Wood v Firth
[2013] NSWSC 845
•27 June 2013
Supreme Court
New South Wales
Medium Neutral Citation: Wood v Firth [2013] NSWSC 845 Hearing dates: 31 May 2013, and written submissions 14 June 2013 Decision date: 27 June 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Appeal dismissed.
Catchwords: LOCAL COURT APPEAL - proceedings against solicitor - failure to advise date for acceptance of CARS award - alleged failure to account for interest - costs order - amendment to raise bias allegation - amendment to raise claim magistrate wrongly failed to include amount for loss of use - whether magistrate erred in acting on basis that plaintiff received offers of compromise within time for acceptance. Legislation Cited: Civil Liability Act 2002
Evidence Act 1995
Local Court Act 2007
Motor Accidents Compensation Act 1999
Supreme Court Act 1970
Uniform Civil Procedure Rules 2005Cases Cited: Aon Risk Services Australia Ltd v Australia National University [2009] HCA 27; 239 CLR 175
Brown v Repatriation Commission [2006] FCA 914
Ciszek v Enterprise Financial Solutions Pty Ltd [2010] NSWSC 1265
Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; 131 FCR 28
Coulter v R [1988] HCA 3; 164 CLR 350
Coulton v Holcombe [1986] HCA 33; 162 CLR 1
Dumitrov v SC Johnson & Son Superannuation Pty Ltd (No 2) [2007] NSWSC 42
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337
Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358
Pritchard v DJZ Constructions Pty Ltd & Ors [2012] NSWCA 196
Repatriation Commission v Warren [2008] FCAFC 64; 167 FCR 511
Sayed v Deng [2012] NSWSC 851
Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332Category: Principal judgment Parties: Phillip Wood (Plaintiff)
Stephen Paul Firth t/a Firths the Compensation Lawyers (Defendant)Representation: Counsel:
In person (Plaintiff)
M.J. Bleasel (Defendant)
Solicitors:
In person (Plaintiff)
Firths (Defendant)
File Number(s): 2012/396881 Decision under appeal
- Date of Decision:
- 2012-11-26 00:00:00
- Before:
- Brydon LCM
- File Number(s):
- 2012/396881
Judgment
The plaintiff, Phillip Wood, appeals from two judgments of the Local Court. In the first judgment, published on 26 November 2012, the presiding magistrate upheld only a small part of his claim against the defendant, Stephen Firth (the "Liability Judgment"). His Honour entered a verdict for $3,743.26 against Mr Firth. Mr Firth was Mr Wood's former solicitor.
In the second judgment, published on 3 December 2012, his Honour ordered Mr Wood to pay Mr Firth's costs from 23 June 2012 which his Honour assessed as $10,000.00 (the "Costs Judgment").
For the reasons that follow Mr Wood's appeal must be dismissed.
Background
The following is taken from the findings set out in the Liability Judgment. That judgment clearly identified the background to the matter and the issues in dispute and set out his Honour's findings on matters of fact and law.
In 2002 Mr Wood was injured while driving a motor coach. He engaged Mr Firth to pursue a claim for compensation on his behalf. His claim was initially the subject of an assessment (a "CARS assessment") by the Motor Accidents Authority pursuant to the provisions of Division 2 of Part 4.4 of the Motor Accidents Compensation Act 1999 ("the Act"). In June 2006 a certificate was issued recording an assessment of $308,835.70 together with costs of $28,504.76, totalling $337,340.46. It appears that the defendant insurer did not dispute liability in respect of Mr Wood's claim. It followed that, if Mr Wood accepted the amount of damages in the certificate within twenty-one days after the certificate was issued, then the CARS assessment became binding on the insurer (see s 95(2) of the Act).
It was common ground before his Honour that the period for the acceptance of the CARS assessment expired on 5 July 2006. Following the issue of the assessment there was correspondence between Mr Wood and Mr Firth concerning Mr Wood's options. Some of that correspondence suggested that Mr Wood was dissatisfied with the assessment. In any event, Mr Firth did not bring the deadline for acceptance of 5 July 2006 to Mr Wood's attention.
Some time after 5 July 2006, Mr Wood instructed Mr Firth to accept the assessment on his behalf. However it was too late and the insurer would not agree to a settlement for the amount awarded by the CARS Assessor. Instead Mr Wood was forced to pursue his rights in the District Court in accordance with Part 4.5 of the Act. There was correspondence between Mr Firth and Mr Wood that was tendered to the Local Court which according to Mr Wood recorded an agreement pursuant to which Mr Firth would compensate him for the difference between the CARS award and any amount awarded in the District Court.
