Trtovac v Total Mix Pty Ltd (No 2)
[2022] VSC 190
•19 April 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PERSONAL INJURIES LIST
S ECI 2020 04464
| SUAD TRTOVAC | Plaintiff |
| v | |
| TOTAL MIX PTY LTD | First Defendant |
| and | |
| HOLCIM (AUSTRALIA) PTY LTD | Second Defendant |
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JUDGE: | O’Meara J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 April 2022 |
DATE OF JUDGMENT: | 19 April 2022 |
CASE MAY BE CITED AS: | Trtovac v Total Mix Pty Ltd & Anor (No 2) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 190 |
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COSTS – Application for indemnity as to plaintiff’s costs and other costs order based in rejection of offer indicated in Calderbank letter – Constructive rejection of offer – Unreasonableness – Hazeldene’s Chicken Farm v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 applied – Civil Procedure Act 2010 (Vic), ss 22 and 24 – Order made.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | CGK Madder | Carbone Lawyers |
| For the First Defendant | PB Jens QC with S Manova | Minter Ellison |
| For the Second Defendant | D McWilliams with P Santamaria | Sparke Helmore |
HIS HONOUR:
On 31 March 2022, I published reasons for decision in both this proceeding and the related recovery action[1] and adjourned to permit a consideration of the reasons and the subsequent proposal of final orders, including as to costs.
[1]Trtovac v Total Mix Pty Ltd & Anor [2022] VSC 149 and VWA v Holcim (Australia) Pty Ltd [2022] VSC 150.
In the present proceeding, the plaintiff claimed damages against both defendants. The first defendant was his employer and the second defendant was the occupier of the concrete plant and owner of the slump stand on which he was injured on 24 February 2016. The trial commenced on 7 February 2022 and ran for nine days. The circumstances of the incident of injury were a major issue at trial, as was liability. The plaintiff’s credit was put in issue, particularly by the second defendant. Contribution proceedings between the defendants had been settled.
The plaintiff succeeded against both defendants. It will be evident from the primary reasons for judgment that the plaintiff’s account of the incident of injury was accepted. To a significant extent, the plaintiff’s success on liability was founded in his evidence and that of another concrete truck driver, Raymond Gason. The plaintiff’s video of the behaviour of the slump stand on the day of injury was also of significance. The attack on the plaintiff’s credit failed.
The parties proposed final orders, five of which are to be made by consent. The present issue arises between the defendants and concerns costs. The first defendant seeks an order in the following terms –
6. The second defendant:
a.indemnify the first defendant for the plaintiff’s costs from 9 February 2022; and
b.pay the first defendant’s costs of the proceeding from 9 February 2022 on a standard basis.
In that connection, the first defendant filed and served written submissions on costs supported by an affidavit of the solicitor for the first defendant sworn 7 April 2022.
In response, the second defendant prepared a written outline of submissions on costs served on 10 April 2022. The written outline was not supported by any affidavit of the solicitor for the second defendant.
Among other things, the solicitor for the first defendant deposed to a Calderbank letter (the Calderbank letter) emailed to the solicitor for the second defendant at 12.25pm on 9 February 2022, which was the third day of the trial.
At the end of the previous day, 8 February 2022, the evidence of both the plaintiff and Mr Gason had been completed. On the morning of 9 February 2022 there was a hiccup in the scheduling of witnesses and an adjournment was necessary in order to await the next witness, a medico-legal doctor. Immediately prior to the adjournment, senior counsel for the first defendant referred elliptically to potential discussions between the parties and stated ‘hope springs eternal’.[2]
[2]Transcript (‘T’) 192.
