plaintiff in New South Wales;
v.the costs associated with the preparation of the further report of Dr Joffe arising from the telephone conversation on 10 February 2015;
vi.the total sum of $4,768.50, which shall be deducted from the costs otherwise to be allowed to the plaintiff as a result of rearrangements necessary for Mr Haralambous' attendance to give evidence by video link following the late disclosure of Dr Joffe's further report of 18 March 2015;
vii.50% of the costs of counsel and solicitors attending at court on 27 March 2015.
Plaintiff’s Calderbank offer dated 5 December 2014
6In late November/early December 2014, the parties’ solicitors exchanged settlement proposals contained in detailed letters as follows:
a.on 25 November 2014, the defendant offered to pay “the sum of $100,000 inclusive of costs and interest on the basis that the Policy is at an end”, with a release to be executed by the plaintiff;
b.on 5 December 2014, the plaintiff offered to settle on the following basis:
i.the defendant “pays the plaintiff the sum of $900,000 in settlement of his claim for past entitlements under the Policy”;
ii.the defendant “accepts the plaintiff’s claim and agrees to pay him a monthly Loss of Income Benefit under the Policy from the date on which the offer is accepted until he turns 65 in 2022 (or otherwise becomes ineligible to receive a benefit under the policy)”;
iii.“the parties agree to bear their own costs”;
iv.the plaintiff “discontinues the proceeding” and agrees to release the defendant “from further liability in relation to his claim, including his claim for interest”.
7In respect of the “past entitlements”, including interest, the plaintiff was significantly more successful at trial than the offer contained in the letter dated 5 December 2014. The critical issue, however, relates to the plaintiff’s “future entitlements under the policy.”
8By the plaintiff’s offer, the defendant was required to pay the plaintiff’s future entitlements under the policy until he turns 65 in 2022 “(or otherwise become ineligible to receive a benefit under the policy)”.
9In my reasons for judgment dated 8 July 2015, I declined “to make the declaration sought as to any ‘continuing entitlement’” and said that if the plaintiff “wishes to pursue that matter, it will need to be the subject of a further claim and an appropriate assessment of the evidence and the satisfaction of the policy’s requirements at that time”.
10Plaintiff’s counsel have submitted that, “Pursuant to His Honour’s orders, the defendant remains liable to meet any ongoing claim properly submitted by the plaintiff”. A “properly submitted” claim would, it was said, require the plaintiff to submit a claim form each month, and to otherwise satisfy “the requirements of the policy in respect of that month’s benefit”.
11I do not consider that this submission is correct for the following reasons:
a.I made no “positive finding as to any ongoing incapacity by Mr Martin which would justify any further entitlement under the policy”;
b.by the plaintiff’s offer, the defendant was required to accept the plaintiff’s claim and to agree to pay the monthly Loss of Income Benefit until the plaintiff turned 65;
c.this required an acceptance of the plaintiff’s continued eligibility to receive this benefit under the policy;
d.the defendant would apparently need to demonstrate circumstances giving rise to an “ineligibility” to continue receiving the benefits.
12In the reasons for judgment, I left open the future determination of the plaintiff’s eligibility under the policy. I referred specifically to the uncontested evidence of Mr Haralambous’ test results which indicated the plaintiff had “exaggerated in his responses”, the “significant insight [the plaintiff has had for some time] into his medical condition”, and the application of s. 54 of the Insurance Contracts Act 1984 (Cth), if the plaintiff were to make further claims under the policy.
13In my view, it is not appropriate to conclude, as plaintiff’s counsel submit, that “On this basis, the defendant is in no better position now in respect of future entitlements that it would have been had it accepted the plaintiff’s Calderbank offer”. I note that the parties’ submissions at trial in relation to the issue of “future entitlements” was essentially limited to a statement of the relief sought by the plaintiff.
