Werner Lushington v State Government Insurance Commission (No. 2) No. SCGRG 86/1743 Judgment No. 3811(2) Number of Pages 4 Costs Practice

[1993] SASC 3811

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA BURLEY J, SUPREME COURT MASTER

CWDS
Costs - Successful plaintiff applies for costs of action to be taxed as between solicitor and client - Plaintiff filed separate offers to consent on liability and quantum - whether discretion should be exercised in favour of the defendant - deceased witness unavailable to the defendant - difficulty in assessing damages for loss of superannuation benefits - costs of action awarded to plaintiff to be taxed as between solicitor and client.SCR 41.04. Whitehead v. Maas (No. 2) (1991) 161 LSJS (Full Court), considered.
Practice - Judgment after trial entered for wrong amount - altered to take account of prior payment by defendant. SCR 84.12.

HRNG ADELAIDE, 11 February 1993 #DATE 12:2:1993
Counsel for plaintiff:         Mr. Eriksen
Solicitors for plaintiff:        Condon and Co
Counsel for defendant:         Mr. Newell
Solicitors for defendant:        Ross and McCarthy

ORDER
Defendant pay the plaintiff's costs of action.

JUDGE1 BURLEY, J    On the 11th February 1993 judgment was entered for the plaintiff against the defendant in the sum of $779,932.14 and I handed down reasons for that decision. 2. It has been brought to my attention that in entering judgment in the above matter on 11th February 1993 I omitted to take account of the sum of $30,000 which had previously been paid by the defendant to the plaintiff on account of the plaintiff's damages. I consider that under the provisions of Rule 84.12 of the Supreme Court Rules I have power to alter the judgment entered by me on 11th February. Accordingly I order that the judgment entered in this action on 11th February 1993 in the sum of $779,932.14 be varied by substituting for that amount the sum of $749,932.14. 3. The plaintiff sought costs of action to be taxed on a solicitor/client basis pursuant to the provisions of Rule 41.04 which provides:-
    "Where a defendant has not accepted a plaintiff's offer made
    pursuant to this Rule and the sum recovered or, as the case may
    be, the proportion of the debt or damages or the relief
    recovered by the plaintiff is equal to or greater than that
    contained in the plaintiff's offer the Court, unless it thinks
    proper to order otherwise, shall order the defendant to pay the
    whole of the plaintiff's costs of action to be taxed as between
solicitor and client." 4. On 24th January 1992 the plaintiff filed an offer whereby the plaintiff agreed to an apportionment of liability, 95% to the defendant and 5% to the plaintiff. That offer was not accepted. By my judgment of 11th February I found that the defendant was 100% responsible for the collision. 5. On 17th August 1992 the plaintiff filed an offer to accept the sum of $600,000 after apportionment. That offer was not accepted by the defendant. The action was listed for trial on 7th September 1992 but was not reached. The action was listed before me for trial on 25th January 1993. 6. On the question of costs it was Mr. Newell's contention that the defendant should only be liable to pay the costs of action taxed on a party and party basis. He said that there were a number of unusual features of the action which should be taken into account in the exercise of my discretion. He pointed out that the original defendant, Mrs. Anderson, died prior to trial and was therefore not available to be called as a witness. In addition, when the defendant sought to tender Mrs. Anderson's answers to interrogatories, I ruled that under the provisions of section 34c of the Evidence Act the answers to interrogatories were inadmissible. Mr. Newell next pointed out that this was the first South Australian case where the Supreme Court has been called upon to assess damages for loss of superannuation benefits. In that regard he said that information and documentation relating to the assessment of damages for loss of superannuation benefits only became available shortly prior to or during the trial. I accept that some of the documentation relating to the plaintiff's claim for loss of superannuation benefits was only made available to the defendant during the course of trial. 7. There have been no reported decisions on the way in which the discretion is to be exercised pursuant to Rule 41.04. However, there are some cases on its predecessor, Rule 41.05. The former Rule 41.05 was as follows:-
    "If the Judge is of opinion that the defendant's refusal of,
    or lack of reply to, the plaintiff's notice was in all the
    circumstances unreasonable, he may order the defendant to pay
    the plaintiff's costs of action to be taxed as between solicitor
