Uniting Church in Australia (NSW Synod) v Legge

[2002] NSWCA 307

NEW SOUTH WALES COURT OF APPEAL

CITATION:      THE UNITING CHURCH IN AUSTRALIA (NSW SYNOD) v LEGGE [2002]  NSWCA 307

FILE NUMBER(S):
41017/01

HEARING DATE(S):               6 August 2002

JUDGMENT DATE: 13/09/2002

PARTIES:
The Uniting Church in Australia (NSW Synod) - Claimant
Raymond Legge - Opponent

JUDGMENT OF:       Sheller JA Santow JA Foster AJA   

LOWER COURT JURISDICTION: Compensation Court

LOWER COURT FILE NUMBER(S):          39356/99

LOWER COURT JUDICIAL OFFICER:     Judge Davidson

COUNSEL:
L J Ellison - Claimant
P Webb QC/P Sternberg/S Balafoutis - Opponent

SOLICITORS:
Holman Webb - Claimant
Elias Gates & Associates - Opponent

CATCHWORDS:
COSTS - appeal from Compensation Court - settlement offer - application of Workplace Injury Management and Workers Compensation Act 1998, s115 - whether settlement offer was reasonable - whether there is a discretion to award costs even if offer is reasonable

LEGISLATION CITED:
Supreme Court Rules 1970
District Court Rules 1973
Compensation Court Act 1984
Workplace Injury Management and Workers Compensation Act 1998
Workers' Compensation Act 1987

DECISION:
1.  Leave to appeal granted
2.  Appeal dismissed with costs

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41017/01
CC 39356/99

SHELLER JA
SANTOW JA
FOSTER AJA

THE UNITING CHURCH OF AUSTRALIA (NSW SYNOD) v LEGGE

The claimant was the respondent in proceedings brought in the Compensation Court by the opponent to recover compensation in respect of an injury that resulted from the nature and conditions of his employment.  The amount of the award ultimately made was just over $12,000.

The only issue raised on appeal related to the application of s115 of the Workplace Injury Management and Workers Compensation Act 1998 (the Act) to a offer of settlement (the settlement offer) of $22,000 made by the claimant on the sixth day of the hearing. The claimant had argued before the trial Judge that any costs in the proceedings after the date of the settlement offer were costs unreasonably incurred within the meaning of s115 and as such the Court must not make an order for payment of those costs by the claimant. The trial Judge did not consider the settlement offer – which allowed the opponent approximately two hours to consider whether to accept the offer – to be reasonable and further, even if the offer was a reasonable one, he had a discretion in the matter and should exercise that discretion against the claimant.

On appeal, as at first instance, the claimant argued that if the Court was satisfied that the settlement offer was reasonable the terms of s115 were mandatory and thus the Court had no discretion to make an order for the payment of those costs by the claimant.  The fact that the settlement offer was substantially more than was awarded indicated that the settlement offer was prima facie reasonable.

The opponent submitted that the Court did have a discretion to determine whether any costs in the proceedings before the Court were reasonably incurred even though a reasonable settlement offer had been made.  The opponent argued that notwithstanding which interpretation of s115 was the correct one, the actual settlement offer made was not reasonable because the opponent had been ambushed by the offer and had not been given sufficient time to consider it.

HELD (per Sheller JA, Santow JA and Foster AJA concurring):

1. Section 115 of the Act does not expressly make the fact that the amount offered exceeds the ultimate award decisive: contrast Cooper v Harrison & Anor (1999) 18 NSWCCR 71 and Thomson v Ryde City Council (2000) 19 NSWCCR 586. The imposition of unreasonable conditions may make the settlement offer unreasonable. The reasonableness of the settlement offer depends upon its own terms and the circumstances in which it is made.

2. Unless it be said that it was not open to the trial Judge on the reasons he gave to conclude that the settlement offer was not a reasonable one, the Court cannot set aside that conclusion.  In this case, the trial Judge's reasons were persuasive.

