Andrew Dennis Walker v The Electrotechnology Industry Group Training Company Ltd and Ecowise Services (Australia) Pty Ltd (No 2)
[2016] ACTMC 13
•3 August 2016
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | Andrew Dennis Walker v The Electrotechnology Industry Group Training Company Ltd & Ecowise Services (Australia) Pty Ltd (No 2) |
| Citation: | [2016] ACTMC 13 |
| Hearing Date: | 27 July 2016 |
| DecisionDate: | 3 August 2016 |
| Before: | Magistrate Morrison |
| Decision: | See [27] |
| Category: | Interlocutory application |
Catchwords: | CIVIL LAW – costs – order made for extension under s36 Limitations Act 1985 - whether relief sought constitutes an indulgence – principles to be applied to costs order in the circumstances – whether conduct of respondent in opposing application unreasonable – order that costs of the application be costs in the cause |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 1721, 1729 |
Cases Cited: | Dibley v Sydney West Area Health Service [2009] NSWSC 856 |
| Parties: | Andrew Dennis Walker (Plaintiff) |
| Representation: | Counsel Solicitors |
| File Number: | CS 785 of 2015 |
MAGISTRATE MORRISON:
In this matter I made an order under s36 of the Limitation Act 1985 (ACT) extending the time within which the plaintiff’s action may be brought. I published reasons dated 29 June 2016. I had not received detailed submissions on costs at the hearing of the application. I made a contingent order that the plaintiff pay the defendants’ costs of the application on the basis that the order not take effect if any party made a request of my associate that the matter be relisted for submissions seeking some different costs order.
That contingency has come to pass and I heard submissions on costs on 27 July 2016. The plaintiff seeks an order that the defendants pay his costs of the application. Both defendants oppose the application and seek confirmation of the costs orders originally proposed. Additionally the second defendant seeks that I certify for counsel on the original application.
The plaintiff’s costs application relies, in effect, upon the merits of the original extension application and certain offers which were made before the hearing of the application.
Mr Whybrow for the plaintiff submits that the combined effect of the merits of the plaintiff’s application and the absence of any evidence of actual prejudice to the defendants meant that the application was bound to succeed and that the conduct of the defendants in opposing it was unreasonable.
He says that the costs application is given added weight by certain letters put before me, without objection, which amount to an offer by the plaintiff to dispose of the extension application by way of a consent order to extend without requiring any appearance in court and with the plaintiff paying the defendants costs of and incidental to the application.
Mr Whybrow submits that rule 1729 of the Court Procedures Rules 2006 (ACT) does not apply in the present circumstances because the extension application was brought under the Limitation Act and not “under these rules”. No contrary argument was put and I accept that to be the correct construction of the rule.
The costs power relied upon therefore is the general discretion contained in rule 1721. It is unfettered but must be exercised judicially. The argument before me turned upon the principles to be applied to the exercise of that discretion and the application of those principles in the circumstances of these proceedings.
In submissions by Mr Whybrow for the plaintiff I was referred to the decision of Santow JA (with whom Handley JA agreed) in Commonwealth of Australia v Smith [2005] NSWCA 478. There his Honour said this:
159 “Sheller JA (with whom Meagher, Handley JJA and Brownie AJA agreed) said in Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 at 147, that:
“... ordinarily a successful applicant, who allowed him or herself to get out of time, should pay the costs of the application unless the respondent’s opposition was wholly unreasonable.”
160 However, there is no rule that binds the judge to deny costs to an applicant for extension of the limitation period. A costs order for such an application is a matter of practice and procedure within the discretion of the primary judge...............”
In Smith, the majority upheld the decision of Barr J at first instance who had extended the limitation period for the plaintiff’s action and had made a costs order against the Commonwealth.
In Smith the plaintiff’s cause of action arose out of the collision between HMAS Melbourne and HMAS Voyager on 16 February 1964. In his reasons, Santow JA referred to the at least 30 other matters in which former members of the Melbourne crew had applied in the Supreme Court of New South Wales for an extension of the limitation period. In dismissing the appeal against the costs order at first instance his Honour said:
“In view of the Commonwealth’s failure in so many of these extension cases over six years the judge would have been entitled to find that the Commonwealth acted unreasonably in opposing an extension in this case and should pay the applicant’s costs.”
The decision in Smith is referred to by the learned author of Law of Costs at paragraph 14.41 in these terms:
It may be, however, that the court went too far in ordering costs against the Commonwealth, as the High Court, in refusing special leave, expressed the provisional view “that a party, if it has an arguable basis for defending an application or a claim, is entitled to do so without the penalty of costs”.[1]
[1] G E Dal Pont, Law of Costs (LexisNexis Butterworths, 3rd ed, 2013)
The comments of Santow JA in Smith were the subject of some observations by Beazley JA in Commonwealth of Australia v Lewis [2007] NSWCA 127. That and other authorities were the subject of scholarly analysis by Hall J in Eastbury v Genea Limited [2015] NSWSC 198.
