| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : MCGLINN as administrator for JEFFERY CRAIG MCGLINN -v- JOONDALUP HOSPITAL PTY LTD [2013] WADC 105 CORAM : PRINCIPAL REGISTRAR GETHING HEARD : 27 MAY 2013 DELIVERED : 1 JULY 2013 FILE NO/S : CIV 967 of 2012 BETWEEN : NATALIA JANE MCGLINN as administrator for JEFFERY CRAIG MCGLINN First Plaintiff
AND
JOONDALUP HOSPITAL PTY LTD
Defendant
Catchwords: Procedure - Costs - Catastrophic personal injury claim - Item 17 Legislation: Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) Sch Table B Item 17
Legal Profession Act (2008) (WA) s 280
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Result: Declaration that the action is a catastrophic personal injury claim
Representation: Counsel:
First Plaintiff : Ms C S R Searle
Defendant : Mr M L Williams
Solicitors:
First Plaintiff : Slater & Gordon
Defendant : DLA Piper Australia
Case(s) referred to in judgment(s):
Anfrank Nominees Pty Ltd v Connell [1991] 6 WAR 271
Bray v Ryan [1999] WADC 66
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)
Dakin Farms Pty Ltd v Elite Grains Pty Ltd [2012] WADC 43
Hall Chadwick Corp Finance (WA) Pty Ltd v Axiom Properties Ltd [2002] WASC 179
Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Kyle v Legal Practitioners Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56
Miller v Evans [2010] WASC 127 (S)
Ninkovic v Cohen [2000] WADC 198
O'Rouke v P & B Corporation Pty Ltd [2008] WASC 36 (S)
Unioil International Pty Ltd v Deloitte Touche Tohmastsu (No 2) (1997) 18 WAR 190
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1 PRINCIPAL REGISTRAR GETHING: In April 2007 Jeffrey McGlinn collapsed at work due to a stroke and was taken by ambulance to the Emergency Department of the Joondalup Hospital. Whilst an inpatient at the Joondalup Hospital, he suffered an extension of his initial stroke and was ultimately transferred to Sir Charles Gardiner Hospital. As a result of the strokes he sustained brain and psychological injuries. He alleges that the extension of his initial stroke occurred as a result of a breach of duty of care by hospital staff.
2 McGlinn's wife, Natalie McGlinn, has been appointed his administrator and is the plaintiff in the present action in this capacity. The defendant, Joondalup Hospital Pty Ltd, is responsible for the management of the Joondalup Hospital. 3 By application dated 8 May 2013, the plaintiff sought a declaration by the court that the present action is a 'catastrophic personal injury claim' for the purposes of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) (Determination) Schedule Table B Item 17. The effect of this declaration is that the maximum number of hours that may be claimed for preparation of the case for trial is increased from 120 hours (of a senior practitioner's time) to such amount as is reasonable in all of the circumstances. 4 The defendant resisted the application on the basis that it was not appropriate for a declaration to be made pursuant to Item 17 at the present stage in the conduct of the action. The action was entered for trial on 20 June 2013. The defendant accepted that it would be appropriate to give the plaintiff liberty to apply for a declaration to be made pursuant to Item 17 should any order be made in the action pursuant to which the defendant is ordered to pay the plaintiff's costs of the action or any part of the plaintiff's costs that include all or part of the preparation of the case for trial under Item 17. 5 Four issues arise for determination: (a) Can an Item 17 declaration be made by a registrar of the court? (b) What is the nature of the inquiry that the court is to make for the purposes of Item 17? (c) What is the appropriate stage in the conduct of an action at which make an Item 17 declaration? (d) Should an Item 17 declaration be made in this action at this time? (Page 4)
6 The third issue involves a consideration of the District Court's published practice, the defendant's contentions and the plaintiff's contentions.
Can an Item 17 declaration be made by a registrar of the court? 7 The plaintiff submits that the reference in Item 17 'the Court' is to a court constituted by a District Court judge. 8 Item 17 provides:
SUPREME COURT SCALE OF COSTS 2012 |
| Item | Time | Fee Earner | $ | | … | | 17. | Preparation of case | | Preparation of case for trial (includes work reasonably and necessarily undertaken prior to commencement of proceedings) | 120 hours* | SP | $54,120 | | * If the claim is one declared by the Court, to be a catastrophic personal injury claim, the time reasonably spent by a legal practitioner, or by a clerk or paralegal of a legal practitioner in preparation of case for trial shall not be limited to 120 hours but shall be such amount that is reasonable in all of the circumstances | 9 The Determination at pt 7 provides the following background to Item 17: 7. Catastrophic personal injury claims The Committee has resolved that the costs associated with preparation of catastrophic personal injury claims for trial should be taxed or fixed without limit to the number of hours fixed under item 17 where the Court has declared a claim to be one for a catastrophic injury. The Committee conferred with the Chief Justice of Western Australia and the Principal Registrar of the District Court of Western Australia, and anticipates that the Courts will develop their own procedures for determination of whether a case is a catastrophic personal injury claim. (Page 5)
The Committee is of the view that a determination of whether a case is a catastrophic personal injury claim for the purposes of item 17 would involve the assessment of two criteria— (a) The injury or injuries sustained by the plaintiff that are at issue in the proceedings; and (b) By virtue of the injury or injuries, whether an extra burden is placed upon the practitioners involved in the case for the preparation of the case for trial. It is intended that the increase to the scale limit could apply to any or all parties not solely the plaintiff. 10 The jurisdiction of a legally qualified registrar is set out in District Court Rules 2005 (WA) (DCR) r 8. A 'legally qualified registrar may deal with any proceedings that a judge may deal with in chambers' other than the types of proceedings identified in r 8(1)(a) to (e). The present application does not fall within DCR r 8(1)(a) to (e). 11 The DCR does not identify what business may be disposed of in chambers. This issue is thus governed by Rules of the Supreme Court 1971 (WA) (RSC) O 59, which relevantly provides that: (1) The business to be disposed of in chambers shall consist of — (a) applications for time to plead, for leave to amend pleadings, for discovery and inspection of documents, and generally all applications relating to the conduct of any cause or matter… 12 An application for a declaration pursuant to Item 17 is an application relating to the conduct of the present action. It follows that it may be dealt with in chambers. By DCR r 8, it may thus be dealt with in chambers by a legally qualified Registrar. 13 This interpretation of the reference to 'the Court' in Item 17 is supported by the manner in which the District Court of Western Australia Act 1969 (WA) (DCA) draws a distinction between 'the Court' and a 'District Court judge'. This is seen in s 71, s 72, s 74 and s 77: 71. Transfer to different place Where an action or matter is commenced in the Court sitting at a place that should have been commenced in the Court sitting at another place, the Court or a District Court judge may order its removal to be tried or heard by the Court sitting at that other place, or may so order that the action or (Page 6)