At 11:54am that morning, senior counsel for the plaintiff emailed senior counsel for the first defendant as follows –
Dear Paul
My instructions are to confirm that as of today the plaintiff would accept an offer to settle the matter as follows:
1. $550,000.00
2. Keep.
3. Costs and that counsel fees be certified or agreed to be paid as follows:
4.(a) 3 days preparation (having regard to written submissions being prepared for the purposes of a remote hearing; a brief to counsel of 3596 pages and preparation of court book)
5. (b) 3 days hearing
6. (c) Snr counsel for 1 day mediation
7. Senior counsel $8800
8. Junior Counsel $4400
In the course of the present hearing, counsel for the second defendant said that he had not seen that email at the time. It was implicit that he had not known of the offer contained in the email.[3]
[3]T31 (11 April 2022).
As I have noted, at 12:25pm on 9 February 2022 the Calderbank letter was emailed from the solicitor for the first defendant to the solicitor for the second defendant. It was marked ‘without prejudice save as to costs’ and read, relevantly, as follows –
We refer to previous correspondence and the agreement in respect of contribution according to which our client accepted your offer to contribute 80.1% towards any settlement or judgment (and costs) with our client contributing the remaining 19.9%.
We also refer to the Plaintiff’s offer, received today, in the amount of $550,000 plus retention of statutory payments made to date plus costs (Offer). We have received instructions to accept the Offer if your client is also prepared to do so and accordingly in that event our client would contribute $109,450 plus 19.9% of the plaintiff’s costs in accordance with our agreement.
Could you please advise us by 1pm on 10 February 2022 whether your client agrees to accept and pay 80.1% towards the Offer. In the circumstances, including where the matter has previously been the subject of without prejudice discussions at mediation attended by all parties and the plaintiff has previously served two formal offers of compromise, your client has sufficient time to consider its position and our current proposal.
We put you on notice that if your client rejects our proposal and the matter proceeds to judgment with the plaintiff receiving a result no less favourable to the plaintiff than the Offer then we will produce this letter on the question of costs from the date of this letter, in accordance with Calderbank v Calderbank (1975) 3 All ER 333 and Hazeldene’s Chicken Farm (No 2) [2005] VSCA 298.
Three minutes later, at 12:28pm, the solicitor for the second defendant responded by email which stated, simply –
I have not received an offer from the Plaintiff.
At 1:33pm, the solicitor for the first defendant replied as follows –
Dear Rosemary
Thank you for your email.
We understand that your counsel has been provided with the Plaintiff’s Offer, however, please let us know if you have not received it.
Kind regards
There were no further emails or communications relevant to the plaintiff’s offer or the Calderbank letter.
The plaintiff’s offer was not accepted and the case ran to judgment after six further days of evidence and addresses.
For completeness, I should note that the solicitor for the first defendant deposed to and produced a sequence of unaccepted pre-trial offers made by the plaintiff, including –
(a) a statutory counter offer made by the plaintiff to the first defendant on 6 November 2020, in which the plaintiff had offered to receive ‘$475,000.000 … after the reduction required by the Act [Workplace Injury Rehabilitation and Compensation Act 2013 (Vic)]’;
(b) a plaintiff’s offer of compromise to both defendants on 15 November 2021, in which the plaintiff had offered to receive $400,000 ‘plus retention of the Plaintiff’s weekly payments of compensation, plus the Plaintiff’s costs of the proceeding on a standard basis’; and
(c) a further plaintiff’s offer of compromise to both defendants on 20 December 2021, in which the plaintiff had offered to receive $350,000 otherwise on the same terms.
It was not in dispute that the plaintiff ultimately did better than all of the offers to which I have referred, including the one made on 9 February 2022.
In connection with the present application, counsel for the first defendant submitted that the second defendant acted unreasonably in respect of the Calderbank letter and relied upon the principles identified and discussed by the Court of Appeal in Hazeldene’s Chicken Farm v Victorian WorkCover Authority (No 2).[4] The Court there identified the critical question as being whether rejection of the offer was unreasonable in all the circumstances.
[4](2005) 13 VR 435 (‘Hazeldene’s Chicken Farm’).
