Catchwords:
Practice and procedure – Offers of compromise pursuant to Rules of the Supreme Court 1971 (WA) O 24A – Whether leave should be given to withdraw acceptance
[2024] WADC 107 (S)
[2024] WADC 107 (S) [JS] Page 1
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION : PERTH
CITATION : BOLTON -v- ELECTRICITY NETWORKS CORPORATION [2024] WADC 107 (S)
CORAM : GETHING DCJ
HEARD : 3 DECEMBER 2024
DELIVERED : 14 JANUARY 2025
FILE NO/S : CIV 4604 of 2015
BETWEEN : MARK BOLTON
Plaintiff
JOHN SMITH (a pseudonym)
XXX Plaintiff
AND
ELECTRICITY NETWORKS CORPORATION
First Defendant
VENTIA UTILITY SERVICES PTY LTD formerly known as THIESS SERVICES PTY LTD
Second Defendant
NOREEN CAMPBELL
Third Defendant
[2024] WADC 107 (S)
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Catchwords:
Practice and procedure – Offers of compromise pursuant to Rules of the Supreme Court 1971 (WA) O 24A – Whether leave should be given to withdraw acceptance
Legislation:
Rules of the Supreme Court 1971 (WA), O 24A r 5
Result:
Leave refused
Representation:
Counsel:
Plaintiff
:
Not applicable
XXX Plaintiff
:
Mr T M Clavey
First Defendant
:
Mr J Inness-Campbell
Second Defendant
:
Ms C J Paxton
Third Defendant
:
Ms M K Joyce
Solicitors:
Plaintiff
:
Slater+Gordon – Perth
XXX Plaintiff
:
Slater+Gordon – Perth
First Defendant
:
DLA Piper Australia – Perth
Second Defendant
:
Wotton + Kearney Lawyers (Perth)
Third Defendant
:
Minter Ellison
Case(s) referred to in decision(s):
A v City of Swan [No 4] [2009] WASC 155
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Connor v Veitch [2023] WASCA 186
Cumper v Pothecary [1941] 2 KB 58
Electricity Networks Corporation t/as Western Power v Herridge Parties [2022] HCA 37; (2022) 276 CLR 271
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[2024] WADC 107 (S) [JS] Page 3
Godden v Alford [1960] WAR 235
Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111
Hodder v Australian Executor Trustees Ltd (as administrator of the estate of Reece William Hodder) [No. 3] [2022] WASC 361
Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Latoudis v Casey (1990) 170 CLR 534
Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers [2020] WADC 27 (S)
Maitland Hospital v Fisher No 2 27 NSWLR 721
Malliaros v Moralis [1991] 2 VR 501
Mohamed v Farah [2004] NSWSC 482
Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 Nesci v Nesci [2005] WASC 65
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Parke v Rubenstein [2020] FCA 1466
Seddone v Commonwealth Bank of Australia [2024] WASCA 70
Sommerville Kalgoorlie Pty Ltd v Gullan Pty Ltd [2023] WASCA 45
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
Uin v Coles Supermarkets Australia Pty Ltd [2022] NSWSC 180
Young v Combe (Unreported, NSWSC, Library No 3254, 29 July 1993)
Zaghloul v Bayly [2023] WASCA 64
[2024] WADC 107 (S)
GETHING DCJ
[2024] WADC 107 (S) [JS] Page 4
GETHING DCJ:
Introduction
1
John Smith (a pseudonym) is one of a large number of people who suffered loss and damage as a result of the Parkerville Bushfires on 12 January 2014.1 He suffers from Post Traumatic Stress Disorder (PTSD) and a Major Depressive Disorder. Mr Smith was part of a class action commenced in the Supreme Court. The defendants were Electricity Networks Corporation trading as Western Power (Western Power), Ventia Utility Services Pty Ltd formerly known as Thiess Services Pty Ltd (Ventia) and Noreen Campbell. The defendants’ liability for causing Mr Smith’s injuries has been determined, as well as the manner in which liability is to be apportioned between them.2 By orders made on 29 June 2022, Mr Smith’s action for damages for personal injuries was remitted to the District Court for assessment.
2
On 5 May 2023, the defendants collectively served on Mr Smith’s lawyers an offer of compromise pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 24A (Offer).
3
On 2 June 2023, Mr Smith, through his lawyers, accepted the Offer (Acceptance).
4
By application filed on 3 November 2023, Mr Smith sought an order giving him leave to withdraw the Acceptance (Application).
5
For the reasons which follow, I decline to grant leave to Mr Smith to withdraw the Acceptance.
Materials before the court
6
Mr Smith relied on the following documents:
(a) his affidavit sworn 3 November 2023 (First Smith Affidavit);
(b) his affidavit sworn 5 October 2024 (Second Smith Affidavit);
(c) an affidavit from Jane Smith (a pseudonym), Mr Smith’s wife, sworn 15 May 2024 (Mrs Smith Affidavit);
1 This decision is an anonymised version of the decision reported as [2024] WADC 107 which is suppressed.
2 See generally: Electricity Networks Corporation t/as Western Power v Herridge Parties [2022] HCA 37; (2022) 276 CLR 271; Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111.
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(d) an affidavit from Jackson Pannam, a solicitor employed by Mr Smith’s lawyers, Slater+Gordon, dated 9 October 2024 (Pannam Affidavit); and
(e) an outline of submissions dated 10 October 2024.
7
Western Power filed submissions dated 19 November 2024.
8
Ms Campbell relies on:
(a) an affidavit of Melissa Joyce, a principal of her lawyers, sworn 19 November 2024; and
(b) an outline of submissions dated 19 November 2024.
9
Ventia did not file any documents. Counsel for Ventia was content to rely on materials filed, and submissions of, the other two defendants.
Correspondence between the lawyers
10
It is instructive to set out the correspondence between the lawyers before considering the correspondence between Mr Smith and his lawyers, and the evidence of his mental health at the time.
11
The Offer is set out in a letter dated 5 May 2023, sent by email, from Jock Inness-Campbell (partner) and Alicia Pull (Senior Associate) of DLA Piper (Western Power’s lawyers) to Briee Rogers of Slater+Gordon. The Offer is to the following effect:
(a) the defendants would pay a sum of money to Mr Smith which I will refer to as the ‘Settlement Sum’;
(b) in addition, the defendants would pay Mr Smith’s legal costs and disbursements to be taxed if not agreed;
(c) the sums payable would be split between the defendants in proportions set out in the letter; and
(d) the terms of the offer, and the agreement formed upon its acceptance, were to be kept confidential and not disclosed (save pursuant to a legal obligation, or to the parties’ legal and professional advisers) without prior written consent of all other parties.
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[2024] WADC 107 (S) [JS] Page 6
12
The Offer was expressed to be open for acceptance by Mr Smith for a period of 28 days from its delivery. Ms Rogers was requested to confirm receipt of the Offer in writing within 3 days pursuant to RSC O 24A r 3(4).
13
On Friday 2 June 2023 at 4.36 pm Ms Rogers sent an email to Ms Pull in the following terms:
I refer to the above matter and the Offer of Compromise issued to Mr [John Smith].
I am instructed to accept that offer.
