Dougan v Trustees of the Marist Brothers (Ruling) [2025] VCC 1663. (Link to JADE).
The plaintiff had sued the defendant for abuse at a school in 1975, which was admitted by the defendant. The defendant had consented to orders setting aside an earlier settlement deed, on the basis that the defendant be entitled to financial credit for the prior settlement sum.
A jury awarded the plaintiff $320,659 in damages (pain and suffering damages $300,000, medical and like expenses $20,659). No allowance was made by the jury for past or future economic loss, which the plaintiff had claimed.
This ruling considered two matters. Firstly, whether the jury award should be reduced by prior payment of about $120,000 ($107,000 after allowing for legal costs) to the plaintiff; and secondly whether costs orders should be made having regard to offers of compromise served by the defendant.
Deduction of prior payment
At [66] the court held that the prior settlement sum related to the abuse, the subject of this litigation, and should be taken into account in the assessment of damages. It was not an amount being conferred on the plaintiff independently of the existence of any right to damages.
Any suggestion the prior settlement sum was not to be offset against any damages award was not raised by the plaintiff until well after the jury verdict.
The award of damages by the jury ($320,659) was reduced by the prior settlement sum. The amount to be deducted from the jury’s assessment was $107,251. Therefore, there was judgment for the plaintiff in the sum of $213,408 plus interest.
Note: This ruling helpfully summarised a number of cases where the courts have considered whether it is just and reasonable to take into account a prior payment under s27QE(2)(a)(i) of the LAA or the equivalent interstate legislation.
Costs
The defendant had made two offers of compromise before the trial, the second of which was for $400,000 plus costs as agreed or assessed, minus the prior settlement received by the plaintiff in the order of $122,500.
The court said at [99] “In circumstances where the plaintiff rejected not one, but two, offers of compromise, both of which were more favourable than the eventual verdict and in circumstances where the plaintiff is now seeking to completely resile from the position he plainly adopted in 2023, and explicitly adopted on day one of the trial to seek to make the defendant responsible for a two-week jury trial that was completely unavoidable, an order the plaintiff pay the defendant’s costs on an indemnity basis, was appropriate.”
As to whether the court should ‘otherwise order’ costs, at [104] the court said that there was no merit in the plaintiff’s argument that “the nature of the proceeding” ought also be taken into account particularly when he made his own offer of compromise.
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