Mann v Brooke [2000] ACTSC 53 (7 July 2000)

Last Updated: 19 October 2004

Stuart Mann v Deborah Brooke [2000] ACTSC 53 (7 July 2000)

CATCHWORDS

PRACTICE AND PROCEDURE - Defendants ordered to pay plaintiff's costs - Seek information and likely quantum - Duty of parties to negotiate costs.

Calderbank v Calderbank [1975] 3 All E R 333

Quirke v Bawden [1992] ACTSC 118; (1992) 112 ACTR 1

No. SC 586 of 1999

Master T. Connolly

Supreme Court of the ACT

Date: 7 July 2000

IN THE SUPREME COURT OF THE )

) No. SC 586 of 1999

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: STUART MANN

Plaintiff

AND: DEBORAH BROOKE

Defendant

ORDER

Coram: Master T. Connolly

Date: 7 July 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff is to pay the defendant's costs in relation to the notice of motion of 16 June 2000.

1. This matter came before me by way of a notice of motion of 16 June 2000 in which the defendant applicant sought directions that the plaintiff provide particulars of claimed disbursements. By the time the matter came on for hearing on 30 June 2000 the plaintiff had submitted a bill of costs in taxable form including a list of disbursements, and the matter proceeded by way of an argument over the costs of the motion. The matter raises an issue as to the appropriate conduct of parties in personal injuries litigation after a matter has settled, and in particular the extent of any obligation to cooperate in order to resolve costs awards and reduce the need for further costs to be incurred in bringing in bills of costs in taxable form.

2. This matter commenced in the Magistrates Court by Ordinary Claim issued on 25 March 1997 in which the plaintiff sued the defendant for personal injuries arising from a motor vehicle accident on 27 December 1995. By notice of motion of 2 August 1999 the plaintiff sought removal of the matter to this Court, and I made that order on 6 August 1999.

3. There were negotiations between the parties, as is encouraged by the rules and practices of this Court, and in May 2000 agreement was reached that there should be judgment for the plaintiff in the sum of $83,000 plus costs. Terms of settlement to this effect were signed by the plaintiff on 18 May and the defendant on 22 May, and the consent judgment was formally taken out on 23 May 2000.

4. When the defendants returned to the plaintiff the signed terms of settlement on 22 May they also requested that the plaintiff solicitors provide them with "an assessment of the plaintiff's party/party professional costs and particulars of claimed disbursements" within seven days. No response was received, and on 29 May the defendant's solicitors again wrote to the plaintiff's solicitors requesting information about the disbursements within a further seven days, and stated that if the information was not provided "we will apply to the court for coercive orders".

5. On 31 May the plaintiff's solicitors responded, and stated that,

"We do not believe that we are under any obligation to provide the particulars you have requested at this particular time. When we have quantified our client's party/party costs, we shall advise you of the details of those costs."

6. The letter went on to state that the plaintiff's solicitors did not operate on a time costing basis, but instead relies on the relevant Scale of Costs in calculating its costs and that accordingly

"until we are able to properly quantify our costs pursuant to the Scale of Costs (either by assessment, or by the preparation of a bill of costs) we cannot provide you with a reasonable estimate of what those costs are, as we simply do not know."

7. On 27 June 2000 the plaintiff's solicitors served on the defendant's solicitors the plaintiff's bill of costs in taxable form for a total of $23,754.91 made up of $17,649.51 for professional costs and $6,105.40 for disbursements. Included in the amount for professional costs were sums in the total of $2,116.90 relating to the drawing up and serving of the bill of costs.

8. Counsel for the defendant argued that the defendant was acting reasonably and in the interests of reducing the overall cost of litigation in seeking to obtain from the plaintiff an early indication, if such could be given, of the plaintiff's total costs, and in particular an early indication of the actual known disbursements, which was the subject of the formal application to this Court. Mr Stretton argued that, in order to comply with the provisions of Order 65 Rule 58 a party required to pay costs as taxed or agreed must make a reasonable offer, and that knowledge of disbursements will, to an experienced litigator, provide a useful indicator of the overall level of likely party/party costs. In support of the application he filed an affidavit by Mr Galbraith, a partner in the defendants solicitors firm, and a practitioner of eighteen years standing who has acted predominantly for defendants in personal injuries actions during that time. Mr Galbraith said in his affidavit.

"In that eighteen years I have settled, or been involved in the settlement of, many hundreds of such claims for damages, the bulk of which settled on the basis that the defendant pay the costs of the plaintiff. From my eighteen years experience I am able to say that the invariable practice in the ACT is that when such actions settle with costs to be paid by the defendant, the solicitor for the plaintiff will voluntarily and within a short period following such settlement, provide the solicitor for the defendant with a monetary figure at which he assesses party/party professional costs and an itemised list of disbursements (usually accompanied by copies of accounts relating to those disbursements)."