There his Honour said this:
27The principle identified in Holt v Wynter and Commonwealth of Australia v Lewis was applied in Williams v Commonwealth of Australia [2007] NSWSC 1342 and Galea v Commonwealth of Australia (No 2) [2008] NSWSC 260. In Dibley v Sydney West Area Health Service [2009] NSWSC 856 James J made the following remarks in relation to those decisions:
[74] In Williams Adams J emphasised the part of Sheller JA’s statement in Holt v Wynter in which his Honour referred to a successful applicant “who has allowed him or herself to get out of time” and expressed his personal view that it would not be just to order a plaintiff who is out of time through no fault of his or her own and who is forced to make an application for an extension of time and who succeeds on the application, to pay the defendant’s costs of the application. Adams J proceeded to inquire whether the opposition of the defendant to the application for an extension had been unreasonable and concluded that the opposition to the application had not been reasonable and this conclusion by his Honour was the basis of the order made by his Honour that the defendant pay the plaintiff’s costs of the application.
[75] In Galea v Commonwealth (No 2) [2008] NSWSC 260 Johnson J at [11] referred to Adams J’s judgment in Williams. Johnson J said:
With respect, I have difficulty with that part of his Honour’s reasoning concerning a plaintiff allowing himself to get out of time. As I understand the principles considered in Commonwealth v Lewis, it may be taken that the present plaintiff allowed himself to get out of time given that it was necessary for him to make application under the Limitation Act 1969. I do not see that any inquiry as to fault on the plaintiff’s part would assist on the question of costs.
[76] I do not consider that I should give the words used by Sheller JA in Holt v Wynter, “who has allowed him or herself to get out of time”, the interpretation placed upon those words by Adams J in Williams. I consider that I should apply what I understand to be the principle stated by the Court of Appeal in Holt v Wynter and Commonwealth v Lewis that the normal rule is that the plaintiff pay the costs of an application for an extension of a limitation period, even if the plaintiff’s application has been successful, unless the defendant’s opposition to the application was wholly unreasonable or at least unreasonable.
Hall J went on to observe that although the authorities are instructive “..... it should be noted that the award of costs remains a matter of discretion for the Court. Accordingly it may not be appropriate to identify a stringent rule or “ordinary basis” applicable to these types of applications .......”
Hall J concluded that the authorities to which he had referred established “that the fault or otherwise of the applicant for an extension of limitation period is not relevant in determining the issue of costs”, and that the question is whether the defendant’s opposition to the application was unreasonable.
By way of example, Hall J went on to refer to the decision in Williams v Commonwealth of Australia [2007] NSWSC 1342 where Adams J said of the circumstances before him “[t]he test is one of practical judgment as to the likely outcome of the application. The overwhelming likelihood of its success made opposition to it unreasonable”.
And by way of further example Hall J referred to the decision in Dibley v Sydney West Area Health Service [2009] NSWSC 856 where James J considered it relevant that the plaintiff in the case before him had “succeeded on fairly narrow grounds” in deciding that the respondents opposition to the application was not unreasonable.
I think I can fairly observe that a practice exists in the courts in this jurisdiction whereby a party seeking an indulgence will usually be ordered to pay the costs of the application regardless of the outcome of the application but I am not aware of any authority in this jurisdiction which has undertaken any detailed analysis of what constitutes “an indulgence” for the purposes of that practice.
A brief review of the authorities in other jurisdictions raises questions about whether an application to extend time amounts to seeking an indulgence from the Court; and also the role played by evidence of “fault” on the part of the applicant. The observations of Hall J on the latter are set out at paragraph 15 above.
These questions were the subject of some observations by Basten JA in Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 in these terms:
147 The language adopted by Sheller JA in Holt v Wynter, referring to an applicant who has “allowed him or herself to get out of time” was apt in the circumstances of that case, the applicant having formed an intention to make a claim within time, but failed to effect the intention before the expiration of the relevant limitation period. That was the kind of case in which it could appropriately be said that the applicant was seeking an indulgence. However, that is not true of a case in which the applicant was unaware of material facts until after the expiration of the limitation period.
