Apitzsch v Gayle - [2003] NTSC 23

Apitzsch v Gayle [2003] NTSC 23
PARTIES:APITZSCH, Rico Bernd
v

GAYLE, Junior Errol

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:104 of 1991
DELIVERED:  18 March 2003
HEARING DATES:  18 December 2002
JUDGMENT OF:  MARTIN CJ
REPRESENTATION:
Counsel:
Plaintiff:L Sylvester QC
Defendant:D Trim QC
Solicitors:
Plaintiff:Ward Keller
Defendant:Cridlands
Judgment category classification:      C
Judgment ID Number:  mar0306
Number of pages:  11

mar0306
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Apitzsch v Gayle [2003] NTSC 23
No. 104 of 1991

BETWEEN:
RICO BERND APITZSCH

Plaintiff
AND:
JUNIOR ERROL GAYLE

Defendant

CORAM: MARTIN CJ
REASONS FOR JUDGMENT
(Delivered 18 March 2003)

The plaintiff is a German citizen living in Germany. He was in the Territory when injured in a motor vehicle accident for which the defendant has accepted liability. Progress towards assessment of damages has been dogged by delay brought about partly by difficulties in relation to the loss which the plaintiff alleges he suffered as a result of the accident, and partly by reason of communication difficulties brought about by language and different legal cultures between Australia and Germany.