I will revert shortly regarding the [XXX] Plaintiff’s position as to costs and disbursements.
14
On Saturday 3 June 2023 at 2.21 pm, Ms Rogers sent an email to Ms Pull in the following terms:
I refer to the above matter and my client’s acceptance of the O24A Offer of Compromise.
I have since been instructed to serve upon you a notice of withdrawal of the acceptance of that offer of compromise pursuant to O24A Rule 5(1).
It appears there has been a misunderstanding with my client which requires clarification.
I will revert to you shortly once further instructions have been obtained.
I would appreciate if you could acknowledge receipt of this correspondence.
15
On Saturday 3 June 2023 at 3.34 pm Ms Joyce sent an email to Ms Rogers in the following terms:
I confirm I have received your below email.
Your client requires leave to serve a notice of withdrawal on the defendants. Please advise whether it is your client’s intention to apply for leave.
16
On Thursday 8 June 2023 at 2.53 pm, Mr Inness-Campbell sent an email to Ms Rogers, referring to the email at [15] in the following terms:
Further to Mel’s email below I confirm that my client’s insurer is collecting funds for payment of the settlement by 30 June.
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[2024] WADC 107 (S) [JS] Page 7
17
On Thursday 22 June 2023 at 4.46 pm, Mr Inness-Campbell sent an email to Ms Rogers in the following terms:
Can you please urgently confirm Mr [Smith]’s intentions? If we have not heard from you by 10am tomorrow, I anticipate that we will lodge a chamber summons seeking orders for payment of the settlement into Court and we will rely on this and earlier correspondence on the question of costs.
18
On Friday 23 June 2023 at 7.57 am, Ms Rogers sent Mr Inness-Campbell an email in the following terms:
I apologise for the delays, I have had difficulty getting particular instructions from my client.
I am now instructed to bring the application for leave to withdraw the acceptance.
Noting it is usual that I am able to select the application date upon filing of the application, if each of the defendants could provide their unavailable dates for hearing of the application in July and August, I will arrange filing and service of the application upon receipt of that information.
I would ask that you take no action prejudicial to my client without contacting me prior.
Should you wish to discuss the above, I should be available all day.
19
On Friday 23 June 2023 at 9.08 am, Mr Inness-Campbell sent an email to Ms Rogers in the following terms:
Thanks for your email. Your client’s acceptance of the settlement offer requires the defendants to pay the settlement sum into court by next Friday. Given that you are now instructed to apply for leave to withdraw the acceptance, can you please confirm that your client will not assert that the defendants’ failure to pay the settlement sum into court by next Friday entitles him to withdraw the acceptance without leave?
Please note that if this cannot be agreed, we will apply for orders for payment into court by next Friday and will seek an order that your client pay the costs of and associated with the application.
If you could please confirm by return this morning.
20
On Friday 23 June 2023 at 9.23 am, Ms Rogers sent Mr Inness-Campbell an email in the following terms:
Are you able to direct me to the rule which requires payment into Court?
[2024] WADC 107 (S)
GETHING DCJ
[2024] WADC 107 (S) [JS] Page 8
As I understand the current position, the acceptance of the offer is open to be formalised by Deed or Judgment. Noting this is a personal injury action with a claim for economic loss, I had presumed your client’s would not be permitted to release funds until a Centrelink clearance and advance payment to Medicare have been made.
If, however, I am incorrect and you can direct me to a requirement that the defendants are required to make payment into Court by acceptance of an O24A offer, I confirm that the Plaintiff will not rely upon the defendant’s failure to pay into Court as an entitlement to withdraw without leave.
I look forward to hearing from you.
21
On Friday 23 June 2023 at 9.35 am, Mr Inness-Campbell sent an email to Ms Rogers in the following terms:
I am referring to Order 24A rule 5(1), which states:
A party who accepts an offer may, by serving a notice of withdrawal on the offeror, withdraw the acceptance-
(a) where the offer provides for payment of a sum of money and the sum is not paid into Court within 28 days after acceptance of the offer; or
(b) where the Court gives leave to do so.
My reading of (a) is if we do not pay the money into Court, your client can withdraw the acceptance without leave we would pay the money into court and then the settlement sum would be disbursed once the Medicare and Centrelink issues had been dealt with.
If you can please now confirm the highlighted part of your email below, we will then await the leave application.
22
On Friday 23 June 2023 at 11.42 am, Ms Rogers sent an email to Mr Inness-Campbell in the following terms:
I had been reading O24A(5)(1)(a) as only applying where the offer provides for money to be paid into Court but I accept your reading is probably correct.
As such, I confirm that the Plaintiff will not rely upon the defendant’s failure to pay into Court as an entitlement to withdraw without leave.
Could you please provide me with your unavailable dates for hearing of the application?
23
All the emails I have referred to above were copied to the lawyers for the other defendants.
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GETHING DCJ
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Facts from Mr Smith’s perspective
24
Having set out the overall chronology as to the correspondence between the lawyers, it is now necessary to add Mr Smith’s perspective.
25
The various affidavits filed by Mr Smith and on his behalf make it clear that legal professional privilege is only waived for the limited purpose of the Application. This is another reason for making the suppression order set out at the conclusion of these reasons.
26
By way of background, Mr Smith deposes that sometime in 2014 he found out that he had an income protection policy issued by OnePath (OnePath Policy). He made a claim on the OnePath Policy and received income protection payments at times between 2014 and 2018. The payments under the OnePath Policy stopped in 2018. Mr Smith deposes that over time he forgot all about these payments.
27
Mr and Mrs Smith were provided with a copy of the Offer by email sent on 16 May 2023 at 7.25 am from Slater+Gordon to their separate email addresses. This email foreshadowed that they would shortly be provided with a detailed letter of advice in relation to the Offer.
28
There is no explanation in the materials before the court as to why there was a delay between 5 May 2023 when the Offer was received by Slater+Gordon and 16 May 2023 when they provided it to Mr Smith.
29
Mr Smith deposes to having difficulty understanding the Offer due to the ongoing impacts of his PTSD and depression. Mrs Smith explained it to him. He understood the Settlement Sum and he understood that he had 28 days from the date on which he received the Offer to respond. His initial response was that the Settlement Sum was too low.
30
Mr Smith requested his wife to advise Slater+Gordon that he was not willing to accept the Offer. This she did by email sent to them on 16 May 2023 at 7.58 am.
31
By email to Mrs Smith (copied to Mr Smith) on 19 May 2023 at 2.52 pm, Slater+Gordon provided her with a detailed letter of advice of that date, along with supplementary materials. The letter of advice, among other things explained to Mr Smith:
(a) that the Settlement Sum included all aspects of the claim including past medical expenses but did not include a contribution towards his legal costs;
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[2024] WADC 107 (S) [JS] Page 10
(b) that, if accepted, the defendants would make a contribution to his legal costs, but he would have to pay the balance out of the Settlement Sum; and
(c) the costs consequences of not accepting the Offer.
In addition, Slater+Gordon provided an updated fee disclosure notice and offered to provide Mr Smith with all the amounts that would be deducted from the Settlement Sum.
