Denis George Simonfi v Janette McLaren Fimmel & Nicola Dowden [2000] ACTSC 66 (11 August 2000)

Last Updated: 17 October 2000

Denis George Simonfi v Janette McLaren Fimmel & Nicola Dowden [2000] ACTSC 66 (11 August 2000)

CATCHWORDS

PRACTICE AND PROCEDURE - Costs - Calderbank offer - Single offer on behalf of defendants in separate actions - Whether offer effective.

Jurisdiction of Courts (Cross Vesting) Act (1987).

Calderbank v Calderbank [1975] 3 WLR 586

Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248

Findlay v Railway Executive [1950] 2 All E R 969

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

Simonfi v Fimmel & Simonfi v Dowden & Anor [2000] ACTSC 54

Smallacombe v Lockyer Investment Co Pty Ltd (1993) 114 ALR 567

Walker and another v Turpin and others [1993] 4 All E R 865

Civil Procedure A.C.T. (Butterworths)

No. SC 209 of 1992; No. SC 528 of 1998

Coram: Master T. Connolly

Supreme Court of the ACT

Date: 11 August 2000

IN THE SUPREME COURT OF THE )

) No. SC 209 of 1992

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: DENIS GEORGE SIMONFI

Plaintiff

AND: JANETTE McLAREN FIMMEL

Defendant

ORDER

Coram: Master T. Connolly

Date: 11 August 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The defendants pay the plaintiff's costs up to 27 August 1999.

2. The plaintiffs pay the defendant's costs thereafter.

3. Judgment in this matter is not to be executed until the costs orders made herein are given effect to.

IN THE SUPREME COURT OF THE )

) No. SC 528 of 1998

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: DENIS GEORGE SIMONFI

Plaintiff

AND: NICOLA DOWDEN

First Defendant

AND: SUNCORP INSURANCE &

FINANCE

Second Defendant

ORDER

Coram: Master T. Connolly

Date: 11 August 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The defendants pay the plaintiff's costs up to 27 August 1999.

2. The plaintiffs pay the defendant's costs thereafter.

3. Judgment in this matter is not to be executed until the costs orders made herein are given effect to.

1. These two actions were claims for personal injuries arising from two motor vehicle accidents, in which liability was not in issue. Action SC209 of 1992 related to an accident which occurred in 1987 in Canberra in which the defendant was Fimmel, and action SC528 of 1998 related to an accident which occurred in 1994 in Queensland in which the defendants were Dowden and Suncorp Insurance. Proceedings in the Dowden matter were originally brought in the District Court of Queensland, but were transferred to this Court pursuant to the Jurisdiction of Courts (Cross Vesting) Act (1987). The matters were heard together over seven days from November 1999 to June 2000. The claims were particularised as very substantial claims in respect of past and future economic loss for what was claimed to be major spinal difficulties and major psychiatric difficulties. In my judgment Simonfi V Fimmel & Simonfi v Dowden & Anor [2000] ACTSC 54 of 7 July 2000 I found that the plaintiff sustained soft tissue injuries only in both accidents, and awarded the sum of $31,630 in the matter of Fimmel and $46,161.23 in the matter of Dowden. I reserved costs for this application.

2. Counsel for the defendants tendered an affidavit from Mr Garnett, a Partner in the firm of Phillips Fox, who said that on 20 January 1995 the sum of $30,000 was paid into court in the matter of Fimmel. It was submitted that as the final sum awarded in this matter, being $31,630, was in effect less than the real dollar value of $30,000 paid in and available to the plaintiff in 1995, I should consider that the plaintiff in this matter received less than the sum paid into court and should award costs to the defendants from the date of payment in. No authority was cited in support of the proposition that, in applying the principle that, as it is put in Civil Procedure A.C.T. (Butterworths) at [8635.10]:

"If the plaintiff refuses so to accept the amount and proceeds to a trial, but only recovers judgment for less than the amount paid into court, then the plaintiff may be liable to pay the defendant's costs from the time of the payment into court"

3. a court is entitled to have regard to inflationary movements to adjust the dollar value of the payment into court in order to compare it to the dollar value of the sum awarded. In this case the payment in was $30,000, and the judgment sum was $31,630, and it seems to me, in the absence of authority or statutory warrant entitling me to have regard to inflation and interest foregone, that the plaintiff has in fact recovered a sum greater than the amount paid into court, and I therefore reject this submission.