matter be tried or heard in the Court sitting at the place in which it has been commenced. 72. Judge may change venue Where a District Court judge is satisfied that an action which is listed to be heard in the Court sitting at a place can be more conveniently or fairly tried in the Court sitting at another place, he may order, on such terms and conditions as he thinks fit, the action to be sent for trial to the Court sitting at that other place. … 74. Court may transfer case to Magistrates Court (1) If an action or matter in the Court — (a) is within the Magistrates Court's jurisdiction; (b) becomes within the Magistrates Court's jurisdiction because the claim in the action or matter is reduced by a payment into court, an admitted set-off, a judgment on part of the claim, or otherwise; or (c) becomes within the Magistrates Court's jurisdiction because its jurisdiction is increased, the Court may order that the action or matter be transferred to the Magistrates Court. … 77. District Court may remit to Supreme Court Where it appears to a District Court judge that any action or matter brought before the Court ought from its nature, or magnitude, or by reason of the question of law involved to be heard and determined by the Supreme Court, he may make an order, remitting the action or matter to the Supreme Court. 14 Where Parliament intended that a particular power only be exercised by a District Court judge it has expressly said so, the implication being that a power able to be exercised by 'the Court' is able to be delegated to a registrar by rules made pursuant to DCA s 88(2)(g). By parity of reasoning, had the Legal Costs Committee intended that the power in Item 17 only be exercised by a District Court judge, it was open for it to have expressly said so, using the dichotomy set out in the DCA. As it did not do so, the reference to 'the Court' in Item 17 should be interpreted consistently with the reference to 'the Court' in the DCA to permit the (Page 7)
decision to be one that may be (and which has been) delegated to a legally qualified Registrar. 15 I am satisfied that legally qualified Registrar has the power to make a determination as to whether an action is a 'catastrophic personal injury claim' for the purposes of Item 17.
What is the nature of the inquiry that the court is to make for the purposes of Item 17? 16 The inquiry the court is required to undertake pursuant to Item 17 is whether the present action is one that may be characterised as a 'catastrophic personal injury claim'. 17 In my view the reference to 'personal injuries' in Item 7 should be construed consistently with the reference to 'personal injuries action' as defined in DCR r 3, namely: 18 For the purpose of Item 17, a 'personal injury' thus includes any illness suffered by the person and any impairment of his or her physical or mental condition. 19 In its ordinary and general usage, the word 'catastrophic' means (relevantly) 'a sudden and wide spread disaster … a final event or conclusion, usually an unfortunate one; a disastrous end ...': Macquarie Dictionary (Fourth edition, 2005, The Macquarie Library Pty Ltd) 202. In the context of Item 17, the word denotes a personal injury that is widespread and disastrous. 20 The word 'claim' in its ordinary and general usage means (relevantly) 'a demand for something as due; an assertion of a right or alleged right … an assertion of something as a fact ... a right to claim or demand; a just title to something …': Macquarie Dictionary 273. The use of the word 'claim' thus directs attention to what the plaintiff demands or asserts he or she is due. Item 17 does not use words like 'if the action is one in which the plaintiff is found to have sustained catastrophic personal injuries'. The attention is directed to the type of 'claim' made. (Page 8)
21 In my view, giving effect to the words of Item 17 and the commentary in part of the Determination quoted above [9], the phrase 'catastrophic personal injury claim' directs the court to inquire: 22 For ease of expression, unless I need to make a separate reference, I will simply refer to the term the 'plaintiff', and use that term to include a case like the present in which the plaintiff sues in a representative capacity. In the present action the inquiry is to be directed at the injuries of the claimant on whose behalf the nominal plaintiff sues. 23 This interpretation is consistent with other items in the schedule which refer to different types of claim, namely: (a) Item 26, 'Arbitration proceedings'; (b) Item 27, 'Proceedings, whether by action or otherwise, for the recovery of compensation for the taking or resumption of land or any other property by the Crown in the right of the State or of the Commonwealth or by any other person, body or instrumentality pursuant to any statutory power'; (c) Item 28, 'Proceedings by way of prerogative writ'; and (d) Item 35, 'Claims under the Motor Vehicle (Third Party Insurance) Act 1943 (WA)'. 24 Once the type of claim or proceeding is identified, then the relevant cost scale is set. 25 The inquiry for the purposes of Item 17 is some respects similar to, and in some respects different from, the inquiry for the purposes of Legal Profession Act 2008 (WA) (LPA) s 280. That section relevantly provides:
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26 The principles governing the determination of an application pursuant to LPA s 280(2), may be summarised as follows: (a) in order for the court to make a special costs order under LPA s 280(2) the court must firstly form an opinion that the costs otherwise allowable would be inadequate and second form an opinion that such inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2013] WASCA 66 (S) [3]; Miller v Evans [2010] WASC 127 (S) [30]; Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11]. (Page 10)
(b) the requirement of inadequacy will be demonstrated if the applicant shows that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination: Cape Lambert [4]; Miller [31]; Heartlink [16], [25];and (c) because the determination would ordinarily be made by the court hearing the application in relation to which the costs are claimed, and in advance of taxation, the court may form the opinions in LPA s 280(2) as a matter of impression rather than of science, mathematics or detailed evaluation: Cape Lambert [3]; Miller [32]; Heartlink [22]; (d) in regard to unusual difficulty, complexity or importance, the court can have regard to whether the work done was appropriate to the significance of the issues that arose in the litigation, to the parties or the public or to the community generally: Miller [32]; Heartlink [19]; (e) 'unusual' in LPA s 280(2) qualifies 'difficulty' only and not 'complexity' or 'importance': Cape Lambert [5]; (f) 'unusual' means unusual having regard to what one might describe as the usual run of civil cases in the Supreme Court and the District Court: O'Rouke v P & B Corporation Pty Ltd [2008] WASC 36 (S) [23]; Dakin Farms Pty Ltd v Elite Grains Pty Ltd [2012] WADC 43 [35]; and (g) the assessment of the question of whether or not there is 'unusual difficulty, complexity or importance' is essentially a value judgment having regard to the court's experience of the particular case and compared to the usual run of cases: O'Rourke [23] - [24]. 27 In the inquiry for the purposes of LPA s 280(2) the court or judicial officer is required to form 'the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate'. This requires an evaluation of the amount of costs that would be allowable. There is no equivalent requirement in Item 17, nor any warrant to imply one. The inquiry is focussed on type of claim made, and it is sufficient that 'an extra burden' is identified, without the need to go on to form a view that the scale limit of 120 hours is likely to be inadequate. (Page 11)