On the material before the Court the plaintiff appears to have suffered severely debilitating permanent injury and that his recovery, such as it has been, has been slow. Both sides have experienced problems in obtaining statements from medical and other relevant experts and lay witnesses. The problem seems to have been aggravated by the need to have statements translated into the English language. The witnesses are not experienced in the processes of the common law which appears to have given rise to a lack of appropriate response to this Court’s case management system. The gathering of evidence in a form which will be sought to be put before the Court in due course has been tedious. The plaintiff’s case now appears to be reasonably well advanced. The defendant will need adequate opportunity to respond, although those representing the defendant have not been simply standing by.
There are three particular issues which have arisen of recent times, now resolved except as to costs. They are:
·     Where and by what means should evidence be taken, bearing in mind that all but a few witnesses reside in Germany.
·     Did the plaintiff suffer from a handicap requiring the appointment of a guardian ad litem and a stay of proceedings until that was done?
·     Proposed amendments to the statement of claim regarding an additional claim by the plaintiff for medical and like expenses which I understand were paid pursuant to the German Social Security system, “the AOK issue”.
These matters have combined to cause the Court to abandon a period of weeks which had been set aside for the hearing during May/June of this year.
In none of these matters has the Court been called upon to make any substantive order. The plaintiff withdrew the application that the proceedings be heard on commission in Germany, or London. The defendant had joined in that question so far as Germany was concerned, but did not seek to pursue it once the plaintiff abandoned that proposal. The plaintiff did not pursue its application to amend the statement of claim to include the AOK issue. The defendant withdrew its application for a stay based upon the alleged incapacity of the plaintiff.
What has bedevilled the parties in regard to the place for hearing has been complicated. For a start there was a dispute between them as to whether the German authorities would permit evidence to be taken in Germany in accordance with Northern Territory law. That dispute was never resolved. It got as far as a form of letter being agreed between the parties to go to what was considered to be the appropriate German authority, but it was never sent because the incapacity issue arose at the instance of the defendant. Prior to that undoubtedly a great deal of time and cost was involved on both sides in obtaining advice from lawyers in Germany, examining travel options, preparing and examining detailed costings in relation to each option, Germany, London or Darwin, and considering the pros and cons of the alternatives. The defendant indicated that it would oppose an application to have the evidence of witnesses taken in London because of cost considerations arising from the information put together. The plaintiff’s decision to abandon pursuit of an application to have the evidence of witnesses taken on commission in Germany was prompted by improvements to the plaintiff’s psychological health, the obtaining of witnesses to replace those who indicated they would never travel to Australia, the extraordinary high cost of having the hearing in London and the apparent difficulties with having evidence heard on commission in Germany on acceptable conditions. A suggestion on the part of the plaintiff that the evidence of some of the witnesses might be taken by means of video conference between Darwin and an appropriate place in Germany is contentious and not yet resolved.
It seems to me that given that the plaintiff resides in Germany and that the bulk of the evidence concerning his loss will need to be taken from German citizens, the question of how that evidence is best to be obtained as an obvious one requiring consideration by both parties and the court from the outset of the proceedings.
The question of the plaintiff’s handicap (O 15) arose in the course of consideration of early medical reports prepared for each party by their respective experts in working up the case on damages. The defendant applied for a stay of proceedings upon the ground that the plaintiff was unable to manage his affairs in relation to the proceedings. In that context he also raised the question of the funds management of the award. Whether that question fell within the ambit of the plaintiff’s management of his affairs in relation to the proceedings was not resolved. The material available to the parties when the issue was originally raised before the Court properly gave rise to real questions as to the plaintiff’s capacity during the running of the proceedings, for example, in relation to any proposed settlement conference, mediation or in relation to whether the plaintiff’s solicitors were properly instructed on other procedural matters. Each party later received reports in which attention was particularly directed to this issue and which satisfied the defendant that the application for the stay need not proceed. In my opinion the defendant was justified in making the application when he did, material was received late in the peace which put an end to the question in the plaintiff’s favour.
The plaintiff applied for leave to amend the statement of claim to introduce the AOK issue. The defendant opposed the application upon the ground that the relationship between the plaintiff and AOK and the operation of law was such that the plaintiff could not succeed on that aspect of his claim. The insurer of the defendant (which is conducting the defence), also raised the question as to whether the defendant would be indemnified under the terms of the insurance policy in respect of such a claim. That gave rise to some interesting procedural questions which in the event do not require to be resolved because the plaintiff withdrew the application. I consider that for present purposes the plaintiff must have been taken to have conceded that he could not succeed upon that issue.
The plaintiff raised by way of application the issue of whether it was entitled to receive from the defendant an advance against the costs which it considered would necessarily flow at the conclusion of the proceedings. It also sought from the defendant, in advance of judgment, an amount on account of damages. These applications were no doubt made by the plaintiff with a view to obtaining means to fund the ongoing cost of these proceedings. The defendant opposed both applications, and the plaintiff was unable to draw the court’s attention to any provisions in a law of the Territory giving the court jurisdiction to entertain either such application. They had no prospect of success.
I have dealt with each matter summarily. There is nothing to be gained by determining the discretionary costs outcome by reference to difficulties which have arisen between the parties as a result of delay in obtaining instructions from Germany and translations, late applications and late delivery of submissions. Apart from the usual and occasional well founded complaints, no application has been made for any adjournment, no particular prejudice advanced and neither party thus far sought any costs in respect of those issues.
