Witcombe v Talbot & Olivier [No 2]

[2009] WASC 173

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   WITCOMBE -v- TALBOT & OLIVIER  [No 2] [2009] WASC 173

CORAM:   BEECH J

HEARD:   24-27 & 30 MARCH, 1 APRIL 2009

DELIVERED          :   19 JUNE 2009

FILE NO/S:   CIV 2485 of 2004

BETWEEN:   GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE (DEC)

Plaintiff

AND

TALBOT & OLIVIER
Defendant

Catchwords:

Professional negligence - Solicitors retained to pursue personal injury claim - Whether solicitors failed to exercise reasonable care and skill - Client died before writ served - Whether client suffered loss or damage

Executors and administrators - Proceedings by executor of client against solicitor - Claim that solicitors negligent and breached contract of retainer - Survival of causes of action - Law Reform (Miscellaneous Provisions) Act 1941 (WA) s 4 - Whether cause of action vested in client before death - Whether damage suffered by client before death

Legislation:

Law Reform (Miscellaneous Provisions) Act 1941 (WA) s 4

Result:

Nominal damages awarded to the plaintiff
Claim otherwise dismissed

Category:    A

Representation:

Counsel:

Plaintiff:     Mr R I Viner QC & Mr J I Cooke

Defendant:     Ms C H Thompson

Solicitors:

Plaintiff:     GV Lawyers

Defendant:     Lavan Legal

Case(s) referred to in judgment(s):

Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229

Astley v Austrust [1999] HCA 6; (1999) 197 CLR 1

Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232

Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64

Commonwealth v Cornwell [2007] HCA 16; (2007) 229 CLR 519

Feletti v Kontoulas [2000] NSWCA 59

Fink v Fink [1946] HCA 54; (1946) 74 CLR 127

Foppoli v Public Trustee [1970] WAR 73

Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504

Hammond Worthington v Da Silva [2006] WASCA 180

Hartley Poynton Ltd v Ali [2005] VSCA 53; (2005) 11 VR 568

Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539

Heydon v NRMA [2000] NSWCA 374; (2000) 51 NSWLR 1

Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351

Kitchen v Royal Airforce Association (1958) 1 WLR 563

Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286

Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638

Nikolaou v Papasavas Phillips & Co [1989] HCA 11; (1988) 166 CLR 394

Olympic Holdings Pty Ltd v Lochel [2004] WASC 61

Prast v Town of Cottesloe [2000] WASCA 274; (2000) 22 WAR 474

Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332

Shire of Gingin v Coombe [2009] WASCA 92

Talbot & Olivier (a firm) v Witcombe [2006] WASCA 87

Woolworths Ltd v Crotty [1942] HCA 35; (1942) 66 CLR 603

BEECH J: 

Introduction

1. The plaintiff, Mrs Glenys Witcombe, sues as the executrix of the estate of her late husband, Mr Keith Witcombe.  The defendant is a firm of solicitors.

2. Mr Witcombe was seriously injured in a motor vehicle accident on 13 November 1994.  In late August 1997 Mrs Witcombe, on behalf of Mr Witcombe, engaged the defendant to act for him in relation to his personal injuries claim.

3. Mrs Witcombe claims that the defendant acted negligently and in breach of the contract of retainer in its conduct of Mr Witcombe's personal injuries claim.  The nub of Mrs Witcombe's complaint is that the claim was not pursued with competence or diligence.

4. In April 2001 new solicitors took over the conduct of Mr Witcombe's claim.  They entered the matter for trial on 7 January 2002 and filed schedules of damages on 30 January 2002.  Those schedules claimed damages totalling about $5 million.

5. On 13 February 2002 there was a pre‑trial conference.  The pre‑trial conference was adjourned to 27 March 2002.

6. On 24 March 2002 Mr Witcombe died.

7. In November 2002, by consent, the claim in the District Court was amended to substitute Mrs Witcombe as the plaintiff.  By the substituted statement of claim, the District Court action was brought by Mrs Witcombe in two capacities.  She sued on behalf of the estate of Mr Witcombe pursuant to the Law Reform (Miscellaneous Provisions) Act 1941 (WA), and also sued on her own behalf pursuant to the Fatal Accidents Act 1959 (WA).

8. On 27 November 2002 Mrs Witcombe settled the District Court action for $825,000 plus costs.

9. Mrs Witcombe claims that the defendant's negligent conduct of Mr Witcombe's personal injuries action caused Mr Witcombe to lose the opportunity to recover the damages that he would have recovered from the accident tortfeasor's insurer before he died.  Mrs Witcombe accepts that the $825,000 received in settlement of the District Court action must be deducted from her damages claimed in this action.

10. The major issues which arise in this action are as follows:

    (1)did the defendant fail to act with reasonable care, skill and diligence in carrying out its retainer?

    (2)if so, what were the consequences of that failure?  In particular, would Mr Witcombe have received, before he died, damages by settlement or following judgment after trial if the defendant had not been negligent?

    (3)what loss, if any, had Mr Witcombe suffered, before he died, as a result of the defendant's negligence?

    (4)what damages, if any, are recoverable by Mrs Witcombe?

11. I propose to deal with the third issue before the second.  Before turning to those issues I will set out my findings of fact. 

Findings of fact

Observations on witnesses

1. The events in question in this action occurred between eight and 12 years ago.  In making findings of fact I have relied primarily on the contemporaneous documents.  In particular, unless I specify otherwise, to the extent there is any inconsistency between the witnesses' oral evidence about what occurred, and what is revealed in contemporaneous documents, I prefer the contemporaneous material.

2. All of the witnesses who gave evidence before me seemed to me to do their best to say what they could recall.  However, given the passage of time there are significant limits on the reliability of the witnesses' recollections.  For example, it is clear that Mrs Witcombe and, to some extent, her son, Mr Matthew Witcombe, developed concerns and dissatisfaction with the defendant and Ms Josephine Auerbach, the solicitor at the defendant with the primary conduct of the file, as to the progressing of Mr Witcombe's claim.  However, it seems to me that their evidence as to the points in time at which they held and expressed those concerns is not always reliable.  Further, the contemporaneous material establishes that there was considerably more interaction between Mrs Witcombe and Ms Auerbach than is reflected in Mrs Witcombe's witness statement.  In a number of those and other respects I have not accepted aspects of Mrs Witcombe's and Matthew Witcombe's evidence in their witness statements.  That is because that evidence is not borne out by the contemporaneous material.

3. Many of the conflicts of evidence about precisely what occurred do not seem to me to bear in any significant way on the resolution of the issues in this action.  Nonetheless, I resolve some of the conflicts, in case a different view were taken on any appeal.

The accident

1. On 13 November 2004 Mr and Mrs Witcombe were injured in a car accident.  The car was driven by their son, Matthew Witcombe.  His negligent driving caused the accident.

2. Mr Keith Witcombe received very serious injuries in the accident.

3. In overview, he suffered a severe head injury; he was totally incapacitated for work; he required care at all times of the day and for ordinary living activities; he was wheelchair and bed bound; he was doubly incontinent; he could not vocalise; and he had short‑term memory loss.

Robertson & Hayles is engaged

1. Later in November 1994 Mr and Mrs Witcombe engaged Messrs Robertson & Hayles to act for them in relation to their claims arising from the accident.

2. By letter of 28 August 1996 the State Government Insurance Commission (SGIC) advised that it would not deny the negligence of the driver, Matthew Witcombe, as long as the claim was settled or proceedings commenced before the expiry of the limitation period.

The defendant is engaged

1. On 25 August 1997 Mrs Witcombe's brother, Mr Jonathan Whisson, telephoned the defendant.  The person who took the call recorded that Mr Whisson said that Mrs Witcombe was concerned that there had been no action on the file at Robertson & Hayles and that she wanted to change solicitors.

2. Ms Josephine Auerbach, a solicitor at Talbot & Olivier, telephoned Mr Whisson.  He told her the following.  His sister's husband, Mr Witcombe, had been badly injured in an accident and was almost a quadriplegic.  His sister was also injured.  His sister had a claim and had a power of attorney for her husband.  His sister was a qualified nurse and wanted her husband at home.  The house would need to be modified and they wanted an electric wheelchair.  His sister wanted to change solicitors because there was not enough feedback from the current solicitors.  A meeting was arranged.

3. Ms Josephine Auerbach completed her articles of clerkship at the defendant and was admitted to practice in December 1992.  She continued to work at the defendant until May 2001.

4. By August 1997 Ms Auerbach was the solicitor in charge of the defendant's 'plaintiff personal injury' files.  The evidence does not reveal when she began to conduct the defendant's plaintiff personal injury work.  In the conduct of plaintiff personal injury files Ms Auerbach did not receive any supervision by any partner or other practitioner within the defendant.

5. As at August 1997 Ms Auerbach had not conducted a motor vehicle personal injuries claim on behalf of a person who was a quadriplegic.

6. On 29 August 1997 Ms Auerbach met with Mrs Witcombe and Mr Whisson.  Ms Auerbach's notes of the meeting record a number of matters including the following:

   (a)Mr Witcombe was permanently disabled with no mental disability but 'big physical injuries';

   (b)some information regarding Mrs Witcombe's injuries;

   (c)Mr Witcombe was not stimulated at the Inglewood Home of Peace where he had been since February 1996 and he reacted more when he was at home;

   (d)Mr Witcombe told the occupational therapists that he got depressed and wanted to come home;

   (e)Mr Witcombe came home every second weekend;

   (f)house modifications were needed;

   (g)it may have been possible to sell their house and buy an already modified house;

   (h)they needed a vehicle and an electric wheelchair.

7. From the start, and throughout, Mrs Witcombe's instructions were that she wanted to care for her husband at home.

8. On 29 August 1997 Mrs Witcombe signed a document by which she authorised and directed the defendant to take over the conduct of Mr Witcombe's claim.

9. Mrs Witcombe's evidence was that she said at the meeting that she held a power of attorney for her husband.  There is no contemporaneous material to support this.  I am not satisfied that it was said at the meeting on 29 August 2007.  In any event, nothing turns on that question, given that Mr Whisson had told Ms Auerbach, during their telephone conversation on 25 August 1997, that Mrs Witcombe held the power of attorney .

10. Both Mrs Witcombe and Mr Whisson said in evidence that, at the initial meeting, Ms Auerbach said words to the effect that the claim could be resolved within a year.  The defendant disputed this evidence, although Ms Auerbach did not deny that she may have said something along those lines (ts 326).  I am satisfied by the evidence of Mr Whisson and Mrs Witcombe that something to this effect was said at the meeting.  However, the making of such a statement, at a point when so little was known about the matter, seems to me to have no bearing on the issues in this action.

September 1997 ‑ March 1998; Obtaining the file

1. On 2 September 1997 the defendant wrote to Robertson & Hayles enclosing authorities signed by Mrs Witcombe authorising and directing the defendant to take over the conduct of Mr and Mrs Witcombe's personal injuries claims.  The letter referred to the lien held by Robertson & Hayles over the files and requested them to grant Mrs Witcombe an indulgence in relation to payment of their account until her matter was finalised.  The letter also stated that an irrevocable authority could be provided over any sum received from SGIC.

2. On 3 September 1997 Ms Auerbach spoke to someone at Sardelic Real Estate.  It is likely that, as Ms Auerbach said in her evidence, Sardelic contacted her (ts 320).  She noted details of a Mr Chris Keen.  She then left a message for Mrs Witcombe.

3. By letter of 7 October 1997 Robertson & Hayles responded to the defendant.  The letter stated that Mr Witcombe's claim may well become the subject of litigation and was not likely to settle quickly.  On that basis, they required an irrevocable authority as suggested in the defendant's earlier letter.  Not having heard from the defendant, Robertson & Hayles wrote again on 27 November 1997 inquiring whether the defendant was still acting.

4. On 9 December 1997 Ms Auerbach spoke with Mr Keen, an architect.  Mr Keen said he would do a quote on modification options for Mr Witcombe's house.

5. On 9 December 1997 Mrs Witcombe spoke by telephone to Ms Auerbach.  Ms Auerbach said that she would write to the Insurance Commission of Western Australia (ICWA), formerly SGIC, to see if it would pay for Mr Keen's assessment of the house.  Mr Keen would do a quote and Ms Auerbach would present it to ICWA.  Mrs Witcombe said that she was happy to sign an authority to pay Robertson & Hayles at the end.  Ms Auerbach's note of this conversation records that there were '[n]o more disruptions now, so we can get stuck into their claims now'.  The evidence suggests that the 'disruptions' referred to a wedding of someone related to Mrs Witcombe (ts 153).

6. On 12 January 1998 the defendant responded to Robertson & Hayles' letter of 27 November 1997.  The defendant's letter stated that the defendant had received Robertson & Hayles' letter while Ms Auerbach was on holidays and that, as Mrs Witcombe had indicated earlier that she was unable to deal with both matters until after her daughter's wedding, the letter was not brought to Ms Auerbach's attention immediately.

