Eicas v Dawson
[2015] SASCFC 78
•3 June 2015
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal)
EICAS v DAWSON
[2015] SASCFC 78
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Nicholson)
3 June 2015
PROCEDURE - COSTS - APPEALS AS TO COSTS - WRONG EXERCISE OF DISCRETION
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES - DEMAND, OFFER AND CONSENT
Application for permission to appeal from a District Court Judge’s order as to costs. The respondent (plaintiff at trial) obtained a judgment for damages for personal injury suffered as a result of a motor vehicle accident in the amount of $682,479.10 plus costs. However, prior to trial the applicant had made a settlement offer for an amount in excess of $1 million plus costs. The applicant sought, pursuant to rule 188(6) of the District Court Civil Rules, its costs on a party/party basis for the period of time after 14 days from the date of that offer. The Judge declined to so order and ordered instead that the parties bear their own costs for that period. The applicant seeks to appeal from that order on the basis that the Judge erred by, inter alia, having regard to an irrelevant consideration, being the financial hardship that would be caused to the respondent should the order as sought by the applicant be made.
Held by the Court, granting permission to appeal:
1. The Judge’s order is attended with sufficient doubt so as to warrant it being reconsidered on appeal.
2. The appeal also raises the important question of whether, at all or the extent to which, financial hardship can inform an order as to costs.
3. Finally, given the length of the trial, the order complained of, if allowed to stand and incorrect, would cause a substantial injustice to the applicant.
Supreme Court Civil Rules 2006 r280, r288. r290; District Court Civil Rules 2006 r187, r188; District Court Act 1991 s43, referred to.
Dawson v Eicas [2014] SADC 151; Dawson v Eicas (No 2) [2015] SADC 38; Landmark Operations Ltd v J Tiver Nominees Pty Ltd & Ors [2009] SASC 185, considered.
EICAS v DAWSON
[2015] SASCFC 78Full Court: Kourakis CJ, Gray and Nicholson JJ
THE COURT
The applicant (defendant at trial) seeks permission to appeal to the Full Court from a decision of a Judge of the District Court. The decision appealed against concerns a question of costs only. The costs decision formed part of the Judge’s final disposition of the action such that any appeal must go to the Full Court.[1] However, as the appeal only concerns costs, rule 288 of the Supreme Court Civil Rules 2006 requires the applicant to obtain permission to appeal. The application has been considered on the papers, in accordance with rule 290 of the Supreme Court Civil Rules.
[1] The decision appealed against is not an interlocutory judgment within the meaning of the exception to rule 280(1)(b) of the Supreme Court Civil Rules 2006 and section 43(2)(c) of the District Court Act 1991. As such, it being a final judgment or part of a final judgment, any appeal lies to the Full Court.
On 24 February 2015, the respondent (plaintiff at trial) obtained a judgment for damages for personal injury suffered as a consequence of a motor vehicle accident in the amount of $682,479.10 in addition to costs.[2] However, prior to trial (on 9 December 2013) the applicant filed an offer of settlement pursuant to rule 187 of the District Court Civil Rules 2006. The applicant offered to settle the respondent’s claim for an amount in excess of $1 million in addition to costs. In the circumstances, the prima facie position provided for by rule 188(6) of the District Court Civil Rules was to the effect that the respondent should pay the applicant’s party/party costs for the period from and after 24 December 2013, being 14 days after the filing of the offer which had not been bettered at trial. A Judge has a discretion not to adopt the prima facie position as set out in rule 188 but must, of course, exercise that discretion judicially and in accordance with the principles established by authority that govern an award of costs in the context of such a rules offer.
[2] Dawson v Eicas [2014] SADC 151.
The Judge declined to make an order in accordance with the prima facie position and ordered instead:
(i)that the defendant [applicant] pay the plaintiff’s [respondent’s] party/party costs incurred until 24 December 2013;
(ii)that subsequent to 24 December 2013, each party is to pay its own costs.
The applicant wishes to appeal only against the order in (ii). It is submitted by the applicant that the Judge, in so ruling, was primarily concerned with the effect that a more onerous costs order would have on the respondent’s financial position. His Honour said this.[3]
In light of the tendered materials and all submissions, if the plaintiff must pay both his and the defendant’s costs subsequent to 14 days after the filing of the offer, in light of his dire financial situation, which has itself largely come about as a result of the injuries and their sequelae, the consequences upon the plaintiff will be unusually drastic. It is likely he will be bankrupted and even if not bankrupted will have no ability to manage his way through the current situation or afford even the future medical treatment that he needs.
[3] Dawson v Eicas (No 2) [2015] SADC 38 at [26].
The applicant contends that this approach by his Honour reveals an error in that it has never been appropriate to take into consideration the financial effect of an order as to costs. The applicant contends that the approach taken is inconsistent with well established principle regarding the exercise of the discretion to award costs.
The applicant has also submitted that the Judge’s decision is attended by other errors and, in particular, conflicts with a number of previous decisions in this Court such that it is desirable that the Full Court provide an authoritative ruling on whether financial hardship is ever a sufficient reason for declining to make an order as to costs or for declining to give effect to the prima facie operation of the rules as to pre-trial offers.
The applicant has provided a detailed summary of argument in support of these contentions.
The principles applicable to an application for permission to appeal were conveniently summarised by Bleby J (with whose reasons Vanstone and White JJ agreed) in Landmark Operations Ltd v J Tiver Nominees Pty Ltd & Ors.[4]
It is convenient to address first the principles applicable to an application for permission to appeal. In South Australian Government Financing Authority v Bank of New Zealand[5] the Full Court of this Court cited with approval the practice adopted in the Supreme Court of Victoria in BHP Petroleum Pty Ltd v Oil Basins Ltd.[6] In that case Fullagar J said:[7]
As this is an application for leave to appeal from interlocutory orders, the authorities show that this Court should address itself to two questions, as follows: (1) whether the correctness of the orders [appealed against] is attended with sufficient doubt to warrant their being reconsidered on appeal; and (2) whether substantial injustice will be caused to the applicant … if the orders [appealed against] stand: see, for example Niemann v. Electronic Industries Ltd. [1978] V.R. 431, at p. 433, per McInerney J., and at pp. 441-2, per Murphy J. At p 441, Murphy J said, inter alia: “If the order was correct then it follows that substantial injustice could not follow. If the order is seen to be clearly wrong, this is not alone sufficient. It must be shown, in addition, to effect a substantial injustice by its operation.”
This is consistent with an earlier decision of this Court in Glenauchen Pty Ltd v Circuit Finance Pty Ltd[8] to similar effect.
[4] [2009] SASC 185 at [21]-[22].
[5] [2002] SASC 56, [13].
[6] [1985] VR 756.
[7] Ibid 758.
[8] [2001] SASC 61, [3].
In the Court’s view, the correctness of the order appealed against in this matter is attended with sufficient doubt to warrant it being reconsidered on an appeal. In addition, because the effect of a costs order almost invariably will be to cause the unsuccessful party hardship, there would be significant scope for the approach adopted by the Judge in this case to be applied across a broad range of situations. As such, the case on appeal raises a question of general importance warranting consideration by the Full Court. Furthermore, given the length of the trial, the order complained of, if allowed to stand and if incorrect, would cause a substantial injustice to the applicant.
For these reasons permission to appeal to the Full Court is granted.
0
5
1