I respectfully agree with and adopt Redlich J's analysis and conclusion. In any event, the outcome in this particular case would be the same, even if (contrary to the above) there were such a prima facie presumption.
12 The final general observation which I wish to make is that courts have warned of the dangers of judging the reasonableness of a settlement offer through the prism of hindsight. As Redlich J observed in Richfield Investments, there is a real risk that a court, upon making findings concerning contested questions of fact, may too readily embrace a submission that it was always inevitable that the proceeding would fail.[9] As Hamilton J said in Grynberg v Muller "These submissions focus the bright light of hindsight. Hindsight sings a siren song of which judges must be cautious."[10]
13 The question for me to consider is whether, taking into account all relevant considerations, including the facts known to the plaintiff offeree at the time of the offer, she unreasonably ignored a reasonable offer of compromise.
The circumstances of this case
14 At trial, the plaintiff asserted that her total damages claim was worth well in excess of $400,000. On the other hand, the figures put forward by the defendant at trial resulted in a nil or negative sum, if one deducted from any damages claim the amount of weekly payments received by Ms Stipanov. Because of my findings as to causation, it was not necessary for me to make any assessment of Ms Stipanov's damages. Even if I had made such an assessment, I would have to be careful to avoid judging the reasonableness of the offer by reference to that later assessment. That is because the reasonableness of the offer of compromise has to be ascertained on the facts known at the time of the making of the offer.
15 This proceeding was originally commenced in the County Court in March 2004. After a date had been fixed for trial in that Court, the plaintiff applied for a transfer to this Court under the Courts (Case Transfer) Act 1991. The defendant was not prepared to consent to the County Court having jurisdiction in excess of $200,000, but agreed to the transfer to this Court. An order for transfer was made in early September 2005. Although it does not appear that any particulars of loss and damage had been delivered, it is reasonable to assume that at that time the plaintiff's claim was believed to be for an amount in excess of $200,000.
16 At the time when the first offer of compromise was made in late September 2005, the pleadings had closed and discovery and interrogation had been completed.
17 Two matters which ultimately played a large role in my causation findings were the April 1998 letter of advice from Maurice Blackburn & Co ("MBC") to the plaintiff, and my adverse findings about the plaintiff and her husband as witnesses.
18 At the time of the first offer, the MBC letter had been listed in the plaintiff's discovery. However, it seems that its significance in terms of causation was not really appreciated by either side until the trial. Certainly, it was not the subject of any pleading by the defendant until the amended defence of 12 May 2006, when he raised it for the first time.
19 Although the original defence denied that the plaintiff had suffered any loss, arguments about causation did not take on any great significance until the trial. From the way in which the case was prepared for trial and presented before me, I conclude that at all times up until well into the trial, both sides perceived that the principle areas of dispute were whether the defendant had been negligent and the various quantum issues. At the time of the offer, it would have been reasonable for those advising the plaintiff to have concluded that the plaintiff had strong prospects of establishing negligence, and that damages in excess of $35,000 might be recovered.
20 There is a particular danger in considering issues of witness credibility through the prism of hindsight. In my earlier reasons for decision, I explained why I could not accept the reliability or accuracy of much of what Ms Stipanov said, and why I formed such an adverse view as to Mr McBain's credibility. But these conclusions were only arrived at after hearing evidence over several weeks. It can be very difficult to predict how a particular witness will perform under the pressures of giving evidence in court, or may be perceived by an unknown judge.
21 Having regard to all these matters, I do not believe that the plaintiff acted unreasonably in rejecting the first offer of compromise. It follows that the plaintiff should pay the defendant's costs on a party/party basis.