Farrell v CSL Limited (No 2)

[2004] VSC 551

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6285 of 1994

CAROL ELIZABETH FARRELL	Plaintiff
(BY HER LITIGATION GUARDIAN, RONALD CHARLES WAUGH)
v
CSL LIMITED AND
COMMONWEALTH OF AUSTRALIA	Defendants

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JUDGE:	BONGIORNO J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 August 2004
DATE OF JUDGMENT:	27 August 2004
CASE MAY BE CITED AS:	Farrell v CSL (No. 2)
MEDIUM NEUTRAL CITATION:	[2004] VSC 551

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PRACTICE AND PROCEDURE – Costs – Joint liability of plaintiff and litigation guardian for costs – Indemnity costs - Masling v. Motor Hiring Company Manchester Limited [1919] 2 KB 538; O'Brien v. Herald & Weekly Times Limited [1937] VLR 135.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms A. Stenmark SC with Mr P. Misso	Blumer Personal Injury Lawyers, Canberra
For the Defendants	Mr R. Stanley QC with Mr M. Wilson	Australian Government Solicitor

HIS HONOUR:

1. I have before me an application for costs on behalf of the defendants, CSL Limited and the Commonwealth of Australia.  This application is consequent upon my finding that those parties were entitled to judgment against the plaintiff[1].

   [1][2004] VSC 308

1. Two issues arise for determination.  The first is the person against whom any order for costs should be made and the second is the basis upon which any order for costs should be made. 

1. Mr Misso for the plaintiff has conceded that the litigation guardian on the record for the plaintiff is liable for costs and he puts no argument to the effect that an order should not go against him.  That concession is undoubtedly correct and is supported by a number of authorities to which I need not refer. However, the defendants make their application for costs not only against the litigation guardian but also against the plaintiff.  In this case, I will make an order for costs against both the litigation guardian and the plaintiff for the following reasons.

1. First, the plaintiff, in accordance with my judgment, was never entitled or required to bring this claim with the benefit of a litigation guardian[2].  I need not go into the detail of why that is so but it necessarily follows from the findings I made on the principal issues in the case.  The plaintiff was not and never has been a person under a disability or a handicapped person within the meaning of the rules.

   [2]Ibid.

1. Secondly, there is authority for the proposition that a plaintiff who sues by a next friend is liable for costs, at least by inference.  In the English case of Masling v. Motor Hiring Company Manchester Limited[3], the question before the Court of Appeal was whether the case should be remitted from the High Court to the County Court because of impecuniosity in the infant plaintiff.  An affidavit in support of the summons was made by a solicitor's clerk who deposed to the fact that the plaintiff's father, who was the plaintiff's next friend, had no means. 

   [3][1919] 2 KB 538.

1. Scrutton LJ, with whom Atkin LJ agreed, said that where a plaintiff sued by a next friend, the matter need not be remitted to the County Court if either the plaintiff or the next friend could demonstrate sufficient funds to fund a High Court action.

1. It seems by inference that the infant is himself liable for the costs of the action, even if the next friend is also liable.  That case has been followed at least once in Victoria in this court, in O'Brien v. Herald & Weekly Times Limited[4] where Gavan Duffy J dealt with the same question. In that case, the issue was the same as in the English case, that is, whether the matter should be remitted to the County Court.  His Honour referred to Masling and quoted Scrutton LJ in the following terms:

If the defendant makes an affidavit that the plaintiff has no visible means of paying the costs of the defendant, that seems to me to be sufficient.  It's then for the plaintiff to answer if he can though he himself has no visible means of paying the costs but his next friend has means of paying them.  On the other hand, if the defendant makes an affidavit that the plaintiff is an infant suing by his next friend and the next friend has no visible means of paying the costs, that's sufficient to put the plaintiff to his answer that the combined means of himself and his next friend are sufficient.[5]

[4][1937] VLR 135.

[5]Ibid.

1. Although Masling was concerned with an English statutory provision, the principle is still applicable to the exercise of the general jurisdiction of this Court as to costs.

1. In the circumstances, having regard to those two reasons and particularly, perhaps, to the first of them, I consider it appropriate that an order for costs be made against both the litigation guardian and the plaintiff.

1. So far as the question of the way in which the costs should be ordered is concerned, the plaintiff and the plaintiff's litigation guardian must pay the defendants’ costs on a party and party basis up until 14 April 2003 and from that date on an indemnity basis.

1. The reasons for ordering indemnity costs from 14 April 2003 are as follows.

1. The plaintiff's case was virtually totally without merit. It was mendacious in its prosecution, such mendacity supplied by the plaintiff, and, to some extent, by her litigation guardian. Whatever might have been the merits of her case on breach of duty had it been necessary to decide it, she was nonetheless unable to establish the basic fundamental element of negligence that she had suffered damage. In trying to establish this element she engaged in deceit of enormous proportions, full details of which are set out in the Court’s published judgment.

1. The findings which I made against the plaintiff, which need not be repeated here, are sufficient to bring the case within that class of cases where indemnity costs are warranted.

1. Furthermore, in this case an offer of compromise was made on 14 April 2003. Although the Rules make no specific provision for indemnity costs since that time in the circumstances prevailing here, when the fact that an offer was made is added to the matters already adverted to it is appropriate for the Court to “otherwise order” in this case. If indemnity costs are not ordered at least from the date of the offer the offer of compromise procedure has no effect in a case where a plaintiff is totally unsuccessful.  Mr Misso did not argue to the contrary.

1. A case could well have been made in the circumstances of this litigation for an order for indemnity costs in toto. However the relief which I have extended to the plaintiff and the plaintiff's litigation guardian in not ordering indemnity costs prior to 14 April 2003 is based primarily on the fact that they are already subject to what I would expect is a very large order for costs necessitated by the adjournment of this case in the middle of last year and a number of other interlocutory orders for costs which were made at various times. The Court is extending mercy to the plaintiff and her former husband at the expense of the Commonwealth and the first defendant.  It should do no more.

1. The orders of the Court are as follows:

1. That the plaintiff and the plaintiff's litigation guardian, that is to say Carol Farrell and Ronald Charles Waugh, pay the costs of the defendants, including reserved costs, to be taxed:-

a)on a party and party basis up to and including 14 April 2003;

b)from 14 April 2003 on an indemnity basis.

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