SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: / Cressy v Miloriad (No 2)Citation: / [2016] ACTSC 339
Hearing Date: / 21 November 2016
Decision Date: / 23 November 2016
Before: / Mossop AsJ
Decision: / See [62]
Catchwords: / DAMAGES – Personal Injury – Motor vehicle accident – Whether judgment should be amended to allow interest on Griffiths v Kerkemeyer damages and past out-of-pocket expenses – Meaning of “liabilities incurred that do not carry interest as against the person claiming interest” in Court Procedures Rules 2006 (ACT), r1619(2)(a) – Griffiths v Kerkemeyer damages not liabilities for the purposes of r1619(2)(a) – Rate of interest where Griffiths v Kerkemeyer damages assessed by reference to current day rates – Meaning of “special circumstances” in r 1619(7) – Whether special circumstances established by reason of change in expert opinion – Whether failure to accept Calderbank offer unreasonable – Whether order should be made varying default costs consequences under r1725 of recovering less than $175,000 in proceedings transferred from Magistrates Court to Supreme Court
Legislation Cited: / Court Procedures Rules 2006 (ACT), rr 1009, 1619, 1725(3)
Evidence Act 2011 (ACT), s 91
Road Transport (Third Party Insurance) Act 2008 (ACT), s 156A
Statute Law (Miscellaneous Amendments) Act 1981 (Cth)
Supreme Court Act 1933 (ACT), s 69(3)(a)
Cases Cited: / Blundell v Musgrave [1956] HCA 66; (1956) 96 CLR 73
Cooper v McLinden [2011] ACTSC 206
Cressy v Miloriad [2016] ACTSC 303
Eastman v Director of Public Prosecutions (No 3) [2014] ACTSCFC 3
Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161
Grincelis v House [2000] HCA 42; (2000) 201 CLR 321
Jess v Scott (1986) 12 FCR 187
JS Hill & Associates Ltd v Dawn [2001] ACTSC 28
MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657
Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307
Quirk v Bawden (1992) 112 ACTR 1; (1992) 111 FLR 115
Re Kavanagh (1995) 125 FLR 138
Schollum v Australian Capital Territory [2012] ACTSC 58
Stewart v Tsueneaki [2012] ACTSC 141
Wattam v Jorgensen [2012] ACTSC 111
Texts: / Report of the Statute Law Revision Committee on Interest on Judgments (Government Printer, Melbourne, 1961)
Parties: / Angela Cressy (Plaintiff)
Milosevic Miloriad (First Defendant)
NRMA Insurance (Second Defendant)
Representation: / Counsel
R L Crowe SC (Plaintiff)
J Pappas (Defendants)
Solicitors
Maliganis Edwards Johnson (Plaintiff)
Moray & Agnew (Defendants)
File Number: / SC 375 of 2015
MOSSOP AsJ:
Introduction
1. These proceedings were heard on 4, 5, 6 and 10 October 2016. Judgment was given on 12 October 2016: Cressy v Miloriad [2016] ACTSC 303. The order of the Court was that judgment be entered for the plaintiff against the second defendant in the sum of $169,779.
2. I gave the parties the opportunity to be further heard in relation to costs and this opportunity has been taken up.
3. The defendants had made a mandatory final offer under the Road Transport (Third Party Insurance) Act 2008 (ACT) (RTTPI Act) as well as a Calderbank offer in the sum of $170,000. The proximity of the judgment amount to the amount of the settlement offers has provoked a number of different applications by both the plaintiff and defendants.
4. By application in proceeding dated 16 November 2016 the plaintiff has sought that the judgment amount be varied to allow for interest on past out-of-pocket expenses and past Griffiths v Kerkemeyer damages.
5. The grounds for that application are as follows:
1. In the course of progress in the plaintiff’s claim for damages, and in filing documents with this honourable Court, interest was claimed on all relevant heads of damage for the plaintiff.
2. During the course of the hearing on 10 October 2016 in proceedings numbered SC 375 of 2015, plaintiff’s counsel inadvertently omitted to claim interest for past out-of-pocket expenses paid by the plaintiff and past Griffiths v Kerkemeyer damages.
