MURPHY v MILLER

Court of Appeal (NSW)|1998-05-29|Before: Mason P, Priestley JA

MASON P, PRIESTLEY and BEAZLEY JJA 29 May 1998, 16 October 1998

SOLICITOR'S NEGLIGENCE - CLIENT'S ACTION NOT COMMENCED IN TIME

RESPONDENT INJURED IN RESTAURANT FIRE - ADVISED OF POSSIBLE ACTION IN COMMON LAW AGAINST RESTAURANT OWNERS - CLAIM NOT COMMENCED IN TIME - trial judge found appellant solicitor, after accepting instructions to proceed with common law claim, negligently allowed the limitation period to expire - when awarding damages, a "broad brush approach " was applied to establish the prospect of success and recovery of moneys in the civil action.

the appellant did not breach his duty to the respondent;

alternatively, if the appellant was in breach, the respondent did not suffer damage because she had not established she had any reasonable chance of success in the Common Law action or any reasonable chance of recovering any moneys from the prospective defendants even if she did obtain judgment;

the trial judge's allowance for economic loss should have been less.

On the cross-appeal the cross appellant/respondent submitted:

in assessing damages the trial judge should have:

a) awarded more for general damages; and, b) included a Griffiths v Kerkemeyer allowance;

the trial judge erred in not awarding indemnity costs.

on the evidence it was proper for the trial judge to find that the appellant was on a continuing retainer to conduct a common law action for the respondent and that he breached this duty by not at least filing a statement of claim to preserve the respondent's position;

with the evidence indicating that there was an arguable case for occupiers' negligence and that another fire victim had succeeded in a civil action for damages, the respondent's chances of obtaining judgment would have been good if proceedings commenced in due time;

on the evidence it was proper for the trial judge to conclude that there were reasonable prospects of the respondent recovering moneys if she got a favourable judgment;

the trial judge sufficiently accounted for relevant matters in assessing damages for economic loss.

no appealable error was shown in the trial judge's award of general damages;

the trial judge was correct in finding the respondent's evidence too vague to support an award of damages under the Griffiths v Kerkemeyer head;

indemnity costs should be awarded, for when the offer of compromise was served the appellant knew the substantial nature of the respondent's case.

Griffiths v Kerkemeyer (1977) 139 CLR 161 Johnson v Perez (1988) 166 CLR 351

Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394

Introduction: the case as decided by the trial judge

This appeal is by a solicitor against a District Court judgment awarding a former client $122,485 damages for the solicitor's negligence in having allowed a personal injuries claim for damages to become statute barred.

The respondent's personal injuries claim arose from a fire at the Pantheon Restaurant in Marrickville on 29 April 1982, in which she suffered severe burns. It was suspected the fire was caused by a fire-bomb thrown from outside the restaurant premises.

The negligence case against the solicitor was heard by his Honour Acting District Court Judge McLachlan in November 1997 and he delivered judgment in December. In the course of the trial there was tendered a bundle of documents (Exhibit A) including the appellant's file in the respondent's matter, from which much of the history of her case appears.

The file shows she first had acting for her a suburban solicitor who briefed counsel to advise what would be the best means of obtaining maximum benefits for her, the alternatives apparently being seen as an application under the Criminal Compensation Act or a common law action for damages. The solicitor had legal aid for the purpose only of obtaining counsel's opinion. Counsel duly advised (by memorandum dated 4 July 1984) that the respondent could seek both criminal injuries compensation and, subject to certain factual matters being ascertained, common law damages.

At some time between then and September 1986 the respondent retained a second firm of solicitors, Sloan & Co, and then retained the appellant. The appellant wrote to Sloan & Co by letter dated 24 September 1986 saying he had now been instructed to act on behalf of the respondent and requesting the transfer of files. In answering, Sloan & Co told the appellant that before they received his request they had negotiated a settlement with the Attorney General's Department for an ex gratia payment under the Criminal Injuries Compensation Act in respect of the respondent's injuries, in the amount of $14,150.