3. The Court applied the reasoning of Campbell J in Webster v Gladesville Macquarie Hospital (1996) 13 NSWCCR 731 and held that once an offer is found to be reasonable a discretion still resides with the Court to determine if costs had been "unreasonably incurred": see also Newell v Waratah Towage Pty Limited (2000) 21 NSWCCR 126.

4. Section 115(2) fetters the general power to treat costs incurred by a party as having been unreasonably incurred for the purposes of the section. The word "only" in subsection 2 defines, by reference to paragraphs (a) to (d), and limits the circumstances in which costs incurred can be so considered or treated: compare David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 277.

5. The Court may not treat costs as unreasonably incurred for the purposes of s115 unless one or more of the conditions set out in paras (a) to (d) of subsection 2 are satisfied.  Even if the Court is satisfied that the offer was a reasonable offer, the Court may still not be satisfied that costs incurred, after the offer was made, were unreasonably incurred.  If the Court is satisfied that any costs in the proceedings were unreasonably incurred the Court must order those costs to be so treated for the purposes of s115 and must not make an order for payment of those costs by any other party in the proceedings.

Per Santow JA:

1. The reasonableness of an offer of settlement is a function not only of its financial terms but also of the reasonableness of the time laid down by the offerer for its acceptance.  That reasonableness is to be judged in the context of the stage of the proceedings reached and the overall circumstances.  Such an approach avoids the oppressive consequence that an offer of settlement made on an unreasonable basis in terms of time to consider, must nonetheless be accepted.

Legislation cited:

Supreme Court Rules 1970
District Court Rules 1973
Compensation Court Act 1984
Workplace Injury Management and Workers Compensation Act 1998
Workers’ Compensation Act 1987

Cases cited:

David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Cooper v Harrison & Anor (1999) 18 NSWCCR 71
Newell v Waratah Towage Pty Ltd (2000) 21 NSWCCR 126
Thomson v Ryde City Council  (2000) 19 NSWCCR 586
Webster v Gladesville Macquarie Hospital (1996) 13 NSWCCR 731

ORDERS

1. Leave to appeal granted.

2. Appeal dismissed with costs.

**********

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41017/01
CC 39356/99

SHELLER JA
SANTOW JA
FOSTER AJA

Friday, 13 September 2002

THE UNITING CHURCH OF AUSTRALIA  (NSW SYNOD) V LEGGE

Judgment

1. SHELLER JA:

   Costs in the Compensation Court;  s115 of the Act

   This application, pursuant to s32(4) of the Compensation Court Act 1984, for leave to appeal from a decision given by Judge Davidson in the Compensation Court on 19 November 2001 as to costs only raises questions about the application of s115 of the Workplace Injury Management and Workers Compensation Act 1998 (the Act).

2. Section 115 of the Act provides as follows:

   “(1)If the Compensation Court is satisfied that any costs in proceedings under this Act before the Court were unreasonably incurred, the Court is to order that those costs are to be treated as unreasonably incurred for the purposes of this section and the Court is not to make an order for payment of those costs by any other party to the proceedings.

   (2)Costs incurred by a party to proceedings are considered to have been unreasonably incurred for the purposes of this section only if they were incurred by the party:

   (a)after a reasonable offer of settlement in the proceedings was made to the party, or

   (b)after the party has failed without reasonable excuse to comply with a written request from another party to the proceedings to provide that other party with particulars (including any necessary medical report) sufficient to enable that other party to properly consider the claim for the purpose of making an offer of settlement, or

   (c)after the party has unreasonably failed to participate in a conciliation of the dispute with which the proceedings are concerned and the Court is of the opinion that the failure has resulted in unnecessary litigation, or

   (d)in connection with an unsuccessful application by the party to admit further evidence in respect of matters of which a certificate or report of a medical panel that has been admitted in evidence in the proceedings is evidence (as provided by section 128(2)) and the Court is of the opinion that the application was frivolous or vexatious.

