In the decision of Metro North Hospital and Health Service v Stewart [2024] QCA 226, the Queensland Supreme Court of Appeal considered whether an offer to settle part of a claim constituted a valid settlement offer under the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).

Stewart commenced proceedings against Metro claiming damages for injuries arising from treatment he received as a patient. Shortly after proceedings commenced and prior to the first hearing, Metro purported to make Stewart an offer pursuant to Part 5 of the UCPR on the following terms:

1. TAKE NOTICE that, subject only to sanction, [Metro] HEREBY OFFERS to pay [Stewart] in full and final satisfaction of its liability to [Stewart] for the claim:
   1. $3,000,000 on account of primary damages inclusive of interest and statutory refunds;
   2. [Stewart’s] reasonable fund management and administration fees to be agreed following resolution of primary damages; and
   3. [Stewart’s] standard costs of and incidental to the claim including the application for sanction to be agreed, or failing agreement to be assessed according to the Uniform Civil Procedure Rules 1999 (QLD) (UCPR).

….

The Queensland Supreme Court found in Stewart’s favour and ordered Metro to pay damages of approximately $2 million, plus management fees to be assessed. Metro was ordered to pay Stewart’s costs up to the date of the offer and the Court made no order for costs after that date.

The Court held that Metro’s express exclusion of an amount for management fees from its offer meant that the offer did not cover the full scope of the claim.  The primary judge considered that pursuant to the UCPR, an offer must settle the whole claim and accordingly, held that the offer failed to satisfy the requirements of the UCPR.

Metro appealed the primary judge’s decision, asserting that the judge erred in finding that the meaning of offer in rule 353(1) of the UCPR was limited to offers capable of settling the whole of the claim.

In dismissing the appeal, the Court made a number of observations including:

• The purpose of rules 353 and 361 of the UCPR is to encourage the just and efficient resolution of disputes, including settlement without a Court hearing.
• The words of rule 535 are unambiguous and the offer must relate to a claim in the proceeding, meaning a cause of action or claim for relief.
• A claim for damages for negligence is one cause of action and although each head of damages may be separately particularised it is not itself a separate claim in the proceeding.

The Court of Appeal concluded that in a negligence claim an offer to settle some heads of damages, with others to be subject to agreement, is an offer to settle only part of the claim and does not comply with rule 353 of the UCPR.

It is interesting to note that although the Court did not apply the costs consequences under the UCPR in respect of the offer, it did not order Metro to pay any costs after the date the offer was made.

This decision nonetheless confirms that an offer must be expressed in terms that resolve all of the claim or claims in the proceeding for the costs consequences under the UCPR to apply.

The full decision can be found here.