Munzer v State of SA (No 2) - [2015] SADC 82

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
MUNZER v STATE OF SA (NO 2)
[2015] SADC 82
Judgment of His Honour Judge Gilchrist
2 June 2015
PROCEDURE - COSTS
Orders sought by the plaintiff that the defendant pays his costs for the whole of the action on solicitor/client basis; and certification that the trial was fit for senior and junior counsel.
Dust Diseases Act 2005 s 9; CIVIL LIABILITY ACT 1936 s 33; DISTRICT COURT RULES r 187, 188(6)(b), referred to.
Munzer v State of SA [2015] SADC 18; Shaw v Jarldorn (1999) 76 SASR 28; Geyer v Resi Corporation (No 2) [2014] SADC 64; Stanley v Phillips [1996] HCA 24, considered.

MUNZER v STATE OF SA (NO 2)
[2015] SADC 82

This is an application for costs following judgment for the plaintiff on 26 February 2015 [2015] SADC 18 in the amount of $95,000.
The plaintiff seeks an order that he recover from the defendant costs on a solicitor/client basis and that the matter be certified fit for senior and junior counsel.
The defendant contends that the appropriate order is for costs in favour of the plaintiff on a party/party basis and that the matter be certified fit for senior counsel only. It contends that the engagement of two counsel was an extravagance that the defendant should not have to pay for.
The claim for costs
The plaintiff’s claim for solicitor/client costs is based upon Rule 188(6)(b) of the District Court Rules. For present purposes the rule provides that if a formal offer of settlement is made by a plaintiff and is not accepted by the defendant and the Court determines the claim on terms that are more favourable to the plaintiff, subject to the Court’s overriding discretion, the plaintiff is entitled to recover from the defendant the costs of the action on a solicitor/client basis.
In order to deal with the plaintiff’s claim for solicitor/client costs it is necessary to set out the various offers and counter offers that were made in the course of this litigation.
The plaintiff made his initial claim by letter dated 19 November 2008 in which he offered to settle his claim for $110,000, all-inclusive, on a provisional damages basis.
By letter dated 30 January 2009 the Crown Solicitor, on behalf of the defendant, rejected the offer and denied liability.
By letter dated 15 December 2009 the plaintiff provided a formulated claim in the sum of $135,000 plus costs and disbursements on a provisional damages basis. That offer was withdrawn by letter dated 9 March 2009.
The matter was listed for a settlement conference in this Court on 22 October 2010. By e-mail dated 19 October 2010 the Crown Solicitor advised that it did not propose making any offers at the conference.
By letter dated 13 April 2011 the plaintiff provided a formulated claim in the sum of $190,000 plus costs and disbursements on a provisional damages basis.
By letter dated 18 January 2012 the Crown Solicitor advised that the defendant would settle the plaintiff’s claim on the basis that each party would bear their own costs.
On 16 February 2013 the plaintiff filed an offer of settlement pursuant to Rule 187 of the District Court Rules in the sum of $50,000 plus costs and disbursements on a provisional damages basis.
By letter date 12 April 2013 Crown Solicitor advised that the defendant would settle the plaintiff’s claim on the basis that it would pay $20,000 all‑inclusive. This offer was increased to $30,000 all-inclusive by letter dated 23 July 2014.
On 11 August 2014 the trial commenced and over the next three days the plaintiff gave his evidence. The trial was then adjourned until 1 December 2014 at which time the plaintiff called Dr Phillips, psychiatrist and the defendant called Dr Begg, psychiatrist.
On the following day the Crown Solicitor advised that the defendant would settle the plaintiff’s claim on the basis that it would pay $30,000 plus costs and disbursements.
On the face of it, the plaintiff has established the right to recover costs on a solicitor/client basis. He was awarded more than his filed offer of $50,000 plus costs and disbursements. The defendant resists the order on the basis of a late amendment to the plaintiff’s Statement of Claim, following psychiatric evidence.
On 2 December 2014 I granted the plaintiff leave to file an amended Statement of Claim. In connection with the plaintiff’s alleged exposure to asbestos and its consequences, the earlier versions referred to “bilateral asbestos related pleural plaques with calcification, and dysthymic disorder”. The later version added “asbestos pleural fibrosis”, “persistent depressive disorder”, “chronic pain disorder” and “somatic symptom disorder with chronic pain”.
The defendant contends that had the Statement of Claim been in this form when the plaintiff’s offer was made it is possible that the defendant might have accepted the plaintiff’s offer. It contends that this is sufficient to enliven the discretion not to award solicitor/client costs.
The plaintiff submitted that there is no factual basis that would enable that inference to be drawn.
He said that the amendments did not materially change the nature of the plaintiff’s case and that from the outset of the hearing, as evidenced by the opening, the defendant could have been under no illusion that the plaintiff was contending that his case was based on a complex amalgam of both physical pathology and psychopathology.
