Tomlins v Sheikh[2005] QDC 229

DISTRICT COURT OF QUEENSLAND

1. [1]
   Judgment was delivered in this proceeding on the 16 June 2005 when the parties were heard further on the question of costs.

2. [2]
   At the outset plaintiff’s counsel submitted, that in view of the quantum of the judgment awarded the court should award the plaintiff her costs up to the date on which the proceedings started on a standard basis but limited to an amount of $2500.00 and after that date on an indemnity basis [pursuant to s 56(3)(b) of the Personal Injuries Proceeding Act 2002 (“PIPA”)].

3. [3]
   A perusal of the court file reveals that the plaintiff filed her claim which started the proceeding on 3 August 2004 but did not then file “…a sealed envelope containing a copy of the claimant’s mandatory final offer” (“MFO”) as provided by s 40(5) of PIPA.  On the other hand the defendant filed such a sealed envelope containing his MFO at the time of filing his defence as provided by s 40(6) of PIPA.

4. [4]
   The court then heard further oral submissions from both counsel with the defendant’s counsel essentially submitting that the only MFO to which the court should have regard “in making a decision about costs” pursuant to s 40(8) of PIPA, is the MFO “filed in the sealed envelope at the commencement of the proceedings”.^[1]

5. [5]
   Plaintiff’s counsel responded that the plaintiff’s failure to file her MFO as provided by s 40(5) “is merely a procedural defect”^[2]but sought leave, which was granted, to consider the matter further and provide the court with written submissions.

6. [6]
   Those further written submissions from the plaintiff’s counsel are to hand as is a response from the defendant’s counsel.

7. [7]
   Plaintiff’s counsel’s submissions also include an affidavit from Christopher Francis McManus (“McManus”), instructing solicitor, which among other things states:

• On 9 July 2004 the parties participated in a compulsory conference pursuant to the requirements of PIPA ^[3];
• As the claim was not settled at conference the parties exchanged mandatory final offers^[4];
• The plaintiff’s MFO dated 9 July 2004 and delivered at the compulsory conference was $35,000.00^[5];
• The defendant’s MFO dated 9 July 2004 and delivered at the compulsory conference was $18,500.00^[6];
• At the time of filing the proceeding by way of the plaintiff’s claim and statement of claim on 3 August 2004 a sealed envelope containing a copy of the plaintiff’s MFO was not filed at the court.

8. [8]
   McManus’ affidavit also exhibits the affidavit of Felicity Emma Collins (“Collins”) employed by the defendant’s solicitors and sworn 16 June 2005 which confirms the events at the compulsory conference and further that on the 11 October 2004 the plaintiff delivered to the defendant what is described as “a formal offer to settle” under Chapter 9 Part 5 of the UCPR in the sum of $40,000.00 but for reasons set out below this further offer would not seem to be of any consequence in the proceeding.

9. [9]
   The question the court now has to decide is whether a party to the proceeding (in this instance the plaintiff) is entitled to the benefit provided by s 56 of PIPA in respect of any costs order to be made in the proceeding in the circumstances which presently apply ie., where the plaintiff has not complied with s 40(5) of PIPA in respect of her MFO which though delivered at the compulsory conference was not filed “…at the start of the proceeding”.

Counsels’ Submissions

10. [10]
    Plaintiff’s counsel reiterates his oral submissions that the court should make an order for costs in the plaintiff’s favour in accordance with s 56(3)(b) of PIPA because the judgment amount awarded to the plaintiff is “…more than the claimant’s mandatory final offer” and that pursuant to that section the plaintiff is entitled to a costs order that:

3. "1.
   The Defendant pay the Plaintiff’s costs of and incidental to the action up to the date on which the proceeding started (that is, up to 3 August 2004) on the standard basis up to a limit of $2,500.00; and

2. The Defendant pay the Plaintiff’s costs of and incidental to the action on and after 3 August 2004 on an indemnity basis.”^[7]

11. [11]
    Defendant’s counsel submits that the appropriate order in this matter is that the plaintiff should receive no order as to costs up to the date of commencement of the proceeding but thereafter she should receive her costs assessed on the standard basis only in accordance with the UCPR. This submission is predicated on the basis that the only MFOs to which the court may have regard in the consideration of s 56 of PIPA are those that are filed by the parties in accordance with s 40(5) and (6) respectively and this interpretation is consistent with the provisions of Chapter 2 Part 1 Divisions 1, 2 and 4 of PIPA being “substantive” as opposed to “procedural law”.^[8]

12. [12]
    Before the start of a court proceeding in a claim such as this (as is now common in most claims for damages for personal injury) comprehensive pre-court procedures must be undertaken by a “claimant” and a “respondent” culminating in a conference of the parties called the “compulsory conference” at which a claimant and respondent “… must … exchange written final offers”.^[9]

13. [13]
    If neither offer is accepted by the other party and a proceeding is started “…in a court on the claim, the claimant must, at the start of the proceeding, file at the court a sealed envelope containing a copy of the claimant’s mandatory final offer.”^[10]

14. [14]
    Section 40 further relevantly provides:

3. “(6)
   A respondent must, before or at the time of filing a defence, file at the court a sealed envelope containing a copy of the respondent’s mandatory final offer or, if a joint final offer is made by multiple respondents, a copy of the respondents’ mandatory final offer.

3. (7)
   The court must not read the mandatory final offers until it has decided the claim.

3. (8)
   However, the court must, if relevant, have regard to the mandatory final offers in making a decision about costs.

3. (9)
   The court may, on application by a party, dispense with the obligation to make mandatory final offers.”