   (3)In determining whether costs were unreasonably incurred the Court is to have particular regard to any conciliation certificate issued under section 84 certifying as to the unreasonable failure of a party to participate in conciliation.  A party who denies unreasonable refusal to participate in conciliation has the onus of rebutting the conciliation certificate.

   (4)A legal practitioner representing a party to proceedings in the Compensation Court is not entitled to recover from the party any costs that the Court has ordered are to be treated as unreasonably incurred.

   (5)The Court may by order exempt any costs or a proportion of any costs from the operation of subsection (4) if of the opinion that it would be unjust not to do so because the legal practitioner concerned made all reasonable efforts to avoid unnecessary litigation in the proceedings or for any other reason should not be held responsible for the incurring of the costs concerned.”

   Award of compensation

3. The claimant, the Uniting Church of Australia (NSW Synod) (UCA), was the respondent in proceedings brought in the Compensation Court by the opponent, Raymond Legge (the worker), to recover compensation in respect of injury the result of the nature and conditions of his employment.  The nature of the injury was described as “depression, dysthymic disorder”.  The worker claimed to have been totally incapacitated for work from 1 August 1996 to 31 January 1997 and thereafter partially.  The hearing before Judge Davidson occupied fourteen days.  Nineteen witnesses gave evidence, four of them medical witnesses, three of those psychiatrists.   Sixty-three exhibits were tendered.  Judge Davidson awarded the worker weekly compensation at different rates for three periods:  from 1 August 1996 to 18 August 1996 on the basis of total incapacity, from 19 August 1996 to 30 September 1996 on the basis of partial incapacity and, from 1 October 1996 to 31 January 1997 on the basis of partial incapacity.  The worker recovered interest on the weekly compensation and s60 expenses in respect of the period from 1 August 1996 to 31 January 1997.  The amount of the award ultimately made was just over $12,000.  His Honour reserved the question of costs.

   Offer of compromise

4. On the hearing of the costs argument UCA tendered an affidavit by its solicitor, Andrew John Kemp, sworn on 9 November 2001 and a letter of the previous year from Mr Kemp to the worker’s solicitors dated 1 November 2000.  On 1 November 2000, the sixth day of the hearing, Mr Kemp was in attendance at court and at approximately 11.52am saw Mr Ellison, UCA’s counsel, hand the letter to Mr Peter Sternberg, the worker’s counsel.   Mr Kemp saw Mr Sternberg say something to Mr Ellison.  When he asked Mr Ellison what had been said he was told that Mr Sternberg had said words to the effect that he “would not get instructions immediately as he has more than enough time at lunch time.” 

5. In the letter UCA offered to settle the proceedings by entering into orders for an award for the worker for a closed period of twenty-six weeks in a total amount of $22,500 and payment of the worker’s s60 expenses for that period upon production and/or receipts up to $7,500 or by joining in an application for commutation of the worker’s rights arising out of his employment with UCA for $32,000 inclusive of s60 expenses.  UCA was to pay the worker’s costs as agreed or assessed.  The letter continued:  “This offer is open for acceptance up to 2pm on 1 November 2000.”  An accepted calculation showed that the amount of the offer was in the order of $22,000.  

6. Mr Ellison for UCA submitted that the letter of 1 November 2000 delivered to the worker’s counsel on that day was a reasonable offer of settlement in the proceedings made to the worker.  In reliance on this UCA submitted to Judge Davidson that the Court should be satisfied that any costs in the proceedings after the date of the offer were unreasonably incurred within the meaning of s115 and that the Court must order that the costs be so treated and must not make an order for payment of those costs by UCA. 