4. Mr Garnett then referred in his affidavit to a letter of 27 August 1999 marked "without prejudice save as to costs" which was written by him to the solicitor for the plaintiff in both matters, and which said:

"In these matters we are instructed to offer your client the sum of $350,000 plus costs in settlement of his claims. This offer is a joint offer.....made for both actions......We are further instructed to advise you that this offer will remain available for acceptance by your client until 5 pm on 10 September 1999 and is then withdrawn. In the event that your client does not accept the offer and the matters proceed to hearing and your client obtains judgments totalling $350,000 or less, the defendants in both actions will apply for orders that your client pay both his own costs and those of the defendants from the date of this letter."

5. The solicitor for the plaintiff requested further time to respond, and the offer was extended on two occasions until 1 October 1999, but was not taken up. The trial commenced on 15 November 1999.

6. Counsel for the defendants submitted that this offer was in the form regularly described as a "Calderbank Offer" from the decision of Calderbank v Calderbank [1975] 3 WLR 586, the use of which to attempt to settle civil litigation has been endorsed and encouraged by the Full Court of this Court in Quirk v Bawden [1992] ACTSC 118; (1992) 112 ACTR 1, and that it should follow that, the plaintiff having recovered the total sum of $77,791.23 against the Calderbank offer of $350,000, the plaintiff should only recover his costs up to the date of the offer, and that the plaintiff should pay the defendants costs, which the defendant says should be on an indemnity basis, from that date.

7. Counsel for the plaintiff submitted that the letter should not be regarded as a Calderbank offer, because it was on its face a joint offer which did not apportion the offer between the two defendants. Counsel did not point to any authority to say that a Calderbank offer must be from only one defendant, and conversely counsel for the defendants did not point me to any authority which endorses the form of the offer in this case. It seems to me that, in the absence of authority, I must decide the point from principle, and on this basis I see no reason why the offer, which from the exchange of letters between the solicitor acting at that point for the purposes of the offer for both defendants and the solicitor for the plaintiff was clearly understood to be in the sum of $350,000 plus costs for both matters, should not be seen as a genuine offer to settle the litigation and to give rise to the consequences that follow from the rejection of a Calderbank offer.

8. The practice book states at [15.801.5]that:

"offers may be made openly or "without prejudice save as to costs" and non acceptance of such an offer may deprive a party of some or all of the costs :Calderbank v Calderbank, Quirk v Bawden."

9. The policy behind this rule was explained clearly by Higgins J in Quirk v Bawden where His Honour 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. Accordingly, I believe that this court should apply an appropriate costs sanction where a party has declined to accept or to make, as the case may be, a reasonable offer of settlement."

10. I see nothing in the authorities, or in the principles which underlie those decisions, that would require me to hold that an otherwise clear offer to settle two claims involving the same plaintiff for a single gross sum is a nullity. I note that in Walker and another v Turpin and others [1993] 4 All E R 865 the English Court of Appeal held that a single and unapportioned payment into court to seek to resolve multiple actions involving multiple plaintiffs and multiple defendants was on its face valid, although the Court indicated that it would have entertained an application for a direction that the defendants apportion the offer between the plaintiffs if such a direction was sought. In the present case the exchange of letters annexed to Mr Garnett's affidavit shows that no objection was taken to the global nature of the offer, and no application was made for an apportionment. It may well be that there may be circumstances where a global Calderbank offer, particularly if there were multiple plaintiffs, might be unclear and where such directions would be appropriate, provided of course that the matter did not come before the trial judge. In all of the circumstances of the present case, however, I am satisfied that the offer was clearly made and understood, and the plaintiff, by not taking it up and eventually recovering a sum greatly lower than that offered, should not be able to escape the consequences by now objecting to the global nature of the offer.

11. The power to award costs is discretionary (O65 r1), although of course this discretion must be exercised judicially. It seems to me that in exercising this discretion I should look at all of the circumstances of the case, and I should not adopt a technical rule, not compelled upon me by authority, that would prohibit the making of a joint Calderbank offer.

12. Calderbank type offers have been disregarded where the offer was "all up" in the sense of being inclusive of costs, as in such circumstances there may be genuine doubt as to the worth of the offer. They have also been disregarded where they were not open for a reasonable time (per Spender J Smallacombe v Lockyer Investment Co Pty Ltd (1993) 114 ALR 567). In this matter the offer was clear in that it was for the sum of $350,000 plus costs, and it was open for a period of time which, while originally only 14 days, was later extended to some 25 days. I am satisfied that this was a reasonable time.

13. I am satisfied that the defendants made a reasonable offer to settle that was not taken up by the plaintiff, who elected to take his chances at trial. I found his claim to be grossly exaggerated in respect of his neck and back claims, and not made out in respect of his claimed psychiatric injuries, and made a number of findings adverse to his credit. The sum awarded was significantly less than the amount of the offer. In such cases, the normal rule is that the plaintiff recovers their costs, as a successful party, up to the date of the offer, but that the defendant recovers their costs after the offer, as by making a reasonable offer that has been rejected and then being forced on to trial, the defendant should be regarded for the purposes of costs as having been the successful party. As Lord Denning said in Findlay v Railway Executive [1950] 2 All E R 969 at 972:

"The hardship to the plaintiff in the instant case has to be weighed against the disadvantages which would ensure if plaintiff's generally who have been offered reasonable compensation were allowed to go to trial and run up costs with impunity. The public good is better secured by allowing plaintiffs to go on to trial at their own risk generally as to costs."

