HIS HONOUR: The current application concerns costs. Over the last 22 years I have observed from time to time that nothing excites the zeal, the ardour and the passion of the legal profession more than an argument about costs. Amongst the costs sought today are costs against the plaintiff's solicitor personally. When such a claim is made the zeal of the members of the legal profession is greater, the ardour is more incandescent and the passion is more perfervid.
The plaintiff sustained a personal injury on 15 April 2013 when she fell at the defendant's residential premises at 289 Bent Street, South Grafton. She commenced proceedings in this Court at Lismore on 2 April 2015. Those proceedings came on for hearing before me at Lismore commencing on 15 August 2016. The hearing took the best part of that whole week. A weekend intervened. I was otherwise occupied on Monday, 22 August 2016 and I gave judgment on 23 August 2016. At the time that I gave judgment I made no order as to costs, deliberately, because I anticipated that certain applications would be made concerning costs.
Eventually, the defendant filed a Notice of Motion on 23 September 2016 and an amended Notice of Motion on 28 September 2016. The first three prayers for relief in the amended Notice of Motion are these:
"1. The first respondents Hanaan Indari and Robert Higgins (the solicitors on the record for the plaintiff) repay and/or indemnify the applicant/defendant for the whole of her costs paid or payable with respect to the second respondent/plaintiff's proceedings herein, pursuant to Sch 2 cl 5 of the Legal Profession Uniform Law Application Act 2014 and/or s 348 of the Legal Profession Act 2004.
2. Alternatively, the second respondent (the plaintiff) pay the applicant/defendant's costs of the said proceedings on an ordinary basis up to 3 February 206 and on an indemnity basis from 4 February 2016, pursuant to Pt 42.15A Uniform Civil Procedure Rules 2005 or alternatively, pursuant to the principle in Calderbank v Calderbank [1975] 3 All ER 333.
3. The first and/or second respondents to pay the applicant/defendant's costs of this Notice of Motion."
There is a fourth prayer in the Notice of Motion but it is the usual provision requesting such alternative order as to the Court may seem fit.
The Facts
My primary reasons for judgment have been uploaded onto Caselaw. They can be found at [2016] NSWDC 236. Unfortunately, it is necessary to do a little recitation of basic facts. The plaintiff was at the time that she fell aged 60 years. She was employed by the Clarence Valley Council Community Support Services as a support worker on a permanent part-time basis. The plaintiff's employer provided to the defendant, Mrs Lucy Day, community support. That included a twice daily "safety check" on the defendant in her home. Such visits would usually last about 15 minutes but could extend to 30 minutes and occasionally up to 45 minutes.
On the afternoon of 15 April 2013 the plaintiff called upon the defendant at her home at 4.15pm. That was an admitted fact in the proceedings. The defendant was at the material time the owner and occupier of 289 Bent Street, South Grafton. That was also admitted in the pleadings. At the time she was 92 years old. According to the plaintiff, she was deaf and half blind. The defendant lived alone but, according to the plaintiff, was visited daily by her son. The plaintiff had been providing community support services to the defendant since either 2008 or 2009. The plaintiff estimated that she had visited the defendant at her home about 50 times between 2008/2009 and the day of the accident. The plaintiff also stated that she may have visited the defendant once per fortnight.
When the plaintiff visited the defendant in the mornings the defendant would have a shower. Other services typically performed by community support workers included preparing a meal, serving a meal, checking to ensure that medication had been taken, making a cup of tea and having a chat and generally checking the safety and welfare of the client, providing companionship to the old, the lonely and the infirm.
Prior to 15 April 2013 the plaintiff had on no occasion left the defendant's home by the back door in order to do any work in the defendant's backyard or on the back verandah of the defendant's home. On 15 April 2013 the defendant asked the plaintiff to bring in some washing. The plaintiff made a statement that was taken by a private investigator. The plaintiff signed that statement on 5 June 2014 after she had consulted with her solicitor, Mr Stephen O'Halloran of the firm of Messrs Carroll & O'Dea. At [21] of my primary reasons I recited paras 14 to 17 of that statement:
"14. This was the first time that I had actually been out the back of her home. I went out the rear door, which leads to the back tiled patio. The tiles were dark brown in colour. I saw some washing on a clotheshorse on the patio. I also some bed sheets drying on a clothesline attached to the wall of the house under the eaves which ran from about the edge of the patio and protruded about 12 inches out from the wall of the house. I also noticed that there was a set of two or three steps leading from the patio to the rear yard.
15. This incident occurred at about 4.20pm, my shift at her home that afternoon was scheduled to run from 4.15pm to 4.30pm, and I was about on time. The rear of the house faces west. The sun was setting and casting shadows across the rear yard, including the rear patio. I had no recollection of seeing any washing on the rotary clothesline located in the rear yard.
