New South Wales District Court CITATION: Mills v Bale & Anor (No. 2) [2010] NSWDC 189 HEARING DATE(S): 13 and 31 August 2010 JUDGMENT DATE: 3 September 2010 JURISDICTION: Civil JUDGMENT OF: Levy SC DCJ 1. The principal judgment is modified to accommodate the slip rule amendments referred to in paragraphs [6], [7] and [8], and the amount of the principal judgment in favour of the plaintiff is varied from $703,149.28 to $666,128.93; 2. The defendants are to pay the plaintiff's costs on the ordinary basis up to 3 November 2008 as agreed or assessed, and on the indemnity basis from 4 November 2008. DECISION: 3. The stay ordered on 13 August 2010 is extended for 7 days from today's date pending the filing of a notice of appeal and then, if that document is filed, the stay is further extended pending further orders to be made by the Court of Appeal on the application of the defendants; 4. The defendants are to pay the plaintiff's costs of the application for indemnity costs on 13 August 2010; 5. Each party is to pay their own costs of the application made on 31 August 2010. CATCHWORDS: PROCEDURE – slip rule amendment to principal judgment – absent consent, no power to make orders to vary a judgment where matters sought to be adjusted under the slip rule UCPR r 36.17 were not argued at substantive hearing - - COSTS – offer of compromise – order for indemnity costs LEGISLATION CITED: Civil Liability Act 2002 Uniform Civil Procedure Rules 2005, r 36.17 CASES CITED: Firth v Sutton [2010] NSWCA 90 PARTIES: Howard John Mills (Plaintiff) Peter Earle Bale & George Paul Boshev trading as Bale Boshev Lawyers (Defendants) FILE NUMBER(S): 1839 of 2009; 2009/334871 Mr BR McClintock SC with M Lawson (Plaintiff) COUNSEL: Mr M Dicker (Defendants – 13 August 2010) Mr P Braham (Defendants – 31 August 2010) SOLICITORS: Thomas Mitchell (Plaintiff) Yeldham Price O'Brien Lusk (Defendants) JUDGMENT 1. On 4 August 2010 judgment was given in favour of the plaintiff in these proceedings in the sum of $703,149.28 : Mills v Bale & Anor [2010] NSWDC 164. 2. The matter was relisted on 13 August 2010 for the purpose of hearing an application by the plaintiff for indemnity costs and to deal with an amendment to the judgment under the slip rule : UCPR r 36.17. The defendants took the opportunity to raise a question as to the appropriate rate to be awarded for pre-judgment interest and sought leave to raise other matters under the slip rule that were not the subject of earlier submissions. 3. On 13 August 2010, I ordered a stay of the earlier orders made on 4 August 2010 for 14 days, to enable the defendants to consider their position with regard to slip rule and other issues. That stay was then extended by consent, pending the delivery of these reasons. In the following paragraphs I deal with the issues that have been raised. Slip rule amendments 4. The judgment contains two unintended errors that require amendment. First slip rule amendment 5. The published judgment included an amount of $290,637.65 for pre-judgment interest which was calculated in a table set out in the Appendix to the reasons for judgment : Mills v Bale & Anor [2010] NSWDC 164. The effect of a typographical error in the interest calculation was that the commencement date for the interest calculation was stated to be 29 December 2002 instead of 29 December 2003. The Appendix to these reasons replicates the previous table, but with the error corrected. 6. The result of the correction is that the amount of pre-judgment interest changes from $290,637.65 to $253,724.64. This has the effect of changing the judgment amount from $703,149.28 to $666,128.93. Second slip rule amendment 7. The second slip rule amendment corrects an editing error. Paragraph [32] of the judgment stated : "32. I have found that if the representation in question had not been made, the principal proceedings would most likely have gone to a trial, and would have been resolved in the plaintiff's favour without discount for alleged contributory negligence. I have found that the probable date for finalisation of the principal proceedings would have been by the end of November 2003, at which time a final judgment would most probably have been entered in the plaintiff's favour in an amount of $649,887.40, after offsetting the amount comprising the statutory defence for payments of workers' compensation payments. I have found that after adjusting this amount to reflect the amount the plaintiff had already received from the actual proceeds of the settlement on 1 August 2002, namely, $140,000 and after making a further adjustment for a discount of 15 per cent in accordance with principle, the plaintiff probably would have had a verdict entered in his favour in the sum of $412,404.29." 8. The final sentence of that paragraph contained an unedited error. The final sentence is now amended to the following text: " 32. I have found that if the representation in question had not been made, the principal proceedings would most likely have gone to a trial, and would have been resolved in the plaintiff's favour without discount for alleged contributory negligence. I have found that the probable date for finalisation of the principal proceedings would have been by the end of November 2003, at which time a final judgment would most probably have been entered in the plaintiff's favour in an amount of $649,887.40, after offsetting the amount comprising the statutory defence for payments of workers' compensation payments. I have found that after making a further adjustment for a discount of 15 per cent in accordance with principle, and after adjusting this amount to reflect the amount the plaintiff had already received from the actual proceeds of the settlement on 1 August 2002, namely, $140,000, the plaintiff should have a verdict entered in his favour in these proceedings in the sum of $412,404.29." 