On 21 August 2009 the District Court gave judgment in favour of Mr Wood in the sum of $383,872.00. He was also awarded costs of $28,504.76. The two amounts totalled $412,376.76. The figure of $383,872.00 included a sum of $28,200.00 for interest which was awarded in accordance with s 137(4) of the Act. It can be seen that the amount of costs awarded equated to only those costs that had been awarded to Mr Wood up to the time of the completion of the assessment in May 2006; i.e. he did not receive any costs of the proceedings in the District Court. Section 151 of the Act in effect provides that there is no liability for costs of those proceedings on the part of the insurer unless either the amount of Court awarded damages exceeds the amount specified in the CARS assessment certificate by at least $2,000 or 20% (whichever is the greater), or by at least $200,000 (s 151(2)(a)). It seems that those thresholds had not been met.
The amounts the subject of the verdict, less deductions, were provided by the insurer in three cheques, with the last cheque being sent on 16 November 2009. In a letter dated 20 November 2009 Mr Firth accounted to Mr Wood for the proceeds. After deductions for repayment of workers compensation benefits, Medicare, Centrelink, professional disbursements on the appeals, and various reports, the letter stated that the amount payable to Mr Wood was $139,431.80. It appears that those monies were not paid over until 10 September 2010 in circumstances to which I will refer.
The letter of 20 November 2009 included a relatively complex explanation from Mr Firth as to why Mr Wood was better off as a result of the District Court judgment compared with the position he would be in had he accepted the CARS assessment. There is nothing in that letter or any other evidence that was tendered to suggest that Mr Firth had ever raised with Mr Wood the possibility that he should obtain independent legal advice about Mr Firth's actions. By no later than 20 November 2009 Mr Wood had already effectively claimed that Mr Firth had been negligent in not advising him of the date to accept the CARS award and Mr Firth had all but conceded that in the correspondence. The terms of the letter of 20 November 2009 reveal that by that time there was a direct conflict between Mr Firth's personal interest and his ongoing duty to Mr Wood. Mr Wood was in a position of considerable disadvantage in dealing with Mr Firth. This disadvantage continued through the proceedings in the Local Court and into this Court as Mr Wood has struggled to articulate his exact complaints. It was not assisted by the fact that the barrister who appeared for Mr Wood in the District Court appeared against him and for Mr Firth in the Local Court. (Different counsel appeared for Mr Firth in the proceedings in this Court.)
In the letter of 20 November 2009 Mr Firth argued that, after various deductions, the effect of the District Court judgment was that Mr Wood would receive a net amount of $139,431.80. His letter then records that he "promised to make good any difference between the award of the CARS Assessor and whatever result [Mr Wood] received on appeal" which meant that it was necessary to compare that figure with what Mr Wood would have received had he accepted the CARS award. Mr Firth calculated the net amount he would have received from the CARS assessment as $179,029.87.
However Mr Firth then addressed a number of additional factors which he contended led to the result that Mr Wood was better off for having pursued proceedings in the District Court.
First, Mr Wood deducted a further amount of $14,462.00. This was said to be referable to further medical expenses that Mr Wood had incurred since the CARS award which he would have had to pay from the CARS award (and were being paid from the judgment proceeds).
Second, he deducted an amount for a child support debt of $37,340.52. According to Mr Firth this meant that Mr Wood would have received a net amount of $127,227.35 from the proceeds of the CARS award.
Third, against this Mr Firth accepted that Mr Wood had not had the "use" of the proceeds of the CARS assessment and included a calculation of interest using the Commonwealth Government 10-year benchmark bond rate. In his letter Mr Firth stated that he chose that rate because it is referred to in s 18(4) of the Civil Liability Act 2002 ("CLA"). The amount calculated was $32,933.90.
Fourth, Mr Firth also argued that Mr Wood benefited from not accepting the CARS award as he continued to be eligible for Centrelink benefits when, so it was said, he would have ceased to be eligible for those benefits had he accepted the CARS award. Mr Firth asserted that Mr Wood received and would receive $55,256.00 in Centrelink benefits that he would not have received or receive in the future had he accepted the CARS award.
According to Mr Firth, the end result of these calculations was that Mr Wood had "suffered no net loss by reason of the time which has lapsed between the award and the appeal".
According to the presiding magistrate, after this letter was sent a stand off emerged between Mr Wood and Mr Firth about the release of the net proceeds of the District Court judgment. The funds were not released until about a year later following the intervention of the Law Society.
The Liability Judgment
Mr Wood did not accept Mr Firth's contention that he was not worse off as a result of not accepting the CARS assessment. He commenced proceedings in the Local Court. His amended statement of claim alleged that Mr Firth owed him a duty to take reasonable care and skill in providing advice and in executing his retainer. It identified three breaches of that duty by Mr Firth. First, it alleged that Mr Firth "failed to advise that the time limit for acceptance of the [CARS award] was 5 July 2006". Second, it alleged that Mr Firth failed to properly account to him for the net proceeds of the District Court judgment of $139,431.80 and sought interest by reason of the delay in the payment of that amount. Third, it alleged that Mr Firth withheld interest awarded by the "Supreme Court Judge" although it was common ground that this should be a reference to the "District Court Judge". The statement of claim purported to quantify the amounts recoverable for each of these alleged breaches.