3. It is in the interests of justice that the plaintiff recover the full damages to which she is entitled as a result of the negligence of the first defendant, including interest.
6. By application in proceedings dated 18 November 2016 the defendants have applied for a variation of the judgment amount so as to exclude any allowance for interest on the past component of general damages and past loss of income after 22 September 2015.
7. The grounds of the application are as follows:
1. In the course of proceedings on 22 September 2015, the defendants made a Mandatory Final Offer of $170,000 inclusive of payments made, plus costs in accordance with section 141 of the Road Transport (Third-Party Insurance) Act 2008 (ACT).
2. This offer was not accepted by the plaintiff and on 12 October 2016, judgment was entered for the plaintiff in the sum of $169,779.
3. Pursuant to rule 1619 (7) of the Court Procedures Rules 2006 (CPR), the court must not order the payment of interest in relation to a period after the defendant offers an appropriate settlement amount to the plaintiff.
4. The amount offered by the defendants in settlement of the proceeding and the amount for which judgment was entered in the proceeding does not exceed the amount offered in settlement by more than 10%. As such, the amount offered by the defendants on 22 September 2015 is an appropriate settlement amount under Rule 1619 (8).
5. At the time judgment was pronounced this Honourable Court was not aware of the offers of settlement made by the defendants and did not comply with Court Procedures Rule 1619 (7) in calculating the plaintiff’s damages.
6. This is a matter appropriate to be dealt with pursuant to rule 6906.
8. At the hearing of the application both parties consented to the reopening of the judgment so as to permit the amendment of the judgment in relation to interest. This avoided the necessity to determine whether, and the extent to which, the judgment should be amended pursuant to the slip rule as a result of the failure by the plaintiff’s counsel at trial to identify in his schedule of damages claims for interest in relation to past out-of-pocket expenses and Griffiths v Kerkemeyer damages. That omission occurred in circumstances where orders of the Court required the plaintiff to do so or be taken to have abandoned that aspect of her claim.
Chronology
9. On 13 June 2012 a “Health Recovery Consultant” employed by the second defendant made an offer of settlement to the plaintiff in the sum of $28,285.19 plus costs. This offer was rejected by letter dated 11 July 2012. The plaintiff’s solicitors pointed out that she continued to require ongoing treatment and was not in a position to engage in any settlement negotiations.
10. On 9 January 2013 the “Health Recovery Consultant” made another settlement offer in the same amount for reasons which were articulated in some detail in the letter. This offer was also rejected on the same basis as the previous offer.
11. The parties participated in a compulsory conference pursuant to pt 4.7 of the RTTPIAct on 22 September 2015. The claim was not resolved. The parties then exchanged mandatory final offers under pt 8 of that Act on 22 September 2015. The plaintiff offered to settle for $215,000 being $120,000 for pain and suffering and $95,000 for damages other than pain and suffering.
12. The defendants offered to settle for $170,000 being $60,000 for pain and suffering and $110,000 for the balance of the claim.
13. On 22 October 2015 the defendants made a Calderbank offer of settlement to settle proceedings for $170,000 inclusive of payments made plus costs.
14. On 26 October 2015 the proceedings were removed from the Magistrates Court to the Supreme Court. This resulted from the plaintiff’s application dated 7 October 2015.
15. On 10 November 2015 the plaintiff made an offer of compromise under the Court Procedures Rules 2006 (ACT) (CPR) to settle proceedings for $200,000 plus costs in accordance with r 1009(2). At this point the evidence of the plaintiff’s solicitor, Mr Treloar, was that he had estimated the damages recoverable by the plaintiff on the basis of the material available at the time including the opinions expressed by Prof Paul Smith in his report of 3 March 2015 numbered paragraph 4. Question 4 which the professor had been asked was as follows:
Whether in your opinion the injuries sustained by our client in the motor vehicle accident materially caused or contributed to the need for hip surgery.
16. In answer to that question Prof Smith’s report provided:
Ms Cressy suffered her injuries in a motor vehicle accident on 11 August 2011. Radiographs performed on 23 November 2011 revealed established right hip osteoarthritis. Prior to the motor vehicle accident Ms Cressy had no history of any hip problems and described no symptoms referable to the hip prior to her accident.