The first defendant also relied upon ss 22 and 24 of the Civil Procedure Act 2010 (Vic), which provide as follows –
22Overarching obligation to use reasonable endeavours to resolve dispute
A person to whom the overarching obligations apply must use reasonable endeavours to resolve a dispute by agreement between the persons in dispute, including, if appropriate, by appropriate dispute resolution, unless—
(a) it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only judicial determination is appropriate.
…
24Overarching obligation to ensure costs are reasonable and proportionate
A person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to—
(a) the complexity or importance of the issues in dispute; and
(b) the amount in dispute.
In response, counsel for the second defendant advanced several arguments, namely that –
(a) reliance by the first defendant upon the email passing between senior counsel for the plaintiff and senior counsel for the first defendant contravened rule 122 of the Legal Profession Uniform Conduct (Barristers) Rules 2015;
(b) no reliance could be placed upon the pre-trial offers to which I have referred because the second defendant did not waive its without prejudice privilege in respect of them;
(c) as contribution had been settled between the defendants prior to trial, the defendant should have simply accepted the plaintiff’s offer and then proceeded against the second defendant in order to recover contribution in respect of it;[5] and
(d) otherwise, and in various respects, the response of the second defendant to the Calderbank letter was not unreasonable.
[5]In that connection, counsel relied upon Stuchberry v HE Deipenau Pty Ltd & Ors (Supreme Court of Victoria, McDonald J, 21 April 1994) (‘Stutchberry’).
Albeit that counsel for the second defendant objected to aspects of the affidavit of the solicitor for the first defendant, objection was not taken to either the whole of that affidavit or to specifically defined passages within it. In fact, in argument, counsel for the second defendant sought to deploy aspects of the affidavit and its exhibits in support of several of the submissions to which I have referred.
In any event, the first objection seems to have been quite limited in its ambit. As I have noted, counsel relied upon rule 122 of the Legal Profession Uniform Conduct (Barristers) Rules 2015 which provides as follows –
122A barrister must not disclose to the court, whether in submissions, examination, cross-examination or otherwise, any communication between the barrister and legal representatives appearing in the proceedings for any other party to the proceedings:
(a) except by consent,
(b) unless what occurred resulted in the creation of some contractual or other legal relationship,
(c) unless it was expressly stated before or at the commencement of such communication that matters communicated should not be regarded as without prejudice or privileged from use or disclosure, or
(d) unless disclosure is required by the court.
Rule 122 does not appear in the Evidence Act 2008 (Vic) and is not a rule of evidence. In any event, the first objection came to be overtaken by events as it was ultimately confirmed that the email that passed between senior counsel was produced to the Court with the consent of the parties to it. In that sense, whatever might otherwise be the effect of rule 122 in a context of the present kind, it came to be complied with.
Further, as counsel for the second defendant confirmed that he had not previously seen the email no issue arose concerning any need for the consent of the second defendant.
In light of both of the features to which I have referred, no material issue remained in respect of that objection to either the affidavit or the email.
The second objection concerned the pre-trial offers identified above. Again, the first of those offers – the statutory counter offer – was made only between the plaintiff and first defendant and its production was implicitly consensual between those parties.[6]
[6]Indeed, ss 344(2) and 344(3) of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) contemplate that statutory offers may need to be produced to a court in order that the issue of costs may be determined.
In any event, counsel for the second defendant seemed to focus in argument more upon the offers made in November and December 2021 and submitted –
… it was a communication to my client, and my client does not consent to the court receiving it. So if we are all party to those without-prejudice communications, then the court should have no reliance on them, in our submission.
There is a curiosity in that submission, as one of the orders consented to in the final disposition of the present matter was that the plaintiff have his costs against the second defendant on an indemnity basis. Such an order is very likely to have proceeded upon a failure of the second defendant to have accepted an offer of compromise. Had there been any issue about the question, the offer of compromise concerned may well have needed to be produced to the Court in order to determine it.
