Costello v State of NSW [2017] NSWDC 307 | Case summary

District Court of NSW|2017-11-06

Background

On 23 June 2017, the principal reasons for decision were delivered in these proceedings: Costello v State of NSW [2017] NSWDC 152. At that time, the plaintiff's damages, including interest, were assessed in the sum of $70,549.
At that time, the parties were invited to make submissions as to whether the plaintiff, being a disabled person who has proceeded by her tutor, the NSW Trustee and Guardian, was by reason of those circumstances, entitled to any additional damages for funds management charges as a consequence of receiving a monetary award in these proceedings. Accordingly, pending the resolution of that question, the entry of final judgment was deferred until now.
The parties subsequently forwarded written submissions which addressed that question. On 25 August 2017, the parties appeared and made oral submissions to supplement their written submissions. At that time, the need for a slip-rule amendment was also identified, as was an argument by which the plaintiff sought indemnity costs.
Leave was then given for the parties to serve evidence on the funds management issue, with any further submissions to be received by 15 September 2017, and for the questions argued to be determined on the papers in order to contain further costs. Subsequently, on 6 November 2017, the parties finalised the position on funds management charges by agreeing, after inquiry, that those charges would over time amount to $7500.

Issues arising

The following matters now arise to be dealt with: 1. A slip-rule correction is required in relation to an identified error in the calculation of interest on the plaintiff's damages, and therefore, on the total amount of damages to be awarded, subject to (2) below; 2. Whether, because of her pre-existing disabled circumstances, the plaintiff should be entitled to make a claim for damages for funds management charges in relation to the verdict monies, and if so, in what amount; 3. A claim by the plaintiff or an otherwise order that the defendant pay part of her costs of the proceedings on an indemnity basis.
My consideration of those matters now follows.

Slip-rule correction

At paragraph [633] of the principal judgment, interest on the plaintiff's damages was calculated on the base sum of $36,000. That figure involved a transcription error. The proper basal amount for the calculation of interest on damages should have been stated as being $30,000.
That error must now be corrected so that the total amount of interest is correctly identified as being the calculation of interest on $30,000 at 4 per cent over 5.55 years. Therefore, the assessed interest should be $6708, and not $8049, as was previously stated.
The total amount of the judgment, subject to the question of any additional damages for funds management charges, should be the corrected sum of $69,208, rather than the previously identified sum of $70,549. I propose to make that correction pursuant to the slip-rule: UCPR r 31.17. There is no controversy on this issue.

Funds management charges amendment

The defendant disputed the plaintiff's entitlement to claim damages for funds management charges as that head of damage had not been pleaded or raised either before or during the course of the trial: Dare v Pulham [1982] HCA 70.
The question of whether there should be an award of damages for funds management only arose during the consideration of the matter after judgment had been reserved. Therefore, the opportunity was given to the parties to make submissions on this issue: Costello v State of NSW [2017] NSWDC 152, at [637].
The plaintiff's need for damages for funds management arises because of the operation of well-established legal principles: Nominal Defendant v Gardikiotis [1996] HCA 53, at [2], [18].
The defendant concedes that an award for funds management could be made in the present proceedings because of the plaintiff's pre-existing cognitive disability, notwithstanding that the defendant did not cause that injury or disability: Campbell v Nangle (1985) SASR 161, at [47]. However, the defendant argued that as this component of the claim had not been pleaded, it should not be allowed.
The question of whether the proposed amendment should be allowed is to be determined according to the provisions of s 64 and s 58 of the Civil Procedure Act 2005 ("CP Act"), having regard to the mandatory requirements of s 56 of that Act.
The starting point of the consideration is the over-riding purpose of facilitating the quick, just, and cheap determination of the real question in dispute: s 56 of that Act.
In my view, justice between the parties requires that an amendment should be allowed to include the costs of funds management. This is because it is a source of expense to the plaintiff that is consequential to the outcome of the case, and which would not otherwise have been incurred. It arises from the operation of law and the regulatory framework which governs the functions of the NSW Trustee and Guardian.
The power of the court to make necessary amendments to the pleadings is founded upon s 64 of the CP Act, which provides: 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate.
The provision in s 64(1) of the CP Act to permit amendments "at any stage of the proceedings" must be taken to include an amendment before the entry of final judgment.
The funds management issue is one of the "real questions raised" in the proceedings, which then raises for consideration the dictates of justice in the circumstances, as provided by s 58(1)(b) and s 64(2) of the CP Act.
Section 58 of the CP Act provides: 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
Applying the consideration required by s 58(2) of the CP Act, I have reached the following conclusions: 1. The funds management question is a real question raised in the proceedings: s 58(2)(a) of the CP Act; 2. There is no significant prejudice apparent to the defendant on account of complexity or degree of difficulty on the question: s 58(2)(b)(i) of the CP Act; 3. The parties have not been guilty of causing any relevant delay: s 58(2)(b)(ii) and (iii) of the CP Act; 4. The matter of funds management was not dealt with at the trial because, without criticism of the parties, it had simply been overlooked: s 58(2)(b)(v) of the CP Act; 5. No injustice, from material prejudice, or otherwise, impacts on the defendant: s 58(2)(b)(vi) of the CP Act.
I therefore propose to add the agreed amount of $7500 to the plaintiff's damages. The amount seems inherently reasonable.

Indemnity costs

On 6 May 2016, the plaintiff made an offer of compromise pursuant to, and in accordance with UCPR r 20.26, in the amount of $35,000.
At that time, the hearing of the proceedings on circuit in Lismore was imminent. The sittings were due to commence on 23 May 2016. The plaintiff therefore framed her offer in terms that expressly provided that it would be open for a period of 14 days before it would expire on 20 May 2016.
That offer was not accepted. The hearing subsequently proceeded on 23, 24, 26, 27 and 31 May; 1, 2, 3, 6 and 7 June; and 2 September 2016, when judgment was reserved, and subsequent submissions then followed, closing on 15 December 2016.
In the described pre-trial circumstances, and having regard to the issues in the case as described in the principal judgment, I consider that the plaintiff's offer of compromise was expressed reasonably, and it allowed a reasonable amount of time for the defendant to consider whether or not that offer should be accepted or rejected.
In the result, the plaintiff obtained a verdict of $62,500 before the calculation of interest and funds management charges. As a consequence of that more favourable outcome compared to the offer of compromise, I consider that it is therefore appropriate that the plaintiff have her costs paid on the ordinary basis up to and including 6 May 2016, and then on the indemnity basis from and including 7 May 2016.

Disposition

The consequence of my additional findings and the slip-rule amendment is that the plaintiff is entitled to a judgment in her favour against the defendant in the sum of $76,708, with costs to be assessed according to the regime stated in paragraph [27] above.

Orders

I make the following orders: 1. Pursuant to UCPR r 31.17, the reasons for judgment delivered on 23 June 2017 in the assessed sum of $70,549 are corrected so that, subject to additional funds management charges which will be the subject of order (2), the plaintiff's damages are assessed in the substituted amount of $69,208, excluding funds management charges; 2. The plaintiff's damages for funds management charges are assessed in the sum of $7500; 3. Judgment for the plaintiff in the sum of $76,708 including all damages, interest, and funds management charges; 4. The defendant is to pay the plaintiff's costs of the proceedings on the ordinary basis up to and including 6 May 2016, and then on the indemnity basis from and including 7 May 2016; 5. The exhibits may be returned; 6. Liberty to apply on 7 days' notice if further or other orders are required.

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: 08 November 2017

Costello v State of NSW

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Judgment (8 paragraphs)

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Cases Cited (4)