MURRAY'S Transport NSW Pty Ltd v CGU Insurance Limited (No 2) - [2013] SASCFC 153

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
MURRAY'S TRANSPORT NSW PTY LTD v CGU INSURANCE LIMITED (No 2)
[2013] SASCFC 153
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Nicholson)
23 December 2013
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - DEMAND, OFFER AND CONSENT
The proceedings relate to a claim for damages following a motor vehicle accident involving a B-double truck owned by the plaintiff and appellant, Murray’s Transport NSW Pty Ltd, and a motor vehicle insured by the defendant and respondent, CGU Insurance Limited. On 9 January 2013, the Court allowed Murray’s Transport’s appeal from a decision of a District Court Judge. The Court ordered CGU Insurance to pay to Murray’s Transport 85 per cent of the damage to the B-double truck. The apportionment of 15 per cent followed a finding of contributory negligence on behalf of Murray’s Transport. The Court reserved its decision on interest and costs.
Whether Murray’s Transport was entitled to its costs of the trial and on the appeal on a solicitor-client basis. Where the parties had agreed the quantum of damages and pre-judgment interest. Where the judgment in Murray’s Transport’s favour following the appeal was in excess of the amount of an offer to settle made by Murray’s Transport shortly before trial. Where Murray’s Transport had failed to comply with rule 33 of the District Court Civil Rules 2006 (SA). Where CGU Insurance submitted that two trial dates had been vacated as a result of Murray’s Transport’s actions.
Held per Gray J (Kourakis CJ and Nicholson J agreeing):
(1) Judgment to be entered in favour of Murray’s Transport in the amount agreed.
(2) Murray’s Transport to recover pre-judgment interest in the amount agreed.
(3) Judgment to be entered on 16 October 2013 and post-judgment interest to run from that date.
(4) Murray’s Transport to recover 85 per cent of its costs of the District Court proceeding and of its costs of the appeal to be taxed on a party-party basis.
Supreme Court Act 1935 (SA) s 30C; District Court Civil Rules 2006 (SA) r 28, r 33 and r 188, referred to.

MURRAY'S TRANSPORT NSW PTY LTD v CGU INSURANCE LIMITED (No 2)
[2013] SASCFC 153
Full Court: Kourakis CJ, Gray and Nicholson JJ
KOURAKIS CJ. I agree with the reasons and orders of Gray J.
GRAY J.

