Nichols v Curtis and QBE Insurance (Australia) Limited (No. 2)
[2010] QDC 99
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- Unreported Judgment
- Nichols v Curtis and QBE Insurance (Australia) Limited (No. 2)[2010] QDC 99
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Nichols v Curtis and QBE Insurance (Australia) Limited (No. 2)[2010] QDC 99
Nichols v Curtis and QBE Insurance (Australia) Limited (No. 2)[2010] QDC 99
DISTRICT COURT OF QUEENSLAND
CITATION: | Nichols v Curtis and QBE Insurance (Australia) Limited (No 2) [2010] QDC 99 |
PARTIES: | Shannon Michelle Nichols v Robert Graham Curtis And QBE Insurance (Australia) Limited (ACN 780 031 191 035) |
FILE NO/S: | BD3070 of 2007 |
DIVISION: | Civil Trials |
PROCEEDING: | Application for costs |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 23 March 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Written submissions to 16 March 2010 |
JUDGE: | Andrews SC DCJ |
ORDER: | the Second Defendant pay the costs of the Plaintiff on a standard basis to a maximum of $2,500 |
CATCHWORDS: | COSTS – where motor vehicle accident claim – where insurer made reasonable mandatory final offer – where plaintiff’s continuity of employment deteriorated after mandatory final offer - where award of damages exceeded insurer’s mandatory final offer – whether award of damages affected by factors not reasonably foreseeable at time of making mandatory final offer
Motor Accident Insurance Act 1994 s 55F(7) Wyong Shire Council v Shirt [1980] HCA 12 |
COUNSEL: | S P Taylor of Counsel for the plaintiff Quinlan Miller and Treston solicitors for the second defendant |
SOLICITORS: | Queensland Law Group for the plaintiff Quinlan Miller and Treston solicitors for the second defendant |
- [1]The parties are in dispute as to the proper order for costs after an award of damages for a motor vehicle accident claim. The defendant insurer (“insurer”) made a mandatory final offer (“MFO”) to settle for less than the award. The insurer submits that there were “factors that were not reasonably foreseeable” when it made its MFO. If correct, the court may consider a subsequent offer made by the insurer which exceeded the award of damages.
- [2]In September 2006 the parties agreed that any damages recovered in relation to the subject accident should be reduced by 40% for contributory negligence.
- [3]On 10 October 2007 the parties convened a compulsory conference pursuant to the Motor Accident Insurance Act 1994 (“MAIA”) and at the conclusion at that conference each relevant party exchanged MFOs as follows:
Plaintiff MFO - $75,000 plus costs,
Second defendant MFO - $28,860.
- [4]Proceedings commenced on 25 October 2007.
- [5]After proceedings commenced, the parties exchanged offers pursuant to Chapter 9 Part of the Uniform Civil Procedure Rules 1999 (“UCPR”), as follows:
29 October 2007 – offer by the plaintiff - $65,000 plus costs
20 May 2009 – offer by the second defendant - $42,500 plus statutory costs
8 September 2009 – offer by the second defendant - $50,000 plus statutory costs
- [6]At approximately 8.33 am on 15 February 2010 being the morning of the first day of trial, the plaintiff made a Calderbank offer, in the sum of $50,001 plus standard costs. That offer was said to be open for acceptance until 10 am that day.
- [7]On 19 February 2010, I gave judgment for the plaintiff, after a reduction of 40% for contributory negligence, in the sum of $47,618.10.
- [8]There was no issue that the claim was a motor vehicle accident claim and that s 55F of the MAIA applied.
- [9]The award was more than $30,000 but not more than $50,000 in damages, and the amount awarded was less than the claimant plaintiff’s MFO and more than the second defendant insurer’s MFO. Consequently, pursuant to s 55F(3)(a) of the MAIA the court, subject to certain exceptions, is required to award costs on a standard basis up to a maximum of $2,500.
- [10]The parties are in contest as to the application of s 55F(7) of the MAIA to the facts of this case. Section 55F(7) provides so far as is relevant:
“55F(7) If an award of damages is affected by factors that were not reasonably foreseeable by a party at the time of making the party’s mandatory final offer, the court may, if satisfied that it is just to do so, make an order for costs under sub-section … (3) as if the reference to a mandatory final offer in the relevant sub-section 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.
Example –
Suppose that a claimant’s medical condition suddenly and unexpectedly deteriorates after the date of the final offers and the court makes a much higher award of damages than would have been reasonably expected at that time. In that case, the court may ignore the mandatory final offers and award costs on the basis of later offers of settlement.”
- [11]The plaintiff seeks an order for costs on the standard basis in the amount of $2,500. The insurer seeks orders that:
- (a)Pursuant to s 55F(3)(c)(i) of the Motor Accident Insurance Act 1994, the Second Defendant pay the costs of the Plaintiff on a standard basis to a maximum of $2,500 incurred to the date of the offer made by the Second Defendant on 8 September 2009;
- (b)Pursuant to s 55F(7) and s 55F(3)(c)(ii) of the Motor Accident Insurance Act 1994, the Plaintiff pay the costs of the Second Defendant on a standard basis incurred subsequent to 8 September 2009, to be agreed or to be assessed;
- (c)Payment of the judgment sum to the Plaintiff be stayed pending an assessment (or agreement) or the Second Defendant’s costs;
- (d)The Second Defendant’s application to have its costs payable by the Plaintiff set-off against the judgment sum be adjourned to a date to be fixed.