7. UCA put to Judge Davidson that no discretion resided in the Court in the matter and that, if the offer was reasonable, the terms of s115 were mandatory.  It relied on a decision of Judge O’Meally in Cooper v Harrison & Anor (1999) 18 NSWCCR 71 and a decision of Judge Burke in Thomson v Ryde City Council (2000) 19 NSWCCR 586. It submitted that the workers compensation legislation encouraged settlement. It was significant that no counter-offer was forthcoming. Even if the Court did have a discretion, in the circumstances of the case, the offer should have been found to have been reasonable and the costs after 1 November unreasonably incurred.

8. Mr Sternberg, for the worker, referred to Webster v Gladesville Macquarie Hospital (1996) 13 NSWCCR 731, a decision of the Chief Judge Justice Campbell, and Newell v Waratah Towage Pty Limited (2000) 21 NSWCCR 126, a decision of Judge Armitage. Mr Sternberg submitted that the Court did have a discretion to determine whether any costs in the proceedings before the Court were unreasonably incurred even though a reasonable offer of settlement had been made. It was submitted that the worker had been ambushed by the offer made at 11.52am on the sixth day of the hearing open only until 2pm on that day. In particular, at that time the worker did not have a report of Dr Maguire, who was retained by UCA and was unfavourable to the worker’s case on the critical issue of the term of his ongoing disability.

9. It is not necessary to go further into the submissions that are summarised in Judge Davidson’s reasons for judgment.  His Honour held that UCA’s application failed, first for reason that his Honour did not consider that the offer was a reasonable one and further, even if the offer was a reasonable one, his Honour had a discretion in the matter and should exercise that discretion against UCA’s submission that the worker be deprived of costs after 1 November.  Judge Davidson was of opinion that the decisions of the Chief Judge and Judge Armitage were correct.  He did not believe that the section was mandatory.

10. The claimant seeks leave to appeal from that decision.  The Court was constituted so as to be able, if leave was granted, to deal with the appeal at the same time.   The appeal was fully argued.

    Discussion

11. The submission was put, rather tentatively, that if an offer exceeded the amount recovered, the offer was within the meaning of subs 2(a) “a reasonable offer of settlement”.  That submission was said to be supported by the following passages from the judgment of Judge O’Meally in Cooper at 74 after his Honour had set out the terms of s115(1) and (2)(a). He said:

    “…It will be seen that the terms of s115(1) are mandatory and no discretion is given to the Court.

    17Mr Crimmins submits that it was reasonable for the applicant, through his advisers, to reject the offer of settlement.  With respect to Mr Crimmins, I am unable to agree.  As a general rule it is to be presumed that the decision of the Court as to amount is that which sets the reasonableness of an offer.  The applicant recovered less than the offer.  In those circumstances I think that the offer made by the respondent is to be regarded as reasonable.  There are no special circumstances disclosed justifying departure from the general rule.

    18As I view the provisions of s115 of the WIM Act, I have no discretion in the matter and I am obliged, whether I agree with the provisions of the section or not, to order that the applicant not have costs incurred beyond the date of the reasonable offer, that is 18 February 1999.  Thus, the applicant may have costs incurred to 18 February 1999 but not thereafter.”

12. In Thomson Judge Burke said at 587:

    “2Ex hypothesi, if the offer was more than the ultimate award, it seems difficult to suggest that the offer was not reasonable. A reasonable offer having been made, the costs of the Court proceeding are incurred after such an offer. In my view the verb ‘considered’ in s115(2)(a) is one of the new Plain English terms for the old word ‘deemed’. In s38A one of the subsections says something will be ‘regarded’ as something. It is not that thing, of course, but it is going to be ‘regarded’ as it anyway. It will be ‘treated’ as, is another common substitute for the old simple word ‘deemed’.

    3In my view, ‘considered’, requires the Court to regard, treat, consider the costs incurred after a reasonable offer of settlement as unreasonably incurred. That being so, this case falls squarely within the provisions of s115(2)(a), all Court costs having been incurred after a reasonable offer of settlement was made.”

