Carr v Anderson (No. 2)[2001] QDC 305

DISTRICT COURT OF QUEENSLAND

1. [1]
   On the 9^th November 2001 I dismissed the claims of both plaintiffs. On that day the defendant applied for indemnity costs and I made directions that the parties provide written submissions directed to that issue. The defendant’s solicitors provided written submissions on the 16^th November 2001. He relies on an affidavit of Katharine Patrice Phillip sworn the 14^th November 2001. I give leave to the defendant to file and read that affidavit. The plaintiff’s submissions were delivered on the 27^th November 2001, and in reaching my decision I have taken into account that material.

2. [2]
   The hearing was conducted over two days from the 22^nd-23^rd October 2001. By facsimile dated the 24^th September 2001 the defendant’s solicitors advised the plaintiffs’ solicitors in these terms:

“We refer to Professor Levi’s report and the medical reports served on behalf of the defendant as follows:-

1. Report of Dr Graeme Beardmore dated 13 September 2001.
2. Report of Dr Turnbull dated 18 September 2001.
3. Additional undated report of Dr Beardmore.

All of the experts who have provided reports for the defendant are supportive of the defendant’s treatment of Mr Carr. Not only was it reasonable to have the lesion for review in one week’s time it would have been irresponsible to attempt to biopsy an inflamed area in an immuno-suppressed patient.

We note that you have not served any expert opinion criticising Dr Anderson’s treatment.

The only expert opinion served on behalf of the plaintiffs does not even support the plaintiffs’ claim with respect to a loss of a chance of the possibility of an improved outcome. Professor Levi has stated that he is unable to say that it is more likely than not that the metastatic disease would not have developed if the lesion had been resected in October 1999 rather than March 2000. Consequently even if your clients could show that Dr Anderson’s care on 19 October 1999 fell below a reasonable standard (which on their present expert evidence they cannot) they are unable to show that they have suffered any compensable loss as a result of such treatment.

In the circumstances our client has instructed us to offer to agree to settle this action on the basis that the claim be discontinued with the defendant bearing his own costs.

Considerable expense has been undertaken in conducting this action on behalf of the defendant to date. Therefore this offer is only open for acceptance until close of business Friday 28 September 2001 and will not be reopened after it has expired.

It has been our client’s policy to enforce costs orders obtained in successfully defending claims where there is little if any evidence of negligence on the part of the defendant and when the plaintiff has refused to take advantage of an invitation to discontinue such a claim. We have no reason to believe that we will not receive similar instructions (ie to enforce any costs order) irrespective of your clients’ unfortunate circumstances. In this regard we would like to point out that, on instructions, we have conducted searches which reveal that your clients own land at Tanawha which is unencumbered and therefore there should be sufficient assets held by your clients to satisfy any award for costs made in the defendant’s favour.

We look forward to hearing from you with respect to your client’s response to this offer by close of business on Friday.”

3. [3]
   The offer contained in the letter was not accepted and the matter proceeded to trial. The letter is admissible as to the question of costs despite being marked “without prejudice save as to costs”: Cutts v Head [1984] 1 All ER 597 applying the dicta of Cairns LJ in Calderbank v Calderbank [1975] 3 All ER 333 at 342. It was said in Cutts v Head (at 610(e)) that such offers could not be used to replace a payment into court system such as that which existed under the superseded Rules of this Court. The UCPR replaced the payment into court system, with the formal offer system set out in Part 5 of Chapter 9 of UCPR.

4. [4]
   The UCPR provides that the costs a court may award must be decided in accordance with Part 2 of Chapter 17 of UCPR: r 680(1)(b) UCPR; and may order costs on an indemnity basis: r 704(1) UCPR. The circumstances here do not fall within any of the categories referred to in r 704(2) UCPR. The letter of offer cannot be regarded as an offer to settle under Part 5 of Chapter 9 of the UCPR because the offer was expressed to be open only for a period of 4 days. Under r 355(1) UCPR a formal offer to settle must remain open for at least 14 days. Mr Diehm’s written submission on behalf of the defendant does not contend otherwise. Rather he refers to what he describes as “a failing in the system provided by the rules”, which “is one which may be redressed by the Court, acting consistently with the policy underlying the rules, by an appropriate exercise of the discretion available …”.

5. [5]
   Part 5 of Chapter 9 provides specifically for costs in the event of an offer to settle being made by a defendant, and r 361(3)(b) provides for an indemnity costs order in favour of a successful defendant in the circumstances set out in the sub-rule, subject to the court’s discretion. Those circumstances do not apply here and, as I have noted, there is an implied acceptance in the defendant’s submissions that he did not make an offer to settle under that Part in any event.

6. [6]
   Having considered the matter, I can see no reason to depart from the general rule, and that is that costs on the standard basis should follow the event. I can see no deficiency in the UCPR, as the successful defendant has its costs albeit on the standard basis; and this is particularly so in the light of the implied decision of the defendant to make an offer to settle which did not qualify as an offer to settle under UCPR. If I am wrong in my conclusion, I would have reached the same conclusion by application of common law principles. These principles are conveniently set out in the judgment of Badgery-Parker J in Rouse v Shepherd (No 2) and Others [1994] 35 NSWLR 277 which was a claim for indemnity costs against an unsuccessful defendant. As to the relevant circumstances, I adopt my findings as to the plaintiff’s reliability set out in my judgment: Carr v Anderson [2001] QDC 300. This is not a case in which “the justice of the case” requires an indemnity costs order: Andrews v Barnes (1887) 39 Ch D 133 at 141, or where there is “some special or unusual feature in the case to justify the court in departing from the ordinary practice”: per Brandon LJ in Preston v Preston [1981] 3 WLR 619 at 637, quoted with approval by Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401; nor do I think that the plaintiffs’ refusal of the offer (given my observations about him) could amount to an imprudent refusal of an offer to compromise: Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724.

7. [7]
   The order of the court will be that the defendant have his costs of and incidental to the claim on the standard basis. The defendant should pay the plaintiffs’ costs (if any) of and incidental to the application for indemnity costs.