- [12]The most significant component of the judgment was the award for future economic loss of $36,000.[1] The insurer submits that award was affected by factors which were not reasonably foreseeable to it at the time it made its MFO on 10 October 2007. The insurer submitted that the award for future loss of earning capacity was affected by the plaintiff’s extended period of unemployment which occurred after May 2008 (sic)[2] for the following reasons:
- (a)At the time of the exchange of MFOs, the plaintiff was able to regularly obtain casual work in coffee shops and there was no evidence that she was then having any physical difficulty with that work, nor evidence that she had difficulty interacting with customers, nor evidence that her anxiety in that regard would prompt her to stop working in the hospitality industry.
- (b)The plaintiff was able to undertake physically demanding work. She had found employment as a cleaner with the Kilcoy Meatworks and had resigned from that employment because she lost her driver’s licence;
- (c)There was no record of any complaint of neck symptoms made by the plaintiff to her treating general practitioners between the date of the accident and the date of the MFOs, and the plaintiff had not sought any form of rehabilitation;
- (d)The plaintiff’s employment history in the 2 years after the accident was better than it had been prior to the accident. She worked in coffee shops and cleaning, and demonstrated little difficulty finding alternative employment. She ceased her work in a nursery in May 2008 (well after the MFOs) and it was only after that that, despite continued efforts, she was unable to find alternative employment;
- (e)The plaintiff’s employment capacity was, prior to the motor vehicle accident, already negatively affected by lack of education, history of depression, lack of confidence in dealing with customers, history of alcohol abuse and history of under-employment. Her inability to find employment after May 2008 despite continued efforts was very different from her experience in finding employment between the date of the motor vehicle accident and the date of the MFO on 10 October 2007. To the insurer, that inability of the plaintiff to find employment meant that even a minor physical restriction would have a more significant effect than the insurer had otherwise thought.
- (f)Because of the plaintiff’s extended unemployment after May 2008, the insurer was required to review its assessment of the likely impact of the injury on the plaintiff’s future employment prospects and the award for future loss of earning capacity.
- [13]I generally accept the insurer’s submissions set out above although for clarity I note that with respect to submission (a) it is more correct that there was an absence of evidence about whether the plaintiff was having physical difficulty with casual coffee shop work and an absence of evidence about whether she had difficulty interacting with customers, and whether her anxiety in that regard would prompt her to stop working in the hospitality industry. With her history of performing that work it was reasonable for the insurer to make an MFO on the basis that the casual coffee shop work would probably continue and be regarded by the court a factor reducing an award for future economic loss. The other facts submitted also make reasonable the quantum of the insurer’s MFO. On the evidence known at the date of the MFO a reasonable expectation was that future economic loss would be based on findings that the plaintiff could find and retain work in the hospitality industry, that she could deal with customers and that she could obtain and perform heavy cleaning work at a meatworks. However, I find that it was a factor reasonably foreseeable that the plaintiff’s work history between MFO and trial might deteriorate for reasons already expressed by experts.
- [14]Three persons had expressed opinions in reports provided by the plaintiff’s solicitors to the insurer in disclosure prior to the MFO. Those reports included opinions about the plaintiff’s physical, social, educational and psychological disadvantages in the labour market. The plaintiff’s work history to the time of the MFO suggested that she obtained and retained types of work with which she should have had difficulty on a reasonable reading of the reports. While it was reasonable for the insurer to make a MFO on the basis that the plaintiff would continue as her work history prior to the MFO that is not the test in s 55F(7) of the MAIA. I reject the insurer’s implied submission that a downturn in the plaintiff’s ability to obtain and retain work was not a reasonably foreseeable factor having regard to the expert reports it had received in disclosure from the plaintiff’s solicitors.
- [15]Those reports are medical reports of Dr Malcolm Wallace dated 10 June and 4 July 2006, an occupational therapy report of L J Stephenson dated 13 June 2006, and an employment report of Ms L Roberts dated 11 June 2006. Dr Wallace opined that there was a DRE2 category impairment of the cervical spine in the range of 5 to 8%; that the pain was aggravated by prolonged sitting and associated with occipital headaches; that the plaintiff had cervical spinal pain worse on the right and with flexion; that she could not stand or sit for any length of time, or do reception work; that car driving caused problems and that the condition was ongoing and stable. Ms Stephenson noted the plaintiff’s reduced capacity for sitting or standing for long periods due to neck pain and headaches. Ms Roberts noted the plaintiff’s complaints that she was depressed, had engaged in self harm, had no confidence and gets scared all the time when faced with new situations and concluded she had lack of self-esteem, emotional instability and other barriers to retraining. It was this which explains the plaintiff’s inability to work with customers.
- [16]The test in s 55F(7) requires the court to consider whether the award of damages was affected by “factors that were not reasonably foreseeable”. That can be contrasted with other concepts related to the reasonableness of the MFO or the probability of factors changing based on history known to the date of the MFO. I find that the award of damages was affected by factors that were reasonably foreseeable at the date of the MFO. I am fortified by my conclusion that in another legal context it has been confirmed that foreseeability and probability are different:
“a risk of injury which is quite unlikely to occur … may nevertheless be plainly foreseeable ...when we speak of a risk of injury as being "foreseeable" we are not making any statement as to the probability or improbability of its occurrence...A risk which is not far-fetched or fanciful is real and therefore foreseeable.”[3]
- [17]The prospects of the plaintiff’s obtaining a greater assessment for future loss of earning capacity were increased by factors arising after the MFOs were exchanged. Her continuity of employment deteriorated but in ways consistent with disadvantages referred to in prior expert reports. The factors were reasonably foreseeable from a reading of the expert opinions. Accordingly, I am not entitled to make an order for costs pursuant to s 55F(7). I am obliged to award costs to the plaintiff on the standard basis to the maximum sum of $2,500.