On 9 October 2013, this Court allowed an appeal in the above proceeding from a decision of a District Court Judge following trial.[1] The Court reserved its decision on interest and costs. Pursuant to leave having been granted, both parties provided written submissions on those issues.
[1] Murray’s Transport NSW Pty Ltd v CGU Insurance Limited [2013] SASCFC 100.
The claim of the plaintiff and appellant, Murray’s Transport NSW Pty Ltd, related to a motor vehicle accident that occurred when a B-Double semi-trailer owned by the plaintiff collided with a Jaguar motor vehicle insured by the defendant and respondent, CGU Insurance Limited. The evidence established that at the time of the accident, the Jaguar motor vehicle was travelling on its wrong side of the road. Murray’s Transport’s claim was dismissed by the trial Judge, who was satisfied that the driver of the Jaguar motor vehicle had deliberately driven the vehicle into the path of the B-Double semi-trailer in order to commit suicide, thereby entitling CGU Insurance to the benefit of an exemption clause in the relevant policy of insurance. As a consequence, the Judge did not make orders in respect of apportionment, damages, interest and costs. On the appeal, Murray’s Transport succeeded in its claim. This Court held that CGU Insurance had failed to discharge its onus to prove that the driver of the Jaguar motor vehicle had acted intentionally in causing the collision. However, CGU Insurance was successful in obtaining an order of apportionment on the basis that the driver of the B-Double semi-trailer had been contributorily negligent. As a consequence, Murray’s Transport recovered 85 per cent of its damages to be assessed.
The parties in their written submissions have agreed that Murray’s Transport is entitled to recover damages in the amount of $126,823.68, representing 85 per cent of its loss of $149,204.34. In addition, the parties agreed that Murray’s Transport was entitled to recover pre-judgment interest calculated in accordance with section 30C of the Supreme Court Act 1935 (SA) until 16 October 2013 in the amount of $48,291.16.
Murray’s Transport submitted that orders should be made in its favour for the costs of the District Court proceedings and the appeal on a solicitor-client basis. The Court was informed that on 30 May 2012, shortly before trial, Murray’s Transport filed an offer to settle the action on the basis that CGU Insurance pay Murray’s Transport $125,000.00 inclusive of pre-judgment interest together with costs to be taxed or agreed. It was pointed out that the judgment in Murray’s Transport’s favour following the appeal was in excess of the amount of the offer. It was then argued that the pre-trial offer continued to have costs consequences for the appeal. In the submission of Murray’s Transport, there was no reason in logic or authority why the filed offer should not be given continuing effect on the appeal. It was said that Murray’s Transport was forced to proceed with an appeal to vindicate its original offer and that had CGU Insurance accepted the filed offer, there would have been no need to appeal. However, it was accepted that the Full Court retained its usual discretion with respect to costs.
CGU Insurance opposed an award of costs on a solicitor-client basis, either in relation to the trial or the appeal. It was submitted that an order should be made that CGU Insurance pay 85 per cent of the costs of Murray’s Transport for both the trial and the appeal on a party-party basis. It was contended by CGU Insurance that Murray’s Transport failed to serve a notice before the commencement of proceedings in accordance with rule 33 of the District Court Civil Rules 2006 (SA). Rule 33 requires a plaintiff in an action based on a monetary claim to, at least 21 days before commencing the action, give the defendant written notice accompanied by an offer to settle the claim on a basis set out in the notice, sufficient details of the claim to enable the defendant to assess the reasonableness of the plaintiff’s offer and any relevant expert reports. Rule 33(7) provides that in awarding costs of the action, the Court may take into account whether the parties have complied with their obligations under the rule.
CGU Insurance submitted that the object of rule 33 is to encourage and facilitate an early resolution of the dispute. Even if no resolution eventuates, compliance with rule 33 will facilitate an efficient processing of the claim by the Court through the early articulation and narrowing of issues. The failure of Murray’s Transport to comply with rule 33 meant that these objects were frustrated. It was pointed out that no basis had been advanced to excuse what was said to be a blatant breach of rule 33.
It was further submitted by CGU Insurance that offers to settle had been filed by both parties during 2011 but that it was not until 30 May 2012 that Murray’s Transport submitted the offer to settle on which it now relies. It was pointed out that this was an offer filed late in the proceedings following the failure to serve a rule 33 notice and the abandonment of two trial dates. It was pointed out that CGU Insurance had prepared the matter for trial on two occasions prior to the receipt of the 30 May 2012 offer.
The Court was informed that the first trial was vacated in November 2011 in the circumstance that Murray’s Transport wished to pursue and add a claim for uninsured losses. It was pointed out that this was a new claim and the costs of the vacated trial were awarded against Murray’s Transport in favour of CGU Insurance. The Court was further informed that the vacating of an April 2012 trial date was occasioned by the late discovery of a large quantity of documents by Murray’s Transport. The question of costs was reserved. It was contended that it would be grossly unfair for CGU Insurance to be visited with the costs associated with the abandonment of the trial dates.
Throughout the trial and the appeal, Murray’s Transport resisted any order for apportionment. As earlier mentioned, CGU Insurance ultimately succeeded on this issue and an order of 15 per cent contribution has been made.
With respect to the costs of the appeal it was pointed out by CGU Insurance that the offer made in the District Court proceedings in May 2012 was incapable of acceptance after the trial. Further, rule 188 of the District Court Civil Rules applies only to the costs of an “action”. Action is defined in rule 28 of the District Court Civil Rules as a proceeding in the District Court and not an appellate proceeding. It was therefore submitted that rule 188 could have no application to the costs of the appeal. It was argued that the rules provided that the offer must be accepted seven days before trial and that this therefore could not occur after judgment. I accept the submission of CGU Insurance that there is no basis to consider the appeal costs on other than a party-party basis.
The trial Judge may have been in a better position than this Court to address the question of the costs of the trial. However, both parties requested that this Court resolve the question of costs. It is difficult to perceive any basis on which CGU Insurance should be held responsible for the costs of the two vacated trial dates. On the question of liability CGU Insurance was entitled to argue for the allowance of some costs because of the ultimate finding on apportionment.
This Court has a broad and unfettered discretion on the question of costs. I would exercise that discretion having regard to the foregoing on the basis that Murray’s Transport recover 85 per cent of its costs of the trial and of the appeal on a party-party basis.
Accordingly, I would make the following orders:
-       That judgment be entered in favour of Murray’s Transport in the amount of $126,823.68 being 85 per cent of its agreed losses.
-       That Murray’s Transport recover interest on the judgment sum in the amount of $48,291.16.
-       That judgment be entered on 16 October 2013 and that post-judgment interest run from that date.
-       That Murray’s Transport recover 85 per cent of its costs of the District Court proceeding and of its costs of the appeal to be taxed on a party-party basis.
NICHOLSON J: I agree with Gray J.