Clarke v South East Sydney Local Health District (No 2)

[2018] NSWSC 357

Supreme Court

New South Wales

Medium Neutral Citation:	Clarke v South East Sydney Local Health District (No 2) [2018] NSWSC 357
Hearing dates:	On the papers
Date of orders:	21 March 2018
Decision date:	21 March 2018
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) Order the plaintiff to pay the defendants’ costs of the proceedings. (2) Order, pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), that the costs ordered to be paid in (1) above be paid in the gross sum of $10,000.
Catchwords:	COSTS – gross sum costs order appropriate – defendants substantially discounted costs against litigant in person – order made
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 98 Uniform Civil Procedure Rules 2005 (NSW), r 42.1
Cases Cited:	Clarke v South East Sydney Local Health District [2018] NSWSC 66
Category:	Costs
Parties:	Sharmain Daisy Clarke (Plaintiff) South East Sydney Local Health District (First Defendant) Julie Herrick (Second Defendant)
Representation:	Counsel: Plaintiff in person L Doust (Defendants)   Solicitors: Hicksons (Defendants)
File Number(s):	2017/101668

Judgment

Introduction

1. On 6 February 2018 I made orders and published reasons for my decision to strike out the plaintiff’s statement of claim and dismiss the whole of the proceedings: Clarke v South East Sydney Local Health District (No 2) [2018] NSWSC 66. I made directions regarding applications for costs.

2. The defendants have sought orders that the plaintiff pay their costs and that the costs be paid in the gross sum of $10,000. The plaintiff contended that there should be no order as to costs.

Consideration

Whether a costs order ought be made

3. The Court has a general discretion with respect to costs: s 98(1) of the Civil Procedure Act 2005 (NSW). The general rule is that costs follow the event: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1.

4. In the present case, the plaintiff submitted that she ought not be ordered to pay the defendants’ costs because of her parlous financial position and her various medical problems, both physical and psychological. She also alleged that the defendants had conducted the proceedings and otherwise acted in a manner which would warrant depriving them of costs pursuant to the general rule. Further she alleged that there was a public interest element to her bringing the proceedings, which meant that it would be unjust to require her to pay the defendants’ costs of defending them.

5. I am not persuaded that the general rule is displaced by any of the matters raised by the plaintiff, each of which I have taken into account in the exercise of my discretion. They will be addressed in turn.

6. I am prepared to assume, on the basis of the plaintiff’s statements and evidence, that if a costs order was made and enforced it would be unlikely that she would be able to pay it from her current resources and that it may cause her financial hardship to raise the funds to pay it. However, while this may provide a reason why the defendants choose not to enforce any costs order made, it does not provide a reason why costs ought not be ordered. While poverty is no bar to a litigant, an impecunious litigant cannot, on that ground, avoid the consequences of defeat in litigation. Such consequences generally include a requirement to pay the successful party’s costs. In moving successfully to have the pleading struck out and the proceedings dismissed, the defendants have plainly incurred costs. It would be, in my view, unjust for this Court not to order the plaintiff to pay those costs merely on the grounds that she is unlikely to be able to comply with the order.

7. I regard the plaintiff’s allegations that the defendants conducted the proceedings in a manner which would warrant my exercising my discretion to deprive them, as the successful parties, of their costs, as unfounded. The defendants conducted in the litigation in a manner which did not disadvantage the plaintiff. They made appropriate allowance for inexact expression in the pleading. The defendants’ submissions catalogued various potential causes of action which might be open to the plaintiff (and which might arise from the wording in the various pleadings which she has filed and served in draft form) in a comprehensive and detailed manner.

8. I am not persuaded that there was any public interest aspect to the proceedings which would bring them outside the general rule. The grievances sought to be ventilated by the plaintiff in these proceedings were peculiar to her own situation and did not appear to have any wider application. She raised no question of general principle.

Whether costs should be ordered to be paid in a gross sum

9. The defendants filed a notice of motion seeking that costs be paid in a gross sum. The amount claimed is $10,000. This amount is a small proportion of the solicitor-client costs actually incurred by the defendants, which amount to $53,015.67. I note that the first defendant has undertaken to meet the costs of the second defendant, who is an employee of the first defendant. The work performed involved several hearings; reviewing the filed pleadings and further drafts; corresponding with the plaintiff; analysing proceedings commenced by the plaintiff in the District Court and appearing at the substantive hearing of the motion on 31 January 2018. The defendants’ legal representatives were required to analyse no fewer than 13 pieces of legislation, both Commonwealth and NSW, in addition to the relevant parts of the Civil Procedure Act and UCPR. In substance, they established that there was no tenable cause of action covered by the pleadings as they stood or as served in draft form which was within this Court’s jurisdiction, and that it was, accordingly, appropriate that the whole proceedings be dismissed.

10. The reason for the substantial discount in the costs sought by the defendants by way of a gross sum is that the defendants recognise that there is little or no prospect of their being paid. The defendants submitted that ordering costs to be paid in a gross sum would obviate the need for a costs assessment, which is likely to be expensive and require the defendants to incur further expenses, which will almost inevitably be irrecoverable. In her affidavit, the defendants’ solicitor explained the first defendant’s reasons for seeking a costs order as follows:

“It [the first defendant] considers, in light of the costs incurred in defending the proceedings that were fundamentally misconceived that it is appropriate for the plaintiff to have some liability, and that the incurring of such liability may operate to deter the plaintiff from the commencement of any further like proceedings.”

11. The plaintiff opposed an order that costs be paid in a gross sum. Her submissions included the following:

“[T]he plaintiff humbly requests the costs order against her to be assessed by the Honourable Court in the interest of her economic situation and her health determinants which presently remain ongoing until the appropriate cause of action has been dealt with.

. . .

The Plaintiff admits if her circumstances were of other than what the Plaintiff is facing presently; her willingness to comply and would be more than grateful to reimburse the defendants’ respondents with the total amount requested in the gross sum $10,000.”

12. Whether or not the making of such an order has a deterrent effect on the plaintiff, as the defendant hopes, remains to be seen. It is, in any event, not necessary that the defendants explain why they seek an order that costs be paid in a gross sum, although they have chosen to do so in the present case. An order that costs be paid in a gross sum pursuant to s 98(4) of the Civil Procedure Act is particularly (though by no means exclusively) appropriate where, as in the present case, the cost of a costs assessment is likely to be irrecoverable. The defendants have incurred considerable costs in bringing these misconceived proceedings to an end. I am satisfied that it is appropriate to order that costs be paid in a gross sum. Although the defendants would have been entitled to significantly more than $10,000 had it been sought, it would not be appropriate to order more than the defendants have claimed. In these circumstances, I will order that the plaintiff pay the defendants’ costs in the gross sum of $10,000.

Orders

13. For the reasons set out above, I make the following order:

1. Order the plaintiff to pay the defendants’ costs of the proceedings.

2. Order, pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), that the costs ordered to be paid in (1) above be paid in the gross sum of $10,000.

**********

Decision last updated: 21 March 2018