The handing over of the papers and the settlement with the Attorney-General's Department took a little time. For the appellant to effect the settlement certain authorities were needed from the respondent. The appellant wrote to the respondent by letter dated 29 January 1987, asking her for these, and also saying, in regard to her common law claim:

"Tt appears that you have an excellent case against the nightclub in question and as soon as we get the file from Sloan & Co. We shall give this Common Law action our immediate attention and pursue it as [sic] aggressively on your behalf.

Accordingly I ask that you sign the two attached authorities and return them to this office as soon as possible so that we may act immediately to protect your interests."

This letter was written to the respondent at 100 Metropolitan Road, Newtown. The authorities, prepared by the appellant, gave the same address. The respondent signed the authorities, dating them 3 February 1987 and returned them to the appellant.

A file note initialled by Mr C McNamara, who seems to have been the person in the appellant's office then in charge of the respondent's case, records that she telephoned him on 23 February 1987, to tell him amongst other things, that she

would be staying for a couple of months at 2 Allambee Crescent, Blue Haven. She also gave her telephone number there.

A later authority in the file, signed by the respondent and dated 10 April 1987 (evidently prepared in the appellant's office) gave the respondent's address as 84 Emu Drive, San Remo.

The next letter to the respondent in the file to the respondent was addressed to her at 100 Metropolitan Road, Newtown. In it the appellant gave the respondent the details of the completion of her criminal compensation claim. A cheque for the proceeds was enclosed, together with an account in which there was an item of $600 described as "Balance held in trust on account of your Common Law Action". In the letter the appellant said he had held that sum in his trust account "on account for the work involved in the preparation of your Common law Action".

The file then shows the appellant set about gathering information necessary for the carrying forward of the common law claim, in accordance, in a general way, with the advice given by counsel in 1984. These inquiries continued during June, July and August 1987. There was a conference with Mr J G Stewart of counsel on 11 June 1987. Then, a brief for advice was sent to the same counsel, enclosing, among other things, the advice given by the earlier counsel in 1984.

By letter dated 17 August 1987 the Legal Aid Commission wrote to the appellant saying that a grant of legal aid had been made to the respondent in 1984 and asked to be advised of the progress of the respondent's matters. The appellant replied by letter dated 27 August 1987 saying what had happened concerning the settlement of the criminal compensation matter and that he was now ascertaining whether the respondent would be able to commence proceedings in the District Court for damages. He ended by saying that the respondent did not "at present... require Legal Aid".

Mr Stewart by letter dated 3 September 1987 advised that the respondent had an arguable cause of action in negligence "against those who had the control and management" of the premises, but that before proceeding to institute it it would be necessary to attend to a number of matters. He ended his letter by saying the steps "should be undertaken as a matter of urgency. The limitation period expires early next year and proceedings should be instituted as soon as possible."

By letter dated 14 September 1987 to the Secretary of the Government Repository the appellant sought from that body plans it held of the Pantheon Restaurant. The letter was headed "re: Judith Miller - Probable Third Party Claim against Pantheon Restaurant".

After this the appellant's file is blank at least until 25 February 1988 with the possible exception that an undated back sheet in the file headed "In the District Court of New South Wales" then, lower down "Judith Miller" and then lower down again "Brief to Advise and draft urgent Statement of Claim" and addressed to a different counsel by the appellant, may have been prepared before then. There is no evidence whether a brief with such a backsheet was sent to counsel, or if so, when.

I will take up the next part of the story as it was told by the trial judge. He was recounting his understanding of the respondent's evidence.

"According to the plaintiff, she gave instructions to the defendant (whom she never met, being constantly referred to a series of people in the defendant's office). She was assured that she had a very good case against the restaurant at common law and that she could recover as much as $750, 000. She says that she continued to contact the defendant's office regularly and that she received the

criminal injuries compensation from the defendant's hands but the defendant retained $600 on account of costs. At that point she moved around a bit and bought a caravan but she says that she told the defendant's office as to her new address when she moved and, at the insistence of the defendant, saw Mr Stewart of counsel in October 1987. At that point, she said that the claim was all set to go ahead - or that was her understanding.