7. Given the conversation between Ms Auerbach and Mrs Witcombe on 9 December 1997, I am not satisfied that there was a satisfactory explanation for the delay from that date until the letter of 12 January 1998 (leaving aside the week between Christmas and New Year).

8. The letter of 12 January 1998 requested Robertson & Hayles to forward the accounts for both matters together with any authority for signing by Mrs Witcombe.

9. On 13 January 1998 Robertson & Hayles responded, enclosing the accounts and an irrevocable authority.

10. On 19 January 1998 Mr Keen wrote informing Ms Auerbach that he had met with Mrs Witcombe to discuss architectural requirements and Mr Witcombe's needs.  The letter stated that '[w]e are still awaiting the medical reports' and requested that Ms Auerbach provide a copy of these.

11. Robertson & Hayles followed up their earlier letter by letter of 23 February 1998 asking whether the defendant had obtained the authorities sent to them.

12. On 4 March 1998 Ms Auerbach spoke with Mrs Witcombe.  Ms Auerbach said that she would send out the documents for Mrs Witcombe to sign and get moving on the file.  She said she would be able to settle Mrs Witcombe's claim quickly.

13. Ms Auerbach's note of the conversation recorded that Mrs Witcombe told her that the current nursing home cost was $64,000 per annum, that it would cost $94,000 per annum to move Mr Witcombe into a four‑person house and $150,000 per annum for carers, with Mrs Witcombe's time on top of that.

14. The note also recorded that Mr Keen had mentioned to  Mrs Witcombe that 10 years would be taken off Mr Witcombe's life expectancy.  Ms Auerbach says, and I accept, that Mrs Witcombe said she did not agree with the suggestion that Mr Witcombe's life expectancy would be reduced by 10 years as a result of the accident.

15. Also on 4 March 1998 Ms Auerbach, on behalf of the defendant, wrote to Mrs Witcombe.  The letter enclosed copies of the Robertson & Hayles accounts (which had been sent on 13 January 1998).  The letter requested that Mrs Witcombe sign the irrevocable authority to enable the defendant to obtain the file.  The letter stated that the next step would be to see Mrs Witcombe's claim settled as quickly as possible and to obtain more information in relation to Mr Witcombe's claim, especially on the need for house modifications.  The letter again requested that the enclosed authority be returned as quickly as possible to enable the defendant to obtain the medical reports necessary for Mr Keen's firm to prepare its final report.

16. Self‑evidently, it was necessary for the defendant to obtain the Robertson & Hayles file in order to progress the matter.  In my opinion, the defendant failed to act with reasonable diligence at least from 9 December 1997 until 4 March 1998 in taking steps to obtain the file.  In her evidence in cross‑examination, Ms Auerbach conceded, rightly in my opinion, that there was no satisfactory explanation for the delay from 9 December 1997 until 4 March 1998 (ts 326).

17. Mrs Witcombe signed the irrevocable authority on 9 March 1998 and sent it to the defendant, who received it on 13 March 1998.  On that day the defendant wrote to Robertson & Hayles enclosing the authority and requesting the files.  Robertson & Hayles made the files available for collection on that day.

The defendant's conduct when it received the file

1. On 13 March 1998 or some day soon after, the defendant collected the files from Robertson & Hayles.

2. The Robertson & Hayles file for Mr Witcombe's claim contained a number of medical and other reports, including the following:

   (a)reports dated 15 September 1995, 6 November 1995, 18 January 1996 and 8 February 1996 from Dr Kim Fong, a senior registrar in rehabilitation medicine at Royal Perth Rehabilitation Hospital;

   (b)letters and reports from Dr James Beel and a report dated 12 February 1997 from Dr Brian Dare at Royal Perth Hospital;

   (c)a nursing staff report dated 10 June 1997;

   (d)a speech pathology report and an occupational therapy report both dated 23 June 1997.

3. The medical reports suggested that Mr Witcombe had substantially stabilised, or would have stabilised by late 1996, and so his claim was thought to be ready to settle by late 1996.  There was no suggestion, at any later stage, that Mr Witcombe's medical condition required delay in settlement to await stabilisation of his condition.

4. The file also included a letter of advice from Mr Derek Chantler of counsel in which he set out what further information would be necessary for him to advise on the quantum of damages.

5. I turn to the question of what Ms Auerbach did when she received the Robertson & Hayles file.  She did not recall whether she read the file straight away but said that she read it 'at some time' (ts 331 and 333).

6. With exceptions to which I shall come, in the documents tendered from the defendant's file, there are no handwritten or typed summaries or notes by Ms Auerbach of what the Robertson & Hayles file contained and the information it revealed.  The exceptions are at pages 3 to 12 and 18 of exhibit 3.  I will deal with those later in these reasons.  I am satisfied that Ms Auerbach did not make any notes of the file contents at any stage in 1998.  The failure by Ms Auerbach to review the Robertson & Hayles file in a comprehensive way, to assess the information it contained and to identify further information required seems to me to be a matter of significance.  I will return to this topic.

March 1998 - March 1999; The defendant focuses on Mrs Witcombe's claim

1. From about March 1998, the defendant advised Mrs Witcombe that the settling of her claim should not await the resolution of Mr Witcombe's claim because Mr Witcombe's claim required further investigation.  Mrs Witcombe accepted that advice (exhibit 3 page 180, ts 174 and 182).  However, it is, to my mind, important to recognise that Mrs Witcombe's instructions did not require or authorise the defendant to slow the progress of Mr Witcombe's claim until Mrs Witcombe's claim had been settled.  The substance of the instructions was no more than that resolution of Mrs Witcombe's claim should not be delayed by the further investigations required to resolve Mr Witcombe's claim.  The scope of work required to progress Mrs Witcombe's claim to the point of settlement did not require any delay in the progress of Mr Witcombe's claim.  Mrs Witcombe made it clear that she wanted her husband's claim to be progressed, not put on hold.

1. The defendant invited a finding of fact that, from March 1998 to early 1999, in accordance with Mrs Witcombe's instructions, the focus of the defendant's work was on the settling of Mrs Witcombe's claims.  For the reasons I have given, I do not accept that anything in Mrs Witcombe's instructions authorised or requested the defendant to slow the progressing of Mr Witcombe's claim in order to give priority to Mrs Witcombe's claim.  However, I accept the proposition that in the 12 months from March 1998 the focus of the defendant's work was on the settling of Mrs Witcombe's claim.  The evidence supports the conclusion that Ms Auerbach did not do substantial work or make substantial progress on Mr Witcombe's action in this period.

2. Mrs Witcombe's statement says that on 18 May 1998 she contacted her brother and told him she was having trouble contacting Ms Auerbach and he said that he would telephone Ms Auerbach (exhibit 7 [31]).  Mr Whisson's evidence was that in May 1998 he rang Ms Auerbach at Mrs Witcombe's request and said to Ms Auerbach that Mrs Witcombe was concerned about how her husband's claim was progressing and that she was not happy with the lack of feedback to her (exhibit 9 [14], ts 255).

3. I do not accept that evidence.  I note that Mrs Witcombe's diary records that on 18 May 1998 she rang her brother, who rang Ms Auerbach (exhibit 5 page 107).  However, nothing is recorded in the diary about the content of the conversation. 

4. I am not satisfied that in the period from March to May 1998 Mrs Witcombe was having difficulty contacting Ms Auerbach.  There is no diary entry or other evidence of unsuccessful attempts by Mrs Witcombe to contact Ms Auerbach in the period March to May 1998.  In this regard I note the evidence of Mrs Witcombe in [29] and [30] of her witness statement (exhibit 7).  Consideration of the contemporaneous documents including Mrs Witcombe's diary (exhibit 5 page 100) and Ms Auerbach's notes (exhibit 3 page 179), together with Mrs Witcombe's evidence in cross-examination (ts 154 ‑ 155), satisfies me that what is said in exhibit 7 [29] and [30] is not correct.

5. There was a telephone message dated 18 May 1998 for Ms Auerbach from Mr Whisson (exhibit 3 page 178).  When Ms Auerbach returned the call she made a note 'carers schedule' on the message (exhibit A [35]).  I also note Mr Whisson's evidence that apart from the initial meeting in August 1997 he had only one contact with Ms Auerbach (ts 255).

6. On 14 May 1998 ICWA wrote to the defendant referring to a telephone conversation in which the defendant advised it was acting for Mr and Mrs Witcombe.  ICWA's letter requested formal advice that the defendant was acting.  ICWA's letter enclosed a report dated 19 April 1998 and requested confirmation that all prior medical reports had been made available to the defendant by the previous solicitors. 

7. On 28 May 1998 the defendant wrote to Mrs Witcombe confirming that it was drafting submissions in settlement of Mrs Witcombe's claim and would forward those submissions to her early the following week.  In relation to Mr Witcombe's claim the letter enclosed a copy of the report received from ICWA and a copy of the carer schedule, and apologised for not having forwarded it earlier.

8. On 27 July 1998 the defendant wrote to ICWA confirming that it had taken over the conduct of Mr Witcombe's claim.  The letter requested confirmation that ICWA would meet the costs of a wheelchair needed by Mr Witcombe.  ICWA provided that confirmation on 29 July 1998.

9. On 30 July 1998 Mr Keen provided his report to the defendant.

10. On 13 October 1998 ICWA wrote to the defendant inquiring when it would be in a position to issue submissions or proceedings in an attempt to settle Mr Witcombe's claim.  The letter stated that '[b]ased on the medical evidence it appears Mr Witcombe's injuries have reached a plateau and we do not see any reason why settlement should be delayed any further'. 

11. There was no written response to this letter.

12. On 23 October 1998 Ms Auerbach spoke by telephone to Mrs Witcombe.  Mrs Witcombe advised that Brightwater would be moved by March 1999, but that Mr Witcombe was not on the list of people to move with it.

13. Mrs Witcombe says in [40] of her statement (exhibit 7) that, during the telephone conversation on 23 October 1998, Ms Auerbach said that Mr Witcombe would be home in six months.  Taking into account the contemporaneous material (Ms Auerbach's note (exhibit 3 page 228) and Mrs Witcombe's diary note (exhibit 5 page 125)) and Mrs Witcombe's evidence in cross‑examination (ts 168 ‑ 172), I do not accept that evidence. 

14. On 29 October 1998 Mrs Witcombe met with Ms Auerbach at the defendant's offices.  The focus of the meeting was the draft submissions prepared by the defendant in support of Mrs Witcombe's claims.  Ms Auerbach made handwritten amendments to the draft submissions during the meeting (exhibit 3 pages 229 ‑ 233). 

15. On 6 November 1998 Mrs Witcombe attempted to contact Ms Auerbach.  I find that the contact was likely to have been regarding Mrs Witcombe's claim, not about Mr Witcombe's claim.  They again discussed her claim in their telephone conversation on 9 November 1998.

16. On 7 December 1998 Ms Auerbach spoke to Melissa, an officer at ICWA.  ICWA raised the question whether Mr Witcombe could handle his own affairs and if not ICWA said it would require court confirmation.

17. Thus by December 1998 ICWA had raised the question of Mr Witcombe's competence to conduct litigation on his own behalf.

18. On 14 March 1999 the defendant sent a letter to ICWA setting out its submissions for settlement of Mrs Witcombe's claim.

19. On 15 and 16 March 1999 Mrs Witcombe attempted to call Ms Auerbach and left messages but did not receive a telephone call in response.  It is likely that she was calling Ms Auerbach to confirm the progress of her own claim.

20. On 19 March 1999 Mrs Witcombe telephoned Ms Auerbach.  Ms Auerbach said that Mrs Witcombe's settlement was proceeding in the normal way (exhibit 7 [51]).  They also discussed Mr Witcombe's claim.  The content of the discussions is referred to in [52] ‑ [55] of Mrs Witcombe's statement (exhibit 7) and page 141 of Mrs Witcombe's diary (exhibit 5).

April 1999 - July 1999; A first draft statement of claim is prepared

1. On 6 April 1999 Mrs Witcombe telephoned Ms Auerbach and left a message.  Mrs Witcombe's evidence in [57] of her statement (exhibit 7) that she met Ms Auerbach on 30 March 1999 is incorrect:  see her diary entry (exhibit 5 page 142) and her evidence in cross‑examination (ts 184 ‑ 187).

2. I find that from the middle of July 1998 until about March 1999 the defendant, by Ms Auerbach, took substantially no steps to progress Mr Witcombe's claim.

