Setton v Eves
[2006] WASCA 3
•20 JANUARY 2006
SETTON -v- EVES [2006] WASCA 3
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASCA 3 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | FUL:41/2004 | 6 OCTOBER 2005 | |
| Coram: | STEYTLER P MCLURE JA SIMMONDS AJA | 20/01/06 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Cross-Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | GABRIELLA SETTON SALLY ANN EVES |
Catchwords: | Torts Damages for personal injury Appeal Diminution of past and future earning capacity Assessment of retained earning capacity Whether proper approach used to discount for retained or residual earning capacity in determination of award for diminution of past and future earning capacity Whether proper approach used to discount for contingencies in determination of award for diminution of future earning capacity Whether proper approach used to determine past and future loss of superannuation contributions Interest on diminution of past earning capacity Practice and procedure Costs Cross-Appeal Order 24A offer of compromise Whether grounds to depart form general rule as to costs |
Legislation: | Motor Vehicle (Third Party Insurance) Act 1943 (WA), s 3C |
Case References: | Bowen v Tutte (1990) A Tort Rep 81-043 Cullen v Trappell (1980) 54 ALJR 295 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 Medlin v State Government Insurance Commission (1995) 182 CLR 1 State of New South Wales v Moss (2000) 54 NSWLR 536 Thomas v O'Shea (1989) A Tort Rep 80-251 Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 Abbott v Pacific Industrial Co, unreported; FCt SCt of WA; Library No 970079; 4 March 1997 Black v Motor Vehicle Insurance Trust [1986] WAR 32 De Sales v Ingrilli (2000) 23 WAR 417 Kschammer v R W Piper & Sons Pty Ltd [2003] WASCA 298 State Government Insurance Commission v Toomath (1996) MVR 319 Wade v Allsopp (1976) 50 ALJR 643 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : SETTON -v- EVES [2006] WASCA 3 CORAM : STEYTLER P
- MCLURE JA
SIMMONDS AJA
- Appellant (Plaintiff)
AND
SALLY ANN EVES
Respondent (Defendant)
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : COMMISSIONER GILES
Citation : SETTON v EVES [2003] WADC 176
File No : CIV 148 of 2002
Catchwords:
Torts - Damages for personal injury - Appeal - Diminution of past and future earning capacity - Assessment of retained earning capacity - Whether proper approach used to discount for retained or residual earning capacity in
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determination of award for diminution of past and future earning capacity - Whether proper approach used to discount for contingencies in determination of award for diminution of future earning capacity - Whether proper approach used to determine past and future loss of superannuation contributions - Interest on diminution of past earning capacity
Practice and procedure - Costs - Cross-Appeal - Order 24A offer of compromise - Whether grounds to depart form general rule as to costs
Legislation:
Motor Vehicle (Third Party Insurance) Act 1943 (WA), s 3C
Result:
Appeal allowed
Cross-Appeal dismissed
Category: B
Representation:
Counsel:
Appellant (Plaintiff) : Mr D R Clyne
Respondent (Defendant) : Mr D R Sands
Solicitors:
Appellant (Plaintiff) : Simon Walters
Respondent (Defendant) : Talbot & Olivier
Case(s) referred to in judgment(s):
Bowen v Tutte (1990) A Tort Rep 81-043
Cullen v Trappell (1980) 54 ALJR 295
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Medlin v State Government Insurance Commission (1995) 182 CLR 1
State of New South Wales v Moss (2000) 54 NSWLR 536
Thomas v O'Shea (1989) A Tort Rep 80-251
Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485
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Case(s) also cited:
Abbott v Pacific Industrial Co, unreported; FCt SCt of WA; Library No 970079; 4 March 1997
Black v Motor Vehicle Insurance Trust [1986] WAR 32
De Sales v Ingrilli (2000) 23 WAR 417
Kschammer v R W Piper & Sons Pty Ltd [2003] WASCA 298
State Government Insurance Commission v Toomath (1996) MVR 319
Wade v Allsopp (1976) 50 ALJR 643
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1 STEYTLER P: I have read the judgment of McLure JA. I agree with it. For the reasons which she has given I would allow the appeal, set aside the orders made by the Commissioner, award, in lieu, damages in the sum of $165,932 and dismiss the cross-appeal.
