Isho v Skupien

Judgment 1I heard Mr Fitzsimmons and Mr Petrie on costs on 20 May 2014. Each had put in written submissions: MFI 15 was Mr Fitzsimmons' submission and MFI 16 was Mr Petrie's submission. Both counsel addressed those submissions. There was some lack of clarity about the form of UCPR 42.15 which was relevant on 8 June 2012. That has been clarified by the correspondence, which I have marked MFI 17 and further submissions are made in MFI 17. 2In these proceedings, I entered a verdict in judgment for the plaintiff in the sum of $25,613. Exhibit 15 is a letter from the defendant's solicitors to the plaintiff's solicitors enclosing an offer of compromise which was made in accordance with UCPR 20.26. That letter and the offer of compromise were dated 8 June 2012. The same solicitors, by letter dated 12 February 2013, repeated the same offer, indicating that they would rely upon the Calderbank principle on the question of costs. 3UCPR 42.15 at the relevant time, which is the form contained in MFI 17, provides that unless I order otherwise, the defendant "is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis", relevantly in this case, "from the beginning of the day following the day on which the offer was made", namely 9 June 2012. 4Mr Fitzsimmons emphasises that the rule is clear and confers an entitlement in favour of his client and that there were no exceptional circumstances. He reminded me of the provision of s 56 of the Civil Procedure Act 2005 (NSW). 5Mr Petrie, on the other hand, took me to a number of authorities, including South Eastern Sydney Area Health Service v King [2006] NSWCA 2 and argued that the evidence at the trial was different to what was known to his client at the time that the offer was made, and that that should persuade me to order otherwise. He pointed to the MAS assessment and to a statement by a Mr Colman. The Colman statement was served 24 February 2014. The MAS assessments were 11 November 2012 by Dr Wan and 14 January 2013 by Dr Apler. In addition, he argued that some of the evidence concerning work by his client obtained through a job agency was not available until February 2014. 6I have been directed to a number of authorities. I have found that Nominal Defendant v Hawkins [2011] NSWCA 93 contains a helpful summary of some of the principles relevant to my determination of these issues. In particular, at [75] of his judgment, Sackville AJA made reference to principles developed by the Court of Appeal in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721. His Honour, at [75], extracted a passage from that judgment which included the following - "Litigation is inescapably chancy. The purpose of the rule is to put a premium on realistic assessment of cases. It is not to demand perfect foresight which is denied even to the judges. That is why a discretion is retained, under the rule, for the Court to order otherwise than as the rule provides. But the ordinary provision is expected to apply in the ordinary case. It has added a new duty to the functions of legal practitioners advising litigants. It is a duty which is both protective of the interests of litigants and of the public interest in the prompt and economical disposal of litigation. It is the duty of courts, allowing for exceptions in particular cases, to give effect to the purpose of the rule." At [78] his Honour, having referred to the Court of Appeal's judgment in Hillier v Sheather (1995) 36 NSWLR 414, quoted from the then President, Kirby P, who pointed out (at 422) that "the case needs in some way to be exceptional. It must be exceptional because the general rule is that provided for in the rule itself. To gain relief, an exceptional exempting order must be made". 7McColl JA in Hawkins' case extracted a passage from her own judgment in Caine v Lumley General Insurance Limited (No 2) [2008] NSWCA 109. Her Honour extracted that passage at [53] of her judgment in Hawkins. The passage reads as follows - "The onus is on the respondent to demonstrate why the Court should not order the respondent to pay the appellants' costs on an indemnity basis. In particular, the respondent must establish that it had given serious thought to the risks involved in not accepting the offers, had assessed the appellants' case properly and in the context of the relevant rules and the achievement of their purpose as outlined in Morgan. Generally, exceptional circumstances are required to justify such an order denying the appellants' entitlement". Her Honour at [56] pointed out that it is "not enough to justify ordering otherwise for a person who refused an offer of compromise to show that he/she acted reasonably in doing so. Generally exceptional circumstances are required." 8The exceptional circumstances which Mr Petrie relies upon are those I have referred to. He says that the case faced by his client in court was different to the case which he thought he was facing at the time of the offer. 9However there were, in my opinion, very significant aspects of Mr Isho's case which required him to think seriously about any offer which was made to him and which put him at significant risk. 10All of these factors were present when the offer was made. The factors are these. First, this was a case where Mr Isho had told the police in his contemporaneous statement that he went through a red light and thought he "could make it". Secondly, the attendant care services for which he made a claim were not only in respect of the conditions which he suffered from the accident, but in respect of other unrelated conditions. Thirdly, in respect of his claim for economic loss, there was very little evidence of his past income. There were real problems, in my opinion, with his claim for past and future economic loss. 11In my opinion, there are no exceptional circumstances to warrant me ordering otherwise and to deprive the defendant of the entitlement which it is granted by the rule. 12Accordingly, the costs order I make is this. The defendant is to pay the plaintiff's costs to be assessed on the ordinary basis up to and including 8 June 2012. The plaintiff is to pay the defendant's costs assessed on an indemnity basis from and including 9 June 2012. 13In addition, I note from MFI 17 the agreement between the plaintiff and the defendant that the defendant is entitled to a defence in the amount of $2,029.25 for the payments made by its insurer pursuant to s 83 of the Motor Accidents Compensation Act 1999 (NSW), with reference to s 83(5) of the Motor Accidents Compensation Act. 14I now return to my reasons. The defendant submitted that it is also entitled to a defence in the amount of $8,500 for recovery payments made by its insurer to the worker's compensation insurer pursuant to s 151Z(1)(e) of the Workers Compensation Act 1987 (NSW). It is recorded in MFI 17 that the plaintiff does not agree. 15The plaintiff's submission is that the defendant is only entitled to a defence for $2,975, being 35% of the amount paid to the worker's compensation insurer. That submission is made pursuant to s 10(2) of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW). That submission is made on the basis of my finding of contributory negligence of 65%. I accept the plaintiff's submission and note that the defendant is entitled to a defence to the extent of $2,975. 16In addition, MFI 17 records that the defendant seeks an order staying the execution of the judgment pending agreement or assessment as to the amount of the defendant's costs, provided the same occur by no later than six months from the date of judgment. It is noted in MFI 17 that the plaintiff does not consent to this order being made. 17I think that the defendant is entitled to some stay, but I think six months is too long. I would order that the execution of judgment be stayed pending agreement on or assessment as to the amount of the defendant's costs, provided same occur no later than 2 months from today.