3. In the first half of 1999 Ms Auerbach commenced preparing a draft statement of claim in Mr Witcombe's action.  Although Ms Auerbach says in her statement (exhibit A [65]) that she had the draft typed in early 1999, I do not accept that a draft was prepared before April 1999.  The defendant's time records (exhibit 3 pages 637 ‑ 638) record that Ms Auerbach spent one hour perusing the file and one and a half hours drafting the statement of claim on 14 April 1999 and about three quarters of an hour settling the statement of claim on 11 June 1999.  I find that it was in the course of taking these steps on 14 April 1999 that Ms Auerbach made the undated handwritten notes which are to be found at pages 3 to 12 of exhibit 3.  With minor corrections, these notes summarised some of the material that was in the Robertson & Hayles file.

4. On 14 April 1999 Mrs Witcombe met with Ms Auerbach at Brightwater.  Ms Auerbach asked Mrs Witcombe to get a list of Mr Witcombe's medication and to find out what the Agriculture Department paid towards his superannuation.

5. On 20 April 1999 ICWA sent a letter to the defendant offering $65,000 to settle Mrs Witcombe's claim.  That letter was received on 23 April 1999 by Ms Auerbach.  Ms Auerbach spoke to Mrs Witcombe on that day (exhibit A [72]).

6. On 27 April 1999 the defendant wrote to Mrs Witcombe in relation to ICWA's offer of settlement (exhibit 3 pages 281 ‑ 283).

7. On 19 May 1999 ICWA wrote to the defendant asking when it intended to issue a writ for Mr Witcombe's claim (exhibit 3 page 286).

8. In late May 1999 Ms Auerbach had a discussion with Ms Samantha Neylon, the senior occupational therapist at Brightwater.  Ms Neylon provided a letter dated 25 May 1999 setting out the equipment that Mr Witcombe needed in order to move to the family house and an estimate of costs (exhibit 3 pages 287 ‑ 289).

9. On 27 May 1999 Ms Auerbach spoke to Melissa at ICWA regarding both Mr Witcombe's and Mrs Witcombe's claims.

10. On 28 May 1999 the defendant wrote to ICWA regarding Mr Witcombe's claim.  The letter enclosed Ms Neylon's letter of 25 May 1999, and sought confirmation that ICWA would pay for the items referred to in that letter.  The defendant enclosed other invoices, requesting payment (exhibit 3 pages 295 ‑ 296).

11. The defendant's letter also stated that the defendant had prepared a draft statement of claim but was still awaiting further details from the occupational therapist in relation to special damages and costs of equipment required.  It also stated that inquiries with the Guardianship and Administration Board had revealed that Mr Witcombe no longer had a guardianship order in place, the order having been revoked in December 1996 after a determination by the Board that Mr Witcombe was capable of handling his own affairs.  Since then Mr Witcombe had been managing his affairs by an enduring power of attorney signed in June 1996 in the presence of two witnesses.  The letter then stated that in the circumstances the defendant proposed to issue proceedings in the name of Mr Witcombe himself rather than through a guardian.

12. On 31 May 1999 the defendant wrote to Mrs Witcombe regarding her claim.  The letter enclosed the defendant's account and an authority enabling the defendant to settle her outstanding account with Robertson & Hayles.  The letter requested receipts for Mr Witcombe's wheelchair van and associated purchase and modification costs, and enclosed Ms Neylon's report of 25 May 1999.

13. On 31 May 1999 Melissa of ICWA contacted Ms Auerbach by telephone and advised that it had accounts from Brightwater for various reports, but the accounts all related to reports that ICWA had not received (exhibit 3 page 299).  Ms Auerbach sent copies of those reports (which were all dated 1997) to ICWA on the following day (exhibit 3 page 306).

14. On 9 June 1999 Mrs Witcombe wrote to Ms Auerbach.  Her letter enclosed a letter from the Agriculture Department about Mr Witcombe's salary and superannuation; the authority for payment of Robertson & Hayles' costs in relation to Mrs Witcombe's claim from Mrs Witcombe's settlement sum; and some other material.

15. The defendant wrote in response on 13 June 1999.  The letter stated that ICWA had indicated it would consider payment of the home modifications, the airconditioning and the van upon settlement of Mr Witcombe's claim.  The letter stated that accordingly, the defendant 'will now proceed to issue the Writ of Summons in Keith's name, and finalise the Statement of Claim a draft copy of which is enclosed herewith'.

16. I infer that the draft statement of claim at pages 256 ‑ 266 of exhibit 3, but without the handwritten amendments, was likely to have been the draft statement of claim enclosed with the letter of 13 June 1999.  That statement of claim was substantially derived from the handwritten notes at pages 3 ‑ 12 of exhibit 3, which were in turn substantially derived from some of the material in the Robertson & Hayles file.

17. On 14 June 1999 Brightwater sent to Ms Auerbach a proposal to employ a personal carer for Mr Witcombe, at a cost of $335 per week.

18. On 30 June 1999 the defendant wrote to Mrs Witcombe enclosing a settlement cheque for her claim.

19. In June and July 1999 there were correspondence and discussions between Ms Auerbach, Robertson & Hayles and Mrs Witcombe about the payment of Robertson & Hayles' account in relation to Mr Witcombe's claim.  Robertson & Hayles said that Mrs Witcombe had agreed that both accounts would be paid on settlement of Mrs Witcombe's claim.  That was the case - see exhibit 3 page 182.  However, Mrs Witcombe adopted the position that only her account with Robertson & Hayles was to be paid on settlement of her claim; Mr Witcombe's account was to be paid on settlement of his claim.

20. On 27 July 1999 ICWA wrote to the defendant asking when ICWA could expect service of the writ of summons for Mr Witcombe's claim (exhibit 3 page 350).

August 1999 to early February 2000 - The defendant seeks and obtains reports from Brightwater

1. On 15 August 1999 Mrs Witcombe wrote to Ms Auerbach about reimbursement of funds spent on Mr Witcombe's needs.  The letter also enclosed a letter from Robertson & Hayles of 11 August 1999 in relation to payment of Robertson & Hayles' account for Mr Witcombe's claim.

2. Some time between Mrs Witcombe's letter of 15 August 1999 and her letter of 12 September 1999, Ms Auerbach spoke to Mrs Witcombe and told her that ICWA was not prepared to pay for the items referred to in those letters.  Mrs Witcombe accepted this in cross‑examination (ts 206 ‑ 207).

3. On 18 August 1999 Ms Auerbach spoke with Ms Kath Pederick from Brightwater.  Ms Auerbach's note of this conversation recorded that group housing would cost $92,000 per annum including full board and care services, occupational therapy and physiotherapy.  Ms Pederick said that there was no guarantee that Mr Witcombe would get a place in group housing, but at‑home services by Brightwater might be an alternative.  The note records that from midnight to 7.00 am and from 5.00 pm to midnight there would be two carers, and one carer from 7.00 am to 5.00 pm. 

4. In relation to this conversation, Ms Auerbach says in her statement that she was trying to obtain costings on the various care options for Mr Witcombe and that she was concerned about the need to ensure that the claim included sufficient funds to meet Mr Witcombe's long‑term care costs (exhibit A [107]).

5. There is no record of Ms Auerbach having an earlier discussion with anyone at Brightwater on this topic.  Nor did Ms Auerbach ask for a report from anyone at Brightwater (or elsewhere) on this topic before September 1999.

6. On 13 September 1999 the defendant wrote to ICWA about Mr Witcombe's claim.  The letter referred to Ms Auerbach's telephone conversation with Melissa that day.  The letter also:

   (a)enclosed some accounts, together with the three month proposal for a personal carer which Ms Pederick of Brightwater had provided to Ms Auerbach in June 1999;

   (b)requested payment of the accounts and advice about whether ICWA would fund the personal carer for a trial period of three months; and

   (c)sought reconsideration of the request for reimbursement of van expenses.

7. The letter concluded that the defendant would like to arrange a meeting with Ms Pederick to discuss the costs of full-time carers for Mr Witcombe when he returned to his home environment 'as this is the major issue complicating settlement in this matter'.

8. In the week after 13 September 1999 Ms Auerbach had a conversation with Melissa of ICWA in which Melissa raised some questions about the expenses sought to be reimbursed and said that approval of the three month carer proposal was likely (exhibit 3A page 8).

9. On 21 September 1999 ICWA approved the personal carer trial; advised that certain invoices had been paid; and raised questions in relation to the van.

10. On 21 September 1999 Ms Pederick told Mrs Witcombe that a place had become available at Brightwater Balcatta for Mr Witcombe.  A meeting was arranged for 28 September 1999 (exhibit 7 [82]).  On the same day Mrs Witcombe spoke with Ms Auerbach and passed on what Ms Pederick had said (exhibit 3 page 361).  It was arranged for Ms Auerbach to attend the meeting on 28 September 1999 (exhibit 7 [85]).

11. On 28 September 1999 Ms Auerbach met with Ms Pederick, Mrs Witcombe and Matthew Witcombe at Brightwater. Ms Pederick advised that a place at Balcatta had come up and estimated that it would cost $93,000 per annum, including rent and food but not including special services.

12. It was agreed that Ms Pederick would send a report on completion of the three month trial with a personal carer.  Ms Pederick said that a different bed, referred to as the Invacare bed, would be trialled to see whether it might mean that one carer would be sufficient for Mr Witcombe at night time.  Ms Auerbach's note recorded that there would be a review of costings and a general review of Mr Witcombe's needs.  She was to request up‑to‑date reports from Ms Pederick, including reports on how much ongoing therapy was required and the cost of it.

13. On 29 October 1999 Ms Jan Bishop of Brightwater wrote to the defendant.  The letter stated that Endeavour House at Inglewood was scheduled for closure in June 2000 and offered Mr Witcombe a place in the Balcatta group house, expected to open on 1 December 1999.  The letter summarised the care services available, and stated the estimated cost at $93,000 per annum (exhibit 3 page 365).

14. In early December 1999 Mr Witcombe was moved, at his family's request, into the Balcatta group house.

15. On 22 December 1999 Mrs Witcombe wrote a letter, sent by facsimile that day, to Ms Auerbach at the defendant.  The letter advised that Mr Witcombe had moved into the Balcatta group house.  The letter stated that Mrs Witcombe had a number of concerns including that they were still waiting for Mr Witcombe's mattress, wheelchair and computer; he had not received his extra physiotherapy and carer hours; they wanted funds to purchase a new wheelchair van before settlement; and they were waiting to be reimbursed for the funds laid out so far.  The letter enclosed four further accounts.

16. By letter dated 23 December 1999 Ms Pederick sent to the defendant reports from nursing, occupational therapy, physiotherapy and speech therapy staff.  The letter stated that following the successful trial of the Invacare mattress a review of the costings report prepared in August 1997 would be completed in January 2000.

17. On 5 January 2000 ICWA wrote to the defendant inquiring whether there had been any progress of the matter.  The letter stated that ICWA looked forward to receiving a writ of summons as soon as possible and that if there appeared to be a delay in issuing the writ the defendant was to provide reasons.

18. On 7 January 2000 Ms Janet Wagland, a senior occupational therapist at Brightwater, wrote to the defendant reporting on the trial of the Invacare mattress.  The letter reported that the trial had been successful and recommended that the mattress be purchased for Mr Witcombe at a cost of $5,600.  The letter stated that the use of this mattress, along with an improved continence management programme, should enable Mr Witcombe's homecare staff levels to be reduced to only one sleepover carer and two carers during the day.

19. On 17 January 2000 Mrs Witcombe wrote to Ms Auerbach.  The letter requested Ms Auerbach to arrange for ICWA to set up a cabcharge account urgently.  It also stated that she was still waiting for a response in relation to matters identified in earlier letters, namely the purchase of a new wheelchair van before settlement and the reimbursement of funds already laid out.

20. On 27 January 2000 Ms Auerbach spoke with Ms Wagland at Brightwater about working schedules for carers.  Ms Auerbach's note records that Mr Witcombe now had mainly one carer during the day and to help him get out of bed in the morning.  The figure of $147,000 per annum was noted.

21. In late January 2000, quotes were provided for a wheelchair recommended for Mr Witcombe (exhibit 3 pages 429 ‑ 432).  Ms Pederick of Brightwater sought confirmation that ICWA would pay for the wheelchair before work commenced on it (exhibit 3 pages 433 ‑ 436).  Ms Auerbach sent the quotes by facsimile to Melissa at ICWA on 31 January 2000.

22. On 2 February 2000 Ms Wagland wrote to the defendant stating that Brightwater had reviewed the total cost of an individual care package for Mr Witcombe.  Because of the successful trial of the Invacare mattress and the changes to Mr Witcombe's continence management, there had been a marked reduction in the number of occasions that Mr Witcombe needed to be manually handled during the day and the night.  That led to a revised care package costed at about $143,000.  A carer roster was enclosed with the letter (exhibit 3 pages 438 ‑ 439).  The revised care package of $143,000 could be compared with the cost of Mr Witcombe's group housing at Brightwater, which cost $93,000 per annum plus about $17,500 for additional personal therapy.

