Attorney-General (SA) v Marmanidis (No 2) - [2019] SASCFC 77

Supreme Court of South Australia
(Full Court)
ATTORNEY-GENERAL (SA) v MARMANIDIS (No 2)
[2019] SASCFC 77
Judgment of The Full Court
(The Honourable Justice Blue, The Honourable Justice Nicholson and The Honourable Auxiliary Justice Tilmouth)
1 July 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION
Applications for costs following appeal.
The Court allowed an appeal against a judgment by a single Judge in a judicial review action quashing a default judgment entered in the Magistrates Court in favour of the second respondent against the first respondent.
The second respondent seeks an order that the first respondent pay his costs of the judicial review action. The appellant and the second respondent each seek an order that the first respondent pay their costs of appeal.
Held (by the Court):
1. There should be no order as to the costs of the action in favour of the second respondent in light of the fact that, but for the exercise of the discretion whether to grant relief on judicial review, the first respondent would otherwise have partially succeeded in the action and because the second respondent requested judgment for the full amount of his claim when he was not entitled to it (at [13]).
2. Taking into account that the appellant and second respondent had the same interest on appeal and failed on appeal on several significant discrete issues, there should be an order that the first respondent pay 50 per cent of the appellant’s and second respondent’s costs of the appeal (at [22]).
3. The interlocutory order staying payment out of moneys held by the Sheriff pending the result of the judicial review action should be discharged (at [25]).
Supreme Court Act 1935 (SA) s 40, referred to.

ATTORNEY-GENERAL (SA) v MARMANIDIS (No 2)
[2019] SASCFC 77
Full Court: Blue and Nicholson JJ and Tilmouth AJ
THE COURT:

On 17 January 2019 this Court allowed an appeal against a judgment by a single Judge of this Court in a judicial review action (action 1297 of 2016) quashing a default judgment entered in the Magistrates Court in favour of the second respondent Samuel Germein against the first respondent Dr Helen Marmanidis.[1]
[1] Attorney-General (SA) v Marmanidis [2019] SASCFC 3.
Mr Germein seeks an order that Dr Marmanidis pay his costs of the judicial review action. The Attorney-General, who intervened in that action, does not seek any order in relation to the costs of that action.
The Attorney-General, who was the appellant on the appeal to this Court, and Mr Germein, who filed a cross-appeal in support of the Attorney-General’s appeal, each seek an order that Dr Marmanidis pay their costs of appeal.
Background
Mr Germein filed a Claim against Dr Marmanidis in the Magistrates Court seeking damages of $2,080 allegedly caused by the negligent driving of Dr Marmanidis when her motor vehicle collided with his motor vehicle. The damages claimed comprised $1,589 cost of repairs and $491 cost of hire car. Attached to the Claim was an RAA Insurance document referring to $1,589 for repairs. No document relating to the hire car was attached.
On the twenty first day after service of the claim by post was deemed to have been effected upon Dr Marmanidis, Mr Germein requested that judgment in default of defence be signed for $2,080 plus costs. The Magistrates Court entered default judgment in the amount requested. Mr Germein took various steps over a prolonged period in an attempt to enforce the judgment.
Ultimately Dr Marmanidis applied to set aside the default judgment. A Magistrate dismissed the application, finding that she had not demonstrated an arguable defence or a reasonable excuse for not having complied with the Magistrates Court Rules.
Dr Marmanidis instituted a proceeding in the Supreme Court which was converted by consent into an action for judicial review. The Attorney-General intervened in the action. A single Judge concluded that the default judgment was irregular because Mr Germein had not served any evidentiary material in respect of the hire car component of the claimed damages; that the Registrar lacked jurisdiction to enter judgment because this precondition had not been met; and that the discretion to refuse judicial review should not be exercised.[2] The Judge quashed the default judgment and remitted the matter to the Magistrates Court to be dealt with according to law.
[2] Marmanidis v Germein [2017] SASC 103.
The Attorney-General appealed against the judgment. Mr Germein filed a notice of cross-appeal which largely duplicated the Attorney-General’s notice of appeal.
