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Paying the Price- Costs Implications of Offers, Credibility and Unmeritorious Arguments


Partridge -v- Hobart City Council & Ors (No2) [2013] TASFC 1

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Hunt & Hunt           

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Background

  • The appellant sued the respondents for damages in respect of injuries suffered as a result of a fall down an external stairway.
  • Prior to trial the respondents made an offer of compromise to the appellant in the sum of $300,000 plus party/party costs which was not accepted. Also, the appellant made an offer of compromise to concede 30% contributory negligence which was not accepted.
  • At first instance the appellant was awarded $295,350, being significantly less than the damages she sought and less than the respondent's offer of compromise.  A finding of 20% contributory negligence was made, being less than what the appellant had offered to concede.
  • The appellant appealed in respect to the Court's assessment of damages, and the respondents also cross-appealed on damages.  Two of the three respondents cross-appealed on liability as well.
  • Prior to delivery of the Full Court's judgment, the appellant made a Calderbank offer to settle for $302,000 plus party/party costs of the action and the appeal which was not accepted.
  • Only one of the appellant's arguments succeeded on appeal, setting a Tasmanian precedent in respect to accounting for social security benefits in calculating damages. Consequently, the appellant's award was increased to $368,530, being more than the respondents $300,000 offer of compromise prior to trial and the appellant's $302,000 Calderbank offer prior to delivery of the Full Court judgment.
  • The balance of the appellant's arguments failed as did the respondents cross-appeals.

Costs

  • Complex costs orders were made by the Trial Judge having regard to adverse findings on the issue of the appellant's credibility. 
  • The Full Court found that most of the trial was devoted to the assessment of damages, and the length of the trial was substantially contributed to by the appellant's lack of credibility and the need for that to be challenged by the respondents.  For this reason, but also taking into account the appellant's offers of compromise, the Full Court limited the appellant's recovery of costs on a solicitor/client basis up to and including the 5th day of the 13 day trial and ordered recovery of her costs on a party/party basis thereafter [1].
  • As to the costs of the appeal, the Full Court found "that substantial costs were needlessly incurred as a result of the appellant pursuing grounds of appeal that had little or no merit, and wasting time in other ways at the hearing of the appeal", and noted that argument in relation to the respondents cross-appeals occupied only a small portion of the hearing.
  • It was found to be open to the Full Court to make a costs order reflecting the appellant's success in relation to one issue on appeal and the respondents' success in defeating all of the others.
  • The Full Court therefore decided against awarding solicitor/client costs and limited the appellant's recovery to 25% of her appeal costs, plus her costs in respect to the respondents cross-appeals, on a party/party basis.
  • Each of the respondents were also granted indemnity certificates pursuant to the Appeal Costs Fund Act 1968 given the Trial Judge followed a number of cases which the Full Court decided to overrule.  This entitles the respondents to utilise the Fund to assist in meeting the appellant's costs. 

Implications

  • The appellant's award of $368,530 will be eroded by the fact that the appellant has not been awarded full costs because of credibility issues and her pursuit of unmeritorious arguments on quantum.  In the wash up, this is going to leave the appellant with significantly less in her pocket and, perhaps, a different view of the respondents' initial offer of compromise.

[1] Solicitor/client costs being the costs actually charged for legal services, and party/party costs being those costs recoverable pursuant to the Supreme Court Rules  2000 which are usually substantially less than total costs incurred.

                   
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