Mr Galbraith set out how such information assists the defendant's solicitor in forming an informed view as to a likely quantum of costs in order to engage in meaningful negotiations to settle the question of costs. He said:

"If a defendant's solicitor is impeded by lack of information in making an accurate assessment of costs, he is not realistically able to advise the defendant on what, if any, sum should be tendered in relation to the order for costs. In the absence of any tender, the plaintiff can incur substantial costs in preparing a bill of costs which will have to be paid by the defendant. The preparation of such a bill and the time of court officers in processing and dealing with it may be entirely unnecessary if the defendant has been able to properly assess costs and make an appropriate offer."

9. The overall cost of litigation and the access to justice are matters that are properly the concern of the courts. In this jurisdiction the Rules of the Supreme Court have undergone substantial revision in recent years, and that revision continues, with a view to making court procedures more efficient and saving costs to litigants. The court has in addition adopted the rule in Calderbank v Calderbank [1975] 3 All E R 333 to encourage reasonable offers of settlement of claims in order to avoid unnecessary expense in litigation (Quirke v Bawden [1992] ACTSC 118; (1992) 112 ACTR 1). In Quirke v Baldwin Higgins J said (at 6)

"There is much to be said for encouraging, at an early stage in the litigation, the serious consideration of offers of settlement. The savings to the parties and to the community from such a process, if successful, is well demonstrated by the Evaluation Report of the recent `settlements week" in New South Wales."

10. Since His Honour's remarks there has been considerable attention focussed on legal costs by studies such as the Australian Law Reform Commissions Report No 89 "Managing Justice: A review of the federal civil justice system".

11. I note that His Honour referred to the savings both to the individual parties and to the community more generally. In personal injuries litigation most matters settle by negotiation with a judgment for the plaintiff and costs. The cost of such judgments is met in this jurisdiction from insurers, under a scheme of compulsory insurance whereby it is a condition of registration of a motor vehicle that the owner take out insurance in respect of personal injuries sustained by third parties. The overall cost of litigation is thus directly a cost passed on to members of the community by way of the cost of operating a motor vehicle.

12. The defendant applicant in this matter argues that it is reasonable for a defendant who has consented to a judgment sum plus costs to require that the plaintiff's solicitor provide them with information at an early stage in order to allow meaningful negotiations to be entered into in respect of the question of costs. The plaintiff argues that there is no such obligation on the plaintiff's solicitor to cooperate, and indeed argued that the duty of the plaintiff's solicitor is to obtain the maximum amount of costs for the client.

13. If this be correct, then all successful plaintiffs in personal injury claims could refuse to cooperate with defendants in the negotiation of costs awards, and simply present, as this plaintiff has done, a bill of costs in taxable form. The preparation of such a bill is itself an expensive process- in the instant case, of $17,649.51 in professional costs some $2,116.90 represents the cost, after the settlement had been reached, in drawing up and serving the formal bill of costs, which represents a premium of about 13.5% on the costs generated to the point of settlement. While there will obviously be a cost reasonably incurred in negotiating any settlement in costs, it seems to me that it is not appropriate or in the public interest to sanction a process whereby an attempt to negotiate a settlement of costs is rebuffed and a formal bill of costs generated, at considerable additional expense.

14. I am satisfied that the request by the defendants solicitors to the plaintiff's solicitors in this case was a reasonable one, made in accordance with what I am satisfied is a widespread practice in this jurisdiction, which this court should strongly encourage, for parties after a settlement has been negotiated to undertake meaningful negotiations to resolve the issue of costs without the need to generate additional costly legal work on behalf of the plaintiff, and eventually to be paid for by the defendant, in drawing up and serving a formal bill of costs. In order for those meaningful negotiations to occur it is necessary for the plaintiff to give the defendant an indication of their costs. Where this can be done by way of an early estimate of party/party costs, that should be done. In any event, a request for details of disbursements is a reasonable request easily complied with, and would, as Mr Galbraith explained in his affidavit, have allowed a meaningful estimate to be made by the defendant of those costs without the need to for the plaintiff to generate, at considerable expense, a formal bill of costs. I would have granted the directions sought in the notice of motion, but in the event the details were provided, in the form of the formal bill of costs, some days before the hearing of the motion. I am satisfied that the defendants acted perfectly reasonably in all of the circumstances, and indeed were embarking on a course designed to minimise the overall costs in this matter, to the benefit of all. The defendants are entitled to their costs on the notice of motion of 16 June 2000.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice

Associate:

Date: 7 July 2000

Counsel for the Plaintiff: Mr Chapman

Solicitor for the Plaintiff: Maliganis Edwards Johnson

Counsel for the Defendant: Mr Stretton

Solicitor for the Defendant: Phillips Fox

Date of hearing: 30 June 2000

Date of judgment: 7 July 2000