However, at the end of February 1988 or early March 1988, she received a telephone call from a man at the defendant's office. He asked if she wanted to go ahead, enquired about legal aid and said that they needed $10,000 to cover costs. She said that did not have it but would see if she could find the money. He said to let it go for a few weeks. She enquired and found that she could not get the money and rang the defendant's office back. She believed that she spoke to the same man and she told him that she could not get the money and she enquired as to whether she could pay it off.

At that point, the man said that it was too late and he mentioned something about the Statute of Limitations. He mentioned, she thought, a six year period. She said in court to me that she had heard about it but did not connect it. She said that she asked as to why she had not been told and he said that he thought that she had.

It is of course clear that action was not commenced within the six year period and that the plaintiff claims that the defendant was negligent in not so doing."

The series of people in the appellant's office referred to by the trial judge appears (from the file and from what the court was told in the course of argument), to have been Mr McNamara then Ms Robyn Sheffield and then Mr Peter Kilduff who seems to have taken the matter over early in 1988.

I return now to the appellant's file so far as it concerns events bearing upon the passing of the six year limitation period without action having been commenced.

"IT SPOKE TO JUDITH MILLER ON 25.2.88 REGARDING HER MATTER AND ADVISED HER THAT SHE IS RUNNING CLOSE TO THE LIMITATION PERIOD OF 6 YEARS. I TOLD HER WE WERE NOT PREPARED TO SPECULATE ON HER CLAIM AND WOULD REQUIRE FUNDS TO UNDERTAKE ANY COURSE OF ACTION.

SHE SAID SHE WOULD GET BACK TO ME WITH WRITTEN INSTRUCTIONS NEXT WEEK.

This file note is not dated, signed or initialled. In evidence Mr Kilduff said he was the only Peter in the appellant's office at relevant times. He had no memory of the note, but said that it was one of his "normal file notes".

The first item bearing a date next in the file after the letter of 14 September 1987 is a letter dated 22 March 1988 from the appellant to the respondent (written by Mr Kilduff) saying (omitting formal parts):

Following discussions held with Mr James Stewart, the Barrister briefed in this matter regarding your chances of success in this claim, I advise that a conference should be held between yourself and my office.

It is hard to ascertain the chances of success in this matter as there are fairly complicated matters of law to be proved.

It is probable that we could bring an action against the owners of the nightclub for their failure to provide proper exits for the patrons. However, under the law as it stands today, it may be unlikely that a Court would hold that it was

reasonably foreseeable for the owners of the establishment that a molotov cocktail would be thrown onto the premises.

It is therefore advisable that you contact me as a matter of urgency to discuss these problems and the likelihood of success in your matter.

Next there is an undated file note headed "Judith Miller" and saying:

"T have placed an ad in the Herald trying to locate her. This cost $30 and will be in Saturday on 21 May 1988."

Underneath that is the typed name "Kim". Mr Kilduff's evidence was that his secretary's name was Kim Sheffield.

Last, there is a set of documents dated 10 October 1988, all addressed to the respondent at 100 Metropolitan Road, Newtown. One is a letter headed "Your Common Law Action", saying:

"T refer to the above matter and to my attempts to contact you regarding same.

T enclose herewith a Memorandum of Fees and Disbursements for work done to date."

and signed on behalf of the appellant. The second document is a memorandum of fees and disbursements, again headed "Your Common Law Action" the text of which was as follows:

"TO my costs of and incidental to taking your $250.00 instructions, including briefing Jim Stewart of Counsel to advise, attending conference 11.6.87, writing to Board of Fire Commissioners, writing to Glebe Coroners Court for a copy of transcript, perusing same, writing to Liquor Administration Board, perusing correspondence from Legal Aid Commission, replying to correspondence from Licensing Court of New South Wales, writing to Government Repository, advising you of limitation period and seeking your further instructions, all attempts to contact you including placing ad in Sydney Morning Herald, exceeding but say,