14The appropriate determination is to refuse the plaintiff’s application for indemnity costs from the date of the letter of 5 December 2014. It could not be said that the defendant unreasonably refused to accept the offer, particularly having regard to the terms in which the offer in relation to “future entitlements” was expressed, and the plaintiff’s failure to persuade me that any order in relation to those entitlements was appropriate.
Plaintiff’s late disclosure of the further report of Dr Joffe
15On 18 March 2015, the third day of the trial, plaintiff’s senior counsel, Mr Gleeson QC, informed the court that a copy of a further medical report of Dr Joffe had been provided to the defendant that morning.
16The report comprised notes of a telephone conversation between the plaintiff’s lawyers and Dr Joffe on 10 February 2015 whilst “Dr Joffe was in the course of driving his car during the telephone conversation”.
17By Rule 33.03, a “medical report” includes an “oral” statement on medical matters concerning the plaintiff made by a medical expert. Rule 33.12 requires that a medical report be “disclosed” by its service on the other party, if evidence is to be adduced by a party at the trial. Where the report is oral, notice in writing of the substance of the report must be served.
18Four earlier reports of Dr Joffe had been served by the plaintiff. The most recent of the reports was dated 11 February 2013. These, and other medical reports were exchanged in accordance with the interlocutory timetable fixed by the Court. The only explanation offered by Mr Gleeson for the late disclosure of the report was that the plaintiff’s “legal team” had taken the “wrong view” that the “circumstances of this discussion with Dr Joffe on 10 February” were not covered by Rule 33.
19The argument arose at the trial because, although defendant’s counsel had indicated to plaintiff’s counsel that they did not require Dr Joffe to attend for cross-examination, Plaintiff’s counsel wished to “nevertheless seek to lead some evidence from him”. Mr Gleeson stated that, apparently before they were informed that Dr Joffe was not required for cross-examination, plaintiff’s counsel considered that as Dr Joffe’s evidence was “a bit out-of-date”, he would “freshen it up in some supplementary oral evidence at the start”.
20These explanations would have had more credibility if it were not for earlier arguments shortly prior to, and at the trial in relation to Rule 33 and the requirement for a written document setting out the substance of oral statements by a medical expert on medical matters concerning the plaintiff.
21The earlier relevant matters include the following:
a.on 10 March 2015, the defendant served a written summary of a verbal report by Mr Haralambous;
b.thereafter, the plaintiff’s lawyers “requested any correspondence with Mr Haralambous, any tracked versions of the reports and any notes of discussions”;
c.on 11 and 13 March 2015, the defendant requested confirmation that the plaintiff had complied with Rule 33 in relation to any “further medical reports” of Dr Epstein and Dr Joffe “or other doctors which ought to be served prior to trial”. No response was received from the plaintiff’s lawyers;
d.on the second day of the trial, 17 March 2015, Mr Gleeson made the following submission:
“It appears from questions that have been put to Mr Martin that ... the defendant proposes to adduce evidence from Dr Greer and that they have a medical report from Dr Greer in this sense - as you know rule 33 requires the provision of a report by the defendant if they intend to adduce evidence from an expert or a doctor. A medical report is defined as a statement on medical matters concerning the plaintiff, whether in writing or oral, made by a medical expert. We saw that Dr Greer and Dr Hamilton had been subpoenaed and assumed, until these questions, that they were taking pot luck. In fact, it's quite apparent they've spoken to Dr Greer and intend to adduce evidence from her about medical matters”.
Mr Gleeson withdrew the application upon being assured by defendant’s senior counsel Mr Cavanagh SC, that the defendant’s lawyers had not spoken to Dr Greer.
22In the circumstances, the failure by the plaintiff’s lawyers to disclose the document with the notes of the further statements by Dr Joffe on 10 February 2015, was surprising.
23The document was signed by Dr Joffe on 18 March 2015. It contained six numbered paragraphs. After submissions by counsel, I ruled that paragraphs 1, 2, and part of 3 were admissible but two passages in paragraph 3 and paragraphs 4, 5 and 6 were not admissible.
