A Esposito, By Her Personal Representative, S Esposito & S Esposito v Nejad & Wood; S Esposito v Wood - [2014] SADC 39

District Court of South Australia
(Civil)
A ESPOSITO, BY HER PERSONAL REPRESENTATIVE, S ESPOSITO & S ESPOSITO v NEJAD & WOOD; S ESPOSITO v WOOD
[2014] SADC 39
Judgment of His Honour Judge Soulio (ex tempore)
28 February 2014
DAMAGES - GENERAL PRINCIPLES - RECOVERY OF COSTS
Two actions ordered to be heard together. Both actions settled by compromise, one for less than the threshold amount, and one for less than the increased threshold amount, below which a plaintiff may be deprived of costs. Court requested to determine entitlement to costs.
District Court Act 1991 (SA) s 42; District Court Rules 6DCR263; Survival of Causes of Actions Act 1940 (SA) ss 2, 3, referred to.
Hall v Dickson (No.2) (1988) 143 LSJS 318; Stevens v Chandler (1988) 46 SASR 541; Cretazzo v Lombardi (1975) 13 SASR 4, considered.

A ESPOSITO, BY HER PERSONAL REPRESENTATIVE, S ESPOSITO & S ESPOSITO v NEJAD & WOOD; S ESPOSITO v WOOD
[2014] SADC 39
Background

This matter involves two separate actions which had been ordered to be heard together and were listed for trial due to commence on 10 February 2014.
The first action[1] was a claim originally brought by Mrs Anna Esposito for damages for injuries sustained in two separate motor vehicle collisions, the first occurring on 22 February 2007 in which liability had been in dispute, and the second on 25 April 2009. The second plaintiff, Mr Salvatore Esposito, sought damages for loss of consortium in that action.
[1] Action 298 of 2010.
The second action[2] is a claim for damages instituted by Mr Esposito who was also in the motor vehicle involved in the second of the collision.
[2] Action 805 of 2012
Prior to trial the parties reached an agreement of sorts to settle both actions. In relation to Mr Esposito’s action, the agreement was constituted by the defendant’s acceptance of an offer made by the plaintiff to accept the sum of $37,500 in addition to party and party costs. The action involving both plaintiffs - and I pause to record that Mrs Esposito unfortunately died in June 2011 of an illness unrelated to the injuries sustained in the accidents, whereupon Mr Esposito continued her action as her personal representative - was settled by an agreement that the plaintiffs would accept the sum of $15,000 inclusive of interest and special damages, and further, by agreement, the parties would have this Court determine the plaintiffs’ entitlement to costs.
Action 805 of 2012
I deal first with the question of costs in relation to Mr Esposito’s claim. The defendant’s original position, in argument before me, was that the acceptance by the defendant of the plaintiff’s offer to accept the principal sum of $37,500 plus party and party costs, did not deprive the defendant of an entitlement to argue, in the alternative, that the plaintiff was not entitled to any costs, or at best, should receive costs on the Magistrates Court scale.
Subsequently, during the course of argument, counsel for the defendant withdrew the submission that one of the possible outcomes was an order depriving the plaintiff of costs entirely, and accordingly the issue for determination was whether the plaintiff had an entitlement to costs on the Magistrates Court scale, or costs on the District Court scale.
However, the reasons for the original position taken by the defendant are relevant to the other action.
Section 42 of the District Court Act 1991 provides that:
(1) Subject to subsection (2) and the rules, costs in any proceedings in the Civil Division will be in the discretion of the Court and may be awarded against any person (whether a party to or a witness in the proceedings or not).
Subsection (2) provides that:
If—
(a)an action for the recovery of damages or any other monetary sum is brought in the Court; and
(b) the action might have been brought in the Magistrates Court; and
(c)the plaintiff recovers less than an amount fixed by the rules[3] for the purposes of this paragraph, no order for costs will be made in favour of the plaintiff unless the Court is of the opinion that it is just in the circumstances of the case that the plaintiff should recover the whole or part of the costs of action.
[3] I have referred to such amounts as the “threshold amounts”.
The relevant rule is 6DCR263, which, at the time proceedings were instituted, provided that:
(1) As a general rule costs follow the event.
(2) The general rule is subject to further specific rules to the contrary and also to the following exceptions (which apply subject to the Court’s order to the contrary).
...
(f)In an action founded on a motor accident claim general costs of action are not to be awarded in favour of a successful plaintiff unless the damages exceed $30,000.
Subsequently, from July 2013, the amount of $30,000 was increased to $50,000, in conjunction with an increase in the jurisdictional limit of the Magistrates Court from $80,000 to $100,000.