13. I doubt whether either judge intended to lay down the proposition UCA contends for.  The section does not expressly make the fact that the amount offered exceeds the ultimate award decisive.   On the other hand, if the applicant in the Compensation Court recovers less than the offer in many cases that may indicate that the offer was reasonable in amount and unreasonably refused.  But that is not the only or necessarily the paramount consideration.  An unreasonable condition may be part of the offer.  The offeree may be unable to meet such a condition.

14. Mr Webb QC, in his submissions for the worker, emphasised the distinction between s115 and provisions to be found in both the Supreme Court Practice and the District Court Practice dealing with offers of compromise. Where, for example, an offer is made by a plaintiff and not accepted by the defendant, the rules of those Courts expressly attach significance to the fact that the plaintiff obtains a judgment no less favourable to the plaintiff; see Pt52A r 22(4) of the Supreme Court Rules 1970 and Pt39A r 25(4) of the District Court Rules 1973. In both courts the rule prescribes the time by which the offer must be made. In the Supreme Court an offer of compromise may be expressed to be limited as to the time it is open to be accepted but the time expressed shall not be less than twenty-eight days after it is made; Pt22 r 3(3) of the Supreme Court Rules. Such regimes are in marked contrast to that found in s115 of the Act.

15. Judge Davidson gave the following reasons for saying that he did not consider that the offer was a reasonable one.

    “15…..I have done so in the background of this case which, comparatively speaking, was a big case, to use a simple term.  The very nature of the claim itself for psychological injury and the, again relatively speaking, large amount of evidence which it involved must be taken into consideration together with other matters to which I will refer in considering whether in the context in which it was made the offer in the letter of 1 November 2000 was reasonable.  I believe that and reasonableness which makes it not a reasonable offer is the extremely short period of time in which it was to remain open which was two hours and eight minutes.  That is in the context of a case which had commenced by the filing of the application for determination on 11 June 1999 and had commenced by way of hearing on 22 May 2000.

    16Even though it be the evidence uncontradicted that applicant’s counsel informed respondent’s junior counsel that he would not get instructions immediately as he had more than enough time at lunchtime  I do not consider that makes the offer a reasonable one, accepting that it was said, as is the evidence by Mr Sternberg.  I do not believe one should interpret it as meaning that in a case of this nature and at that particular time in the running of it would be reasonable to expect a considered answer to be given within two hours and eight minutes.  I believe also the fact that it was the only offer ever made, so far as the evidence discloses, must be taken into consideration although one has to deal with the only offer and it is that only offer which I am considering as to its reasonableness and to which I have come to the conclusion it was not reasonable[sic].

    17The question of any renewal of it really is not germane to that question but is, as I will again refer to later, relevant in another consideration.  Place the applicant and his counsel and/or solicitor under the condition of replying to the offer in that short time I cannot conclude was reasonable….”

1. Unless it be said that it was not open to Judge Davidson on the reasons he gave to conclude that the offer was not a reasonable one, this Court cannot set aside this conclusion.  As it happens I find his Honour’s reasons persuasive.  In the circumstances it was unreasonable that the offer should be expressed as open for acceptance up to 2pm on 1 November 2000.

2. The matter was a difficult one and I see no reason why the worker should not have been given a greater and proper time to obtain advice and to consider the offer.  No one should ordinarily be required to make such decisions within such a short time.  It matters not that he did not ask for further time.  The reasonableness of the offer depends upon its own terms and the circumstances in which it is made. 