32
The 19 May 2023 letter did not provide any advice as to whether or not to accept the Offer, but did provide an invitation for Mr Smith to discuss the issue with either them or counsel. The letter did not address the issue of whether Mr Smith would have to repay any amount from the Settlement Sum in respect of income protection payments received by him in the past.
33
The 19 May 2023 letter concluded with a request for Mr Smith to contact Slater+Gordon by no later than 29 May 2023 to provide his instructions on whether he wished to accept or ignore the Offer.
34
Mr Smith deposes that he could not understand the letter because it was very long. However, Mrs Smith explained it to him. He deposes that the letter did not change his decision not to accept the Offer. He goes on to say that he understood that he had 28 days from the date he received the Offer, 16 May 2023, within which to give instruction to his lawyers.
35
Mr and Mrs Smith ended up having a meeting with his lawyer and counsel on 31 May 2023. He deposes that, after that conference, he understood that:
(a) he could let the Offer lapse without responding to it or reject it;
(b) he was to have a medical review in September 2023; and
(c) the Offer was inadequate because:
(i) it was below the amount of damages the court may award if he were to go to trial;
(ii) of the amount of legal costs and disbursements incurred in the proceedings that might be deducted from the settlement amount; and
[2024] WADC 107 (S)
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(iii) of the unknown amounts of Medicare and Centrelink payments that may be deducted from the settlement amount.
He understood that if he accepted the Offer there was very little compensation in it for his injuries.
36
He told his solicitors to let the Offer lapse.
37
Mr Smith then deposes that in the car on the way home, he began to feel ‘anxious, and numbed down, and … also began to feel angry about how long it was taking to finalise … [his] claim’.3 After discussing the issue with his wife, he decided that he wanted a day or so to let the discussion at the conference settle before making a decision. He also began to feel unwell and to experience the physical symptoms of PTSD.
38
That evening, Mrs Smith sent the following email to Slater+Gordon:
Hello Jordyn,
Thank you – and all for the meeting today. lt was helpful.
[John] and I were reflecting on the way home – and while we indicated today that we would like to let the offer lapse –
we have decided we would like to take the next day to allow the information received to settle – and confirm our decision to you either way on Friday morning.
Kind regards,
[Jane Smith]
39
The circumstances in which Mr Smith instructed Slater+Gordon to accept the Offer are best expressed in Mr Smith’s own words:
- All that night, I felt like I was in an irrational state. By that I mean I could not order or arrange my thoughts. I was confused and indecisive.
- On 1 June 2023 [Jane] told me about an email sent by my solicitors confirming that the Offer would expire at close of business Friday (2 June) afternoon and seeking my final instructions by 12pm 2 June (the Expiry Email).
3 First Smith Affidavit, par 52.
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GETHING DCJ
[2024] WADC 107 (S) [JS] Page 12 - I had a discussion with [Jane] about the Expiry Email.
- It didn’t really register with me until that point that I only had until that next day to make a final decision about the Offer and that made me very anxious.
- I had already told my solicitors to let the offer lapse but felt pressure because the time for it to lapse was the next day. This sense of time pressure really aggravated my PTSD symptoms.
- I was under a lot of pressure and feeling anxious. I was feeling physically unwell and became very fixed on the deadline. I had to go to the toilet a lot. I felt a loss of control and feeling irrational and unsure what to do.
- I felt very desperate to finish the claim because it has been over 9 years of feeling unwell, and the process doesn’t seem to end.
- I was not thinking about whether or not the settlement number was adequate or fair or what it would mean to us financially, I was just in so much emotional pain and distress that I wanted it to end.
- I felt like all these years of suffering and pain during the claim had been compressed into just a few days and I had to make an important decision to accept or reject the Offer.
- My thinking at the time was that it’s been 9.5 years, and at that point, I’d had enough, I didn’t want to go on, I wanted it all to end, I had thoughts that I wished I’d never been involved in making a claim and I was angry about how I thought I was being treated by the people who caused the fire.
- I thought if I accepted the Offer I could start to move on my thoughts would be straighter, and thought I’d get a relief at the process being finished.
- I don’t specifically remember the point in time where I told [Jane] to tell the solicitors to accept the Offer.
- I saw on my computer that my wife [Jane], sent an email to my solicitors at 9:56 am instructing them to accept the Offer.
- At or about 11.30am on that morning Ms Rogers of S+G telephoned me.
- I felt unwell and unable able to talk to Ms Rogers and told Ms Rogers words to that effect, and that she should speak to [Jane]. I asked her to contact my wife [Jane].
- I didn’t get a sense of relief during the day. I think I was exhausted from the process of trying to make the decision.
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GETHING DCJ
[2024] WADC 107 (S) [JS] Page 13
40
On 2 June 2023 at 3.35 pm, Ms Rogers sent Mrs Smith, copied to Mr Smith, an email in the following terms:
Dear [Jane],
Further to your email below, I confirm receipt of your instructions to accept the Defendant’s offer of Compromise to [John].
I attach for your review and signature settlement authority and authority to defendant to pay settlement funds to Slater and Gordon.
While it is preferable that these authorities are received prior to my communicating your acceptance to the Defendants, I will ensure that the Offer is accepted prior to its expiry at close of business today. I will send that communication at 4.30pm AWST.
I will also forward these authorities by docusign, if you would prefer to sign electronically, rather than print, scan and email back.
Should you wish to discuss the above please contact us.
41
One of the documents attached to the email included a detailed estimate of the net amount which Mr Smith would receive from the Settlement Sum.
42
As to Mr Smith’s response, again this is best expressed in his words: - There was a paragraph in the Authority enclosures that mentioned payments for workers compensation insurer and income protection insurer. When I read that paragraph, I was thinking this paperwork was for someone on wages, not me.
- [Jane] then told me that we could be liable to pay OnePath back for the payments they had made. Until then I had entirely forgotten about the income protection payments from OnePath. They weren’t in my mind; I wasn’t thinking about them and they had not been brought to my attention before then.
- When [Jane] explained to me that there might be an issue with OnePath recovery, a lot of fear came up. I know we’re going to be on a pension anyway because all our money is gone and thinking we might owe more money is scary. We’re already financially ruined by my inability to work effectively since the fire.
- When [Jane] told me that, I didn’t want to accept the Offer anymore because it meant that I would not receive any money from the offered settlement sum and I understood that I could end up owing money.
- I stated to realise that I needed clarification on a lot of things, I can’t recall much of what I was thinking at the time because I was in a state of shock and confusion.
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[2024] WADC 107 (S) [JS] Page 14 - I had not been aware that there was a possibility that I could be required to make a payment to OnePath form the Offer.
- When I started to think about it, I could see I had made a decision based on how I was feeling, not based on what I was entitled to if my claim was assessed by a court.
- I now know that my thinking then was not rational thinking and I wasn’t making a decision based on my best interests but was responding to my PTSD symptoms.
- There were a number of things I did not understand or remember at the time. I
(a) was not clear on how much money I would receive; I thought it might be a little but not that I would owe money back to others.
(b) thought I could continue to negotiate my legal costs with my solicitors before a settlement of my claim became binding on me. I understood that [Jane] and I would have a discussion with my solicitors about legal fees before the claim finally settled.