Counsel - James Stewart $240.00 Sundries - telephone, photocopying, postage $2.30 $492.30"

The third document, was headed "Trust Statement" and beneath that "Your Common Law Action". It contained the following details: The third document, was headed "Trust Statement" and beneath that "Your Common Law Action". It contained the following details:

"TO: Christopher Murphy - as per attached account $492.30 TO: Glebe Coroners Court - transcript $77.70

TO: John Fairfax and Sons - advertisement $30.00 BY: Amount received from you on account

The file also contained an envelope addressed to the respondent at the Newtown address marked "Return to Sender" with the postmark 14 October 1988.

10 On the question whether the appellant should be found liable for negligence, the trial judge said he did not think it necessary to go into any great detail. He said he had considered the evidence and the submissions of counsel and continued:

"T say that the evidence established that, at the latest, the Defendant by his

15 employees had accepted instructions as to the common law claim by December 1986. The six year limitation did not expire until April 1988 - some sixteen months later. True it is that the Plaintiff changed address on at least two occasions but the Defendant knew of the San Remo address on 10th April 1987 and she attended a conference with Mr Stewart in June 1987 which resulted in the advice

20 of September 1987 to which I have already referred. Then, as late as late February or early March 1988, there was the telephone conversation which I accept - on the balance of probabilities - was between the Plaintiff and Mr Kilduff. Mr Kilduff used a telephone number which contacted the Plaintiff. The evidence before me suggests that although the Defendant had accepted

25 instructions as early as December 1986 and had led the Plaintiff to believe that he had accepted instructions, the Defendant was substantially unprepared to file a Statement of Claim. What seems to have happened is that Mr Kilduff was employed a few months before and had the job of going through about 100 files amongst which was this file. It is not necessary, in my view, to consider as to

30 whether he was negligent. I find that the Defendant was negligent - if for no other reasons - because of a failure to provide advice in a timely fashion and requiring the Plaintiff to pay a substantial amount of money as a pre condition to undertaking further work in circumstances in which the limitation period was shortly to expire. Alternatively, the Defendant was negligent to failing to

35 communicate with his client in circumstances where he had accepted instructions to proceed with a common law claim."

The trial judge turned next to the question whether the respondent had lost a chance of recovering damages from the proposed defendants mentioned by Mr Stewart in his letter of 3 September 1987. He commented that from the

40 considerable amount of evidence before him concerning that question two matters stood out. One was that another person injured in the fire had recovered $150,000 against three men named Kalambokis, allegedly the occupiers of the restaurant by a consent judgment entered against them in the Supreme Court, dated 4 February 1985, in proceedings in which the plaintiff in that case had

45 alleged that her damages were caused by or contributed to by their negligence. The other feature was that there was evidence in the material that the Messrs Kalambokis had been at the time of the fire successful in their business undertakings but no longer lived in Australia.

There was in evidence a letter from Messrs McCulloch & Buggy dated 24

50 November 1993 to the respondents present solicitors. Messrs McCulloch & Buggy were the solicitors who had signed the terms of settlement on behalf of the

Messrs Kalambokis upon which the consent award had been in favour of the plaintiff earlier referred to. The letter said that the solicitors were:

"instructed to advise that Messrs Kalambokis (the owners) accepted a limited indemnity from our client (the insurer) in respect of any liability claims arising out of the fire. That indemnity has long since expired and we understand that Messrs Kalambokis have ceased to reside in Australia."

After noting that the appellant had not received instructions from the respondent until some time in 1986, the trial judge said:

"There is also some indication given throughout a reading of the material from the coronial enquiry that - at least at the time of the fire - the owners had the ability to pay some damages in addition to any insurance indemnity.

Despite this, my ability to assess this question of availability of resources is restricted by the lack of evidence and the onus is on the Plaintiff."

