Paul v Cooke

Judgment (ex tempore) 1HIS HONOUR: I gave judgment in these proceedings on 25 July 2012 [Paul v Cooke [2012] NSWSC 840] in which I concluded that, save for the necessity to undergo additional CT scans in 2006, Dr Cooke's admitted negligence was not causative of harm to Mrs Paul and that it apparently followed that there should be judgment for the defendant, but that I would first, as had been requested, afford the parties an opportunity to be heard on the question of costs. 2As it was not entirely clear at that stage what had been the agreement between the parties in respect of the additional CT scans, I deferred formally giving judgment until there had been an opportunity to address that issue also. There appears now to be no dispute that there should be judgment for the defendant, and I will give that judgment at the conclusion of these reasons. 3The principal issue remaining for determination is that of costs. The relevant factual background, other than that which appears from the principal judgment, includes the following chronology. The statement of claim initiating the proceedings was filed on 1 October 2008. A year later, on 2 October 2009, the defendant made an offer of compromise to the plaintiff in conformity with (NSW) Uniform Civil Procedure Rules 2005 ("UCPR"), r 20.26, to the effect that there be judgment for the defendant with each party to pay its own costs. The letter that conveyed that offer set out the reasoning that underpinned it, and made clear that the basis upon which the offer was formulated was essentially that the defendant must succeed on the question of causation. On 12 March 2010, the defendant "revived" that offer and served a further offer in conformity with UCPR, r 20.26. On 24 March 2010, by filing an amended defence, the defendant admitted breach of duty. On 21 September 2010, the plaintiff made an offer of compromise, said to be in accordance with r 20.26, in the sum of $525,000 plus costs. The plaintiff made a further offer of compromise, in conformity with r 20.26, on 16 June 2011 in the sum of $500,000 plus costs. On 23 June 2011, the defendant renewed his offer to the effect that there be judgment for the defendant, with each party to pay its own costs. 4As will be apparent from the principal judgment, the case as argued at trial involved, at least on one view, four main issues: scope of duty, factual causation, scope of liability, and the effect of (NSW) Civil Liability Act 2002 ("CLA"), s 5I. 5As Mr Graham for the plaintiff has submitted, at least viewed strictly, the defendant failed on scope of duty, on factual causation and on section 5I, but succeeded on scope of liability, as a result of which the defendant succeeded in the litigation. Nonetheless, the plaintiff submits that, by virtue of the plaintiff's success on three of four of those issues, and in addition on breach of duty by concession, there should be an apportionment of costs, so that each party is responsible for 50 percent of the other's costs or, alternatively, that each bear its own costs. 6The starting point is that the defendant, having been brought to court by the plaintiff and having succeeded, is entitled to his costs. It is for the plaintiff to establish a basis for departing from that rule. A successful defendant who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the plaintiff's costs of them [Hughes v Western Australian Cricket Association (1986) ATPR 40 - 7489]. This course, whilst open, is one on which the Court embarks with hesitancy [Cretazzo v Lombardi (1975) 13 SASR 4, 16; Trade Practices Commission v Nickloss Enterprises Pty Limited (No 3) (1979) 28 ALR 201; Walkers v Henderson (Australia) NSWCA, 6 July 1994, unreported; NRMA Limited v Morgan (No 3) (1999) NSWSC 768; Mobile Innovations Limited v Vodaphone Pacific Limited (2004) NSWCA 15; and Waterman v Gerling Australia Insurance Company Pty Limited [2005] NSWSC 1111]. From these cases emerge consistent themes: first, that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues that might be material to the decision in the case; but, secondly, that it may be appropriate to award costs of a separate issue where a clearly definable and severable issue, on which the otherwise successful party failed, has occupied a significant part of the trial. 7Examining the issues to which reference has been made in this case, so far as breach of duty is concerned, it of course occupied no time at the trial, but it would have occupied some time in the pleading, and potential assembly of expert evidence, in the early stage of the proceedings, until breach of duty was admitted. Ordinarily, in a personal injuries case where a defendant succeeds, by reason of the plaintiff's failure to establish causation, the outcome is that the plaintiff is required to pay the defendant's costs. That is so even if, after a contest at the trial, the plaintiff succeeds in establishing breach of duty. On the other hand, it is difficult to see why, in such circumstances, the defendant should be entitled to the costs of resisting the argument on breach of duty. To my mind, breach of duty is an identifiable separate issue, albeit one that played a relatively small role in this case. As a starting point, in principle, while the defendant should not be required to bear the plaintiff's costs on the breach of duty issue, the defendant should not be entitled to their costs on that issue. 