(c) didn’t understand that my decision would be binding as soon as I told my solicitors to accept the Offer when I hadn’t signed anything. - At the time of accepting the Offer, I didn’t understand how offers worked in legal proceedings, I thought I could suspend everything to get more time to think about it or take a break and have some more time.
- I told [Jane] to tell my solicitors to stop the settlement because there was new information that had come to light since I made the decision to accept the Offer and I had misunderstood what accepting the Offer meant concerning what compensation I may receive.
43
At 8.08 pm on 2 June 2023, Mrs Smith sent Slater+Gordon an email in the following terms:
Hello Briee,
Thank you for your email of this afternoon with attachments:
SETTLEMENT AND PAYMENT AUTHORITY AND ACKNOWLEDGMENT
AUTHORITY TO PAY SETTLEMENT FUNDS TO SLATER AND GORDON LAWYERS
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GETHING DCJ
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Now that [John] has received the SETTLEMENT AND PAYMENT AUTHORITY AND ACKNOWLEDGMENT documentation, and read the details contained within the document, he now wishes to immediately suspend any further action on his acceptance of the Offer of Compromise for the following reasons:
Refer item 7 page 4 – Workers Compensation and Similar Repayments
This information was not drawn to our intention in any previous advice, particularly where any “income protection insurer payment must be deducted or paid from the settlement sum.”
If this is to apply to the settlement sum it may completely undermine any benefit in settling; indeed the settlement could end up in the negative.
We have only just been made aware of this through receiving the SETTLEMENT AND PAYMENT AUTHORITY AND ACKNOWLEDGEMENT document today.
Therefore, until we can fully analyse the financial impacts of the Item 7 Page 4 as explained, and have received a better explanation of legal fees and costs in their entirety, [John] is not in a position to accept or decline the Offer of Compromise.
In order to determine his actual position he needs full costs transparency/clarification including legal fees and charges.
Otherwise the offer may now prove to be detrimental.
Kind regards,
[Jane Smith]
44
Mr Smith goes on to depose that Mrs Smith has made some inquiries of OnePath, but remains unsure if he needs to pay back the income protection payments received during the claim.
45
In the Second Smith Affidavit, Mr Smith goes into more detail as to the mental and physical health symptoms in the lead up to the expiry of the Offer on 2 June 2023 and in the days following. I accept that the symptoms of his PTSD were particularly acute during this period.
46
Mr Smith annexes to the Second Smith Affidavit a report from Dr Carmela Pestell a clinical psychologist and clinical neuropsychologist. The appointment from which this report was prepared took place on 15 September 2023.
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47
Counsel for Mr Smith drew my attention to the following aspects of this report:
(a) interactions with Mr Smith’s legal counsel were ‘certainly triggers for his psychological symptoms’;
(b) stress caused by the legal proceedings will impact on his cognition, particularly his perception of memory impairment and reduced attention;
(c) the ongoing legal proceedings are ‘likely potential precipitants of acute psychological worsening’;
(d) Mr Smith’s neuropsychiatric symptoms, including apathy, irritability, anxiety disinhibition and amotivation may impair his judgment;
(e) on objective testing Mr Smith qualitatively impressed as having difficulty with executive function suggestive of diminished decision making;
(f) in addition to fatigue, Mr Smith demonstrated difficulties sustaining attention and concentration;
(g) beyond the psychological distress, it was evident from synthesized history, objective testing and clinical interview, that Mr Smith had experienced a decline in cognitive abilities, which may facilitate decision making skills;
(h) Mr Smith demonstrated marked neuropsychiatric symptoms which may increasingly impair his ability to make reasoned decisions in his personal injury claim; and
(i) Mr Smith is considered vulnerable to cognitive decompensation and poor decision making under periods of heightened stress and neuropathological changes.
48
It is instructive to quote three passages from Dr Pestell’s report in full:4 - What circumstances or events trigger or are likely to trigger or exacerbate the client’s psychological symptoms, and how do his symptoms effect his mental capacities?
- Mr [Smith] reported initially experiencing high levels of anxiety and distress regarding interactions with legal counsel, which were certainly triggers for his psychological symptoms. He reported that, at present, he is experiencing less distress and
4 Second Smith Affidavit, pages 20 and 22.
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instead expressed an apathy and indifference to the proceedings, with some residual anxiety and frustration. The ongoing legal proceedings are thus likely potential precipitants of acute psychological worsening, although, at present, he denied significant mental health concerns or symptoms of post-traumatic stress. Stress caused by the legal proceedings will impact his cognition, particularly his perception of memory impairment and reduced attention.
… - Is the client capable of giving appropriate instructions, receiving, understanding, and acting appropriately upon legal advice, and/or making reasoned judgments and decisions in respect of his personal injury claim?
- Mr [Smith] appeared to have experienced some distress in managing legal proceedings, which is perhaps understandable given they have persisted for almost ten years. However, beyond the psychological distress, it was evident from the synthesized history, objective testing, and clinical interview, that he has experienced a decline in cognitive abilities, which may facilitate decision-making skills. He demonstrated marked neuropsychiatric symptoms (e.g., apathy, irritability, anxiety) combined with executive functioning and attention difficulties on testing. These may increasingly impair his ability to make reasoned decisions in his personal injury claim.
- Does the client have capacity to manage his own financial affairs and appropriately manage a substantial amount of money?
- Mrs [Smith] appears to be managing complex financial decision-making for her husband, a task she described having been responsible for since the index incident. Mr [Smith] reported he can manage his bank account and make payments when required. While he currently has some cognitive capacities to make reasoned personal, lifestyle, medical and financial decisions, he is considered vulnerable to cognitive decompensation and poor decision-making under periods of heightened stress or neuropathological changes. His decision-making capacity may vary over time, and he will require oversight for complex financial matters. His cognitive impairments, which may worsen with time, are likely to impact his ability to evaluate complex financial information, integrate multiple sources of information, and to revise his opinion when presented with new information. Appointment of a professional financial advisor is recommended, although, given Mr [Smith]’s apathetic state, it is unclear if he will be receptive to advice. If he does not already have advanced planning documents, it is suggested he consider Enduring Power of Attorney (EPA), Enduring Power of Guardianship (EPG), and an Advance Health Directive (ADH).
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49
Counsel for Mr Smith submitted that Dr Pestell’s report is entirely consistent with his evidence. I agree.
50
As to the Mrs Smith Affidavit, Mrs Smith confirms the chronology of events which I have already set out. She describes in considerable detail the extensive impact of Mr Smith’s psychiatric and psychological conditions on a day-to-day basis. This includes cognitive difficulties when trying to engage with complex or difficult information. She deposes that engaging with his lawyers about the claim tends to re-traumatise him, requiring significant period of time to recover. She also deposes to the increase in symptoms which she observed the time Mr Smith was considering the Offer, in particular in the lead up to agreeing to accept the Offer.
