Oliver v Roberts (No 2)
[2018] ACTCA 44
•9 October 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Oliver v Roberts (No 2) |
Citation: | [2018] ACTCA 44 |
Hearing Date(s): | 7 August 2018 |
DecisionDate: | 9 October 2018 |
Before: | Murrell CJ, Loukas-Karlsson and Charlesworth JJ |
Decision: | The respondent is to pay the appellant’s costs at first instance on a solicitor/client basis for the whole of the proceedings. The respondent is to pay the appellant’s costs of the appeal on a party/party basis. |
Catchwords: | PRACTICE AND PROCEDURE – COSTS – Where plaintiff made offer of compromise – Where offer not accepted and judgment on appeal no less favourable to plaintiff – Rule 1010 Court Procedures Rules 2006 (ACT) – Whether the plaintiff’s claim changed significantly after offer was made – Whether there are exceptional circumstances PRACTICE AND PROCEDURE – COSTS – Costs of appeal – Whether the appellant enjoyed only a limited success on appeal – Whether costs should follow the event |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 1002, 1010 |
Cases Cited: | Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 Forge v Rewers (No 2) [2017] ACTSC 273 Oliver v Roberts [2018] ACTCA 35 |
Parties: | Andrew Robert Oliver (Appellant) Caroline Roberts (Respondent) |
Representation: | Counsel Dr A Morrisson SC and Mr I Bradfield (Appellant) Mr K Rewell SC and Mr D Crowe (Respondent) |
| Solicitors MTM Legal (Appellant) Moray and Agnew (Respondent) | |
File Number(s): | ACTCA 66 of 2017 |
Decision under appeal: | Court/Tribunal: Supreme Court of the ACT Before: Walmsley AJ Date of Decision: 12 December 2017 Case Title: Oliver v Roberts Citation: [2017] ACTSC 360 Court File Number(s): SCC 439 of 2013 |
THE COURT
The Appeal
In Oliver v Roberts [2017] ACTSC 360, the primary judge awarded damages of $1,084,575 to the appellant, who had suffered a traumatic brain injury in a motor vehicle accident. The damages included a buffer of $200,000 for future economic loss.
On appeal (Oliver v Roberts [2018] ACTCA 35), we increased the buffer to $450,000 and increased the associated damages for superannuation loss. The overall award for damages was increased to $1,369,575.
Submissions on costs
Relying on r 1010 of the Court Procedures Rules 2006 (ACT) (“CPR”), the appellant claimed his costs of the trial proceedings on a solicitor/client basis. On 27 May 2016, the appellant had offered to settle the proceedings for $1.2M plus costs by an offer of compromise that complied with r 1002 of the CPR.
The respondent opposed the proposed costs order and submitted that, after the offer of compromise, the appellant’s claim had changed significantly but the offer had not been renewed. In relation to the change of circumstances, the respondent submitted:
(a)The offer of compromise had been made soon after the appellant had commenced working at Questacon and prior to the appellant serving expert reports opining that there was a risk of future unemployment.
(b)Due to the late service of expert reports and of a proposed amended statement of claim that increased the claim for damages (including damages for future economic loss), the original trial date of 18 July 2016 had been vacated.
(c)Thereafter, the appellant had made offers of settlement of not less than $2 million.
In relation to the costs of the appeal, the respondent submitted that, as the appellant had enjoyed limited success on the appeal (he was successful in relation to the assessment of future economic loss but unsuccessful in relation to the assessment of future commercial care, including case management), he should receive only 50% of his costs of the appeal.
Costs of the trial
Rule 1010 of the CPR provides:
1010Offer not accepted and judgment no less favourable to plaintiff
(1)This rule applies if an offer is made by the plaintiff in relation to a claim, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer.
(2)Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in relation to the claim—
(a)if the claim is a personal injury claim—assessed on a solicitor and client basis for the whole of the proceeding
…
Consequently, the default position is that the appellant is entitled to his costs of the trial on a solicitor/client basis.