14. Counsel for the defendants submitted that the defendant's costs from 27 August 1999, being the date of the offer, should be on an indemnity basis. This is not the inevitable, or even the normal consequence when an offer is made in a personal injuries case and the plaintiff rejects the offer and recovers a lower sum. In the offer itself the defendants put the plaintiff on notice that:

"In the event that your client does not accept the offer and the matters proceed to hearing and your client obtains judgments totalling $350,000 or less, the defendants in both actions will apply for orders that your client pay both his own costs and those of the defendants from the date of this letter."

15. but I note that this is not put on the basis that the costs will be sought on an indemnity basis, and in the absence of this I take it to be a warning that costs will be sought on the ordinary basis.

16. In personal injury cases, there is of course a degree of uncertainty as to outcome. As Higgins J said in Quirk v Bawden at 8:

"Which of these outcomes will, ultimately, be reflected in the final judgment is a matter upon which the parties might reasonably differ. Indemnity costs should not be used to inhibit either party from litigating an issue reasonably in contention between them. However, neither should parties be permitted to persist in an unrealistic assessment of the chance that the issue or issues in dispute will be determined favourably to them when that view is able to be perceived as unrealistic."

17. In Quirk a plaintiff had made an offer to settle a claim for a sum of $350,000 plus costs, which was not agreed to by the defendant, so the matter went to trial and the plaintiff recovered a greater sum. Master Hogan awarded the plaintiff indemnity costs, and this finding was approved on appeal. It must be taken into account that, where the offer is made by the plaintiff and rejected, and the plaintiff succeeds in obtaining a greater verdict, indemnity costs is in effect the only sanction, as the plaintiff will recover party party costs in any event. Where costs sanctions are endorsed as a means of encouraging parties to undertake realistic settlement activities, the award of indemnity costs to a plaintiff in these circumstances is appropriate.

18. Where the offer is the other way, however, the defendant will obtain a significant benefit from the ordinary form of the order, which is that the defendant pays the plaintiff's costs only to the date of the offer, and the defendant has their own costs, on the ordinary basis, paid by the plaintiff thereafter. I am not satisfied, in all of the circumstances of this case, and taking into account what Sheppard J said in Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 that this is a case where, in my discretion, I should award costs on an indemnity basis to the successful defendant. The defendant, it seems to me, is appropriately rewarded, and the plaintiff appropriately sanctioned, by an order that the defendants have their costs from the date of the offer on the ordinary basis.

19. Counsel for the plaintiff made submissions that the defendants acted unreasonably to prolong the matter and generate additional expenses by insisting that medical witnesses in the plaintiff's case attend in person, and for this purpose the Court, in order to save costs and at the parties request, sat in Brisbane in April 2000. As the law stood at that time there was no power for the court to order that evidence be taken by telephone or video link, and it seems to me that the defendants, facing a claim particularised at well over a million dollars, acted reasonably in requiring the experts whose reports were used to advance such a claim to be available for cross examination. I might add, however, that where the court now has power to order that evidence be taken by video or audio link (Evidence (Miscellaneous Provisions) Act 1991 Part 3 inserted by Justice and Community Safety Legislation Amendment Act 2000 (No. 3), costs issues might arise where one party insists that experts appear in person and at the end of the day the court is of the view that the evidence could just as easily have been taken by telephone.

20. Counsel for the defendants requested an order that the judgments in the primary matters not be executed until the issues as to costs have been taxed and resolved, and this was not objected to, and I will so order.

21. In both matters, I order that the defendant is to pay the plaintiffs costs to 27 August 1999, and the plaintiff is to pay the defendants costs thereafter. Judgment in matters 209 of 1992 and 528 of 1998, delivered in Simonfi v Fimmel & Simonfi v Dowden &

22.

23.

24. Anor [2000] ACTSC 54 on 7 July 2000 is not to be executed until the costs orders made herein are given effect to.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master T. Connolly.

Associate:

Date: 11 August 2000

Counsel for the Plaintiff: Mr Parker with Mr Mildren

Instructing solicitors: Barker Gosling

Counsel for the Defendant: Mr Grieve QC

Instructing solicitors: Phillips Fox

Date of hearing: 3 August 2000

Date of judgment: 11 August 2000