In any event, the short answer to the substance of the second objection is that both offers were offers of compromise made under the Supreme Court (General Civil Procedure) Rules 2015 (Vic), and rule 26.05(2) provides as follows –
(2)Where an offer of compromise has not been accepted, then, except as provided by Rule 26.08(6), no communication with respect to the offer shall be made to the Court on the trial of the proceeding until after all questions of liability and the relief to be granted have been determined.
The exception stated within the rule does not presently apply and, at this point, all questions of liability and relief have been determined by a combination of the primary reasons and the final orders proposed by consent. The only remaining issue is one of indemnity and costs and it is hardly controversial to consider unaccepted offers of compromise in that context.
As to the failure of the first defendant to settle with the plaintiff and pursue the second defendant, counsel submitted that the litigation could thereby have been ‘brought to an end’. It was submitted that the terms of the agreement between the defendants as to contribution were clear –
… the second defendant did not cap any amount to which it gave its imprimatur. It is completely clear. Take notice that the second defendant offers to contribute 80.1 per cent to any judgment or settlement. So it would not be entitled, in our submission – and indeed any defendant to say, “Hang on a minute. No, no. We said any settlement, but we really didn’t mean it.” With respect, that can’t fly.
As I have noted, counsel relied upon the decision of McDonald J in Stuchberry v HE Deipenau Pty Ltd & Ors[7] and said that the decision ‘made it clear’.
[7]Stuchberry n 5.
Contrary to the submission to which I have referred, in Stuchberry, McDonald J extracted the following passage from the earlier decision of Murphy J in Henderson v Simon Engineering (Australia) Pty Ltd[8] –
Though a specified sum is not mentioned in the SEC offer and “any verdict or settlement” appears at first glance to be wide, it is, I think, reasonably clear as a matter of construction, that the defendant, SEC, by this offer of compromise was indicating its preparedness to place itself in the hands of its co-defendants.
Indicating its trust in them not to settle for an inordinate amount nor to allow a verdict to go for an extravagant amount, it was prepared to pay 35 per cent of ‘any’ total amount for which they settled or for which a verdict might be entered. I do not see that the offer is open to any other construction.
The law is that terms of settlement must be construed in the same way as any other contract and if the terms are in writing as they would be, if the SEC’s offer in writing had been accepted in accordance with the rule, the writing would constitute the contract and according to its terms and the interpretation thereof would fall to be determined. See Fraser v. Elgen Tavern Pty Ltd [1982] V.R. 398.[9]
[Emphases added]
[8][1988] VR 867 (‘Henderson’).
[9]Stutchberry n 5, 10.
Consequently, it does not necessarily follow from the words ‘any settlement or judgment’ that litigation must be ‘over’ if one defendant were to accept such an offer and thereafter pursue the other defendant for the agreed proportion of contribution. The construction adopted in Henderson – extracted with evident approval in Stuchberry – admits of the potential for further disputation if it were thought that the sum for which the proceeding was settled is ‘inordinate’.
In that connection, I note that in the present application the second defendant essentially took the position that it was not unreasonable for it not to have engaged with the offer adverted to in the Calderbank letter and to have continued to run the trial because, as it was put –
… at that point we had heard from two witnesses; we had not heard from the doctors. So that’s a pivotal question as to quantum. We’d not heard from the expert Mr Lewis at that stage.
From a factual basis, of course, there were two witnesses from whom we had heard upon whose evidence Your Honour relied at length in the judgment, but we had certainly not seen the full complexion of it, and certainly in light of the fact that the plaintiff’s prior negotiations had seen – to the extent that Your Honour can rely upon them – and, of course, submission is at first blush Your Honour can’t – but the plaintiff’s offers were going down and then jumped up a significant amount, so it wasn’t unreasonable for the second defendant to not respond to the offer that was made.
