Ward v Coomber[2005] QDC 251

1. [1]
   On 16 June 2005, I gave judgement for the plaintiff against the defendants for $36,718.65 inclusive of interest. The proceeding was one for damages for personal injury arising out of a motor vehicle collision which occurred on 27 October 2001. Written submissions regarding costs were to be provided.

2. [2]
   The judgment amount was wrong because an amount of damages assessed had inadvertently been omitted from the total. On 14 July 2005, the error was corrected and judgement given for the plaintiff against the defendants for $43,718.65 inclusive of interest.

3. [3]
   It appears that the compulsory conference required by Division 4 Part 5A of the Motor Accident Insurance Act 1994 (MIA) took place on 26 June 2004.  Following that, the written final offers (called mandatory final offers) required by the Act were made; by the plaintiff $123,116 plus costs; by the second defendant $37,500 plus costs.

4. [4]
   Section 55F MIA deals with costs. Subsection (3) requires the court to “apply the following principles –

“(a) If the amount awarded is less than the claimant’s mandatory final offer, but more than the

insurers mandatory final offer, costs are to be awarded to the claimant on a standard basis

up to a maximum of $2,500.00. 

(b)If the amount awarded is equal to or more than the claimant’s mandatory final offer, costs

are to be awarded to the claimant on the following basis –

2. (i)
   costs up to the date on which the proceedings started are to be awarded on a standard basis up to a limit of $2,500;

2. (ii)
   costs on or after the date on which the proceedings started are to be awarded on an indemnity basis.;

(c)If the amount awarded is equal to or less than the insurers mandatory final offer, costs are to

be awarded on the following basis –

2. (i)
   costs up to the date on which the proceedings started are to be awarded to the claimant on a standard basis up to a limit of $2,500;

2. (ii)
   costs on or after the date on which the proceedings started are to be awarded to the insurer on a standard basis.”

5. [5]
   On 9 July 2004 a statement of claim was filed. Damages were sought for neck injury, back injury, shock and right arm injury. There was no reference to psychiatric or psychological injury.

6. [6]
   At the commencement of the trial, counsel for the plaintiff sought and was granted leave to amend the statement of claim to include a claim for psychological injury caused by the collision the subject of the proceeding. There was no objection. The defendants had been aware of the potential for such a claim for some time. On 12 November 2004, the plaintiff had commenced treatment with Dr. Radovich, a Psychiatrist. On 10 January 2005 the plaintiff consulted with Dr. Cantor, a Psychiatrist for medico-legal purposes. Both Dr Radovich and Dr. Cantor provided evidence at the trial. On 23 November 2004 the plaintiff’s solicitors enquired about the second defendant funding for psychological treatment proposed by Dr. Radovich. On 30 November 2004, the plaintiff’s solicitors gave notice of an intention to claim for psychological injury. In the meantime, the second defendant had given notice to the plaintiff’s solicitors it required to arrange an independent psychiatric assessment. Consequently on 4 February 2005 and 17 May 2005, the plaintiff consulted with Dr. Chalk, Psychiatrist, arranged by the second defendant. Dr Chalk provided evidence at the trial.

7. [7]
   On 22 October 2004, the second defendant, made what purported to be a written offer pursuant to Chapter 9, Part 5 of the Uniform Civil Procedure Rules (UCPR) of $45,000 plus $2,500 costs.  On 27 October 2004, the plaintiff responded with what purported to be a written offer, pursuant to Chapter 9, Part 5 UCPR offer of $66,000 plus costs. (the UCPR offers)

8. [8]
   Rule 361 UCPR (Part of Chapter 9, Part 5 UCPR) is the rule which applies if a defendant makes an offer to settle that is not accepted by the plaintiff and the plaintiff obtains a judgement that is not more favourable to the plaintiff than the offer to settle. Unless a party shows another order for costs is appropriate in the circumstances, the court is required to order the defendant pay the plaintiff’s costs calculated on the standard basis up to and including the day of service of the offer to settle and order the plaintiff pay the defendants costs calculated on the standard basis after the day of service of the offer to settle.