There appears to be no legislative requirement for a party to remit an action to a lower court, consequent upon a change in the jurisdictional limit of either that court or the lower court, or a change in the threshold amount for the award of costs, enacted subsequent to the institution of the proceedings.
Indeed, in Hall v Dickson,[4] Lunn AJ observed, in referring to the decision in Stevens v Chandler,[5] which outlined the rationale behind the enactment of s 42 as it then stood:
However, neither that decision nor any other which I can find suggests how the discretion should be exercised where the action was properly commenced in this court but should subsequently have been transferred to the District Court.
[4] Hall v Dickson(No.2) (1988) 143 LSJS 318.
[5] Stevens v Chandler (1988) 46 SASR 541.
There are a number of authorities which deal with a situation where a judgment has been entered for less than the threshold amount, but an award of costs was made, having regard to the circumstances of the particular case, including factors in the case such as principles of general importance, difficult questions of law, lengthy or complicated matters of fact, or the amount of damages involved, which factors could justify the bringing of an action in the higher jurisdiction despite the fact that judgment ultimately fell below the threshold.
Counsel for the plaintiff contended that on a straightforward reading of s 42 District Court Act, the only relevant time for consideration of whether the action should have been brought in the District Court is at the date of the institution of proceedings. There is some attraction in such an interpretation, but it is not necessary for me to consider that in the present case.
In Stevens v Chandler,[6] the Court observed that s 42 speaks prima facie of the day on which judgment is delivered as the relevant date for consideration of the award of costs. I note however that the wording of the section at the time of that decision was somewhat different to the wording in the present section and did not then, it appears, speak of the time at which “the action might have been brought.”
[6] Stevens v Chandler (1988) 46 SASR 541.
In Cretazzo v Lombardi,[7] Hogarth J expressed the following view:
I think that generally speaking, when a case was not already set down for hearing, when the amending Act came into force, it is reasonable to expect a plaintiff to have reconsidered his position before proceeding further in this court. In an appropriate case, it is to be expected of him that instead of entering his action for trial he would apply to this court under s 40 of the Local and District Criminal Courts Act 1926-1974 for an order removing the action for hearing in a local court, having amended his pleadings where necessary, to limit his claim to the jurisdiction of that court. If such a plaintiff fails to do this and is nevertheless awarded no more than $10,000 in this court, he must face the prospect of not recovering his costs.
[7] Cretazzo v Lombardi (1975) 13 SASR 4 p 6.
Hogarth J went on to say:
Where an action had already been entered for trial in this Court before the amending Act came into force, I think that different considerations may well apply. In such a case it may not be reasonable to expect a plaintiff to lose his place in the list of cases awaiting trial in this Court and to take his place at the end of the list of cases awaiting trial in a Local Court.
That was the situation here, in that prior to the amending provisions coming into force, the matter had been allocated a trial date, albeit a trial date after the commencement date of the new provisions. It seems to me that in such circumstances it was not reasonable to expect the plaintiff to lose his place in the list of cases awaiting trial in the District Court and take his place at the end of the list of cases awaiting trial in the Magistrates Court.
I have no information as to the length of the trial list in the Magistrates Court, nor as to the ability of the Magistrates Court to deal with a series of cases being remitted in order to accommodate the change, but as I say, this matter having been listed for trial, there is no warrant for criticism of the plaintiff in maintaining the action in this court.
As I have said, the defendant does not now contend that the plaintiff is entitled to no costs. Given the lack of any provision requiring a plaintiff to remit an action, and given the fact that the matter was listed for trial, it seems to me that the proper course is to regard the plaintiff as being entitled to his costs of action on the District Court scale.
Action 298 of 2010
I turn then to consider the claim for costs in Action 298 of 2010. Counsel for the plaintiff submitted an argument that, as the action by Mr Esposito had been listed for trial, and an order had been made that two actions be heard together, it was appropriate that costs, subject to other issues to which I will refer in a moment, be awarded on the District Court scale and that there be, in effect, no criticism of the plaintiff in failing to remit the action.
Whilst that may be, on its face, an attractive proposition, it is important to give consideration to the timing of the order that the matters be heard together, and indeed the relationship between the actions.
Well prior to the institution of proceedings by Mr Esposito in the second action, in mid 2012, Mrs Esposito had unfortunately been initially diagnosed as suffering from cancer. At that stage her prognosis was not clear, and I infer from actions which followed, including discussions which took place at a settlement conference in January 2011, that she had not informed those advising her, of that diagnosis. That illness overwhelmed her, and she died in June 2011. Her entitlement to damages, or rather the entitlement of her estate to damages, continued pursuant to the provisions of s 2 of the Survival of Causes of Actions Act 1940, but given the provisions of s 3 of that Act, was severely constrained. It should have been tolerably clear at that time, that her estate’s entitlement to damages was at least very likely to be less than the $30,000 threshold.