Based on the radiographs available Ms Cressy most likely had gradually developed osteoarthritic change over the course of her life, however this was rendered symptomatic by the vehicle accident. Based on the radiographs it would appear that Ms Cressy would have required hip replacement at some point in her life, however may have remained asymptomatic for a long period if the vehicle accident had not occurred.
17. The parties agreed that as at this date the reports of Dr Stubbs, Dr Pascall, Dr Gorman and Dr English, each of which had been served by the defendants, were also available to the plaintiff.
18. The plaintiff filed her statement of particulars on 29 April 2016.
19. The hearing took place on 4, 5, 6 and 10 October 2016. Mr Treloar was not in court on the day when Mr Muller made his oral submissions and had not reviewed his written submissions prior to them being provided to the Court.
Issues
20. The issues that arise for determination are as follows:
(a) Should the judgment amount be varied to take account of interest on Griffiths v Kerkemeyer damages and out-of-pocket expenses?
(b) Should the judgment amount be varied so as to exclude interest pursuant to r1619(7) of the CPR?
(c) Should the costs order be varied by reason of the defendants’ mandatory final offer or Calderbank offer?
(d) Should an order be made pursuant to r1725(3) of the CPR?
Should the judgment amount be varied so as to add amounts for interest not claimed in the plaintiff’s damages schedule?
21. It was uncontroversial that interest should be awarded on past out-of-pocket expenses. Depending upon which date interest is calculated up until, the relevant amounts were as follows:
(a) calculated up to 22 September 2015: $327.69
(b) calculated up to 12 October 2016: $440.62.
22. I address below the appropriate date up to which interest should be awarded.
23. In relation to Griffiths v Kerkemeyer damages, the decision in Grincelis v House [2000] HCA 42; (2000) 201 CLR 321 (Grincelis) is generally taken to support the award of interest upon such damages.
24. In the present case the defendants made three submissions in relation to Griffiths v Kerkemeyer damages.
25. First the defendants submitted that no interest should be awarded because those damages were within the scope of r 1619(2)(a) of the CPR, namely, “compensation in relation to liabilities incurred that do not carry interest as against the person claiming interest or claiming a lump sum instead of interest”. Rule 1619(2) precludes the award of interest on such amounts.
26. The defendants contended that this issue was left open by the decision in Grincelis because in that case the Court said (at [8]):
Neither party contended that sub-section (3) [a provision in similar terms to r 1619(2) (a) of the CPR] applied to the present case. It is therefore, unnecessary to consider what is meant by “compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest”.
27. The second argument was that no interest should be awarded where the Griffiths v Kerkemeyer damages were calculated by reference to current dollar rates rather than rates which had been applicable at the time the gratuitous services were provided. The substance of the argument was that in circumstances where the award of Griffiths v Kerkemeyer damages was made in current day dollars it was inappropriate to make any award of interest because the use of current day dollars took into account the factors which would be addressed by an award of interest.
28. The third argument was that the defendants should be permitted to depart from the rate of $35 per hour which had been agreed during the course of the trial and that rates in the range of $20-$22 per hour should be substituted if an award of interest was then to be made. The rates of $20-$22 an hour were derived from decisions of this Court said to disclose the rate which would have been applied in the period 2011-2012. It was only if these rates were adopted that any award of interest should be permitted.
29. In Grincelis the plaintiff had been awarded very substantial damages which included damages for gratuitous services provided by his parents. The issue between the parties was whether and, if so, at what rate interest should be awarded. In this Court Hogan M had not awarded interest on those damages. A cross-appeal to the Full Court of the Supreme Court challenging the failure to award interest was, by majority, dismissed. From there an appeal was taken to a five judge bench of the Full Court of the Federal Court. In relation to interest the Court held that interest should have been allowed on damages awarded in respect of past gratuitous services. The majority concluded that interest should be calculated in the manner described in MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657 (Gogic). Mr Grincelis appealed to the High Court in relation to the calculation of interest.