Dean v Phung (No 2)
[2013] NSWSC 116
•25 February 2013
Supreme Court
New South Wales
Medium Neutral Citation: Dean v Phung (No 2) [2013] NSWSC 116 Hearing dates: 15/02/2013 Decision date: 25 February 2013 Before: Hislop J Decision: I make the following Orders:
(a) Each party to bear his own costs of the plaintiff's application to amend his Statement of Claim, heard by Deputy Registrar Howard on 14 October 2010.
(b) The defendant pay the plaintiff interest, at the rate prescribed by s 101 of the Civil Procedure Act 2005, on the costs the subject of the costs order of Hislop J made on 30 June 2011 as assessed or agreed from 3 August 2011 until payment.
(c) Each party to bear his own costs of the Notice of Motion filed on 25 October 2012.
Catchwords: Tort - personal injury - costs - interest thereon Legislation Cited: Civil Procedure Act 2005
Uniform Civil Procedure Rules (NSW) 2005Cases Cited: Australian Development Corporation Pty Limited v White Constructions (ACT) Pty Limited [2002] NSWSC 280.
Grogan v Thiess Contractors Pty Limited [2000] NSWSC 1101.
Puntoriero v Water Administration Ministerial Corporation [2002] NSWSC 217.
Lahoud v Lahoud [2006] NSWSC 126. Davies v Kuring-gai Municipal Council [2003] NSWSC 1010.Category: Costs Parties: Todd Owen Dean (P)
Mark Phung (D)Representation: Counsel: D. Toomey (plaintiff)
M. Phung (self-represented)
Solicitors: Beilby Poulden Costello (plaintiff)
File Number(s): 2008/289693
Judgment
Introduction
By Notice of Motion filed on 25 October 2012 the plaintiff sought orders that:
"1. The Defendant pay the Plaintiff's costs of the Plaintiff's application to amend his Statement of Claim, heard by Deputy Registrar Howard on 14 October 2010.
2. The Defendant pay the Plaintiff interest, at the rate prescribed by Section 101 of the Civil Procedure Act 2005, on his costs the subject of the costs order of Hislop J made on 30 June 2011 as assessed or agreed from 3 August 2011 until payment of that interest."
The application arose in proceedings brought by the plaintiff to recover damages for dental injuries sustained whilst under the care of the defendant, a dentist.
The background to the application is set out in the plaintiff's written submissions as follows:
"2. The trial of these proceedings first commenced before Johnson J, and proceeded together with an action brought by the workers compensation insurer of the plaintiff's former employer, in whose employ the plaintiff suffered the dental injuries which brought him under the care of the defendant. In its action, the workers compensation insurer was seeking to recover amounts paid to, for or on behalf of the plaintiff pursuant to its obligation under the Workers Compensation Act 1987, on the basis that, inter alia, the defendant had performed the dental work on the plaintiff for the purposes of financial gain rather than the plaintiff's therapeutic benefit.
3. During the course of the proceedings before Johnson J the defendant's senior counsel stated to the court that the defendant conceded that 'none of the treatment [he provided to the plaintiff] was reasonably necessary.'
4. When the plaintiff's proceedings against the defendant first came before Johnson J they were framed in contract and negligence. No allegation as to the commission of an intentional tort was made. During the course of the proceedings before Johnson J the defendant admitted liability to the plaintiff. As the proceedings before Johnson J were on the question of liability, only, the plaintiff withdrew, upon the admission being made, and the workers compensation insurer's proceedings continued.
5. Justice Johnson later took the view that he ought not to hear the plaintiff's case on damages, hence that aspect of the matter ultimately coming before your Honour.
6. On the strength of the defendant's admission before Johnson J, that none of the treatment had been reasonably necessary, the plaintiff brought an application to amend his pleading to plead the intentional tort of battery on the basis that any consent obtained by the defendant from the plaintiff to the performance of the dental procedures was vitiated by fraud.
7. The application to amend the pleading came before Assistant Registrar Howard on 14 October 2010. It was resisted by the defendant. Assistant Registrar Howard granted the leave sought and reserved the question of the costs of that application to the trial judge. Those reserved costs were not subsumed into the general costs order made by Your Honour when delivering judgment in the matter because the defendant requested that they be determined separately. The question as to who should pay the costs of the plaintiff's application to amend therefore remains undetermined.
8. None of the costs ordered by your Honour to be paid by the defendant have yet been paid. The plaintiff's costs and disbursements on a solicitor and client basis in the amount of $495,082.08 were paid by the plaintiff out of the proceeds of his verdict on 3 August 2011."