16. I was standing on the rear patio just outside the rear door and at the top of the steps. I reached forward to touch the washing to see if it was dry enough to bring in and this is the last thing I recall prior to realising that I was laying on the ground at the base of the steps. I had no recollection of actually falling.
17. I was not attempting to walk down the steps from the patio to the rear yard. I have no recollection of seeing a hand rail attached to the wall of the house beneath the clothesline and to the right of the steps."
I went on at [22] to say this:
"It is patently clear from that statement that the plaintiff saw the steps prior to approaching them. It is patently clear from that statement that she knew she was standing at the top of the steps when [she] reached forward to touch the washing, that is, the sheets hanging on the clothesline, to see if they were dry enough to bring in. The plaintiff confirmed those things in her evidence."
In the following paragraph of my reasons I recited the plaintiff's movements from the time that she arrived at the defendant's premises on the afternoon of 15 April 2013 up until the time that she stepped out on the verandah. I then said this:
"24. She told me that she scanned the area around her and saw steps. Immediately in front of her, however, about two metres from the back door, was the clotheshorse and she walked straight towards it to feel the washing that was drying on the clotheshorse to ascertain whether it was dry enough to bring in. The plaintiff told me that, hanging on the clotheshorse that afternoon, were "smalls", by which she meant ladies' undergarments. After she felt those items to see if they were dry, she turned to her right. She then again told me that she saw the steps. They were further away from where she then was when she turned to the right. Again, she saw the bed sheets, which were white and queen-bed sized, hanging on the clothesline under the eaves, the clothesline affixed to the brick wall.
25. She told me that her main goal was to take the sheets off the line, but before she did so, she had to feel them to ascertain whether they were dry. She then walked over the verandah towards the clothesline. She noticed the protruding bracket swathed in the cloth/rag, to which I have earlier referred. She said that the area was quite shadowed, that it was quite dark, that it was late in the afternoon, and that she was at the eastern end of the house rather than the western end, and everyone one knows that the sun sets in the west, so that the eastern side of the house would have been in shadow. However, she did admit that there was sufficient sunlight to enable her to see. She walked towards the sheets and she told me that she was "about parallel" with the sheets. She told me that she reached out with her right hand to test the sheets to see if they were dry enough to be brought in. However, that evidence had an air of reconstruction about it. She believed that she reached out with her right hand because she is right handed. However, she was, in essence, facing the brick wall, facing the door, facing towards the bracket and the natural thing would be to reach out with one's left hand to touch or feel something that is on one's left-hand side. She told me that she stepped to the left with her left foot and found that was in "mid-air". She stepped over the upper step. Her left foot was not on the same plane as her right foot. Hence, she fell to her left and down the steps."
I provided further detail in the following two paragraphs of my reasons and then said this at [28]:
"28. The plaintiff misstepped, that is the best description of what occurred to her, because she failed to heed the presence of the step, which she had clearly seen on two occasions prior to standing where she stood to feel the clothing, immediately prior to misstepping. The plaintiff's explanation for her fall is that she was distracted by the sheets hanging on the clothesline from observing where she was to put her foot. However, persons can often be distracted by many, many things when they are standing on the edge of something and standing on a landing immediately above the first step of a set of steps. The plaintiff could have been distracted by Mrs Day calling out to her. She could have been distracted by a flash of lightning, or a thunderbolt. She could have been distracted by a bird call or a swooping magpie. A person standing on a staircase might be distracted by a wall hanging, or a picture affixed to the wall to decorate it. Any number of things could distract a person who is at, or in the process of descending, a step or stairs. In my assessment of the evidence, the plaintiff misjudged where she was. She knew that she was at the top of the stairs, she forgot where she was, misstepped, and that was the cause of her accident."
I went on to bring in a verdict for the defendant. As required by the Court of Appeal, I went on to assess the plaintiff's damages lest there be an appeal. I brought in the plaintiff's damages at $178,075.
The Legislation
As far as I have been able to ascertain, the current regime concerning the matters now in question has been governed by the Legal Profession Uniform Law Application Act 2014 since 1 July 2015. As I understand the transitional provisions, work done prior to 1 July 2015 is governed by the Legal Profession Act 2004. In any event, it is common ground between the parties that the applicable legal principles are the same and can be gleaned from Sch 2 of the Legal Profession Uniform Law Application Act 2014. The heading to cl 2 indicates that it is designed to ensure that a lawyer is not to act for a party to litigious proceedings unless there are reasonable prospects of success. The heading to cl 4 indicates that restrictions are placed on commencing proceedings without there being reasonable prospects of success.
