(d) that at trial, though not previously, the plaintiff made a claim for domestic assistance which resulted in an award to the plaintiff in the sum of nearly $300,000 but which sum included a substantial interest component as well as an allowance for past and future domestic assistance.
11 The defendant also refers to the amended particulars at trial claiming an increase of some 300% in the claim for economic loss.
12 The plaintiff refers to Part 52A Rule 30 concerning the costs on a re-hearing from an arbitrator's award and in particular the provisions of Part 52A Rule 30(4) and (5).
13 As the plaintiff pointed out, no evidence was called on liability by the defence and little, if any, issue was raised on that question. Further, when it became apparent at the outset that the proceedings were to be complex because of matters, in particular, raised by the defence going to the issues I dealt with in my judgment when determining that I would try the issues of fact myself, nonetheless, the defendant contested the application for me to determine the questions of fact and subsequently during the hearing threw in issue all questions of liability and damages.
14 As to the latter, not only were issues raised even going to the effect on such damages as might be awarded for the accident upon which the action was brought of a later injury and an award for it of workers compensation, but further issues were raised relating to whether or not the period for which damages might be awarded was, by comparison with those periods for which damages were sought, minimal.
15 Contentions were put, indeed, that the plaintiff's back condition was such as would merit an award for damages for only a few weeks loss of salary and various positions adopted by the defendant on a progressive fall back basis right through to the contention that the shoulder accident and award effectively entirely displaced the operation of the back condition as meriting compensation beyond those few weeks or as required discounting the otherwise appropriate common law damages.
16 As can be seen from my judgment on all except the application of the Manser v. Spry principle, the defendant was unsuccessful. The quantum of the arbitrators award suggests the defendant was unsuccessful on most matters it put in issue there. Whilst it could not be said (except perhaps on liability) that the defence was entirely hopeless, it should have been appreciated that even a partial failure would be likely to result in a verdict greater than the offers and potentially substantially above the award figure. Nonetheless, the defendant opted for the re-hearing.
17 Even having regard to the increased claim for economic expenses and domestic assistance, the verdict, after adjustments in respect of the shoulder injury compensation, refund of workers compensation paid and those matters which are set out in my judgment, was greatly more favourable to the plaintiff than the result on the arbitration by a considerable degree. Any suggestion that the plaintiff should have accepted the arbitral award or the original offer of compromise or the subsequent offers, in the light of the amount of the verdict, should be rejected. It was the defendant that procured the re-hearing. The plaintiff would apparently have accepted the arbitration award otherwise, even though, considered against the verdict, that award was much less than that to which the plaintiff was entitled.
18 The modern availability of such arbitrations is designed to allow parties to obtain a resolution of their matters without incurring the full costs and waiting as long as would be required for a trial in this court.
19 The modern provision for arbitration prior to the matter going to hearing affords a valuable facility to a defendant to see the plaintiff's full case exposed and to conclude the litigation process by acceptance of the award or the making of an appropriate offer. It is not a means to enable a plaintiff to be held out longer from damages to which he or she is entitled in law or to force a re-run on a free kick basis. A plaintiff should not be held out from all their damages any longer than they would be by a rational and competent process seeking to determine properly the claims. In the normal case the arbitration should be such a process. Its result may be an award or may cause an offer of compromise at a reasonable amount before litigation. These will have consequent costs effects. A plaintiff will be exposed to costs risks should he or she fail to accept a reasonable award or a reasonable compromise in the light of the verdict later recovered. In that sense, one can regard the circumstance of an award of substantially less in quantum to a verdict later received which is not accepted by the party seeking re-hearing as akin to the circumstance of an offer or an offer of compromise when considering questions of the extent of costs and the incidence for costs on the re-hearing.
20 Orders for costs in proceedings in this court are intended to be an indemnity against costs incurred in those proceedings. It is clear that for many years party and party costs have not been such an indemnity: see Mahoney, JA. in Huntsman Chemical Co. Australia Limited v. International Pools Australia Limited (1995) 36 NSWLR 242 at 250F-251C.