It is understandable that there would have been a period during which little action would have been taken in relation to Mrs Esposito claim, given Mr Esposito’s other obligations and his emotional reaction to her death. However, it appears that he was in a sufficiently fortified position to provide instructions regarding a reformulation of her claim in late July 2011, although at that stage he had not been appointed as her representative, and could not have taken steps to settle her action.
As I have said, her claim, and the related claim of Mr Esposito for loss of consortium, ultimately settled for the sum of $15,000, plus such costs as might be determined by the Court.
Rules of Court Offer
Counsel for the defendant put the proposition that a rules of court offer to pay the sum of $15,000 inclusive of interest and special damages, plus costs, had been filed at an earlier date, and the costs consequences following late acceptance of an offer should apply. The rules of court offer was conditional upon the plaintiffs’ acceptance of a formula which included a requirement that the plaintiffs accept costs on the Magistrates Court scale up to a date 14 days after the filing of the offer, and thereafter pay a costs penalty in favour of the defendants on the higher scale.
I reject that argument for two reasons. First, although the action ultimately settled for the sum of $15,000, in the interim the defendant had paid additional special damages of the order of $500, which meant, in practical terms, that the amount received by the plaintiffs in settlement of Action 298 of 2010 exceeded the sum of $15,000 originally offered.
Second, I regard a joint offer, to two plaintiffs, of a single sum in settlement of the claim of each, to be an invalid offer for the purposes of the Rules. Whilst it is true that the plaintiffs in question were Mrs Esposito by her personal representative Mr Esposito, and Mr Esposito in his own right, the interests are different and it may well be that the estate provided for the distribution of any assets of the estate to someone other than Mr Esposito. I have no evidence about that, but cannot regard them as the same person and as I say, I regard the offer as invalid for the purposes of imposing a costs penalty upon the plaintiffs.
Section 42 District Court Act
What then falls for consideration is whether the provisions of s 42, in conjunction with 6DCR263, operate to deprive the plaintiffs of their costs entirely, or whether there is some other position which justly reflects the circumstances of the case.
On the basis of the materials, including medical reports, put before me in affidavit form, the plaintiffs were justified in originally bringing the Action in this Court. What then of the failure by the plaintiffs to remit the Action?
In Hall v Dickson,[8] where the action was instituted in the Supreme Court, and the plaintiff recovered less than the threshold amount, Lunn AJ said:
I am of the view that at some stage a reasonable time before the action was entered into the trial list of this court, the plaintiff should have applied for it to be transferred to the District Court for trial. Such an order would certainly have been made.
The discretion under section 42 is not to be exercised in an arithmetical way on any precise calculation of when an action should have transferred, or to what costs were incurred before or after that date. I am satisfied to exercise it on the basis that the plaintiff should be sufficiently penalised in costs to deter other plaintiffs in a similar position from proceeding in this court, but that she should not be penalised to the extent that she would have been penalised if she should have not have commenced the action in this court. In the latter instance, the proper order would have been that she should have no costs.
[8] Hall v Dickson(No.2) (1988) 143 LSJS 318 p 320.
In that case, Lunn AJ went on to order that the plaintiff have 50 per cent of her costs.
Despite Lunn AJ’s suggestion that the approach should not be to calculate when it was that steps should have been taken to remit the matter, here the circumstances are rather more stark and it seems to me that at an appropriate time after the death of the first plaintiff, such action should have been taken. The question then is when?
It is true that the plaintiff’s personal representative, prior to his appointment to that role in April 2012, must have provided some instructions in relation to the reformulation of the plaintiff’s claim in late July 2011. It is not clear to me and there is no evidence as to why it took so long for Mr Esposito to be appointed as personal representative.
I consider it appropriate to allow a period for the taking of steps to appoint Mr Esposito formally as personal representative, and for him to receive advice and provide instructions to remit the action. As I say, he was presumably providing some instructions by at least late July 2011. I consider that a reasonable allowance for the time to take such steps would be to do so by 30 September 2011. It seems to me appropriate that the plaintiffs in Action 298 of 2010 have their costs of the Action on the District Court scale up to and including 30 September 2011.
I am not persuaded that there is an appropriate basis upon which the plaintiff should be ordered to pay the defendant’s costs, having regard to all of the circumstances surrounding the action, and accordingly simply order that from 1 October 2011 there be no order as to costs in that Action.
The orders I have made encompass not only the costs of the Actions, but also the costs of this application. I will hear counsel as to any consequential orders.