2 MCLURE JA: The appellant appeals from an assessment of damages made by Commissioner Giles in respect of personal injuries suffered by the appellant in a motor vehicle accident on 1 August 1999. Liability was admitted. The appellant challenges the awards for past and future loss of earning capacity.
3 The matter is complicated by lengthy delays between the trial, the delivery of reasons and the entry of judgment. The trial took place on 13, 14 and 15 November 2002. The Commissioner handed down her reasons on 11 August 2003. The reasons disclosed that the Commissioner had assessed damages in the sum of $180,000 less an amount advanced to the appellant against her likely award for past economic loss. The Commissioner notes that the parties were in dispute as to the amount paid. Save for a costs order, judgment was not otherwise entered on 11 August 2003 because of the uncertainty as to the amount of the prior advance.
4 After the parties had considered the reasons, the appellant contended and the Commissioner accepted that she had made a number of errors. They included a failure to deduct the threshold amount under s 3C of the Motor Vehicle (Third Party Insurance) Act 1943 (WA) and a failure to determine past economic loss to the date of judgment with the consequence that the wrong multiplier for future economic loss was used.
5 Following a number of appearances before the Commissioner concerning these matters, the Commissioner on 25 March 2004 ordered that the respondent pay to the appellant damages in the sum of $154,577.68. The judgment sum was based on calculations agreed by the parties as either reflecting or being consistent with the Commissioner's reasons as clarified by the Commissioner. I will come to those calculations in due course.
6 In addition, the Commissioner in effect vacated the costs order made on 11 August 2003 and ordered that the respondent pay the appellant's costs to be taxed up to 10 July 2002 and thereafter the appellant pay 50% of the respondent's costs to be taxed.
7 The appellant contends that the Commissioner erred in making a deduction for retained earning capacity from the award for past loss of
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- earning capacity and that the award for future loss of earning capacity is too low. In the event it is successful on either or both of those grounds, she seeks adjustments to the award of interest on past loss of earning capacity and to past and future loss of superannuation contributions. The respondent cross-appeals against the costs order.
8 At the commencement of the hearing of the appeal, the appellant unsuccessfully sought leave to amend her grounds of appeal to claim that the award for pain and suffering was outside a sound discretionary range. The respondent opposed the application on the ground that not all relevant material was in the appeal book. The appellant accepted that to be the case and, it appears, had made no attempt at any stage to identify to the respondent what it regarded as the relevant material. It is fundamental to the fair and proper administration of justice that the Court and the opposing party have all the material that is relevant to the determination of an appeal. The application to amend without such material was misconceived and bound to fail.
Background and findings
9 The appellant was aged 30 at the time of the accident in August 1999. She was a trained chef and was living in Broome. The appellant's accident-caused injuries included a fracture to her left leg, extensive soft tissue injuries to both lower limbs and soft tissue injuries to her cervical and lumbar spine. She spent nine days in Broome Hospital after the accident.
10 The Commissioner found that the appellant had a permanent leg injury that prevented her from standing for lengthy periods which in turn prevented her from working either full-time or part-time in her chosen trade as a chef. The Commissioner accepted the appellant's evidence that part-time work as a chef involved eight-hour shifts.
11 The Commissioner also found that the appellant had retained capacity to work as a full-time caterer, child-care worker, teachers' aide and probably a clerk. These findings are not challenged.
12 The appellant commenced work again in early 2000. She worked as a relief cook at an Aboriginal child-care centre in Broome for three weeks from 8 January to 1 February 2000. It appears from her evidence that she worked four hours a day (T30). The appellant was unsuccessful in an application for permanent appointment to the position.
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13 In March 2000 the appellant had an operation to fuse a joint in her left foot and was in a cast for about 10 weeks following the procedure.