His Honour next indicated that he would be guided by what had been said by Wilson, Dawson, Toohey and Gaudron JJ in their joint reasons in Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394 concerning the proper approach to assessment of damages in cases of the present kind. They said, at p404, the judge should first focus on the plaintiff's situation when the claim for damages for personal injuries became statute barred. They continued that the judge:

"should have assessed damages by reference to the loss at that date of the right to claim damages. That loss would ordinarily be quantified by the trial Judge taking a broad brush approach to the several matters that in a particular case may require to be resolved - the likely date when in the absence of the negligence of the solicitor the action would have come to trial, the evidence that would or should have been available to the plaintiff at that time, the relevant principles of law then governing the assessment of damages, the question of contributory negligence, and... the prospects of any judgment given in favour of the plaintiff being satisfied - in order to arrive at a figure representing the loss suffered by the plaintiff when his action against the defendant was dismissed."

His Honour then indicated that after considering all the evidence and taking into account contingencies, uncertainties of litigation and the uncertainty as to whether money would actually have been recovered that he was not satisfied that the respondent had had an excellent prospect of success and recovery, and that applying the "broad brush approach" he was intending to apply a discount of 50% to the amount he thought the respondent would have been able to establish as the quantum of the damage he had suffered.

Turning then to the question of quantum, he made the following assessments: Turning then to the question of quantum, he made the following assessments:

General damages 80,000 Interest on past general damages (2% on $40,000) 12,400 Out of pocket expenses Nil

Past and future out of pocket expenses 6,000 Future medical treatment 2,500 Past wage loss 40,000 Future loss of earning capacity 20,000 Domestic assistance Nil

The amount the trial judge awarded was therefore $80,450. To this there was added a figure of $42,035 for interest on the damages allowed, from the notional trial date to the date of judgment. Judgment was therefore given for $122,485 and costs. An application on the respondent's behalf for indemnity costs was refused.

There were ten grounds set out in the appellant's Notice of Appeal, and four in the respondent's Notice of Cross-appeal. Counsel for the appellant in beginning his oral argument conveniently simplified the situation by saying the appeal and cross-appeal could be dealt with by reference to four issues.

The first was whether the appellant was in breach of his duty, whether it was contractual or tortious.

The second was whether the respondent suffered any damage if the appellant were in breach of duty. This second issue was subdivided into two parts, the first being whether the respondent had had any chances of success against the owners of the restaurant, the second, whether she had had any chances of recovering any moneys pursuant to any judgment she may have obtained against those owners.

The third issue was the proper assessment of the appellant's damages. This was raised under both the appeal and cross-appeal. The appellant was saying the allowance for economic loss should have been less. The respondent was saying (a) general damages should have been more and (b) there should have been a Griffiths v Kerkemeyer allowance.

The fourth issue, raised by the cross-appeal, was whether the trial judge should have awarded indemnity costs to the respondent.

The principal argument for the appellant on this issue took as its starting point the file note commencing "I spoke to Judith Miller on 25.2.88", with the typed signature "Peter" (set out on p6 above). It was submitted that the note furnished evidence that the respondent had been told close to the expiration of the limitation period that the appellant was not prepared to proceed with the respondent's case unless he was put in funds. The submission was to the effect that in the absence of response from the respondent before the six year period ran out the solicitor had either discharged any duty he had to the respondent or had terminated her retainer of him or both. It was also submitted that the trial judge had not dealt adequately with this file note in his reasons.