Mr Witcombe is hospitalised

1. On 4 February 2000 Mr Witcombe was admitted to Royal Perth Hospital with a chest infection (exhibit 2 page 5).  At 2 pm on that day a meeting was held between Ms Auerbach, Mrs Witcombe and Matthew Witcombe.  That meeting had been pre‑arranged (exhibit 5 page 177).  Both Matthew Witcombe (exhibit 10 [23] ‑ [26]) and Mrs Witcombe (ts 214) gave evidence that, in the course of the meeting with Ms Auerbach, Matthew Witcombe received a telephone call from Brightwater advising that Mr Witcombe had been taken to Royal Perth Hospital, and that Matthew and Mrs Witcombe then left the meeting.  I do not accept that evidence, although nothing turns on it.  The contemporaneous material seems to me to establish that by the time Mrs Witcombe and Matthew Witcombe came to the meeting with Ms Auerbach they were aware that Mr Witcombe had been taken to hospital.

2. Mr Witcombe was admitted to hospital at 1.04 pm (exhibit 2 page 5) almost an hour before the meeting.  Mrs Witcombe's diary entry for 4 February 2000 records a telephone conversation with a person at Brightwater who rang to say that they were sending Mr Witcombe to RPH (exhibit 4 page 177).  The first item recorded on Ms Auerbach's notes was that Mr Witcombe had a severe chest infection and had been taken to Royal Perth Hospital that morning (exhibit 3 page 442).  When the contemporaneous material was put to Mrs Witcombe in cross‑examination she appeared to accept that it was not consistent with her recollection (ts 214 ‑ 218).

3. As I have said, nothing seems to me to turn on whether Matthew and Mrs Witcombe already knew about Mr Witcombe's hospitalisation at the beginning of the meeting or only found out about it during the meeting.  However, I explain my findings on this point in part because it may serve to illustrate my approach to the finding of the facts in this case.  I accept the genuineness of the evidence of both Mrs Witcombe and Matthew Witcombe as to what they now recall.  However, measured against the contemporaneous material, I do not accept the accuracy of their recollection. 

4. Ms Auerbach's note of 4 February 2000 recorded that a cabcharge was needed, especially for attending intensive physiotherapy after Mr Witcombe's botox therapy.  The note also recorded that they 'discussed all of [the] issues'.  The following issues are then listed:  cabcharge; other private expenses; wheelchair; private carer; physio; maintenance costs of electric equipment; and new carers' schedule.

February 2000 ‑ April 2000; Dealing with Centrelink issue

1. Later in February 2000 ICWA confirmed that it would accept the reasonable costs of replacing Mr Witcombe's wheelchair.

2. On 11 March 2000 Mrs Witcombe wrote to Ms Auerbach.  The letter explained that Centrelink had sent Mrs Witcombe a notice that her partner allowance had been cancelled because the value of her and her partner's assets was above the allowable limit.  Mrs Witcombe's letter concluded by referring to problems recently experienced by Mr Witcombe at Brightwater.  The letter stated that Mrs Witcombe was also under stress from having to wait so long for Mr Witcombe's compensation and from not having him at home.

3. On 14 March 2000 Ms Auerbach spoke to someone from Centrelink who explained the issue of asset limits.

4. Ms Auerbach's evidence is that she believed she would have telephoned Mrs Witcombe on the same day and told her what she had been told by Centrelink (exhibit A [144]).  There is no note of any such conversation.

5. Mrs Witcombe had a note in her diary (exhibit 5 page 181) of information substantially the same as the information recorded in Ms Auerbach's note at exhibit 3 page 448.  In answer to questions from me, Mrs Witcombe agreed that what was written in her diary at exhibit 5 page 181 matched up with a lot of what was written in Ms Auerbach's file note and that, in that light, Ms Auerbach had probably telephoned her and told her those things (ts 222).

6. However, on a more careful review of the diary note, I do not think that that is the position.  The diary note is dated 13 March 2000, not 14 March 2000.  Further, it records that Mrs Witcombe went to Centrelink.  Accordingly, I conclude that what is recorded in the diary reflects what Mrs Witcombe was told by someone at Centrelink when she went to Centrelink.

7. Given that the Centrelink matter was the subject of subsequent complaint by Mrs Witcombe to Ms Auerbach, I am not satisfied that Ms Auerbach did report her conversation of 14 March 2000 to Mrs Witcombe.

8. On 30 March 2000 Ms Pederick of Brightwater wrote to the defendant seeking approval of funding for equipment purchases for Mr Witcombe.  Ms Pederick wrote further on this topic on 13 April 2000.  There were further telephone discussions and facsimiles between Ms Auerbach and Ms Pederick in early May.

9. In early April 2000 Mrs Witcombe complained to the Hon Phillip Pendal MLA, member for South Perth, about the difficulties she was encountering with Centrelink and ICWA.  The complaint was not directed to the conduct of the defendant.  Mr Pendal wrote to the managing director of ICWA, who responded by letter of 20 April 2000.

May 2000; Mrs Witcombe complains

1. On 14 May 2000 Mrs Witcombe wrote to Ms Auerbach.  The subject matter of the letter was described as 'Re:  Communication'.  The letter included the following:

   We have not heard from you since our February meeting.  Noting that we are now at five and a half years it is well and truly time for the payout to be made.  What progress have you made?

   I have written to my local Member of Parliament, Mr Phillip Pendal, about the intolerable waiting period forced on people when waiting for compensation.  He in turn has written to Mr Vic Evans, Managing Director of the Insurance Commission of WA (Mr Evan's reply follows this letter).

   We are still waiting on funds to pay taxi fares for Keith's transport.

   We are still waiting on funds to purchase a wheelchair van.

   …

   I would appreciate a reply to my facsimiles and would appreciate being kept up to date on our progress.  One way this could be achieved would be for you to forward copies of correspondence regarding Keith to me.

2. ICWA's letter of 20 April 2000 stated that ICWA had written to the defendant on 13 October 1998 recommending that steps be taken to finalise the claim.  Since 13 October 1998, ICWA had written on five separate occasions and made two telephone calls asking the defendant to take the necessary action.

3. On 26 May 2000 ICWA wrote to the defendant stating that ICWA had received two complaints regarding the length of time taken to settle the claim.  The letter also stated that it appeared for the past year and a half ICWA had been requesting that a writ of summons be issued.  ICWA suggested that in light of the recent complaints a writ of summons should be issued within the following 28 days.

4. On 30 May 2000 Mrs Witcombe and Matthew Witcombe sent a letter addressed to 'Messrs Talbot & Olivier'.  The letter included the following:

   Messrs  Glenys J Witcombe (Wife)

   Talbot & Olivier  Matthew P Witcombe (Son)
   Barristers, Solicitors and Notaries  102 Bessell Avenue

   55 St George's Terrace  Como  W A  6153

   Perth  W A  6000  Ph:  9367 5239

   30 May, 2000

   Re: The Handling of Keith Witcombe's Compensation Claim

   Dear Messrs,

   Josephine Auerbach has been handling Keith's compensation claim.  We have reached a point where our faith in the progress of the claim has reached a low.  We would appreciate your investigation of the progress being made on Keith's claim, as we have not seen evidence of progress.

   We have felt compelled to contact MVIC directly to determine the state of the claim.  The response from MVIC causes concern as to the efforts being made on Keith's behalf by your firm.

   The first letter from MVIC indicates that approval for the funds required to purchase a new wheelchair for Keith took MVIC two days to approve, but yet we had been waiting for nearly two years for approval.

   …

   Yours sincerely

   Glenys J Witcombe  Matthew P Witcombe

5. This letter was addressed to Messrs Talbot & Olivier and the salutation was 'Dear Messrs'.  That is in contrast to previous correspondence which had been addressed to Ms Auerbach, with the salutation 'Dear Josephine'.  Moreover, the content of the letter makes it plain that it was intended for the partners of the firm rather than Ms Auerbach.

6. Regrettably, it appears that the letter went to Ms Auerbach without being seen by a partner and she did not provide it to the partners.  In my opinion, she should have done so.  Her explanation that there was nobody senior in the firm dealing with plaintiff personal injury work or her matter is not a satisfying one (ts 401 ‑ 402).

7. Ms Auerbach accepted in her evidence that many of the complaints in the letter were justified.  She admitted that she had 'slacked off' for a while in the months before June; that there were a number of things distracting her; and that she did not have an excuse for the delay between February 2000 and June 2000 (ts 402). 

8. Ms Auerbach's evidence‑in‑chief was that when she got the letter she realised that the Witcombes were unhappy and that she had to speed up the progress of the claim (exhibit A [156]).  As Ms Auerbach said in cross‑examination, when she got the letter she realised she 'needed to get [her] A into G' (ts 403). 

9. On 12 June 2000 Ms Auerbach contacted Mrs Witcombe and said words to the effect that she was sorry for not putting more effort into getting the claim settled and contacting her regularly.  The next day Ms Auerbach telephoned Mrs Witcombe about arranging for a specialist to review Mr Witcombe and about the costings for care.  Ms Auerbach asked Mrs Witcombe for a copy of Mr Witcombe's enduring power of attorney, which Mrs Witcombe provided soon after.

June 2000 - July 2000; The defendant seeks further information and reports

1. From 14 to 16 June 2000 Ms Auerbach made some telephone calls to people at the State Head Injury Unit at Royal Perth Hospital (exhibit 3 pages 470 ‑ 473).  She asked the State Head Injury Unit who would be a suitable person to do an up‑to‑date report on Mr Witcombe's further physical requirements (ts 403 ‑ 404). 

2. Someone suggested to Ms Auerbach that Dr John Ker might be a suitable person to do a report (ts 405). 

3. On 16 June 2000 Ms Auerbach spoke to Dr Ker, who said that he would be able to review Mr Witcombe in the second half of July.

4. On 22 June 2000 Ms Auerbach, on behalf of the defendant, wrote to Dr Ker.  The letter enclosed a bundle of medical reports.  It stated that the defendant understood that ICWA had requested Dr Ker's assessment in relation to future medical needs only.  The letter requested a comprehensive report from Dr Ker as to:

   (1)a summary of Mr Witcombe's disabilities and current treatment needs;

   (2)an estimate of the annual cost of medical and allied health services which Mr Witcombe would require on an ongoing basis in the future;

   (3)an estimate of the annual cost of medication required on an ongoing basis;

   (4)an estimate of the annual cost of occupational therapy, speech therapy and physiotherapy required on an ongoing basis;

   (5)an opinion whether it was likely that Mr Witcombe would require particular surgery in the future related to his motor vehicle accident injuries and, if so, what type of surgery and estimated costs;

   (6)an indication of Mr Witcombe's life expectancy in light of his injuries.

5. In cross‑examination Ms Auerbach accepted that she could have requested this information from Dr Ker in 1998 or 1999, or from Dr Beel or Dr Fong (ts 408).

6. No report was ever received from Dr Ker.  Ms Auerbach took no steps to chase up Dr Ker's report.  She accepted that there was no excuse for that (ts 408 ‑ 409).

7. On 26 June 2000 Ms Auerbach, on behalf of the defendant, wrote to ICWA.  The letter apologised for the defendant's delay in responding to ICWA.  The letter included the following:

   We advise, however, that we have now had an opportunity to completely review our client's file and we would like to move the matter towards finalisation as soon as possible.  To this end we have seen fit to request a medical report from Dr Ker on our client's future treatment needs, and we also propose requesting an assessment from Independent Occupational Therapy Services in relation to Mr Witcombe's requirements for future care and maintenance of equipment.

   As soon as these reports are received we will attend to the finalisation of the Draft Statement of Claim which we intend to file with the Writ of Summons.  Although we hope to be able to discuss final settlement figures with you in the next few months…

8. The letter then proceeded to deal with other matters such as taxi vouchers and the van.

9. On 3 July 2000 Ms Auerbach wrote to Ms Gail Sharp at Independent Occupational Therapy Services.  The letter requested a detailed report on the annual cost of Mr Witcombe's medical and associated needs, including carer and domestic support; medical and allied health services; medications; bladder and bowel management; recurring equipment and supply costs; assistive devices for general hygiene care and communication needs; bedroom and lounge furniture; transport; other accessories; physiotherapy treatment; occupational therapy; speech therapy; and vocational management and recreational programmes.  The letter:

   (a)enclosed a bundle of medical reports and a copy of the carers' schedule prepared by Ms Wagland of Brightwater, and invited Ms Sharp to endorse or comment on that schedule;

   (b)expressed concern about the need to balance the annual cost of carers that ICWA could be expected to fund against the wish to provide Mr Witcombe with the best possible care;

   (c)noted that Mrs Witcombe used to be a nurse and intended to participate in her husband's care, but that the defendant did not wish her help and assistance to be essential because of the potential stress that could cause and invited Ms Sharp to address that issue with Mrs Witcombe directly.