Further, as is evident in the primary reasons, notwithstanding the manner in which the plaintiff gave his evidence, the second defendant persisted in the contention that he was not a witness of credit; a position that was not shared by the first defendant and was, as I have noted, ultimately rejected.
In addition, as noted, the plaintiff had earlier offered, in broad terms, settlements at ‘headline’ figures of $475,000, then $400,000 and then $350,000. The latter two offers were made shortly prior to the commencement of the trial and the plaintiff’s offer at the ‘headline’ figure of $550,000, might be said to have been significantly higher than any of them. So much was essentially emphasised in the ‘not unreasonable’ submission extracted above.
In the circumstances, if the first defendant had accepted the plaintiff’s offer it is not obviously likely that the second defendant would have simply accepted that development and paid up. It is much more likely that the second defendant would have sought to contend that such a settlement was ‘inordinate’. In that event, the litigation would certainly not have been simply ‘brought to an end’ by the first defendant’s acceptance of the plaintiff’s offer. Indeed, there may well have loomed the rather messy potential for a ‘trial within the trial’ concerning whether or not any such sum should ever have been paid to the plaintiff.
In such circumstances, I can quite understand why it might have been that the representatives of the first defendant would be slow to accept the plaintiff’s offer without the express agreement of the second defendant.
That leaves the broad issue of unreasonableness in respect of the second defendant’s response to the Calderbank letter. In that connection, the second defendant advanced several interrelated contentions, particularly that –
(a) the second defendant’s representatives had not been made aware of the detail of the offer made between senior counsel for the plaintiff and senior counsel for the first defendant in the email of 9 February 2022;
(b) that offer by email was said to be unclear in that the words ‘as of today’ might indicate that the offer could or would increase;
(c) the Calderbank letter was said to be ‘deficient’ because it was open for only one day, did not specify the full terms of the underlying offer, why such an offer should be accepted and the consequences of any failure to accept it; and
(d) more generally, the Calderbank letter was said to have been sent in context of ‘fluid negotiations’ and in circumstances in which, it was contended, no ‘realistic assessment’ of the plaintiff’s prospects could be made by reason of the fact that the ‘full complexion’ of the dispute had not yet been exposed and there remained ‘pivotal’ issues to be determined.
In Hazeldene’s Chicken Farm, the Court of Appeal identified a sequence of factors relevant to the assessment of unreasonableness and therefore the exercise of the court’s discretion, particularly: the stage of the proceeding at which the offer was made, the time allowed for consideration of it, the extent of the compromise offered, the offeree’s prospects of success at that time, the clarity of the terms and whether the offer foreshadowed an application for indemnity costs. That said, the Court of Appeal made clear that there is no exhaustive list of relevant circumstances and that the critical question is whether the rejection of the offer was unreasonable in the circumstances.
In the present case, the plaintiff’s offer was made and the Calderbank letter sent at an important point in the trial. Both the plaintiff and Mr Gason had gone well in their evidence concerning the circumstances on the day of the incident. The plaintiff’s evidence had been bolstered by his video recovered immediately prior to the trial. In any objective sense, it could come as no surprise that there might be discussions between the parties at that point and I indicated as much to the representatives when senior counsel for the first defendant said ‘hope springs eternal’.[10]
[10]T192.
Nor, for essentially the same reasons, should it have come as any surprise that the dimension of the plaintiff’s offer might then have increased beyond the offers put prior to the trial when the evidence of the plaintiff and Mr Gason had not yet been received and, importantly, the video had not yet been recovered. By the end of the second day of the trial it should have been evident that the plaintiff’s prospects on the critical issues relevant to liability – which was far and away the biggest issue in the trial – had been significantly enhanced. That is not to say that the case was over – plainly the second defendant, in particular, had its own witnesses to consider – but it was well placed to evaluate the strengths and weaknesses in that potential evidence.[11]
[11]That would, presumably, include the potential evidence of Mr McDonald who was called by the first defendant. At the time of trial, Mr McDonald was an employee of the second defendant. See, T488.