In the Liability Judgment his Honour outlined the background to the proceedings. His Honour then addressed the allegations of negligence.
First, his Honour found that Mr Firth was negligent by reason of his failure to advise Mr Wood as to the appropriate date for accepting the CARS award.
Second, his Honour rejected the allegation that Mr Firth was negligent by reason of his failure to properly account to Mr Wood for the monies he had received. His Honour accepted evidence from Mr Firth that he was at all times ready and willing to dispense the net proceeds of the judgment which was in his trust account to Mr Wood, but that Mr Wood failed to request him to do so. His Honour found that Mr Wood had acted under the misunderstanding that if he had taken the money he would have had to relinquish his rights against Mr Firth. His Honour further found that he was not satisfied that it had been established that, by failing to pay the money out in those circumstances, Mr Firth had "acted otherwise to the standard ... of an ordinary skilled person exercising and professing to have such special skill as a legal practitioner".
Third, his Honour rejected the complaint that Mr Firth had failed to account for the interest awarded in the District Court. His Honour stated that Mr Firth "did account to [Mr Wood for] an amount of interest [of $28,200.00] which was part of the judgment".
Having made these findings, his Honour then addressed the loss said to have been suffered by Mr Wood as a consequence of the established negligence of Mr Firth. His Honour first referred to the manner in which Mr Wood had particularised the loss he had suffered in his amended statement of claim. His Honour noted that the particularised claim for loss in respect of this aspect of Mr Wood's case was identified in sub-paragraph 9(a) of the amended statement of claim as being $2,257.55 with interest on that amount of $1,006.27. His Honour's judgment then identified the relevant issue as follows:
"Nonetheless it is important to determine what loss [Mr Wood] has suffered at the hands of the [Mr Firth's] negligence and whether anything was agreed." (emphasis added)
Having posed the issue in those terms his Honour then addressed the correspondence between Mr Wood and Mr Firth between 15 August 2006 and 31 October 2006 in which Mr Wood said that Mr Firth made various promises and undertakings. His Honour rejected the contention that there was any separate contract between Mr Firth and Mr Wood concerning that matter. Having addressed and rejected the relevance of that correspondence, his Honour then assessed the difference between the CARS award and the District Court judgment and concluded that there was a differential of $2,257.55 in favour of the CARS award. This was the figure nominated by Mr Wood in his amended statement of claim.
His Honour considered and then rejected the contention that had previously been put by Mr Firth in his letter of 20 November 2009 to the effect that there should be an offset for certain medical expenses which were payable out of the judgment but which would have to have been paid by Mr Wood had he accepted the CARS award, and a benefit Mr Wood is said to have gained in continuing to be eligible for Centrelink benefits (see [13] to [16] above).
Thus his Honour found that there was a net loss of $2,275.55 occasioned by Mr Firth's negligence. His Honour also awarded a further amount of $1,485.71 interest on that amount being an extension of the interest calculations in the amended statement of claim to the date of judgment.
Two matters should be noted about this reasoning. First, there was no express reference in any part of his Honour's judgment to the provisions of Part 1A of the CLA which was applicable to Mr Wood's claim as pleaded. At no point during the submissions was his Honour referred to the legislation and neither party referred to it during the appeal. However his Honour's findings were not inconsistent with the analysis of breach mandated by ss 5B and 5C of the CLA.
Second, his Honour did not expressly find that had Mr Firth notified Mr Wood of the date for acceptance of the CARS award then he would have accepted it within time, although that may be implicit in his Honour's reasoning. In any event, no cross appeal or notice of contention was filed on behalf of Mr Firth raising any complaint about such an omission from the judgment although a related complaint was raised in response to a point sought to be made by Mr Wood (see [70]).
The Costs Judgment
Immediately following the announcement of his Honour's judgment on 26 November 2012, Mr Firth made an application for indemnity costs relying on two offers of compromise. His Honour heard argument on the application and adjourned the proceedings until 3 December 2012 when he published the Costs Judgment.
The first offer of compromise was contained in an e-mail dated 31 May 2012 with an offer to compromise the proceedings for $10,000 excluding legal costs. The offer was expressed to remain open until 4:00pm on 1 June 2012 in circumstances where the hearing was due to commence on the following Monday, 4 June 2012. His Honour found that this left too little time for Mr Wood to seek any legal advice in relation to its effect.