3. In Webster a Commissioner had declined to make an order for costs in accordance with s119 of the Workers’ Compensation Act 1987, the equivalent of s115 of the Act.  The employer sought a review of this decision.  An offer of settlement had been made by the employer.  The Commissioner took the view that in the circumstances the further costs subsequent to the offer of settlement had not been unreasonably incurred.  Before Campbell J it was contended that upon its true construction s119(2) (see s115(2)) required that a finding be made that costs were unreasonably incurred if they were incurred after a reasonable offer of settlement in the proceedings was made to the party.  Campbell J said that if this construction was correct there was no further discretion in the Court once it was satisfied that a reasonable offer of settlement in the proceedings was made to the party.  His Honour said at 735-6:

   “I do not consider this construction to be correct.  As a matter of language, section 119(1) deals with the principal question of satisfaction by the Court that costs are unreasonably incurred and what order the Court is required to make once it is determined that they are unreasonably incurred.  In my view, subsection (2) places a fetter upon the power of the Court to, so far as this section is concerned, determine that costs are unreasonably incurred.  For it says that costs incurred are considered to be unreasonably incurred for the purposes of this section only if they were incurred by the party after a reasonable offer of settlement of the proceedings was made to the party, or other alternatives to which it is unnecessary to go.  As a matter of language that subsection fetters the general power rather than requiring that it be exercised in the circumstances set out in the subsection.  I see no warrant for concluding that the words ‘only if’ are to be read as ‘if, and only if’, a not unusual phrase in modern statutory drafting.

   The construction contended for by Mr Barber would lead to the odd result that the costs of an applicant of taking advice upon and considering an offer of settlement would be unreasonably incurred since they would be incurred after a reasonable offer of settlement had been made.  Such an outcome seems an unlikely and indeed absurd one.  Interestingly enough, the letter of 7 March 1996 seeks an order that there be no costs after that date without even allowing time for its delivery, let alone the taking of instructions.

   The purpose of the section would be adequately served by a construction which allows the Court to determine for itself whether costs have been unreasonably incurred, subject to the limitation contained in subsection (2).”

4. After referring to the relevant explanatory note and the Second Reading Speech, Campbell J continued:

   “The use of the words ‘unreasonable refusal’ is consistent with the construction of the section which I prefer.

   If it be accepted that the offer contained in the letter of 7 March 1996 was a reasonable offer of settlement, it remained open to the Commissioner to determine that the subsequent costs were not unreasonably incurred.  From the submissions made and the Commissioner’s comments, it is reasonable to infer that he had regard to the date of the letter, the circumstance that the matter had already been prepared for trial, including the briefing of counsel and that most of the costs would have already been incurred.  He would have been aware from hearing the matter that the applicant lived at Putty.  He was in my view entitled to have regard to those matters and I am not satisfied that his discretion miscarried either because he considered inappropriate material or for any other reason.”

5. With respect, what Campbell J said is compelling.  For reasons his Honour gave it enables a practical application of the section without in any way diminishing its effect if a worker unreasonably refuses a reasonable offer of settlement.

6. In Newell Judge Armitage had to deal with the submission that, because an award was less than the amount of a previous offer, the offer must have been “reasonable” within the meaning of s115 of the Act.  Judge Armitage referred to Campbell J’s decision in Webster and said at 130 that he was in respectful agreement with “everything which fell from his Honour in that case.”

7. In the course of argument some attention was directed to the meaning of subs (2).  It was put that the subsection properly construed meant that costs incurred by a party to proceedings must be treated as having been unreasonably incurred for the purposes of the section if they were incurred by the party after a reasonable offer of settlement was made.  This argument does not help UCA in this case because Judge Davidson had found that the offer of settlement made was not a reasonable offer of settlement.  However, I do not think subs (2) can be so read.  As Campbell J said, the subsection fetters the general power to treat costs incurred by a party as having been unreasonably incurred for the purposes of the section.  The subsection insists that costs may only be so treated in the circumstances described in paras (a) to (d).  That is the force of the word “only”.  Compare David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 277. In this context, the word “only” defines, by reference to paras (a) to (d), and limits the circumstances in which costs incurred can be so considered or treated. Subsection (3) is directed to the determination of whether the condition stipulated in subs (2)(c) of the Act is satisfied. It does not provide for another circumstance in which the Court may hold that costs have been unreasonably incurred within s115.