28 In both the context of LPA s 280(2) and Item 17 the ultimate question as to what amount of costs is reasonable in all of the circumstances is left to the taxing officer. In each case the determination would ordinarily be made in advance of taxation, as it sets the parameters for the taxation. Given that similarity, by analogy it seems appropriate for the court to adopt the same standard of evaluation in relation to both: (a) the threshold question in Item 17 - Is the claim a catastrophic personal injuries claim?; and (b) the threshold question in LPA s 280(2) - Is the amount of costs allowable in respect of a matter under a costs determination inadequate? This would direct a court in the context of Item 17 to evaluate the question of whether the claim is a 'catastrophic personal injuries claim' as a matter of impression rather than of detailed evaluation: Cape Lambert [3]; Miller [32]; Heartlink [22]. 29 There is no inherent injustice in this approach. This is because in both the context of LPA s 280(2) and Item 17, the ultimate question as to what amount of costs is reasonable in all of the circumstances is left to the taxing officer. Specifically, in the context of Item 17, the question of whether, byvirtue of the injury or injuries there was in fact an extra burden on practitioners for the party entitled to costs under Item 17 involved in the case preparing it for trial is one that awaits the taxation process. The taxing officer will assess the getting up in fact undertaken and form a view as to what amount 'is reasonable in all of the circumstances'. 30 In my view, the phrase 'catastrophic personal injury claim' directs the court to inquire: (a) whether the injuries and illness suffered by the plaintiff, and the impairment of his or her physical or mental condition, may be described as widespread and disastrous; and (b) whether this is the type of personal injuries action in which the practitioners involved in the case may ordinarily be expected to be under an extra burden in preparing the case for trial by virtue of the plaintiff's injuries. Because this determination would ordinarily be made in advance of taxation, it is a matter of impression rather than of detailed evaluation. (Page 12)
What is the appropriate stage in the conduct of an action at which to make an Item 17 declaration? – District Court published practice 31 There is no express restriction in the Determination, the DCR or the SCR as to when in the conduct of an action an Item 17 declaration may be made. 32 The defendant contends that it is not appropriate for the court to make a declaration pursuant to Item 17 in the present case given the stage at which the action has progressed. The defendant's contention calls in to question the position set out in Circular to Practitioners CIV 2012/3, Catastrophic Personal Injuries which states that the 'Court encourages parties to request the Court to determine whether the claim is a catastrophic personal injuries claim at an early stage in the case'. 33 It is appropriate to quote this Circular to Practitioners in its entirety: 1. Introduction Item 17 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA)provides that the Court may declare a claim to be a catastrophic personal injury claim. If that declaration is made, the number of hours that may be charged for preparation of the case is increased from 120 hours (of a senior practitioner's time) to such amount that is reasonable in all of the circumstances. 2. What is a catastrophic personal injuries claim? The Court has not issued any formal guidance on what constitutes a catastrophic personal injuries claim. Rather, this issue needs to be developed on a case by case basis. The Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 at Part 7 states that the Committee is of the view that whether a case is a catastrophic personal injuries claim for the purposes of item 17 would involve the assessment of two criteria: The Court does not consider these two criteria to be exhaustive. 3. Procedure for declaring a claim to be a catastrophic personal injuries claim (Page 13)
The Court encourages parties to request the Court to determine whether the claim is a catastrophic personal injuries claim at an early stage in the case. The determination of whether to make a declaration that a case is a catastrophic personal injuries claim may be made by chamber summons. It should not ordinarily be made until a statement of claim has been filed, as this will set out the injury or injuries sustained by the plaintiff that are in issue in the proceedings. The application will need to be supported by an affidavit. The affidavit would need to address the criteria set out in Part 2 above. The determination may also be made by consent order. The appropriate form of the order is: 1.the Court declares that the claim is a catastrophic personal injuries claim for the purposes of Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) item 17. Where a consent order is filed, no affidavit is required unless a Registrar makes a direction requiring one to be filed. The consent order should not be filed until a statement of claim has been filed and served. This will allow the Registrar considering the consent order to review the statement of claim and form a view as to whether declaration is justified. Where the Court declines to make a consent order, the party seeking the declaration will need to file and serve a chamber summons supported by an affidavit if it wishes to press the application at that time. The declaration may also be made by the trial Judge in the course of, or at the conclusion of, a trial. 4. Compromises In a compromise application, whether in the course of an action or commenced by originating summons, the plaintiff (applicant) may seek a declaration that the claim is a catastrophic personal injuries claim. Although the usual supporting material will ordinarily be sufficient for the Court to assess the injury or injuries sustained by the plaintiff, there may be a need for additional affidavit evidence on the extra burden placed on the practitioners involved in the preparation of the case. The standard order is that set out in Part 3. 34 A Circular to Practitioners issued by the District Court has no formal status. All it does is set out what is the ordinary or usual practice of the court in order to assist parties and practitioners. A Circular to Practitioners may identify options, including options preferred by the court, to assist parties to comply with the RSC (as they apply to the District Court) and the DCR, or otherwise exercise rights given under (Page 14)
those rules as well as other procedural rights. If, as a result of judicial decisions of the court (or other judicial decisions), the ordinary or usual practice of the court changes from that set out in a Circular to Practitioners, the court (though is internal management structures) will authorise the Principal Registrar to cancel, amend and/or update the relevant Circular to Practitioners. 35 It follows that I am not bound in any way by Circular to Practitioners 2012/3 in considering the present application, but am both free to, and obliged to, determine the application on its merits.