The second offer of compromise was one that his Honour found "was sent to the residential address of [Mr Wood]" and dated 22 June 2012. His Honour found that it was open "for consideration for 28 days" and issued two weeks after the first hearing date of 4 June 2012, but well before a resumed hearing date in August 2012. It offered to compromise the amount in the same terms as the first offer, namely by the payment of an amount of $10,000 exclusive of legal costs. His Honour found that that offer complied with r 20.26 of the Uniform Civil Procedure Rules 2005 ("UCPR"), and provided "ample time" for Mr Wood to address its reasonableness. His Honour considered that UCPR 42.15 was engaged and was not persuaded that any basis for displacing the operation of that rule had been established.
Accordingly, his Honour made an order for costs in favour of Mr Firth from 23 June 2012. Mr Firth claimed an amount of $29,080.00 from the time of the commencement of the proceedings. Having regard to the truncated time for which the costs order operated and the costs incurred by Mr Wood up to June 2012, his Honour assessed the amount to be paid at $10,000.00.
The Appeal
Sub-section 39(1) of the Local Court Act 2007 confers on Mr Wood a right of appeal but only "on a question of law". This is subject to ss 40(2)(c) which imposes a leave requirement on appeals from "an order as to costs". One aspect of Mr Wood's appeal concerns his Honour's costs order. In addition ss 40(1) confers on Mr Wood a right to appeal on a "ground that involves a question of mixed law and fact" but only with the leave of the Court.
I addressed these provisions including the significance of the need to obtain leave to appeal in Sayed v Deng [2012] NSWSC 851 at [27] to [34]. I will not repeat that discussion other than to note that a requirement to grant leave "... represents a constraint upon the overall cost of litigation by protecting parties, particularly respondents, from the costs of a full hearing of appeals ..." (Coulter v R [1988] HCA 3; 164 CLR 350 at 359 per Deane and Gaudron JJ).
As I have stated, Mr Wood represented himself in the proceedings in the Local Court and in this Court. His amended summons contained eight appeal grounds, which I will address. He also relied upon a set of written submissions which were marked "MFI A" and expanded upon by him in oral submissions. The complaints made in the written and oral submissions travel beyond what was in the amended summons. Counsel for Mr Firth in this Court did not generally take issue with Mr Wood expanding upon his appeal grounds, except in respect of two matters which are addressed at [38] to [43] and [56] to [70].
I have already referred to the difficulties that Mr Wood experienced in identifying his precise complaints. My reading of the transcript in the Local Court reveals that his Honour strived to ascertain what Mr Wood's case was and afforded him latitude in doing so. I attempted to do likewise. However both his Honour and I were obliged to do so with the constraints of what can be loosely described as the adversarial system of justice and the dictates of procedural fairness. One consequence of those constraints is that every time Mr Wood appeared to change or reformulate his claim and complaints further notice and an opportunity to respond were required to be given to Mr Firth. A claim of professional negligence against a solicitor is not straightforward and the professional whose conduct is impugned is entitled to have the claim articulated clearly so that they can have a proper opportunity to respond. It is not the Court's function to undertake that task for a party although it can intervene to clarify the case sought to be made. In addition, there are further difficulties with attempts to reformulate a case on appeal. Even in cases where the appeal is by way of rehearing it is settled that a new point cannot be taken on appeal if it could have, not would have, been met by evidence (Coulton v Holcombe [1986] HCA 33; 162 CLR 1 at 7). Where the appeal is on a "question of law" then there is even more limited scope to raise a new issue and almost no scope to reformulate a case that has already been decided (see Repatriation Commission v Warren [2008] FCAFC 64; 167 FCR 511 at [78] per Lindgren and Bennett JJ).
Bias allegation
On the first page of his written submissions marked MFI A and under the heading "Bias", Mr Wood referred to an occasion where he had allegedly witnessed counsel for Mr Firth in the Local Court "instigating doubt by remaining behind in the locked court at recess then [later] emerg[e] from the back of the court".
No express allegation of bias is to be found in any of the appeal grounds set out in the amended summons. In oral argument, Mr Wood explained that he had "concerns" about bias by reason of an incident that he had witnessed as described in his submissions. He appeared to suggest that counsel for Mr Firth had some privileged access to the court premises that Mr Wood did not. Mr Wood stated that he had no evidence that any of this took place with the approval of the presiding magistrate, or that any communication to the presiding magistrate occurred in his absence.
Counsel for Mr Firth in this Court, Mr Bleasel, objected to this allegation being addressed in the absence of it being properly raised as a ground of appeal. After hearing the parties, I indicated that I would refuse leave to amend to raise this ground and provide my reasons for doing so.
It appears that Mr Wood has been floating some allegation to this effect for some period of time. On the Court file there is to be found an affidavit from the barrister who appeared in the Local Court for Mr Firth denying that any such incident occurred. This barrister had not been required for cross examination. It was thus apparent that, if this matter was to be pursued, there would need to be a calling of further evidence with the likelihood of an adjournment.
