Bosk v Burgess & QBE Insurance (Australia) Limited [2022] QSC 79 (2022) 100 MVR 52

SUPREME COURT OF QUEENSLAND CITATION: Bosk v Burgess & QBE Insurance (Australia) Limited [2022] QSC 79 PARTIES: VINCENT ENZO BOSK (plaintiff) v NOLA BARBARA BURGESS (first defendant) AND QBE INSURANCE (AUSTRALIA) LIMITED (ACN 003 191 035) (second defendant) FILE NO/S: SC No 5036 of 2017 DIVISION: Trial Division PROCEEDING: Application of the Slip Rule Application for Costs ORIGINATING COURT: Supreme Court of Queensland at Brisbane DELIVERED ON: 9 May 2022 DELIVERED AT: Brisbane HEARING DATE: Heard on the papers JUDGES: Wilson J ORDER: I order that: (a) the judgment be amended in accordance with these reasons; (b) the order made in the judgment be corrected to read as follows: “I give judgment for the plaintiff against the second defendant in the sum of $576,506.58 and €932,617.46.”; (c) the second defendant pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer (7 December 2017); (d) the plaintiff pay the second defendant’s costs, calculated on the standard basis, after the day of service of the offer (7 December 2017); and -- 1 of 25 -- 2 (e) the plaintiff’s Senior and Junior counsel be certified for. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – CORRECTION UNDER SLIP RULE – GENERAL PRINCIPLES – where the plaintiff obtained judgment in personal injury proceedings – where the plaintiff identified five errors in the calculation of the award – where the defendant accepted that four errors were properly described as accidental slips or omissions – whether the contested error resulted from an accidental slip or omission – whether the judgment should be corrected PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OFFER OF COMPROMISE OR OFFER TO SETTLE OR CONSENT TO JUDGMENT PURSUANT TO RULES – GENERALLY – where the second defendant made two formal offers to settle in accordance with Chapter 9, Part 5 of the Uniform Civil Procedure Rules 1999 – where the offers were expressed entirely in Australian dollars – where the judgment was expressed in both Australian dollars and Euro – where the plaintiff alleged the second defendant’s offer would have been conditional on the plaintiff agreeing to “extraneous terms” – where the offer made first in time was made prior to a number of pieces of evidence being produced – whether either of the offers was more favourable to the plaintiff than judgment – whether r 361 of the Uniform Civil Procedure Rules 1999 is engaged - whether the plaintiff should pay the second defendant’s standard costs incurred after the offer was made PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTICULAR ITEMS – COUNSEL FEES – SENIOR OR QUEEN’S COUNSEL – where the plaintiff engaged senior and junior counsel – where the defendant submits the case did not warrant two counsel – where liability was admitted – where the case involved evidence from overseas - whether the case warranted two counsel on behalf of the plaintiff COUNSEL: M Grant-Taylor QC and G J Barr for the plaintiff R C Morton for the second defendant SOLICITORS: Maurice Blackburn Lawyers for the plaintiff McInnes Wilson Lawyers for the second defendant -- 2 of 25 -- Introduction [1] The plaintiff in this matter is a 31-year-old German national who was injured while holidaying in Australia. The injury occurred on 26 May 2014 at Noosa Heads when the first defendant lost control of her car at a roundabout, drove onto the footpath and collided with him. The plaintiff sustained severe injuries, the most serious of which resulted in a below-knee amputation of his left leg. The second defendant is the first defendant’s insurer. [2] The plaintiff claimed damages for personal injury against the second defendant. Liability was admitted, as were a number of heads of damages. The issues which remained for determination at hearing were the quantum of the following heads of damages: (a) past economic loss; (b) impairment to future earning capacity; (c) the future costs of some home aides and equipment; and (d) future prosthetic costs. [3] I gave judgment for the plaintiff in the amount of $573,616.13 and €871,373.04 (“the judgment”).1 [4] I note that the court has the power to express an award for damages in a foreign currency, although it should give judgment in the currency which best expresses the plaintiff’s loss.2 My view was that the plaintiff’s past and future economic loss and future prosthetic costs the plaintiff is likely to incur were best expressed in Euros, and the future costs of home aids and equipment were best expressed in Australian dollars. [5] This judgment concerns two matters: (a) whether the slip rule should be applied to correct five errors identified by the plaintiff which result from accidental slips or omissions; and (b) the resolution of the question of costs. Application of the Slip Rule [6] The total damages awarded were set out in the schedule at paragraph [163] of the judgment. 1 Bosk v Burgess & Anor [2021] QSC 338, [163] (“the judgment” hereafter). 2 Yamaguchi v Phipps & Anor [2016] QSC 151 at [204]. -- 3 of 25 -- 4 HEAD OF DAMAGES AUD ($) EUROS (€) Pain and suffering and loss of amenities of life $167,760.00 Agreed Past economic loss €74,683.48 Interest on past economic loss €1,138.59 Future economic loss €181,931.84 Pension loss €24,378.46 Barmenia refund $262,082.90 Agreed Wilson v McLeay $8,572.95 Agreed Interest thereon3 $493.85 Agreed Past Prosthetic Cost $5,169.36 Agreed Interest on past prosthetic costs4 $294.23 Agreed Past expenditure $24,500.00 Agreed Interest on past expenditure5 $1,411.34 Agreed Future expenditure $33,331.50 Agreed Future costs of replacing and maintaining everyday, waterproof, cosmetic and sports protheses €529,240.67 Future prosthetics costs due to technological advancements €40,000.00 Future prosthetics costs due to above-knee amputation €20,000.00 Past care $40,000.00 Agreed Future care $80,000.00 Agreed Subtotal $623,616.13 €871,373.04 Less advance on damages ($50,000.00) Agreed TOTAL $573,616.13 €871,373.04 [7] The plaintiff submits that the judgment contains five errors resulting from accidental slips or omissions that the court ought to correct pursuant to r 388 of the Uniform Civil Procedure Rules 1999 (Qld) (“the UCPR”). These errors relate to: 3 $8,572.95 x 0.00754 x 7.64. 