Steven Patrick Morgan and Samantha Sue Morgan v The Legal Personal Representative of Willard [2015] NSWDC 96

District Court New South Wales

Medium Neutral Citation: Steven Patrick Morgan and Samantha Sue Morgan v The Legal Personal Representative of Willard [2015] NSWDC 96 Hearing dates: 24, 28 November 2014, 17 April 2015, 14, 21 May 2015 Decision date: 12 June 2015 Jurisdiction: Civil Before: Lakatos J Decision: Defendant to pay one third of the plaintiffs' costs of the proceedings Catchwords: Costs Legislation Cited: Civil Procedure Act 2005 Cases Cited: All Trans Express Limited v CVA Holdings Ltd [1984) 1 All ER 685 Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 Category: Costs Parties: Steven Patrick Morgan (First Plaintiff) Samantha Sue Morgan (Second Plaintiff) The Legal Personal Representative of Willard (Defendant) Representation: Counsel: D Toomey (First and Second Plaintiffs) G Carolan (Defendant)

Solicitors: T Tancred, Whiteley, Ironside & Shillington M Candan, MCK Lawyers File Number(s): 2014/00035313

Judgment 1. On 17 April 2015, I handed down judgment in these proceedings ordering that there be a verdict and judgment for the plaintiffs in the sum of $820.90. 2. The parties have put conflicting submissions to the Court in relation to the appropriate order for costs. It is common ground that the appropriate starting point is section 98 of the Civil Procedure Act 2005 which by subsection (1) provides: Subject to rules of court and to this any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. 1. It is the common position that although the section creates a wide discretion, it must be exercised judicially and subject to any statutory limitations. The net result of the interaction of these principles is that a successful party should not be deprived of costs unless there is material to justify a contrary order being made. As noted in the commentary to Ritchie's Uniform Civil Procedure NSW at [s.98.10], this may occur where the otherwise successful party has failed on substantial issues in the litigation; has caused other parties to incur unnecessary costs in their conduct proceedings or has rejected, and failed to better, reasonable offers of settlement. 2. It is also the common position that whilst the plaintiffs were successful in obtaining a verdict, they have failed to establish the major part of their claim in monetary terms, which relate to the destruction of a trailer and the death of two greyhound racing dogs. Whilst it was conceded that the replacement cost of the phone was not free of some controversy, significant matters were contested particularly in relation to the proper quantum of damages for the death of the dogs and to a lesser extent in relation to the loss of the trailer. In any event, no claim was pressed at the hearing in relation to the trailer. 3. The proceedings concluded by way of a verdict and judgment to the plaintiffs in a modest amount, but a substantial failure by the plaintiffs to quantify the more significant losses relative to the death of the greyhound dogs. 4. The parties adduced evidence on the costs application. The plaintiffs relied upon the affidavit of the solicitor Mr Tobias Tancred sworn 4 May 2015. Objection was taken by Mr Carolan, counsel for the defendant, to the opinions expressed by Mr Tancred in paragraphs 13 and 14, in which the solicitor attested to the proposition that both plaintiffs were "psychiatrically affected to a significant degree" in his observation and recounted his experiences as a solicitor in dealing with persons suffering from psychiatric injury. 5. I admitted the paragraphs. I did so, on the basis that whilst the solicitor clearly does not have expertise in the psychiatric field, it is open to have regard to his opinions based on his contact with persons with psychiatric problems. Hence, I concluded that his observations carry some weight, although clearly less than that of an expert psychiatrist/psychologist. 6. Mr Toomey, counsel for the plaintiffs, particularly relied upon the report of psychiatrist Dr Frukacz, dated 4 February 2014, relevant to the first plaintiff Steven Morgan and the report of Dr Blom, Approved Medical Specialist (Permanent Impairment and General Medical Disputes) – Workers Compensation Commission and a psychiatrist, dated 1 September 2014, relevant to the second plaintiff, Samantha Morgan. 