10. On 5 July 2000 the defendant wrote to Mr Keen requesting his advice on whether and to what extent the costs in Mr Keen's report of 30 July 1998 needed to be revised.  The letter stated that Mr Witcombe's needs and wishes remained unchanged.  Mr Keen provided a response on 3 August 2000 (exhibit 3 page 510).

11. On 11 July 2000 Ms Auerbach spoke to Melissa at ICWA.  Ms Auerbach advised that she had organised an assessment by Dr Ker and by Independent Occupational Therapy Services.

12. On 12 July 2000 the defendant wrote to ICWA stating that Mr Witcombe had moved into the Balcatta group house and that it cost $93,000 per annum.  The letter confirmed that the defendant had requested assessments and reports from Dr Ker and Independent Occupational Therapy Services 'which will assist in determining an appropriate amount for future care and maintenance of our client'.  The letter stated that '[a]ll other heads of damages should be relatively easy to assess, such as past and future loss of earnings and damages for pain and suffering'.  The letter enclosed copies of some tax returns and notices of assessment for Mr Witcombe and a letter about likely wage increases.

13. The defendant's letter also enclosed copies of the 'up-to-date' reports from Brightwater (being those obtained in late 1999 and early 2000).  Ms Auerbach said in cross‑examination that she had incorrectly assumed that ICWA already had those reports (ts 415).

14. At some point, Ms Auerbach made a one-page list of issues to deal with in order to finalise the statement of claim and draw up the schedule of damages (exhibit 3 page 18).  The list is undated.  From its content and the evidence as a whole, I infer that Ms Auerbach made the list in or about July 2000.

15. On 14 July 2000 the defendant wrote to the senior payroll officer at the Agriculture Department seeking an update of the letter of 3 June 1999 regarding Mr Witcombe's earnings.  The letter stated that, as the claim looked to be finalised very soon, updated information was requested as a matter of urgency.

16. On 14 July 2000 there was a meeting between Ms Auerbach, Mrs Witcombe and Matthew Witcombe.  The main subject matter of the meeting was the complaints by Matthew and Mrs Witcombe about the lack of progress and poor communication by Ms Auerbach in relation to Mr Witcombe's claim.  I accept that at the meeting Matthew Witcombe raised the list of complaints which he had prepared in advance, and a copy of which was annexed to his witness statement.

17. I accept the evidence of Mrs Witcombe and Matthew Witcombe that at the meeting Ms Auerbach said that she had 'had her butt kicked' over the letter of complaint dated 30 May 2000.  I do not accept that Ms Auerbach simply said something along the lines that the letter had 'given her a kick up the butt' (exhibit A [183]).  As I have said, it seems to me to be plain that the letter was intended to be read and acted upon by the partners.  I think that that was apparent to Ms Auerbach and she conveyed the impression that that had occurred.

18. On 17 July 2000 Ms Auerbach told Mrs Witcombe that she was getting a barrister, Mr Eric Heenan, to look at the statement of claim (exhibit 5 page 195, exhibit 7 [115]).

19. On 18 July 2000 a writ was issued in the District Court, but not served.  The writ had not been served by the time the defendant ceased acting in April 2001.

July 2000 - August 2000; Progressing the draft statement of claim

1. On 20 July 2000 Matthew Witcombe sent an email to Ms Auerbach asking for a complete copy of the statement of claim, as the copy they had was missing some pages.

2. Ms Auerbach responded by email on 21 July 2000 and attached the draft statement of claim.  The document attached in the original email is not attached to the email at page 505 of exhibit 3, but I infer that the attached document was the version that Matthew Witcombe sent back on 6 August 2000, to which I will come (exhibit 3 pages 514 ‑ 524).

3. Ms Auerbach's email of 21 July 2000 stated that the writ had been issued, but because she was waiting on some information to check the claim for past and future loss of earnings she had not yet served the document on ICWA.  Her email stated that she would serve the writ as soon as she had received an answer to her letter to the Agriculture Department and had been able to amend the figures presently highlighted in the statement of claim.

4. In a further email on 26 July 2000, Ms Auerbach stated that the defendant would serve the writ as soon as it had been able to make the changes to the statement of claim, once it had received a reply to its letter to the Agriculture Department.  She stated that the defendant would then serve the writ as well as the statement of claim.

5. On 6 August 2000 Matthew Witcombe wrote to Ms Auerbach.  His letter enclosed a draft statement of claim dated 1999 with corrections that Mrs Witcombe and he had made (exhibit 3 pages 514 ‑ 524).  The letter also enclosed an updated list of expenses for the van. 

6. The suggestions and amendments made by Matthew and Mrs Witcombe in the draft statement of claim were substantially incorporated in the amended draft statement of claim dated 2000 at pages 406 ‑ 418 of exhibit 3.  That amended draft statement of claim had a schedule of damages attached, listing 22 heads of damages.  An amount was identified only in respect of the head of pain and suffering.

7. The amended draft contained figures for past earnings to 31 July 2000 (exhibit 3 page 414).

8. There is another draft statement of claim at pages 393 ‑ 405 of exhibit 3 which was on the defendant's file.  In this draft the claim for past loss of earnings and superannuation entitlement extended to 30 September 2000.  For that reason I infer that this draft was prepared later in time than the draft at page 406.

9. On 8 August 2000 the Agriculture Department responded to the defendant's letter of 14 July 2000 about Mr Witcombe's salary increases.

10. A further letter was provided by the Agriculture Department on 16 August 2000.

11. Notwithstanding her statements in the emails to Matthew Witcombe, when Ms Auerbach received the figures from the Agriculture Department, she did not serve the writ or finalise the statement of claim.

1. On 25 August 2000 the defendant wrote to ICWA confirming that a writ had been issued and would be served on ICWA shortly.  That is one of many examples, in letters from the defendant, of statements that asserted that action would occur soon or upon receipt of certain information, but which were not borne out.  I will return to this point.

Late August 2000 to December 2000; Awaiting and receiving requested reports

1. In late August Ms Auerbach briefed Mr Darryl Kelly to provide a continence assessment.  He provided a report dated 29 September 2000, which was sent to Matthew and Mrs Witcombe on 23 October 2000.

2. Ms Auerbach wrote to Mrs Witcombe on 30 August 2000.  The letter confirmed that Ms Auerbach had received the economic loss information from the Agriculture Department and had amended the statement of claim accordingly.  The letter also advised of appointments arranged for Ms Sharp and Mr Kelly to assess Mr Witcombe.

3. The defendant wrote again to Mrs Witcombe and Matthew Witcombe on 31 August 2000.  The letter stated that the only things on which the defendant was now waiting were the assessments by Ms Sharp and Mr Kelly, which it expected a few weeks after Ms Auerbach returned from leave in early October.  The letter stated that Ms Auerbach would then like to arrange an informal conference before the end of the year, after considering the reports and making an informed assessment on quantum.  Ms Auerbach suggested that they should postpone service of the writ and statement of claim until they had received the reports.

4. There was further correspondence from ICWA on 21 September 2000, which was forwarded by the defendant to Mrs Witcombe on 25 September 2000.

5. On 23 October 2000 Mrs Witcombe spoke with Ms Auerbach.  Ms Auerbach then wrote to Matthew and Mrs Witcombe enclosing a copy of Mr Kelly's report.  The letter also stated that Ms Sharp had advised that she would complete her report within the next two weeks.  The letter sought Mrs Witcombe's instructions on aspects of Mr Kelly's report.

6. On 4 November 2000 Mrs Witcombe wrote to Ms Auerbach.  The letter related to the need for a purchase order for a mattress and delta talker for Mr Witcombe.  The letter concluded by saying:

   We would also like to know what progress is being made as it is now approaching six years since the accident.  (original emphasis)

7. Ms Auerbach responded to those parts of the letter relating to the mattress and delta talker.

8. On 4 December 2000 Ms Sharp provided her report to the defendant.  On 7 December 2000 Matthew Witcombe sent an email to Ms Auerbach asking whether Ms Sharp had submitted her report. 

9. Ms Auerbach responded on 12 December 2000 advising that she had received Ms Sharp's report on Friday but had 'only had a chance to skim through it today'.  Ms Auerbach stated that she had sent a copy of the report to the Witcombes and would appreciate it if they could read the report carefully and advise whether they considered it factually correct and complete and whether it could be released to ICWA.

10. Ms Auerbach's email stated further as follows:

    Finally, I have also spoken to Counsel in relation to an informal conference.  I am currently waiting to hear from him as to his available dates and also as to an estimate of costs, as I will require your written authorisation to proceed to instruct Counsel f[or]mally before the conference.  In the meantime I believe that we should send the reports of Mr Kelly and Ms Sharpe to the Commission if you are satisfied with them, so that they can proceed to get an opinion [from] their legal advisers as to quantum.

11. On 23 December 2000 Mrs Witcombe sent a letter by post to Ms Auerbach regarding Ms Sharp's report.  The letter stated that Matthew and Mrs Witcombe had made some corrections in pencil.  The letter requested that a copy of Ms Sharp's report be returned to them and that Ms Auerbach also send a copy of Dr Ker's report.  The letter concluded by saying:

    Please get these things done quickly as December has passed without a conference.  We are still waiting to be paid for the wheelchair van and to get money to purchase a new one and the payout.

12. By letter of 16 January 2001 ICWA wrote again seeking to know when it would receive the writ of summons and any current medical reports.

January 2001 to March 2001

1. On 18 January 2001 Ms Auerbach sent an email to Matthew and Mrs Witcombe.  The email included the following:

   I had tried to get in contact with Mr Heenan QC who specialises in big personal injuries cases regarding an informal conference, however I only managed to leave messages with his secretary as he was in a trial. 

   He has, however, now returned my calls and indicated that he would be available to assist us in a conference with the Commission, but he would like an opportunity to peruse all information on file and have a meeting with us beforehand.  I have therefore seen fit to prepare a brief to him, but I require your [Mrs Witcombe's] instructions in writing before I can send this to him.  It would suffice by e-mail.

2. Ms Auerbach's email reported information about Mr Heenan's charge rates.  The email advised that Ms Auerbach had returned Ms Sharp's report to her requesting that she make the changes proposed.  The email concluded that as the changes were relatively minor, Ms Auerbach wanted to send the remainder of the file to Mr Heenan in the meantime to enable him to assess the claim.  The email requested Mrs Witcombe's advice on whether she agreed with this proposed course of action.

3. The only record, on the defendant's file in evidence before me, of a conversation between Ms Auerbach and Mr Heenan is an undated one‑page note (exhibit 3A page 11).  I infer from the contents of that note that it records the first conversation between Ms Auerbach and Mr Heenan.  In that conversation, Ms Auerbach advised that the matter was a quadriplegic claim, with liability admitted.  Mr Heenan advised his charge rates.  He also said that he could not deal with the matter 'right now', but would be available later on as he had trials at that time.

4. I infer that the conversation recorded in this note occurred after the email of 12 December 2000 and before the email of 18 January 2001, most likely shortly prior to 18 January 2001.

5. There is no evidence that Mrs Witcombe responded to the request in the email of 18 January 2001 to give written instructions that Mr Heenan be briefed and that the remainder of the file be sent to him pending any amendments to Ms Sharp's or Mr Keen's report. 

6. The statement by Ms Auerbach in her email of 18 January 2001 that she had returned Ms Sharp's report with a request that she make the proposed changes was inaccurate (exhibit A [247]).  The report that contained Mrs Witcombe's and Matthew Witcombe's comments was not sent to Ms Sharp until 9 February 2001 (exhibit 3 page 623).   Soon after, on 14 February 2001, Ms Sharp told Ms Auerbach that she was not prepared to make the changes proposed.

7. ICWA wrote to the defendant again on 30 January 2001 and 31 January 2001.

8. On 16 February 2001 the defendant wrote to Matthew and Mrs Witcombe.  The letter enclosed an amended report from Ms Sharp and noted that not all the suggested changes had been made.  The letter sought instructions to send a copy of the amended report to ICWA and to counsel 'to update his copy'.  The letter concluded by saying that Ms Auerbach would communicate with the Witcombes again as soon as she heard further from counsel.

9. On 19 February 2001 Ms Auerbach sent an email to Matthew and Mrs Witcombe.  The email referred to discussions with Ms Sharp on 'last Tuesday' (being 13 February 2001) about the report.  The email further stated that Ms Auerbach had received the amended report on Friday (being 16 February 2001) and had arranged for another copy to be sent to the Witcombes.  The email stated that Ms Auerbach would also 'update the copy to Counsel', and that:

   As for Counsel's opinion, I expect this to be forthcoming shortly.  Alternatively I expect him to request further information from us or other relevant sources, in which event I will liaise with you again.