He said that when regard is had to the defendant’s offers, before and after the amendment was made, it is plain that the amendment would not have altered the defendant’s thinking in respect of increasing its offer to the amount sought by him.
The authorities make it clear that where there has been a significant change in the manner in which the plaintiff’s case is presented at the trial, or the manner in which the evidence emerges at the trial, a defendant can be relieved of the sanction that Rule 188(6)(b) effectively imposes.
But it has to be a very significant change. In Shaw v Jarldorn (1999) 76 SASR 28 at 34, Perry J spoke of it in terms of a change of such a nature “that it might fairly be said that the full dimensions of the plaintiff’s entitlement could not possibly have been foreseen before the hearing commenced.”
In Geyer v RESI Corporation (No 2) [2014] SADC 64 Judge Jennings found that there had been a late change in the opinion of one of the plaintiff’s key witnesses that had sufficient importance to relieve the defendant of the obligation to pay costs on a solicitor/client basis. In that case it was a significant change.
In this case the oral evidence of the psychiatrists was broadly consistent with the opinions expressed in their written reports. Any change could not be described as one that was of such significance that without knowing it, the defendant could not possibly have foreseen the full dimensions of the plaintiff’s entitlement.
As for the amendment to the Statement of Claim, in my view, it was more cosmetic than real. I agree with the plaintiff’s submission that it did not materially change the nature of the plaintiff’s case as indicated in the plaintiff’s opening. There is no reason to think that if the amendment were made any earlier that it would have affected the defendant’s view that the plaintiff would recover less than the amount of his offer.
In my view there are no grounds justifying a departure from the expected operation of the rule where a plaintiff beats his or her filed offer.
The plaintiff is entitled to recover costs on a solicitor/client basis.
I now turn to the second issue.
Fit for senior and junior counsel?
The plaintiff’s claim for certification regarding counsel is based upon the general jurisdiction of the court as to costs.
The principles guiding the determination of this issue were discussed by Barwick CJ in Stanley v Phillips [1966] HCA 24 at para 17; (1966) 115 CLR 470 at 479-80. After noting that the issue is whether the services of more than one counsel are reasonably necessary for the adequate presentation of the case he said:
But it seems to me to be unprofitable to attempt any exhaustive examination of what features of a case will justify the opinion that more than one counsel are required to conduct it if justice is to be done. The important matter is to recognize that the question is not whether one member of the Bar will present the case better than another. The question for the taxing master is whether the case by reason of any of its features, the volume of material to be handled, the number or character of the witnesses to be examined, the nature or extent of the cross-examination required, the anticipated length of the case, the complexity of its issues of fact or of law, the extent of the preparatory research of fact or of law to be undertaken, the involvement of charges of fraud, or other serious imputations of personal reputation or integrity, the complexity of the required presentation and so on, make it reasonably necessary or proper that the services of two counsel be engaged in order that the court may do justice between the parties.
With these matters in mind I now turn to consider this case.
It was a complicated factual case. It proceeded over seven sitting days. The plaintiff gave his evidence over three days over which his credibility was under significant attack. The medical evidence comprised of oral evidence and reports from psychiatrists, a thoracic and sleep disorders physician, a chest physician, and an Associate Professor in Respiratory Medicine as well as various medical records. It involved the marshalling of a great deal of written material. It involved a novel medical proposition, namely whether pleural plaques can cause pain.
It was a complicated legal case. It involved a consideration as to the applicable law concerning the application for an extension of time; whether any psychologically caused injury was subject to the law as prescribed by the Civil Liability Act in its current form; whether the plaintiff’s continued smoking provided a basis to reduce his entitlement to damages by reason of contributory negligence; and whether the nature of the plaintiff’s injuries comprised of a dust disease for the purposes of the Dust Diseases Act 2005 in connection with the issue of exemplary damages.
Upon reflection I think it can be said that it was reasonably necessary and proper for the plaintiff to engage the services of two counsel to prosecute his case. I certify the matter fit for senior and junior counsel.