Chandler v Silwood[2016] QSC 120

SUPREME COURT OF QUEENSLAND 

[1] HOLMES CJ: On 27 April 2016, I gave judgment in this proceeding in the agreed amount of $650,000.  The parties were given leave to make written submissions as to costs.  It is not disputed that a costs order should be made in favour of the plaintiff; what is in dispute is whether costs should be awarded on the standard or indemnity basis and whether the District Court scale should be applied.

[2] The plaintiff made a series of offers which is relevant in deciding on which basis costs should be awarded.  On 14 October 2013, the plaintiff made a mandatory final offer, pursuant to s 39 of the Personal Injuries Proceedings Act 2002, in the sum of $500,000 plus costs.  On 22 May 2015, in a without prejudice letter, she made a written offer in the sum of $500,000 plus costs on the Supreme Court scale.  Finally, on 25 June 2015, the plaintiff made a written offer expressed to be made pursuant to Chapter 9 Part 5 of the Uniform Civil Procedure Rules 1999, in the amount of $400,000 plus costs.

[3] The first and second offers are akin to Calderbank[1] offers, and the live question in respect of them is whether the defendant made what has been termed “an imprudent refusal” of them[2].  The offer made under the Uniform Civil Procedure Rules brings into play Rule 360; the defendant must be ordered to pay the plaintiff’s costs on the indemnity basis from the time the offer was made “unless the defendant shows another order for costs is appropriate in the circumstances”.

[4] The major factor in consideration of the reasonableness or otherwise of the defendant’s refusal of the offers is the significance of the plaintiff’s consumption of alcohol, the proportions and timing of which remained unclear throughout most of the proceeding. There were, to begin with, some references to her having drunk alcohol in the medical records.  On 19 September 2013 she signed a statement of loss and damage, presumably provided to the defendant, in which she said that she had consumed three glasses of red wine and lemonade on the evening prior to the accident.  She made the mandatory final offer within a month of the statement of loss and damage.  At that stage, I do not think it was imprudent or unreasonable for the defendant not to accept the offer in the amount of $500,000.  The indication that the plaintiff had drunk three glasses of red wine and lemonade without details as to quantity or timing left it open that intoxication had played a part in the accident.  By way of illustration, Dr Buchanan, who gave expert evidence for the plaintiff, said in his report that three 150 millilitre glasses of wine at 13.5% alcohol level would produce a blood alcohol concentration of 0.147%, with elimination of the alcohol at a rate of .02% per hour. 

[5] On the state of information available to the defendant, there must have seemed a real prospect of establishing contributory negligence.  That prospect would have become stronger when, not long before the second written offer, the plaintiff filed an amended reply in which she referred to consuming three glasses of wine on the evening. It was not, in fact, until November 2015 that it was made clear what amount of alcohol the plaintiff said she had consumed:  that the plaintiff’s case was that she had drunk the wine in question from a 150 ml glass between 4 pm and 7 pm in an even mix of wine and lemonade. In those circumstances I do not think that it was unreasonable or imprudent for the defendant not to accept the first and second offers in the amount of $500,000.

[6] The position, however, is different in relation to the offer made under the Uniform Civil Procedure Rules.  On satisfaction that the offer was made and that the plaintiff was willing and able to carry it out (as to which there is no contention) the court must order the defendant to pay the plaintiff’s costs on an indemnity basis “unless the defendant shows another order for costs is appropriate in the circumstances”.  The defendant says that the uncertainty as to the plaintiff’s consumption of alcohol persisted; the amended reply remained on foot, alleging that she had drunk three glasses of wine.  Nonetheless, it seems to me that the defendant has not demonstrated that another order than indemnity costs is appropriate.  It is true that the intoxication question remained live.  But the amount of the offer had changed.  If one assumes that the quantum agreed between the parties of $650,000 was a realistic assessment of a probable award of damages, an offer of $400,000 reflected slightly more than 40% discount; consistent with what might reasonably be expected to be the reduction in the award for contributory negligence.  Consequently, I do not think that the possibility of establishing contributory negligence on the basis of intoxication provides any sufficient reason for the defendant not having accepted that offer.  Accordingly, the defendant should pay costs on the indemnity basis from the expiration of the Rule 360 offer to settle served on 25 June 2015.

[7] The remaining question is as to whether the award of costs for the period prior to the making of that offer should be on the District Court scale.  Rule 697 of the Uniform Civil Procedure Rules 1999 provides that the plaintiff’s costs must be assessed as if the proceeding had begun in the District Court, since the relief obtained could have been given by that court, unless this court orders otherwise. The plaintiff did not make any submission as to why the primary position endorsed by the Rule should not apply, and there is no reason apparent to me why I should “order otherwise”.  Accordingly, the order for costs is as follows:

The defendant is to pay the plaintiff’s costs of the proceeding on the standard basis up to the expiration of the formal offer to settle on 25 June 2015, as agreed or assessed, on the District Court scale and thereafter is to pay the plaintiff’s costs of the proceeding on the indemnity basis.