Although the appellant is correct in asserting that the trial judge did not deal in terms with the file note, I do not think that affects the validity of his decision on breach of duty. It is apparent from the reasons given by the trial judge for finding the solicitor in breach in the passage I have earlier set out (at p9 and p10 above) that he accepted the respondent's evidence concerning her telephone conversations with the appellant's office in the period in approximately February, March and April of 1988. The file note, even if fully accepted, when read in light of the trial judge's general acceptance of the respondent's evidence of the telephone conversations, does not, in my opinion, support the appellant's submission that in some way the appellant's retainer by the respondent had become terminated or that he no longer had a duty to commence proceedings on her behalf within the limitation period. The appellant's own records show that at the time when the limitation period expired he had money "held in trust on account of [the respondent's] Common Law Action". The letter of 22 March 1988, although it did not reach the respondent, nevertheless serves to show that

at that date the appellant still regarded himself as retained to conduct a common law action for the respondent. The later documentation from the appellant's file supports this conclusion. In the circumstances I agree with the trial judge's findings that the appellant was negligent in failing to provide advice in a timely fashion and in failing to communicate with the respondent in circumstances where he had accepted instructions to proceed with the common law claim. In the general factual situation as the trial judge saw it in light of his findings, I do not think it was essential for him to deal explicitly with the significance of the file note relied upon for the appellant. The general line of his reasoning to my mind appears sufficiently clearly from what he said in his written reasons.

There are however further grounds which were argued before the judge but not

relied upon by him in concluding that the appellant was liable to the respondent. The first of these, it seems to me, with very little doubt, is sound. The substance of this argument was raised with counsel for the appellant in argument in this court.

Before the trial judge the respondent had contended that in the circumstances the appellant had at least had a duty to file a statement of claim within the limitation period. A solicitor had been called who gave opinion evidence that the appellant had had an obligation, in the circumstances, to file a statement of claim. In the course of submissions by counsel for the appellant he was asked by the court on what basis such evidence had been admissible. Counsel replied by pointing out that the evidence had not been objected to so that no ground of appeal concerning its admissibility had been included in the notice of appeal. He was thus not in a position to contest its admissibility but did assert that the solicitor's opinion should not be accepted.

Leaving the solicitor's opinion out of account, I am nevertheless myself of the view that in the circumstances in which the appellant found himself as the limitation period neared expiry, he was under a duty because of his continuing retainer and his relationship with the client to file a statement of claim so that thereafter he could renew his attempts to obtain direct instructions from her, with her position under the Limitation Act being preserved in the meantime.

It is possible to imagine answers to this argument along the line that it was not shown that the appellant had sufficient funds held on trust for the respondent to pay for the drafting and filing of the necessary statement of claim. However, no case of this kind appears to have been made for appellant at the trial. It seems to me that before the appellant could rely upon such an argument it would be necessary for him to prove what moneys were available to him and what the costs would have been of preparing and filing a statement of claim. No attempt was made to put any such evidence before the court. It therefore seems to me proper to come to the conclusion stated above that on the facts before the trial judge the appellant was in breach of duty in not at least filing a statement of claim in order to preserve the respondent's position.

The further available argument stems from the judge's general acceptance of the respondent's account of her telephone conversations with the appellant's office, including her report that she had been told that $10,000 would be required before her case could be proceeded with. This advice was incorrect, at least insofar as concerns the cost of getting the respondent's case to the point of the filing of the statement of claim. On the material available to the appellant immediately before the limitation period expired, certainly enough was known of the respondent's case to make it proper for a statement of claim to be filed. This is particularly so when it is borne in mind that the filing of the statement of claim

would stop the running of time and it would not be necessary to serve the statement of claim for some time afterwards, during which both further instructions could be obtained and the opportunity given to the respondent to make necessary financial arrangements.

In my opinion advice along the foregoing lines should have been given to the respondent rather than the forbidding information that $10,000 was required. It seems to me to have been a breach of duty for the appellant (by his employee) to have said to the respondent what he did and not to have given more accurate advice about what needed to be done and the cost of what needed to be done before the limitation period expired. It also seems to me that had proper advice been given, then on the balance of probabilities, the respondent would have been able to bring about at least the filing of the statement of claim within the limitation period.

For the foregoing reasons I do not think this court should disturb the trial judge's finding that the appellant was liable for breach of duty.

The final matter which should be recorded concerning liability is that in the appeal papers there is a reference to an application for an extension of the limitation period having been filed in the District Court but then stood over (Blue AB 324).