What is the appropriate stage in the conduct of an action at which to make an Item 17 declaration? – Defendant's contentions 36 The defendant contends that an application for a declaration that an action is a catastrophic personal injury claim is appropriately brought by a party (applicant): 37 This is for five reasons (for clarity of my analysis, I have reordered the reasons from that set out in the defendant’s submissions): (a) it is not until the close of the plaintiff's claim at trial or when the parties agree to settle or compromise the action (and not when the plaintiff files a statement of claim or at the close of pleadings) that the injury or injuries sustained by the plaintiff that are 'at issue in the proceedings' crystallise for the purpose of the Determination; (b) allowing a declaration to be made that an action is a catastrophic personal injury claim early in the progress of an action would require repeated reassessment by a court as an action progresses and ought not necessarily still stand at the conclusion of the action; (c) there is no presumption at any stage of proceedings that a party will be entitled to be paid its costs under Item 17; (Page 15)
(d) the entitlement of a party to have its costs under item 17 not limited to 120 hours is properly assessed by reference to the extra burden that is placed on that party by virtue of the injury or injuries sustained by the plaintiff that are in issue in the proceedings, not the burden placed on another party; and (e) absent a costs order is the applicant's favour, the applicant may not be the party ultimately entitled to costs under Item 17 and the applicant's supporting affidavit therefore will not address whether an extra burden is placed on the practitioners for the party in fact entitled to costs under Item 17.
The declaration cannot be made before the injuries in issue are crystallised 38 The defendant submits that it is not until the close of the plaintiff's claim at trial or when the parties agree to settle or compromise the action that the injury or injuries sustained by the plaintiff that are 'at issue in the proceedings' (to quote the Determination) crystallise for the purpose of the Item 17 declaration. It is not possible for this to occur either when the plaintiff files a statement of claim or at the close of pleadings. While the close of pleadings marks the first point at which the issues between the parties are defined, the issues between the parties are not fixed at this point. This is because: (a) a plaintiff may amend his or her statement of claim at any time in the action to withdraw an allegation (albeit only with leave after the time stipulated in DCR r 48A(2B) has passed); (b) a defendant may amend his or her defence at any time in the action (again, albeit only with leave after the time stipulated in DCR r 48A(2B) has passed) to admit that a breach of duty by the defendant was a material cause of one or more injuries alleged by the plaintiff (thereby rendering the injury not in issue in the proceedings); and (c) having regard to the duties identified in Hall Chadwick Corp Finance (WA) Pty Ltd v Axiom Properties Ltd [2002] WASC 179 [22], [27] and Kyle v Legal Practitioners Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56 [12], [23], [65] - [66], pleadings ought properly be amended during the course of an action if counsel is no longer satisfied that there is some credible material in support of a plea. (Page 16)
39 It followed from this, in the defendant's submission, that 'the extra burden (if any) that is (not may be) placed upon the practitioners involved in the case for the preparation of the case for trial by reason of the injury or injuries in issue is appropriately assessed retrospectively, not prospectively' (emphasis in original). This is said to be the case for four reasons. 40 The first is that the extra burden on a party in preparing the case for trial is not felt at the close of pleadings, but rather accumulates as the action progresses towards trial. The 120 hour limit provided by Item 17 (absent a declaration or other special costs order) is for preparation for trial (that is, preparation of the case up to the first day of trial). Most actions in the District Court settle prior to being allocated a trial date. A party's preparation for trial up to that point may not have involved an extra burden that warrants removing the limit on recover under Item 17 to 120 hours. It may be the case that the extra burden will not manifest in many cases until after the action is allocated a trial date. If such an action settles at a pre-trial conference or mediation, prior to the allocation of a trial date, it follows that the applicant has not suffered an extra burden and the applicant's costs under Item 17 should therefore be limited to 120 hours. 41 The second is that some heads of damage (some that would have the potential to involve large amounts of evidence if they required assessment by the court at trial) may be agreed at pre-trial conference or mediation. In such a case, the action may then progress to trial on a limited number of issues that do not place an extra burden upon the practitioners that warrants removing the limit on recovery under Item 17 to 120 hours. 42 The third reason is that causation is a live issue in many personal injury claims. Expert medical evidence may be required for a plaintiff to prove that his or her injuries were materially caused by the defendant's breach of duty. Expert evidence obtained by a party after the close of pleadings may not support a finding that some of the plaintiff's alleged injuries were caused by the defendant's breach. This may result in counsel no longer being satisfied that there is some credible material to support some of the allegations of injury in the statement of claim. The statement of claim will therefore then appropriately require amendment. The injury or injuries sustained by the plaintiff that are at issue in the proceedings will therefore change. The extra burden (if any) placed upon the practitioners involved in the case of the preparation of the case for trial may therefore never manifest. (Page 17)
43 The fourth reason is that a party is not entitled to the costs of preparing a case for trial on an issue that is not ultimately tried unless the court makes an order entitling a party to the costs thrown away by reason of the amendment to the pleading that withdraws the allegation of fact that was previously in issue. There is no reasonable presumption that all matters in issue on the pleadings will remain in issue by the state of trial or even following a pre-trial conference. It follows that the court cannot make a prospective assessment of whether an extra burden is placed upon the practitioners involved in the case for the preparation of the case for trial by virtue of the injury or injuries sustained by the plaintiff that are at issue early in the proceedings. 