14 Some time later, the appellant obtained work at a crèche at the Broome swimming pool. The Commissioner was unclear as to when she commenced at the crèche but thought it was around mid-2000. She worked two hours a day for three or four days each week. Apart from a six-week break around April 2001 connected with the birth of her first child, the appellant continued to work at the pool crèche until August 2002.
15 In August 2002 the appellant and her partner relocated to Yallingup in the Southwest of the State. At the time of the trial in November 2002, the appellant had not worked since returning to Yallingup.
Past loss of earning capacity
16 As a result of the accident, the appellant was unable to take up a position as a cook at a pearl farm north of Broome for which there would be extensive overtime not otherwise available to a chef. The trial Judge concluded that the appellant would have remained at the pearl farm for two years before moving to another job as a chef. It also appears the Commissioner accepted that, but for the accident, the appellant would have had children later in life. Accordingly, the consequences of child bearing and raising were factored into the calculation of the appellant's future earning capacity. No challenge is made to this approach. The Commissioner's calculations of the appellant's past loss of earning capacity are as follows:
"I calculate the plaintiff's past economic loss with these findings in mind, as follows:
$746 net per week x 52 weeks x 2 years = $77,584.
$482 net per week x 64 weeks = $30,848.
This period of slightly more than three years covers the period between the accident and the trial.
Total lost earnings from the date of accident to the date of trial are $108,432.
In January 2000 the plaintiff demonstrated a residual earning capacity by obtaining short-term employment as a cook with the Aboriginal child care centre. She worked 20 hours per week
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- earning $228 net and $265 gross per week. Allowing 16 weeks off for the surgery and recuperation, I assess the plaintiff's residual earning capacity during this period as follows:
$228 net x 4 = $912 per month x 31 months = $28,272.
This figure deducted from the total figure estimated for lost past earnings brings past economic loss to $80,160."
17 She added interest of $7,815 bringing the total award to $87,975.
18 There is no challenge to the figures used in the calculation. The Commissioner's calculations were amended by agreement so as to extend to the date of judgment on 25 March 2004 and to deduct the amount advanced by the insurer. The actual judgment sum for past economic loss is $79,127.56 calculated as follows:
$551.67 per week x 52 weeks x 2 years $57,373.68
$482.65 per week x 137.6 weeks $66,412.64
$123,786.32
Less residual earning capacity from
January 2000 at $912.00 per
month less 16 weeks for surgery
$912.00 x 47 $42,864.00
$80,922.32
Less amount advanced $11,500.00
$69,422.32
Interest on $69,422.32 x 3% x 4.66 years $9,705.24
$79,127.56
20 The second challenge is in these vague terms in the grounds of appeal:
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- "The … Commissioner gave undue weight to the short-term position the appellant … held for 3 weeks in January 2000 in assessing the appellant's … retained earning capacity, and failed to give adequate consideration to the difficulties that the appellant would have had in securing long-term work in the open job market, and being able to continue in that work".
21 As developed in the course of counsel's oral submissions, the appellant contended that the Commissioner ought not to have valued her retained earning capacity by reference to her net earnings at the child-care centre because it was for a short and unrepresentative period. The appellant did not challenge the correctness of the figures used by the Commissioner. Counsel was initially unaware of the appellant's earnings at the pool crèche or whether evidence on that issue had been tendered at trial. He asked the Court to infer from the appellant's shorter working hours at the pool crèche that she received less than what she earned at the child-care centre. It was suggested that in those circumstances, the proper course was for the Commissioner to deduct 5%-10% from the appellant's pre-accident earnings to reflect retained working capacity.
22 During his reply, the appellant's counsel produced a book of taxation returns that had been tendered at trial (Exhibit 19). The appellant's taxation return for the year ended 30 June 2002 disclosed that the Shire of Broome paid the appellant $2,687 gross ($2,664 net) in that financial year. There is no income tax return for the financial year ending 2001 in the book. However, there is a PAYG payment summary for the year ending 30 June 2001 which shows that in the period 15 August 2000 to 30 June 2001 the Shire of Broome made gross payments to the appellant of $2,676 and withheld no tax. The average weekly earnings over the period from 15 August 2000 to 30 June 2002 is around $54.50. The PAYG Summary suggests the appellant commenced working at the pool crèche in mid-August and not mid-June 2000.