No submissions based on this were put to the court. No doubt there are good reasons for this, but I thought it prudent to mention that the making of the extension application had been noticed, in case at some later stage it might be thought to have been overlooked. In the absence of any submission relating to the point, there is no need to say anything further.

Respondent's chances of success against the owners of the restaurant. The summary I have given of the trial judge's approach to the respondent's chances of recovery from the restaurant owners shows that he did not consider separately the two sub-issues raised in the appeal. It seems to me to be clear nevertheless that his Honour considered that the respondent must have had good chances of obtaining judgment against the prospective defendants. His conclusions generally on the two sub-issues were arrived at by taking the "broad brush approach" recommended by the High Court in both Nikolaou (and also in Johnson v Perez (1988) 166 CLR 351).

There was a considerable body of material before the trial judge from which it seems to me he could validly infer that an arguable case of negligence could have been made out against the occupiers based on the insufficiency of ways into and out of the restaurant and also the insufficiency of exit signs in the restaurant premises in the event of foreseeable circumstances of danger in the premises, such as those created by fire.

It may be that not all of the material before the judge supporting this view of the case the respondent would have had against the occupiers would have been admissible. Nevertheless, in my view there was sufficient material either admissible or likely to have led to the obtaining of admissible evidence, to support the view that the plaintiff must have had an arguable case against the occupiers.

When this is taken together with the fact that another person injured in the fire had obtained judgment against the three alleged occupiers of the restaurant for $150,000 in 1985, I do not see any basis for this court interfering with the view

the trial judge implicitly arrived at, that the chances of the respondent's obtaining judgment would have been good if proceedings had been commenced in due time.

The respondent's chances of recovering pursuant to judgment. Again, his Honour's reasons show that he took the "broad brush approach" to this matter also. The evidence before him had been that the occupants of the restaurant had been men of substance, that they had some insurance cover and that they had gone to live in Greece. It is clear from his Honour's reasons that there had been some prospect in the circumstances of the respondent's recovering in fact from those occupants in the event of obtaining judgment against them. This seems to me to be a reasonable conclusion, even leaving out the possibility of recovery from the insurer. Although as a practical matter it will be more difficult to obtain payment from a judgment debtor living overseas and determined not to pay than it will be from a similar debtor living in Australia, the practical complications are surmountable, particularly when the targets are persons of means and when they live in jurisdictions such as Greece. A determined judgment creditor has legal means available to try and obtain from persons in overseas jurisdictions the benefits of judgments obtained against them in New South Wales.

The trial judge's assessment of the plaintiff's chances. The trial judge referred to the difficulties in trying to assess the respondent's chances of recovery. On the evidence available reasonable minds could reasonably differ quite widely in estimating the chances of recovery in percentage terms. I do not think the figure arrived at by the trial judge is so out of keeping with the evidence before him as to indicate that he had stepped outside the limits of a sound estimating judgment. I therefore would not disagree with the 50% figure which he held was appropriate.

Economic loss. The trial judge dealt with this topic briefly. He said the amount claimed by the respondent, $120,000, was unrealistic. He said "Undoubtedly, she suffered some economic loss for - say - four years following the accident". He mentioned some other of the scanty facts on the question and said that in the circumstances he could "do little other than to make an educated guess, having allowed for the income she has earned and also make provision for interest". He then stated the figures earlier set out, $40,000 for past wage loss and $20,000 for future loss of earning capacity.

In regard to the past wage loss, the appellant did not criticise the four year period referred to by the trial judge but said that the evidence which was before the court could not justify the trial judge's $40,000 figure. This argument was supported by pointing out that, taking a four year period, $40,000 represented approximately $200 a week. The actual evidence of the rather meagre earnings of the respondent in periods prior to the fire and the respondent's work record were then gone into and the submission was made that the maximum that could have been reached was $24,960 for the four year period but that in any event the judge should have awarded much less than that.