Further I formed the view that the argument sought to be made if the application to amend was granted was extremely weak. Mr Wood accepted he had no evidence whatsoever that the presiding magistrate condoned any of the conduct alleged against the barrister. In the absence of that I saw no realistic basis upon which a "fair minded lay observer might reasonably [have] apprehend[ed] that the [presiding magistrate] might not bring an impartial mind" to the resolution of Mr Wood's claim (Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 at [6] per Gleeson CJ, McHugh, Gummow and Hayne JJ).
Thus I considered the application to amend to raise a serious allegation was too late, too likely to lead to an adjournment and too weak to warrant it being granted (Aon Risk Services Australia Ltd v Australia National University [2009] HCA 27; 239 CLR 175). Given that conclusion it was not necessary for me to consider whether a complaint of bias is an appeal "on a question of law" within the meaning of s 39(1) or could only be raised in proceedings commenced in the Court's supervisory jurisdiction confirmed by s 69 of the Supreme Court Act 1970 (see Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; 131 FCR 28 at [8] per Gray ACJ and North J; contra at [67] per Gyles J; Brown v Repatriation Commission [2006] FCA 914 at [13] per Branson J).
Ground 4 - Magistrate's field of expertise
Ground 4 of the appeal grounds and aspects of Mr Wood's written submissions take issue with his Honour's expertise to decide the claim against Mr Wood. The basis for this ground is a statement by the presiding magistrate on the first day of the hearing that "I can tell you now my background is not in motor vehicle accidents. I'm an expert in crime".
This ground has no substance. It does not raise either a question of law or of mixed law and fact. For the sake of completeness I note two points. First, persons appointed as magistrates are to be taken to have the necessary legal expertise to decide the cases before them (see s13(2) of the Local Court Act). Second, it is clear from reading the transcript of the hearing and his Honour's judgment that, both as a matter of procedure and substance, his Honour dealt with the matter appropriately.
"Ignoring the contractual agreements"
In his written and oral submissions, Mr Wood took issue with so much of his Honour's judgment in which his Honour addressed the correspondence he engaged in with Mr Firth in the period August to October 2006. Mr Wood's written submissions point to passages in the transcript in which his Honour stated that he was dealing with a claim for negligence (and inferentially not one in contract). Mr Wood submitted that his case was "not a claim for negligence ... [but] one of damages not negligence as claimed by the Magistrate".
Unfortunately, it is Mr Wood who is mistaken. I have described the statement of claim above. Mr Wood's claim was for damages for breach of the implied term of his retainer agreement with Mr Firth. In substance it was a claim for damages for "negligence". Mr Wood never pleaded a case in contract based on the exchange of letters in late 2006, and his Honour was not obliged to address any such case. In fact his Honour did tangentially address a claim that there was an agreement and found that there was no "separate contract" (see [25] above). However this was a side issue to Mr Wood's pleaded claim. No question of law or of mixed law and fact is raised by this complaint.
Even if his Honour was obliged to consider whether there was an agreement arising out of those letters, any such agreement rose no higher than obliging Mr Firth to make up the difference between the amount Mr Wood received from the District Court judgment and the amount he would have received had he accepted the CARS award. This is the very inquiry that his Honour undertook in determining the quantum of damages payable as a result of the negligence found against Mr Firth.
Rejection of the failure to account claim
In the course of his oral and written submissions Mr Wood made a complaint in respect of his Honour's findings in relation to so much of his case that complained about Mr Firth's failure to promptly account to him for the net proceeds of the District Court judgment.
I have already summarised his Honour's findings on that issue. Those findings rested upon findings of fact by his Honour, especially his Honour's acceptance of Mr Firth's oral evidence. No arguable error of law has been demonstrated in relation to his Honour's reasoning, nor is there any matter raised that warrants a grant of leave to appeal on any mixed question of fact and law.
Grounds 5 and 6 - Interest awarded by the District Court
Grounds 5 and 6 of the appeal seek to re-agitate the third particular of negligence that was pleaded which alleged that Mr Firth failed to account for the separate award of interest of $28,200.00 made by the District Court. I have already summarised the reasons of his Honour for rejecting this claim. His Honour's conclusion that this amount was accounted for in the determination of the net amount owing from the judgment to be paid to Mr Wood was clearly a finding of fact. There was more than sufficient evidence on which to base such a finding, namely, the letters from Mr Firth which included that amount in the reconciliation of the judgment, as well as Mr Firth's oral evidence. Nothing that was submitted on behalf of Mr Wood raises any question of law or of mixed law and fact in relation to this aspect of his Honour's judgment. I reject this ground.