44 The effect of a declaration that a claim is a 'catastrophic personal injury claim' does not automatically entitle the party receiving the benefit of a costs order to recover the cost for preparation of the case for trial in excess of 120 hours of the time of a senior practitioner. Rather, the effect of the declaration is simply to remove the upper limit. It is then for the taxing officer to review the actual preparation done, in the context of the submissions of the parties at the taxation hearing, to determine what amount for getting up 'is reasonable in all of the circumstances'. The process of taxation is summarised in the following passage from the decision in Bray v Ryan [1999] WADC 66 [37]: In the final analysis it is necessary to first, identify what services were necessary in the particular case and secondly, objectively assess a reasonable allowance for such services by applying the Rules, the Determination and the underlying principles thereof and thirdly, measure the amount actually claimed in the bill for the services against the objective assessment in order to determine whether or not the amount claimed is reasonable and what adjustment, if any, should be made. 45 Thus, if the action does settle at an early stage prior to significant preparation being undertaken for trial, the taxing officer will take this into account in assessing what amount is 'reasonable in all of the circumstances' 46 I do not consider the fact the injuries of the plaintiff in issue in the proceedings will not formally crystallise from a pleadings perspective until close to trial to be a reason why the Item 17 declaration should not be made at an early stage in the conduct of the action. For the reasons set about above [16] – [30], it is sufficient that the 'claim' is able to be characterised as being 'a catastrophic personal injury claim'. By analogy with the inquiry in LPA s 280(2), it is sufficient that court forms an impression of the injury or injuries sustained by the plaintiff that are in (Page 18)
issue in the proceedings and the likely extra burden on the practitioners involved in the preparation of the case for trial arising by virtue of those injuries. The determination of the injuries of the plaintiff that are in issue in the proceedings the making of an Item 17 declaration does not involve a finely grained pleadings or factual analysis. Nor is a detailed evaluation of the relevant costs necessary, as that will be done by the taxing officer, subject to any directions made pursuant to LPA s 280. If the court is not able to form such an impression on the material before it, then it can decline to make the declaration at that stage.
An early declaration would create a need for repeated reassessment 47 The defendant then submits that if a declaration is made early in the conduct of the action, the declaration will properly require reassessment/review by the court: (a) after every amendment to a pleading; (b) every time a development occurs in the action that decreases the burden on the practitioner involved in a party's case for the preparation of the case for trial; (c) following a pre-trial conference and mediation (so that the court can assess whether any issues have been resolved and thereby decreased the burden on the practitioner involved in a party's case for the preparation of the case for trial). 48 This is said to be because each of these matters affects the two central matters that require the court's consideration when determining the application for the declaration, namely: 49 The defendant submits that 'multiple reviews of both these matters and the consequent efficacy of a declaration that the case is a catastrophic personal injuries claim at the time an order for costs under Item 17 is made in a party's favour will involve an unnecessary use of the court's limited resources and ought to be discouraged'. (Page 19)
50 In my view, this argument again does not place sufficient emphasis on the use of the word 'claim' in Item 17. As I have set out above, the use of the word 'claim' in Item 17 directs the court to inquire as to the type or class of action which has been commenced. If the claim as made can be described as a 'catastrophic personal injury claim', then it is appropriate that the declaration be made. If it subsequently transpires that, for whatever reason, the limit on preparing the case for trial should be reinstated there is ample power to do so following trial pursuant to LPA s 280(3). 51 Accordingly, I do not consider the fact the scope of injuries claimed may change during the course of the action, as may the scope of preparation, to be a reason why the Item 17 declaration should not be made at an early stage in the conduct of the action.
An early declaration must presume the applicant’s entitlement to costs 52 The defendant submits that a declaration for the purposes of Item 17 should not be made at an early stage in the conduct of the action because there is no presumption at any stage of proceedings that a particular party will be entitled to be paid its costs under this item. This is because a party's entitlement to costs, even if it is successful in the action, is a matter within the wide discretion of the court. This discretion is properly exercised after taking account relevant matters, including but not limited to: (a) whether an unsuccessful defendant has made an offer of compromise to a successful plaintiff further to RSC O 24A and is entitled, further to O 24A r 10(5), to an order that the plaintiff pay the defendant's costs in respect of the claim from the day after the offer was made; and (b) the successful party's and/or that party's practitioners' conduct of the litigation: see for example Unioil International Pty Ltd v Deloitte Touche Tohmastsu (No 2) (1997) 18 WAR 190, 193. These matters are relevant to the exercise of the court's discretion and are said not be apparent at an early stage of the action nor generally until an application for costs is made. 53 However, the making of a declaration for the purposes of Item 17 does not presuppose that either party will be awarded its costs of preparing the case for trial. The commentary in the Determination makes it clear that the increase in the scale limit could apply to any or all parties (Page 20)
not solely the plaintiff. All that the Item 17 declaration does is to remove the scale limit in the Determination. 54 The making of an Item 17 declaration does not impact on the discretionary power of the court in RSC O 66 r 1 in relation to costs. Nor does making a declaration pursuant to Item 17 limit the power of the court in LPA s 280. Significantly for present purposes, both the power in LPA s 280(2) and LPA s 280(3) may be exercised notwithstanding that a declaration has been made for the purposes of Item 17. This is because, as I have stated above, the only effect of the declaration being made is to remove the upper limit for Item 17; the costs remain regulated by the Determination. The power in RSC O 66 r 1 and LPA s 280(3) means that the fact that an Item 17 declaration would not limit the ability of the court, following trial, to adjust the costs that would otherwise follow the event to take into account an RSC O 24A offer or take into account the conduct of the party or its lawyers. The reservation in LPA s 280(3) is also wide enough to allow the trial judge to reinstate the scale limit in Item 17 following trial, notwithstanding that a declaration was made for the purposes of that item at an early stage in the conduct of the action. 55 Accordingly, I do not consider the fact the ultimate costs orders will not be known until the completion of the action to be a reason why an Item 17 declaration should not be made at an early stage in the life of the action.