4 $5,169.36 x 0.00754 x 7.64. 5 24,500.00 x 0.00754 x 7.64. -- 4 of 25 -- 5 (a) the award for interest on past economic loss (“error 1”); (b) the omission of the award for the perching stool, automatic one-touch can, jar and bottle openers and food processor in the calculation of total damages (“error 2”); (c) the omission of the cost of replacement cosmetic and sport shafts from the calculation of the award for future prosthetic costs (“error 3”); (d) the use of the incorrect multipliers provided in the second defendant’s submissions which do not extend to the plaintiff’s agreed life expectancy (“error 4”); and (e) the application of an incorrect multiplier for discount rate based on the plaintiff’s agreed life expectancy to calculate the maintenance and repair costs of future prosthetics (“error 5”). [8] The second defendant accepts errors one, two, four and five are properly described as resulting from accidental slips or omissions and should be corrected. In relation to the third error, the second defendant states that it was not clear that it was an accidental slip or omission. Relevant legal principles [9] Rule 388 of the UCPR provides: “388 Mistakes in orders or certificates (1) This rule applies if - (a) there is a clerical mistake in an order or certificate of the court or an error in a record of an order or a certificate of the court; and (b) the mistake or error resulted from an accidental slip or omission. (2) The court, on application by a party or on its own initiative, may at any time correct the mistake or error. (3) The other rules in this part do not apply to a correction made under this rule.” Consideration Error 1 [10] The first error the plaintiff notes is in relation to the award for interest on past economic loss, which appears at paragraph [34] of the judgment. -- 5 of 25 -- 6 [11] I awarded €1,138.59 for interest on past economic loss.6 This was on the basis of applying the agreed interest rate of 0.745 per cent for the 7.64 years between the date of injury and judgment to the award for past economic loss, which was €74,683.48.7 [12] The plaintiff submits that this is an error, as the calculation stated produces a different result. [13] The plaintiff also submits that the amount of $50,000.00 which was paid by the second defendant by way of an advance on damages must be brought to account in calculating the interest on any past economic loss order.8 This amount, when converted to Euros using the exchange rate current at the date of judgment (AUD 1.00 = €0.6306), is €31,530.00. [14] The second defendant accepts that this error is properly described as resulting from an accidental slip or omission and should be corrected. [15] I accept the parties’ submissions. [16] The award for interest on past economic loss should therefore be calculated as follows: = (€74,683.48 - €31,530.00) x 0.00745 x 7.64 = €43,153.48 x 0.00745 x 7.64 = €2,456.21 [17] The award for interest on past economic loss should be €2,456.21 instead of €1,138.59. The total award for damages should be adjusted accordingly. Error 2 [18] The second error the plaintiff identifies relates to the omission from the calculation of total damages of the award of $2,890.45 for the perching stool, automatic one- touch can, jar and bottle openers and food processer made at [113] of the judgment. [19] The plaintiff submits that this amount should be added to the total damages. The second defendant accepts that this error is properly described as resulting from an accidental slip or omission and should be corrected. [20] I agree, and the omitted amount should be added to the calculation of the total award for damages. 6 Bosk v Burgess & Anor [2021] QSC 338, [34]. 7 Bosk v Burgess & Anor [2021] QSC 338, [33]-[34]. 8 I note that this was raised in oral submissions by counsel for the plaintiff at T2-06.24-39. -- 6 of 25 -- 7 Error 3 [21] The third error the plaintiff flags is the omission of the costs of replacement cosmetic and sport shafts from the calculation of the award for future prosthetic costs at paragraph [142]. [22] Paragraph [142] of the judgment set out the following: “[142] Applying those multipliers, as well as a further 20 per cent discount in relation to the cosmetic and sports prostheses, I find the plaintiff is entitled to damages of: (a) €103,900.00 for everyday prosthetic limbs; (b) €114,290.00 for cosmetic prosthetic limbs;9 (c) €101,822.00 for sports prosthetic limbs;10 (d) €51,950.00 for waterproof prosthetic limbs; (e) €37,024.00 for replacement ordinary shafts; and (f) €27,744.00 for replacement waterproof shafts.” [23] The plaintiff submits that the costs of replacement cosmetic and sport shafts should be included, given the findings I made at paragraphs [134] and [135] of the judgment. [24] The second defendant submits that it is not clear that this error is an accidental slip or omission, and nothing in the reasons throws light on why these amounts were not included. However, they submit that if the court considers that it was intended to award those amounts and that they were accidentally omitted, then they accept they should be included. [25] Paragraphs [134] and [135] of the judgment state the following: “[134] Taking all of the evidence into account, I am satisfied on the balance of probabilities that, when the plaintiff can afford them and when the condition of his stump allows, the cosmetic and sports prosthetic limbs will be produced. Accordingly, I am satisfied that the plaintiff will obtain and use cosmetic and sports prosthetic limbs, as well as the everyday and waterproof limbs he currently uses. [135] In my view, damages should be awarded to account for the future costs of the cosmetic and sports prosthetic limbs. However, I acknowledge that there is a possibility that they may not be used, or may not be used immediately. Accordingly, in line with the principles in Malec v JC Hutton Pty Ltd,11 a 20 per cent discount should be applied to the claims for the cosmetic and sports prostheses.” 9 Includes a 20 per cent discount. 10 Includes a 20 per cent discount. 