8. However, if one or more of the conditions set out in paras (a) to (d) of s115(2) are satisfied and the Court is satisfied that the costs in the proceedings before it were unreasonably incurred, in my opinion, the Court has no choice but to treat those costs as unreasonably incurred for the purposes of the section and not to make an order for payment of them by any other party to the proceedings.

   Orders

9. This application can be disposed of by saying that no ground has been shown for interfering with Judge Davidson’s conclusion that the offer of settlement made on 1 November 2000 was not a reasonable offer of settlement within the meaning of s115.  In view of the doubt said to have been raised by the decisions of Judge O’Meally and Judge Burke in the Compensation Court, it may be useful for this Court to go further than deciding the issue between the parties and express the view that I have about how s115 of the Act operates. 

10. In summary, the Court may not treat costs as unreasonably incurred for the purposes of s115 unless one or more of the conditions set out in paras (a) to (d) of subs (2) are satisfied.  The Court may conclude that an offer of settlement within the meaning of para (a) was not reasonable even though, in amount, it was the same or greater than the amount the applicant ultimately recovered in the proceedings.  The conditions of the offer may, for example, be unreasonable.  Even if the Court is satisfied that the offer was a reasonable offer, the Court may still not be satisfied that costs incurred, after the offer was made, were unreasonably incurred.  If however the Court is satisfied that any costs in the proceedings were unreasonably incurred the Court must order those costs be so treated for the purposes of the section and must not make an order for payment of those costs by any other party to the proceedings.

11. I propose the following orders:

    1.Grant leave to appeal;

    2.Appeal dismissed with costs.

12. SANTOW JA:  I have had the advantage of reading the judgment of Sheller JA in draft and agree with it.  I would only wish to add these observations. 

13. There is an alternative route to the conclusion which Sheller JA reaches.  It is also a route which, in the present case, avoids the absurd and oppressive consequence that an offer of settlement made on an unreasonable basis in terms of time to consider, must nonetheless be accepted.  This is on pain of all costs incurred after that, being otherwise deemed to have been unreasonably incurred.  That route is to recognise the obvious commonsense that the reasonableness of an offer of settlement is a function not only of its financial terms but also of the reasonableness of the time laid down by the offerer for its acceptance.  That reasonableness is to be judged in the context of the stage of the proceedings reached and the overall circumstances. 

14. In the present case, it was submitted, as the trial judge considered correctly, that the worker had been ambushed by the offer communicated to his barrister made at 11.52 am on the sixth day of hearing, but open only until 2 pm on that day.  This was at a time when the worker did not have a report of Dr Maguire, who was retained by the Appellant, and which was unfavourable to the worker’s case on the critical issue of the term of his ongoing disability.  To regard such an offer purely in terms of its financial content, here by reference to the lesser amount recovered, is to ignore the fact that the offer included as one of its terms, that it must be accepted in just over two hours.  This was for a busy barrister engaged in the case to deal with, in the middle of the hearing, on day six.  Objectively, whatever the barrister said, this was not reasonable.  That pointed, with the bare two hours to accept, to that term of the offer not being reasonable.  I would therefore conclude that such term as to acceptance, judged in that context, rendered the offer of settlement not “a reasonable offer of settlement”. 

15. The alternative route to this conclusion is that adopted by Sheller JA.  It is based upon the reasoning in Webster v Gladesville Macquarie Hospital (1996) 13 NSWCCR 731, a decision of Chief Judge Justice Campbell. Essentially that reasoning turns upon the word “considered” in s115(2) as being essentially equivalent to “deemed”. The reasoning still leaves open other circumstances in which it can be factually demonstrated, as distinct from merely deemed, that the costs in question were not unreasonably incurred, though they follow an offer which was itself reasonable. That depends upon the claimant so satisfying the Court.

16. I therefore concur in the result and agree in the orders proposed by Sheller JA. 

17. FOSTER AJA:  I agree with Sheller JA.

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LAST UPDATED:               16/09/2002