This Court concluded that Mr Germein was not entitled to sign judgment in respect of the cost of the hire car; that the Magistrate’s failure to consider irregularity of the default judgment in respect thereof constituted jurisdictional error; that the Magistrate addressed the wrong question in considering whether Dr Marmanidis established a reasonable excuse for not having complied with the Rules; that the Magistrate ought to have found that this was established; and that the Magistrate ought to have set aside the judgment to the extent of the amount of the cost of the hire car. However, this Court concluded by majority that judicial review should be refused in the exercise of the discretion.
Costs of the action
In assessing the appropriate order in relation to the costs of the judicial review action, it is necessary notionally to substitute this Court’s conclusions on the resolution of the issues in the action for those of the Judge at first instance.
This Court determined that the default judgment was irregular insofar as it included damages in respect of the hire car, the Magistrate committed jurisdictional error by not addressing that question and that the Magistrate ought to have set aside the default judgment to that extent. On this Court’s conclusions, Dr Marmanidis would have succeeded in her action for judicial review to that extent, save only for the exercise of the discretion.
At the level of separate issues, Dr Marmanidis would have succeeded on several of the issues in the action; although she would have failed on the issue whether the Magistrate committed jurisdictional error in concluding that she did not have an arguable defence. In addition, Mr Germein’s conduct in requesting default judgment for an amount to which he was not entitled was a material cause of the costs incurred in the action.
In all of the circumstances, the appropriate order is that each party bear her and his own costs of the judicial review action.
Costs of the appeal
The appeal was successful in the sense that the judgment of the Judge at first instance was set aside on appeal. The starting point is that ordinarily an unsuccessful respondent is ordered to pay the appellant’s costs of an appeal. However costs are ultimately in the unfettered discretion of the Court. There are potentially two reasons why the appropriate award in the present case is not simply that costs follow the event.
The first reason why it might not be appropriate that Dr Marmanidis pay the full costs of the appeal of both the Attorney-General and Dr Germein is that, when two parties having similar interests choose to be separately represented, the Court may in the exercise of its discretion order that the unsuccessful party only pay the costs that would have been payable if they had had common representation. Thus, rule 269 of the Supreme Court Civil Rules 2006 (SA) provides:
269—Over-representation of parties with common interest
If two or more parties have identical or similar interests but are separately represented and, in the Court's opinion, unnecessarily so, the Court may exercise either or both of the following powers—
(a)the Court may order that costs to which the parties are entitled be determined on a basis that would be appropriate if they had common legal representation;
(b)the Court may order the over-represented parties to compensate other parties to the action for additional costs incurred by them as a result of the over-representation.
Rule 269 does not limit the Court’s unfettered discretion in relation to costs conferred by section 40 of the Supreme Court Act 1935 (SA) which is reflected for example in rules 263 and 264.
The present case is unusual in that Mr Germein elected not to appeal against the judgment of the single Judge within the 21 day time limit and the appeal that was instituted was instituted by the Attorney-General who was an intervener, rather than a party, in the action before the single Judge. Mr Germein filed a cross-appeal seeking the same orders as the Attorney-General on essentially the same grounds. The cross-appeal did not raise any additional grounds that succeeded on appeal.
The Attorney-General and Mr Germein had the same interest on appeal. They sought the same orders and relied on essentially the same contentions. To the extent that they succeeded on appeal, they succeeded on the very same contentions. To the very limited extent that either made a contention not made by the other, that contention was irrelevant to the determination of the appeal. It is true that the Attorney-General and Mr Germein had different motivations in pursuing the appeal: the Attorney-General’s motivation was the public interest and Mr Germein’s motivation was self-interest. However, the fact that they had different motivations does not detract from the fact that they had essentially the same interest.
Given that Mr Germein did not himself elect to appeal within the 21 day time limit and the Attorney-General did, it would have been open to him simply to allow the Attorney-General to prosecute the appeal and receive the benefit thereof. Conversely, given that the Attorney-General was an intervener rather than a party with a direct interest in the judicial review action, it would have been open to the Attorney-General to allow Mr Germein to prosecute the appeal.