The extra burden must fall on the applicant’s legal practitioners 56 The defendant submits that a further reason why a declaration pursuant to Item 17 should not be made early in the conduct of the action is that 'a party should only be entitled to not have the time reasonably spent in preparation of case for trial limited under Item 17 to 120 hours unless an extra burden has been placed on that party's legal practitioner by the injury or injuries by the plaintiff that are in issue in the proceedings' (emphasis in original). Parties to a personal injury action do not share equally in work reasonably undertaken to prove their case or disprove another party's case. It follows from this submission that until it is known which party is entitled to the costs of preparation, it will not be possible to determine whether, in the circumstances of the particular case, that party has been under an extra burden in preparing the case for trial by virtue of the plaintiff's injuries, so as to warrant a declaration being made pursuant to Item 17. 57 Further, it is submitted that the commentary in the Determination – 'It is intended that the increase to the scale limit couldapply to any or all (Page 21)
parties not solely the plaintiff' – supports Item 17 being construed to require the court to focus exclusively on a party who is entitled to be paid its costs of its preparation when considering whether to declare the case a catastrophic personal injury claim for the purpose of that party's limit of recovery under Item 17. 58 Again in my view, this argument unnecessarily complicates the inquiry in Item 17. As set out above, the use of the word 'claim' directs the inquiry to whether this is the type of personal injury case in which the practitioners involved in the case may ordinarily be expected to be under an extra burden in preparing the case for trial by virtue of the plaintiff's injuries. The fact that the 'extra burden' may be different in aspects as between the practitioners for the plaintiff and the practitioners for the defendant does not prevent the court making the inquiry at an early stage in the conduct of the action, based on what ordinarily occurs in action involving injuries of the type in issue in the action.
The applicant's affidavit can only address the applicant's position 59 According to the circular, an affidavit filed by a party in support of an application for an Item 17 a declaration must address (at least): 60 The defendant submitted that a party is rarely if ever be privy in advance to all matters that comprise or will comprise another party's preparation for trial. Consequently, the supporting affidavit of applicant cannot properly inform the court of the burden placed upon the practitioners involved in each party's case for the preparation of the case for trial and whether the injury or injuries sustained by the plaintiff that are at the issue in the proceedings place an extra burden on the practitioners involved in each party's case for the preparation of the case for trial. It follows that, in an application for a declaration made by one party: (a) the court's determination of the issue must therefore be limited to whether that applicant's entitlement to costs under Item 17 should be restricted to the 120 hours provided for by default; and (Page 22)
(b) it is not appropriate to make a declaration that applies to all parties without evidence of an extra burden having been placed on each of those parties. 61 This argument also, in my view, unnecessarily complicates the inquiry in Item 17. As set out above, the use of the word 'claim' directs the inquiry to whether this is the type of personal injury case in which the practitioners involved in the case may ordinarily be expected to be under an extra burden in preparing the case for trial by virtue of the plaintiff’s injuries. Any party is in a position to identify the 'extra burdens' that are likely to be placed on the practitioners preparing this type of case for trial. 62 I am not able to discern from the arguments raised by the defendant, nor from the Determination, the DCR or the SCR, any inherent or implied restriction as to when in the conduct of an action an Item 17 declaration may be made.
What is the appropriate stage in the conduct of an action at which to make an Item 17 declaration? – Plaintiff's contentions 63 The primary reason submitted by the plaintiff as to why it is appropriate for the declaration to be made at the present stage in the conduct of the action is that it will position her solicitors to provide more meaningful costs disclosure. This disclosure is required as to both what costs might be recovered from the defendant and what costs the plaintiff may have to pay the defendant in the event that the claim is unsuccessful. 64 The obligation on a law practice to provide costs disclosure to a client is set out in LPA s 260, which, so far as is relevant for present purposes, provides: (Page 23)
65 If the matter is litigious, then additional cost disclosure must be given prior to the execution of a settlement, pursuant to LPA s 264: 66 A law practice then has an ongoing obligation to make costs disclosure of any substantial change to anything included in a disclosure already made: LPA s 267. 67 In the District Court, there is an additional costs disclosure obligation which must be complied with prior to entering the case for trial, being that contained in DCR r 36: (Page 24)
(a) the approximate legal costs and disbursements of the party up to and including giving the notice; (b) the estimated future legal costs and disbursements of the party up to but not including the trial; (c) the estimated length of the trial and the legal costs and disbursements associated with it; (d) the estimated legal costs and disbursements that the party would have to pay to another party if the party were to lose the case. (2) Within 14 days after the date on which a party is served with a Form 1 (Entry for trial), the lawyer for the party must give the party written notice of the legal costs and disbursements referred to in subrule (1). 68 The entry for trial papers filed in the action on 20 June 2013 contained the reservation that costs disclosure pursuant to DCR r 36 had been deferred until the determination of the present application. 69 Counsel for the plaintiff submitted that if the determination of whether or not the claim is a catastrophic personal injury claim is left until settlement or after trial, then it is not possible for the plaintiff's lawyers to comply with their cost disclosure obligations in a meaningful or realistic way. To my mind this submission is valid, though perhaps slightly overstated. 70 If a declaration is not made pursuant to Item 17, the costs disclosure in relation to preparing the case for trial in a case which the lawyers considered was a catastrophic personal injury claim would need to be on two alternative bases: (a) that the scale limit applied, in which case the number of hours is limited to 120 hours of the time of a senior practitioner; or (b) the case will be declared to be a catastrophic personal injury claim, in which case the amount is that which is reasonable in all of the circumstances. In either case, the lawyers will need to estimate what is likely to be a reasonable amount for the cost of preparing the case for trial. 71 In dollar terms, 120 hours at the current rate of as senior practitioner ($451) is $54,120. The scope of matters covered in preparing a case for trial is extensive: Anfrank Nominees Pty Ltd v Connell [1991] 6 WAR (Page 25)