11 (1990) 169 CLR 638. -- 7 of 25 -- 8 [26] Further, at paragraph [143] of the judgment, I note that “… I am satisfied that the plaintiff will require all four prosthetic limbs”. [27] The costs of replacement cosmetic and sports shafts should have been included in the calculations in paragraph [142]. The failure to do so was an accidental slip or omission and it should be corrected. [28] In their submissions, the plaintiff helpfully sets out the calculation of the amount to be added in the below table (noting the 20 per cent discount to be applied for these prostheses flagged in paragraph [135] of the judgment): Primary Cost Age Year 5% Multiplier Present Day Value Compensable Cost (Euro) New sports shaft 8,000.00 33 2023 0.907 7,256.00 8,000.00 37 2027 0.746 5,968.00 8,000.00 41 2031 0.614 4,912.00 8,000.00 45 2035 0.505 4,040.00 8,000.00 49 2039 0.416 3,328.00 8,000.00 53 2043 0.342 2,736.00 8,000.00 57 2047 0.281 2,248.00 8,000.00 61 2051 0.231 1,848.00 8,000.00 65 2055 0.190 1,520.00 8,000.00 69 2059 0.157 1,256.00 8,000.00 73 2063 0.129 1,032.00 8,000.00 77 2067 0.106 848.00 8,000.00 81 2071 0.087 696.00 37,688.00 New cosmetic shaft 8,000.00 33 2023 0.907 7,256.00 8,000.00 37 2027 0.746 5,968.00 8,000.00 41 2031 0.614 4,912.00 8,000.00 45 2035 0.505 4,040.00 8,000.00 49 2039 0.416 3,328.00 8,000.00 53 2043 0.342 2,736.00 8,000.00 57 2047 0.281 2,248.00 8,000.00 61 2051 0.231 1,848.00 8,000.00 65 2055 0.190 1,520.00 8,000.00 69 2059 0.157 1,256.00 8,000.00 73 2063 0.129 1,032.00 8,000.00 77 2067 0.106 848.00 8,000.00 81 2071 0.087 696.00 37,688.00 Subtotal: €75,376.00 -- 8 of 25 -- 9 Primary Cost Age Year 5% Multiplier Present Day Value Compensable Cost (Euro) Discounted by 20%12 15,075.20 €60,300.80 Discounted by a further 15% for contingencies13 9,045.12 €51,255.68 [29] I accept that the award for future prosthetic costs should be increased by €51,255.68 to reflect the inclusion of the cost of replacement cosmetic and sports shafts. The total award for damages should be adjusted accordingly. Error 4 [30] The plaintiff submits that the amounts I determined the plaintiff was entitled to in paragraph [142](a)-(f) of the judgment are incorrect as they are not calculated to the plaintiff’s full life expectancy. They highlight that the calculation of these amounts was based on the multipliers set out in the second defendant’s submissions, which were based on the plaintiff living to between 77 and 79 years of age. [31] The plaintiff submits that this multiplier was incorrect as the parties agreed that the plaintiff’s life expectancy was a further 51.85 years. The plaintiff is presently 31.6 years old. This takes the plaintiff to the age of 83.45, not 79. [32] They consequently submit that the amounts should be increased by one further four- year increment (as at paragraph [140] of the judgment, I stated that the cost of replacement shafts should be calculated on the basis that they are required every four years). [33] The second defendant accepts that this error resulted from an accidental slip or omission and should be corrected. [34] The plaintiff summarises the amount which should be added to the total damages in relation to the corrected amounts at paragraph [142](a)-(f) in the calculations extracted below: Reasons Calculation Amount (€) [142](a) €20,000.00 at age 83 in 2073 (x 0.079) 1,580.00 12 In their written submissions, the plaintiff notes that this discount is required by paragraph [135] of the judgment. 13 The plaintiff applies this discount as it is required by paragraph [144] of the judgment. -- 9 of 25 -- 10 Reasons Calculation Amount (€) [142](b) €27,500.00 at age 83 in 2073 (x 0.079) x 0.8014 1,738.00 [142](c) €24,500.00 at age 83 in 2073 (x 0.079) x 0.80 1,548.40 [142](d) €10,000.00 at age 83 in 2073 (x 0.079) 790.00 [142](e) €8,000.00 at age 81 in 2071 (x 0.087) 696.00 [142](f) €6,000.00 at age 81 in 2071 (x 0.087) 522.00 €6,874.40 Discounted by a further 15% for contingencies15 1,031.16 €5,843.24 [35] This error was the result of an accidental slip or omission and should be corrected. [36] The amount of €5,843.24 should be added to the award for total damages. Error 5 [37] The fifth error the plaintiff notes is the use of the incorrect multiplier for the discount rate applicable to the weekly cost of prosthetic maintenance and repair at paragraph [143]. I identified the applicable multiplier at footnote 19 of the judgment as 966.7 based on the second defendant’s written submissions. The plaintiff submits that this multiplier is incorrect, as it is based on the incorrect assumption the plaintiff would live a further 48 years (to the age of 79). They note that it was agreed between the parties that the plaintiff’s life expectancy was a further 51.85 years (to the age of 83.45). [38] The plaintiff submits that the applicable multiplier for the discount rate for a life expectancy of 51.85 years is 984 (rounded down). I identified the appropriate award for maintenance and repair of future prosthetics as €192.31 per week at paragraph [143] of the judgment. When the correct multiplier is applied, this results in a sum of €189,233.00. When discounted for contingencies by 15%,16 this yields an amount of €160,848.05. [39] The second defendant accepts that this error is properly described as resulting from an accidental slip or omission and should be corrected. [40] I accept the parties’ submissions and that the correction should be made. 14 The plaintiff, in their written submissions, note that this is applying the 20% discount required by paragraph [135] of the judgment. 15 The plaintiff notes that this is required by paragraph [144] of the judgment. 