23 The trial Judge made no express finding as to the employment opportunities available to the appellant in Broome in relation to her retained work capacity. The only evidence on the subject was from the appellant who said that the job at the pool crèche "was really the only thing that was available for me to do at the time". This evidence was not challenged in cross-examination. Moreover, the trial Judge accepted the appellant as a truthful witness and found that she was keen to participate in the workforce.
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24 As a result of the unchallenged extension of the period for past loss to the date of judgment, it is also necessary to consider the work opportunities in Yallingup in the period August 2002 to March 2004. The respondent called Professor Charles Mulvey, the Director of the Centre for Labour Market Research at the University of Western Australia. He had prepared a labour market analysis for the positions of stock clerk, general clerk, teacher's aide and child-care worker (which includes nannies). His analysis included average weekly full-time earnings, job availability and turnover. However, his focus was on job availability in the metropolitan area not in the Yallingup area and he accepted that job availability for the specified positions in a regional area like Yallingup would be less. The Commissioner concluded that there was no evidence concerning the availability of opportunities in Yallingup for full-time work of the type within the appellant's retained capacity except that of the appellant who indicated that there may be some fairly limited openings for her in child-care or in running a small catering business. Further, there is no evidence that the appellant had sought work in Yallingup between her arrival in August 2002 and the trial in November 2002.
25 It is necessary at this stage to refer to the relevant legal principles that govern the disposition of this matter. A claimant carries the onus of proving loss of earning capacity and the extent to which that loss produces, or might produce, financial loss: Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 18 per McHugh J.
26 In general, it is desirable for a plaintiff to call precise evidence of what he or she would have been likely to earn but for the injury and what the plaintiff actually did earn (past loss) and was likely to earn after the injury (future loss). However, the failure to call such evidence, particularly in relation to future loss, does not necessarily result in nominal damages: Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 643; State of New South Wales v Moss (2000) 54 NSWLR 536 at 551 - 555 per Heydon JA. On the other hand, if a plaintiff calls incomplete evidence, it is difficult to complain of a low award for lost earning capacity: Moss (supra) at 552.
27 Unless a defendant asserts a failure to mitigate, he bears no legal onus. However, if the plaintiff leads evidence from which relevant inferences may be drawn, then a defendant will bear an evidentiary onus. So for example, if a plaintiff proves she has lost her pre-accident earning capacity and has been unable to find alternative employment, an evidentiary burden is cast on the defendant to show what employment opportunities were open, including the state of the labour market and the
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- likely earnings: Thomas v O'Shea (1989) A Tort Rep 80-251; Bowen v Tutte (1990) A Tort Rep 81-043.
28 In relation to the appellant's claim for past loss, her case was that she had retained work capacity but that the only available employment in Broome within her capacity was the pool crèche job. She was not challenged on that evidence and there was no evidence to the contrary. Moreover, there was no plea or evidence to support a plea, that the appellant had failed to mitigate her loss, the onus of which is on the respondent. In these circumstances, the proper course for the period January 2000 to August 2002 is to deduct the appellant's actual net earnings in that period from the amount the appellant would have earned but for the accident. On my calculations, the appellant's actual earnings (based on the unchallenged finding as to the earnings from the child-care centre) totalled $6,242 as follows:
Jan/Feb 2000 $228 x 3 $684
Aug 2000 to June 2001 $2,676
July 2001 to 30 June 2002 $2,664
July 2002 $54.50 x 4 $218
Total: $6,242
29 It is then necessary to consider the period August 2002 to the entry of judgment on 25 March 2004. As already noted, there was no evidence that the appellant had sought but failed to find employment in Yallingup in the period before trial. In the absence of evidence supporting an inference that there was no available work within the appellant's residual capacity in the Yallingup area, there is no evidentiary onus on the respondent to show that there were employment opportunities or the likely earnings associated with those opportunities. The evidential position for this period is the same as that for the calculation of future loss of earning capacity. That being the case, the approaches should be the same.
