In Armstrong v. Allianz,1 McMeekin J refused to factor in a faxed Offer to Settle, made by the defendant pursuant to r.361 of the Uniform Civil Procedure Rules (Qld) (UCPR), when considering the issue of costs.
In reaching his conclusions, McMeekin J said that an Offer to Settle must be certain, and in this particular case:
- should have been accompanied by a Release and Discharge; and
- should have conformed with r.122 of the UCPR.
On 18 November 2008, the plaintiff, who was 16 years old at the time, sustained personal injuries from a motor vehicle accident in which he was the passenger.
The car rolled and his left hand was crushed.
The defendant admitted liability and the assessment of damages was governed by the provisions of the Civil Liability Act 2003 and the Civil Liability Regulation 2003.
Judgment was delivered on 7 November 2012 with the plaintiff awarded $491,917.25 in damages.
The offer was relevant to the issue of costs as the defendants' had submitted to the plaintiff a UCPR offer of $500,000.00, plus costs and outlays up to the date of the offer.
If the UCPR offer was valid, the Court would need to consider exercising its discretion to award costs against the plaintiff in favour of the defendant, which would have included the costs of the trial.
However, the UCPR offer was worded in such a way that it was made subject to the plaintiff signing a "… suitably worded discharge to the satisfaction of the defendants".
McMeekin found that, as the terms of the discharge were not disclosed along with the offer, the offer was invalid. His Honour stated:
"what 'suitably worded' might mean is at least contentious. Suitable to whom would be the relevant question... that there was the potential for the plaintiff's rights to be affected by the discharge cannot be doubted".
On that point, His Honour found:
"In these circumstances and where the terms of the proposed discharge are not defined I cannot see why a plaintiff is not entitled to see the terms of the discharge before committing himself to accepting the offer. Otherwise he may be committing himself to the giving up of rights that he would not otherwise have done.
The onus it seems to me is plainly on the defendant to show that the offer made met the pre-conditions set down in the rule if the defendant is to take advantage of the rule.
Here there was a further condition imposed which has the potential to require the plaintiff to give up rights that went beyond the effect of any judgement in the proceedings. Hence I am not satisfied that the offer did in fact meet the pre-conditions of r 361".
McMeekin J also found that service of the UCPR offer by facsimile did not comply with r.122 of the UCPR, which meant that service was not effected by fax but later by post which (had the offer been valid) would have affected the date from which costs would have been calculated.
Rule 122 of the UCPR states:
"A document served by fax must include a cover page stating the following:
a) the sender's name and address;
b) the name of the person to be served;
c) the date and time of transmission;
d) the total number of pages, including the cover page, transmitted;
e) the telephone number from which the document is transmitted;
f) the name and telephone number of a person to contact if there is a problem with the transmission; and
g) that the transmission is for service under a stated rule"
Ultimately, His Honour concluded stating the purported UCPR offer should not be considered in determining costs, and on that basis costs were in the discretion of the Court and should usually follow the event.
His Honour ordered the second defendant pay the plaintiff's costs of the proceedings on a standard basis.
This is an important case from a practical perspective as the issues concerning the wording of UCPR offers is common in all forms of cases.
When wording an offer under the UCPR, one must give careful consideration so as not to allow the Plaintiff to escape the consequences of not beating that offer.
In particular, if an offer refers to the requirement for the parties to execute a Release and Discharge, be sure to include the said Release when serving the offer.
Also, when serving an offer via facsimile, be sure to comply with r.122 of the UCPR. Before you consider making your UCPR formal offer, and or you wish to discuss any aspect of this case, please do not hesitate to contact the writer.