Supreme Court New South Wales Medium Neutral Citation: Borg v Ramsay Health Care (No 2) [2014] NSWSC 133 Hearing dates: 20 February 2014 Decision date: 27 February 2014 Jurisdiction: Common Law Before: Adamson J Decision: (1) Order the defendants to pay the plaintiff's costs of the proceedings on an ordinary basis to 6 September 2012. (2) Order the plaintiff to pay the defendants' costs of the proceedings on an indemnity basis from 7 September 2012 Catchwords: COSTS - offer of compromise - time of offer - whether information available at time of offer made it unreasonable for the plaintiff to refuse offer - plaintiff's ignorance of existence of video surveillance filmed of his activities before offer - whether service of medical report sufficient to disclose basis of defendants' case at trial - where adverse view of plaintiff's credibility is formed after offer is rejected - where defendants rely on uncontentious and well known legal principles at trial after offer is rejected - whether appropriate that matter be heard in Supreme Court Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Uniform Civil Procedure Rules 2005 (NSW), r 20.26, r 42.15, r 42.34 Cases Cited: Borg v Ramsay Health Care trading as North Shore Private Hospital Pty Limited [2014] NSWSC 37 Hood Constructions Pty Limited v Nicholas (1987) 9 NSWLR 60 Category: Costs Parties: Peter Borg (Plaintiff) Ramsay Health Care t/as North Shore Private Hospital (First Defendant) Dr Mark Donnelley (Second Defendant) Representation: Counsel: M Campbell (Plaintiff) M Fordham SC (Defendants) Solicitors: Brydens Lawyers (Plaintiff) HWL Ebsworth Lawyers (First Defendant) Avant Law Pty Ltd (Second Defendant) File Number(s): 2009/332608; 2011/411575 Publication restriction: Nil Judgment 1On 12 February 2014 I ordered that there be judgment in favour of the plaintiff in the sum of $20,700 and ordered that, unless an application was made for a different order, the defendants pay the plaintiff's costs: Borg v Ramsay Health Care trading as North Shore Private Hospital Pty Limited [2014] NSWSC 37. The defendants applied for a different order: namely, that the plaintiff pay the defendants' costs on an ordinary basis to 7 September 2012, or, in the alternative, to 3 January 2014, and on an indemnity basis thereafter. In the alternative, the defendants submitted that I ought make no order as to costs by reason of r 42.34 of the Uniform Civil Procedure Rules 2005 (NSW) since the plaintiff obtained a judgment less than $500,000. 2The evidence in support of the defendant's application consisted of the following two offers: (1)An offer of compromise dated 6 September 2012 and communicated by email on that day which the plaintiff conceded was made in accordance with UCPR r 20.26 (the Offer of Compromise); and (2)An offer made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 dated 19 December 2013 and communicated by email on that day which was expressed to be without prejudice except as to costs and to remain open until 2 January 2014 (the Calderbank offer). 3The Offer of Compromise comprised an offer by the defendants to pay the plaintiff the sum of $130,000 exclusive of costs. The Calderbank offer comprised an offer by the defendants to pay the plaintiff the sum of $160,000 inclusive of costs. 4The plaintiff tendered a letter dated 6 January 2014 in which his solicitors referred to the Calderbank offer and said that it had been received on 2 January 2014. The letter concluded: "Should the First Defendant intend to rely on this offer in any application for costs in its favour the Plaintiff will contend that there was insufficient time for the Plaintif to consider the offer before the offer expired." 5UCPR r 42.15 applies to the present application since the Offer of Compromise was not accepted and the plaintiff obtained judgment no more favourable to it than the terms of the offer. It relevantly provides: (1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer. (2) Unless the court orders otherwise: (a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. 6The Court's power to award costs is discretionary: s 98 of the Civil Procedure Act 2005. 7The time at which the offers were made is material. By 6 September 2012, when the Offer of Compromise was made, the following had occurred: (1)The statement of claim had been filed on 6 September 2009 in which the plaintiff claimed damages for injuries sustained when he fell from an operating table in November 2006; (2)The first defendant had filed a defence dated 20 April 2010; (3)An amended statement of claim which joined the second defendant had been filed on 6 February 2012; (4)The proceedings had been transferred from the District Court to this Court on 19 June 2012; (5)The defendants had served the report of Dr Dalton dated 15 June 2010; (6)The plaintiff had been filmed standing for prolonged periods watching his son play sport on 26 June 2010 and had not displayed any apparent disability. 8The report of Dr Dalton dated 15 June 2010 included the following passages: In my opinion Mr Borg may have sustained a strain and symptomatic aggravation of the underlying lumbar spine condition as a result of the incident in November 2006. Careful examination of his medical records and subsequent radiological investigations do not suggest that he has suffered significant aggravation or acceleration of the underlying degenerative changes in his lumbar spine and in my opinion the effects of that aggravation have long since resolved. Unfortunately Mr Borg has multilevel degenerative changes in his lumbar spine to the extent that Dr Rosenberg has contemplated further decompression and stabilisation at the L3/4 level. This man has advanced degenerative disc disease and facet joint arthropathy at L3/4 which is clearly degenerative in origin. Such changes would not have resulted from the incident in November 2006 and, in my opinion, such an incident would not have caused material aggravation or acceleration of what are clearly longstanding degenerative changes in his lumbar spine. ... In my opinion there is no evidence to suggest that this man has an incapacity for work arising directly from injuries or complications related to the incident which took place in November 2006. It is quite clear that the condiiton of Mr Borg's right shoulder at that time would have prevented him from returning to security work or any physically demanding role in the foreseeable future. ... 