The calling of Mr Firth
One matter raised in the written and oral submissions on behalf of Mr Wood concerned his attempts to call Mr Firth as a witness in his case. The first witness to give evidence in the proceedings was Mr Wood himself. After giving his evidence, his Honour asked him if he wished to call any other witness. Mr Wood stated that "I would like to call Mr Stephen Firth so that I can ...". His Honour responded: "Well this is your case. I am just concerned about that at the moment. Is there any other witness you want to call in your case or in support of your case?" Mr Wood then replied that he believed the documentation supported his case, and his Honour noted that Mr Wood's case had closed.
Counsel for Mr Firth (Mr Goodridge) then opened the case for Mr Firth and tendered various documents. His Honour then confirmed with Mr Goodridge that he did not propose to call Mr Firth. Mr Wood then again raised with his Honour whether he could call Mr Firth. His Honour stated that he was reluctant to allow him do so, noting that it is "highly unusual for a plaintiff to call the defendant". Mr Wood then insisted on calling Mr Firth. There was then further debate as to whether Mr Wood would be able to call Mr Firth. Eventually he was allowed to do so, and Mr Wood questioned him at length. Mr Goodridge briefly cross examined his own client.
There is no doubt that Mr Firth was a compellable witness in Mr Wood's case (Evidence Act 1995, s 12). However there is no basis for considering that any reluctance on the part of his Honour in allowing Mr Wood to call Mr Firth raises any question of law or question of mixed fact and law. In the end result Mr Wood did call Mr Firth. Further his Honour's hesitation was consistent with his Honour attempting to prevent Mr Wood doing harm to his own case by calling the opposing party. However Mr Wood insisted on doing so and thereby harmed his own case by reason of the answers he received to his questions. For example, Mr Wood asked Mr Firth as follows:
"Q. Could you tell me, Mr Firth, if the $28,200 that was given as interest back in 2009 [forms] part of the award?
A. Yes, most definitely it does."
Thereafter, Mr Firth gave a detailed explanation as to why it did so. As I have stated, his Honour accepted Mr Firth's evidence.
I reject this ground.
Further Proposed Ground - Failure to Account for Loss of Use of Funds
I have already described how his Honour calculated the verdict in favour of Mr Wood by deducting the net proceeds received from the District Court judgment in late 2009 from the net amount that Mr Wood would have received had he accepted the CARS award in 2006. During the hearing of the appeal I raised with the parties whether this calculation was erroneous because there was no allowance for the benefit that Mr Wood would have derived from having the proceeds of the CARS assessment three years earlier than proceeds of the District Court judgment, i.e. the lost value of the "use" of the money that he would have received had he accepted the CARS award.
Mr Wood embraced this contention and further argued that this was a matter that he raised in the Local Court. This was disputed by counsel for Mr Firth. At the conclusion of the hearing, I directed the parties to provide further written submissions on this issue and any notice of contention or cross appeal that Mr Firth wished to agitate if I allowed Mr Wood to pursue this point. Further submissions were filed. Mr Wood took the opportunity in those submissions to attempt to re-agitate various other issues and attached documents which presumably he sought to tender. I have ignored those further submissions and documents, except for those that relate directly to the subject matter of the grant of leave.
I have treated the submissions as directed to both an application to amend Mr Wood's summons to raise this ground and the substance of the argument in support of the ground of appeal if leave was granted.
The proper characterisation of a claim for lost use of funds is not for pre-judgment interest, but instead it is part of a claim for damages. It requires that there be a factual investigation into the loss suffered from being held out of the use of money for a period of time (see Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 363 to 364 per Giles J; Dumitrov v SC Johnson & Son Superannuation Pty Ltd (No 2) [2007] NSWSC 42 at [22] to [25] per Gzell J). It follows that, for any question of law or of mixed fact and law to arguably arise in relation to this matter, there needed to be either a clearly articulated claim for such a head of damage or, perhaps, it had to at least be a necessary component of any such claim that Mr Wood made.
I have already summarised the amended statement of claim. It did not make any claim for general damages as a result of Mr Firth's alleged negligence. Nor did it make any specific claim for any head of damage referable to the lack of the use of the money between September 2006 and September 2009. Instead it contained a very specific calculation of the amount of damages claimed in respect of the failure to advise of the date for acceptance of the CARS award. The structure and findings in the Liability Judgment coincided with the points made in the amended statement of claim. On its face this suggests that, quite properly, his Honour addressed himself to the pleaded case. His Honour stated that a number of times during the hearing.
Nevertheless, Mr Wood submitted that he articulated a claim for this amount before the Court. He relied on the following material in support of that claim.