51
One fact that Mrs Smith deposed to that is worthy of note is that when reading the detailed settlement information sent by Slater+Gordon on 2 June 2023 at 3.35 pm, she recalled the OnePath policy. In her words:5 - In relation to Authority b. deduction of Workers Compensation and Similar Repayments, I remember,
57.1 Reading a similar repayment type referred to as income protection insurer payments, seeking [John]’s understanding and agreement that such payments must be deducted from the settlement sum.
57.2 [John]’s OnePath policy coming into my mind and becoming aware I had completely forgotten about OnePath, and the incompleteness of the advice received from insurers and lawyers earlier in the Claim, in the context of possible global settlement in around 2019 – 2020.
57.3 Becoming aware there had not been any clarification from OnePath, and/or S+G, as to whether those payments had to be repaid from any settlement of the Claim, including in relation to the Offer in the new Court context of the District Court.
57.4 Becoming aware I could not recall any reference in the Offer documents and/or discussions about deductions for income protection insurers and/or payback obligation during [John]’s consideration of the Offer, that may have prompted my remembering OnePath.
5 Mrs Smith Affidavit, par 57.
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57.5 Going back to Offer documents and reviewing them.
57.6 Becoming aware there was no reference to income protection insurers and or payback obligation and that this was new information in Offer documents.
57.7 Realising [John] had not been supplied with information, complete advice, and/or discussion about OnePath in the Claim before, or since the Offer, until that day.
57.8 When I discussed with [John] what I knew about OnePath in the Claim and Fire proceedings, I observed [John] appearing confused, and I heard him express his fear and worry as to why/how OnePath was appearing in documents at this stage of an offer process.
52
Counsel for each of the defendants did not take issue with the evidence given by Mr and Mrs Smith. However, they did seek to place a different characterisation on its effect.
53
In summary, on the evidence, there are two reasons why Mr Smith seeks to withdraw the Acceptance. The first is that because of the symptoms of his psychiatric and psychological conditions at the time he made the decision to accept the Offer, his judgment was impaired. The second is that when he made the decision to accept the Offer, he had forgotten that he had received some income protection payments and was unaware that he might have to repay some or all of those amounts from the Settlement Sum.
54
In oral argument, counsel for Mr Smith only placed reliance on the first reason as a basis for the grant of leave to withdraw the Acceptance.6
Legal framework
55
The rules relating to the withdrawal of an acceptance of an offer made pursuant to RSC O 24A are set out in RSC O 24A r 5:
Withdrawing acceptance of offer
(1) A party who accepts an offer may, by serving a notice of withdrawal on the offeror, withdraw the acceptance –
(a) where the offer provides for payment of a sum of money and the sum is not paid into Court within 28 days after acceptance of the offer; or
(b) where the Court gives leave so to do.
6 ts 44 (3 December 2024).
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(2) On withdrawal of an acceptance all steps in the proceedings taken in consequence of the acceptance shall have such effect only as the Court may direct.
(3) On withdrawal of an acceptance or on the motion for leave to withdraw an acceptance, the Court may –
(a) give directions under subrule (2); and
(b) give directions for restoring the parties as nearly as may be to their positions at the time of the acceptance; and
(c) give directions for the further conduct of the proceedings.
56
RSC O 24A r 5(1) provides for two circumstances in which a party who accepts an offer may withdraw the acceptance. The first circumstance is ‘where the offer provides for payment of a sum of money’. In this circumstance, the acceptance may be withdrawn if ‘the sum is not paid into Court within 28 days after acceptance of the offer’.
57
The evident purpose of this first circumstance is to give the party accepting the offer security for payment. It would be most undesirable for a party to accept an offer which provides for the payment of money, for the money not to be paid, and for the party to then have to litigate to enforce the settlement. Hence, the rules allow a party who has accepted an offer to withdraw the acceptance as of right in this circumstance. The parties would then continue with the primary litigation.
58
There is a suggestion in the correspondence that the party making the offer is required to obtain an order for payment of the money into court (see [19]). I disagree. There is no requirement for an order in RSC O 24A r 5(1)(b). Rather, the money is paid in pursuant to RSC O 24A r 5(1)(b).
59
The second circumstance is ‘where the Court gives leave to do so’.
60
I will return to this second circumstance later in this judgment.
Is Mr Smith entitled to rely on RSC O 24 r 5(1)(a)?
61
Mr Smith submits that he should be entitled to withdraw his acceptance of the defendants’ offer on the basis that the Settlement Sum was not paid into court within 28 days of acceptance of the Offer.
62
It is common ground that the Settlement Sum was in fact not paid into court within 28 days of acceptance of the Offer. On a plain reading of the text of RSC O 24A r 5(1)(a), this would entitle Mr Smith to withdraw his acceptance as of right.
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63
However, as I have set out at [20] and [22], in her emails of 23 June 2023 at 9.23 am and 11.42 am, Ms Rogers makes it clear that Mr Smith will not rely on the defendants’ failure to pay into court as an entitlement to withdraw without leave. It is also clear that the defendants relied on this statement by not applying for orders in relation to payment into court (though noting what I have said at [58] that there was no need to do so).
64
Counsel for Mr Smith was not able to provide me with any satisfactory reason for resiling from the position set out in the email. Rather, Mr Smith’s position is that in order for him to be bound by the statement of his lawyers, the defendants would have to show by evidence that they in fact suffered prejudice. This would have required them to have put on evidence to prove that they could in fact have paid the Settlement Sum into court by the expiration of the 28 days deadline from the acceptance of the Offer.
65
I do not agree that the submission made by counsel for Mr Smith that the lawyer receiving the commitment should have to go to the effort of proving factual prejudice before being able to hold the other lawyer to the commitment made. I can readily imagine this leading to trials within trials to resolve interlocutory disputes.
66
In my view, it is essential to the efficient administration of justice that lawyers are able to rely on commitments given by other lawyers in relation to matters of procedure, both of whom are officers of the court. A lawyer should not be able to resile from a commitment given to another lawyer unless good reason is shown. In the present case, no good reason has been shown. Accordingly, as a matter of case management, I will not allow counsel for Mr Smith to argue that Mr Smith is entitled to withdraw his acceptance of the defendants’ offer on the basis that the settlement sum was not paid into court within 28 days of acceptance of the offer.
Should Mr Smith be granted leave to withdraw the Acceptance?
67
In relation to the second circumstance, ‘where the Court gives leave to do so’, the power of the court to give leave is unconfined in the sense that it contains no positive indication of the considerations which the court is to take into account, or not take into account, in determining whether to grant leave.
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68
In exercising the power to grant leave, the court must have regard to the factors set out in RSC O 1 r 4B, which is in the following terms:
4B. Case flow management, use and objects of
(1) Actions, causes and matters in the Court will, to the extent that the resources of the Court permit, be managed and supervised in accordance with a system of positive case flow management with the objects of –
(a) promoting the just determination of litigation; and
(b) disposing efficiently of the business of the Court; and
(c) maximising the efficient use of available judicial and administrative resources; and
(d) facilitating the timely disposal of business; and
(e) ensuring the procedure applicable, and the costs of the procedure to the parties and the State, are proportionate to the value, importance and complexity of the subject matter in dispute; and
(f) that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party.
(2) These rules are to be construed and applied and the processes and procedures of the Court conducted so as best to ensure the attainment of the objects referred to in subrule (1).