9. [9]
   Rule 353 (3) UCPR provides that an offer to settle under Chapter 9, Part 5 “must be in writing and must contain a statement that it is made under this part.” The UCPR offer by the defendants was entitled “offer to settle” and commenced “Take notice that the first and second defendants hereby offer to settle in accordance with Part 5 of the Uniform Civil Procedure Rules 1999… ”It was submitted by the plaintiff that because the defendants UCPR offer did not state the chapter of the UCPR it did not comply with rule 353 (3) and was therefore not an offer to settle under Chapter 9, Part 5 UCPR. I do not think this is correct, because its identification on its face as an offer to settle under Part 5 UCPR identifies it as an offer under Chapter 9, Part 5 UCPR. Part 5 of Chapter 9 is the only part in the UCPR which provides for offers to settle.

10. [10]
    Section 55 F(7) MIA provides that “if an award of damages is affected by factors that were not reasonably foreseeable by a party at the time of making the parties mandatory final offer, the court may, if satisfied that it is just to do so, make an order for costs under subsection - - (3) as if the reference to a mandatory final offer in the … subsection were a reference to a later offer made in the light of the factors that became apparent after the parties completed the exchange of mandatory final offers”.

11. [11]
    On the material before me, the defendants UCPR offer was made on 22 October 2004, three weeks before the plaintiff consulted Dr. Radovich and a month before the plaintiffs solicitors enquired regarding funding for psychological treatment proposed by Dr Radovich. I note that prior to the plaintiff solicitors first contact with the second defendant about the plaintiff’s psychological condition, the second defendant was probably in possession of medical records of the Maroochydore seven day medical centre, relating to the plaintiff which together with the statement of loss and damage, make reasonably clear the plaintiffs addiction to prescription drugs and refer to assorted ailments. However, these documents do not to my mind alert a reader to the prospect of psychological injury caused or contributed to by the collision, the subject of the proceedings. There is nothing else in the material before me to suggest any other potential factors relevant to the application of subsection (7).

12. [12]
    If costs were to be awarded based solely on the MFOs’, the claimant would obtain a costs order on a standard basis up to a maximum of $2500.00. If costs were to be awarded solely on the UCPR, then unless the plaintiff was able to show some other order was appropriate in the circumstances, the plaintiff would obtain an order for costs calculated on the standard basis, up to and including the day of service of the offer to settle and the defendant would obtain a costs order for costs calculated on the standard basis, after the day of service of the offer to settle.

13. [13]
    The second defendant contended that the appropriate costs order should be for the plaintiff to have her costs calculated on a standard basis, up to the date the proceedings started and up to a maximum of $2500 and for the second defendant to have its costs calculated on a standard basis thereafter. This is the order contemplated by section 55 F (3) (c) MIA.

14. [14]
    Section 55 F (3) is mandatory in its terms. If the court awards more than $30,000 but not more than $50,000, the court must apply the principles set out therein. The only discretion is introduced by subsection (7).

15. [15]
    Here, the award of damages was affected by factors that were not reasonably foreseeable by the defendants at the time the defendants made their MFO. Subsection (7) appears to me to apply to a further offer made when information not reasonably foreseeable at the time of the parties exchange of MFO “comes to light”. It’s purpose in that event is to allow the parties on either of them a further opportunity to obtain the benefit or avoid the detriment of the costs consequences provided in section 55 F (2) and (3). I do not think it has application, simply because a party on reflection considers its MFO may have been too low and would wish to increase it. As White J commented in Gitshan, Edwards and Jensen v Suncorp Metway Insurance Limited 2002 QCA 310, “the intention of the legislature was that the parties be as fully prepared as if commencing a trial of the action when    participating in the compulsory conference.” Para 21.

16. [16]
    The defendants UCPR offer was stated to be open for 14 days after the date of its service. So far as I have been made aware, it was not renewed after the plaintiff’s solicitors queried the second defendants preparedness to fund psychological treatment for the plaintiff. On the material before me it is not shown to have been made in the light of psychological factors. Nor does it purport to be made relying on section 55 F (7).

17. [17]
    I do not think subsection (7) has application. Even if it did, I would not make an order for costs different to that which appears below. I would not consider it just to do so. In coming to that view of it, I have had regard to the relatively small award and to the mandatory upper limit of $2,500 for the plaintiff’s costs. I record I have not overlooked the fact that the plaintiff’s UCPR offer was for $66,000 plus costs and was dated the 27 October 2004.

18. [18]
    In my opinion, in the circumstances, the appropriate order for costs is that the defendants pay the plaintiffs costs of and incidental of the proceeding up to a maximum of $2,500. Order accordingly.