Clause 5 of Sch 2 is headed "Costs order against law practice acting without reasonable prospects of success." The relevant parts of the clause are these:
"5(1) If it appears to a court in which proceedings are taken on a claim for damages that a law practice has provided legal services to a party without reasonable prospects of success, the court may of its own motion or on the application of any party to the proceedings make either or both of the following orders in respect of the practice or of a legal practitioner associate of the practice responsible for providing the services:
(a) an order directing the practice or associate to repay to the party to whom the services were provided the whole or any part of the costs that the party has been ordered to pay to any other party,
(b) an order directing the practice or associate to indemnify any party other than the party to whom the services were provided against the whole or any part of the costs payable by the party indemnified."
The three succeeding subclauses are presently irrelevant.
The Issue
The issue currently before me is a preliminary issue to the first prayer in the Notice of Motion and is whether the facts established by the evidence before the Court form the basis for a reasonable belief that the claim had reasonable prospects of success under the legislation. That issue can be discerned from [6] of the judgment I gave on 31 October 2016. I need to determine whether there is a prima facie case that the first respondents, two partners of Messrs Carroll & O'Dea representing that firm, provided legal services by commencing and maintaining these proceedings without there being a reasonable prospect of success. Defined in that fashion, the issue can be found in [6] of the defendant's outline of submissions concerning the personal costs order sought against the plaintiff's solicitors, MFI C2.
Case Law
The leading case on the meaning to be assigned to the legislation here in question is Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; (2005) 63 NSWLR 300. The principal judgment was given by McColl JA with whom Hodgson and Ipp JJA concurred. The judgment concerns the initial incarnation of the current legislative regime that appeared in the Legal Profession Act 1987 commencing on 20 March 2002. This legislative amendment changed the substantive law concerning costs. At [92] her Honour said this:
"The new Div 5C should be construed against the background of the following principles which can be gleaned from the English and Australian authorities which have considered the power to order legal practitioners to pay the costs of proceedings in which they have represented parties: …"
Her Honour then between (a) and (g) set out six different propositions which represented the law prior to the enactment of the novel legislation.
Commencing at [116] her Honour turned to the construction of the relatively new legislation. At [127] her Honour said this:
"Turning to the construction of Div 5C, it is apparent that the question whether legal services have been provided "without reasonable prospects of success" turns, in the first instance, on the legal practitioner's "reasonable" belief as to the "provable facts" and his or her view of the law: s 198J (1). Section 198J (2) explains the circumstances in which a fact will be regarded as "provable", again turning on the question of the legal practitioner's "reasonable" belief that the material then available provides a proper basis for alleging that fact. There is no express requirement that this material be admissible. However s 198J imposes a continuing obligation. There may be a stage in a claim for damages where the fact a legal practitioner could not then reasonably believe that the evidence available would be admissible to enable the claim to be proved or defended, may lead to a prima facie case of a contravention of s 198J: cf Cahill v Ekstein (Smart J, unreported, Supreme Court of New South Wales, 5 June 1998)."
Commencing at [131], her Honour referred to the decision of Barrett J in Degiorgio v Dunn (No 2) [2005] NSWSC 3; (2005) 62 NSWLR 284. Her Honour pointed out that his Honour accepted that the new legislation imposed upon legal practitioners ""a standard that is more demanding than that applicable in cases where, by reference to general law principles, a costs order is sought against a party's lawyer". Her Honour quoted from his Honour's reasons at some length, citing [27]:
"In drawing a line at a somewhat higher point on the relevant scale of conduct, the Legal Profession Act should not, in my opinion, be presumed to intend that lawyers practising in New South Wales courts must boycott every claimant with a weak case. A statutory provision denying to the community legal services in a particular class of litigation cannot be intended to stifle genuine but problematic cases. Nor do I see the statutory provisions as intended to expose a lawyer to the prospect of personal liability for costs in every case in which a court, having heard all the evidence and argument, comes to a conclusion showing that his or her client's case was not as strong as [it] may have appeared at the outset to be. The legislation is not meant to be an instrument of intimidation, so far as lawyers are concerned."
Her Honour drew attention to that part of his Honour's reasons by adding the emphasis to the quotation.
At [132] her Honour said this:
"Barrett J's construction of the expression "without reasonable prospects of success" appears to me to accommodate both the purpose of Div 5C and to reflect the language of s 198J. The test, whether a claim or a defence was "so lacking in merit or substance as to be not fairly arguable", must be applied, however, in the context of the constituent components of s 198J."
