Doughty v Hillier

Further background relevant to costs

1. As set out above, the defendant performed the last operation on the plaintiff on 11 June 2009.
2. In 2014 the plaintiff obtained advice from a different surgeon, Dr Ow-Yang, the significance of which is set out in the principal judgment.
3. In 2019 the plaintiff saw an advertisement on Facebook as a result of which she consulted her current solicitors, Commins Hendriks.
4. On 13 July 2021 the plaintiff read a report by Dr Hopcraft from which she acquired actual knowledge of all matters relevant to her claims against the defendant as specified in ss 50D and 60I(1)(a) of the Limitation Act 1969.
5. On 8 February 2022 the Statement of Claim was filed.
6. On 18 August 2023 the Defence was filed in which the limitation periods were pleaded.
7. On 26 August 2022 the solicitors acting for the defendant wrote to the solicitors acting for the plaintiff about the limitation periods. The letter is not in evidence, but it may be inferred from other evidence that the plaintiff was asked to explain why the limitation periods do not apply.
8. On 15 September 2023 the solicitors acting for the defendant sent a letter to the solicitors acting for the plaintiff in which an offer was made to settle the claim on terms that there be judgment for the defendant and that each party pay its own costs. At some length, a number of reasons were put forward as to why the plaintiff's case would fail. The first reason was the limitation periods. There had evidently been some prior correspondence between the parties about the limitation periods, which correspondence is not in evidence. The letter dated 26 August 2023 is referred to above. There may have been other letters. In the letter dated 15 September 2023 the defendant's solicitors contended that the plaintiff's claims were statute barred and that it was incumbent on the plaintiff to apply for an extension of the limitation periods under ss 60G and 62A. The letter referred to the Calderbank authorities.
9. There is no evidence of a reply to the letter dated 15 September 2023. The offer was not accepted.
10. On 29 September 2023 the proceedings were listed for directions before Cavanagh J. The limitation periods were raised on that occasion. Cavanagh J ordered that by 20 October 2023 the plaintiff reply to the letter dated 26 August 2022 "specifying the basis on which the plaintiff submits that the limitation defence does not apply". Cavanagh J also ordered that by 23 October 2023 either party who wanted to pursue an application in respect of the limitation issue give notice to the other side.
11. On 23 October 2023 the plaintiff's solicitors sent a letter to the defendant's solicitors in apparent compliance with the orders referred to in the preceding paragraph. The letter simply stated that the plaintiff did not agree that her claims were statute barred. No reason was given for that position. The letter also stated that the plaintiff did not intend to make any application under ss 60G and 62A "at the present time".
12. On 23 October 2023 the plaintiff filed a Reply in which she denied that her claims were statute barred. She also pleaded that if "at final hearing" the Court determines otherwise, she is entitled to extensions of the limitation periods under ss 60G and 62A of the Limitation Act 1969. No particulars were given of the alleged entitlement.
13. On 27 October 2023 the proceedings were again listed for directions before Cavanagh J. On that occasion counsel for the plaintiff accepted that the letter dated 23 October 2023 did not comply with the orders made on 29 September 2023. Cavanagh J ordered the plaintiff to give a "proper response". The defendant foreshadowed filing a notice of motion about the limitation issue. The proceedings were listed for further directions in December 2023.
14. It may be inferred from other evidence that the plaintiff's solicitors subsequently gave a further response to the letter dated 26 August 2022 but the response is not in evidence.
15. On 24 November 2023 the defendant filed a Notice of Motion in which he sought orders for the separate determination of the limitation issues in advance of the final hearing. One of the separate questions proposed by the defendant was whether orders ought to be made to extend the limitation periods.
16. On 8 December 2023 the proceedings were listed before Cavanagh J. The plaintiff foreshadowed filing a "competing" Notice of Motion by which she would seek an extension of the limitation periods. Cavanagh J ordered the plaintiff to file her Notice of Motion by 16 February 2024 and relisted the proceedings for 15 March 2023.
17. On 28 February 2024 the plaintiff filed a Notice of Motion. By that Notice of Motion the plaintiff sought orders that the defendant's Notice of Motion be dismissed with no order as to costs. To that extent, the plaintiff's Notice of Motion was otiose. In paragraph 3 of the plaintiff's Notice of Motion, a statement was made that the plaintiff sought an extension of the limitation periods, but only if the Court: 1. first decided that the limitation issues were to be decided in advance of the other issues in the case, and 2. also decided that the plaintiff's claims were statute barred.
18. The proceedings were listed for directions on 15 March 2024 at which the limitation issues were discussed at some length. The proceedings were listed on 24 April 2024 for determination of the defendant's application for separate questions about the limitation issues to be set down in advance of all other issues in the case.
19. On 24 April 2024 counsel for the plaintiff conceded for the first time that the plaintiff's claims were statute barred and that she needed to apply for an extension of the limitation periods. Cavanagh J ordered the plaintiff to file any notice of motion for an extension of the limitation periods by 14 May 2024.
20. On 14 May 2024 the plaintiff filed a Notice of Motion seeking orders that the limitation periods be extended to 8 February 2022. Thereafter the Notice of Motion was amended a number of times and eventually became the Further Amended Notice of Motion filed on 19 August 2024. This was the application heard on 19 and 20 August 2024 and which is the subject of the principal judgment.
21. Against this background, the two costs issues fall for determination.