In that context, the solicitor for the second defendant must have known from the Calderbank letter that the ‘headline’ number in the plaintiff’s offer was $550,000, which was above the offers put shortly before trial. However, that was not an increment of an unduly excessive kind and seems to me to have been readily explicable by reference to the circumstances to which I have referred.
Further, while that ‘headline’ number was higher than those which immediately preceded it, it was small by reference to a full assessment of the plaintiff’s claim for damages.
In that regard, it could not have come as much of a surprise when, later and in address, counsel for the plaintiff claimed a sum of $300,000 for pain and suffering. Even on the assessment of the second defendant, the figure for pain and suffering could have been as high as $150,000.[12]
[12]Outline of submissions on behalf of the second defendant, [93].
More importantly, however, it was not a case in which the underlying figures or calculations relating to the plaintiff’s claim for past and future loss of earning capacity ever emerged as significantly in dispute. On those figures, in particulars of special damages served well prior to trial, the plaintiff claimed a total of $1,239,120.64.[13]
[13]Prior, of course, to any discounts for vicissitudes.
As commonly occurs, at trial that figure came to be greater still: in closing submissions it was identified at more than $1,450,215.50, with amounts for interest and Fox v Wood to be added.[14]
[14]See, plaintiff’s particulars of special damages, loss of earnings and loss of earning capacity produced together with the plaintiff’s outline of closing submissions dated 18 February 2022, [13].
Applying a standard discount for vicissitudes for the future and taking account of what is now known about the deductions required by reason of receipt of payments of statutory compensation, any combination of the mooted assessments for pain and suffering and loss of earning capacity is considerably higher than the plaintiff’s offer made on 9 February 2022.
As I have noted, that offer was also made on the third day of what ultimately became a nine day trial.
It follows that notwithstanding the dimension of the past offers, the offer made on 9 February 2022 remained a very significant compromise of the plaintiff’s potential claim and acceptance of such an offer was also likely to produce a very significant reduction in the overall costs of the trial.
To the above should, of course, be added the observation that prior to the trial the second defendant had obtained the agreement of the first defendant to contribute to any settlement in the percentage which it had insisted upon, namely 19.9%. In that sense, the contribution of the second defendant to any such settlement would in any event be considerably lower than the full amount.
In the circumstances described, it seems to me that it was not of any real significance that the Calderbank letter did not descend into a full explanation and process of argument concerning the plaintiff’s prospects in the proceeding; nor that it was open for only one day. The second defendant was represented by very experienced counsel and the Calderbank letter was sent at a time at which the practitioners – particularly counsel – must have been acutely focussed upon the issues and, indeed, immediately after the plaintiff’s most important liability witnesses had been called. In that setting, the plaintiff’s prospects in the proceeding should have been able to be very readily assessed having regard to what had unfolded and would in the future be likely to unfold and it seems that the representatives for the first defendant had no trouble in doing so: they had been instructed to accept the offer.
Moreover, as the Calderbank letter stated –
In the circumstances, including where the matter has previously been the subject of without prejudice discussions at mediation attended by all parties [in October 2021] and the plaintiff has previously served two formal offers of compromise, your client has [had] sufficient time to consider its position and our current proposal.
In my view, it was also not ‘deficient’ for the Calderbank letter not to have explained in detail what the consequences of not accepting the offer might ultimately be. The letter stated that it may be produced ‘on the question of costs’. Very experienced practitioners were involved. In the combination of circumstances to which I have referred it seems to me to have been unnecessary for the solicitors for the first defendant to articulate precisely what orders might come to be sought because it must have been obvious that an indemnity could come to be sought. That was the likely meaning of producing the letter ‘on the question of costs’ and, indeed, no alternative meaning was identified in argument.