8So far as quantum is concerned, it is true that quantum was agreed, but quantum is always dependent on the question of causation. I do not think it is realistic to separate the issue of quantum from that of causation in this case. 9After 12 March 2010, and certainly by the time the matter came to trial, it was clearly presented as a case about causation. Both parties commendably conducted the case with great efficiency, focussed on the real issues in dispute, and developed comprehensive, elaborate, articulate and well-reasoned submissions on issues that were reasonably arguable both ways. I do not think it is realistic to segregate from the causation issues the scope of duty issue raised by the defendant. Realistically, the arguments that were presented on the scope of duty issue overlapped to a material extent with those presented under causation on scope of liability. Scope of duty was not a clearly definable, separate issue for the purposes of allocation of costs. 10Nor do I think it realistic to separate the issues of factual causation and scope of liability. As I have said, the case was clearly presented on both sides as one fundamentally about causation. While authorities before the CLA have indicated that causation involves more than mere but-for causation, I am not aware of any case in which questions of factual causation and scope of liability have been considered discrete issues for the purposes of costs allocation. To my mind, it would be largely impossible to do so. It is true that a substantial amount of the evidence adduced in this case went to factual causation, but I do not think it correct to say that that evidence was irrelevant also to scope of liability. 11As I observed in the principal judgment, in the cases on which reliance was chiefly made, in particular Chappell v Hart [I998] HCA 55, the absence of provisions such as those now contained in the CLA, s 5, meant that the court had not, in those cases, considered so discretely and separately the two limbs that s 5D requires to be considered. The evidence as to whether or not there was a material increase in risk by the time the procedure eventually and belatedly came to be performed was relevant to scope of liability; the evidence as to the mechanism by which the rupture was ultimately caused - and, in particular, showing that it was in the course of the operation, as a result of what happened in the operation - was also relevant to scope of liability, as well as to factual causation. I do not think it would be appropriate to segregate the two aspects of the causation issue for the purposes of costs allocation. 12So far as CLA, s 5I, was concerned, while I came to the view that had scope of liability been established, s 5I would not have saved the defendant, nonetheless, on s 5I itself the parties had mixed success, the plaintiff unsuccessfully raising at least two arguments in respect of that section. I do not think it would be appropriate segregate the costs of the s 5I issue. 13The plaintiff has made compelling submissions to the effect that the defendant's offers of compromise, being effectively "walk away" offers, ought not be treated as offers of compromise triggering the costs mechanisms under the UCPR, and, in particular, under r 42.15A. Strictly speaking, it would seem that those offers meet the requirements of triggering an indemnity costs liability under that rule. However, the cases to which the plaintiff has referred indicate that that may not be enough and - despite the submissions of Ms Thomas for the defendant, that a distinction is to be drawn between Calderbank offers and offers under the Rules - the Court of Appeal's decision in Regency Media v AAV Australia [2009] NSWCA 368, is one which refers to the relevant provisions of the Rules of the Court. 14In any event, the defendant does not seek an indemnity order, but relies on the offers only as informing the general exercise of the Court's costs discretion. The fact of those offers, including that their rationale had been explained on 2 October 2009, to my mind reinforce the view that it is inappropriate to segregate and treat as separate issues those on which the defendant did not succeed, other than breach of duty. In principle, therefore, the plaintiff should pay the defendant's costs, other than those associated with the breach of duty issue. 15As I have said, the breach of duty issue played no part in the trial, and ceased to be an issue by 24 March 2010, more than a year before the trial. Beyond that, and beyond regard to the statement of claim, there is no evidence that enables me to make more than a most approximate apportionment of the proportion of the defendant's costs that might have been attributable to the breach of duty issue. On a broadaxe basis, perhaps five per cent of the defendant's costs might have been attributable to the defence of the breach of duty issue. 16I therefore conclude that the plaintiff should pay 95 per cent of the defendant's costs. 17My orders are: (1)Give judgment for the defendant. (2)Order that the plaintiff pay 95 per cent of the defendant's costs. 18The parties have agreed that execution of the costs order should be stayed pending any appeal. Accordingly, and by consent, I order that execution under order 2 be stayed until the later of 4 September 2012 or, if a notice of appeal is filed before that date, the hearing and determination of any such appeal, or a further order of this Court or of the Court of Appeal. 19I reserve liberty to apply to vary or discharge the stay.