Those constituent parts of the provision can be gleaned from [127] of her Honour's reasons which I have already cited. Partly, they are the legal practitioner's "reasonable belief" as to "provable facts" and his or her view of the law being "reasonably arguable". Whether a fact is provable or not relies on the reasonable belief of the practitioner that the material available to him does allow him or her to allege the fact in question. The use of the word "reasonably" in these various formulations is an attempt to imply some form of objective test.
Defendant's Argument
The argument of the defendant essentially is this. The plaintiff's solicitors were in possession of a copy of the statement signed by the plaintiff on 5 June 2014 after she had consulted with Mr O'Halloran. In that statement she admitted that she had seen the steps. Nevertheless, a large number of particulars of negligence and of fact were pleaded that appeared to be inconsistent with that admission by the plaintiff herself prior to the commencement of proceedings. For example, par 1(g) of the statement of claim is this:
"The steps upon which the plaintiff fell were situated in close proximity to the rear clothesline of the house and were indistinguishable from the back verandah area by reason of being the same colour tile and thus constituted a risk of harm to the plaintiff that was foreseeable by the defendant which was a risk that was not insignificant and could have been eliminated by the exercise of reasonable care by the defendant."
The next averment in the statement of claim is the allegation of negligence and then are provided the following particulars:
"(i) Failing to warn or advise the Plaintiff of the risk of harm constituted by having the said steps hidden in shadow from adjacent trees;
(ii) Failing to trim or lop adjacent trees so as to remove the shadow effect upon the said steps;
(iii) Failing to delineate with paint or other substance the edge of the steps from the surrounding verandah;
(iv) Placing a clothesline in close proximity to the rear steps of the property thereby causing persons using the clothesline to have their attention diverted from the presence of nearby steps thereby constituting a significant risk of harm;
(v) Failing to remove the clothesline from the rear verandah to a point away from the steps concealed by shadow at certain times during the day;
(vi) Failing to eliminate the risk of injury that was not insignificant and could have been eliminated by the exercise of reasonable care by the Defendant;
(vii) Failing to warn the Plaintiff of the risk of danger which presented to persons using the clothesline by virtue of the close proximity of the steps;
(viii) Failing to ensure that the steps were adequately designed and constructed (including but not limited to the stair surfaces);
(ix) Failing to ensure that the design and construction of the stairs complied with all relevant Australian Standards;
(x) Failing to ensure that the stairs had a non-slip surface."
At the commencement of the hearing I granted leave to the plaintiff to file in court an amended statement of claim. Notice of the amended statement of claim had been provided by the plaintiff to the defendant under cover of a letter of 30 September 2015 received by the defendant's solicitors on 1 October 2015. The amendment was merely to add the following additional particular of negligence:
"(xi) Allowing bins, buckets, containers and other items to be present near the clothesline and railing, thus causing additional shadow over the subject steps and the presence of such items distracting the Plaintiff's attention from the said steps."
I discussed those particulars of negligence commencing at [61] of my principal reasons for judgment. The following conclusions can be provided about those particulars:
(i) The steps were not hidden in shadow. The plaintiff saw them.
(ii) Since the steps were not hidden in the shadow of trees or shrubs, there was no need to trim shrubs or lop trees.
(iii) There was no need to delineate the edges of each of the steps because the plaintiff saw them and noted that there were two or three steps but nevertheless did not look at them when she was standing near them feeling the washing that was hanging on the clothesline.
(iv) This is the particular of negligence which was ultimately urged upon me.
(v) The plaintiff did not press this in final argument but merely pressed the allegation that the plaintiff ought to have been warned of the distracting presence of the sheet hanging on the clothesline.
(vi) This is merely a further averment of negligence.
(vii) This is the averment that the plaintiff put to me in support of her case at the end of the evidence.
(viii) There was no evidence that any inadequate design or construction of the steps was directly relevant or causative of the plaintiff's injury.
(ix) There was no evidence that the steps failed to comply with any relevant Standard.
(x) The plaintiff did not slip at all; she misstepped. In any event the evidence established that the stairs in question had a non-slip surface.
(xi) The plaintiff did not see these items. Ultimately the submission made was that the plaintiff did not see those items because they were not there. The allegation put in submissions was that the items were placed there on the morning after the plaintiff's fall by officers of the Clarence Valley Council Community Support Services. There may have been this reason for this volte‑face in the plaintiff's case: the items on the stairs helped to draw attention to the fact that there were stairs.
The defendant argues, consistently with what I have found, that the plaintiff misstepped simply because she did not look where she placed her foot. The defendant also draws my attention to certain particulars which were provided. On 14 May 2015 Messrs Moray & Agnew delivered a request for particulars containing 19 numbered paragraphs. The first three refer to "liability". They are these:
"1. What caused the plaintiff to fall on the date of the accident.
