Perry v Pese (No 2)
[2018] ACTSC 232
•24 August 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Perry v Pese (No 2) | |
Citation: | [2018] ACTSC 232 | |
Hearing Date: | On the papers | |
DecisionDate: | 24 August 2018 | |
Before: | Elkaim J | |
Decision: | See [20] | |
Catchwords: | TORTS – NEGLIGENCE – Costs – Offer of compromise – Jurisdiction of Magistrates Court | |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 1010, 1725, 1725(1)(c) and 1725(2)(d) Road Transport (Third-Party Insurance) Act 2008 (ACT) s 156A | |
Cases Cited: | Gray v Richards (No 2) [2014] HCA 47 | |
Parties: | Matthew Perry (Plaintiff) Pupi Pese (First Defendant) Insurance Australia Limited trading as NRMA Insurance (ABN 11 000 016 722) (Second Defendant) | |
Representation: | Counsel Mr A Muller (Plaintiff) Mr D Crowe (First and Second Defendant) | |
| Solicitors United Legal (Plaintiff) Hall & Wilcox (First and Second Defendant) | ||
File Number: | SC 67 of 2018 | |
ELKAIM J:
On 1 August 2018, I gave a judgment in this matter in which I awarded damages to the plaintiff in the sum of $157,884. I ordered the defendants to pay the plaintiff’s costs of the proceedings but gave leave to the parties to make submissions on an alternate costs order.
The parties took up the invitation and have each made written submissions.
It is evident from the submissions that the parties engaged in negotiations prior to the hearing. The following offers are relevant:
(a)The plaintiff made a mandatory final offer of $125,000 on 18 January 2018.
(b)On the same day, the defendant made a mandatory final offer of $50,000.
(c)On 31 May 2018, the plaintiff made an Offer of Compromise of $75,000.
A mandatory final offer is an offer made for the purposes of the Road Transport (Third-Party Insurance) Act 2008 (ACT) (‘road transport legislation’).
The first observation to be made about the history of offers is that all of the offers were for a figure below the judgment sum. Normally, and pursuant to r 1010 of the Court Procedures Rules 2006 (ACT), where a plaintiff has done better than his or her Offer of Compromise, the plaintiff would be entitled to costs on a solicitor and client basis for the whole of the proceedings.
However, under 1725(2)(d) the plaintiff is, without more, only entitled to 75% of his or her costs and disbursements that would have been recovered had the judgment exceeded $250,000. This result is triggered by the judgment sum being below $175,000 (r 1725(1)(c)).
Section 156A of the road transport legislation, as well as rr 1010 and 1725, allow for a discretion to make an order different to that contemplated by their normal respective effects. This discretion should be exercised to achieve a just result:
The disposition which is ultimately to be made in any case where there are competing considerations will reflect a broad evaluative judgment of what justice requires. (Gray v Richards (No 2) [2014] HCA 47)
The defendants, in their written submissions, have suggested that, allowing for the competing considerations, a fair result would be to order that the defendants pay the plaintiff’s costs “assessed at 75% of the costs and disbursements the Plaintiff would have been entitled to recover on a solicitor and client basis for the whole of the proceeding”.
The plaintiff submitted that he should receive his costs on a solicitor and client basis for the whole of the proceeding.
In addition to the written submissions I was also provided with an affidavit from the plaintiff’s solicitor, Mr Noman Farooq.
I note the defendants have not objected to the affidavit other than submitting that Annexure ‘F’ is not relevant. This annexure is a letter from the plaintiff’s solicitor to the defendants’ solicitor. I allow it to remain, but view it as of little weight. I further note the assertion that r 1725 “is of no consequence” because it “only relates to party/party costs” is not shared by the plaintiff’s counsel in his written submissions.
In his affidavit, which was sworn on 20 August 2018, Mr Farooq seeks an order that the plaintiff’s disbursements in the sum of $34,574.43 be paid immediately. The reason given for this order is that it will take a number of months before costs will be assessed and “given he has cancer” the plaintiff should not have to wait for the funds.
In the course of his evidence during the substantive hearing, the plaintiff recited his history of cancer. In answer to a question from me, his counsel said the plaintiff was now in remission (T 2.21). More importantly, the plaintiff’s submissions on damages extended to claims that he be compensated, for example for future care, for the rest of his life expectancy of 37 years. This life expectancy took no account of any reduction for cancer, nor was there any evidence to suggest the plaintiff was suffering from any return of cancer.
If the basis for the immediate payment of disbursements is because the plaintiff now has cancer and has a much shortened life expectancy, then that was not the way in which the case was run on his behalf. It is of course possible that the plaintiff’s cancer has returned, or been diagnosed, since the hearing. However, that is not stated in the affidavit. On the basis of the history of the matter, and the absence of up to date medical evidence concerning cancer, I decline to make the order sought by the plaintiff’s solicitor.
Returning to the general costs order, there is plainly a tension between rr 1010 and 1725 in circumstances such as the present. The plaintiff should be entitled to the benefit of having made an Offer of Compromise below the verdict amount. Had the offer been accepted there would have been no need for a trial and significant costs would have been saved.
On the other hand, this is a case that could appropriately have been run in the Magistrates Court. Liability was admitted so no considerations of the verdict requiring compromise, for example for the possibility of a judgment for the defendants or an assessment of contributory negligence, were relevant. Further, the parties’ offers and the final verdict sum are all well under the jurisdiction in the Magistrates Court of $250,000.
I do not see the road transport legislation as being relevant to the present argument.
I think the proposal put forward by the defendants best meets a just resolution of the competing interests outlined above. The plaintiff will suffer the consequences of not commencing his case in the Magistrates Court, when it was eminently suitable for that court, but will receive the costs that flow from my order on a solicitor and client basis.
In relation to the costs of this argument, I think each party should pay its own costs.
I make the following orders:
(i)Order (ii), concerning costs, made on 1 August 2018 is vacated.
(ii)In lieu of the above costs order, and subject to Order (iii), the defendants are ordered to pay 75% of the costs and disbursements the plaintiff would have been entitled to recover on a solicitor and client basis for the whole of the proceeding.
(iii)Each party is to pay its own costs in respect of the argument on costs.
| I certify that the preceding twenty [20] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim. Associate: Date: |
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