7. In his report, Doctor Frukacz, reported that the first plaintiff continued to suffer serious sequelae from his involvement in the accident in which his brother died. The first plaintiff reported sleep problems, experiencing guilt, feeling tired and lethargic and being generally more wary, nervous and twitchy. He reported depression and headaches. Furthermore he reported seeing a psychologist on a regular basis. On examination, the first plaintiff presented as alert and cooperative with no psycho-motor abnormalities. His speech was logical and sequential and there was no formal thought disorder. However his mood was depressed and anxious and his affects were constricted. 8. Doctor Frukacz concluded that the first plaintiff had experienced significant anxiety and depression following a catastrophic motor vehicle accident. He had symptoms consistent with post-traumatic stress disorder. Those symptoms were specified. He also had symptoms of a depressive disorder. The first plaintiff was assessed as being unfit to perform all of his pre-injury work. His capacity was reduced by reason of his hyper-arousal symptoms which lead him to being irritable and interfered with his capacity to deal with clients and colleagues as well as his reduced motivation and endurance due to his depressive symptoms. Doctor Frukacz reported that the first plaintiff's concentration was also impaired through constant rumination about the accident. He continues to see a psychiatrist and a psychologist on a regular basis. 9. In relation to the second plaintiff, Doctor Blom's report recorded her history following the death of her husband. Her concern and anxiety were increased on the day of the accident as she had not received a phone call from her husband which was the usual practice. She increasingly became confused and disoriented and shocked. She was referred to a psychologist whom she saw once every two or three weeks, in early 2013. She found the sessions helpful in dealing with her overwhelming grief. Over the following months her symptoms gradually subsided. 10. On examination, Ms Morgan appeared quite distressed and her affect was somewhat flattened. Her thinking was somewhat slowed and occasionally disorganised – there was no evidence of cognitive impairment. Doctor Blom diagnosed Ms Morgan as having a Major Depressive Disorder with symptoms of depressed mood, significant and persistent loss of energy, disturbed concentration and significant sleep disturbance. She was placed on a trial of antidepressants but had not shown any significant response. The considered view was that the second plaintiff, whilst being able to work in her job as a retail manager at a chemist, was not able to function at full capacity. Part-time work was suggested. 11. In addition to this material, Mr Tancred referred to the following chronology: * proceedings were commenced on 4 February 2014; * there was a pre-trial conference of 9 May 2014 at which time orders were made relating to the filing of the defence and reliance on expert evidence; * the defendant was served with the affidavit of the plaintiffs' expert on or about 1 September 2014; * the defendant did not serve any evidence or tender evidence in the proceedings; * at 5:18pm on 19 November 2014, a letter was received via email from the defendant's solicitor in which an offer of compromise was made for a sum of $33,800. The offer was stated to be "open and capable of acceptance until 5pm 21 November 2014" and was made in accordance with rule 20.26 of the Uniform Civil Procedure Rules. 1. The defendant relied upon the affidavit of its solicitor Mr Muharrem Koyuncu, sworn 14 May 2015. In substance, the affidavit indicated that the offer of compromise was faxed at 4:52pm on 19 November 2014. 2. On 24 November 2014, the defendant's solicitor spoke with his counsel Mr Carolan, to the effect that there had been discussions between counsel and the plaintiffs were prepared to accept $125,000 inclusive of costs. The solicitor conveyed instructions to his barrister that the defendant was prepared to go up to $45,000 to settle the matter. 3. The defendant pointed to contact between the solicitors between 6 March 2014 and 17 September 2014 in relation to the quantification of damages and associated matters. It was contended that the chronology demonstrated persistent attempts to ascertain the basis upon which the plaintiffs quantified their claim. Counsel for the defendant conceded that whilst the short period of time between the making of the offer and the deadline, was not in accordance with the usual period of 28 days, the Court is not precluded from taking it into account when asked to exercise its discretion in relation to costs. Counsel argued that the plaintiff's oral offer for $125,000 made on 24 November 2014 and the counter offer made shortly thereafter, indicated that the plaintiffs were capable of providing timely instructions in relation to settlement issues, despite any psychological difficulties.