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Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd ...
IN THE COUNTY COURT OF VICTORIA Revised Not Restricted AT MELBOURNE CRIMINAL DIVISION DAMAGES – COMPENSATION GENERAL DIVISION Case No. CI-07-05011 Krista Harvey Plaintiff v Alison Tascone (Trading as My Chemist Health & Beauty Doncaster) First Defendant Mario Verrocchi Second Defendant East Yarra Friendly Society Pty Ltd Fourth Defendant --- JUDGE: HIS HONOUR JUDGE MORROW WHERE HELD: Melbourne DATE OF HEARING: 12 December 2008 DATE OF RULING: 18 December 2008 CASE MAY BE CITED AS: Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd MEDIUM NEUTRAL CITATION:  VCC 1612 RULING --- Catchwords: --- APPEARANCES: Counsel Solicitors For the Plaintiff Mr P Rattray QC with Ellis Palmos & Co. Mr M Stiffe For the First Defendant Mr D Curtain QC with Dibbs Abbott Stillman Ms P Cefai For the Second and Fourth Mr R Middleton SC Guild Lawyers Defendants COUNTY COURT OF VICTORIA !Undefined Bookmark, I 250 William Street, Melbourne HIS HONOUR: 1 On the 12th December 2008, the jury in the above action found in favour of the plaintiff and awarded her the sum of $250,000.00 by way of damages for pain and suffering, such damages to be reduced by sixty per cent due to the plaintiff’s contributory negligence, and the jury further decided that on the contribution proceedings between the first defendant and the second and fourth defendants, that the first defendant’s contribution should be eighty per cent and the second and fourth defendants, twenty per cent. 2 Mr Middleton, Senior Counsel for the second and fourth defendants, now submits that the first defendant should pay the second and fourth defendants’ costs from 4.30 pm on the 9th December 2008 pursuant to an offer made by them to the first defendant in a “Calderbank” letter of the 8th December 2008. 3 As far as I can ascertain, the relevant material in relation to this claim is, firstly, that on the 11th November 2008, the second and fourth defendants’ solicitors wrote to the first defendants’ solicitors in the following terms: “I enquire whether your client would be prepared to share in an offer of compromise for $50,000.00 plus costs plus keep on a 50/50 basis to put pressure on the plaintiff.” 4 On the 19th November 2008, the plaintiff’s solicitors served an Offer of Compromise in accordance with Part II of Order 26 of the County Court Rules on the defendants, offering to compromise the plaintiff’s claim for the sum of $150,000.00 plus costs, and the offer was stated to be open for acceptance by the defendants for a period of fourteen days from the date of service of the offer on the defendants. Mr Middleton has informed me that in fact his client was not served with the offer until the 25th November 2008 which means, that as far as the second and fourth defendants were concerned, the offer would have expired on the 9th December 2008. 5 On the 1st December 2008, the first defendant’s solicitors wrote to the 1 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd solicitors for the second and fourth defendants and referred to their letter of the 11th November 2008 and stated: “It is our position that an offer of compromise would not be appropriate or valid given the statutory offer and counter offer process pursuant the provisions of the Accident Compensation Act 1985. We suggest that you may wish to consider putting a Calderbank offer to the plaintiff in the terms outlined in your above-mentioned correspondence, namely $50,000.00 plus retention of compensation paid on a 50/50 basis. Should your client be amenable to this course of action, we ask that you contact the writer to discuss further.” 6 On the 8th December 2008, the solicitors for the second and fourth defendants wrote to the solicitors for the first defendant, and said: “The second and fourth defendants offer to the first defendant to contribute 40 per cent towards any sum that the plaintiff obtains by way of settlement, verdict or judgment in the proceeding (inclusive of interest), together with 40 per cent of the plaintiff’s party/party costs. This offer is in satisfaction of the first defendant’s claim for contribution against the second and fourth defendants and the second and fourth defendants’ claim for contribution against the first defendant. This offer is open for acceptance until 4.30 pm on 9 December 2008. In the event that this offer is not accepted and the defendants achieve a more favourable result, than that offered herein at trial, I will produce this letter on the question of costs and claim costs in accordance with the principles of Calderbank v Calderbank  Fam 93 and applied in the decision of M T Associates Pty Ltd v Aqua-Max Pty Ltd (No. 3)  VSC 163.” 