30 In relation to future economic loss, I have determined that it was open to the Commissioner to conclude that the appellant suffered a net loss of $96 per week and that figure should be discounted by 15%. The reasoning in support of that conclusion is equally applicable to the period August 2002 to March 2004. On my calculations, that produces a figure of $7,029.02 as follows:
$96 x 86.14 weeks
less 15% for contingencies $7,029.02
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31 The total past economic loss for the entire period to 25 March 2004 is as follows:
$551.67 per week x 52 weeks x 2 years $57,373.68
$482.65 per week x 52 weeks $25,097.80
(to end of July 02)
Aug 02-March 04 $7,029.02
$89,500.50
Less actual earnings $6,242.00
$83,258.50
Less amount advanced $11,500.00
$71,758.50
Interest on $71,758.50 at 3% x 4.66 years $10,605.46
$82,363.96
32 An adjustment is also required for past loss of superannuation. The Commissioner calculated the superannuation to which the appellant would have been entitled, but for the accident, to the time of trial (mid-November 02) less the superannuation she actually received. That came to $7,500. There is no challenge to the methodology or result. However, it is also necessary to calculate the superannuation loss for the period November 2002 to March 2004 which is as follows:
$15.39 per week x 72 weeks
less 15% for contingencies $941.87
- Thus, the award for past loss of superannuation is $8,441.87, minus 30% tax, resulting in a figure of $5,909.31.
Future loss of earning capacity
33 In relation to future loss, the Commissioner assessed the appellant's pre-accident capacity as a chef at the rate of $636.30 gross ($482 net) per week, and found that she had a retained capacity to work as a child-care worker earning $465 gross per week ($386 net), giving a weekly net loss of $96 per week. The child-care worker earnings are based on Professor Mulvey's evidence. The Commissioner multiplied this net loss by 779 (the 35-year multiplier) producing a figure of $76,704 (owing to an arithmetical error this figure should have been $74,784). She then made a deduction of 25% for contingencies which reduced the figure to $57,528
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- ($56,088 when reducing the correct figure). On the subject of contingencies, she said:
"I accept that without the accident, the [appellant] would have had the capacity to work longer than standard hours particularly before having children and after her children are grown up. This would increase her future economic loss. This must be considered against the probability of the [appellant] taking time off for children and therefore working part-time. I think a deduction of 25 per cent for contingencies is reasonable."
35 The appellant contends in her ground of appeal that the Commissioner "failed to consider, or gave inadequate weight to, difficulties of retraining, and finding, and keeping [work as a child-care worker] in the Yallingup area."
36 Although not foreshadowed in the ground of appeal, the appellant's contention advanced at the hearing of the appeal was that the method of assessment used by the Commissioner was, in the circumstances, incorrect and the appropriate course was to calculate the appellant's "but for" loss to the date of retirement and to deduct from that a percentage for retained capacity and contingencies. In support of that proposition, the appellant relies on evidence that work in the evenings as a chef was readily available in Yallingup, the limited evidence as to the availability of relevant alternative employment in Yallingup and an alleged finding that the appellant would need to retrain for at least six months.
37 The Commissioner does not find that to obtain employment as a child-care worker the appellant would have to train for six months nor does the evidence support such a finding. The Commissioner is simply recognising Professor Mulvey's evidence that there are two streams of child-care workers, those who have some form of training (a six-month TAFE course) and those who are untrained. The average weekly earning figure of $465 gross ($386 net) is the entry point wage for nannies, which position is at the low end of the broader category of child-care workers. Moreover, the average weekly earnings for nannies is the lowest of all the
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- occupations considered by Professor Mulvey which, as I have noted, included stock-clerk, general clerk and teacher's aide.
38 The Commissioner found that the appellant had many skills, aptitudes and abilities and that her history (including her continuous participation in the work force, albeit with many employers), her return to the workforce relatively soon after the accident and six weeks after the birth of her child all indicated that she was keen to participate in paid employment and would do so to the extent of her capabilities. Those findings are subject to the appellant's evidence of her intention to have two children and to work part-time until her children were at school.