9. This correction makes no difference to the amount of the assessed pre-interest damages. Indemnity Costs 10. The plaintiff has made an application for indemnity costs. The basis of the application is that on 3 November 2008 the plaintiff served an offer of compromise on the defendants in conformity with UCPR rules 42.14 and 42.15 in the amount of $220,000 plus costs. The defendants now consent to an order for the plaintiff's costs to be paid on the ordinary basis up to 3 November 2008 and on an indemnity basis from 4 November 2008. Matters of contention between the parties 11. The matters of contention in this application relate to the defendants seeking to modify my reasons delivered on 4 August 2010 on account of argued slip rule errors. The matters at issue relate first, to the appropriate rate of interest to be awarded in respect of pre-judgment interest, and secondly, whether the total amount of the damages awarded should be adjusted to reflect a different method of allowing identified offsets and adjustments that would affect the overall judgment sum. Alternate method of adjusting damages 12. The defendant referred to the decision of the Court of Appeal in Firth v Sutton [2010] 90, which was delivered on 30 April 2010. Amongst other things, relevantly, that decision deals with the order in which various deductions are to be made in assessing damages in this type of case. That decision was delivered after judgment was reserved in these proceedings. It is common ground that neither party drew that decision to my attention before I delivered my reasons in the principal judgment in this matter. 13. The parties were unable to agree on the appropriate method by which the judgment in these proceedings should be adjusted, if at all, to reflect that decision. The defendants argued it was a matter that could be adjusted under the slip rule, which would result in the judgment being reduced from the corrected amount of $666,128.93 to a revised amount of $548,326.81. The plaintiff resisted that approach, arguing it was not an appropriate matter for adjustment under the slip rule. Appropriate interest rate 14. The defendants have argued that because the plaintiff's claim was framed in negligence, and findings were made that the defendants were vicariously liable for the negligence of their employed solicitor Mr Schipp, the proceedings were also subject to Part 1A of the Civil Liability Act 2002, which required that interest be assessed in accordance with s 18 of that Act, namely the long term bond rate, rather than the UCPR rate, which was the rate at which I assessed interest. 15. The plaintiff argued that since in the principal judgment I accepted the submission that Mr Schipp's actions were calculated by him to induce the plaintiff to act to his detriment to settle his common law claim, the CL Act rate does not apply to intentional acts, and therefore the correct interest rate to be applied was the UCPR rate, which was the rate I employed to calculate interest. 16. The plaintiff also argued that since the claim was for damages for the loss of chance, s 18 of the CL Act did not apply to a claim for pure economic loss. Both parties referred to Firth v Sutton [2010] 90 and to the remarks by Allsop P at [189] concerning the applicable interest rate in a case such as this, that being the rate prescribed by s 18 CL Act. The plaintiff contended those remarks were obiter. The defendants argued they were binding. Conclusion on maters of contention 17. In my view the foregoing matters of contention are not appropriately addressed as slip rule issues as there is no power to supplement or vary final orders by making substantive alterations to a judgment to accommodate points that were not argued, considered or decided at the hearing. Accordingly, in the absence of consent, I do not consider it appropriate to make slip rule orders in relation to these matters, especially since the defendants have indicated that an appeal is to be filed within 7 days of these reasons and where matters arising from the decision in Firth v Sutton [2010] 90 will be agitated on an appeal in this case, as was indicated by the defendants in this application. Orders 18. I order the following further orders varying the orders made on 4 August 2010, namely: (a) The principal judgment is modified to accommodate the slip rule amendments referred to in paragraphs [6], [7] and [8], and the amount of the judgment in favour of the plaintiff is varied from $703,149.28 to $666,128.93; (b) The defendants are to pay the plaintiff's costs on the ordinary basis up to 3 November 2008 as agreed or assessed, and on the indemnity basis from 4 November 2008; (c) The stay ordered on 13 August 2010 is extended for 7 days from today's date pending the filing of a notice of appeal and then, if that document is filed, the stay is further extended pending further orders to be made by the Court of Appeal on the application of the defendants; (d) The defendants are to pay the plaintiff's costs of the application for indemnity costs on 13 August 2010; (e) Each party is to pay their own costs of the application made on 31 August 2010. APPENDIX Modified Interest Calculation on $412,404.29 Period Date range Prescribed interest rate Days Interest amount 1. 29.12.200 3 to 31.12.2006 9% 1097 $111,552.52 2. 01.01.2007 to 05.03.2009 10% 794 $89,712.05 3. 06.03.2009 to 08.09.2009 9% 186 $18,914.10 4. 09.09.2009 to 30.06.2010 9% 294 $29,896.48 5. 01.07.2010 to 23.07.2010 9.5% 34 $3,649.49 Total - - $253,724.64 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.