Xu v Thurgood & Anor

[1] On 21 November 2008 I gave judgment for the plaintiff in this matter in the sum of $74,556.39. That was less than the defendant's mandatory final offer made on 31 October 2007. The plaintiff does not oppose an order that she pay the defendant's standard costs of the proceedings on and from 1 November 2007.

1. That such an order should be confined to the defendant's costs incurred on and after 1 November 2007, and,

2. The plaintiff should recover her costs incurred up to and including 31 October 2007.

[3] The defendant argues that the second order cannot be made because an order for those costs "would not be an order for costs of 'the proceedings', which had not then commenced, and is beyond the power of the court".

[4] This was an action which was subject to the provisions of the Motor Accident Insurance Act 1994 ("the Act"). That Act establishes a regime which requires a plaintiff to undertake a series of steps before any action subject to the Act can be commenced.

[5] The last of those steps is taking part in the compulsory conference required by s 51A:

"(1) Before the claimant brings an action in a court for damages for personal injury arising out of a motor vehicle accident, there must be a conference of the parties (the compulsory conference)."

[6] At least seven days before that conference, a legally represented party must give the party a "certificate of readiness".[1] That certificate is required by s 51B(6) to state:

(a) the party is in all respects ready for the conference and the trial; and

(b) all investigative material required for the trial has been obtained (including witness statements from persons, other than expert witnesses, the party intends to call as witnesses at the trial); and

(c) medical or other expert reports have been obtained from all persons the party proposes to call as expert witnesses at the trial; and

(d) the party has fully complied with the party's obligations to give the other parties material relevant to the claim; and

(e) the party's lawyer has given the party a statement (a costs statement) containing the information required under subsection (7)."

[7] In an action which is not subject to the Act or any other statute with compulsory pre-trial requirements of a similar nature the costs of, for example, obtaining statements of witnesses, would be part of the costs of and incidental to the proceedings, even though they were incurred prior to the action commencing.

[8] This is consistent with the definition of the term "costs of the proceeding" to be found in r 679 of the UCPR:

"costs of the proceeding mean costs of all the issues in the proceeding and includes -

(a) costs ordered to be costs of the proceeding; and

(b) costs of complying with the necessary steps before starting the proceeding; and

(c) costs incurred before or after the start of the proceeding for successful or unsuccessful negotiations for settlement of the dispute."

[9] The defendants argue that the defendants are not limited in the recovery of their costs to those incurred only after 31 October 2007. There is, though, no reason advanced which takes this case away from the application of the usual principles which would result in an order that the defendants are entitled to their costs incurred after the mandatory offer was made. Section 51C(10), in requiring the court to have regard to the mandatory final offers in making a decision about costs, does not dictate any particular result.

[10] The discretion to be exercised subject to s 51C(10) has been considered in a number of cases, including Lawes v Nominal Defendant,[2] Reardon-Smith v Torres-Farr & Anor[3] and Monement v Faux & Anor.[4] The consideration of the principles in those cases leads me to the view that in the absence of any contrary consideration the appropriate order to make in this case is that the defendants pay the plaintiff's costs of the proceeding up to 31 October 2007 and that the plaintiff pay the defendants' costs of the proceeding incurred after 1 November 2007.

[11] The defendants seek a stay of execution of judgment. The power to stay the whole or part of a judgment is available under a number of the provisions of the UCPR including r 658, r 660 and r 560.

[12] Mr Justice Helman, in Young v Bayliss & Anor,[5] when faced with a similar situation made orders which resulted in the setting off of statutory and other payments and ordered a payment into court of the relevant sum.

[13] In this case, there is evidence that the second defendant's standard basis costs incurred between the end of the compulsory conference and judgment exceeds the amount of the judgment.

[14] The plaintiff argues that such a sum cannot be regarded as reasonable given the requirements for preparation before a compulsory conference contained in the Act. That may be correct, but that is a matter about which I only have evidence from Mr Jensen, the second defendant's solicitor, before me. Such a matter is more appropriately determined upon assessment rather than by a determination made by me on limited evidence.

[15] The plaintiff does not oppose a partial stay of the judgment but in these circumstances it appears to me that, provided that assessment proceeds expeditiously, the appropriate order is that judgment be stayed until the assessment is completed.

[16] On the assumption that the second defendant will provide a suitable undertaking with respect to proceeding expeditiously I will make the following orders:

1. The second defendant is to pay all relevant statutory refunds and charges.

2. The second defendant pay an amount ("the balance sum") equal to the difference between

3. The amount of the assessed costs of the defendants be set-off against the balance sum.

4. There be judgment on the record for the plaintiff or the second defendant as appropriate in the amount resulting from such set-off.

5. The balance sum be paid out with accretions if any:

(i) to the second defendant in payment of the assessed costs,

(ii) the balance to the party entitled to it pursuant to the operation of the set-off referred to above.

[2] [2007] QSC 103

[3] [2007] QSC 8

[4] [2005] QSC 342

[5] [2005] QSC 152