and client." In Civil Procedure, para. 41.04.1 and 41.04.5, the learned author deals with the new provision. He states that the intention of Rule 41 is penal and it is to be applied as an incentive to settlements. The learned author cites Whitehead v. Maas (No.2) (1991) 161 LSJS 167. Although that case dealt with the provisions of the former Rule 41.05, I respectfully agree that the difference between the former Rule 41.05 and the current Rule 41.04 does not detract from that statement of principle. Indeed, I consider that all of the principles enunciated by the Full Court in that case apply with equal force to the provisions of R.41.04, with only one qualification to which I now turn. 8. The learned author submits that the discretion conferred upon the Court in the current Rule 41.04 is likely to be exercised in accordance with the authorities on the former Rule 41.05, ie whether the refusal was unreasonable. Whilst I consider that the authorities dealing with the former Rule 41.05 will be of assistance in exercising the discretion under Rule 41.04, I consider that there is a difference of substance between the former Rule 41.05 and the current Rule 41.04. The former required the discretion to be exercised by reference solely to whether or not the defendant's refusal of the plaintiff's offer was unreasonable. Under the current provision, the discretion conferred is of a more general nature. If the Court thinks it proper to order otherwise, the Court may remove, either partially or totally, the requirement of the Rule that the costs of action be awarded on a solicitor and client basis. It therefore seems to me that the Court may take into account circumstances which, although they may include a consideration of whether or not the defendant has been unreasonable, are not limited to such a consideration. 9. The death of Mrs. Anderson and the consequent inability of the defendant to call her at trial can, of necessity, only go as to the question of liability. In Whitehead v. Maas (No. 2) (supra) King CJ, with whom the other members of the Court agreed, said (at page 171):-
    "It follows from what I have said that, in my opinion, where a
    plaintiff has made full, honest and proper disclosure before
    trial in conformity with the Rules and has made the offer in
    sufficient time to enable the defendant to give it proper
    consideration, the defendant's non-acceptance of an offer made
    in accordance with the Rules which is as favourable or more
    favourable to it than the liability adjudged by the Court, will
    be regarded, in the absence of unusual circumstanes, as
unreasonable." 10. In applying that principle to the circumstances of this matter, I am of the view that the defendant has failed to satisfy me that I should "order otherwise", at least in so far as the question of liability is concerned. Nothing has been put before me to suggest that there has been other than full, honest and proper disclosure before trial by the plaintiff, in conformity with the Rules, to the defendant. I do not consider that the inability of the defendant to call Mrs. Anderson constitutes an unusual circumstance. To hold otherwise would be to place any party who has been unable to call a witness because of the death of that witness prior to trial in a special position. It would be unwise to do so. A party such as the defendant in this action has to make a decision as to the appropriateness of the plaintiff's offer in light of the knowledge that the defendant is unable to call a material witness because of the death of that witness. Admittedly in this matter, the defendant had hoped to be able to tender in evidence the sworn answers to interrogatories of Mrs. Anderson. However, from an objective point of view, the defendant could not assume that such evidence would be admissible particularly in view of the provisions of section 34c(3) of the Evidence Act. 11. As to the assessment of damages, I accept that the assessment of damages for loss of superannuation benefits has been a difficult exercise. There is not a great deal of authority on the question. The difficulty is compounded by the fact that superannuation schemes may vary considerably. Consequently it would not come as a surprise to me that the defendant was up to the time of trial, uncertain as to what allowance it should make for that aspect of the plaintiff's claim. Nevertheless I consider that the defendant as at mid-August 1992 must have been aware that some allowance had to be made for the loss of superannuation benefits. Nothing has been put before me to suggest to the contrary. In addition, given that the plaintiff, some 3 weeks prior to the listing of this action for trial in September 1992, offered to accept a sum considerably less than that which was ultimately awarded, I cannot see that the circumstances are such that the defendant should do other than to bear the ordinary consequences of refusal to accept that offer. 12. For the above reasons I order that the defendant pay the plaintiff's costs of action to be taxed or agreed as between solicitor and client.