2. In what respects is it alleged that the steps were inadequately designed and constructed.
3. In what respect is it alleged that the design and construction of the stairs did not comply with all relevant Australian Standards."
I heartily encourage Messrs Moray & Agnew to discover the question mark. On 26 May 2015 Messrs Carroll & O'Dea provided these answers to those three questions:
"1. The plaintiff's inability to detect the presence of the steps on the rear verandah of the defendant's premises in close proximity to a clothesline she was approaching in order to remove washing on behalf of the defendant.
2 & 3. We will supply a separate response to this question shortly."
I assume that answer was meant to be that they would supply a separate response to those questions anon.
The fact is that the plaintiff had detected the presence of the steps on the verandah before she misstepped. Messrs Moray & Agnew wrote to the plaintiff's solicitors on 2 September 2015 concerning the outstanding particulars. On 11 September 2015 the plaintiff's solicitors provided these answers to the second and third questions:
"2(a) The stairs were glazed and potentially slippery.
(b) The stairs were devoid of any nosing.
(c) The stairs were devoid of a slip-resistance tread.
(d) The height of the steps varied by more than 5 millimetres.
(e) The stairs did not provide a contrast on the nosing of the stairs.
3. The stairs did not comply with relevant Australian Standards in that they:
(a) The stairs did not provide a slip-resistant tread.
(b) The height of the steps varied by more than 5 millimetres variance allowed under the Australian Building Code."
The letter went on to give notice of the intention to amend the statement of claim to provide what became particular (xi), further notice of which was given, as I said, on 30 September 2015.
None of the matters contained in pars 2 and 3 of the particulars delivered on 11 September 2015 was causative of the plaintiff's accident.
The plaintiff's solicitors retained an expert, Mr David Cockbain, who did not visit the defendant's premises but merely provided an opinion based on certain coloured photographs which before me became exhibit L, a letter of instructions, a copy of the statement of claim, and the document which became exhibit V. Significantly, they did not provide to Mr Cockbain a copy of the plaintiff's statement of 5 June 2014. That caused Mr Cockbain to conduct an interview with the plaintiff by telephone on 13 August 2015. He did not obtain from her an admission that she had seen the steps prior to her fall.
The opinion of Mr Cockbain is flawed because he was unaware that the plaintiff had in fact seen the steps prior to her fall. Mr Cockbain's report bears date 2 October 2015 and largely supported the particulars delivered by the plaintiff's solicitors on 11 September 2015. However, despite the many allegations of slipping, Mr Cockbain pointed out that the plaintiff had not slipped. He pointed out that she had "misstepped". He defined what he meant by a "misstep" at [53] of his primary report. As to matters visual he set out at [59] how the human eye was capable of a number of different tasks involving many different complexities of vision. He pointed out that one aspect that can cause visual error is "distraction," which is clearly what happened here: the plaintiff was distracted by her task of reaching out and feeling the sheet hanging on the line to see if it was dry and when she stepped forward she had overlooked the fact she was standing near the edge of the steps and that caused her to misstep and fall causing her injury.
At [68] and [69] of Mr Cockbain's primary report he said this:
"68. The writer considers that, on the basis of the Plaintiff's limited experience walking in the subject area, the presence of the steps, which were not delineated, would have created a hazard to any person in similar conditions and should have been identified and controlled by the Defendant.
69. In order to prevent a misstep and fall on a stairway, it is essential to provide clear visual cues for the start and finish of the stairs, ample lighting above the stairs, and a tread pattern that does not distract from perceiving the edge of each individual step. A common control measure implemented in workplaces and in private dwellings is the application of non-slip edges (nosings) to improve safety on stairs and increase the visual definition of the edge of the stairs."
This, I would have thought, was a counsel of perfection.
The defendant went on to submit that as the plaintiff's solicitors had the plaintiff's statement of 5 June 2014 prior to the commencement of the proceedings, they must have known that the plaintiff had not been deceived about the presence of the steps at all. That must have led them, so the defendant submits, to the view that the plaintiff just was not looking where she was going at the time she misstepped. The defendant went on to submit this:
"… given the material known to be in the possession of the solicitors for the plaintiff prior to the commencement of proceedings, it was not 'fairly arguable' that the plaintiff was deceived about the presence of the steps."
The defendant pointed out that the obligation of the plaintiff's solicitors was ongoing, as set out by McColl JA in [127] of Lemoto's case. This position of maintaining what was not maintainable persisted up to the end of the hearing. Mr Guihot submitted that at the end of the plaintiff's case the case was confined to a claim that the defendant was negligent in placing a clothesline on the brick wall above the steps because it could distract a person such as the plaintiff. In that regard he is correct. It was also part of the plaintiff's pleaded case, in particular (iv), of the statement of claim. The defendant then submitted that the plaintiff's case was so lacking in merit as not to be fairly arguable.
