Higgins v Pretorius

1. On 7 April 2025 judgment in the sum of $1,090,003.04 was entered for the Plaintiff against the Defendant, verdict having been entered on 28 February 2025.

2. The facts and circumstances of the proceeding are set out extensively in the principal decision (Higgins v Pretorius [2025] ACTSC 64) and need not be repeated here save to say that the Plaintiff brought proceedings against the Defendant for damages arising from an assault on her by the Defendant. Liability was admitted. The proceedings concerned the assessment of damages to be awarded for the Plaintiff’s injuries, loss and damage.

3. The hearing took place between 14 and 16 October 2024.

4. On 13 September 2024 the solicitor for the Plaintiff served on the Defendant an offer of compromise in the following terms: We are instructed to make an offer of compromise to settle our client’s claim, being judgment in favour of the plaintiff in the amount of $950,000. This offer is made pursuant to Part 2.10 of the Court Procedure Rules 2006 (ACT) (“Rules”). This offer does not make provision for costs, and our client will rely upon Rule 1009(2) of the Rules if the offer is accepted. The offer is open for acceptance in writing to our office until 5.00pm on Friday 20 September 2024, at which time it will expire. This offer is made as an offer which is capable of acceptance by notice in writing. ….

5. The letter of offer continues and puts the Defendant on notice that if the offer is not accepted and the Plaintiff obtains a judgment not less favourable than the terms of the offer, the Plaintiff will seek an order pursuant to r 1010 of the Court Procedures Rules 2006 (ACT) (the Rules).

6. The offer was not accepted.

7. At the time the offer was made and during the hearing, the Defendant was legally represented.

Special costs order

8. It is useful to set out the rule relevant to making an offer of compromise. 1002 Making offer (1) A party may, by written notice, make an offer to another party to compromise any claim in proceedings, either in whole or in part, on stated terms. (2) An offer under this rule must— (a) identify— (i) the claim or part of the claim to which it relates; and (ii) the proposed orders for disposal of the claim or part of the claim including, if a monetary judgment is proposed, the amount of the judgment; and (b) if the offer relates only to part of the proceedings, include a statement— (i) for an offer by the plaintiff—stating whether the remainder of the proceedings will be abandoned or pursued; or (ii) for an offer by a defendant—stating whether the remainder of the proceedings will be defended or conceded; and (c) not include an amount for costs or state that it is inclusive of costs; and (d) state that the offer has been made in accordance with this part; and (e) state the period of acceptance.

9. The Court may make an order that costs against a party be assessed on a solicitor and client basis, a “special costs order” (r 1752 of the Rules). Whether such an order is made is a matter in the exercise of discretion. The fundamental purpose of such an order is to compensate the successful party where it is reasonable and just that the party who has caused the other party to incur costs be called on to reimburse the other.

10. The result must be a fair one having regard to the particular facts and circumstances of the proceedings in the interests of justice: Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 at [8], citing Lewis v Chief Executive Department of Justice and Community Safety (No 2) [2014] ACTSC 196.

11. Where an offer is said to be made in accordance with r 1002, it must comply with the provisions of that rule.

12. In Marhaba v Chen (No 2) [2024] ACTSC 288 at [24], McWilliam J set out the principles governing an offer of compromise made under the Rules which I gratefully adopt and summarise.

13. The offer must be a genuine offer of compromise and be clear and certain in its terms. The judgment obtained must be no less favourable to the plaintiff than the terms of the offer and, where the offer is made within 2 months of the hearing, the offer must be open for acceptance for a reasonable period.

14. What is a reasonable time was discussed in Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 by Basten JA at [20]: In considering whether the time allowed for acceptance is “reasonable in all the circumstances” once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.

15. It was not argued that the offer of compromise to the Defendant did not comply with the terms of r 1002 and the Plaintiff argued that as a consequence, the Defendant having rejected the offer, it falls then to a consideration of r 1010 to determine the costs to be paid by the Defendant.

16. Rule 1010 is in the following terms: Offer not accepted and judgment no less favourable to plaintiff (1) This rule applies if an offer is made by the plaintiff in relation to a claim, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer. (2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in relation to the claim— (a) if the claim is a personal injury claim—assessed on a solicitor and client basis for the whole of the proceeding; or …

17. The Plaintiff argued that the verdict amount was no less favourable to the Plaintiff than the sum offered and, unless the Court otherwise orders, the Plaintiff is entitled to her costs on a solicitor and client basis for the whole of the proceedings. It was argued that there were no circumstances which would cause the Court to depart from the terms of r 1010 and “otherwise order” costs on a different basis.

18. The Defendant conceded the offer complied with r 1002 and that r 1010 was engaged, but argued that the Court should exercise its discretion and make an order for costs otherwise than in conformity with the rule.

