Ning v McGrath (No 2)

[2015] ACTSC 213

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Ning v McGrath (No 2)

Citation:

[2015] ACTSC 213

Hearing Date:

20 July 2015

DecisionDate:

20 July 2015

Before:

Murrell CJ

Decision:

See [14].

Category:

Costs

Catchwords:

APPEAL – Costs – Calderbank offer – rejection – whether rejection unreasonable

Legislation Cited:

Court Procedures Rules 2006 (ACT) rr 1721(1), 1751

Cases Cited:

Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435

Ning v McGrath [2015] ACTSC 163
Oshlack v Richmond River Council (1998) 193 CLR 72
Pires v DibbsBarker Canberra Pty Limited [2014] ACTSC 283

Quirk v Bawden (1992) 112 ACTR 1

Parties:

Stephen Ning (Appellant)

Aaron James McGrath (Respondent)

Representation:

Counsel

Ms V Wilkinson (Appellant)

Mr R Coen (Respondent)

Solicitors

Sparke Helmore Lawyers (Appellant)

Maurice Blackburn Lawyers (Respondent)

File Number:

SCA 77 of 2014

Decision under appeal: 

Court:  ACT Magistrates Court

Before:  Magistrate Dingwall

Date of Decision:         19 August 2014

Case Title:  McGrath v Ning

Court File Number:       CS 997 of 2012

MURRELL CJ:

Background

1. These personal injury proceedings came before the Magistrates Court in 2013. On 19 August 2014, the Magistrate gave judgment for the respondent in the sum of $193,150.45, finding that the appellant/defendant should bear all responsibility for the accident.

1. The appellant appealed against the findings on primary liability and contributory negligence. There was no appeal against the assessment of damages.

1. On 2 July 2015 I decided to allow the appeal and apportion to the respondent/plaintiff one third of the responsibility for the accident: Ning v McGrath [2015] ACTSC 163. I allowed the parties to make submissions in relation to the costs.

1. The appellant seeks an order for party/party costs up to and including 1 December 2014 and thereafter on an indemnity costs. On 31 October 2014, the appellant made a Calderbank offer to settle the proceedings on the basis of a 29.5% reduction for contributory negligence. The offer was open until 1 December 2014.  It was not accepted by the respondent.

Determination of Costs

1. Any award of costs is discretionary: r 1721(1) of the Court Procedures Rules 2006 (ACT) (CPR). Prima facie, an unsuccessful party will be ordered to pay the costs of the successful party on a party/party basis: Oshlack v Richmond River Council (1998) 193 CLR 72 at 86; Pires v DibbsBarker Canberra Pty Limited [2014] ACTSC 283 at [92]; r 1751 of the CPR.

1. Generally speaking, where a party has made a Calderbank offer that has been unreasonably rejected, that party may expect to recover indemnity costs: Quirk v Bawden (1992) 112 ACTR 1 at. 5. A number of considerations arise when considering whether an offer has been unreasonably rejected: Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [25]. The Court retains its discretion in relation to costs even where an offer has been unreasonably rejected.

Consideration

1. The offer was made at a time when the parties were well aware of all the facts; the matter had proceeded to a hearing in the Magistrates Court. They were also well aware of the amount of damages awarded by the Magistrates Court and knew that there was no appeal against the assessment of damages. When deciding whether to accept or reject the offer, the only real question was the appropriate percentage reduction for contributory negligence.

1. The difference between a reduction of 29.5% for contributory negligence (the offer that was made) and a one-third reduction (the amount that I ordered on 2 July 2015) is significant. The respondent considered that a 25% reduction would have been reasonable; they made a Calderbank offer in that sum.

1. The respondent submitted that it was reasonable to reject the offer based on the outcome in two comparable cases. In one case, a reduction of 15% was made for the contributory negligence of a motor cycle rider. In another, there was a 30% reduction. While two cases do not determine a reasonable range of reductions, the offer of 29.5% fell within the range that the respondent now asserts was reasonable.

1. To some extent, the outcome of all litigation is uncertain. Parties must make choices based upon the offer that is made, the stage of the proceedings and the information available to them. In this case there was abundant information available to both parties at the time when the Calderbank offer was considered (see [7] above). The outcome was significantly more favourable than the offer that was made. I find that the respondent unreasonably rejected the offer.

1. The respondent should pay the appellant’s costs on an indemnity basis.

1. I directed the parties to prepare short minutes of order to give effect to my reasons for judgment of 2 July 2015. I will make orders in accordance with those short minutes.

Orders

1. I make the following orders:

(a)The appeal is allowed.

(b)The judgment of the Magistrates Court dated 19 August 2014 in favour of the respondent in the sum of $193,150.45 is set aside.

(c)In lieu thereof, judgment is entered for the respondent in the sum of $128,766.95, to take account of the respondent’s contributory negligence

(d)The appellant is to pay the respondent interest on the sum of $29,167.74 at a rate of 7.5% per annum from 4 September 2014 to 20 July 2015, a total of $1,917.88.

(e)The orders of the Magistrate of 3 September 2014 in relation to costs are set aside.

(f)The appellant is to pay the respondent’s costs of the Magistrates Court hearing on a party/party basis to 3 September 2014

(g)The respondent is to pay the appellant’s costs of the appeal up to and including 1 December 2014 on a party/party basis and thereafter on an indemnity basis.

I certify that the preceding thirteen [13] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell.

Associate:

Date: 3 August 2015