21 There have been judicial pronouncements which have suggested that the general rule should be that parties should be entirely indemnified for costs, eg., Rogers, J. in Qantas Airways Limited v. Dillingham Corporation & Ors (unreported, 14 May 1987).
22 It is clear that costs on an indemnity basis have increasingly more frequently become available and that, although generally costs should not be seen as a punishment of an unsuccessful party, either when they are awarded or in the extent to which they awarded, regard must be had to the principle that costs operate by way of compensation to the successful party for what has had to be incurred in successfully asserting that party's rights in court. It must be noted that indemnity costs are limited to those costs which are reasonably incurred in prosecuting the proceedings to a successful conclusion. Costs on an indemnity basis merely restore fully the successful party's position.
23 Costs on an indemnity basis are available where one party to proceedings is guilty of "relevant delinquency": Oshlack v. Richmond River Council (1998) 193 CLR 92. Such "relevant delinquency" includes persevering with proceedings that have no real prospect of success, misleading the court, maintaining proceedings for an ulterior motive or causing undue delay and expense in the resolution of the proceedings (see Wentworth v. Rogers [1999] NSWCA 403 at 85). Such occasions will include where a defendant has unreasonably delayed an admission of liability for the purpose of obtaining a tactical advantage: Rouse v. Shepherd (No. 2) (1994) 35 NSWLR 277.
24 It appears to me that costs on an indemnity basis should be provided where a party to proceedings causes costs and expense in the prosecuting of the litigation to the successful party which unreasonably exceed those costs the litigation process normally requires for the vindication by the plaintiff of his rights by resort to this court.
25 A party that comes to this court, put to the necessity to bring proceedings here to assert their lawful right to a full recovery, should not themselves be mulcted in costs in the upshot so as to deprive them of a substantial portion of the that to which, in law, they are entitled as the price of their obtaining the vindication of their lawful rights. Particularly is this so where they have had to undergo expensive litigation in this court, although previously submitting themselves to the process of arbitration in which they expose fully or substantially the nature of their case.
26 Although this plaintiff in the arbitration did not claim domestic assistance or economic loss to the extent claimed in the litigation, he undoubtedly exposed his claim such as to enable the defendant to make a considered and experienced assessment of that claim. The increased claim involves no matter devised with such great ingenuity that it could have come as a surprise to the defendant when such a claim was made at the hearing in this court.
27 I note that there was no application at the trial based upon any such claim taking the defendant by surprise. I note that there is no discussion in the agreed facts of any offer by the defendant to the plaintiff of quantum comparable to what was the extent of the verdict. Indeed, the offers approximate the sum I ordered to be paid as a condition of the stay as a mere proportion of the verdict amount.
28 The case took a long while to hear and required much detailed, complex, professional evidence. It properly absorbed the attentions of senior counsel and junior counsel on both sides. There was never any suggestion but the plaintiff was required to prove all matters in issue on the question of damages, at least. There is no suggestion that, except as to the changes I have noted above, there was any material or substantial difference in the case at arbitration.
29 The fact that it became necessary in these proceedings for the plaintiff to vindicate the plaintiff's legal rights by resort to litigation to obtain damages the quantum of which was so high by comparison with what was offered, suggests to me in the circumstances I have referred to, that the defendant, by requiring the matter to be heard in this court, by making the offers that it did and by its own refusal to accept the result of the arbitration, was seeking to settle this matter on the cheap, relying on attrition as a weapon.
30 Therefore, I have concluded that, notwithstanding Part 52A Rule 32 provides that "costs payable by or under the rules or any order of the court shall be payable on a party and party basis unless the rules or an order provide that they are payable on an indemnity basis", I should award costs on an indemnity basis.
31 There being no submission from the defendant to the contrary as to the form of order, I order that the defendant pay the plaintiff's costs on a party/party basis up to and including 15 July 1994 and thereafter the defendant is to pay all the plaintiff's costs except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exceptions the plaintiff will be completely indemnified by the defendant for his costs in this period.