No transcript of the application before Assistant Registrar Howard is available.
Evidence
The defendant appeared in person to oppose the application. He sought to tender in evidence decisions of proceedings against him in the Dental Tribunal of New South Wales dated 18 May 2012 and 20 November 2012, photocopies of pages of textbooks, medical reports and a statement made by him to the Tribunal on 10 July 2012 dealing, inter alia, with his financial situation.
The defendant submitted the documents should be admitted on the application as
"... at the time of the Supreme Court proceedings all the evidence there is against me in regard to all the damage to Mr Dean. It looks like it has come from me ... but in the Dental Tribunal, which is all specialist tribunal, it find out I did not cause any damage to the temporomandibular joint ... all the damage to Mr Dean is from the temporomandibular joint and all the cost is to the temporomandibular joint, which was not caused by me. I was not the person who caused all the trouble to Mr Dean, it was the accident that caused him the damage and I do not understand why I have to pay for all those damages."
The tender of the documents, save for such of the medical reports as were in evidence in the principal proceedings and the defendant's statement (except paragraphs 27 to 30) was opposed by the plaintiff on the basis
"Dr Phung seeks to revisit matters which have already been determined by this Court, and in which Dr Phung imposes decisions of the Dental Tribunal of New South Wales, which, in my submission, are irrelevant to the matters your Honour must consider for the determination of this application..." [The defendant] seeks to reopen matters which have been the subject of final determination by this Court. The question of costs per se only relates to costs of the application to amend. The application to amend did not have anything to do with the extent or nature of the damage but the characterisation of the defendant's acts for the purpose of determining whether the assessment of damages should be governed by the Civil Liability Act or be at large.
The second prayer in the Notice of Motion simply seeks interest in respect of the costs, based upon a costs order which was made by your Honour. To that extent that is the subject of a final determination. So on any view of it, in my submission, the reports have no relevance to any matters in issue on this application."
I upheld the plaintiff's submissions and rejected the tender of the documents save for the plaintiff's statement (excluding paragraphs 27 to 30).
The costs of the amendment
The defendant submitted that the application to amend was an indulgence in respect of which he should not be burdened with further costs.
The plaintiff submitted:
'13. In circumstances where a plaintiff seeks to amend his pleading on the basis of material already available, or reasonably available, to him at the time the original pleading was filed, courts will frequently order him to pay the costs of the application on the basis that he is being granted an "indulgence". This is not such a case. The basis of the plaintiff's application to amend, ultimately being the basis of his success in the Court of Appeal, was the concession which came from the defendant, through his counsel, in the proceedings before Johnson J. The plaintiff's decision, on the basis of that admission, to seek to amend his claim was not only appropriate, but correct. The defendant's concessions, at the commencement of the trial before your Honour, only go to demonstrate that the plaintiff's application to amend ought never to have been resisted. The costs of the motion ought follow the event. As Gleeson CJ said in Ohn v.Walton (1995) 36 NSWLR 77 at 79:
The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursement.
14. To similar effect is McHugh J's statement of principle in Oshlack v Richmond River Council (1998) 193 CLR 72 at [69]. As already noted, the principle is given statutory force by UCPR 42.1.
15. In the plaintiff's respectful submission, there is nothing in the plaintiff's conduct of the proceedings which makes it unjust or unreasonable that he should receive reimbursement for the costs incurred by him in bringing his application to amend.'
In my opinion the appropriate order, in the exercise of my discretion, is that each party bear his own costs of the plaintiff's application to amend for the following reasons:
a) the original statement of claim was filed on 18 December 2008. It pleaded, inter alia, the following particulars of breach in paragraphs 10 and 11:
"e) Providing dental and related treatment which was not required.
(f) Advising the plaintiff to undergo treatment which he did not require. "
and continued:
"12. The treatment was performed without the plaintiff giving his informed consent and was an assault and battery and trespass to the person of the plaintiff.