7 The trial commenced on Monday, the 8th December 2008. 8 The response from the first defendants came on the 10th December 2008, and in a letter of that date, the solicitors for the first defendant stated: “The first defendant offers to the second and fourth defendants to contribute 50 per cent towards any sum that the plaintiff obtains by way of settlement, verdict or judgment in the subject proceedings (inclusive of interest), together with 50 per cent of the plaintiff’s party/party costs. This offer is in satisfaction of the second and fourth defendants’ claim for contribution against the first defendant’s claim for contribution against the second and fourth defendants. This offer will remain open until 5.00 pm on the 11th December 2008. In the event that this offer is not accepted, and the defendants achieve a more favourable result than that offered herein at trial, then the first defendant will rely on this letter and invite the Court to exercise its 2 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd discretion in accordance with the principles enunciated in Calderbank v Calderbank  3 All ER 333 and applied in the decision of M T Associates Pty Ltd v Aqua-Max Pty Ltd (No. 3)  VSC 163.” 9 Mr Curtain, Senior Counsel for the first defendant, made the following submissions: • That the plaintiff’s offer, which had been made on the 19th November 2008 and which had been open for fourteen days, had in fact expired by the time the second and fourth defendants made their offer to the first defendant. He said that the second and fourth defendants had plenty of time from the 19th November to give notice to the first defendant, but they did not and put forward no reason why they waited until the plaintiff’s offer had expired before making their offer to the first defendant. • He further submits that under the provisions of Order 26.10, all offers should be open for fourteen days, whereas here the first defendant had only 24 hours to consider the offer made by the second and fourth defendants. • Mr Curtain argues that if in fact the first defendant had accepted the offer, it would not have shortened the case, and the second and fourth defendants would still have to be represented. He says, further, that the offer was made too late, in that all the costs had already been incurred by the plaintiff and the other parties. • Mr Curtain relied heavily on Henderson’s Case, to which I will refer later. 10 Mr Middleton, in reply, said that if in fact his clients’ offer had been accepted by the first defendant, they would have been able to go to the plaintiff, with a united front, to try and resolve the case, and despite the fact that the plaintiff’s formal offer had expired, there was no reason why a further negotiation could not have been attempted. 11 The Rules of Court via Order 26.10 attempt to establish a framework for offers 3 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd between defendants in a case such as this. 12 By Sub-Rule (1): “Any party to the contribution claim may serve on any other party to the contribution claim an offer to contribute towards a comprise of the claim made by the plaintiff on the terms specified in the offer.” 13 Sub-Rule (2) provides that a court may take such an offer into account in determining who should pay the whole of part of the costs of the party who made the offer and any costs which that party is liable to pay to the plaintiff. 14 In Henderson v Simon Engineering (Aust) Pty Ltd & Ors.  VR 867, Mr Justice Murphy had to deal with a somewhat similar situation as to this case, but the offer of one of the defendants in that case purported to be made pursuant to Order 26.10. The defendant who made the offer in that case was successful insofar as the jury decided that that defendant should only contribute thirty per cent whereas he had offered to contribute thirty-five per cent. An application was made to the Judge by the successful defendant, based on the offer. 15 His Honour rejected the defendant’s application, inter alia, because the notice had not been given at an early stage in the proceedings (a matter relied upon by Mr Curtain). His Honour said at the time that the notices were given, the other defendants were placed in a difficult position. His Honour went on to say: “If the offer made by the SEC was accepted what then was to happen? The notices did not say - Would counsel for the SEC continue to appear or would they bow out of the case? If the latter, who if anyone would appear for the SEC, and if it was intended that counsel for the SEC was to continue in the case what was to be gained by acceptance of the offer?” (See page 872). 