24Essentially, I permitted the plaintiff to tender those parts of the report which had been referred to in earlier reports, but excluded fresh matters. These included:
a.any explanation as to why the plaintiff may not have sought medical treatment between 2009 and 2011;
b.any comment on the susceptibility to error of neuro-psychological testing;
c.the cogency of the plaintiff’s explanation that he had not seen Dr Harris for psychiatric treatment because of “financial reasons”;
d.whether the plaintiff was a malingerer;
25Mr Gleeson examined Dr Joffe further to the written reports. However, the further examination had little relationship to the disputed further report. Dr Joffe’s examination in chief (including formal matters and identification of his reports), comprises just over 12 pages of transcript. Dr Joffe’s cross-examination comprised about 21 pages of transcript.
26Defendant’s counsel submitted that the effect of the late disclosure of the further medical report of Dr Joffe was that:
a.Mr Haralambous had not been able to give evidence at 10.30am on 18 March 2015 as had been intended, and as Mr Gleeson had noted when the Court resumed that morning. This resulted in a claim by Mr Haralambous for his lost time and the additional cost of rescheduling the video-link;
b.as a result of the time spent dealing with the issue of the late disclosure of the report on 18 March 2015, the trial did not conclude on 20 March 2015, and it was necessary to list the trial on 27 March 2015 in order to complete the submissions. The “wasted” time comprised 30 minutes during which the trial was stood down at the start of the day on 18 March and a further 2 hours, before and after the lunch break that day.
27The defendant submitted that the Court should exercise the power given to it by sections 28 and 29 of the Civil Procedure Act 2010 (Vic). No formal application was made under the Act. I consider, however, that the Court’s general discretion in relation to costs is sufficient to deal with the situation.
28No real explanation was given for the plaintiff’s failure to disclose the further report of Dr Joffe. As it transpired, the evidence in chief of Dr Joffe, was largely unrelated to anything in the further report. The “new” matters raised by that report had been essentially excluded from the report which was permitted to be tendered.
29The trial was tightly run by very competent counsel. I am reluctant, in those circumstances, to pick out one aspect of the trial and penalise the successful plaintiff because the conclusion of the trial was delayed by what turned out to be a largely unsuccessful attempt to rely upon a medical report and to lead further evidence from Dr Joffe in accordance with that report.
30However, the report should have been disclosed weeks earlier in accordance with the Rules. No real excuse was offered for the failure to do so. If the report had been disclosed prior to the trial commencing, it is likely that the plaintiff would have been able to rely on the report. In these circumstances, Dr Joffe would have been able to give opinion evidence on a number of significant issues in the trial, which he was prevented from doing.
31This was largely because of the stage that had been reached in the trial when the disclosure of the further report was made. It was not possible, by that time, to allow the further evidence without changing the dynamics of the trial following the forensic decisions made by defendant’s counsel in their cross-examination of the witnesses that had already been called.
32In the circumstances, I propose to require an allowance to be made in respect of the costs incurred by the defendant in rescheduling the video evidence of Mr Haralambous. In relation to the costs of the plaintiff’s lawyers on 27 March 2015, I propose to allow the plaintiff to recover from the defendant only 50% of those costs.
Further costs of the proceeding being issued in Victoria
33In response to a request from the defendant’s solicitors, the plaintiff’s solicitors by letter dated 7 March 2014 agreed that, if successful in the proceeding, the plaintiff would not claim certain specific costs which would not have been incurred if the proceeding had been issued in a court in New South Wales.
34In the circumstances, I consider it is appropriate to make formal orders setting out the substance of the parties’ agreement.
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Certificate
I certify that the preceding 8 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 18 September 2015.
Dated: 18 September 2015
Mi-Lin Chen Yi Mei
Associate to His Honour Judge Anderson
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