13. By reason of the aforesaid breaches of contract and/or negligence and/or assault and battery and trespass to the person of the plaintiff by the defendant, the plaintiff has suffered and continues to suffer injury, loss and damage."
b) these allegations were essentially maintained in the subsequent statement of claim,
c) part of the amendment related to a claim for aggravated damages which was not pressed,
d) the plaintiff's legal representatives were aware that the workers compensation insurer was asserting the defendant had performed the dental work on the plaintiff for the purpose of financial gain rather than the plaintiffs therapeutic benefit,
f) at the trial the plaintiff failed on the amended claim but this was reversed on appeal. The matter involved a degree of complexity. It was not inappropriate for the defendant to oppose the application for amendment,
g) these circumstances, in the usual course, would be likely to attract a costs order against the plaintiff on the basis he was seeking an indulgence- Ritchie's Uniform Civil Procedure (NSW) s 64.5, s 64.45, r 42.1.25, 42.7.15, para 10(13) above,
h) however as the plaintiff ultimately succeeded in the Court of Appeal on the pleading as ultimately pressed, and having regard to UCPR 42.1 and 42.7, the appropriate order, in my opinion, is that each party bear his own costs.
The interest claim
The Civil Procedure Act 2005 provides
"101(4) The court may order that interest is to be paid on any amount payable under an order for the payment of costs.
101(5) interest under subsection (4) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from:
(a) the date or dates on which the costs concerned were paid, or
(b) such later date as the court may order."
The purpose of an award of interest on costs is to compensate a successful litigant for having been out of pocket for legal costs that would otherwise have earned interest or been used in a commercial enterprise - see the cases summarised by Einstein J in Australian Development Corporation Pty Limited v White Constructions (ACT) Pty Limited [2002] NSWSC 280.
There is no requirement on the applicant to show a "special" case - Australian Development Corporation Pty Limited at [23]-[28]; Grogan v Thiess Contractors Pty Limited [2000] NSWSC 1101 at [10], Puntoriero v Water Administration Ministerial Corporation [2002] NSWSC 217 at [10] or to demonstrate that the circumstances of the case are "out of the ordinary" - Lahoud v Lahoud [2006] NSWSC 126 at [82]; Davies v Kuring-gai Municipal Council [2003] NSWSC 1010 at [7].
The defendant submitted, essentially, that it would be unjust to award interest on costs against him as his financial position was parlous, he was unrepresented and it was unclear whether an insurer would cover the interest claimed.
The plaintiff submitted that the fact the defendant was unrepresented and that it was unclear whether an insurer would cover the interest claimed was irrelevant.
As to the defendants alleged impecuniosity the plaintiff submitted:
a) The defendant's capacity to pay interest is irrelevant to whether or not an order for its payment should be made because of the compensatory purpose of such an order.
b) If capacity to pay is relevant, any difficulty the defendant will have in meeting an order in respect of interest should militate in favour of the making of such an order, having regard to the almost inevitable consequent delay in the payment of the costs on which that interest is sought.
c) The evidence before the Court does not establish that the defendant is incapable of meeting a costs order or an order that interest be paid on those costs. This is because the evidence is silent as to the defendant's total asset position. There is a possibility an insurer may be liable to pay the costs and interest.
d) The plaintiff has sought assessment of the costs. The assessment has not yet been completed. There have been lengthy but unsuccessful attempts to agree on costs. However no significant delay in the plaintiff's pursuit of the costs order has occurred and it was reasonable to endeavour to resolve such matters by consent rather than to proceed immediately to an assessment resulting in additional costs being incurred.
e) The plaintiff has been out of pocket in a substantial sum since 3 August 2011. The plaintiff should be entitled to interest on costs from that date.
I accept the plaintiff's submissions. In my opinion it is appropriate to exercise the discretion in favour of the plaintiff in respect of the award of interest.
Costs
The costs of the application before the Court were not sought in the Notice of Motion filed on 25 October 2012. Counsel for the plaintiff dealt with this when opening his case. He said 'I should state at the outset that there should have been an additional prayer that the applicant seeks the costs of this motion in the event that he is successful.' Costs need not be specifically claimed in a notice of motion (UCPR 18.3(2)) though it is advisable to do so when a respondent is unrepresented. As both parties enjoyed a degree of success on the application, in my opinion the appropriate order for the costs of the Notice of Motion filed on 25 October 2012 is that each party bear his own costs.
Orders
I make the following Orders:
(a) Each party to bear his own costs of the plaintiff's application to amend his Statement of Claim, heard by Deputy Registrar Howard on 14 October 2010.
(b) The defendant pay the plaintiff interest, at the rate prescribed by s 101 of the Civil Procedure Act 2005, on the costs the subject of the costs order of Hislop J made on 30 June 2011 as assessed or agreed from 3 August 2011 until payment.
(c) Each party to bear his own costs of the Notice of Motion filed on 25 October 2012.
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Decision last updated: 26 February 2013
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