Bjelecic v Lawcover Insurance Pty Limited

District Court of NSW|2016-03-09|Before: Mr J

Plaintiff: Mr J Wilson Defendants: Mr S Longhurst

Solicitors: Plaintiff: Russell McLelland Brown Lawyers (Wollongong) Defendants: Yeldham Price O'Brien Lusk File Number(s): 2014/28102 Publication restriction: None

The applications before the court

The applications before the court are as follows: 1. The defendants' application (by notice of motion filed on 22 December 2015) under r 36.16(1) Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), or alternatively r 36.16(3A), for the correction of Judge Delaney's judgment by omitting paragraphs 88 and 89 and replacing them with the following paragraphs: "88. There will be a verdict and judgment for the plaintiff on liability and damages for $51,431 against the first defendant. 89. There will be verdict and judgment for the second defendant against the plaintiff. 90. The first defendant is to pay the plaintiff's costs to be assessed or agreed on the ordinary basis, up to and including 16 April 2015. 91. The plaintiff is to pay the first defendant's costs to be assessed or agreed on an indemnity basis, from on and after 17 April 2015. 92. The plaintiff is to pay the second defendant's costs to be assessed or agreed on the ordinary basis, up to and including 16 April 2015. 93. The plaintiff is to pay the second defendant's costs to be assessed or agreed on an indemnity basis, from on and after 17 April 2015." 1. The defendants' application for indemnity costs by reason of an offer of compromise and Calderbank offer in the sum of $85,000. 2. The plaintiff's proposed notice of motion (which Counsel for the plaintiff sought leave to hand up in court) seeking corrections to what are asserted to be significant errors in Judge Delaney's judgment in terms of the mathematics of the claim.

Background

These proceedings, which involved allegations of professional negligence on the part of solicitors acting for the plaintiff in connection with a motor accident personal injury claim, were the subject of a five day hearing before Delaney DCJ. The second defendant, the solicitor who acted for the plaintiff in the personal injury claim, was a director of a legal practice incorporated pursuant to the Legal Profession Act 2004 (NSW), with which the plaintiff entered into a retainer agreement. As this incorporated legal practice was deregistered, the plaintiff sued the first defendant, Lawcover Insurance Pty Limited, in the shoes of this deregistered legal practice, pursuant to s 601AG Corporations Act 2001 (Cth).
The principal issues in the trial were the issues raised by the plaintiff's claim for breach of contract and negligence in terms of loss of a chance and limitation issues. Judge Delaney handed down a written judgment dated 18 December 2015 in relation to the claims against both defendants. In his Honour's judgment, his findings are set out at paragraphs 85-89 as follows: "85. Accordingly, I am of the opinion that if there had not been a failure to commence proceedings the plaintiff's case would have been before an assessor from CARS in September 2006 and the plaintiff would have been awarded damages in excess of $300,000. I form this view because I accept that the plaintiff has permanent disabilities to her neck [sic] shoulder and back as well as psychological condition caused by the accident which impact on her ability to work and some need for domestic help. Although the medical evidence does not always favour the plaintiff I generally accept her evidence about the extent of her daily problems. 86. The plaintiff's claim is for loss of a chance. There are a number of issues to consider including the evidence of Ms Holz that the plaintiff has rights that have not yet been extinguished. In my opinion, there should be a reduction of 25% to the figure of $333,242 to take into account that those rights might still be sustainable and the difficulty of recovery. 87. This would leave the plaintiff with an award of $257431 before deduction of workers compensation and social security of $206,000. After such deduction the figure if $51431. 88. There will be a verdict and judgement [sic] for the plaintiff on liability and damages for $51,431 against Trimac, as represented by Lawcover. 89. The defendant [sic] is to pay the plaintiff's costs to be assessed and agreed on the ordinary basis subject to any application in writing to the contrary within 14 days sent to the District Court Sydney."
However, in paragraph 35 of the judgment, Judge Delaney held that the action against "the solicitor personally" (namely the second defendant, Mr Antoniou) was statute-barred by virtue of s 14 Limitation Act 1969 (NSW) (his Honour went on to note that the claim against the first defendant was not statute-barred).
The orders which were entered on JusticeLink were as follows: "Judgment: LAWCOVER INSURANCE PTY LIMITED, First Defendant Peter Christopher Antoniou, Second Defendant are to pay Rada Bjelecic, First Plaintiff the sum of Claim amount: $51431.00 Interest claimed: $0.00 Filing fees: $0.00 Service fees: $0.00 Solicitors fees: $0.00 Other costs: $0.00 TOTAL: $51431.00 There will be a verdict and judgement for the plaintiff. There will be a verdict and judgement for the plaintiff on liability and damages for $51431 against Trimac, as represented by Lawcover. The defendant is to pay the plaintiff's costs to be assessed and agreed on the ordinary basis subject to any application in writing to the contrary within 14 days sent to the District Court Sydney."