Costs of the defendant's Notice of Motion filed on 24 November 2023

1. Uniform Civil Procedure Rules 2005 (NSW), r 42.1 provides: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
2. The plaintiff accepts that costs are to follow the event for the proceedings but submits that there ought to be a carve out for the costs of the defendant's Notice of Motion filed on 24 November 2023.
3. The effect of the plaintiff's contention is that the Court ought to make "some other order" for that part of the costs. The Court may only do so if it appears to the Court that some other order should be made. The plaintiff needs to demonstrate to the Court that this is so.
4. There is no evidence before the Court which warrants a finding that the defendant filed his Notice of Motion on 24 November 2023 other than in the ordinary course of conducting his defence. It does not matter whether the Notice of Motion was formally moved on when the proceedings were listed before Cavanagh J on 24 April 2024. On that date the plaintiff conceded for the first time that her claims were statute barred and that she needed to apply for an extension of the limitation periods. Up until that date, the plaintiff had disputed these matters. The defendant effectively achieved everything sought in his Notice of Motion.
5. The only reason put forward by the plaintiff as to why she ought not pay the costs of the defendant's Notice of Motion is that she filed her own Notice of Motion on 28 February 2024 "to extend time". Two things need to be said about that submission. First, it does not explain why the plaintiff ought not pay the costs of the defendant's Notice of Motion from 24 November 2023 until 28 February 2024.
6. Secondly, it is not correct to describe the plaintiff's Notice of Motion dated 28 February 2024 as an application to extend time. Whilst paragraph 3 referred to an extension of time, it did so in terms conditional upon the defendant first succeeding with his Notice of Motion filed on 24 November 2023. Given the approach taken by the plaintiff prior to 24 April 2024, the defendant's Notice of Motion was both necessary and appropriate.
7. The plaintiff has not shown any reason why she ought not be ordered to pay the defendant's costs of the Notice of Motion filed on 24 November 2023 along with all the defendant's other costs of the proceedings.