69
The considerations in RSC O 1 r 4B suggest that the factors which the court should consider in exercising the discretion to grant leave to withdraw an acceptance include:7
(a) whether there was any delay in applying for leave and, if so, the explanation for the delay;
(b) the reason for seeking leave; 7 See generally: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [89] – [103], [111] – [112] (Gummow, Hayne, Crennan, Kiefel & Bell JJ).
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(c) any injustice or prejudice to the party seeking the leave if leave is not granted;
(d) any injustice or the prejudice to the party opposing leave if leave of granted; and
(e) any prejudice to the proper administration of justice.
70
The onus is on the party seeking the grant of leave to persuade the court that it is appropriate to do so.
71
The purpose of the regime in O 24A is to encourage a party to whom a fair and reasonable offer of compromise has been made to accept the offer and bring the proceedings to an end. It seeks to save public and private costs and avoid the inherent risks and delays of litigation.8 The aim is to oblige the offeree to give serious thought to the risk involved in non-acceptance.9
72
An offer of compromise under RSC O 24A is a procedural device governed by the terms of the order.10 It is not governed by ordinary contractual principles.11 In this regard I note that counsel for Mr Smith accepted that on ordinary contractual principles, Mr Smith would not have been able to set aside the agreement constituted by the acceptance of the Offer.12
73
I have not been able to find any cases dealing with the proper interpretation of RSC O 24A r 5(1)(b).
74
The power to withdraw an acceptance of an offer made pursuant to the rules of court is found in other jurisdictions.13 However, the only decision I have been able to find from other jurisdictions is Uin v Coles Supermarkets Australia Pty Ltd.14 In that case, the defendant, Coles Supermarkets Australia Pty Ltd (Coles) served an offer of compromise on the plaintiff, Ms Uin. The offer of compromise
8 Hodder v Australian Executor Trustees Ltd (as administrator of the estate of Reece William Hodder) [No. 3] [2022] WASC 361 [44] (Curthoys J); Maitland Hospital v Fisher No 2 27 NSWLR 721, 724 (Kirby P, Mahoney JA & Samuels AJA)(Maitland Hospital); Malliaros v Moralis [1991] 2 VR 501, 505 (McGarvie J). 9 Maitland Hospital (724).
10 Mohamed v Farah [2004] NSWSC 482 [33] (Barrett J). 11 Nesci v Nesci [2005] WASC 65 [18] (Newnes M) (Nesci); Parke v Rubenstein [2020] FCA 1466 [21] (Besanko J).
12 ts 30 (3 December 2024).
13 Uniform Civil Procedure Act 2005 (NSW) s 73(1); Uniform Civil Procedure Rules 2005 (NSW) pt 20 r 20.28(1); Federal Court Rules 2011 (Cth) pt 25 r 25.09.
14 Uin v Coles Supermarkets Australia Pty Ltd [2022] NSWSC 180 (Uin).
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was
sent to Ms Uin’s former solicitors on 13 December 2021 and was expressed to be open for acceptance until 20 January 2022. On 20 December 2021, Ms Uin’s former solicitors filed a notice of ceasing to act. On 20 January 2022, being the date on which the offer of compromise was to lapse at 5.00 pm, Ms Uin sent an email to Coles at 4.32 pm in which she said that she will accept the offer and referred to the deadline of 5.00 pm that day. The effect of the acceptance of the offer was to resolve the proceedings. However, on 2 February 2022, Ms Uin in an email to the solicitor with carriage of the matter on behalf of Coles, informed him that she had second thoughts about accepting the offer of compromise and she was very concerned about the effect of the acceptance of the offer on her Centrelink benefits. She then purported to withdraw her acceptance of the offer and indicated that she wished to continue with the action.
75
Ms Uin subsequently brought an application for leave to withdraw her acceptance. Coles did not oppose the application. Adamson J granted Ms Uin leave to withdraw her acceptance. In doing so, her Honour observed:15
I am persuaded that it is appropriate to permit the plaintiff to withdraw her acceptance in the present proceedings. At the time she accepted the offer, she was no longer represented by solicitors … She communicated her change of heart, or change of mind, to the solicitors for the defendant relatively soon after having accepted the offer of compromise. Furthermore, and of significant importance, the defendant does not oppose the grant of leave.
I confirm that the plaintiff has indicated to me her understanding that by continuing with the proceedings she may receive a result better than the offer of compromise, worse than the offer of compromise or the same as the offer of compromise. In these circumstances I am satisfied that she appreciates the risk she runs in continuing to prosecute the proceedings, but that this is something that she wants to do because she wants to litigate her claim.
In these circumstances, I am satisfied that it is in the interests of justice that leave to withdraw acceptance of the offer of compromise be granted.
The factors considered by Adamson J mirror those set out at [69].
76
There is a parallel power to that in RSC O 24A r 5(1)(b) in O 24A r 3(6) in relation to the withdrawal of an offer:
An offer shall not be withdrawn during the time it is open to be accepted, unless the Court orders otherwise.
15 Uin [7] – [9] (Adamson J).
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77
The principles governing the exercise of this power were stated by Master Newnes (as his Honour then was) in Nesci:16
It is, I think, clear that the question of the withdrawal of an offer made under O 24A is not to be determined on ordinary contractual principles. The offer is made under the rules of Court and acceptance of an offer made under O 24A is an agreement made subject to the procedures of the Court, including the procedure by which the offeror may be permitted to withdraw the offer … The overriding principle with which the Court is concerned is the interests of justice and the rules are to be applied so as to promote the attainment of justice between the parties, not to frustrate it …
This statement of general principle is apposite to the power in RSC O 24A r 5(1)(b).
78
Circumstances which have justified the court ordering an offer to be withdrawn include:17
(a) where the offer was made by a virtue of a bona fide mistake;
(b) where the offer reflected a position reasonably taken when the full facts could not be known;
(c) new evidence coming to light after the offer was made; and
(d) where the offer which reflected a position taken before the law was changed.
79
However, the analogy between withdrawal of an offer and withdrawal of an acceptance is not perfect. This is because an offer must remain open for a period of time during which circumstances may change. Hence, in Nesci Master Newnes identified the question to be determined in that case as being ‘whether there has been such a change of circumstances since the offer was made as to make it just that the plaintiff should be permitted to withdraw his offer’.18
80
Another power which is somewhat analogous is the power to allow a party to withdraw a payment made into court. In that context, the test has been phrased as ‘whether there is sufficient change of circumstance since the money was paid in to make it just that the 16 Nesci [18] (Newnes M) (references omitted).
17 Nesci [26], [27]; Young v Combe (Unreported, NSWSC, Library No 3254, 29 July 1993) 9 (Hodgson J).
18 Nesci [30].
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defendant should have an opportunity of withdrawing or reducing his
payment’.19 Such circumstances include:20
(a) the discovery of further evidence which puts a wholly different complexion on the case; and
(b) a change in the legal outlook brought about by a new judicial decision.
81
However, the same caveat set out at [79] applies to this power.
