Collins v Carey & Anor [2002] QSC 417

SUPREME COURT OF QUEENSLAND CITATION: Collins v Carey & Anor [2002] QSC 417 PARTIES: LANCE STANLEY COLLINS (plaintiff) v PAULA J CAREY and GREGORY J CAREY (first defendants) GRACE WORLDWIDE (AUSTRALIA) PTY LTD (second defendant) FILE NO/S: S 11531 of 2001 DIVISION: Trial Division PROCEEDING: Further Order ORIGINATING COURT: Supreme Court Brisbane DELIVERED ON: Judgment delivered on 3 December 2002 Further Order delivered 12 December 2002 DELIVERED AT: Brisbane HEARING DATE: 3 December 2002 JUDGE: Philippides J FURTHER ORDER: That the defendants pay the plaintiff’s costs of and incidental to the proceeding to be assessed on the standard basis on the District Court scale where the amount recovered exceeds $50,000. CATCHWORDS: COSTS – SCALE – where plaintiff succeeded in personal injuries action – where amount awarded within monetary jurisdiction of District Court – whether costs should be on Supreme or District Court scale COSTS – OFFERS TO SETTLE – where plaintiff had offered to settle on liability – where plaintiff succeeded on statement of claim amended at outset of trial – where costs to follow event – whether costs should be on indemnity or standard basis COSTS – DISCRETION – whether solicitors’ costs should be increased by 30% – whether certification for two counsel should be made – whether costs should be reduced because plaintiff failed on certain issues Uniform Civil Procedure Rules 1999 (Qld), r 360(1), r 360(2), r 690(5), r 698, r 698(1), r 698(3) Cameron v Nominal Defendant [2000] QCA 137, 18 April -- 1 of 5 -- 2 2002 Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd [2002] QSC 319, 17 October 2002 Cretazzo v Lombardi (1975) 13 SASR 4 Davies v Fay [1995] 1 Qd R 509 Forster v Farquhar [1893] 1 QB 564 Nielson Investments (Qld) P/L & Ors v Spud Mulligan’s P/L & Ors [2002] QSC 295, 27 September 2002 Sweeney v Attwood Marshall [2002] QSC 294, 27 September 2002 Walz Construction Co P/L v ASP Ship Management (A Firm) & Ors; Qld Alumina Ltd v Walz Construction Co P/L & Ors; Walz Construction Co P/L v Suncorp Insurance & Finance [2002] QCA 155, 3 May 2002 COUNSEL: R Lilley for the plaintiff P Hackett for the first defendants J Rolls and A Kitchen for the second defendant SOLICITORS: Murphy Schmidt for the plaintiff HBM Lawyers for the first defendants Phillips Fox for the second defendant [1] PHILIPPIDES J: Judgement was given in the plaintiff’s favour on his claim for damages for personal injuries, with the plaintiff being awarded $103,311.05 (after deduction of the WorkCover refund of $26,751). The issue of costs now falls for determination. There are a number of issues that require consideration: (a) whether costs should be ordered on the District Court or Supreme Court scale; (b) whether costs should be ordered on an indemnity basis in respect of the issue of liability, in view of an offer to settle made by the plaintiff on 22 August 2002; (c) whether a certificate for an increase of solicitors’ costs should be made pursuant to rule 690(5) of the Uniform Civil Procedure Rules 1999 (“UCPR”); (d) whether the order for costs should be reduced so that the plaintiff does not recover the costs in respect of issues upon which he did not succeed; (e) whether a certificate for two counsel should be made. The Appropriate Scale [2] The quantum of the award recovered by the plaintiff fell within the monetary jurisdiction of the District Court. Rule 698 of the UCPR provides: “(1) Subrule (2) and (3) apply unless the court otherwise orders. … -- 2 of 5 -- 3 (3) If the only relief obtained by a plaintiff in a proceeding in the Supreme Court is relief that, when the proceeding began, could have been given by the District Court, but not a Magistrates Court, the costs the plaintiff may recover must be assessed as if the proceeding had been started in the District Court.” [3] The plaintiff submits that pursuant to r 698(1) the court has a discretion to award costs on the Supreme Court Scale and that this is an appropriate case for the exercise of that discretion. The defendants, while accepting that there is such a discretion, contend that the discretion should not be exercised and that District Court costs should be given pursuant to r 698(3). In urging that the discretion should be exercised in his favour, the plaintiff accepts that r 698 requires the plaintiff to bear the onus of demonstrating that an order other than that specified in r 698(3) is appropriate (see Walz Construction Co P/L v ASP Ship Management (A Firm) & Ors; Qld Alumina Ltd v Walz Construction Co P/L & Ors; Walz Construction Co P/L v Suncorp Insurance & Finance [2002] QCA 155, 3 May 2002, at [9]; Nielson Investments (Qld) P/L & Ors v Spud Mulligan’s P/L & Ors [2002] QSC 295, 27 September 2002, at [3] and [14]; Sweeney v Attwood Marshall [2002] QSC 294, 27 September 2002, at [7]-[12]). [4] Proceedings were initially commenced in the District Court on 1 October 1998, but were transferred to the Supreme Court on 1 November 2001 on the basis of an affidavit by the plaintiff’s solicitor that there were “reasonable prospects that the plaintiff’s damages will exceed $250,000”. Nevertheless, on 8 August 2002, the plaintiff made an offer to settle for $200,000 inclusive of statutory refunds plus costs. In support of the plaintiff’s contention, it is submitted that the plaintiff’s claim had unusual aspects to it, in particular the aspects concerning the plaintiff’s loss following his change of occupation, for which a substantial claim was made. The claim was said to involve an aspect of novelty and complexity. [5] I am not persuaded that there was anything unusual or exceptional about this case which warrants an exercise of my discretion so as to depart