148 Nevertheless, an application for an extension of time, if successful, results in the prospective defendant losing an immunity from suit which it would otherwise enjoy. Whether the suit will ultimately be successful is not known. The application may be seen in these circumstances as an interlocutory, but essential, element of the plaintiff’s proceedings. Unless it can be said that the plaintiff was at fault in not bringing the proceedings earlier, or did not otherwise run the application appropriately, it is doubtful whether the applicant should be ordered routinely to pay the respondent’s costs of a successful application.
149 That being so, it does not follow that the respondent should be required to pay the applicant’s costs of the application, on the assumption that the respondent had not acted unreasonably or inappropriately in resisting the application. In such a case, the preferable order may be that the costs of the motion be the applicant’s costs of the proceedings. Such an order means that, as explained by Heydon JA in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116, at [37], if the plaintiff succeeds at trial he or she will receive the costs of the application but, if the plaintiff is ultimately unsuccessful, there will be no order as to the costs of the application for extension of time.
In his affidavit which was before me on the extension application the plaintiff deposed to the fact that he was unaware of any time limit for the commencement of proceedings. He also gave oral testimony to that effect and it was not suggested to him in cross examination that he did not have that belief.
In the circumstances, I do not regard the plaintiff as being “at fault” within the meaning given to that term by Basten JA. In reaching that conclusion I express no opinion on Hall J’s view that fault, is, in any event, an irrelevant consideration on the question of costs.
On the question of whether or not the application amounts to the plaintiff seeking an indulgence I see no useful purpose in taking the step of assigning, or not assigning that descriptor to the circumstances before me. The word “indulgence” does not appear to be used in any legislation or rules which either trigger a power to award costs or guide the exercise of the discretion to do so. As to the practice referred to earlier, as I have said, I am not aware of any authority in this jurisdiction which has undertaken any detailed analysis of what constitutes an indulgence. In the circumstances consideration of whether what is sought does or does not amount to what can be described as “an indulgence” risks being both unnecessary and a diversion from what should be the proper considerations for the exercise of the discretion.
Relevantly for present purposes the discretion in this case falls to be exercised against the following background:
(a)The application was necessary because the plaintiff’s action was otherwise statute barred. Mr Shillington points out that the plaintiff could have left the Limitation Act question for determination at hearing. He is technically correct but the plaintiff can’t be criticised for the pragmatic decision to have the matter dealt with by way of interlocutory application.
(b)I have accepted the plaintiff’s evidence that he was unaware of relevant limitation periods.
(c)There had been some modest delay in bringing the extension application. I was critical of the evidence put before the Court on the extension application by way of explanation of that delay. That evidence ought to have expressly addressed the matters about which I ultimately drew inferences in granting the application. Self evidently however I ultimately concluded that the evidence did support the inferences drawn.
(d)The plaintiff’s submissions about the lack of evidence of any actual prejudice suffered by the defendants is accepted, although that is correctly identified by the defendants as being but one of the relevant considerations. (In making this observation I am not overlooking the prejudice by way of the defendants being required to re-write a potential damages liability into their books.)
(e)Some of the cross examination of the plaintiff was directed towards eliciting evidence going to the strength of the plaintiff’s claim. Cross examination for that purpose was relevant having regard to the medical evidence. It must be said however that the submission based on the strength of the plaintiff’s claim only ever had slight prospects of success given that, for the purposes of the extension application, the court’s considerations are limited to the “apparent strength of the plaintiff’s claim” – see S and B Pty Ltd v Podobnik (1994) 53 FCR 380 at 404.
(f)The plaintiff had made the 2 offers evidenced by the letters dated 6 May 2016 and 16 May 2016, which offers included payment of the defendants’ costs if the application was disposed of by way of consent order without requiring appearances.
Some features of that background weigh in favour of the order sought by the plaintiff and some weigh against it. The assessment of the reasonableness or otherwise of the parties conduct is to be made on the basis of the circumstances leading up to the hearing of the application; that is, without the benefit of hindsight.
In the end result the absence of evidence of actual prejudice was, and was always going to be, a material consideration. Despite the criticisms of part of the evidence in support of plaintiff’s application, and my conclusion that the cross examination of the plaintiff going to the strength of his claim was at least relevant, the defendants ought reasonably to have accepted the offer to dispose of the application on the basis proposed, at least at the second point-in-time occasion. The decision by the defendants not to do so does not however, in the circumstances, go so far as to justify imposing “the penalty of costs” on the defendants on the application.
In the circumstances I order that the costs of the application, including of the submissions in relation to the costs of the application, be costs in the cause – that is costs in the cause generally rather than only the plaintiff’s costs in the cause. I do certify for counsel as sought by the second defendant.
I certify that the preceding twenty seven (27) paragraphs are a true copy of the Reasons for Decision of his Honour Magistrate P J Morrison.
Associate: Emma Buckland
Date: 3 August 2016
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