10. The parties were at issue at the trial as to whether, by this time, Ms Auerbach had sent a brief to counsel.  It seems to me that that issue does not assist in the resolution of the real issues in this action.  Nonetheless, I make the following observations.

11. Ms Auerbach's evidence was that she could recall preparing a brief for Mr Heenan (exhibit A [246]).  In her evidence in cross‑examination she said that she could visualise a folder of information that she had prepared for Mr Heenan (ts 423 and 425).  I accept this evidence.

12. That leaves the question of whether the folder, and any accompanying brief, was sent to Mr Heenan.

13. Ms Auerbach did not, in her evidence, specifically say that she could recall sending the folder constituting the brief to Mr Heenan.  However, the flavour of her evidence was that she believed she had done so.  She did not profess to have any recollection of sending the brief.  Given the passage of time, the absence of recollection does not militate against the event (the sending of the brief) having occurred.  Ms Auerbach was not directly asked whether she could remember discussing the contents of the brief with Mr Heenan but the flavour of her evidence was that she could (see ts 425).  She could not explain why the defendant's file did not include any covering letter or documented brief to counsel.  If the brief had been sent, it is likely that it would have been returned after the defendant ceased to act in April 2001.  It may not have been retained by the defendant.

14. I also take into account Ms Auerbach's evidence in cross‑examination at ts 431 ‑ 433, referred to below.

15. In the circumstances, I am not prepared to make a finding one way or the other as to whether Ms Auerbach sent the brief to Mr Heenan.

16. On 28 March 2001 the defendant sent ICWA copies of the reports of Mr Kelly and Ms Sharp and their accounts for preparing the reports. 

17. The defendant's letter concluded by stating that:

    Counsel will be settling the pleadings and we expect to meet for an informal conference with you in the near future.

18. Ms Auerbach was asked in cross‑examination whether she had given a brief to counsel to settle the statement of claim.  She responded in these terms:

    I had been in touch with counsel.  I had communications with him.  I had prepared something.  I can't recall where it got to from there (ts 431).

19. Ms Auerbach did not recall whether at March 2001 Mr Heenan was available or what his timetable was (ts 431 ‑ 432).  She accepted in cross‑examination that her statement that the defendant expected to meet with ICWA for an informal conference in the near future was no more than hope (ts 433).

April 2001; Mrs Witcombe appoints new solicitors

1. On 3 April 2001 D'Angelo & Partners wrote to the defendant.  The letter advised that Mrs Witcombe wished D'Angelo & Partners to take over the conduct of the matter.  The letter enclosed a file release authority and confirmed Mrs Witcombe's preparedness to pay the defendant's reasonable fees out of funds derived from settlement of Mr Witcombe's claim.

2. By letter of 26 April 2001 the defendant sent the file to D'Angelo & Partners.  The letter enclosed an account and confirmed that the defendant agreed to await payment until Mr Witcombe's claim was finalised.

3. There is no evidence that the account was ever paid.  That is relevant to the question of loss and damage.

The subsequent progress of the action

1. In April 2001 D'Angelo & Partners took over the conduct of Mr Witcombe's claim.  They served the writ in May 2001.  In June 2001 they filed a statement of claim.

2. The action was entered for trial on 7 January 2002.  On 30 January 2002 schedules of damages were filed and served, claiming damages totalling about $5 million.

3. On 30 January 2002 the solicitor for ICWA, Mr Colin O'Sullivan, spoke to Mr Cooke of D'Angelo & Partners.  Mr Cooke advised that D'Angelo & Partners was awaiting reports from Dr Ker, who had seen Mr Witcombe again in December 2001; Dr Beel; Brightwater and Dr Linda Hayward, who would report on Mr Witcombe's capacity to give instructions.

4. On 30 January 2002 Mr O'Sullivan advised ICWA that he needed to see all the evidence and the schedules (which he had not by then seen) before advising on the need for further evidence from ICWA's perspective and on quantum.

5. Dr Ker provided a report on 4 February 2002.  Dr Ker expressed the view that Mr Witcombe's affairs would best be managed by a court appointed trustee and that the services of a next friend to assist him would be valuable.

6. On 13 February 2002 solicitors for Mr Witcombe and ICWA attended a pre‑trial conference at the District Court.  The pre‑trial conference was adjourned to 27 March 2002.  On 13 February 2002 Mr Cooke provided Mr O'Sullivan with some more reports and said that he was seeking further reports from Dr Ker, Dr Beel and possibly Brightwater.

7. On 15 and 18 March 2002 Mr O'Sullivan had telephone conversations with Mr Cooke.  Mr Cooke advised that he was waiting for reports from Dr Hayward, a neuropsychologist reporting on Mr Witcombe's capacity, and further reports from Dr Ker and from Brightwater (exhibit B [27]).  Mr Cooke and Mr O'Sullivan agreed that the pre‑trial conference scheduled for 27 March 2002 be rescheduled and that, in the meantime, an informal settlement be arranged for a date in April 2002.  It was proposed that the formal pre‑trial conference be adjourned to a date probably in May 2002.  Mr O'Sullivan advised Mr Cooke that a further medical review of Mr Witcombe might be necessary, but that Mr O'Sullivan had not yet advised ICWA on the issue.

8. At that time, Mr O'Sullivan considered that the question of whether Mr Witcombe should be looked after at home or in a medical institution would have a significant bearing on the likely award of damages and that evidence bearing on that issue would be a significant part of assessing the likely quantum of Mr Witcombe's claim.

9. Given Dr Ker's comments in his report of 4 February 2002, Mr O'Sullivan would not have recommended to ICWA that it settle Mr Witcombe's claim without a next friend being appointed, the opinion of independent counsel being obtained and any proposed settlement being the subject of an application to compromise by the court.

10. On 18 March 2002 Dr Beel provided a further medical report to D'Angelo & Partners.  Dr Beel said the following about Mr Witcombe's prognosis:

    … I cannot see any dramatic change either for better or worse.  Further improvement can only be minimal and very slow.  His life span is liable to be reduced by his disabilities as he is more prone to intercurrent infections, thromboses due to inactivity etc but it is impossible to quantify this.

Mr Witcombe passes away

1. Mr Witcombe had dental surgery under general anaesthetic on 21 March 2002.  He was admitted to Royal Perth Hospital at about 5.45 pm on 23 March 2002.  He died from aspiration pneumonia in the early hours of the morning on 24 March 2002. 

2. Mr Witcombe's death was sudden and unexpected.  None of Mrs Witcombe, other members of the family, Mr Witcombe's legal advisers or his doctors had any sense that death was or may have been imminent.

The state of the action as at 24 March 2002

1. As at 24 March 2002:

   (a)D'Angelo & Partners was awaiting further medical reports;

   (b)Mr O'Sullivan had not provided advice to ICWA on quantum;

   (c)no final decision had been made on whether a next friend would be appointed for Mr Witcombe;

   (d)no decision had been made on whether ICWA would accept that Mr Witcombe could be cared for at home; and

   (e)Mr O'Sullivan had not made any recommendations to ICWA about whether Mr Witcombe needed to be examined by other medical practitioners.

2. Mr O'Sullivan's evidence, which I accept, was that one of the recommendations he would have made was that ICWA obtain evidence on the issue of Mr Witcombe's future care, including whether he should be cared for at home.

3. Thus, at the time Mr Witcombe died, a number of further steps still needed to be completed before the action would have been ready for settling (or proceeding to trial).

4. I have already mentioned [7] ‑ [8] the amendment of the District Court action to substitute Mrs Witcombe as plaintiff, and the settlement of that action in November 2002.

5. The defendant objected to numerous parts of the evidence given by Mr O'Sullivan in the course of his cross‑examination.  The passages are identified in a document dated 7 May 2009 entitled 'Updated Transcript References To Expert Evidence Objected To By The Defendant'.  The ground of objection is that the evidence in cross‑examination was expert evidence; that leave to adduce the evidence was required by Rules of the Supreme Court 1971 (WA) O 36A r 3(2); and that leave had not been sought.

6. The parties were content that I rule on the objection, to the extent necessary, in the course of giving my reasons for decision.

7. With one exception, it is not necessary to rule on the objection because I have not relied on the evidence in question and, were I to do so, that evidence would not alter my factual findings or other conclusions.

8. The exception relates to evidence of Mr O'Sullivan at ts 445, 447 and 461 ‑ 463, to which I will refer later in my reasons.  I overrule the objection to this evidence.  I do not receive this evidence as expert opinion, but rather as evidence of fact.  Mr O'Sullivan was the solicitor for ICWA, insurer of Matthew Witcombe, the accident tortfeasor in Mr Witcombe's action.  Thus, his views on matters such as what further evidence was required at the time when Mr Witcombe died, what the main issues were and the likelihood that the case would have settled are all relevant to an important factual issue.  That issue is:  but for the defendant's negligence, would the case have settled before Mr Witcombe died?

9. That brings me to the question of whether the defendant failed to act with reasonable care, skill and diligence in carrying out its retainer.

Did the defendant fail to act with reasonable care, skill and diligence in carrying out its retainer?

1. It is not in dispute that the defendant, as solicitors for Mr Witcombe, owed Mr Witcombe a duty to exercise reasonable skill, care and diligence in the performance of the retainer.  The duty is owed both in tort and in contract:  Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539; Astley v Austrust [1999] HCA 6; (1999) 197 CLR 1 [44] ‑ [48].

2. The defendant's duty of care required it (among other things) to:

   (a)advise Mr Witcombe, and Mrs Witcombe on his behalf, on all matters relevant to the proceedings so far as was reasonably necessary;

   (b)carry out the client's instructions by all proper means;

   (c)consult with the client on all matters not falling within the discretion left to the defendant;

   (d)keep the client informed to the extent reasonably necessary; and

   (e)carry out the client's instructions by all proper means within a reasonable time:  Olympic Holdings Pty Ltd v Lochel [2004] WASC 61 [167].

3. The defendant owed a duty to act with reasonable diligence to commence the action and progress it to the point of entry for trial:  Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229, 254 ‑ 255.

4. The standard of care required is that of the ordinary skilled person conducting a personal injuries action:  Heydon v NRMA [2000] NSWCA 374; (2000) 51 NSWLR 1 [146], [362], [649].

5. Like all questions of breach, the question of whether the standard of care required was exercised is to be assessed at the time the breach is said to have occurred, not by a hindsight analysis. 

6. I start with the particulars of negligence pleaded in par 13 of the statement of claim.

7. Particular (a) is that the claim was handled by a junior solicitor who was not properly or adequately supervised by a partner or senior solicitor.  I find that that allegation is established.  Ms Auerbach had been admitted for less than five years.  This was a substantial claim for a person who was a quadriplegic.  Ms Auerbach had no previous experience in a personal injuries claim for a quadriplegic.  She had no supervision of any kind.  As I will explain, it seems to me that many of the shortcomings in the way she conducted Mr Witcombe's action would have been avoided if she had been properly supervised.

1. For these reasons I find that Mr Witcombe did not suffer any loss or damage by reason of the defendant's negligence.

2. That finding leads to the conclusion that nominal damages only should be awarded to Mrs Witcombe for the defendant's breach of contract, and her claim for negligence should be dismissed.

3. Nevertheless, for the sake of completeness I state my conclusions, in a summary way, on the question of whether Mrs Witcombe has established that, but for the defendant's negligence and breach of contract, Mr Witcombe would have recovered damages from the accident tortfeasor before his death. 

Absent negligence on the part of the defendant, would Mr Witcombe have recovered damages from the accident tortfeasor before he died?

1. The onus is on Mrs Witcombe, as the plaintiff in the action, to prove that Mr Witcombe suffered loss and damage.

2. A plaintiff must prove, on the balance of probabilities, that the defendant's wrong, whether by breach of contract or in tort, caused the plaintiff to suffer loss and damage:  Sellars v Adelaide Petroleum NL (355);  Hammond Worthington v Da Silva [118]; Feletti v Kontoulas [2000] NSWCA 59 [34]; Gett v Tabet [337] ‑ [389].

3. In a case of breach of contract a plaintiff must, if he or she is to recover more than nominal damages, affirmatively establish that he or she suffered assessable loss or damage, that is loss or damage capable of being measured in monetary terms:  Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd; Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 118.

4. In this action it is an essential integer of Mrs Witcombe's primary damages claim that Mr Witcombe would have recovered damages before he died, by way of settlement or after judgment.  Consequently, in my opinion, Mrs Witcombe has the onus to prove on the balance of probabilities that that is so.

5. In Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, 639 and in Sellars v Adelaide Petroleum NL (350), the court drew a distinction between the approach to be taken concerning the proof of past historical facts on the one hand, and proof of future possibilities and past hypothetical situations on the other hand.  However, that distinction was drawn in the context of assessing damages, not in the context of proof that the defendant's wrong caused loss or damage to the plaintiff.  See also Gett v Tabet [334].