16 As required by paragraph [144] of the judgment. -- 10 of 25 -- 11 Revised damages [41] The plaintiff has helpfully provided tables which summarises a comparison of the amounts awarded under the judgment with the amounts awarded in Australian dollars and Euro once the corrections are made. They are set out below. Head of Claim Amount (AUD) Court Corrected General damages 167,760.00 167,760.00 Interest thereon 0.00 0.00 Barmenia refund 262,082.90 262,082.90 Wilson v McLeay damages 8,572.95 8,572.95 Interest thereon 493.85 493.85 Past prosthetic costs (Pohlig) 5,169.36 5,169.36 Interest thereon 294.23 294.23 Past expenditure on mileage, public transport, hire car, other travel and pharmaceuticals 24,500.00 24,500.00 Interest 1,411.34 1,411.34 Future medical and allied health expenses 28,627.00 28,627.00 Future equipment expenses, excluding home based aids and equipment 4,704.50 4,704.50 Future home based aids and equipment expenses (note: corrected under error 2) 0.00 2,890.45 Past gratuitous care 40,000.00 40,000.00 Future gratuitous and paid care 80,000.00 80,000.00 $623,616.13 $626,506.58 Less advance payments met by QBE Insurance 50,000.00 50,000.00 $573,616.13 $576,506.58 -- 11 of 25 -- 12 Head of Claim Amount (Euro) Court Corrected Past economic loss 74,683.48 74,683.48 Interest (note: corrected under error 1) 1,138.59 2,456.21 Future economic loss 181,931.84 181,931.84 Pension loss 24,378.46 24,378.46 Future costs of replacing and maintaining everyday, waterproof, cosmetic and sports prostheses (note: corrected under error 529,240.67 589,167.47 Future prosthetic costs due to technological advancements 40,000.00 40,000.00 Future prosthetic costs due to above knee amputation 20,000.00 20,000.00 €871,373.04 €932,617.46 [42] Accordingly, I make the following orders: (a) The judgment should be amended in accordance with these reasons; and (b) I correct the order made in the judgment to read as follows: “I give judgment for the plaintiff against the second defendant in the sum of $576,506.58 and €932,617.46.” Application for Costs [43] At the conclusion of the judgment, I noted that I would hear the parties as to costs. I invited the parties to serve written submissions on the question of costs and indicated that I would deal with the question on the papers unless either party requested a hearing. Neither party has requested a hearing. [44] The order sought by the plaintiff is that the costs follow the event and that the court certify for both Senior Counsel and Junior Counsel. [45] The order sought by the second defendant is that the second defendant pay the plaintiff’s standard costs up to and including 7 December 2017, and the plaintiff pay the second defendant’s standard costs thereafter. They submit that the matter did not warrant Senior Counsel and the court should not certify for that. -- 12 of 25 -- 13 Background [46] I note that, as at the date of judgment, 14 December 2021, the exchange rate was at 0.6209. The portion of the judgment in Euros would convert to $1,502,041.33, giving a total for the judgment in AUD of $2,078,547.91. [47] The second defendant made two settlement offers pursuant to r 353 of the UCPR: (a) an offer on 7 December 2017 in the amount of $2,250,000.00 plus costs (“the 2017 offer”); and (b) an offer on 25 March 2020 in the same terms (“the 2020 offer”). Relevant legal principles [48] The general rule about costs is that they are in the discretion of the court in accordance with r 681, which provides: “681 General rule about costs (1) Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise. (2) Subrule (1) applies unless these rules provide otherwise.” [49] The general rule that a successful party in litigation is entitled to an order of costs in its favour is grounded in reasons of fairness and policy and should only be departed from where the other party can point to “some good reason”. There must be “special” or “exceptional” circumstances to depart from the general rule,17 so that the award of costs gives effect to the following principle: “[67] … The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party bears the liability for the costs of the unsuccessful litigation.” 18 [50] In Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) (“Interchase”),19 the Court of Appeal had to consider the effect of rule 681(1),20 and McPherson JA noted: 17 Oshlack v Richmond River Council (1998) 193 CLR 72 at [120], [134] and [143] per Kirby J. 18 Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] per McHugh J. 19 Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26. 20 Then numbered rule 689(1). -- 13 of 25 -- 14 “[84] … [Costs] follow the ‘event’ which, when read distributively, means the events or issues, if more than one, arising in the proceedings unless the court makes some other order that is considered ‘more appropriate’…” [51] In McDermott v Robinson Helicopter Company (No 2),21 Peter Lyons J noted: “[30].It appears to me to follow from the decision of the Court in Interchase and by reference to the language of rr 681 and 684, that, under the current rules, events in an action are to be identified by reference to individual issues or questions in the action, and the event is not simply the result or outcome of the action; and, at least by implication, that the predilection for making orders for costs by reference to success on individual events within the action remains. In that case, no ground for depriving the fourth defendant, successful in the action, of his costs, other than his failure on a number of issues, was identified.” (citations omitted) [52] Parties may offer to settle claims and r 353 of the UCPR provides that: “353 If offer available (1) A party to a proceeding may serve on another party to the proceeding an offer to settle 1 or more of the claims in the proceeding on the conditions specified in the offer. (2) A party may serve more than one offer. (3) An offer must be in writing and must contain a statement that it is made under this part.” [53] Rule 361 of the UCPR provides that: “361 Costs if offer by defendant (1) This rule applies if – (a) the defendant makes an offer that is not accepted by the plaintiff and the plaintiff does not obtain an order that is more favourable to the plaintiff than the offer; and (b) the court is satisfied that the defendant was at all material times willing and able to carry out what was proposed in the offer. (2) Unless a party shows another order for costs is appropriate in the circumstances, the court must – 21 [2015] 1 Qd R 295. -- 14 of 25 -- 15 (a) order the defendant to pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer; and (b) order the plaintiff to pay the defendant’s costs, calculated on the standard basis, after the day of service of the offer. (3) However, if the defendant’s offer is served on the first day or a later day of the trial or hearing of the proceeding then, unless the court otherwise orders – (a) the plaintiff is entitled to costs on the standard basis to the opening of the court on the next day of the trial; and (b) the defendant is entitled to the defendant’s costs incurred after the opening of the court on that day on the indemnity basis. (4) If the defendant makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule.” Consideration [54] Rule 361 sets out the costs consequences of an offer to settle made be the defendant, and contemplates two stages: (a) first, the “gateway” to the engagement of the rule requires that “the plaintiff does not obtain an order that is more favourable to the plaintiff than the offer”.22 The formulation of this rule makes it clear that the defendant bears the onus to satisfy the court that the offer on which it relies is not less favourable than the order.23 (b) second, assuming the defendant discharges the onus required by r 361(1)(a), the onus shifts to the plaintiff (conformably with r 361(2)), to displace the defendant’s prima facie entitlement by showing that an order for costs other than one described in r 361(2) “is appropriate in the circumstances”. The 2017 offer [55] In relation to the 2017 offer, three issues arise: (a) the appropriate exchange rate to adopt when comparing the value of the offer to the judgment, given the judgment was expressed in Euro and Australian dollars and the offer was expressed in Australian dollars only; (b) whether the second defendant would have required the plaintiff to agree to “extraneous terms” as a condition of the offer, therefore making the judgment “more favourable” despite being of a lower monetary value; and 22 Rule 361(1)(a) of the UCPR. 23 Armstrong v Mitchell-Smith (No 2) [2012] QSC 370, [13] (McMeekin J). -- 15 of 25 -- 16 (c) whether it was reasonable for the plaintiff to refuse the offer, given a number of pieces of evidence had not yet been produced. The 2017 offer - exchange rate [56] The plaintiff notes that as the offer was expressed entirely in Australian dollars and the judgment in a mix of Australian dollars and Euro, they are not directly comparable. It is therefore not immediately apparent whether the judgment is less favourable than the offer. They submit that a consideration of the value of the offer by the plaintiff would be impacted by international exchange rates. [57] They accept that if current exchange rates were applied, it may be concluded that the monetary total obtained by converting the Euro component of the judgment to Australian dollars produces a total less than the offer (as noted above, the value of the total judgment in AUD at the date of judgment was $2,078,547.91). [58] However, they submit, following the reasoning in Yamaguchi v Phipps & Anor,24 an average commercial exchange rate is appropriate for the period of time over which past losses have been suffered, whereas the current rate may be used for future losses. They submit that there is presently insufficient evidence to make a determination about such matters. [59] However, I am satisfied that there is sufficient evidence to make a determination about this matter. It is appropriate to look at the exchange rate as at the date of the offer to see what it was worth to the plaintiff at the time and thus determine whether the plaintiff has failed to obtain an order that is more favourable to the plaintiff than the offer. [60] As at the date of the offer, 7 December 2017, the exchange rate was 0.6395. This converts the Euro component of the judgment to $1,458,354.12 and makes the total value of the judgment $2,034,860.70. The 2017 offer made by the second defendant is more favourable to the plaintiff than the judgment. [61] I also note a number of exchange rates which could be applied, all of which result in the 2017 offer being more favourable to the plaintiff than the judgment. These are: (a) Mr Lee provided a report which carried out an averaging exercise as to the exchange rate for the years from 26 March 2014 to 20 April 2017, and found the exchange rate was 0.7123. This seems to be the average commercial exchange rate the plaintiff proposed apply to the Euro component. This converts the total Euro component of the judgment, not simply the past losses, to $1,309,304.30 and makes the total value of the judgment $1,885,810.88. The second defendant notes that this does not extend to the date of the offer, and suggests that it is unlikely that there was any substantial change in the rate 24 Yamaguchi v Phipps & Anor [2016] QSC 151, [206]-[209]. -- 16 of 25 -- 17 between 20 April 2017 and 7 December 2017 (the date of the offer), but in any event, the above exercise shows that it is much more favourable to the plaintiff to use the exchange rate at the date of the offer. (b) Relying on a Westpac document exhibited to the affidavit of the second defendant’s solicitor, the second defendant submits the average rate for the years ended 30 June 2015, 30 June 2016, 30 June 2017 and 30 June 2018 was 0.6736. This converts the Euro component of the judgment to $1,384,527.10, giving a total of $1,961,033.68. [62] I accept the second defendant’s submission that the 2017 offer was more favourable, in monetary value, than the judgment the plaintiff obtained. [63] I accept the evidence contained in the affidavit of the second defendant’s solicitor, Mr Daniel Lavercombe, that states he verily believes the second defendant was willing and able to carry out what was proposed in the offer. He notes that the second defendant has been one of his main clients since around 2010, and he has acted for them in hundreds of claims. In that time, he deposes that he has never been involved in or become aware of an instance where it has not been willing and able, or has failed, to carry out the terms of an accepted offer. The 2017 offer - “extraneous terms” [64] The plaintiff submits that this court should find that the judgment was more favourable to the plaintiff than the offer despite the conclusion reached above because of “extraneous terms”25 associated with the offer. I note that the “extraneous terms” are not contained in the offers themselves, but in two example Release and Discharge documents exhibited to an affidavit of Mr Julian McNamara, a solicitor at Maurice Blackburn Solicitors (solicitors for the plaintiff). [65] The plaintiff submits that the court should conclude that, had the plaintiff accepted the 2017 or 2020 offers, there would have been an insistence on the part of the second defendant that the plaintiff execute a Release and Discharge. This is based on the evidence of Mr McNamara, who deposes in his affidavit that “in [his] experience, it is the practice of insurers including the Second Defendant to insist on the execution of a Release and a Discharge as a condition of any settlement.” [66] Exhibited to Mr McNamara’s affidavit were two example Release and Discharge documents: one dated 10 May 2017 (pre-dating the 2017 offer) and the other dated 12 March 2020 (pre-dating the 2020 offer). Also exhibited to his affidavit was an email from the second defendant to the plaintiff’s former solicitors dated 9 May 2016, which asked the former solicitors to “obtain [their] client’s instructions so that we can forward the settlement documentation”. 