There is force in these arguments, but I do not think they give sufficient account to the fact that there was a fifteen year period between the date when the respondent suffered her injuries and the trial, that the trial judge was dealing with a number of variables in that period in respect of which the evidence was not precise, and further, that the trial judge was overall favourably impressed by the respondent. The figure to be arrived at was one involving the exercise of

judgment. The trial judge although not lavish in his reasons on the point, seems to me to have sufficiently indicated that he took relevant matters into account in arriving at the figure. Bearing in mind that he was well aware of the facts, had noticed the demeanour of the respondent and was in an area of judgment as to the figure, the result he arrived at seems to me to have been within a reasonable range and should not be disturbed by this court.

Similar considerations lead me to the view that the trial judge's estimate of future loss of earning capacity should not be disturbed either.

General damages. The respondent said that the trial judge had under-valued the general damages of $80,000 which he allowed her. Having considered the medical evidence for myself, and having taken into account what the trial judge said on the topic, together with his observation that had observed the respondent's scars and had assessed her in the witness box, I would not interfere with his assessment. I see no sign of any misconception of the materials he had to deal with or misunderstanding of the law which would justify the court in thinking he had made any appellable error.

Griffiths v Kerkemeyer allowance. The claim put to the trial judge by the respondent was thirty weeks assistance at five hours per day at $10 per hour. The evidence relied on was that for a period between June and November 1982 the respondent's nine year old daughter gave her considerable domestic assistance, that she also had help from a District Nurse, a physiotherapist and other family members and that at a later period she had further assistance of a like kind. She was not cross-examined on the evidence.

The answer of the appellant to the submission was that the evidence relied on was vague and the greater part of it concerned the District Nurse and physiotherapist who were said to be not in the class of helpers within Griffiths v Kerkemeyer. The submission continued that there was no precise time put on the assistance from the daughter nor evidence of the commercial cost of her services nor the precise work that a helper would be being paid for.

Notwithstanding the absence of any cross-examination upon the respondent's evidence it seems to me that it was within the province of the judge to conclude that it was of such a vague and imprecise character as not to satisfy him on the probabilities that services had been provided to the respondent for which an award within Griffiths v Kerkemeyer should be made. I would not interfere with the judge's conclusion which is a mixed matter of factual assessment and judgment.

The respondent made a compromise offer of $60,000 on 7 March 1995. The trial judge based his refusal to order indemnity costs from the date of the offer on the view that important amendments to particulars of the respondent's case were not made until immediately prior to the commencement of the hearing. The trial judge acted on the footing that a plaintiff must properly particularise a claim before serving an offer of compromise and that this had not happened in the case before him.

In this court attention was drawn to material which seems to me to show satisfactorily that at the time of the service of the offer of compromise the substantial nature of the case the respondent intended to make against the appellant had been made known to the appellant.

In my view the general principles underlying the rules concerning offers of compromise and indemnity costs required that the respondent have her costs on an indemnity basis from the date of the compromise offer.

In my opinion the appeal should be dismissed with costs.

In my opinion the cross-appeal should be dismissed except so far as concerns the order for costs at the trial. In that respect, in my opinion, the judge's order for costs should be set aside and instead it should be ordered that the respondent have her costs of the proceedings below, and from the date of the offer of compromise those costs should be on an indemnity basis.

Although the respondent had only partial success on her cross-appeal, I do not think the costs of the appeal and cross-appeal considered together will have been significantly increased by preparation for and argument of that part of the cross-appeal on which the respondent failed. It therefore seems to me appropriate that the appellant should bear the respondent's costs of the cross-appeal.

Cross-appeal dismissed except so far as concerns the order for costs at the trial where the respondent is to have her costs of the proceedings below, and, from the date of the offer of compromise, on an indemnity basis;

Appellant to bear the respondent's costs of the cross appeal.

Counsel for the appellant: G Davies SC/G Austin Solicitors for the appellant: Colin Biggers & Paisley Counsel for the respondent: M J Williams

At a glance

Court

Decision date

Before

Source

Judgment (137 paragraphs)

Parties

Cases Cited (3)

Cited By (2)