6. Mrs Witcombe's submissions referred on numerous occasions to statements in cases such as Johnson v Perez and Nikolaou to the effect that a trial judge should take a 'broad brush' approach:  see, for example, Nikolaou (404), Johnson v Perez (367).  These statements were made in the context of questions of assessment of damage.  For example, in Johnson v Perez (367), the court observed that when assessing damages the judge might take 'a broad brush approach in determining when, in the absence of negligence, the action would have come to trial and the evidence bearing on the quantum of damages would or should have been available for tender to the court'.  In those cases, as I have explained, there was no doubt that the negligence of the solicitors had caused the plaintiff to lose his cause of action against the alleged tortfeasor. 

7. Such an approach is consistent with the well‑established principle that once an 'actual loss' has been shown, difficulties of quantifying the loss will not be permitted to defeat the plaintiff's claim for damages for that loss.  The court will do the best it can on the evidence:  Fink v Fink [1946] HCA 54; (1946) 74 CLR 127, 143; Commonwealth v Amann Aviation (83, 102, 125, 135 and 153).  For the reasons I have already given, the question of whether and when Mr Witcombe's action would have settled arises in a different context and for a different purpose:  did Mr Witcombe suffer an actual loss?

8. The question is, therefore, whether the evidence satisfies me, on the balance of probabilities, that Mr Witcombe's claim would have been tried and judgment given (Foppoli v Public Trustee [1970] WAR 73, 79) or settled before he died on 24 March 2002. That issue involves giving attention to two topics: first, the way in which the preparation of the claim would have been progressed absent any negligence on the part of the defendant; and secondly, the response which would have been made to the claim by ICWA and its solicitors.

9. I begin with the first of these topics.  The progress of the preparation of Mr Witcombe's claim is to be tested against the minimum standard of non‑negligent conduct of the action by a solicitor, not against what was possible or what might have resulted from best practice.

10. I am not satisfied that Mrs Witcombe would have terminated the defendant's retainer and engaged D'Angelo & Partners had the defendant prepared and progressed the claim without negligence.  Accordingly, whether Mr Witcombe's action would have been settled or judgment given before he died is to be tested on the hypothesis that the defendant would have continued to conduct the trial, not on the basis that D'Angelo & Partners would have taken over its conduct.

11. I have set out my findings in relation to the respects in which the defendant failed to exercise reasonable care, skill and diligence in the conduct of Mr Witcombe's action.  Taking all those matters together, I find that the negligent conduct of the action by the defendant caused an overall delay in the region of 15 to 18 months in the progressing and preparation of the claim by writ, statement of claim, schedule of damages and gathering expert evidence.

12. That invites attention to the questions of how ICWA would have responded to the claim and whether Mrs Witcombe has proved on the balance of probabilities that the case would have settled before Mr Witcombe died.

13. Because of the stage which the case reached at the time Mr Witcombe died, ICWA was some distance away from making an informed decision as to its response on the question of quantum.  When Mr Witcombe died:

    (a)Mrs Witcombe had not obtained all the medical reports to be relied upon;

    (b)Mrs Witcombe had not obtained final reports in relation to the question of Mr Witcombe's life expectancy.  The most up‑to‑date information available at the time Mr Witcombe died was Dr Beel's report of 18 March 2002, the relevant passage of which is set out earlier [212];

    (c)Mr O'Sullivan had not made recommendations about whether further medical evidence should be obtained but it was likely that he would have recommended that ICWA obtain medical evidence on the question of future care,  including whether home care was appropriate;

    (d)no decision had been made about whether ICWA would accept that damages should be assessed on the basis that Mr Witcombe was cared for at home; and

    (e)Mr O'Sullivan had not provided advice to ICWA in relation to quantum.

14. In cross‑examination it was put to Mr O'Sullivan that there was a general policy that it was preferable for disabled people to live in the community rather than in institutional care.  Mr O'Sullivan did not agree in terms with that proposition.  He said that there needs to be a balance between the needs of a plaintiff and the interests of a defendant, that it was a question of reasonableness, and that each case needed to be considered on its merits (ts 445).  I take Mr O'Sullivan's answer as reflecting the approach that he would have taken in 2001 and 2002.

15. In the course of cross‑examination it was put to Mr O'Sullivan that a difference between $110,000 per annum for institutional care and $143,000 for home care was 'a readily bridgeable gap if the parties were seeking to compromise' (ts 447).  Mr O'Sullivan did not in terms express agreement (or disagreement) with that proposition.  He said that the significance of a difference like that would be influenced by Mr Witcombe's life expectancy, as well as the cost of home modification.

16. Mr O'Sullivan was taken through most of the heads of damage claimed by Mr Witcombe and invited to identify those where he thought issues were likely to have arisen (ts 461).  The major area that would have required at least consideration, discussion and further evidence was the question of future care, including whether Mr Witcombe should be cared for at home, the cost of home modification, and future medical needs.  Other matters requiring further consideration and discussion included the claim for gratuitous services and the claim for a vehicle (ts 461).

17. As I have mentioned, by 24 March 2002, D'Angelo & Partners had not obtained all its evidence in relation to Mr Witcombe's life expectancy.  Mrs Witcombe's instructions to the defendant had consistently been that she did not accept Mr Witcombe's life expectancy was diminished and that his claim should not be reduced on account of any diminished life expectancy. 

18. Further, ICWA had not yet obtained evidence in relation to life expectancy.  If Mrs Witcombe had maintained the position that damages should be assessed on the basis that there was no reduced life expectancy then, I find, ICWA would have obtained medical evidence on that question.

19. It was put to Mr O'Sullivan that in Mr Witcombe's case it was more likely than not that a compromise would have been reached (ts 462).  Mr O'Sullivan's response was 'I don't think I can answer that'.  He referred to the fact that statistically most cases settle and in that sense it was more likely than not, but, he said, in this particular matter there was still further evidence to come forward and issues of capacity, life expectancy and future care outstanding (ts 462).

20. Mrs Witcombe's evidence in relation to settlement is contained in par 159 of her statement (exhibit 7).  She said that she 'was always prepared to negotiate settlement of Keith's claim on the advice from Mr Cooke for a reasonable sum without having the matter proceed to trial', and was always prepared to do so when the file was with the defendant.

21. In my opinion, that evidence is of very little assistance.  First, it is in very general terms.  It does not identify, in any way, the respects in which or the extent to which Mrs Witcombe would have been prepared to compromise the claim.  Secondly, while I do not in any way doubt the genuineness of Mrs Witcombe's evidence, the evidence is hypothetical and given with the benefit of hindsight.  It must be weighed carefully against the objective and contemporaneous material.  In this regard, the evidence seems to be analogous to the subjective evidence of reliance on a warning in a negligence case, as to which see Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232, 246 and 272; Prast v Town of Cottesloe [2000] WASCA 274; (2000) 22 WAR 474 [49] and [62] ‑ [63]; Shire of Gingin v Coombe [2009] WASCA 92 [79] ‑ [80].

22. A review of the communications between Mrs Witcombe and the defendant, and between Mrs Witcombe and D'Angelo & Partners, does not suggest any significant preparedness on the part of Mrs Witcombe to compromise.  To the contrary, the material indicates that Mrs Witcombe had a firm position on many of the matters which were likely to have been at issue in a compromise.  These include whether damages should be assessed on the basis that Mr Witcombe was cared for at home, and the question of his life expectancy.  I find that Mrs Witcombe intended that Mr Witcombe be cared for at home once the claim was finalised, regardless of the basis on which damages for his future care were determined.  In other words, the question of whether Mr Witcombe would, in fact, be cared for at home would not have been influenced by the basis on which damages were assessed.  That fact, in combination with Mrs Witcombe's views about her husband's life expectancy, may well have led to a particular reluctance on the part of Mrs Witcombe to compromise too much on the question of damages.  For example, if Mrs Witcombe had compromised the claim on the basis of a figure close to $110,000 per annum for care (being the costs of institutional group care), she would have been concerned that the lump sum damages would run out well before Mr Witcombe died (particularly given her views on life expectancy).

23. The evidence does not satisfy me, on the balance of probabilities, that Mr Witcombe's claim would (absent negligence on the part of the defendant) have settled before Mr Witcombe died.

24. Neither am I satisfied that the action would, absent negligence on the part of the defendant, have reached the point of judgment after trial before Mr Witcombe died.  Mrs Witcombe did not adduce any evidence on the likely time between entry of trial and trial dates in the District Court from mid‑2000 to 2002.  Some parts of Mrs Witcombe's oral submissions in closing appeared to suggest that I could make an assessment of that question on the basis of my 'judicial experience'.  I do not accept that proposition.  In my opinion, it is a question which must be determined on the evidence.  In the absence of evidence, I am not satisfied that the action would have proceeded to trial and judgment given before Mr Witcombe died.

25. Where it is reasonably open to do so, a provisional assessment of damages should be made (where a claim has not been sustained).  In this case, I have found that I am not satisfied that Mr Witcombe's action would have settled before he died.  That finding, and the reasons for it, mean that there is no basis to identify the level of any settlement sum.  I accept the plaintiff's submission that the claim, if made and quantified, in 2000, would have been in the region of $3 million, in accordance with the plaintiff's 'Heads of Damages as at February 2000' handed up in opening of the trial of this action.  I am unable to identify, even in a broad way, where in the spectrum ranging up to 100% of the sum claimed any hypothetical settlement would have been (if, contrary to my finding, one would have occurred before Mr Witcombe's death).  Thus I do not attempt a provisional assessment.

Conclusion

1. My conclusions may be summarised as follows:

   (1)the defendant breached its contract and acted negligently in failing to act with reasonable care, skill and diligence in its conduct of Mr Witcombe's action;

   (2)the defendant's breach of contract and negligence did not cause Mr Witcombe to suffer any loss or damage in that, assuming that but for the defendant's negligence Mr Witcombe would have recovered his damages on the notional recovery date before his death, that fact does not lead to the conclusion that Mr Witcombe suffered any loss or damage;

   (3)further, I am not satisfied that but for the defendant's negligence Mr Witcombe would have recovered his damages before he died; and

   (4)consequently, Mrs Witcombe is entitled to nominal damages only for the defendant's breach of contract, and has not established loss or damage in respect of the negligence claim.

2. For these reasons, Mrs Witcombe should be awarded nominal damages for the contract claim, which I would fix at $10, and the claim should otherwise be dismissed.

3. I will hear from the parties as to the form of orders and as to costs.

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION: WITCOMBE -v- TALBOT & OLIVIER [No 2] [2009] WASC 173 (S)

CORAM:   BEECH J

HEARD:   24-27 & 30 MARCH, 1 APRIL 2009 AND ON THE PAPERS

DELIVERED          :   19 JUNE 2009

SUPPLEMENTARY

DECISION              :27 JULY 2009

FILE NO/S:   CIV 2485 of 2004

BETWEEN:   GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE (DEC)

Plaintiff

AND

TALBOT & OLIVIER
Defendant

Catchwords:

Costs - Plaintiff awarded nominal damages for breach of contract - Negligence claim dismissed - Costs of action - O 24A offer by defendant - Offer not accepted by plaintiff - Defendant obtained a better result by judgment after trial - Appropriate costs orders - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA) O 24A r 10

Result:

Costs orders made

Category:    B

Representation:

Counsel:

Plaintiff:     No appearance

Defendant:     No appearance

Solicitors:

Plaintiff:     GV Lawyers

Defendant:     Lavan Legal

Case(s) referred to in judgment(s):

Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394

Anglo‑Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397

Grant v Brewarrina Shire Council [No 3] [2003] NSWLEC 108

Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak [2006] NSWSC 1149

MLW Technology Pty Ltd v May [No 4] [2003] VSC 293

Nexus Minerals NL v Brutus Constructions Pty Ltd [1997] FCA 926; (Unreported, Full Court, Federal Court, 10 September 1997)

Ng v Chong [2005] NSWSC 385

Permanent Building Society v Wheeler [No 2] (1993) 10 WAR 569

Stewart v Biodiesel Producers Ltd [2009] WASC 145(S)

Talbot & Olivier v Witcombe [2006] WASCA 87; (2006) 32 WAR 179

Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166

Witcombe v Talbot & Olivier [No 2] [2009] WASC 173

BEECH J: 

Introduction

1. On 19 June 2009 I delivered my reasons on the trial of this action:  Witcombe v Talbot & Olivier [No 2] [2009] WASC 173.  In summary, I found that:

   (a)the defendant breached its retainer and acted negligently in failing to act with reasonable care, skill and diligence in its conduct of Mr Witcombe's personal injuries claim;

   (b)the defendant's breach of contract and negligence did not cause Mr Witcombe to suffer any loss or damage; and

   (c)consequently, Mrs Witcombe was entitled to nominal damages for the defendant's breach of contract, and had failed to establish the essential element of damage in respect of the negligence claim.

