McChesney v Singh

Case [2004] QCA 217

SUPREME COURT OF QUEENSLAND

CITATION:  McChesney v Singh & Ors [2004] QCA 217
PARTIES:  TONI ANNE McCHESNEY (by her litigation guardian
JANICE ANNE McCHESNEY)
(plaintiff/respondent)
v
MUKHTIAR SINGH
(first defendant)
PETER AARON HOPKINS
(second defendant)
SUNCORP INSURANCE & FINANCE
(third defendant)
SUNCORP GENERAL INSURANCE LIMITED
ACN 075 695 966
(fourth defendant/appellant)
FAI GENERAL INSURANCE COMPANY LIMITED
ACN 000 327 855
(fifth defendant)
FILE NO/S:  Appeal No 11991 of 2003
SC No 8851 of 1998
DIVISION:  Court of Appeal
PROCEEDING:  Personal Injury
ORIGINATING 
COURT: 		 Supreme Court at Brisbane
DELIVERED ON:  25 June 2004
DELIVERED AT:  Brisbane
HEARING DATE:  2 June 2004
JUDGES:  Jerrard JA, Atkinson and Philippides JJ
Judgment of the Court
ORDER:  Appeal dismissed with costs
CATCHWORDS:  PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – COSTS OF THE WHOLE ACTION – WHERE MONEY PAID INTO COURT OR OFFER OF COMPRIMISE MADE – OFFER OF COMPROMISE MADE - where appellant made an offer to settle that was not accepted by the respondent and the respondent obtained a judgment that was not more favourable than the offer to settle - where costs awarded to respondent - whether the learned primary judge erred in the exercise of his discretion pursuant to r 361(2) Uniform Civil Procedure Rules 1999 (Qld) in finding that there were circumstances which justified departure from r 361(2)(b) - whether respondent had an informed opportunity to assess the chances of either side doing better than the offer to settle - where offer to settle evaluated in the light of circumstances existing at time of the offer
Uniform Civil Procedure Rules 1999 (Qld), r 361
Campbell v Jones [2002] QCA 332; [2003] 1 Qd R 630, cited
Castro v Hillery [2002] QCA 359; [2003] 1 Qd R 651,
applied
Minister for Aboriginal Affairs v Peko-Wallsend Limited
(1986) 162 CLR 24, cited
Morgan v Johnson (1998) 44 NSWLR 578, considered
COUNSEL:  S C Williams QC, with M J Burns, for the appellant
M Grant-Taylor SC, with C Heyworth-Smith, for the
respondent
SOLICITORS:  Quinlan Miller & Treston for the appellant
Murphy Schmidt for the respondent
[1] THE COURT:
Background

  1. This is an appeal against an order made at first instance that the appellant pay the respondent’s costs of and incidental to the proceeding to be assessed on the standard basis.

  2. On 7 October 2002 judgment was given in the amount of $1,885,276 in favour of the respondent in an action for damages for personal injuries sustained in a motor vehicle accident. Certain remaining issues were left for further hearing on 18 March 2003. That culminated in orders being made on 4 April 2003 that the judgment sum be increased to $1,918,215.75 and that the appellant pay, in addition to the judgment sum, the amount of $119,830 as management fees. The total amount awarded to the respondent was therefore $2,038,045.75. The issue of costs was deferred, pending an appeal by the respondent against the damages awarded. On 14 November 2003 the Court of Appeal dismissed that…

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AGLC
McChesney v Singh [2004] QCA 217
Case
[2004] QCA 217
Decision Date

CaseChat Overview and Summary

The matter of McChesney v Singh involved a dispute over the assessment of costs following a judgment for damages for personal injuries sustained in a motor vehicle accident. The respondent was awarded damages totaling $2,038,045.75, which included an increase in the judgment sum and management fees. The appellant had previously made an offer to settle the proceedings for $2,500,000, which the respondent rejected. The primary judge awarded costs to the respondent, leading to the appellant's appeal against the decision on the basis that the judge had erred in departing from the general rule that costs follow the event, particularly under r 361(2)(b) of the Uniform Civil Procedure Rules 1999 (Qld). The appeal court needed to determine if the primary judge had correctly exercised his discretion to award costs, considering whether the respondent had an informed opportunity to assess the chances of doing better than the offer to settle.

The court examined whether the primary judge had erred in his exercise of discretion to depart from the general rule that costs follow the event, specifically under r 361(2)(b) of the UCPR. The appellant argued that the respondent had an informed opportunity to assess the chances of doing better than the offer to settle and that the offer should be evaluated in light of the circumstances existing at the time it was made. The court considered the substantial reduction in the gratuitous assistance claim, the component for ongoing care, and the introduction of surveillance evidence after the offer was made. The primary judge concluded that the respondent's case was not based on an exaggeration of the need for care but rather on a novel point about the proper extent of what might be charged as part of necessary care. The surveillance evidence, which was unknown to the respondent at the time of the offer, provided a new element that could affect the adequacy of the offer. The court found that the primary judge's approach in considering the new evidence was reasonable and supported by previous case law.