The Rules of this Court as to costs are to be found in O 63. Rule 63.03(1) provides that subject to the Rules and any other law in force in the Territory, the costs of a proceeding are in the discretion of the court and except as otherwise provided, costs are to be taxed on what is called the standard basis, r 63.28(1). On a taxation of costs on the standard basis, there shall be allowed a reasonable amount in respect of all costs reasonably incurred, and any doubts which the Taxing Master has as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party, r 63.36.
However, on a taxation of costs on the indemnity basis, all costs shall be allowed except to the extent that they are of an unreasonable amount or have been unreasonably incurred, and any doubts which the Taxing Master has as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party (r 63.27). Each party seeks orders on this basis.
The scales of cost contained in the Appendix to the Rules apply in relation to all taxation of costs (r 63.32).
Unlike the Victorian Rules, upon which much of this Court's Rules are modelled, there is no express provision for ordering costs to be paid by one party to another on a solicitor and client basis, and it seems to me that in this jurisdiction an order for payment of costs on a indemnity basis may not be the same as an order for payment of costs on a solicitor and client basis. The cases in the Federal Court of Australia may be misleading if not considered, bearing in mind the difference between the provisions relating to costs operating in that Court and under the Rules of this Court (see for example the extensive review of the Federal Court provisions by Sheppard J in Colgate Palmolive Co and Anor v Cussons (1993) 118 ALR 248).
Nevertheless, with respect, I consider that guidance is available from the cases in that and other jurisdictions where the question has arisen as to the circumstances in which it may be appropriate to order costs to be paid by one party to another on a basis other than the usual basis so that the paying party is obliged to make a payment to larger measure. Sound grounds must be established to justify departure from the norm.
The following passage from the judgment of Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Others (1988) 81 ALR 397 at 401 provides some helpful guidance:
"I believe that it is appropriate to consider awarding "solicitor and client" or "indemnity" costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or a clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion."
After referring to this passage, Justice Sheppard, commencing at p 254 of Colgate Palmolive, referred to a number of cases in which it was considered and at p 256 proposed a number of principles or guidelines which could be distilled from them, including that drawn from Woodward J concerning the commencement or continuance of proceedings in wilful disregard of known facts or clearly established law. His Honour went on, however, to observe that in such a case a Judge is not necessarily obliged to exercise the discretion to make such an order.
But there are special rules in this Court in relation to costs in interlocutory proceedings, such as r 63.18:
“Each party shall bear his own costs for an interlocutory or other application in a proceeding, whether made on or without notice, unless the court otherwise orders.”
Furthermore, it is provided in r 63.04(3) that where the court makes an interlocutory order for costs, the costs shall not be taxed until the conclusion of the proceedings to which they relate unless the court otherwise orders (r 63.04(4)). I canvassed in general terms the operation of these Rules in TTE Pty Ltd & Anor v Ken Day Pty Ltd (1992) 2 NTLR 143 referred to by Kearney J in Yow v NT Gymnastic Association Inc (1991) 1 NTLR 180 and Thomas J in Otter Gold NL v Barcon (NT) Pty Ltd and Sankey (unreported, 2000 NTSC 100). In Markorp Pty Ltd v King (as liquidator of Murray Constructions Pty Ltd) and Ors (1992) 106 FLR 286 Mildren J discussed the purpose of the subrule that where the court makes an interlocutory order for costs, the costs shall not be taxed until conclusion of the proceedings. His Honour observed at p 293 that:
“… presumably it was designed to reduce the administrative burden of having to tax orders for costs made in interlocutory matters, which may in the end become unnecessary, as well as to obviate the need for the payment of costs by one party, and the repayment of costs by the same party, who may well have had both favourable and unfavourable cost orders made as a result of interlocutory proceedings over the lifetime of the action.”
Although each case must be considered on its merits, the discretion of the court is not fettered by these earlier observations, but, with respect, they provide guidance which may assist in the determination of each particular case.
Reviewing the submissions made by the parties in relation to these applications for costs, I am of the view that much of what was put goes to the proper allowance of costs on taxation and not the discretionary power to make an order. The submissions for example, went to costs of attendances before the court at directions hearings when the issues were raised, argued and ultimately disposed of. Those are matters for the Taxing Master.
I have already indicated that it was in the interests of both parties to pursue and if necessary obtain an adjudication upon the question of how the evidence of the witnesses in Germany should be given. I am not satisfied that this matter requires the setting aside of the normal Rule.
As to the plaintiff’s suffering a handicap requiring the appointment of a guardian ad litem, there was a prima face case justifying the defendant raising the issue such as to require the plaintiff to pay particular attention to it. That produced the expert reports which satisfied the defendant that its application for the stay of proceedings ought not to be pursued further. I see no reason to depart from the ordinary rule.
On the question of the AOK issue, the Rule provides that in the case of a party who amends a pleading by leave, that party is to pay the costs of and occasioned by the amendment and the costs thrown away because of the amendment (r 63.11(7)). That was not the case here, but the plaintiff sought to amend and later withdrew the application. It has indicated that it proposes to raise the issue of the recovery of the alleged loss to which reference has been made by another path. It seems to me that that acknowledges that the proposed amendment would not have been permitted. The plaintiff must pay the defendant’s costs of and occasioned by the application for the amendment, and costs thrown away, because of that application, on the indemnity basis. Those costs are not to be taxed until conclusion of the proceedings. For the reasons advanced by Mildren J an order for taxation before then may be a waste of time and money.
The application by the plaintiff for payment by the defendant on account of the plaintiff’s costs and on account of damages were not seriously advanced and ultimately withdrawn, there being no basis put forward upon which the court could make any such order. The defendant, however, had prepared detailed submissions in opposition to those claims. The plaintiff should pay the defendant’s costs in relation to those matters on an indemnity basis as provided for in r 63.27, but for reasons already mentioned they are not to be taxed until conclusion of the proceedings.
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