2. On 19 June 2009 I ordered that judgment be entered for the plaintiff in the sum of $10.  I also ordered that the parties exchange written submissions on costs and that the question of costs be determined on the papers.

3. The defendant submits that the plaintiff should be ordered to pay its costs on an indemnity basis for the whole of the action, alternatively since the date of the Court of Appeal decision in Talbot & Olivier v Witcombe [2006] WASCA 87; (2006) 32 WAR 179 (the 2006 Court of Appeal decision); or alternatively since the date of the defendant's O 24A offer in December 2008.

4. Mrs Witcombe submits that she was the successful party in the action and is entitled to an order that the defendant pay her costs of the whole action, or alternatively her costs up to and including the date of the defendant's O 24A offer.

5. For the reasons that follow, it seems to me that the appropriate costs orders are to the following effect:

   (1)Mrs Witcombe pay one-half of the defendant's costs of the action up to and including the date of the defendant's O 24A offer; and

   (2)Mrs Witcombe pay the defendant's costs on an indemnity basis from the date of the O 24A offer.

The parties' submissions

1. The defendant's primary submission is that Mrs Witcombe's claim for substantial damages was always doomed to fail on the ground that no loss or damage was suffered by Mr Witcombe prior to his death which was caused by any breach on the part of the defendant.  That, the submission continues, engages the principle that where a plaintiff, 'properly advised, should have known that he or she had no chance of success, the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of known facts or the clearly established law, and in those circumstances an award of indemnity costs should be considered'.  In this regard, the defendant refers to Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 401.

2. Alternatively, the defendant submits that Mrs Witcombe should be ordered to pay costs on an indemnity basis from the date of the 2006 Court of Appeal decision.  That is said to be because the Court of Appeal's decision made it clear that the Mrs Witcombe would not and could not succeed in the case on loss and damage that she ran at trial.  Further, the defendant submits, the flaws in Mrs Witcombe's case on damages were pointed out in correspondence from the defendant's solicitors following the decision of the Court of Appeal.

1. In the further alternative, the defendant points to the offer of compromise it made under O 24A of the Rules of the Supreme Court 1971 (WA). On 16 December 2008 the defendant offered to settle the matter in the sum of $150,000. The effect of O 24A r 10(1) is that the sum of $150,000 was exclusive of costs. The defendant submits that Mrs Witcombe's refusal to accept that offer was unreasonable and should lead to an award of indemnity costs.

2. Mrs Witcombe submits that because she succeeded in establishing the defendant's breach of contract she should be viewed as the successful party and should be awarded costs.

3. She submits that it was 'open to [her] to lead evidence and argue the law, notwithstanding the [2006 Court of Appeal decision]'.

4. The plaintiff further submits that:

   (a)the defendant's O 24A offer did not admit liability and went only to the quantum of damages; and

   (b)'the subject matter and law of this case was without precedent and there was no prior decision to guide [Mrs Witcombe] requiring the matter to be determined by the court'.

General principles

1. The court's costs discretion under s 37 of the Supreme Court Act 1935 (WA) and O 66 of the Rules of the Supreme Court is broad.

2. Order 66 r 1(1) ‑ O 66 r 1(3) are in the following terms:

   1.     General rules as to costs

   (1)Subject to the express provisions of any statute and of these Rules the costs of and incidental to all proceedings including the administration of estates and trusts shall be in the discretion of the Court but, without limiting the general discretion conferred on the Court by the Act, and subject to this Order, the Court will generally order that the successful party to any action or matter recover his costs.

   (2)If the Court is of opinion that the conduct of a party either before or after the commencement of the litigation or that a claim by a party for an unreasonably excessive amount has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the costs of an unsuccessful party either wholly or in part.

   (3)Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.

3. The terms of O 66 r 1(1) invite attention to the question of who was the successful party in the action. I will return to that question.

4. Order 66 r 2(a) provides:

   In the absence of any special order -

   (a)where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought;

5. The effect of O 66 r 2(a) is that a defendant is prima facie entitled to its costs on causes of action on which the plaintiff fails. However, such an order is not made as of course. The court looks at the realities of the case and attempts to do justice. Where all causes of action arise out of the one course of dealings with the same facts, there would usually be one order for the general costs of the action moulded as necessary to ensure that substantial justice is done: Permanent Building Society v Wheeler [No 2] (1993) 10 WAR 569 574 ‑ 575.

6. In this case, the same questions of breach and damage arose in respect of each of the two causes of action.  Mrs Witcombe succeeded on the breach issue and failed on the damages issue. 

7. Order 24A r 10(5) provides as follows:

   (5)Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was made, taxed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter, taxed on a party and party basis.

8. As to indemnity costs, I repeat the general principles I stated in Stewart v Biodiesel Producers Ltd [2009] WASC 145(S) [6] ‑ [10].

   The usual costs order is that the party who succeeds in an action is awarded its costs on a party and party basis. An order for indemnity costs will be made only if there is some special or unusual feature in the case to justify departure from the ordinary practice. The court has power to make an indemnity costs order whenever justice requires it: Unioil International Pty Ltd v Deloitte Touche Tohmatsu(No 2) (1997) 18 WAR 190; Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [8].

   The categories of cases in which the discretion to award indemnity costs may be exercised are not closed: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233–234; Unioil International Pty Ltd (191).

   Most of the situations in which indemnity costs have been awarded have involved an element of improper or unreasonable conduct on the part of the unsuccessful party or its advisers in the conduct of the case: Flotilla Nominees Pty Ltd [9]; Colgate-Palmolive Co (233–234). In Flotilla Nominees Pty Ltd [9] Pullin J gave some examples:

   Thus, the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or in wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders. See Colgate-Palmolive v Cussons (supra) at 233. The creation of false issues by tactical denials or failures to admit the facts may, in the circumstances of particular cases, lead to such an order: Unioil’s case. An action commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success, may lead to such an order because such action might be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law. See Fountain Selected Meats (supra).

   Where one party points out to the other, with sufficient particularity, reasons why it is inevitable that the other party’s case must fail, this can be a factor in favour of an award of indemnity costs: NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; (2001) 109 FCR 77 [87] ‑ [88].

   Generally at least, an indemnity costs order will not be made unless it is shown that some part of the costs order will not be covered by an order for party party costs or by a special costs order: Unioil International Pty Ltd (193); Flotilla Nominees Pty Ltd [11], [24]–[26].

9. A rejection of a settlement offer may justify an award of indemnity costs if the rejection was unreasonable in the circumstances at the time the offer was made:  Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 [16] ‑ [31].

The proper exercise of the costs discretion

1. I begin with the question of identifying which party was successful at the trial of the action, given the award of nominal damages for breach of contract.

2. Where a party claiming damages for breach of contract succeeds in obtaining an award for nominal damages only, the question of which party (if any) was successful will depend upon all the circumstances of the case:  Anglo‑Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873, 874; Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394, 402 ‑ 403; Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166 [9].

3. A number of cases concerning costs after the award of nominal damages are discussed in Dal Pont GE, Law of Costs (2nd ed, 2009) [8.35].

4. The cases emphasise that there are no hard and fast rules.  The modern cases appear to favour the view that, generally speaking, the event will be regarded as going against a party who receives nominal damages only, unless the establishment of a legal right independent of damages was one of the primary purposes of the proceedings; see, for example, Thiess Contractors [9]; Nexus Minerals NL v Brutus Constructions Pty Ltd [1997] FCA 926; (Unreported, Full Court, Federal Court, 10 September 1997, 12); MLW Technology Pty Ltd v May [No 4] [2003] VSC 293; Ng v Chong [2005] NSWSC 385 [8]; Grant v Brewarrina Shire Council [No 3] [2003] NSWLEC 108 [5]; Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak [2006] NSWSC 1149 [49] ‑ [52].

5. In this case,  the only relief claimed in the action was an award of damages.  The evident primary, if not sole, object of Mrs Witcombe's claim was an award of very substantial damages.  She failed to achieve that object.  That seems to me the most significant consideration.    Nonetheless, I think that the plaintiff has had some measure of success. 

6. Essentially, the subject matter of the action comprised two issues:

   (1)Did the defendant breach its duties?; and

   (2)If so, did the defendant's breach cause Mr Witcombe to suffer any loss?

7. The case was vigorously defended in respect of the allegations of breach of contract (and breach of the duty of care).  A substantial majority of the documentary and witnesses' evidence was concerned with that issue, rather than damages.  Given the history between the parties, the findings of breach of contract and breach of a duty of care may have some significance to Mrs Witcombe notwithstanding that they have not resulted in an order for substantial damages.

8. I consider that an order that the plaintiff pay one‑half of the defendant's costs (prior to the O 24A offer) reflects the relative success of the parties and the substantial justice of the case.

9. I do not accept the defendant's submission that Mrs Witcombe should pay its costs for the whole of the action on an indemnity basis because the claim for substantial damages was always doomed to fail.  The position was not so clear from the start.  Further, the subject matter of the action included the breach issue.  The circumstances were not such as to call for the exercise of the exceptional power to award indemnity costs.

10. Nor do I accept that Mrs Witcombe should pay the defendant's costs subsequent to the 2006 Court of Appeal decision on an indemnity basis.

11. The decision of the Court of Appeal in Talbot & Olivier v Witcombe was handed down on 26 May 2006. I set out my understanding of the effect of that decision in my reasons at [320] ‑ [331]. I concluded that the 2006 Court of Appeal decision precluded acceptance of Mrs Witcombe's case on loss and damage.

12. Mrs Witcombe submits that she was entitled to 'argue the law' notwithstanding the 2006 Court of Appeal decision.  I am not sure that I understand what is meant by that submission.  The 2006 Court of Appeal decision is and was binding on me and on the parties to the action.  In any event, Mrs Witcombe's submissions at trial did not identify a basis to read the 2006 Court of Appeal decision in a way that was consistent with her contention as to loss and damage.

13. Nevertheless, I would not order indemnity costs from the date of the 2006 Court of Appeal decision.  That is because I consider that the subject matter of the litigation is properly viewed as including the substantial issues about whether the defendant breached its duties.  The cases about which party was successful when the court awards nominal damages do not control the question of whether indemnity costs should be awarded.

14. However, to my mind, the appropriate costs order is different after the defendant made its O 24A offer on 16 December 2008.

15. It is true, as Mrs Witcombe submits, that the offer did not deal with the question of liability. However, acceptance of the offer would have entitled Mrs Witcombe to apply to the court under O 24A r 3(9) for such judgment or order as she was entitled to. In the circumstances, she would have been entitled to an order that judgment be entered in the sum of $150,000 (together with a costs order).

16. I note that there is no evidence that Mrs Witcombe responded to the offer (apart from acknowledging its receipt).  In particular, Mrs Witcombe did not request the addition of any term expressly admitting liability.

17. The effect of O 24A r 10(5) is that, unless the court otherwise orders, the defendant is entitled to an order for costs against the plaintiff in respect of the claim from the date of the offer, taxed on a party and party basis.

18. In this case, I consider that, in the circumstances in December 2008, Mrs Witcombe's rejection of the defendant's O 24A offer was unreasonable and should lead to an award of costs on an indemnity basis from the date of the offer.

19. That is so, in my opinion, primarily because the offer was made against the backdrop of the 2006 Court of Appeal decision.

20. As I have said, in my view the effect of the 2006 Court of Appeal decision was to preclude the acceptance of Mrs Witcombe's contention as to loss and damage. Consequently, I reject Mrs Witcombe's submission that 'there was no prior decision to guide [her], requiring the matter to be determined by the court'. At the trial, Mrs Witcombe did not attempt to run the case which (as I understand their Honour's reasons) the Court of Appeal had identified as arguable; see my reasons [332]. Moreover, the evidence adduced by Mrs Witcombe at trial did not support such a claim. I infer that, as at 16 December 2008, the evidence available to Mrs Witcombe would, similarly, not have supported such a claim.

21. Consequently, in my opinion Mrs Witcombe should have considered the offer of $150,000 plus costs to be substantially better than any result which, in light of the 2006 Court of Appeal decision and the apparently available evidence, she could, at the time of the offer, reasonably have expected to obtain at trial.  Her decision not to accept the offer and to proceed to trial of the action was, I find, unreasonable.

Conclusion

1. For these reasons I order that:

   1.The plaintiff pay one‑half of the defendant's costs of the action, including reserved costs, up to and including 16 December 2008, such costs to be taxed if not agreed; and

   2.The plaintiff pay the defendant's costs from and including 17 December 2008, including reserved costs except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to those exceptions, the defendant be completely indemnified by the plaintiff for its costs.