23 In my opinion, the plaintiff did not better the defendant's offer. Viewed from this standpoint, he received by judgment an amount substantially less than he had been offered. This was not a case in which vindication of reputation was involved. In a defamation proceeding, the importance of vindication of reputation might outweigh the circumstance that a plaintiff received by judgment less than he or she had been offered by an offer with confidentiality attached. But that is not this case. Further, the plaintiff did not assert that a judgment free of confidentiality was of importance to him; or that for some reason he had an interest in the fate of the litigation brought by other former crewmen of Melbourne such as impelled him to reject the offer because there was a condition of confidentiality.
24 It is, I think, clear that the defendant wanted everything its own way. The letter of offer shows that such was the case. If the plaintiff was to accept its offer, then the defendant required confidentiality. But in the event that the plaintiff did not recover a greater amount than had been offered, then it sought to use its letter on the question of costs. That was so although the amount recovered would necessarily be free of any requirement of confidentiality.
25 Beyond those circumstances, it seems to me very clear that the defendant attached particular significance to the question of confidentiality. It is notorious that, as at December 2004, there were a large number of claims by former crewmen of Melbourne outstanding against the defendant, such claims being for alleged PTSD (sometimes in association with other psychiatric disorders) arising out of the circumstances of the collision. It is notorious that for a number of years preceding December 2004 the defendant had been resisting such claims strenuously. Injuries had been denied and limitations defences taken. The litigation had followed a tortuous path. Very few cases had been compromised. It was very much in the defendant's overall strategic interests that any settlement which it effected should not come to the notice of other plaintiffs. That was not the less because the solicitors acting for the plaintiff were the solicitors acting for many of the other plaintiffs. The requirement that the proposed settlement of the plaintiff's claim be held confidential by the solicitors, as well as by the plaintiff, met - or was intended to meet - that problem.
26 But it does not follow, in my opinion, from the fact that the defendant sought to achieve two purposes by its offer - that is, to achieve a settlement with the plaintiff, and at the same time protect its position in connection with claims by other former Melbourne crewmen - that the plaintiff bettered the defendant's offer because he obtained a judgment unaffected by confidentiality. The defendant, in the end, did not achieve confidentiality. By the plaintiff obtained a judgment which was for a much lesser amount than he had been offered. The Court encourages compromise of claims. It would run counter to that encouragement to conclude that a plaintiff whose reputation was not in issue in the litigation could successfully argue that he had bettered an offer by obtaining judgment for a much smaller amount than that offered, albeit unaffected by a requirement of confidentiality.
27 But assume that I was wrong to conclude that the plaintiff did not better the defendant's offer. Did he, then, unreasonably refuse a reasonable offer? In my opinion, all things considered, the answer is yes.
28 First, the offer was made at a stage when the plaintiff and his advisers were ready - or nearly so - for trial. That is, the plaintiff and his advisers should have been well-equipped to assess his prospects of success and the quantum of damages.
29 Second, the offer was made sufficiently in advance of the trial to permit a considered decision to be made; and, as I said earlier, no complaint was made on behalf of the plaintiff as to the date upon which the offer was made, or the time left open for its acceptance.
30 Third, the offer was clear in its terms.
31 Fourth, it should have been evident to the plaintiff as at late 2004 that if he succeeded in showing that he had suffered from PTSD ever since the collision, and if he could connect an underlying PTSD with the major depressive episode which he suffered in 1989, and its sequelae, then his claim for damages - encompassing both economic and non-economic loss - must have led to an award well-exceeding $100,000. The plaintiff held evidence to support such a claim. But he, or at least his solicitors, must have known that such a claim - upon the lay evidence which was available, and then considering the evidentiary foundation for the expressions of medical opinion - was far from impregnable. It should not have required the wisdom of hindsight to appreciate that this was so. Moreover, the claim faced a limitation defence, the decision of the Court of Appeal in Clark v Stingel[9] was then outstanding, and it could not have been said with any confidence that the approach in Herschberg and Anor v Mula[10] would be maintained. In all, whilst this was a personal injuries claim of some complexity, it was far from being a claim where the risks could not be adequately assessed for the purposes of considering the defendant's offer.
32 Fifth, the offer did not foreshadow an application for indemnity costs in the event of the plaintiff rejecting it and then recovering a lesser amount by judgment. But, on the other hand, the letter of offer adverted to costs consequences; and the defendant only sought party and party costs.
33 Sixth, it was not submitted for the plaintiff that his non-acceptance of the offer had anything to do with the confidentiality term.
34 Seventh, the offer was not only clear, it was shown by the judgment to have been reasonable, in that there was a considerable disparity between the amount of the offer and the amount of the judgment. It was not an unreasonable offer, in the circumstances of the particular case, because it attached a condition of confidentiality.
35 In all the circumstances, I consider that the plaintiff should have his costs on a party and party basis up to date of trial - rather than only to 21 December 2004; and thereafter the defendant should have its costs on such a basis.