Of course, each of the Attorney-General and Mr Germein had a right to participate fully in the prosecution of the appeal, but it does not follow that Dr Marmanidis should pay two sets of costs when the appeal could equally effectively have been prosecuted by the parties incurring only a single set of costs.
The second reason why it might not be appropriate that Dr Marmanidis pay the full costs of the appeal is that the Attorney-General and Mr Germein failed on several important and discrete issues on appeal. They included the issues:
·whether Mr Germein’s claim was for a “liquidated sum” within the meaning of rule 61(1)(a) of the Magistrates Court Rules 2013 (SA) (the Rules);
·whether his claim in respect of the hire car was for “other consequential loss” within the meaning of rule 61(1)(b) of the Rules;
·whether a claim for “incidental expenses” within the meaning of sub-rule 61(3) is subject to the requirements imposed by sub-rule 61(2) of the Rules to serve evidentiary material;
·whether Mr Germein was entitled to sign judgment in respect of the cost of the hire car;
·whether the Magistrate failed to consider irregularity of the default judgment in respect of the cost of the car hire;
·whether any such failure constituted jurisdictional error;
·whether the Magistrate addressed the wrong question in considering whether Dr Marmanidis established a reasonable excuse for not having complied with the Rules;
·whether the Magistrate ought to have found that a reasonable excuse was established; and
·whether the Magistrate ought to have set aside the judgment to the extent of the amount of the cost of the hire car.
The time devoted to these issues represented a substantial portion of the total time spent on appeal.
A third factor to be considered in relation to costs is the conduct of the parties. If costs on an appeal have been increased by misconduct by a party in or leading up to the appeal, the effect of such misconduct may be reflected in an appropriate costs order.[3] The Attorney-General contends that Dr Marmanidis engaged in inappropriate conduct by lodging irrelevant material and failing to certify the casebook. However, the conduct of Dr Marmanidis, who was not legally represented, cannot be characterised as misconduct which should be reflected in a different costs order to that which would otherwise be appropriate. In addition, in the overall scheme, taking into account that Dr Marmanidis made no oral submissions on the hearing of the appeal, it cannot be said that her conduct materially increased the costs incurred by the other parties.
[3] This is but a specific application of the more general principle that conduct by a party in, relating to or leading up to proceedings may be reflected in an appropriate costs order: see for example Bostock v Ramsey Urban District Council [1900] 2 QB 616 at 622 per A L Smith LJ; Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874 per Devlin J; Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 at 154-155 per Ormiston J.
In all of the circumstances, it is appropriate to order that Dr Marmanidis pay 50 per cent of the costs of appeal of each of the Attorney-General and Mr Germein.
Monies paid to the Sheriff
On 28 July 2016 the Magistrate ordered a stay of a warrant of sale of Dr Marmanidis’ house that the Sheriff was in the process of executing, on condition that she pay into court $14,769 representing the amount of the judgment debt plus interest and costs (including costs said to have been incurred by the Sheriff). Dr Marmanidis paid this sum to the Sheriff.
On 14 October 2016 this Court made an order (order 7) in the judicial review action that the monies held by the Sheriff not be paid out pending further order by this Court.
Now that the judicial review action has been dismissed, Mr Germein seeks an order that the monies held by the Sheriff and any interest thereon be paid to him. It is appropriate to discharge order 7 made on 14 October 2016 given the result of the judicial review action. However, it is not appropriate for this Court to make an order for payment of the monies held by the Sheriff: that is a matter for Mr Germein to take up with the Sheriff.
Conclusion
We make the following orders:
1The first respondent is to pay 50 per cent of the costs of appeal of each of the appellant and second respondent, such costs to be adjudicated if not agreed.
2Each party is to bear her and his own costs of action in the underlying action 1297 of 2016.
3Order 7 made in action 1297 of 2016 on 14 October 2016 is discharged.