First he referred me to a passage in his own evidence and a passage in the cross examination of Mr Firth, in which reference was made to the calculation undertaken by Mr Firth in his letter of 20 November 2009 of the value of the lost use of the money that I have noted in [15] above. My reading of those exchanges reveals that they occurred when Mr Wood was making some generalised complaint about Mr Firth not complying with the terms of an agreement he claimed they reached in the latter part of 2006. At most, these passages indicate that somewhere in the milieu of facts raised in the case was an allegation that Mr Firth made a promise to pay interest. However that falls a long way short of what is necessary to support the suggestion that a contention that Mr Wood was entitled to interest for the loss of the use of the money he would have received in 2006 was clearly put to his Honour.
Second, at the hearing of this appeal Mr Wood submitted a document which he initially asserted was his written submissions in the Local Court. This document was tendered (and marked exhibit C2) and states, inter alia:
"Moneys for interest agreed by the defendant to pay the plaintiff in letter dated 31 October 2006 but did not pay claiming Centrelink's payments to the plaintiff compensated for this. Centrelink not being mentioned at the time of the agreement, which formed our contract, which included an interest payment. The interest payment was to be made on the, 'amount in question' which was the figure I would have received back in 2006 if accepted on time. The defendant did understand this and calculated the interest on that figure being $179,029.87 as agreed at bank interest totalling $32,933.90 up to 20 November 2009. Firth did the calculations but refused to pay. (Loss $32,933.90 see document TWO below.)"
In relation to this document, the following exchange occurred at the hearing of the appeal:
"HIS HONOUR: The document I think Mr Bleasel we are talking about is the one that starts at page 11 [of exhibit C2]. I think Mr Wood says that's the document that was sent to the Local Court.
PLAINTIFF: Correct.
HIS HONOUR: I think Mr Wood tenders that. What I am inclined to do Mr Bleasel, subject to any further episodes, is accept it as an exhibit but reserving to your client an opportunity to make some enquiries about it because you weren't there and your instructor wasn't there and you may need to go and check. Why we don't get the Local Court file sent up to us is a mystery to, me anyway.
PLAINTIFF: Your Honour may I say something? From page 11 to 12, 13 and 14 was in a bound document.
HIS HONOUR: You talked about that.
PLAINTIFF: That's the document that was in the bound document.
HIS HONOUR: Do you say that document [was filed] not via Mr Goodridge.
PLAINTIFF: No, it went to Mr Goodridge initially and after that it was filed.
HIS HONOUR: By you?
PLAINTIFF: Yes."
Thus, Mr Wood explained that exhibit C2 was not an exact copy of the document that he said was tendered in the Local Court. However, included in the material sent after the hearing was a document which was bound, which was similar to exhibit C2 and which included the passage set out above in [63]. I understand Mr Wood to assert that that is the document that he "filed in the Local Court". I have marked that document "exhibit E" and placed it with the papers. However, that does not assist him for two reasons.
First, I have perused the transcript of the oral submissions made by Mr Wood to the Local Court on 12 October 2012. It is clear that the document Mr Wood was reading from on that day was not the document that has now been marked exhibit E. I can find no reference to Mr Wood ever referring the magistrate to the submissions in exhibit E, including the submission set out above. I am not satisfied that he did so.
Second, in any event, throughout the hearing in the Local Court his Honour was at pains to stress that the issues he was deciding were those identified in the amended statement of claim. At no stage was any real attempt made to amend the pleading. The submissions made on behalf of Mr Firth also addressed the claims made in the amended statement of claim.
The end result is that Mr Wood did not clearly articulate a separate claim for the loss of the use of the monies that he would have received had he accepted the CARS award in 2006. Further, such a claim was not a necessary component of the claims he did make. The proper discharge of the presiding magistrate's function of determining Mr Wood's claim did not require his Honour to undertake some assessment of the value of the lost use of the proceeds of the CARS assessment, whether using prevailing interest rates or otherwise, in the absence of such a claim being made and supported by evidence.
Accordingly and notwithstanding my initial misgivings about the failure of his Honour to take account of the benefit that Mr Wood would have derived from the earlier receipt of the proceeds of the CARS assessment, I do not consider that it is arguable that any wrongly decided question of law or question of mixed fact and law arises from his Honour not accounting for that matter in determining the amount of damages to be awarded to Mr Wood. It follows that I reject Mr Wood's application for leave to rely on this ground.
This conclusion makes it unnecessary for me to consider an alternative submission made on behalf of Mr Firth that, should the appeal have been allowed on this ground, he should have been granted leave to file a cross appeal or notice of contention concerning his Honour's failure to assess the damages to be awarded to Mr Wood on the basis of the percentage probability that Mr Wood would have accepted the CARS award if he had been advised of the time of its expiry (citing Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 335). I have considerable doubt as to whether that contention is correct given that a finding on the balance of probabilities that he would have accepted the CARS award was necessary to be made before it could be concluded that Mr Wood suffered some damage (as opposed to determining the quantum of damages): see Pritchard v DJZ Constructions Pty Ltd & Ors [2012] NSWCA 196 at [322] to [323] (per Whealy JA with whom Bathurst CJ and Barrett JA agreed on this point).
