Kurk v Miller (No. 2)[2014] QDC 135

DISTRICT COURT OF QUEENSLAND

1. [1]
   On 16 May 2014, after a trial where the only issue was quantum, I gave judgment for the plaintiff in the sum of $83,971.28. I have received written submissions from both parties in relation to an order for costs. The parties agree to the application being determined on the papers.

2. [2]
   The plaintiff seeks an order for costs on the indemnity basis pursuant to r360 of the Uniform Civil Proceedure Rules 1999 (Qld) (“UCPR”). Rule 360 provides:

1. (1)
   If—

1. (a)
   the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle; and

2. (b)
   the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer;

the court must order the defendant to pay the plaintiff's costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances.

2. (2)
   If the plaintiff makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule.

3. [3]
   The plaintiff submits the defendants should pay indemnity costs because the judgment sum exceeds an offer made by the plaintiff on 31 October 2013 to settle the action for $80,000 plus standard costs. The offer was made pursuant to Chapter 9 Part V of the UCPR.

4. [4]
   The defendants submit that the appropriate order would be that the defendants pay costs on the standard basis and in accordance with the Magistrates Scale of fees. The defendants submit that, although the judgment amount exceeds the offer, and the discretion under r 360 is enlivened, the court on this occasion should have regard to relevant circumstances, and determine that the defendants have shown that another order for costs is appropriate.

5. [5]
   The defendant submits the relevant circumstances include:

• The plaintiff’s original offer was for $80,000 plus costs to be assessed. The defendant submits it can be inferred that the plaintiff’s offer of $80,000 plus costs meant costs on the District Court scale. The defendant argues that, because costs should be assessed on the Magistrates Court scale, the total payment of the judgment amount plus costs would be less than the total amount that would have been payable under the offer to settle.
• The plaintiff’s case substantially changed after the offer was made. The Defendant submits that Dr Gillett in his original report, said the plaintiff’s future work capacity would be affected by overtime. At trial Dr Gillett conceded that he had erroneously noted  the plaintiff was working full time when he interviewed her, when she was in fact only working part time. The defendants submit they were entitled to proceed to trial on the basis that the specialist evidence relied upon by the plaintiff was to the effect longer hours would only adversely affect her capacity to work if she worked any hours over and above a full time working week.
• The defendant’s offer to settle was relatively late in the proceedings, with the matter being listed for trial only 30 days after the offer expired, so any indemnity costs order should be limited to the period after the offer was made.

Conclusion

6. [6]
   None of these circumstances persuades me that I should exercise my discretion to make an order for costs on the standard basis, or that I award indemnity costs only from the date of the offer to settle.

7. [7]
   Because the plaintiff’s offer was comfortably within the jurisdiction of the Magistrates Court, and because the plaintiff did not specify that the costs ought to be paid on the District Court Scale, it was, in my view, apparent that her offer only contemplated her costs be paid on the applicable scale, namely the Magistrates Court scale.

8. [8]
   Although an offer to settle must be evaluated in light of the circumstances disclosed at the time of an offer, I do not accept that the plaintiff’s case changed substantially, when Dr Gillett gave evidence at the trial. I consider that any ambiguity in Dr Gillett’s report could have easily been canvassed by the defendants with Dr Gillett prior to the trial.

9. [9]
   If the defendants were in any doubt about that, and they were considering acceptance of the offer, it would have been an easy matter to clarify with the plaintiff’s solicitors. There is no evidence that such an enquiry was made. In any event, I am of the view that the offer was clear as to its terms.

10. [10]
    Finally, I consider the circumstances of this case are not such that justice would be better served by ordering indemnity costs only from the date of the offer. As noted by Moynihan SJA (as he then was) in Fail v Hutton & Anor [2003] QSC 291 at [11]-[12]:

“[11] It is clear from the provisions of UCPR 354 that it was open to either party to make an offer to settle at any time up to judgment.

[12] One of the considerations the recipients of an offer has to take into account in determining whether or not to accept it is that if the other obtains a judgment no less favourable an indemnity costs order might be made. In other words it is part of the scheme of the rules to exert pressure on a party to consider an offer made in accordance with the rules. See Connolly v Skrapulj (McDonald J) Supreme Court of Victoria 434 of 1990 judgment delivered 2 March 1993, p9(a).”

11. [11]
    In this case, as in Fail’s case, there is no suggestion that the defendants did not have the opportunity to make an informed decision as to whether to accept or reject the plaintiff’s offer made months before the trial commenced.

12. [12]
    I do not consider that the second defendant has shown that an order other than an order for costs on the indemnity basis is appropriate in the circumstances of this case. For these reasons I order the plaintiff should recover her costs to be assessed on the indemnity basis.