25 McKay v Armstrong & Anor [2020] QDC 146, [17]-[21]. -- 17 of 25 -- 18 [67] The plaintiff states in their written submissions that if the second defendant wishes to contend that they would not have “insisted” on the execution of a Release and Discharge as a condition of settlement, or that the reference to “settlement documentation” contained in the second defendant’s letter dated 9 May 2016 did not involve a Release and Discharge, an affidavit to that effect could be sworn and the deponent cross-examined. On 11 March 2022, I inquired whether the parties required any further hearing on the matter, flagging this submission specifically. Both parties indicated that they did not. [68] The plaintiff, on the premise that such a Release and Discharge would have been insisted on as a condition of settlement, contends that a number of terms were “extraneous”. First, they suggest that requiring a Release and Discharge to be signed as a condition of settlement is, itself, “extraneous”. They also point to the following terms contained in the example Release and Discharge documents: (a) indemnity obligations (by clause 2); (b) an acknowledgment that the settlement sum is paid without any admission of liability (by clause 7); and (c) a term that no obligation to pay the settlement sum would accrue until 28 days after the insurer’s receipt of clearances or discharges from, at the least, Centrelink and Medicare Australia (by clause 13(a)). [69] The plaintiff notes that, by their Defence filed 20 June 2017, the defendants admitted the accident was caused by the first defendant’s negligence. They also highlight that the plaintiff gave uncontradicted evidence that he had been truthful “in the things that [he] told the doctors and the Allied Health professionals who wrote those reports” and that the plaintiff told psychiatrist Dr de Leacy, inter alia, “he feels justice has not fully been done” and that it is a “major inconvenience for him to have to come back to Australia to have medical examinations and attend court when he was the victim.” [70] They submit that, in the context of these circumstances, to require as a condition of settlement the “extraneous terms” they identify was “incongruent with the fundamental attributes of our system of open justice”, adopting the words of Morzone DCJ in McKay v Armstrong & Anor [2020] QDC 146 (“McKay”). [71] The plaintiff highlights that in McKay the court concluded, in a case where the issues were essentially indistinguishable from those which inform rights and obligations in the present case, that the plaintiff there did obtain a judgment that overall was more favourable to her than the offer with the extraneous terms, notwithstanding the fact that the award was less than the insurer’s UCPR offer. [72] They submit that I should reach a similar conclusion in this case. -- 18 of 25 -- 19 [73] In my view, the decisions the plaintiff relies on, Armstrong v Mitchell-Smith (No 2) (“Armstrong”)26 and McKay, are distinguishable from the matter before me. In those cases, it was a condition of the offers themselves that a Release and Discharge be executed. Here, the plaintiff’s case relies on me accepting that “there would have been an insistence on the part of the Second Defendant, as a condition of settlement, that the Plaintiff execute a Release and Discharge” on the basis of Mr McNamara’s evidence. In my view, in the circumstances, this is speculative. [74] Further, I note the affidavit of the second defendant’s solicitor, Mr Daniel Lavercombe. Mr Lavercombe swears that he had no instructions to make the 2017 offer conditional on the signing of a Release and Discharge, the offer was intentionally expressed in unconditional terms, and at no time while he had conduct of the matter was it represented to the plaintiff that any settlement would be conditional on a Release and Discharge. He also notes that he is not aware of the second defendant having made such a representation prior to his involvement in the matter. [75] Further, he notes that after Armstrong was decided, it became his practice to purposely not make his clients’ offers of settlement made pursuant to the UCPR conditional on the signing of a Release and Discharge, so as to avoid any argument that the offers could be invalidated by such a condition. [76] The second defendant offered to settle on certain terms, which did not include the execution of the Release and Discharge. In the circumstances, I accept the second defendant’s position that what they might have done in other situations where matters have settled is irrelevant to what it did in this case, so the offer of 9 May 2016’s reference to “settlement documentation” is irrelevant. The 2017 offer - evidence not available [77] The plaintiff submits that the 2017 offer being made prior to a number of pieces of expert evidence being available meant that it was reasonable for the plaintiff to decline to accept the offer in the circumstances. [78] They note the principle expressed in Campbell v Jones & Ors [2003] 1 Qd R 630 that the question of whether an offeree is justified in declining to accept an offer to settle depends upon the circumstances which exist at the time the offer was made. [79] The plaintiff notes that the offer of 7 December 2017 was made at a point in time prior to the following evidence being available: (a) Report of prosthetist Mr Olaf Gawron dated 5 March, 2018 stating “Experience tells us that active prosthetic users require replacement prostheses on average 26 [2012] QSC 370. -- 19 of 25 -- 20 every three years”, but which contained a table citing renewal frequency every four years when providing costs. (a) Report of Dr David Morgan dated 