Grounds 1, 2 and 3 - Costs Judgment
Mr Wood seeks to appeal the costs order made by his Honour. As I have already indicated, he needs a grant of leave to appeal in respect of that judgment. The basis for the costs order was that the verdict granted in his favour did not exceed the amount of the offer of compromise dated 22 June 2010 that had been made on behalf of Mr Firth, namely $10,000.00.
In substance, Mr Wood made two separate complaints about his Honour's costs order. First, Mr Wood denied that he had received the offer of compromise of 22 June 2010. He asserted that the first time he saw that offer was in an informal settlement conference he had attended in August 2012 when he was shown the offer, but was told it was "off the table" as it had expired. Second, he complains that his attempts to explain this to the presiding magistrate were stifled.
As I have stated, the application for the costs order was made following the publication of the Liability Judgment on 26 November 2012. The solicitor for Mr Firth tendered the two offers of compromise. His Honour asked Mr Wood had he seen those documents. He replied: "I do - I have seen them before".
The solicitor for Mr Firth then made submissions concerning UCPR 42.15 which relates to offers of compromise. The passage in which Mr Wood says he was prevented from putting his assertions was shortly after that in which the presiding magistrate had an exchange with the solicitor for Mr Firth, and Mr Wood stated: "May I just, if I may, on the 14th, if I may, I beg your pardon". This occurred in the context of Mr Firth's solicitor addressing his Honour. Mr Wood then interpolated as follows:
"[Mr Wood]: I may be able to make a comment that's quite relevant your Honour. On 14 August you asked the parties including myself to retire and see if we can come up with a compromise.
His Honour: Yes.
[Mr Wood]: At that meeting with Ross Goodridge and Stephen Firth, Stephen Firth and Ross Goodridge withdrew the offer documents that you have in front of you. Withdrew them. Thank you, your Honour."
The solicitor for Mr Firth then pointed out that they were not withdrawn but had simply expired. His Honour then took an adjournment to consider the offers and "to have a look at the rules".
After the adjournment his Honour asked Mr Wood whether he was seeking costs. He said he was. There was discussion concerning his costs. His Honour then returned to Mr Firth's application and the offers of compromise. Mr Wood stated:
"Your Honour, the reason that I didn't accept these offers is because my claim was for considerably more. Considerably more. And the fact is, the facts that I've put forward to yourself were that the money was held by Stephen Firth and not handed over and that money owes interest to me. And that money - I mean it was held over ..." (emphasis added)
Later, his Honour gave Mr Wood a number of opportunities to address on whether UCPR 42.15 should operate in relation to these offers of compromise. Mr Wood's only response was to continue to argue the merits of his case. Ultimately his Honour asked again if there was anything that Mr Wood wished to "say ... on the question of the application of this rule [i.e. concerning indemnity costs]". Mr Wood again reiterated his complaints about Mr Firth.
It is evident from these exchanges that his Honour repeatedly and politely gave Mr Wood every opportunity to address concerning the offers of compromise. At no time was he cut off from putting anything to his Honour. At no time did he state that he had never received the offers. He did not state that he did not have the opportunity to accept the offers because they had expired by the time he received them. Instead he stated that he did not accept the offers because he regarded his case as being worth more than what was being offered to him. The exchanges between Mr Wood and his Honour were capable of being construed by his Honour as an acceptance that he had received the offers while they were still open.
To the extent that the Costs Judgment accepts that the offers were served upon Mr Wood within a time that enabled him to accept them, then that was a finding of fact that was supported by "evidence" being the statements made to his Honour by Mr Wood. Otherwise there is no basis for suggesting that his Honour erred in the application of UCPR 42.15. I do not consider that any question of law or of mixed fact and law arises in relation to the costs order made by his Honour.
It follows that I reject these grounds of appeal.
Disposition
At the hearing of the appeal the transcript of the entirety of the proceedings in the Local Court was tendered and referred to but, other than the transcript of 26 November 2012, I neglected to give it an exhibit marking. It should be noted that I have marked the remainder of the transcript as "exhibit D".
It follows that the appeal will be dismissed. In the ordinary course Mr Wood would be required to pay Mr Firth's costs of these proceedings. If either party seeks to contend for a different form of costs order, they should serve any submission to that effect, and provide a copy to my Associate, on or before 4 July 2013. Such submission should not exceed two pages. If no submission is received from either party, I will make the suggested costs order in chambers.
Accordingly the Court orders that:
(1) The proceedings are dismissed.
(2) Any submissions on costs should be served on or before 4 July 2013 and a copy provided to the Associate to Beech-Jones J, such submissions not to exceed two pages.
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Decision last updated: 27 June 2013
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