9Ms Campbell submitted on behalf of the plaintiff that his non-acceptance of the Offer of Compromise should not lead to the consequences for which UCPR r 42.15 provides. Ms Campbell contended that, at the time of the Offer of Compromise, the plaintiff did not have enough information to make a proper assessment of the offer. She submitted that he did not know that he had been filmed on 26 June 2010 since the video surveillance was not disclosed to him until November 2013 and that he could not possibly have known that I would have formed an adverse view of his credibility at that time. She also relied on the fact that the defendants did not raise the application of Hood Constructions Pty Limited v Nicholas (1987) 9 NSWLR 60 until they referred to it in court on about 18 September 2013 and that they did not plead such reliance until an amended defence to the amended statement of claim was filed on 11 October 2013. 10Ms Campbell submitted in respect of the Calderbank offer that its timing precludes its being taken into account since it was sent on the eve of the court vacation at a time when solicitors would have scant time to obtain instructions and that there was no evidence that the email in which it was contained was opened during the currency of the offer. Indeed, the hard copy letter which was also sent was not received before the offer expired. She submitted that the Calderbank offer was made at a time when it was too early for the plaintiff to give it proper consideration since it pre-dated the experts' conclave and the plaintiff's cross-examination. 11Ms Campbell also submitted that I ought not refuse to make a costs order in favour of the plaintiff under UCPR r 42.34 since the proceedings involved complex issues of medical causation and that it was, accordingly, appropriate that they be determined by this Court. She also contended that the principles in Hood Constructions Pty Limited v Nicholas were complex and worthy of consideration by this Court, rather than the District Court, where the proceedings were commenced. She also placed reliance on the defendants' lack of opposition to the transfer of the proceedings to this Court. 12I see no reason why the plaintiff's non-acceptance of the Offer of Compromise ought not lead to the consequences for which UCPR r 42.15 provides. The Offer of Compromise involved a significant element of compromise on the defendants' part since the amount offered was, in the circumstances, substantial and it was unreasonable of the plaintiff not to accept it. 13In my view, it would have been reasonably apparent to the plaintiff and his legal advisers on receipt of the report of Dr Dalton that the defendants' case on damages was that the fall from the operating table, on which the plaintiff's claim was based, did not cause a substantial injury and did not aggravate the plaintiff's pre-existing back and shoulder conditions, which were chronic, and which had prevented him from working for two years prior to the fall. In my reasons for decision I substantially accepted the defendants' case on damages and ordered damages of $20,700, which comprised an amount for non-economic loss and an amount for future medical expenses associated with the potential need for some psychological treatment. 14Further, although the plaintiff did not know that he had been filmed watching his son play football, he, of all people, knew what he was able to do and what he was in fact doing. What he did not know was the extent to which the defendants were also aware of his capacities by reason of video surveillance. 15In my view, the appellant is entitled to have its costs on an indemnity basis from 7 September 2012, being the date after the Offer of Compromise was made, in accordance with UCPR r 42.15(2)(b)(ii). 16Accordingly, it is not necessary for me to determine the alternate arguments based on the Calderbank offer or UCPR r 42.34. I will, however, add that I do not accept Ms Campbell's submissions that the proceedings were of a nature or complexity that made it either necessary or desirable that they be heard in this Court. They concerned a man, who was already incapacitated for work, who fell from an operating table. The issues of medical causation were not complex and depended, almost entirely, on what the plaintiff said, and whether he could be believed. The principles articulated in Hood Constructions Pty Limited v Nicholas are uncontentious and well known. Although it was desirable that they be formally pleaded, as occurred, they were required to be applied by any court determining the matter in any event. They did not materially add to the complexity of the matter. Order 17I make the following order: (1)Order the defendants to pay the plaintiff's costs of the proceedings on an ordinary basis to 6 September 2012. (2)Order the plaintiff to pay the defendants' costs of the proceedings on an indemnity basis from 7 September 2012. ********** Amendments 13 March 2014 - Slip rule Amended paragraphs: par 17 and coversheet 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. Decision last updated: 13 March 2014