21 March 2018 recommending against an above knee amputation. (b) Letter from Mr Gawron dated 11 August 2018 that stated “As a rule of thumb, new prostheses are necessary every four years”, and went on to set out calculations for prosthetic replacements at intervals of four years rather than three years. (c) Joint reports of the orthopaedic, psychiatric and occupational therapy experts. (d) Report of Stephen Hoey, Occupational Therapist dated 30 June 2020, that set out rates for care services in Germany between €16.00 and €19.00 per hour, which represented a substantial departure from the rates in his report dated 24 April 2017, that quoted rates of between $974.03 and $1,924.43 per week. [80] The plaintiff accordingly submits, in the circumstances where this evidence was not available, it was reasonable for the plaintiff to not accept the offer. [81] The second defendant notes that it is not said why these matters, all of which came after the 2017 offer, meant it was reasonable for the plaintiff to refuse the offer at that time. [82] The second defendant makes the following comments on the evidence highlighted by the plaintiff: (a) In relation to the report and letter of Mr Gawron, there was some discrepancy between a turnover rate of three years or four years. However, they state that the plaintiff could have clarified this and their failure to do so is not the fault of the second defendant. (b) In relation to the report of Dr Morgan which recommended against an above- knee amputation, there was an existing report by Dr Boys dated 8 March 2017 (available to the plaintiff at the time of the 2017 offer) which made the same recommendation. At that time, the only evidence from orthopaedic surgeons was that an above-knee amputation was not required. (c) It is not clear what impact the joint reports of the orthopaedic, psychiatric and occupational therapy experts would have made. (d) As to Mr Hoey’s report, the rates which were quoted were rates in Australian dollars. They suggest it is no answer to the current application for costs by the second defendant for the plaintiff to say he did not get rates in Euros until 30 June 2020. There is no suggestion that there would have been difficulty obtaining rates in Euros prior to 7 December 2017. -- 20 of 25 -- 21 [83] The second defendant characterises this evidence being produced as simply an example of the way things can change in litigation, which is a matter a practitioner should factor in when determining whether an offer should be accepted. [84] In the circumstances, I agree. A party who makes a generous offer should not lose the benefit of the offer because the other party has not obtained necessary evidence or there is a conflict in the evidence. [85] In Morgan v Johnson; Green v Lovatt; Gambrill v Cook (1998) 44 NSWLR 578, Mason P discussed the provisions of Part 39A, rule 25 of the District Court Rules 1973 (NSW), and stated: “The leading cases on the Supreme Court Rules are Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721 and NSW Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100. The leading cases on the corresponding provision in the District Court Rules are Hillier v Sheather (1995) 36 NSWLR, Quick v Mustafa (Court of Appeal, 15 June 1995, unreported) and Houatchanthara v Bednarczyk (Court of Appeal, 15 June 1996, unreported). The following principles can be extracted: (1) The purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest of the prompt and economical disposal of litigation: Maitland Hospital (at 725-726); Hillier (at 421, 431). (2) The aim is to oblige the offeree to give serious thought to the risk involved in non-acceptance: Maitland Hospital (at 724). (3) The prima facie consequence of non-acceptance will be that the rule will be enforced against the non-accepting party: NSW Insurance Ministerial Corporation v Reeve (at 102); Hillier (at 422). This is because, from the time of non-acceptance ‘notionally the real cause and occasion of the litigation is the attitude adopted by [the party] which has rejected the compromise’: Maitland Hospital (at 724); Hillier (at 420). (4) Lying behind the rule is the common knowledge that ‘litigation is inescapable chancy’: Maitland Hospital (at 725). For this reason, the ordinary provision is expected to apply in the ordinary case: NSW Insurance Ministerial Corporation v Reeve (at 102-103). The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the -- 21 of 25 -- 22 rule: NSW Insurance Ministerial Corporation v Reeve (at 102). As Clarke JA expressed in Houatchanthara (at 2-3): ‘The rule lays down the general principle that should be applied, and the order provided for in that rule should only be departed from for proper reasons which, in general, only arise in an exceptional case. It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flowers naturally from the risks of litigation. The idea behind the rule is to encourage settlement or compromise of proceedings. Where an offer is made by a defendant to a plaintiff, the latter is put on notice that unless he or she accepts that offer, there is a significant risk that the order provided for by the rule may follow. In declining to accept the offer, the plaintiff undertakes the risk and the consequences that flow naturally from that risk.’ (5) The discretion to displace the rule is a judicial one, requiring the private and public purposes of the rule to be borne in mind: Maitland Hospital (at 725 – 726). Reasons must be given for ‘otherwise ordering’: Hillier (at 419); Quach.”27 (citations omitted) [86] Later in the judgment, Mason P pointed out that “the ultimately critical evidence was not at hand at the time of the arbitration, but could with reasonable diligence have been available and called.”28 In that case, that a party had not obtained that evidence was not enough to displace the principles relating to unaccepted settlement offers. [87] In all of the circumstances, the absence of the evidence referred to by the plaintiff did not make it reasonable for the plaintiff to refuse the 2017 offer at the time it was made. The 2020 offer [88] In relation to the 2020 offer, the plaintiff raises two matters. [89] First, they contend that if, contrary to their submission in relation to the 2017 offer, the court accepts that a direct comparison is able to be made by reference to international exchange rates, then the rate applicable as at the date of the offer must be considered. [90] The exchange rate from Euro to Australian dollars at 25 March 2020 was 1.80789. The Euro component of the judgment is €932,617.46 which, when converted using 27 Morgan v Johnson; Green v Lovatt; Gambrill v Cook (1998) 44 NSWLR 578, 581-582. 