“Unless the Court orders otherwise”

19. The Defendant argued that an award of damages which provides the Plaintiff with ketamine infusions for her lifetime was not supported by the evidence in the Defendant’s possession at the time the offer was made, and it was argued it was thus not unreasonable for her to reject the offer. Counsel for the Defendant pointed out that in the result, the damages in relation to the ongoing ketamine infusions accounted for a considerable proportion of the verdict.

20. At the time the offer was made to the Defendant, the Plaintiff had served medical reports of Dr Stephen Allnut going to the Plaintiff’s psychological and psychiatric injuries, and of Dr Ross Melick as to the physical consequences of the Defendant’s assault on the Plaintiff. The Defendant had also been served with two reports of Dr Shaun Zhai, a consultant neurologist.

21. Dr Zhai also prepared a report which post dated the service of the offer of compromise, however his two earlier reports had been served on the Defendant at the time the offer was made. The reasons for judgment recorded the contents of those two reports as follows: [32] Dr Zhai provided a number of reports on his treatment of the Plaintiff. In a report of October 2023, Dr Zhai referred to pain medication prescribed which had been of limited therapeutic effect and suggested that in the future treatment could include the input of a pain specialist in a multidisciplinary setting. In terms of prognosis, he said that some degree of facial pain/neuralgia would be likely to persist in the intermediate to long-term “considering the chronicity of symptoms and the refractoriness to … medication”. [33] Dr Zhai’s next report is dated June 2024 at which time the Plaintiff had had two ketamine infusions and he notes that the Plaintiff reported significant benefit but that the symptoms returned in April which led to the need for a further infusion.

22. At the same time that the offer was served, the Plaintiff served an updated statement of particulars which included the following: 8.2. The Plaintiff suffers chronic pain and requires long term management in the form of quarterly ketamine infusion provided by her treating neurologist, Dr Shaun Zhai. 8.3. The Plaintiff claims the costs of quarterly ketamine infusion (including hospital admission) at no less than $8000 per admission.

23. The Defendant argued that the evidence served at the time of the offer did not support or perhaps suggest that the ketamine infusions would be required for life, as opposed to medium to long term. In my view the distinction is a fine one.

24. While the Defendant did not have the benefit of Dr Zhai’s final report, she was in possession of the evidence from him that the Plaintiff’s neuralgic pain, which had arisen from the assault, had not been ameliorated by previously prescribed medication but had responded to ketamine infusions, but that their effect diminished over time requiring further infusions. The updated Statement of Particulars made it clear that the claim for damages for ketamine infusions was ongoing. There was nothing in that statement to indicate that it was for a finite period.

25. I am satisfied that the following information was available to the Defendant during the period the offer was open to be accepted and should have alerted the Defendant to the extent of the claim for ketamine infusions: (a) that the Plaintiff’s neuralgic pain was likely to continue into the medium to long term; (b) previously prescribed analgesia had been ineffective in addressing the pain; (c) she had had two ketamine infusions which had been of significant benefit; (d) the effect of the ketamine infusions diminished and further was required; and (e) the Plaintiff claimed the costs of quarterly ketamine infusions into the future.

26. While this last point was contained in the updated statement of particulars served with the offer, a reasonable assumption on the Defendant’s behalf ought to have been that the claim was not made without substance.

27. The order for a special costs order remains ultimately a matter in the exercise of discretion. The discretion is wide and must be exercised judicially, in accordance with established principle and the statutory context.

28. In Hulanicki v Walton (No 2) [2015] ACTCA 45 at [13] the Court said: The acceptance of reasonable offers of compromise is in the interests of litigants and the public; it minimises the personal and financial costs to litigants and it enables the courts to focus resources on claims that are not amenable to compromise.

29. While that case concerned the making of a Calderbank Offer, the principle is nonetheless apposite to the exercise of discretion in this matter.

Discussion

30. This was not a case in which no damages would have been awarded against the Defendant. Indeed, in submissions, the Defendant proposed a sum of about $270,000 as being an appropriate verdict and that this sum included the provision of ketamine infusions (albeit limited to a period of a few years). That the verdict would include provision for ketamine infusions was apparent at the time the offer was served, as was the cost of each infusion also apparent.

31. I am not persuaded that the order ultimately made for a lifetime of ketamine infusions was so extraordinary and unsupported by the then available evidence that it was reasonable to reject the offer and does not persuade me to make a costs order otherwise than as provided in the Rules.

32. The Defendant has appealed the judgment and has been granted a stay of the judgment pending the resolution of the Appeal. It is appropriate that this order be stayed pending the appeal.

Orders

33. For those reasons, the following orders are made: (1) The Defendant is to pay the Plaintiff’s costs of the proceedings on a solicitor and client basis. (2) Payment of those costs is stayed until the disposition of the appeal in the matter.

I certify that the preceding thirty-three [33] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Acting Justice Ainslie-Wallace. Associate: Date: 12 June 2025