271, 280; Ninkovic v Cohen [2000] WADC 198 [14]. It is not hard to contemplate scenarios in which the number of hours reasonably required to prepare a complex personal injury case for trial would be well in excess of 120 hours. The actual number of hours could well double or triple 120 hours, making the dollar amounts significant. 72 I accept that if an Item 17 declaration is made, the costs disclosure required to be given by all parties is able to be more accurate. This is because the uncertainty of whether or not the scale limit applies will be resolved. 73 The next issue to consider is the significance of the cost disclosure being more certain and thus more accurate. Perhaps this is of most significance in the mediation or settlement process. In my experience conducting mediations in complex personal injury actions, the amount of costs potentially payable and receivable are relevant issues. The fact that costs issues are relevant to settlement is why DCR r 36 exists and requires compliance when it does. Knowing whether the scale limit in Item 17 has been removed will assist all parties to more accurately advise their clients on all of the costs scenarios. 74 Counsel for the defendant challenged the assertion that the prospects of an action settling at a settlement conference (pre-trial conference or mediation conference) are increased if the court declares prior to the settlement conference that the case is a catastrophic personal injury claim and the parties thereby enter negotiations knowing the extent of their entitlement to costs in advance. This was for four reasons. 75 The first is that, in the case of a dispute involving a party under a disability, the Circular contemplates an application for a declaration that the case is a catastrophic personal injuries claim being made at the time of an application for approval of a compromise being made under RSC O 70 r 10. This application would be made after an in principle settlement agreement had been reached. However, all the Circular states is that the plaintiff may seek an Item 17 declaration with the compromise application. There is nothing in the DCR or Determination preventing a plaintiff from seeking an Item 17 declaration in a case in which a settlement would have to be approved by the court before, say, a mediation conference. This declaration will stand for the purposes of taxing costs pursuant to the compromise (unless, for example, a contrary order is made at the compromise hearing pursuant to LPA s 280). (Page 26)
76 The second reason advanced by counsel for the defendant against the assertion that an Item 17 declaration will assist in clarifying costs issues for settlement purposes is that it presupposes that the party obtaining the Item 17 declaration will be the party who, following negotiations that result in a settlement of an action, will be paid a sum of money for costs. As I have set out above [52] - [55], the making of an Item 17 declaration does not presuppose which party (indeed if any) will be entitled to claim costs pursuant to Item 17. In my view, knowing whether the scale limit in Item 17 has been removed will assist all parties to more accurately advise their clients on all of the costs scenarios. As set out above [63] - [67] this advice will need to include both costs potentially payable as well as costs potentially receivable. 77 The third reason advanced by counsel for the defendant against the assertion that an Item 17 declaration will assist in clarifying costs issues for settlement purposes is that it is not uncommon for actions to be settled on the basis that costs will be negotiated after the settlement conference. For example, there could be a judgment with costs to be taxed if not agreed. Likewise, the action may settle on the basis that a party will apply after the settlement conference for an order pursuant to LPA s 280(2). Counsel submitted that reservation of a right to apply for such an order does not, and ought not, reasonably fetter negotiations in relation to the settlement of the other issues in the action. However, the fact that the agreement may be on the basis that costs be taxed does not detract from the assertion that the making of an Item 17 declaration will assist in clarifying costs issues for settlement purposes. The advice on costs pursuant to DCR r 36 must still be provided. During the course of settlement discussions, the parties will still need to be advised on the costs potentially payable or recoverable on taxation in order to determine whether the option of leaving costs to taxation is acceptable in the context of the wider settlement offer. This is particularly so when the costs agreement between a plaintiff and their lawyers allows for some of the costs to be paid out of the settlement proceeds ultimately received. 78 The fourth reason advanced by counsel for the defendant against the assertion that an Item 17 declaration will assist in clarifying costs issues for settlement purposes is that it is not uncommon for actions to be settled on the basis that costs are agreed. Such settlements occur without the party to whom the costs will be paid presenting the other party with a draft bill of costs for taxation. This is because the parties' lawyers can assess during settlement negotiations the likely range of allowances that a party might receive on taxation of that party's costs if the action settles at that point. The lawyers are equally able to assess whether the time (Page 27)
reasonably spent by the relevant legal practitioners in preparation of the case for trial exceeded 120 hours and, if so, whether that was due an extra burden being placed on the practitioners by virtue of the injury or injuries sustained by the plaintiff that are at issue in the proceedings at the time of the settlement. However, in my view, knowing whether the scale limit in Item 17 has been lifted will assist the lawyers to make a more accurate assessment of the likely taxed costs. This in turn will assist them to provide more meaningful advice on whether to agree costs at a particular amount. 79 I am of the view that the making of an Item 17 declaration prior to entry for trial or a mediation conference will assist the lawyers for the parties to provide more accurate and meaningful costs disclosure and advice, which will be of particular assistance to the parties in settlement discussions. Given the costs disclosure required pursuant to DCR r 36 and the usual practice of the District Court to hold settlement conferences after entry for trial (by way of either a pre-trial conference or a mediation conference), this at least suggests that it may be appropriate to make an Item 17 declaration prior to entry for trial.
