Lamble v Howl at the Moon Broadbeach Pty Ltd

[1]

**[1] When judgment[1] was delivered in this matter on 9 September 2013, the defendant did not, initially, resist an order being made for costs against it on the indemnity basis because the judgment of $1,399,000 was greater than the plaintiff's mandatory final offer, pursuant to s 39 of the Personal Injuries Proceedings Act 2002 (Qld). That mandatory final offer made on 6 December 2010 was to accept $1,350,000.

[2]

[2] Before the order was taken out, however, I gave leave to the defendant to file further written submissions to the effect that costs should only have been awarded on the standard basis. The principal argument for the defendant was that, had damages been assessed on 6 December 2010 along the lines of my judgment, the value of the plaintiff's claim then would have been approximately $1,212,549.50 or almost $130,000 less than the mandatory final offer.

[3]

[3] Mr Atkinson, for the defendant, also pointed to other considerations that made it reasonable, in his submission, for the defendant to contest the case such as the "hotly contested issues going to vicarious liability and direct liability (with the second issue being resolved in the defendant's favour)". There was also, of course, a contest about the effect of the motor vehicle accident suffered by the plaintiff in October 2010 and among the medical experts having regard to their different views as to the effect of the video evidence. In those circumstances, he submitted that the defendant's conduct in failing to accept the mandatory final offer could not be said to be unreasonable and would not fall into the classification which would normally warrant an indemnity order. I agree that those issues were validly raised by the defendants but, as counsel for the plaintiff pointed out in their written submissions, there was a significant issue regarding when the house policy document was signed. On that issue I effectively rejected the majority of the evidence offered by the relevant witnesses for the defence in circumstances where I doubted the frankness of some of those witnesses about the circumstances in which relevant documents were created.

[4]

[4] Mr Atkinson pointed out, in reliance on decisions such as Lawes v Nominal Defendant [2007] QSC 092 and Gibbings-Johns v Corliss (No 2) [2010] QSC 78, that an offer made under the Personal Injuries Proceedings Act is not equivalent to a formal offer made under the Uniform Civil Procedure Rules 1999, Chapter 9, Part 5. In Lawes v Nominal Defendant, Byrne J described a mandatory final offer, referring to equivalent sections of the Motor Accident Insurance Act 1994, as potentially a significant though not a decisive consideration in the exercise of a discretion to award costs on an indemnity basis. He likened such an offer to a Calderbank offer, where the mere fact that the party making the offer obtains a judgment more favourable than the offer does not of itself inevitably justify a departure from the ordinary assessment of costs.

[5]

[5] As the plaintiff's counsel submitted, however, the fact that a judgment secured exceeds the mandatory final offer remains a significant factor in the exercise of a discretion to award costs on an indemnity basis.

[6]

[6] Counsel for the plaintiff criticised the approach of assessing the damages as at the time of the mandatory final offer by pointing out the risks of litigation, emphasised by Doyle CJ in Shaw v Jarldorn.[2] Mr Diehm QC also pointed out that at the time of the offer, the preponderance of the evidence indicated a real prospect of a finding such as I made about the seriousness and permanence of the plaintiff's injuries as well as their likely effect. It was submitted on that basis that there may well have been some lapse of time prior to a trial of the matter such that damages for past economic loss, and past care in particular, would increase at the rate of thousands of dollars per week. The period of about two years, it was submitted, between the mandatory final offer and the trial being held, was well within the bounds of expectation. In refusing to accept the mandatory final offer, the plaintiff's counsel submitted that the defendant lost the entitlement to assume that the sum likely to be awarded would be constrained to the assessment achieved by its recalculation of my assessment as at December 2010.

[7]

[7] Those issues, coupled with my finding about the signing of the house policy document, led the plaintiff to submit that it was still appropriate that costs be awarded on the indemnity basis.

[8]

[8] It seems reasonable to me that where an offer has been made of this nature, in circumstances where there is likely to be a reasonable period of time between the offer and any trial, a defendant should factor that time into its calculation. The defendant's own final offer of $400,000 plus costs was very significantly below the assessment of damages.

[9]

[9] There remains a reasonable basis from which to proceed to an order for indemnity costs where, as here, the assessment of damages is higher than the mandatory final offer. The amount of time spent in litigating the issue about the house policy document was also, on my findings, not justified. In those circumstances, therefore, it seems to me to be appropriate to maintain the order for indemnity costs that I made originally.

[10]

[10] The judgment should be altered, however, as the parties agree that the costs for future care, assessed by me at $30 per hour based on the initial submission made for the plaintiff, should have been assessed at the rate of $25 per hour. That has the result that my assessment of damages under that head should be reduced from $114,000 to $95,160. It follows that the judgment should have been for $1,380,164.60 together with costs assessed on the indemnity basis.**

[11]

[1] Lamble v Howl at the Moon Broadbeach Pty Ltd [2013] QSC 244

[12]

[2]Shaw v Jarldorn (1999) 76 SASR 28, 29-30

At a glance

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Judgment (12 paragraphs)

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