The Plaintiff's Argument
Much of this has been accepted by learned counsel for the first respondent, Mr Knowles. His written submissions are MFI C4. With what might be considered a significant Freudian slip, he said this at [17] of those submissions:
"The plaintiff gave evidence (and it is not disputed) that she was at the defendant's premises, was in the process of checking whether the washing on the clothesline was dry, and slipped and fell, causing her to suffer serious injuries. It is also not disputed that the clothesline was near the steps, and that the plaintiff was not warned of any danger that may arise from the proximity of the steps and the clothesline. Accordingly, there was a question as to whether the defendant was negligent in failing to warn the plaintiff. The assessment of this question, whilst guided by established principles, inevitably involves questions of impression and degree. Even if the claim was not necessarily a strong one (which is not conceded), it did not reach the level of hopelessness or one that was bound to fail."
That reasoning reads much more felicitously if one replaces the word "slipped" with the word "misstepped". That argument has force.
Commencing at [33] of my principal reasons I outlined the nature of the plaintiff's case. At [42] of those reasons I said this:
"42. Again, the plaintiff's case falls back to the washing on the line being a distraction to her, and this is alleged to have been caused by the negligence of the defendant. In my view, the plaintiff's accident occurred because she failed to watch [where] she was placing her left foot when she knew of the existence of the steps and she knew she was standing near them and failed to look where she placed her left foot, which unfortunately was over the first step down, causing her to lose balance and fall. The plaintiff, in my view, did not take reasonable care for her own safety.
43. As I have earlier indicated, there are many things which can distract a person who is near or on a staircase or set of steps. There is no evidence that any person other than the plaintiff had ever suffered from the distraction which the plaintiff suffered which led to her fall. As I said, I do not know for how long the wall‑mounted clothesline had been in place at the defendant's premises, but from the condition of the cloth/rag, it appears to me to have been probably at least a year and one can speculate about many scenarios: that it may have been erected by Mrs Day's late husband many years ago to make it easier to dry washing when the weather was inclement."
The reference in [43] above is a reference to [28] of my reasons for judgment. In similar fashion, at [52] of my principal reasons, I pointed out that there was no evidence that the defendant knew of any similar incident ever having occurred.
Mr Knowles drew my attention to the decision of the Court of Appeal in Jandson Pty Ltd v Walsh [2008] NSWCA 317 where the principal judgment was delivered by Mcfarlan JA with whom Giles JA concurred. That was another misstepping case over a few steps which the plaintiff in that case had not seen. Commencing at [20] Mcfarlan JA said this:
"20. Evidence called by the appellant indicated that despite extensive inspections of the display home over an extended period there had been no reports of injuries relating to the steps in question. The witnesses who were called also indicated that they had not observed any incidents, such as stumbles, on the steps. However their ordinary work duties did not place them in the home on a consistent basis and their opportunity to observe such incidents was accordingly very limited.
21. While the evidence of the absence of reported injuries was clearly of assistance to the appellant's case, I do not consider that it requires the conclusion to be drawn that accidents on the steps resulting in significant injuries were not reasonably foreseeable.
22. In my view her Honour's inference that unless an injury was sustained, incidents may well not be reported was an appropriate one (Red Appeal Book 22-3). Particularly is this so in light of the fact that only a small change in floor level was involved. Whilst missing such a change in level might in some circumstances have serious consequences such as ensued for the respondent, one can imagine that in many cases a person who stumbled would be able to retrieve his or her position without injury. It is unlikely in those circumstances that a report would be made to representatives of the appellant, they ordinarily not being present in the display home at the time of inspection.
23. The absence of reported injuries did not therefore negate the inference to be drawn from the circumstances found by her Honour that there was a not insignificant risk of someone being injured. As indicated in Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301, "the weight that will attach to an accident-free history involves a question of fact to be determined in light of all the relevant circumstances" (at 309).
24. I consider the situation here to be different from that in Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 81 ALJR 1773 where the activity which led to the injury was the intentional, recreational one of diving from a bridge. Depending on the circumstances, that may or may not involve a significant risk of injury. Here the activity involved is the accidental one of stumbling on steps which have not been observed. Common experience suggests that there is a not insignificant risk of injury occurring when that happens.
25. The fact that no injuries had been reported in the past is relevant to the assessment of the degree of the risk but in my view does not in the circumstances of this case enable one to treat the risk as an insignificant one."