Indemnity costs from 16 September 2023

1. The chronology above sets out the Calderbank offer made by the defendant on 16 September 2023.
2. The defendant submits that the plaintiff acted unreasonably by not accepting the offer. Although settlement on the terms of the offer would have meant no payment to the plaintiff, it would have allowed her to avoid an order that she pay the costs of the proceedings since they were commenced on 8 February 2022. The defendant offered to bear his own costs. In the circumstances of the case the offer was a genuine compromise.
3. The principles governing the costs consequences of a failure to accept a more favourable Calderbank offer are well known. Under s 98(1) of the Civil Procedure Act 2005 (NSW), the Court has a discretion as to which party is to pay the costs of the proceedings and whether the costs are to be paid on the ordinary basis or on an indemnity basis. An earlier failure to accept a more favourable Calderbank offer is one matter which the Court may take into account in the exercise of the discretion. The Court will consider whether the Calderbank offer was a genuine compromise: Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4]-[5] (Handley, Beazley and Basten JJA). The Court will also consider whether the offeree acted unreasonably in rejecting the offer: Evans Shire Council v Richardson (No. 2) [2006] NSWCA 61 at [26] (Giles, Ipp and Tobias JJA). In any event, the Court will consider all the circumstances of the case: South Eastern Sydney Health Service v King [2006] NSWCA 2 at [90] (Hunt AJA, with whom Mason P and McColl JA agreed). Where a more favourable Calderbank offer has not been accepted, there is no presumption in favour of an order for indemnity costs.
4. The defendant bears the onus of demonstrating that the Court ought to exercise its discretion to order the plaintiff to pay costs on an indemnity basis: Evans Shire Council v Richardson at [26].
5. Ultimately, the Court will strive to achieve fairness when considering the costs implications of an unaccepted Calderbank offer.
6. One particular matter which the Court may consider is whether the unaccepting offeree has given proper consideration to the offer and the consequences of not accepting it: South Eastern Sydney Area Services v King at [83]. South Eastern Sydney Area Services v King was a case where the offer was made formally under the Court Rules, but the same question may also be relevant to a failure to accept a Calderbank offer. Depending on the case, a failure to accept such an offer may be unreasonable if the offeree has not given the offer serious consideration or has not properly assessed the offeree's own case, either generally or in relation to a particular issue. This is especially so where a particular issue is raised in the Calderbank offer which subsequently proves fatal to the offeree's claim. That is not to say that the offeree is not obliged properly to consider a problem with his or her own case unless the other side raises it as an issue. A party which approaches proceedings without giving proper consideration to potential problems with its case may contravene its obligations under s 56(3) of the Civil Procedure Act 2005. Nonetheless, where one party raises a particular problem about the other party's case and makes a Calderbank offer in the context of that problem, the consideration which the offeree gives to the problem may be relevant to whether the offeree's subsequent rejection of the offer is reasonable.
7. The fact that a Calderbank offer does not include any payment to a plaintiff does not automatically mean that the plaintiff's failure to accept the offer was not unreasonable. There will be cases where a consideration of all the circumstances show that the plaintiff's failure to accept a Calderbank offer was unreasonable even though the plaintiff would receive nothing. Examples of such cases are Melchior and Ors v Sydney Adventist Hospital Ltd and Anor (No 2) [2009] NSWSC 65, Vagg v McPhee (No 2) [2012] NSWSC 187 (offer of compromise case) and Crump & Ors v Equine Nutrition Systems Pty Ltd trading as Horsepower & Anor (No 2) [2007] NSWSC 25.

Submissions

1. The defendant submits that the plaintiff's failure to accept the offer made on 16 September 2023 was unreasonable because the letter set out a detailed critique of the plaintiff's claims, in which the limitation periods featured prominently. The letter pointed out that the plaintiff had not applied for an extension of time. The defendant submits that the plaintiff's entitlement to an extension of time depended upon matters in her own knowledge and, had she given the offer proper consideration and in any event, she should have appreciated that she was not entitled to an extension of time.
2. The plaintiff submits that the limitation issues raised in the letter dated 16 September 2023 did not canvass the matters ultimately considered by the Court. She points out that the offer was made at a time when "neither party had filed any application in respect to limitation" and when the plaintiff had not served any evidence about her entitlement to an extension. She submits that the Court's decision not to extend the limitation periods was based on the evidence of Drs Wilcox and Smith, the plaintiff's statements prepared in March and April 2024 and the plaintiff's oral evidence at the hearing of the application. It is submitted that the plaintiff "should not have realised that she would not demonstrate that she was entitled to an extension of time".