The appeal was dismissed with costs, affirming the primary judge's decision that there were circumstances justifying the departure from the general rule that costs follow the event. The court held that the primary judge had correctly exercised his discretion under r 361 of the UCPR in awarding costs to the respondent, considering the new evidence that was not available at the time of the offer to settle. The respondent's position was based on a proper reason, and the primary judge's assessment of the claim and the new evidence was appropriate. The decision underscored the importance of evaluating offers to settle in light of all available evidence at the time of the offer and the need for a realistic assessment of the claim by the plaintiff's legal advisers.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 7 October 2002 judgment was given in the amount of $1,885,276 in favour of the respondent in an action for damages for personal injuries sustained in a motor vehicle accident. Certain remaining issues were left for further hearing on 18 March 2003. That culminated in orders being made on 4 April 2003 that the judgment sum be increased to $1,918,215.75 and that the appellant pay, in addition to the judgment sum, the amount of $119,830 as management fees. The total amount awarded to the respondent was therefore $2,038,045.75. The issue of costs was deferred, pending an appeal by the respondent against the damages awarded. On 14 November 2003 the Court of Appeal dismissed that appeal. The Decision as to Costs On 17 December 2003, his Honour heard submissions as to costs. Relevant to this issue was the fact that on 21 September 2001 the appellant had made a formal Offer to Settle the proceedings in the sum of $2,500,000, exclusive of rehabilitation expenses. This amounted to a net offer to settle in the sum of $2,654,289.18. It was thus not in dispute that the respondent had obtained a judgment that was “not more favourable to the respondent than the offer to settle”, invoking r 361 of the Uniform Civil Procedure Rules 1999 (Qld) (the UCPR). Before the learned trial judge it was argued by the appellant, as it was argued before this court, that the appropriate order for costs was one that: The learned trial judge rejected those submissions, and instead in the exercise of his discretion under r 361 ordered that the appellant pay the respondent’s costs of and incidental to the proceeding to be assessed on the standard basis. It is appropriate to set out his Honour’s reasoning in some detail. His Honour stated: “Three particular aspects of the reasons of judgment of 7 October 2002 were focused on by the defendant. The first was that there had been a substantial reduction on the gratuitous assistance claim. It was accepted by the defendant that the finding was not premised on dishonesty by family witnesses although a claim was made that it was exaggerated. However, both the number of hours per week and the rate per hour at which services were to be charged were reduced by me. … The second and third matters were concerned with the component for ongoing care which was hotly disputed at the trial. Aspects of charging for commercial care, including some of the fundamental issues about what was reasonably necessary in the process of delivering such care, were called into question. The view taken by me in that regard was a significant factor in substantially reducing the amount claimed by the plaintiff under that heading. One other aspect was whether the number of hours of care being funded by the defendant in the pre-trial period under its obligation under the Motor Accident Insurance Act was actually being provided. There was surveillance evidence on that issue. The surveillance was conducted after the offer was made, its existence was not disclosed to the plaintiff before the trial since an order was obtained from an applications Judge relieving the defendant of the obligation to make disclosure. The validity of the conclusions to be drawn from the surveillance evidence were vigorously contested at the trial. Given the focus on the issue at trial it was necessary for findings to be made on it. The finding was that the evidence of the carer was unreliable on the issue; paragraph 41. However, that finding was only one factor among several contributing to a finding as to the number of hours of care and the hourly value of care that was reasonably necessary; paragraphs 37 and 38 relate to this. Mr Grant-Taylor also makes the point that there was evidence from an officer of Suncorp that an assessment had been made at the level of care being offered by its officers in this regard as well. But in any event, the fact that there was surveillance evidence was not an operating factor at the time the offer was made. It was common ground that it was incumbent upon the plaintiff’s legal advisers to make a realistic assessment of the claim in deciding whether an offer made pre-trial should be accepted. It was submitted that the plaintiff’s case was based on a gross exaggeration of the need for care. It should be said at the outset that the case is not one where the plaintiff was personally responsible for the ambit of the claim proving to be wider than justified. The plaintiff was a significantly brain-damaged person. It is not in the same category as a case where the plaintiff has concealed the true state of health in the broad sense and the surveillance evidence discovers facts otherwise peculiarly within the plaintiff’s knowledge tending to disprove the claim. A major part of the discrepancy was concerned with an argument about the proper extent of what might be charged as part of necessary care. In the way in which the issue arose it was, in my experience, a novel point. There was no reference to similar cases in argument. To the extent that surveillance evidence is one factor in testing the validity of the propositions advanced by the parties I have already noted that it was unknown to the plaintiff at the commencement of the trial that there was such evidence. The defendant’s submissions suggested that the plaintiff’s parents and/or legal adviser should have played a role in checking to see that what was being paid for by the defendant was in fact provided … It is not a case where there is any evidence that they should have had suspicions about the matter in my view. It would have been impractical and, in my view, unproductive to attempt to obtain a reliable account from the plaintiff herself as to what hours were actually being performed. Further, the primary responsibility once the request for care is made lies upon the defendant to provide an appropriate level of care. In the circumstances, I do not accept the maintenance of the plaintiff’s position in this regard lacked a proper reason. It was based on the fact that an agency engaged by the defendant was providing services of the kind delivered by the caring profession pursuant to the defendant’s obligation under the Act. In the absence of evidence causing alarm bells to ring there was no onus upon the plaintiff or her advisers to carry out their own surveillance. … While there is some force in the defendant’s submissions that some of the components relied on by the plaintiff proved to be unrealistically high the surveillance evidence was a new factor relied on by the defendant. While the approach taken in the reasons for judgment gives it secondary rather than primary significance in resolving the issue it was nevertheless a new element capable of having an effect upon a consideration of the adequacy of the offer. I do not consider that it is a proper approach where that is the case to analyse whether an offer made without that information was reasonable on the basis of the different view of the facts then available to the parties. A passage from the judgment of Justice Williams in Castro v Hillery (2002) QCA 359, particularly paragraphs 72 and 75, supports this approach.” The grounds of appeal

Ratio Decidendi

Legal Principle Established

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