Hammerschlag J dissented. At [71] his Honour said this:
"71. Secondly, the absence of other injuries caused by the steps over an extended period of time despite the passage through the house of many people who had no doubt not been there before, provides compelling support for the conclusion (which I have reached) that the risk posed by the steps was insignificant."
Those conflicting reasons in the Court of Appeal could draw similar responses on appeal from me, and could draw a different view from another Judge of this Court. As Mr Knowles very properly pointed out, the law of negligence is particularly fact specific and one in which different minds can reach different decisions by different reasoning processes or by putting different emphasis on different aspects of a case.
Ultimately I was not persuaded that Mrs Day was under any duty to warn the plaintiff. In particular, it was not known who had hung out the washing and that ultimately the plaintiff's injury occurred because she failed to take adequate care for her own safety.
To emphasise the fact that different minds may approach a matter differently, Mr Knowles also took me to the decision of Harper M in Morales v Commissioner for Social Housing [2012] ACTSC 117. In that case the plaintiff was a tenant of social housing provided by the ACT Government. There was a large tree growing next to the house of which the plaintiff was the tenant. That large tree caused numerous problems for the tenant including the breaking up of a footpath. Complaints had been made about the broken footpath to the relevant government authority. The Master was satisfied that there was an obvious hazard which should have been recognised as a danger. It was repaired at modest cost within a few weeks of the plaintiff's injury and there was no suggestion by the defendant that the cost of the rectification was a problem for the funding of the government authority.
However, unlike the decision in Jandson Pty Ltd v Welsh, the Master found contributory negligence by the plaintiff because the plaintiff knew of the presence of the danger and deducted 25% from the damages to be awarded to the plaintiff in that case. In Jandson the allegation of contributory negligence was taken by Mcfarlan JA to be no more than an assertion of momentary inadvertence which was not given the same status as contributory negligence. Hammerschlag J, on the other hand, pointed out the steps in the display home there in question were not an unusual feature of any domestic residence, even a single storey one, and that the accident occurred not because the steps posed a reasonably foreseeable risk to users but because the respondent, unlike hundreds of other persons who had before her passed through the house and had seen the steps without any visual cues, did not see them.
Consideration
I can see on the facts established before me an arguable case which was presented ultimately on behalf of the plaintiff but at the end of the case I was not satisfied that the plaintiff had discharged the onus of establishing that the defendant was negligent. Others may form a different view. Especially is that so when one considers that on the day after the plaintiff's injury her employer, the Clarence Valley Council Community Support Services, attended the defendant's premises and proposed to take "corrective action" as outlined in exhibit V which included removing the clothesline from the wall above the steps and taking a large number of other "corrective actions" which could not possibly have prevented the plaintiff's fall from occurring but might indicate that the housekeeping at the defendant's house could have been "better". The problem for the plaintiff in that regard is that the defendant was not her employer. The defendant was merely an old lady seeking to live out her life in her own home.
Accordingly, it seems to me that the plaintiff's solicitor could reasonably believe on the basis of provable facts and a reasonably arguable view of the law that the plaintiff's claim had a reasonable prospect of success. A reasonable prospect of success does not mean that the case must win but merely that the case could win or it is arguable or is capable of being accepted by the tribunal of fact, whether it be judge or a jury. Accordingly, the defendant in my view has not made out the basis for seeking a personal costs order against the plaintiff's solicitor. Accordingly, prayer 1 in the amended Notice of Motion filed on 28 September 2016 is refused.
The Alternative Application
I turn now to the second prayer made by the defendant. The defendant served an offer of compromise. The offer of compromise was that there be judgment for the defendant with no order as to costs. The offer was open for a period of 28 days after the date on which it was made. It was served on 3 February 2016. It was rejected by the plaintiff's solicitor by letter dated 9 February 2016 received by the defendant's solicitor on 10 February 2016. The offer of compromise made in this case is generally referred to as a "walk‑away offer".
In the current proceedings it was clearly obvious to the defendant and ought to have been obvious to the plaintiff that there was a real issue on the question of liability. The offer of compromise permitted the plaintiff to end the proceedings without there being any obligation upon her to pay the defendant's costs if the defendant were successful. The defendant was successful. It is then submitted by the plaintiff that there was no real compromise here because there was nothing in fact being given away by the defendant. I am unable to accede to that argument.