The application under the "slip rule"

Both the plaintiff and defendants raise issues which they contend gives rise to relief under the "slip rule". I shall deal first with the application raised by the plaintiff in the notice of motion filed on 22 December 2015.
Rule 36.17 UCPR provides: "36.17 Correction of judgment or order ("slip rule") If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error."
This provision is the only means for correcting a judgment which has been formally entered (r 36.11 UCPR) and is confined to accidental slips and omissions. In Newmont Yandal Operations Pty Ltd v J Aron Corp (2007) 70 NSWLR 411, Spigelman CJ, with whom Santow JA and Handley AJA agreed, explained the operation of the rule as being to prevent unforeseen or unintended legal consequences (at [58]-[60]) but as restricted to an issue that has intentionally not been adjudicated upon. The correction cannot have a consequence which the judge clearly intends to avoid.
The provisions of sub-s 56(1) and (2) are also of relevance for the reasons explained by Spigelman CJ at [113]-[117] and, for this reason, earlier discussions on the slip rule must be viewed with caution.
Unlike UCPR r 36.16, where any application must be brought within 14 days, an application under the slip rule may be brought at any time. In the present case, however, the plaintiff wisely took the course of bringing the application so promptly that, if the application could not be brought under UCPR r 36.17, it could still be brought under UCPR r 36.16, and the question of whether this application for amendment (which is very close to the border of what is permissible under the slip rule) falls under UCPR r 36.16 or 36.17 fortunately need not be determined.
Whether covered by the slip rule or not, on any reading of Judge Delaney's judgment, it is clear that what his Honour intended to do was to enter judgment in favour of the second defendant against the plaintiff (see paragraphs 35 and 88 of the judgment as set out above) and to make a costs order in the second defendant's favour, subject to the same liberty to apply as set out in paragraph 89.
Neither of these orders in favour of the second defendant was made at all, and both must clearly be attended to, in the interests of finality.
The orders against the first defendant are similarly in need of correction because the orders made by Judge Delaney only refer to the "defendant" (see paragraph 89). While the court staff member noting the orders on JusticeLink has valiantly attempted to do this by making the relevant order against "Trimac, as represented by Lawcover", the JusticeLink orders do not accurately represent the contents of the judgment.
Mr Wilson, for the plaintiff, concurred in the submission that the orders made by Delaney DCJ do not accurately reflect the findings that the court intended to make. Accordingly, I have made the orders sought by both parties.
Mr Wilson also brought an application under the slip rule to vary the judgment amount but, having entered judgment and costs orders against the correct defendant, the next step I shall take is to determine the defendants' applications for indemnity costs.

Application for indemnity costs

The defendants served the plaintiff's solicitors with a valid offer of compromise under r 20.26 UCPR in the sum of $85,000 plus costs as agreed or assessed. In addition to relying upon the offer of compromise, the defendants also expressly sought to rely upon this offer in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.
I am satisfied that the offer of compromise was expressed in valid terms. At the time that the offer of compromise was made, the reports of the experts called at the hearing had been served. There is no submission that the timing of the offer of compromise was inappropriate or unfair.
Mr Wilson's submissions were that the court should not exercise its discretion to award indemnity costs by reason of the complex nature of the claim, which required two experts to give evidence not only as to issues of liability and quantum but also in relation to issues of limitation. The quantification of the loss of a chance was more than usually difficult and there were issues of credit in relation to the nature and extent of the plaintiff's injuries. Mr Wilson submitted that it was impossible to determine liability or quantum of the claim until such time as the court made the necessary findings as to liability, including the question of the limitation period. As it was not possible to make any assessment of the quantum of the claim until after the evidence of the expert was heard, I should exercise my discretion not to award costs on an indemnity basis.
I do not accept these submissions. This was not a case where liability was complex, and the real issues were the impact of the limitation period which, even on the plaintiff's best case, meant that any action against the solicitor personally was statute-barred by virtue of s 14 Limitation Act 1969 (NSW).
The real issue was the question of heads of damages in circumstances where the plaintiff's injury would not have reached the threshold and where those damages would be offset by social security benefits. While calculations of this nature may vary widely, they were not of such complexity that the policy considerations underlying the rationale for the offer of compromise provisions.
In making this finding, I have also taken into account the provisions of ss 56-62 Civil Procedure Act 2005 (NSW), and in particular s 60. The amount of damages awarded and the amount offered need to be seen in the light of the costs of the 5-day hearing resulting from the rejection of the offer.
This brings me to the plaintiff's draft notice of motion seeking orders which would amend the damages sum to an amount more than double the sum awarded.