In Forge v Rewers (No 2) [2017] ACTSC 273 (Forge) at [28], Mossop J referred to the decision in Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [45]–[47], where the NSW Court of Appeal discussed whether, under the NSW rules, it was necessary to show “exceptional circumstances” in order to justify departure from a default position. Referring to the position in NSW and South Australia, Mossop J observed at [29] in Forge:
The use of an expression such as “exceptional circumstances” is thus not to be treated as an impermissible gloss on the language but rather a practical explanation of the predicament facing the offeree in the light of the obvious purpose of the Rules to encourage settlement of the proceedings and their structure insofar as they provided default position which cannot be ignored when exercising that discretion.
At [30], his Honour concluded that those remarks applied to the operation of r 1010.
Similarly, in Geddes v Taleni (No 2) [2017] ACTSC 215 at [12], Elkaim J found that:
The ability of the court to order ‘otherwise’ when considering a Rules offer should only be used in exceptional circumstances. I do not consider that a verdict sum that exceeds the offer by only a small amount, be it 2.1% or even .5%, is an exceptional circumstance. Rule 1010 refers to the result being “no less favourable” than the offer …
In this case, should the Court of Appeal order “otherwise”?
10. There are no exceptional or other circumstances justifying a departure from the r 1010 default order. From the outset, the appellant claimed that a traumatic brain injury had caused significant ongoing disabilities. As an insurer, the respondent was well equipped to obtain its own expert advice and form an opinion about the merits of the appellant’s claim. It would appear that events in late 2016 (upon which the respondent now relies to justify its decision to reject the appellant’s May 2016 offer) have assumed importance only recently; before and after those changes (in May 2016 and January 2017), the respondent made the same “Calderbank offer” of $900,000 plus costs.
11. Any personal injury litigation is a dynamic process in which perceived merits and capacity to predict outcome may fluctuate many times before the litigation concludes. In assessing costs, a court should embark with reluctance upon the retrospective determination of whether, at a particular stage, a party took a reasonable approach to an offer of compromise. In any event, the capacity to reasonably assess outcome is only one factor informing whether it is prudent for a party to make or accept a particular offer; other considerations include the desire for finality and risk minimisation, the avoidance of stress associated with a hearing, the likely legal costs and any possible cost to reputation. Some of those considerations may be less compelling to insurers than to other litigants. As Mossop J said in Forge at [24]:
The Rules reflect the fact that in most personal injury litigation there is an insurer involved and hence the potential for a significant disparity between the incentives on a party to settle proceedings, or, more accurately, disincentives to not settling proceedings. These differences are reflected in the disparity between the costs consequences flowing from a failure to accept an offer of compromise in relation to personal injury proceedings …
12. The r 1010 default position should apply to costs in this case.
Costs of Appeal
13. On the appeal, the appellant succeeded on the arguments to which most time and attention were devoted: those concerning the assessment of future economic loss. In relation to the assessment of damages for future case management, we found that the primary judge had failed to give adequate reasons. Nevertheless, we concluded that the primary judge had awarded the appropriate amount. Relatively little time was devoted to other issues.
14. The circumstances of the present case are not analogous to those in Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8. In that case, the Court of Appeal made no order as to the costs of the appeal because the appellant had failed on four of five grounds and, taken together, those grounds had dominated the submissions.
15. We would not characterise this appeal as one in which the appellant enjoyed only a limited success or failed on most arguments; he succeeded on his central submissions about future economic loss and we increased his damages by 26%. There is no reason to depart from the ordinary rule that costs follow the event and be paid on a party/party basis.
Costs Orders
16. The respondent is to pay the appellant’s costs at first instance on a solicitor/client basis for the whole of the proceedings.
17. The respondent is to pay the appellant’s costs of the appeal on a party/party basis.
| I certify that the preceding seventeen [17] numbered paragraphs are a true copy of the Reasons for Judgment of their Honour Chief Justice Murrell, Justices Loukas-Karlsson and Charlesworth. Associate: Date: |
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