28 Morgan v Johnson; Green v Lovatt; Gambrill v Cook (1998) 44 NSWLR 578, 598. -- 22 of 25 -- 23 this rate, is $1,686,069.78. When this is added to the Australian dollar component, the total value of the judgment is $2,262,576.36. [91] The plaintiff states that this amount exceeds the second defendant’s offer of $2,250,000, and thus, the judgment is more favourable to the plaintiff than the 2020 offer. [92] Second, they contend that the McKay argument made in relation to the 2017 offer is equally applicable to the 2020 offer. [93] The second defendant does not make submissions specifically on the 2020 offer. [94] The second defendant repeated the same offer in 2020 which was rejected by the plaintiff in 2017. [95] The only difference between the 2017 offer and the 2020 offer is a different exchange rate at the relevant times: (a) Applying the 2017 exchange rate to the Euro component of judgment means that Euro component was $1,458.354.12; and (b) Applying the 2020 exchange rate to the Euro component of the judgment means that Euro component was $1,686, 069.78. [96] The result of this is that, by applying the 2020 exchange rate to the judgment, the total of the judgment slightly exceeds the 2020 offer. However, the consequences of applying this higher exchange rate is that the 2020 offer is not captured by r 361 of the UCPR. An offer that is less favourable to the plaintiff than the judgment the plaintiff obtains is not an offer satisfying r 361(1). [97] The 2017 offer satisfies r 361 and the plaintiff faces consequences for not accepting this offer. Unless they can show that another order for costs is appropriate in the circumstances, the court must: (a) order the defendant to pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer; and (b) order the plaintiff to pay the defendant’s costs, calculated on the standard basis, after the day of service of the offer. [98] The objective of r 361 of the UCPR is to encourage the making of offers to settle by defendant for favourable costs consequences if the requirements of the rule are met. [99] The 2017 offer meets the requirements of the rule and by not accepting this offer, the consequences for the plaintiff are those set out in r 361(2). The plaintiff rejecting the same offer 3 years later, at a time of a higher exchange rate, in my view, does not show that another order for costs is appropriate. -- 23 of 25 -- 24 Two counsel [100] The plaintiff proposes the costs order should certify for both Senior and Junior Counsel on trial. They do not make specific submissions on this point. [101] The second defendant says that there is nothing about the case which warranted two counsel. Liability was always admitted, most heads of damage were agreed by trial, there was no particular point of principle or unsettled law involved and there was nothing particularly difficult about any aspect of the case. [102] In my view, this was a case where it was appropriate for the plaintiff to have two counsel. [103] I note that this case involved evidence from overseas, and the fact that it seemed not particularly difficult was due to the experience of the senior counsel who ran a very efficient case. In other, less experienced, hands this trial could have been much more protracted and difficult. [104] Accordingly, I accept that this was a case that warranted two counsel on behalf of the plaintiff. Conclusion on the application for costs [105] In my view, the conditions of r 361 have been satisfied in relation to the 2017 offer: (a) the defendant made an offer to settle under Ch 9, Pt 5 of the UCPR on 7 December 2017; (b) the plaintiff did not accept the offer; (c) the plaintiff did not obtain an order that was more favourable to the plaintiff than the offer; and (d) the defendant was at all material times willing and able to carry out what was proposed in the offer. [106] I find that, on the range of exchange rates provided, the monetary value of the 2017 offer was greater than the award in the judgment. [107] I do not accept that the judgment was more favourable to the plaintiff than the 2017 offer because of the “extraneous terms” contained in the example Release and Discharge documents provided to me. I therefore refuse to make a finding akin to that made in McKay. [108] I do not accept that the plaintiff not having the benefit of the evidence produced after the 2017 offer made it reasonable for him to refuse the offer at the time. -- 24 of 25 -- 25 [109] In this case, the plaintiff did not obtain an order in more favourable terms to the plaintiff than the offer made by the second defendant in 2017. [110] Rule 361 sets out the costs consequences of an offer to settle that is more favourable than the judgment being made by the defendant and not accepted by the plaintiff. I am satisfied that this is the case here. [111] In all of the circumstances, the plaintiff has not displaced the second defendant’s prima facie entitlement to costs by proving that an order for costs other than the one described in r 361(2)(a) and (b) is appropriate in the circumstances. [112] I order that the second defendant pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer (7 December 2017). [113] I order that the plaintiff pay the second defendant’s costs, calculated on the standard basis, after the day of service of the offer (7 December 2017). Conclusion [114] I order that: (a) the judgment be amended in accordance with these reasons; (b) the order made in the judgment be corrected to read as follows: “I give judgment for the plaintiff against the second defendant in the sum of $576,506.58 and €932,617.46.”; (c) the second defendant pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer (7 December 2017); (d) the plaintiff pay the second defendant’s costs, calculated on the standard basis, after the day of service of the offer (7 December 2017); and (e) the plaintiff’s Senior and Junior counsel be certified for. -- 25 of 25 --