Windon v Edwards[2005] QDC 29

HIS HONOUR: The Court distributed reasons for its conclusion to the parties on the 10th of December last year. The plaintiff established entitlement to damages of $25,080.90.

Pursuant to the invitation in the reasons to make submissions about what the proper orders ought to be, the parties have produced written submissions about costs rather than incur the trouble and expense of attending in Court today. I will place with the file the costs submissions on behalf of the second defendant prepared by Mr Howe, and the fax of today's date enclosing costs submissions on behalf of the plaintiff, from Mr Simpson.

The Court now learns that the mandatory final offers of the parties were $25,000 from the plaintiff, $20,000 from the second defendant, which means that section 55F(2) of the Motor Accident Insurance Act 1994, as amended, is applicable. It provides, in particular, on the face of things, that paragraph (b) is applicable.

The second defendant submits that it ought not to be applied and that there ought to be either no order for costs, which would give effect to section 55F(2(a), or, alternatively, costs should be awarded on the Magistrate's Court scale, which is the result that would be indicated by rule 698 sub rule (2). The latter was the outcome to be expected in view of the judgment amount before information regarding the mandatory final offers was to hand.

The argument in favour of there being no order is based on a dissection of the judgment amount which included interest components of $1,200 on the past component of general damages, $381 on special damages and $100 interest on past Griffiths v. Kerkemeyer damages.

Mr Howe's estimate of the amount of interest accrued since the making of the relevant mandatory offer in June 2003 is $420, or thereabouts. His point is that if matters were to be judged as at June 2003, (a) of section 55F(2) would be applicable, rather than paragraph (b).

I agree with Mr Simpson's submission that the section does not contemplate any attempt to dissect judgment sums to separate out interest or any other amounts for the purpose of determining whether an offer is more or less favourable than the judgment amount. He submits that a strict interpretation of the section is called for.

It is expressed in mandatory terms giving the Court little, if any, room to manoeuvre. Experiences shows - and, indeed, it would not have been difficult to predict in advance this would happen - that sections such as section 55F, and, indeed, the rules in the UCPR regarding costs offers may have, in particular cases, outcomes that seem capricious, even harsh or unjust.

The judgment has been made by the legislators that the stakes in litigation ought to be raised for participants in the ways set out. As much as can be has been done to deprive the Courts of a discretion, especially in s 55F.

I think the intention that costs on an indemnity basis, which must be taken as reference to UCPR rule 704, should be awarded to the plaintiff in the circumstances covered by (b) is very clear. There is a difficulty in achieving that outcome if rule 698 is applied; that is for the reason that there is no indemnity basis of assessment contemplated in the Magistrate's Court costs scale in schedule 3 of the rules. In respect of claims by a solicitor against the solicitor's own client, rule 690 regulates the matter, but for the purposes of costs of a party in a proceeding, there is no special scale. The observation might be made that if the rule 690 approach were proposed to be adopted, there would be no advantage flowing to the plaintiff in the present case because all relevant amounts that might be referred to exceed $20,000, which marks the highest level incorporated in the Magistrate's Court scale. As I understand the situation, there is no provision in Magistrate's Court costs assessments for that to be exceeded.

The same difficulty was discussed by the Court of Appeal in Beardmore v. Franklins Management Services Pty Ltd [2002] QCA 60. There, the successful litigant's entitlement to indemnity costs presumably arose under the Uniform Civil Procedure Rules 1999. As to the difficulty of collecting indemnity costs in practice in the Magistrate's Court, see what The President said at paragraph [24] and what Ambrose J said at paragraph [95].

If the plaintiff is to have the indemnity costs contemplated and then it appears the taxation has to occur pursuant to the District Court scale. As the Court of Appeal has emphasised in Beardmore, rule 698(1) gives the Court a discretion to overcome the effect of sub rules (2) and (3). Beardmore was regarded as an appropriate case in which to make such an order. I think the present is one, too.

As Mr Simpson notes in his submission, the District Court costs scale, found in schedule 2 of the UCPR, makes specific provision for costs where the amount recovered or claimed is not more than $50,000. The claim here was for $65,000. (See the heading and following introductory provisions preceding item 73.)

The matter ought not to be approached on the basis that the plaintiff, if adjudged entitled to indemnity costs on the District Court scale, is obtaining some underserved windfall. It is already noted that provisions such as section 55F can seem to work capriciously. The plaintiff will get absolutely nothing on account of his costs incurred up to the date when he commenced his proceeding, notwithstanding being allowed "indemnity" costs. He will be substantially out of pocket in respect of costs.

The whole purpose of provisions found in the Act under consideration and other Acts - also rules regarding costs - is to punish those who do not make and/or accept appropriate offers.

I am not persuaded the second defendant, in this case, is entitled to escape its punishment on the basis presented by

Mr Howe. The second defendant, it seems, ought to have anticipated the delay that might precede a trial and formulated a mandatory final offer - or reacted to the plaintiff's mandatory final offer - accordingly.

There will be judgment for the plaintiff against the second defendant for $25,088.90 with costs from the date of commencement of the proceeding to be assessed on the indemnity basis on the District Court scale notwithstanding rule 698(2).