Tran v The Government Insurance Office of NSW (No 2)

[2001] NSWCA 211

Reported Decision: 51 NSWLR 733

New South Wales

Court of Appeal

CITATION:	TRAN v THE GOVERNMENT INSURANCE OFFICE OF NSW (NO 2) [2001] NSWCA 211
FILE NUMBER(S):	CA 40270/99
HEARING DATE(S):	3 May 2001
JUDGMENT DATE:	5 July 2001
PARTIES :	My Van Nguyen TRAN v THE GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES (NO 2)
JUDGMENT OF:	Mason P at 1; Stein JA at 1; Fitzgerald AJA at 1

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	9451/97
LOWER COURT JUDICIAL OFFICER :	Naughton DCJ

COUNSEL:	Appellant: P Menzies QC/W R Ward Respondent: N J Satouris (Sol)
SOLICITORS:	Appellant: Gajic & Co Respondent: McLachlan Chilton
CATCHWORDS:	Motor Accidents Act 1988, s73(4) - claim for interest - offer of settlement in fixed sum "plus costs" - value of costs to be disregarded in determining whether threshold passed (D)
DECISION:	See par 10.

CA 40270/99

DC 9451/97

MASON P

STEIN JA

FITZGERALD AJA

My Van Nguyen TRAN v THE GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES

JUDGMENT

1    THE COURT: The Court as presently constituted gave judgment in this matter on 16 August 2000 (Tran v Government Insurance Office of Australia [2000] NSWCA 217).

2    The appellant filed a Notice of Motion seeking an award of interest with respect to the substituted judgment in her favour in the sum of $247,692.29. The application was opposed and it was directed that it be dealt with on written submissions. These have been considered.

3 The respondent opposes the award of interest on the ground that the requirements of s73(4)(a)(iv) of the Motor Accidents Act 1998 were not met.

4 Section 73 precludes the award of interest on damages absolutely as regards some heads of damages and conditionally as regards others. This application concerns the latter category. So far as presently relevant s73(4) states:

The following provisions apply to damages, other than damages to which subsection (2) or (3) applies, payable in relation to a motor accident:
(a) interest is not payable (and a court cannot order the payment of interest on such damages unless:
(i) ….
(iv) the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) is more than 20% higher than the highest amount offered by the defendant and the highest amount is unreasonable having regard to the information available to the defendant when the offer was made.

Section 73(4)(b) provides:
(b) The highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff’s full entitlement to all damages of any kind.

5    The respondent relies upon a written offer of settlement, made on 4 March 1999 (the fourth day of the trial) in the sum of “$200,000.00 plus costs”. It submits that, since its offer was to pay $200,000 plus costs, then the plaintiff did not recover an award more than 20% higher than that sum because of the value of the “plus costs” component. In our view this misinterprets the provision, which deals only with the difference between “all damages …awarded by the court” and “the highest amount” of damages offered by way of settlement. The words bolded are clearly implicit in the provision.

6 Section 73(4)(a)(iv) makes it necessary that the Court be satisfied that the highest amount offered by the defendant was unreasonable having regard to the information available to the defendant when the offer was made. Furthermore, the Court has an ultimate discretion whether to award interest on damages (cf District Court Act, s83A).

7    The offer was made on the fourth day of the trial while the appellant was nearing the end of five days of cross-examination. This occurred at a time well after the respondent had had an opportunity to consider the various medical reports relied upon by the appellant (cf Red 157). The respondent submits that its offer was not unreasonable having regard to various difficulties with the appellant’s credibility. The respondent also points to a significant disparity between the appellant’s claim for economic loss and what was ultimately assessed.

8    This Court is required to decide whether the offer was unreasonable having regard to the information available to the respondent when the offer was made. Such a task cannot of course be divorced from the facts as ultimately found. On this criterion and, not without some hesitation, we would conclude that the offer was unreasonable. The respondent had had an extensive opportunity to probe the strength and weaknesses of the appellant’s case in her gruelling cross-examination. We are also satisfied that it is appropriate to exercise the residual discretion in the appellant’s favour.

9    The other submission advanced by the respondent, based on delay, should be rejected having regard to the compensatory nature of interest. The facts do not reveal a case where interest should be withheld on this account.

10 Accordingly, the appellant is entitled to an award of interest and to the costs of the present application. The parties should calculate interest up to the date of judgment at first instance and submit final orders to be made by the Registrar in accordance with the Court’s reasons. Post-judgment interest will apply according to s85 of the District Court Act.