15. [15]
    It is well established law that “conflicting statutory provisions should be reconciled so far as is possible” and the observations of the High Court in Project Blue Sky Inc & Ors v Australian Broadcasting Authority^[11]are relevant to this proposition where it was stated:

“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute: See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213 per Barwick CJ. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole":  Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617 per Lord Scarman, "in the context of the legislation read as a whole". In Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed: Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312 per Gibbs CJ, 315 per Mason J, 321 per Deane J.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals: Ross v The Queen (1979) 141 CLR 432 at 440 per Gibbs J. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions: See Australian Alliance Assurance Co Ltd v Attorney-General of Queensland [1916] St R Qd 135 at 161 per Cooper CJ; Minister for Resources v Dover Fisheries (1993) 43 FCR 565 at 574 per Gummow J; 116 ALR 54 at 63. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other": Institute of Patent Agents v Lockwood [1894] AC 347 at 360 per Lord Herschell LC. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.”^[12]

16. [16]
    The further observations by the High Court at paragraph [93] of that report are also of relevance for present purposes:

“In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood ([1978] 1 NSWLR 20 at 23-24. See also Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 161-162 per Gibbs J) in criticising the continued use of the "elusive distinction between directory and mandatory requirements" (Australian Capital Television Pty Ltd v Minister for Transport and Communications (1989) 86 ALR 119 at 146 per Gummow J) and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning: McRae v Coulton (1986) 7 NSWLR 644 at 661; Australian Capital Television (1989) 86 ALR 119 at 147.

That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales: Hatton v Beaumont [1977] 2 NSWLR 211 at 213, 226; Attorney-General (NSW); Ex Rel Franklins Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955 at 965; Tasker v Fullwood [1978] 1 NSWLR 20 at 24; National Mutual Fire Insurance Co Ltd v Commonwealth of Australia [1981] 1 NSWLR 400 at 408; TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93 at 102; 62 ALR 63 at 71; McRae v Coulton (1986) 7 NSWLR 644 at 661 and see Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 454 at 457-460; Yates Security Services Pty Ltd v Keating (1990) 25 FCR 1 at 24-26; 98 ALR 68 at 90-92. See also two recent decisions of the Court of Appeal of the Supreme Court of the Northern Territory:  Johnston v Paspaley Pearls Pty Ltd (1996) 110 NTR 1 at 5; Collins Radio Constructions Inc v Day (1997) 116 NTR 14 at 17; and Wang v Commissioner of Inland Revenue [1994] 1 WLR 1286 at 1294, 1296; [1995] 1 All ER 367 at 375, 377. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute": Tasker v Fullwood [1978] 1 NSWLR 20 at 24.”^[13]

17. [17]
    It cannot be disputed that one of the primary purposes of PIPA is to promote the “speedy resolution of claims for damages for personal injury”^[14]and an integral part of that objective is the careful adherence to pre-court procedures and the imposition of sanctions on one party or another in respect of costs in the event that a party elects to start a proceeding and either that party’s or the defending party’s hopes or expectations are not realised by the court’s decision.

18. [18]
    Should a party to a proceeding who fails to comply with a mandatory provision of a statute to file a document the contents of which are known and accepted as being correct by the other party and which has been created under the pre-court procedures of the legislation, be denied the costs advantage under a following provision of the legislation, arising from the court’s ultimate decision?

19. [19]
    There is also no doubt that the MFO referred to in s 56 is the same MFO exchanged by each party at the compulsory conference^[15]and the same MFO to be filed at the start of the proceeding.^[16]

20. [20]
    Section 56 of PIPA does not specify that it is only the MFO filed in accordance with s 40(5) and (6) which must be considered by the court when it is required to do so and the Attorney-General’s Second Reading Speech and the Explanatory Notes to the legislation reinforce PIPA’s purposive intent to advantage or penalise as the case may be, parties to litigation who have not succeeded in achieving a compromise before commencing or defending the litigation (my emphasis).

21. [21]
    It is my view therefore that the provisions of s 56 (in this instance s 56(3)(b)) should apply notwithstanding that the plaintiff did not file her MFO under s 40(5) of PIPA as there is nothing contained in s 56 which makes it compulsory for the court to have regard only to the filed offer. It would be contrary to the purpose and intent of the legislature to deny a party the advantage of costs sanctions in the legislation merely on the basis that it failed to file the MFO where no advantage, prejudice or detriment is caused to one party or another by such a formal omission.

22. [22]
    It follows therefore that an order for costs should be made in favour of the plaintiff in accordance with s 56(3)(b) of PIPA.

23. [23]
    As stated in paragraph [8] above, following the compulsory conference and the start of proceedings the plaintiff also delivered “a formal offer to settle” under Chapter 9 Part 5 of the UCPR. Although I was not addressed on this issue I should say that it is my view that the delivery of an offer to settle under the UCPR would have no impact on the court’s mandatory obligation to apply the “principles” set out in s 56 of PIPA when considering the question of costs under PIPA despite the fact that s 56 is not couched in the same emphatic terms as s 325(1) of the WorkCover Queensland Act 1996 as discussed by the Court of Appeal in Sheridan v Warrina Community Co-operative Ltd & Anor [2004] QCA 308.

24. [24]
    In all the circumstances I make the following orders as to costs:

1. The Defendant pay the Plaintiff’s costs of and incidental to the action up to the date on which the proceeding started (that is, up to 3 August 2004) on the standard basis up to a limit of $2,500.00; and

2. The Defendant pay the Plaintiff’s costs of and incidental to the action on and after 3 August 2004 on an indemnity basis