In this context, the real contention for the second defendant centred upon the detail in the email that passed between senior counsel for the plaintiff and senior counsel for the first defendant and, as I have noted, the statement of counsel for the second defendant in argument that he had not seen it until the hearing of the present application. Without the detail in that email – which, of course, did not appear in the Calderbank letter – it was submitted that the offer referred to in the Calderbank letter lacked clarity and was ‘deficient’ and that the second defendant was, in effect, not unreasonable in failing to engage with it.
In my view, in the circumstances which I have described, it is the response of the second defendant to the Calderbank letter – namely, its failure to respond to it in any meaningful way – which tips the overall assessment of the second defendant’s conduct in connection with the letter into the realm of unreasonableness. True it is that the Calderbank letter did not articulate all of the underlying details of the offer, but it did advise both of the fact that it had been made and the ‘headline’ number involved as well as several other relevant features of the offer. As I have indicated, at that point the reason for the increased dimension of the offer and the discount that it offered against a full assessment of the plaintiff’s claim for damages should have been obvious.
Importantly, within three minutes of the Calderbank letter being emailed, the solicitor for the second defendant advised, in effect, that she had not received the detail of the plaintiff’s offer.
The response of the solicitor for the first defendant – little over half an hour later – was to advise the solicitor for the second defendant that the offer had been provided to counsel for the second defendant and, in turn, to advise ‘if you have not received it’.
After that, the solicitor for the second defendant did not ask for the details of the offer or, indeed, seemingly engage at all at any time prior to the expiry of the period nominated in the Calderbank letter.
As became apparent in argument on the present application, counsel for the second defendant had not received the email that passed between senior counsel. But that is no answer to the offer of the solicitor for the first defendant to supply the details of the offer to the solicitor for the second defendant if counsel did not have them. Nor is it any answer to the failure of the solicitor to engage at all in respect of the substance of the Calderbank letter.
As I have noted, the solicitor for the second defendant swore no affidavit in connection with the present application. Her thoughts and actions are unexplained. In that connection –
(a) it is not known whether the solicitor sought the details of the offer from counsel for the second defendant;
(b) it is not known whether the solicitor obtained the details of the offer by some other means;
(c) it is not known precisely why the solicitor did not take up the implicit offer of the solicitor for the first defendant to supply the details of the offer;
(d) it was not said either at that time or at any time prior to the hearing of the present application that the Calderbank letter was in any way ‘deficient’; and
(e) bluntly, the solicitor’s precise reasons for failing to engage with the offer and Calderbank letter are unexplained.
In the circumstances, the inference is irresistible that the second defendant was not interested in engaging with the offer or, perhaps, considering any such settlement. The precise reasons for that are both unknown and unexplained.
I am, of course, conscious that in advancing such an explanation the solicitor is entitled to be careful not to waive any legal professional privilege of the client. However, that can be done and, indeed, a similar exercise of an extensive kind had been undertaken by the solicitor for the second defendant in a letter dated 10 January 2022 in which it had been explained why it was that the first defendant should settle upon the second defendant’s preferred percentage of contribution.
Notwithstanding the above, no such exercise was undertaken by the solicitor in connection with the hearing of the present application. Instead, counsel was left to advance submissions concerning what might be thought to have been the relevant considerations, but without those points of argument being able to be tethered to any account of the solicitor that represented the precise considerations that stood to explain the evident failure of the second defendant to engage with the offer made.
In this context, I have earlier referred to a sequence of features of the case at the point at which the offer was made, together with the dimension of the offer, that stood to suggest that there should have been very good reasons for the second defendant to have given it careful consideration. In so observing, I do not mean to say that such an offer must have been accepted: it is not necessarily unreasonable not to accept an offer simply because it later proves to have been a discount on the sum ordered following trial. However, in the present instance, as I have indicated, the various arguments now advanced from the Bar table as a purported explanation or justification for not having engaged in any substantive way with the plaintiff’s offer lack an overall persuasive logic and there is not otherwise any affidavit of the solicitor which stands to explain her reasons for electing not to so engage.