What is the appropriate stage in the conduct of an action at which to make an Item 17 declaration? – Conclusion 80 The analysis set out above may be summarised as follows: (a) the phrase 'catastrophic personal injury claim' directs the court to inquire: (b) because this determination would ordinarily be made in advance of taxation, it is a matter of impression rather than of detailed evaluation; (Page 28)
(c) there is no express restriction in the Determination, the DCR or the SCR as to when in the conduct of an action an Item 17 declaration may be made; (d) there is no inherent or implied restriction in the Determination, the DCR or the SCR as to when in the conduct of an action an Item 17 declaration may be made; (e) ordinarily at least a statement of claim will be required in order to identify the injuries sustained by the plaintiff that are in issue in the proceedings; (f) the making of an Item 17 declaration does not presuppose which party is entitled to its benefit – this will be determined by the costs orders ultimately made in the action, on settlement, in compromise orders or following trial; (g) the determination of the injuries of the plaintiff that are in issue in the proceedings for the purpose of making of an Item 17 declaration does not involve a finely grained pleadings or factual analysis; (h) it follows that from (g) that if a determination is made based on a statement of claim, there is no need for repeated reassessment as the pleaded case changes – though reassessment is possible by orders made pursuant to LPA s 280; and (i) the making of an Item 17 declaration prior to entry for trial or a mediation conference will assist the lawyers for the parties to provide more accurate and meaningful costs disclosure and advice, which will be of particular assistance to the parties in settlement discussions. 81 In each case the Court will need to consider the whether material presented to it is sufficient to for it to be satisfied that it is appropriate to make the declaration at that stage in the conduct of the action.
Should an Item 17 declaration be made in this action at this time? 82 The extent of Mr McGlinn's injuries and residual disabilities is set out in the particulars of damages filed 30 April 2013, as follows: (Page 29)
(i) residual right hemiparesis with grossly restricted use of the right upper limb and curtailed lower limb movement with impact on his ability to stand and walk; (ii) dysphasis which significantly compromises his use of language both in expressing himself and in comprehending others; (iii) cognitive impairment impacting on memory and problems solving; (iv) nocturnal lower limb movement disturbance. (b) Psychological injury, including depression and anxiety. The plaintiff's residual disabilities and loss of enjoyment of life include: (a) the plaintiff suffered recurrent seizures; (b) the plaintiff suffers from vertigo; (c) the plaintiff has right sided leg weakness with associated impaired gait; (d) the plaintiff has impaired communication including difficulty taking; (e) the plaintiff suffers from poor memory; (f) the plaintiff has impaired balance; (g) the plaintiff has impaired cognitive functioning; (h) the plaintiff has blurred vision in his right eye; (i) the plaintiff has difficulty using his right hand for tasks and daily activities, despite being right hand dominant prior to injury; (j) the plaintiff suffers from fatigue. (k) the plaintiff has an impaired swallowing function; (l) the plaintiff has a reduced attention span; (m) the plaintiff has impaired reading and comprehension; (n) the plaintiff suffers from anxiety and depression; (o) the plaintiff needed to be re-taught how to toilet; (p) the plaintiff has lack of insight into his health issues and/or an inability to communicate health concerns; (Page 30)
(q) the plaintiff has an inability to identify wear and tear or damage to household items or clothing; (r) the plaintiff is unable to engage in pre-accident recreational or leisure activities, including: (i) playing soccer; (ii) gardening; (iii) socialising with friends; (iv) playing with his children; (v) coaching his son's football team; (vi) social isolation; (vii) impaired marital relations; (viii) attending concerts; (ix) attending movies or the circus with his children; (x) going on rides at theme parks or the Royal Show; (xi) attending AFL matches; (s) the plaintiff has an inability to drive; (t) the plaintiff is unable to care for his children; (u) the plaintiff is incapable of celebrating special events and anniversaries with his family; (v) the plaintiff has difficulty coping with crowds; (w) the plaintiff is unable to help his children with homework and schooling; (x) the plaintiff is unable to cook; (y) the plaintiff is unable to go shopping; (z) the plaintiff is unable to participate in decisions as to the welfare and finances of his family; (aa) the plaintiff is unable to do household maintenance and repairs; (bb) the plaintiff is unable to do vehicle maintenance and repairs.
(Page 31)
83 This summary of the injuries is supported, and elaborated upon, in a series of medical and health services reports annexed to an affidavit dated 9 May 2013 by the lawyer with conduct of the claim, Karina Hafford. 84 The extent of the disabilities is such the plaintiff has been appointed as administrator of Mr McGlinn's affairs. 85 In my view, the injuries and impairments Mr McGlinn in issue in the proceedings are widespread and disastrous, and so may appropriately be described as catastrophic. 86 Ms Hafford also states that because of the injuries and the extent of disability greater work is required to undertake the Mr McGlinn's claim (presumably than compared with other personal injuries cases), namely: (a) review of a large volume of hospital records; (b) additional medico legal reviews, including neuropsychological, care assessment, speech therapy, occupational therapy, neurology and rehabilitation; and (c) additional witness statements with respect to the care and impact of Mr McGlinn's injuries. 87 Ms Hafford then goes on to state that Mr McGlinn's disabilities and inability to communicate means that he cannot provide information as to the impact on his life, including residual disabilities, need for care and impact on employability. All this information needs to be obtained from third parties and documentary sources and is 'much more labour intensive'. 88 The defendant has filed a defence. It has denied liability and not admitted any of the injuries pleaded in the statement of claim. In submissions filed on behalf of the defendant, counsel stated that, should the court consider that the plaintiff issued the summons at the appropriate stage of the action and that it is appropriate to determine at this time whether the case is a catastrophic personal injuries claim, the defendant does not make any submissions as to: (Page 32)
89 I am satisfied that, for the purposes of Item 17, that the type of claim made by the plaintiff as administrator for Mr McGlinn is one that is appropriately characterised as 'a catastrophic personal injury claim'. It is a type of personal injury action in which the practitioners involved in the case may ordinarily be expected to be under an extra burden in preparing the case for trial by virtue of the plaintiff's injuries. Of particular significance is the: (a) wide range of impairments being experienced by Mr McGlinn which makes the process of medical review by the parties extensive and complex; and (b) fact that Mr McGlinn is a person under administration, which not only imposes an extra burden on the plaintiff’s lawyers, but also on the defendant's lawyers as they are not able to rely as heavily on the usual method of obtaining information about a person claiming compensation being by way of interview from reviewing medical practitioners and other health professionals. 90 The material presented to it is sufficient to for me to be satisfied that it is appropriate to declare, at this stage in the conduct of the action, that it is a catastrophic personal injury claim for the purposes of Item 17. 91 I will hear from counsel as to the form of the orders and costs.
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