from the general rule in r 698(3). Accordingly, costs to be recovered by the plaintiff are to be assessed on the District Court scale. Costs on a Standard or Indemnity Basis? [6] Rule 360 of the UCPR provides: “(1) If – (a) the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains judgment no less favourable than the offer to settle; and (b) the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer; the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances. -- 3 of 5 -- 4 (2) If the plaintiff makes more than 1 offer satisfying sub-rule (1), the first of those offers is taken to be the only offer for this rule.” [7] The first defendants contend that the plaintiff made three offers that satisfy r 360(1). On 25 October 2001, the plaintiff offered to settle for $319,000, inclusive of statutory refunds plus costs. On 8 August 2002, the plaintiff offered to settle for $200,000, inclusive of statutory refunds plus costs. On 22 August 2002, the plaintiff offered to settle liability on the basis that the defendants were 100% liable. It was submitted by the first defendants that, in view of r 360(2), the third offer cannot be taken into consideration. That submission must fail because the offer referred to in r 360(2) is an offer “satisfying sub-rule (1)” (see Cameron v Nominal Defendant [2000] QCA 137, 18 April 2002). The first and only offer made which satisfied r 360(1) was the offer of 22 August 2002 to settle liability. [8] The defendants do not dispute that that offer is a good offer per se for the purposes of Part 5 Chapter 9 of the UCPR and I accept that it is (see Davies v Fay [1995] 1 Qd R 509; Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd [2002] QSC 319, 17 October 2002). The defendants submit, however, that notwithstanding the offer of 22 August 2002 an order for indemnity costs is not appropriate in the circumstances of this case. [9] It is said that the plaintiff’s claim against the first defendants was founded both in negligence and in scienter, the plaintiff failing in the latter claim, which it persisted in notwithstanding that an unsuccessful application to strike it out identified the flaws in the claim. Further, as to the negligence action, the first defendants point out that the plaintiff succeeded in only one of the four particulars of negligence, which particular was not in the Statement of Claim at the date of the offer, but only inserted by leave at the outset of the trial. The second defendant made similar submissions concerning the lateness of the amendments to the pleading. It also submitted that if indemnity costs were awarded against it, it would have to bear the costs of the scienter issue, even though that issue was not litigated against it. Additionally, it was submitted that were indemnity costs to be awarded, they should be confined to only those costs incurred 14 days after the expiration of the offer or, at the earliest, the date of the offer on 22 August 2002, having regard to the late amendment of the pleadings upon which the plaintiff ultimately succeeded and the lateness of the offer, which meant most costs had already been incurred. [10] There is much weight in the defendants’ submissions that this is a case where it has been shown that an order other than that in r 360(1) is appropriate. The amendment to the pleading on which the plaintiff succeeded was made on 4 September 2002 and was therefore not part of the pleadings when the offer of 22 August 2002 was made. In the circumstances I consider that costs should be awarded on a standard basis only. Increase of 30% [11] The plaintiff submits that this is an appropriate case for the exercise of the discretion pursuant to r 690(5) to order that the solicitors’ component of any costs assessed on a standard basis be increased and that in this case an increase by 30% should be made (see Sweeney v Attwood Marshall [2002] QSC 294, 27 September 2002). Rule 690(5) provides: -- 4 of 5 -- 5 “If the nature and importance, or the difficulty or urgency, of a proceeding and the justice of the case justify it, the court may allow an increase of not more than 30% of the solicitor’s costs allowed on the assessment of the costs of the proceeding.” [12] I do not consider that this is a case where any discretion should be so exercised. The case was not of such a nature and importance, nor of such difficulty or urgency as to bring the discretion in r 690(5) into play. Unsuccessful Issues [13] The first defendants contended that there ought to be some reduction in any costs ordered in favour of the plaintiff, because the plaintiff failed on the scienter issue and on three of four particulars of negligence (see Forster v Farquhar [1893] 1 QB 564; Cretazzo v Lombardi (1975) 13 SASR 4 at 12). I do not consider that such an approach is warranted in this case, the scienter evidence and the evidence of negligence being closely interwoven. Two Counsel [14] Since costs are to be limited to the District Court scale, a certification is required pursuant to Item 83 of the District Court Scale of Fees. The plaintiff contends that the certification for two counsel is appropriate because the case was complex and involved management of a large volume of material, in circumstances where both liability and quantum were in issue and where the second defendant saw fit to retain two counsel. I do not consider that any such certification is warranted. The case was not of a complexity or nature that such a certification should be made. Order [15] I order that the defendants pay the plaintiff’s costs of and incidental to the proceeding to be assessed on the standard basis on the District Court scale where the amount recovered exceeds $50,000. I make no certification for two counsel. -- 5 of 5 --