In making these observations, it will be evident that I am conscious of the potential for the influence of hindsight. That said, most of the features evident at the point of the case to which I have earlier referred were known or knowable and otherwise capable of then being evaluated, especially by experienced practitioners.
In all of the circumstances to which I have referred, the failure of the solicitor to engage in any substantive way with the plaintiff’s offer adverted to in the Calderbank letter or subsequently to articulate any persuasive combination of reasons for not having done so, must, in my view, indicate that there was a constructive and unreasonable rejection of it.
Counsel for the second defendant advanced a further nuance in the argument based in the contention that it should not be assumed that the offer articulated in the email would have been available the next day and within the time stipulated in the Calderbank letter.
In my view, there is no real substance in that submission. There was no specific suggestion in the email that the offer would lapse the following day and, in light of the circumstances to which I have referred, it would be unlikely if it did. The email was sent to senior counsel for the first defendant only. That suggests that the first defendant was to be charged with the task of persuading the second defendant to accept the offer, if possible. That kind of negotiation is not ordinarily completed in an instant.
Nor is it common in such circumstances for such an offer to be arbitrarily withdrawn and increased. Usually, it is hard enough for counsel involved to achieve settlement on the figure proffered, and in circumstances of that kind the slightest suggestion of movement in the figure is often enough to derail such negotiations irretrievably.
In any event, the circumstances of the case at that point do not suggest that any further increment in the offer was likely in any period shortly after it was made: at that time the proceeding was adjourned and when it re-commenced a sequence of merely medical witnesses were called. It is unlikely that much of what those witnesses could have said could have caused the offer to be withdrawn and increased. Liability was the biggest issue in the case and no further witness gave evidence in respect of that issue until after the period identified in the Calderbank letter expired; namely after 10 February 2022 at 1.00pm.
Finally, I do not accept the submission of counsel for the second defendant that the offer and Calderbank letter were sent in the midst of ‘fluid negotiations’. On the evidence, the only offer made during the trial was that made by the plaintiff on the third day, and the second defendant seems to have avoided engaging with it. There was no evidence of any counteroffers being advanced at any point. On no view, can a ‘negotiation’ of the kind described accurately be characterised as a ‘fluid’ one.
As I have earlier noted, counsel for the first defendant also relied in argument upon ss 22 and 24 of the Civil Procedure Act 2010 (Vic).
The earlier reasoning does not depend upon those provisions. However, those provisions applied to the practitioners and the parties and it is not obvious how it could be that failing to engage with the offer and Calderbank letter could amount to either the taking of reasonable endeavours to resolve the dispute or to avoid unreasonable costs.
While there is something in the proposition that the failure of the solicitor to make an affidavit should stand as a sufficient opportunity for explanation,[15] I am not convinced that I should go further and make any positive findings in respect of these provisions. I am not confident that the practitioner or practitioners concerned have sufficiently grasped the gravity of the circumstances involved.
[15]Especially in circumstances where counsel for the second defendant were able to and did provide written submissions directed to the present argument.
In the present circumstances, it is sufficient to say that any notion that simply failing to engage with an outwardly explicable and arguably reasonable offer the acceptance of which would have brought an early end to a lengthy piece of litigation could amount to compliance with the provisions to which I have referred would and should take some careful explanation. Those provisions are not merely aspirational; they are the reality of what is required.
Further, as I have earlier indicated, not only was there no real endeavour to engage with the offer and Calderbank letter concerned, but there was no sworn or other persuasive explanation of how and why it could have been considered reasonable not to have done so. In the particular circumstances of this case, the various written and other submissions of counsel, including assertions from the Bar table, were no real substitute for any careful explanation of what had actually occurred, and why.
In the circumstances, the further orders sought will be made, albeit that they will be made with effect on and from 11 February 2022, being the day after the expiration of the period within which the offer and Calderbank letter might have been accepted.
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