82
In summary, in considering whether or not to grant leave to a party to withdraw an acceptance pursuant to RSC O 24A r 5(1)(b), the overriding principle with which the court is concerned is the interests of justice or, in the words of RSC O 1 r 4B(1)(a), to promote the just determination of litigation. This requires a consideration of all the circumstances of the particular case. It also requires a consideration of the public interest in the just determination of all litigation in the court. Without being in any way exhaustive, the factors which the court should consider include:
(a) whether there was any delay in applying for leave and, if so, the explanation for the delay;
(b) the reason for seeking leave;
(c) any injustice or prejudice to the party seeking the leave if leave is not granted;
(d) any injustice or the prejudice to the party opposing leave if leave of granted (including whether the grant of leave is opposed); and
(e) the public interest, being any prejudice to the due administration of justice in the court as a whole.
83
As to delay, Mr Smith’s lawyers advised the lawyers for the defendants that there may be an issue with the Acceptance within 24 hours of notifying them of the Acceptance ([14]). However, the Application was not commenced until some five months later. No reason is provided for this delay. However, no defendant has asserted that they have suffered any specific prejudice, as a result of the
19 Cumper v Pothecary [1941] 2 KB 58 [70] (Scott & Goddard LJJ, Stable J); Nesci [28].
20 Nesci [28] – [29].
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delay. The defendants did draw my attention to the length of time this
litigation has been on foot. However, in my view, this is not germane to the present application.
84
The prejudice to Mr Smith if he is not allowed to withdraw his acceptance is that he would have lost the opportunity to have the court assess the damages to which he is entitled for the injures which he says he suffered as a result of the Parkerville Bushfires and their ongoing sequelae. The particulars of damages which he filed itemise loss and damage totalling $1,454,646, inclusive of non-pecuniary loss. The Settlement Sum is significantly less than this amount. As the Court of Appeal recently observed (albeit in the other contexts) there is typically no injustice in having a case determined on its merits.21
85
The prejudice to the defendants if leave is not granted is that they cannot rely on a settlement which had been reached, in good faith, pursuant to the rules of the court.
86
It is not suggested that any of the defendants engaged in any improper conduct in relation to the making of the Offer and receipt of the Acceptance.
87
This leaves the reason for seeking leave.
88
I note that none of the circumstances which I have identified at [78] and [80] apply.
89
As set out at [53] and [54], the sole reason why Mr Smith seeks to withdraw the acceptance is that because of the symptoms of his psychiatric and psychological conditions at the time he made the decision to accept the Offer, his judgment was impaired.
90
I accept on the evidence that Mr Smith’s judgment was in fact impaired because of the symptoms of his psychiatric and psychological conditions at the time he made the decision to accept the Offer.
91
In some respects, the present application is stronger than the Uin. Mr Smith’s change of heart regarding settlement was due to the symptoms of his psychiatric and psychological conditions and its impact on his decision-making capacity. On the other hand, the decision in Uin can be distinguished in two respects. The first is
21 Zaghloul v Bayly [2023] WASCA 64 [52] (reasons of the court) (refusal to order summary judgment); Sommerville Kalgoorlie Pty Ltd v Gullan Pty Ltd [2023] WASCA 45 [3] (reasons of the court) (extending the time for compliance with a springing order).
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that Coles did not oppose the order, something considered to be of
‘significant importance’.22 The second is that Ms Uin was not represented at the time she accepted the offer.
92
Had the settlement agreement been made by consent order, the reasons advanced by Mr Smith would not have justified the court declining to make orders in terms of the consent. This conclusion is evident from the recent decision of the Court of Appeal in Connor v Veitch.23 In that case, the parties signed a consent order to determine the appeal following a mediation. Ms Veitch, the respondent, had instructed her counsel to sign the consent order. However, after it was filed with the court to extract, she requested the court to not extract the consent order and instead list the action for a further mediation. Ms Veitch filed affidavit evidence to the effect that she felt stressed, confused and scared towards the end of the mediation, and felt that she had no option but to agree to resolve the dispute on the terms offered, even though she was not happy with it. The Court of Appeal observed that the case was, in substance, one in which Ms Veitch ‘had reconsidered her position and wished to withdraw her consent to the parties’ compromise of the litigation’.24 The Court of Appeal was of the view that it had no discretion to do so. Even if it had, it would have declined to exercise the discretion, observing that the rules did not provide for a litigant to have a ‘cooling off’ period having consented to the orders.25
93
The following observations by the Court of Appeal are apposite to the present application: 26
Counsel for Ms Veitch emphasised the prejudice that would be suffered by Ms Veitch if orders were extracted and issued. In that respect Ms Veitch’s cross-appeal will not be determined on its merits. But the issue is one which must be considered from the appellant’s point of view as well as that of Ms Veitch. Accepting, consistently with Ms Veitch’s evidence, that she did so reluctantly and feeling stressed, confused and scared, it remains the position that Ms Veitch authorised her solicitor to agree to the compromise. The appellant was entitled to consider that the terms of the consent notice were bringing an end to the litigation. Where, as here, there is no disentitling conduct on the part of Ms Veitch’s contractual counterparty – and Ms Veitch herself makes no complaint in that regard – the court should respect the compromise
22 Uin [7].
23 Connor v Veitch [2023] WASCA 186 (Connor).
24 Connor [23] (reasons of the court).
25 Connor [34].
26 Connor [33] – [34].
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reached by the parties. That is all the more so where it is a compromise entered into following court mediation. Moreover, were the matter to be resolved solely as an exercise of discretion, the public interest must be considered. If the court too readily disregards compromises of litigation made following mediation the important object of promoting the settlement of litigation will be hindered. The interests of justice, including the interests of the due administration of justice, will not be served by the court declining to extract and issue final orders in accordance with a consent notice following mediation simply because one litigant wishes to recant from the compromise having rethought his or her position.
Counsel for Ms Veitch disputed the proposition that refusal of the extraction and issue of final orders would be inconsistent with the due administration of justice. Counsel submitted that a favourable exercise of discretion, refusing the extraction and issue of final orders in this case, would not bring the administration of justice into disrepute. Counsel likened the present situation to one where advantage was being taken of a ‘cooling off’ period. The difficulty with that submission is that r 60 makes no provision for a cooling off period. Nor, in our view, should it be thought that the court will afford a litigant a cooling off period as a matter of course. The uncertainty that will arise as a consequence of a court endorsed de facto cooling off period will tend to impair the effectiveness of mediation as a means of litigants resolving their disputes by compromise.
94
I observe that the rationale for an offer pursuant to RSC O 24A being required to be open for a minimum of 28 days (RSC O 24A r 3(3)) is to ensure that the party to whom the offer is made has ample time to consider their position such that no further ‘cooling off’ period is required.
95
However, the analogy of a consent order is also not perfect. This is because, unlike a consent order, there is a specific power of the court to give leave to a party to withdraw an acceptance made pursuant to RSC O 24A. Though, as noted, had there been a discretion, the Court of Appeal would not have exercised it in favour of Ms Veitch.