16 All of these observations are relied upon by Mr Curtain. 17 The answer to these questions posed by Murphy J., seems to me to be simply 4 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd that the defendants could have presented a united front to the plaintiff, but is that consideration sufficient for me to exercise my discretion in this case? 18 I note that again at page 872, His Honour Mr Justice Murphy said: “I am also of the opinion that even if the Notices of Contribution herein were ineffective as notices under r2610, yet the giving of them would none the less be a factor to consider as material relevant to the exercise of my discretion on the issue of costs . . . .” 19 Unlike the case before Murphy J, in this case the first defendant also decided to join in the exercise of sending a Calderbank letter to the second and fourth defendants in very similar terms, as can be seen from the letters to which I have referred above. 20 Observations made by Murphy J in Henderson’s Case and in other cases such as Lend Lease Retail Products Pty Ltd v Construction Engineering (Aust) Pty Ltd & Ors.  VSCA 114, a decision of the Court of Appeal, make it clear that a judge has a wide discretion in respect of orders as to costs, and as I stated in the Ruling I made in Parsons v Muni Gayfer & Citywide Service Solutions (10th April 2001), there is a long line of authority including Calderbank (supra); Cutts v Head & Anor.  1 All ER 597; Multicon Engineering Pty Ltd v Federal Airport Corp (1997) 47 NSWLR 631; MGICA (1992) Ltd v Kenny & Good Pty Ltd & Kenny (1996) 140 ALR 313; and particularly Azzopardi v Netin  VR 593 and Mutual Community Limited v Lorden Holdings Pty Ltd (VSC, Unreported, Byrne J, 28 April 1993) which establish the following principles: (1) That it has been the policy of the courts for a long time to encourage parties to settle rather than litigate their cases. (2) That the trial judge has an overriding discretion on the question of costs. (3) That despite the existence of a rules based framework for the making 5 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd of offers between parties to settle their differences rather than litigate them, the courts will, in an appropriate case, where the justice of a situation demands it, allow parties to make genuine offers to settle a matter, even if such offer is outside the framework of the Rules. 21 Here both defendants made offers to one another, no doubt having the principles to which I have referred to, in mind. Each was making an offer based on their assessment of the contribution which they thought was fair and that they should make, and if their judgment was vindicated by the jury on the contribution proceedings, then they sought that their costs be paid and any costs that they may have to pay to the plaintiff from the date of their offer, should be paid by the other defendant. 22 Now the first defendant, having lost its argument for contribution before the jury, seeks to criticise the “successful” defendants and to object to paying their costs despite the fact that it was their intention to take advantage of the same considerations if in fact the jury verdict had been in the first defendant’s favour. The first defendant had the same time period to consider making an offer of contribution to the second and fourth defendants and had offered them no more time, than had been offered to it, when it did in fact make its offer. The first defendant can now not be heard to complain considering that it played “the game” by the same rules. In general I do not believe it is inappropriate to make “Calderbank” offers during a Trial. 23 In my view, if the defendants had been able to present a united front to the plaintiff then it would have been a substantial “step”, per Murphy J in Henderson’s Case, at p.872, and although it may be said to be speculative as to whether the case would have settled, the fact is that serious negotiations with the plaintiff could not commence until the defendants had settled their differences. 24 In my view, it is proper to take the second and fourth defendants’ offers to the 6 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd first defendant into account when exercising my discretion in relation to costs, and in the circumstances, it is appropriate that the second and fourth defendants’ offer to contribute to the extent of forty per cent should be given effect to. --- 7 RULING VCC:AS Harvey v Tascone, Verrocchi & East Yarra Friendly Society Pty Ltd
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