39 The Commissioner made an assessment based on the methodology approved in Cullen v Trappell (1980) 54 ALJR 295 at 298 which is to ascertain the difference between the plaintiff's earning capacity as it would have been but for the accident and her earning capacity as it was at trial, then estimate the period over which the loss is likely to occur and finally to estimate the sum which, if paid at judgment, would compensate the plaintiff for that loss. The question is whether that method of assessment was open on the evidence. In my view it was.
40 Professor Mulvey's evidence in relation to child-care workers was that job prospects are rated as very good although job turnover is high and there is a low proportion of full-time jobs (51%). However, a range of occupations were within the appellant's capacity and the Commissioner used the lowest of the average net earnings in the range of suitable occupations. There is no evidence that the appellant had made any attempt to find employment in the Yallingup area or that she had investigated relevant employment opportunities in that area. Her only evidence on the subject was that she would "like to see if there is a day care centre there that I could do those short hours of cooking, perhaps catering". She is referring to part-time work. Moreover, her evidence that work in the evenings as a chef was readily available in the Yallingup area was also in the context of the availability of part-time positions. Her evidence was she intended to have two children and work part-time until the children were of school age.
41 Having regard to the meagre evidence on the subject, I would not infer that the availability of full and part-time work within the appellant's retained capacity was relevantly different from the availability of employment as a chef.
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42 The appellant also claimed the 25% deduction for contingencies was outside a reasonable range for future economic loss. The four major contingencies that expose employees to the risk of loss of income are sickness, accident, unemployment and industrial disputes: Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 497 - 498. High job turnover was a characteristic of the appellant's pre-accident employment history and that was likely to continue. Further, the appellant's intention was to work part-time until her children were of school age. Apart from these matters, there was little else in her circumstances to suggest that her earning capacity was at risk from the range of contingencies. Counter-balanced against those matters is the fact that, because of the gaps in the evidence, the assessment of the net loss may be conservative. In those circumstances, a reduction of 25% is manifestly excessive and I would substitute a figure of 15% for future earning capacity.
43 On that basis, the appellant's damages for future loss of earning capacity is $96 x 735 less 15% for contingencies, being the sum of $59,976.
44 The loss of future superannuation is as follows:
Weekly value 15.39
$15.39 x 735 $11,311.65
Less 30% tax ) $3,393.50
Less 15% contingencies ) $1,187.72
$6,730.43
Summary
45 I am satisfied that the Commissioner made a number of errors which resulted in the award being outside the range of a sound discretionary judgment. In summary, the appellant is entitled to damages of $165,932 as follows:
1. Pain and suffering $7,420.00
2. Past loss of earning capacity and interest $82,364.00
3. Future loss of earning capacity $59,976.00
4. Future medical treatment $2,500.00
5. Past loss of superannuation $5,910.00
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- 6. Future loss of superannuation $6,731.00
7. Special damages $1,031.00
$165,932.00
Conclusion
46 I would allow the appeal, set aside the orders made by the Commissioner and award damages in the sum of $165,932.
Cross-Appeal
47 On 10 July 2002 the respondent made an O 24A offer of compromise of $150,000 exclusive of the prior advance of $11,500. If the Commissioner had entered judgment on 11 August 2003 adjusted for the agreed errors, the appellant would have been awarded $141,730. That being the case, prima facie the respondent would be entitled to her costs from 10 July 2002. However, as both parties had been inconvenienced as a result of the errors in the original judgment, the appellant more so than the respondent, the Commissioner in the exercise of her discretion departed from the usual order. My preliminary view is that Court caused inconvenience is outside the matters to which the Commissioner can properly have regard to deprive the respondent of the benefit of acting under O 24A. However, it is unnecessary to determine the question because the outcome of the appeal is to increase the award above $150,000 as at August 2003. I would dismiss the cross-appeal.
48 SIMMONDS AJA: I have had the advantage of reading in draft the reasons prepared by McLure JA. I agree with the reasons and conclusions of her Honour and have nothing to add.
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