96
The decision in Seddone v Commonwealth Bank of Australia,27 in the context of an order consented to in court before the Master, is to the same effect as the decision in Connor. Relevantly for present purposes, the Court of Appeal observed that ‘there was no obligation on the acting master to interrogate Ms Seddone about her understanding of the agreement or the state of her mental health’.28
27 Seddone v Commonwealth Bank of Australia [2024] WASCA 70 (Seddone).
28 Seddone [27].
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97
As to the fact that Mr Smith’s psychiatric and psychological symptoms increased, and physical health deteriorated, in the period he was considering the Offer, in my experience a significant proportion of plaintiffs in personal injuries cases in the court have serious psychiatric and psychological issues, including PTSD. This suggests that the fact that Mr Smith’s mental and physical health deteriorated in the period he was considering the Offer is not, of itself, a sufficient reason to allow him to withdraw the Acceptance. One reason why the O 24A offer must remain open for 28 days is to allow a plaintiff in this class ample time to properly consider the offer without the pressure of having to make a quick decision. In the present case, it was not helpful to Mr Smith for Slater+Gordon to wait until 16 May 2023 to send to Mr Smith the Offer which it received on 5 May 2023. He thereby lost 11 of his 28 days.
98
It is incumbent on a lawyer acting for a plaintiff in personal injuries litigation to deal with the plaintiff in a manner which respects and manages any psychiatric and psychological issues then being experienced by the plaintiff. At the point in time the plaintiff’s lawyer forms the view that the plaintiff may not be competent to provide instructions, they should make arrangements to have this issue addressed by a psychiatrist and, if necessary, take steps to ensure that a guardian is appointed who can be the next friend in the litigation.29 Until then, the court, and the other parties, are entitled to presume that that plaintiff is competent to provide instructions.30 I add that if there is evidence that when a plaintiff gave their lawyer instructions to accept a RSC O 24A offer of compromise, they lacked capacity to do so, this would readily justify the court granting the plaintiff leave to withdraw the acceptance pursuant to RSC O 24A r 5(1)(b).
99
In the present case, whilst after the events in question Dr Pestell raised some concerns about Mr Smith’s capacity (see [48]), it is not to the effect that he lacked the capacity to provide instructions. I also observe that, in my experience, the profile of consequences described by Dr Pestell is not uncommon for plaintiffs suffering from PTSD. It is a profile that should have been well known to Slater+Gordon.
100
The approach adopted by Slater+Gordon of providing Mr Smith with detailed authority to settle (see [40] above), including estimated deductions, was both prudent and necessary. This approach provides a client with one last opportunity to reconsider their position before
29 RSC O 70 r 3(6).
30 A v City of Swan [No 4] [2009] WASC 155 [37] (Templeman J).
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giving final instructions to their lawyer to settle. The issue in this case
is that the detailed authority to settle was only provided to Mr Smith some hours before the Offer was due to expire. It is unfortunate that the acceptance of the Offer was communicated by Slater+Gordon (albeit in accordance with Mr Smith’s then instructions) before it received the signed authority to settle. This compressed time frame is, however, a consequence of Mr Smith losing the first 11 days of the 28-day period as a result of Slater+Gordon’s delays in sending it to him.
101
Paraphrasing the words of the Court of Appeal in Connor31 counsel for Mr Smith emphasised the prejudice that would be suffered by Mr Smith if he were not granted leave to withdraw the Acceptance. The quantum of his damages, to which he has established an entitlement, will not be determined on its merits. But the issue is one which must be considered from the defendants’ point of view as well as that of Mr Smith. Accepting, consistently with the evidence relied on by Mr Smith, that at the time he authorised his lawyers to accept the Offer his psychiatric and psychological symptoms were acute, it remains the position that he authorised his lawyer to accept the Offer. The defendants were, and are, entitled to consider that the Acceptance brought an end to the litigation. Where there is no disentitling conduct on the part of the defendants, the court should respect the compromise reached by the parties. That is all the more so where it is a compromise entered into in compliance with the regime in RSC O 24A.
102
Continuing the paraphrase, in the exercise of the discretion as to whether to grant leave to withdraw the Acceptance, the public interest must be considered. If the court too readily disregards compromises of litigation made using the procedure in RSC O 24A, the important object of promoting the settlement of litigation will be hindered. The interests of justice, including the interests of the due administration of justice, will not be served by the court granting Mr Smith leave to withdraw the Acceptance in the circumstances which have been placed before the court in evidence. The uncertainty that will arise as a consequence of the court allowing a party to withdraw their acceptance in a case like the present one will tend to impair the effectiveness of RSC O 24A as a means of litigants resolving their disputes by compromise. Rather, the due administration of justice requires the settlement entered into by reason of the Acceptance to be enforced.
31 Connor [33] – [34].
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103
For these reasons, Mr Smith’s application for leave to withdraw the Acceptance is refused.
The appropriate final orders
104
I will hear from counsel as to the appropriate orders to finalise the action in accordance with the Acceptance.
105
As to costs, costs of proceedings in the court are to ‘be paid by or apportioned between the parties in such manner as the District Court judge directs’.32 In default of such a direction, the costs shall ‘abide the event’.33 Aside from the default position, the court’s discretion is unconfined in the sense that there are ‘no positive indication of the considerations upon which the court is to determine by whom and to what extent costs are to be paid’.34 The discretion is very wide.35 However, it must be exercised judicially, that is, in accordance with established principles and factors directly connected with the litigation, and not arbitrarily, capriciously or so as to frustrate the legislative intent.36 It must be exercised so as to achieve what is fair and just between the parties according to the circumstances of the particular case.37 Nevertheless, ‘practices or guidelines have developed, one of which is that, generally speaking, a wholly successful party should receive his or her costs unless good reason is shown to the contrary’.38
106
The present application is the first one that I am aware of in which either this court or the Supreme Court has been asked to exercise the power in RSC O 24A r 5(1)(b). So it is not the case that Mr Smith’s lawyers had a well-established body of case law on which to advise him as to the merits of the Application. Because of this, my preliminary view is that the order which is fair and just between the parties according to the circumstances of this particular case is to make no order as to the costs of the Application. I will hear from counsel as to costs.
32 District Court of Western Australia Act 1969 (WA) s 64(1) (DCA).
33 DCA s 64(1). See also: RSC O 66 r 1(1).
34 Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5] (reasons of the court) (Hughes).
35 Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 [48] (judgment of the court) (Strzelecki); Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 [39] (Steytler P, with whom Pullin JA & Murray AJA agreed); Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers [2020] WADC 27 (S) [14] (Herron DCJ).
36 Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 [24] (judgment of the court); Strzelecki [48].
37 Latoudis v Casey (1990) 170 CLR 534, 558 (Dawson J); Godden v Alford [1960] WAR 235 [237] (Jackson CJ, Virtue & Hale JJ).
38 Hughes [5].
[2024] WADC 107 (S)
GETHING DCJ
[2024] WADC 107 (S) [JS] Page 33
107
I also propose to make an order suppressing this decision. RSC O 24A r 7 makes it clear that the mere existence of an offer is to be kept confidential from the court, in particular the trial judge. In case there is an appeal, I will suppress the decision until 31 January 2025. If there is an appeal, then an order can be made extending the suppression. If there is no appeal, the decision will be published in the usual course.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
OS
Associate to Judge Gething
14 JANUARY 2025
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