Mr Curran referred me to the decision of the Court of Appeal in Toyota Finance Australia Limited v Gardiner (No 2) [2016] NSWCA 181. In that case the appellant filed a Notice of Appeal on 9 December 2015. On 11 December 2015, two days later, the respondent made an offer of compromise, namely, that the Notice of Appeal which had been filed on 9 December 2015 be dismissed and that there be no order as to costs. As their Honours in the Court of Appeal pointed out, it is hard to know what, if any work, was done by the appellant's solicitors between 9 and 11 December 2015. Commencing at [15] the Court (McColl, Leeming and Payne JJA) said this:
"15. It is clear that 'where no significant compromise at all is made by a party to an appeal, the default position provided for in the rules will not be applied': Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2016] NSWCA 3 at [5]; Taheri v Vitek (No 2) [2014] NSWCA 344 at [9]-[11].
16. In the present case, the offer of compromise was made by the respondent almost immediately after the Notice of Appeal had been filed. No evidence was filed by the respondent which identified any amount of solicitor's costs or counsel's fees which would have been forgone by the respondent had the offer of compromise been accepted.
17. Acceptance of the offer required 'almost complete capitulation' by the appellant and, in our view, it would not be appropriate in those circumstances for the appellant's non-acceptance of this offer to result in a special costs order."
The current case is completely different. It is clear that, on behalf of the defendant, a factual investigation was made that ended in the statement taken from the plaintiff that was made on 5 June 2014. After proceedings were commenced on 2 April 2015 the defendant retained Messrs Moray & Agnew to act for her. On her instructions they filed a defence on 26 May 2015. Steps that are normally taken to defend such a personal injury case were then taken. The defendant sought further and better particulars as I have already indicated on 14 May 2015. It was necessary to pursue the plaintiff to provide full particulars, full particulars not being supplied until, as I have earlier mentioned, 11 September 2015. The defendant also arranged for appearances at court to attend a pre-trial conference and a status conference, the first on 1 July 2015 and the latter on 4 November 2015. The defendant's solicitors arranged for the plaintiff to be examined by two medico-legal experts, Dr Frank Harvey and Dr Richard Sekel. Dr Harvey reported on 25 August 2015 and Dr Sekel reported on 22 January 2016. The defendant issued a number of subpoenas for production and arranged for service of those subpoenas upon the addressees. These were essentially to obtain documentary evidence to support the defence and to assist in determining the quantum of the plaintiff's claim. The defendant's solicitors also qualified Associate Professor Yandell, a consultant engineer, who visited the defendant's home and carried out an inspection and testing on 29 October 2015 and provided a report bearing date 5 November 2015. The defendant's solicitor served that report on 3 February 2016, on the same day that the defendant served the offer of compromise.
Not only would there be substantial costs involved in a solicitor attending to each of those matters on behalf of the defendant but also there would be the cost of the disbursements, the fees payable to Dr Harvey, Dr Sekel and to Associate Professor Yandell and one would think that payable to Associate Professor Yandell would have been travelling expenses for attending at the defendant's home at Grafton. There is also cost involved in filing and serving subpoenas and to attending to their production at court.
This Court is capable of making lump sum costs orders and of assessing costs incurred itself. I do not need to try to ascertain what the costs might have been between the commencement of proceedings and 3 February 2016 but the costs would have been substantial. In other words, the defendant was offering to throw away substantial costs incurred. In fact it appears that little further costs were incurred in preparing the matter for trial; the further costs were of the trial itself.
The matter was set down for hearing by the Registrar at Lismore at a directions hearing on 17 February 2016 for the sittings of this Court at Lismore commencing 23 May 2016. Unfortunately Levy DCJ marked the matter "not reached" at those sittings but the hearing commenced at the following sittings conducted by me commencing on 15 August 2016. As I said, the costs of preparation were all done, it appears to me, by 3 February 2016 when the offer of compromise was delivered.
Under UCPR 42.15A the plaintiff bears the onus of establishing that the defendant should be denied her prima facie entitlement under the rules: see Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [29] per McColl JA. The specific offer here made is justified under UCPR 20.26(3). No evidence has been put before me as to why the offer of compromise was rejected. As I said, the major issue before me was the question of liability. This was not a case in which there needed to be any great compromise on, for example, a question of damages. Accepting as I do that real compromise was contained in the offer of compromise, it appears to me that I should apply the rules.
For those reasons I order the plaintiff to pay the defendant's costs on the ordinary basis until 3 February 2016 and on an indemnity basis from 4 February 2016.
The remaining issue concerns the costs of the Notice of Motion. The successful parties must have their costs paid. Accordingly, I order the defendant to pay the costs of the first respondents, Ms Hanaan Indari and Mr Robert Higgins. The plaintiff must pay the defendant's costs of the relief sought by the defendant from her.
Any other orders sought?
CURRAN: No, your Honour.
GUIHOT: No, your Honour.
[2]
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Decision last updated: 27 January 2017