Determination

1. The plaintiff's submission that the letter dated 16 September 2023 did not canvass the matters ultimately considered by the Court is incorrect. The letter squarely raised limitation and articulated why the plaintiff's claims were not maintainable. One reason stated for the claims not being maintainable was that no application had been made by the plaintiff to extend the limitation period. The absence of such an application was fatal to the plaintiff's claims because no extension could be granted unless the plaintiff applied: ss 60G(2) and 62A(1) of the Limitation Act 1969.
2. In any event, upon the receipt of the offer the plaintiff was not relieved of her obligation to give her own case proper consideration by virtue of the defendant's failure to identify any particular issue.
3. On any view of the plaintiff's claims, none of the causes of action were maintainable by virtue of ss 18A and 50C(1)(c) of the Limitation Act 1969. This is evident from the following facts: 1. as the plaintiff accepted, loss was suffered when each operation was performed; 2. the last of the six operations occurred more than 12 years before the proceedings commenced; 3. when directed by Cavanagh J on 29 September 2023 to provide a response to the defendant specifying the basis on which the plaintiff submitted that the limitation defence does not apply, the plaintiff did not identify any reason but merely stated that the plaintiff did not agree that the claims are statute barred; 4. on 24 April 2024 the plaintiff conceded that her claims are statute barred; 5. at the hearing of the plaintiff's Notice of Motion on 19 and 20 August 2024 the plaintiff accepted that her claims are statute barred; and 6. there is no evidence of the plaintiff ever articulating any reason why the limitation defences did not apply to her claims.
4. It follows that the plaintiff's proceedings were destined to be dismissed unless the plaintiff could prove that: 1. she was subject to a disability for sufficient periods to have the limitation periods suspended under ss 52 and 50F; or 2. the Court ought order extensions under ss 60G and 62A.
5. Disability warranting suspension was asserted in the final version of the Notice of Motion relied upon by the plaintiff on 19 and 20 August 2024. The report of Dr Smith was put forward as evidence to establish sufficient disability but the contention was abandoned at the hearing. There is no evidence that the plaintiff ever had a basis to assert disability for the purposes of ss 50F or 52, and that includes the period after Dr Smith's report was obtained in April 2024.
6. In this respect, the plaintiff's submission on costs is incorrect. The evidence of Drs Wilcox and Smith was only relevant to the disability argument. It was not relevant to the application for extensions of the limitation period which were decided independently of Dr Smith's (and Dr Wilcox's) evidence.
7. As for extensions of time under ss 60G and 62A, a number of the plaintiff's documents refer to the plaintiff's "entitlement" to an extension. The Limitation Act 1969 does not give any such entitlement. The only entitlement given to the plaintiff is to make an application under s 60G(2) and/or s 62A(1).
8. As at 16 September 2023 the plaintiff had not made any application for an extension of time. On 23 October 2023 the plaintiff's solicitors wrote the letter in which they positively stated that the plaintiff did not intend to apply for an extension "at the present time". Paragraph 1 of the plaintiff's Notice of Motion filed on 28 February 2024 contemplated that no application would be made until the final hearing.
9. Given the plaintiff's claims were statute barred, it was incumbent on the plaintiff to apply for an extension of the limitation periods. The plaintiff's submission that, as at September 2023, "neither party" had made an application and the plaintiff's evidence in support of her application had not yet been prepared has to be viewed in this context. To the extent that the submission refer to the plaintiff's omissions, they do not excuse the plaintiff from giving proper consideration to the limitation problem upon receipt of the defendant's offer.
10. There is no evidence of the plaintiff articulating a basis for an extension of the limitation periods prior to the hearing of her application on 19 and 20 August 2024. The impression which arises from a consideration of the evidence as a whole is that the plaintiff did not give any prior consideration to the limitation period which was fatal to her claim, including in September 2023 when the defendant made his Calderbank offer.
11. Given the limitation problem, I accept that the Calderbank offer was a genuine compromise.
12. In those circumstances I am satisfied that the plaintiff's failure to accept the offer was unreasonable.
13. Having regard to that matter, and all the other circumstances of the case, the discretion as to costs is to be exercised in making the following orders.

Orders

1. I make the following orders: 1. Plaintiff's Further Amended Notice of Motion filed on 19 August 2024 is dismissed. 2. Proceedings dismissed. 3. Plaintiff pay the defendant's costs, including the costs of the defendant's Notice of Motion filed on 24 November 2023: 1. upon until 16 September 2023, on the ordinary basis; and 2. thereafter on an indemnity basis.

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