Application by the plaintiff to amend mathematical calculations in Judge Delaney's judgment

The plaintiff foreshadowed an application, also asserted to be by way of "slip rule", to vary the judgment of Judge Delaney to take into account asserted mathematical errors of some significance. This application was challenged by the defendants on the basis that no application had been made pursuant to r 36.16 UCPR within 14 days of the judgment of Judge Delaney dated 18 December 2015, and that the matter did not fall within the "slip rule" in any event.
The first question is whether Rule 36.16 UCPR is available. This rule provides: "36.16 Further power to set aside or vary judgment or order (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if: (a) it is a default judgment (other than a default judgment given in open court), or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B). (4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order."
The circumstances in which a party should bring an appeal, as opposed to bringing an application under r 36.16 UCPR, are explained by the New South Wales Court of Appeal in Coren v Master Builders Association of New South Wales Pty Ltd [2014] NSWCA 244.
The limited time provision for r 36.16 UCPR have been called a trap for the unwary, in that these time limits cannot be extended: AT v Commissioner of Police (No 2) [2010] NSWCA 337 at [6] - [13] per Basten JA, noting the different roles played by UCPR r 36.15, 36.16 and 36.17. The plaintiff is out of time for the bringing of any application under r 36.16 UCPR. Mr Longhurst sought to argue that Delaney DCJ's 14-day period in paragraph 89 of his Honour's judgment was an additional hurdle, but I am satisfied that this proviso merely related to any application to vary the costs orders (a step the defendants wisely took within time).
Nor can these applications properly form part of any application under UCPR r 36.17, the slip rule. The objections are to the calculations of the amounts as follows: 1. An amendment of paragraph 72 to arrive at a total of $145,649.00; 2. An amendment of the sum in (b) to change this figure from 333,242.00 to $343,242.00 (while this appears to be a typographical error, it forms part of a larger series of asserted errors); 3. Amendments to paragraph 87 to increase the judgment sum to $111,382.00; and 4. An award to the plaintiff, in paragraph 88 of the judgment, of $111,782.00.
These corrections are extensive and relate to the whole of the assessment of damages process. In my view, they would require correction at appellate level, in that they are not mathematically agreed sums, but challenges to the method of calculations as well as being asserted errors of fact and (in one case) a typographical error. The defendants are in the additional and invidious position of losing an entitlement to seek indemnity costs, as the damages have been more than doubled and would now exceed the sum in the defendants' offer of compromise.
Applying the reasoning of Spigelman CJ in Newmont Yandal Operations Pty Ltd v J Aron Corp, the issues raised by Mr Wilson clearly fall outside the slip rule. This court does not have inherent jurisdiction of the kind referred to in Newmont Yandal Operations Pty Ltd v J Aron Corp at [167]-[180] and no order of that kind could accordingly be made.
I have the additional difficulty of not having been the trial judge. Although the parties agreed that the application should be heard by me, the trial judge being unavailable, that means that I am exercising the additional degree of caution which comes from not having been the judge who has made the orders in the first place.
Following my foreshadowing of the making of this order, Mr Wilson asked for time to reflect on the issue and I stood the proceedings over to 9 March 2016.

Additional orders made on 9 March 2016

Order (8) of my orders of 8 March 2016 provides as follows: "(8) Balance of the notice of motion stood over to a later date in these sittings."
On 9 March 2016 I was informed by Mr Wilson that the plaintiff no longer presses the balance of his notice of motion, and I accordingly vacate order (8) of my orders made on 8 March 2016.
I also took the opportunity to ask the parties to agree that the orders of the trial judge, Judge Delaney, should run from 9 March 2016 and not from 18 December 2015. The parties have agreed, but if they had not, I would have made an order to that effect, as it would be contrary to the interests of justice to have the appeal time running when all of the orders made required amendment. Accordingly the parties have 28 days from 9 March 2016 in which to bring any appeal.
This would probably also require the parties to include, in any appeal from Delaney DCJ, an appeal from this judgment, conformably with what occurred in Federal Capital Press of Australia Pty Ltd v Balzola [2015] NSWCA 285, although in the judgment I handed down which was appealed from I was dealing with a fresh application due in part to the inadvertence of the parties in failing to ask the judge hearing the original application to make the necessary order striking out the defence of contextual justification.

Orders 1. Vacate the JusticeLink order dated 16 December 2015 for the first and second defendants to pay the judgment sum of $51,431. 2. In accordance with paragraph 35 of Delaney DCJ's reasons, enter judgment in favour of the second defendant against the plaintiff. 3. Judgment for the plaintiff for $51,431 against the first defendant. 4. The first defendant is to pay the plaintiff's costs to be assessed or agreed on the ordinary basis, up to and including 16 April 2015. 5. The plaintiff is to pay the first defendant's costs to be assessed or agreed on an indemnity basis, from on and after 17 April 2015. 6. The plaintiff is to pay the second defendant's costs to be assessed or agreed on the ordinary basis, up to and including 16 April 2015. 7. The plaintiff is to pay the second defendant's costs to be assessed or agreed on an indemnity basis, from on and after 17 April 2015.

Amendments 02 August 2016 - Caselaw defaulted date of orders from "8 and 9 March 2016" to "8 September 2016" - Date corrected to "9 March 2016" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 August 2016

Legal Profession Act 2004(NSW)

Uniform Civil Procedure Rules 2005(NSW)rr 36.15, 36.16, 36.17

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