Fatima v Mount Pritchard and Community Club Limited
[2011] NSWDC 29
•11 March 2011
District Court
New South Wales
- Amendment notes
Medium Neutral Citation: Fatima v Mount Pritchard & Community Club Limited [2011] NSWDC 29 Hearing dates: 11 March 2011 Decision date: 11 March 2011 Jurisdiction: Civil Before: Neilson DCJ Decision: 1) Application for a stay of proceedings is dismissed;
2) I order the Defendant to pay the Plaintiff's costs of the motion.
Catchwords: PRACTICE AND PROCEDURE - application for stay - costs of application for preliminary discovery unpaid - UCPR 5.3, 5.8, 12.4, 12.10 and 42.7 considered - Defendant had not filed any defence - application refused Legislation Cited: Civil Procedure Act 2005, s 67
Uniform Civil Procedure Rules 2005, 5.3, 5.8, 12.4, 12.10, 42.7Cases Cited: McHenry v Lewis (1882) 22 Ch D 397
Maritime Insurance Company Limited v Geelong Harbour Trust Commissioners (1908) 6 CLR 194
Norwich Pharmaceutical Co v The Customs and Excise Commissioners [1974] AC 133
Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225
St Pierre v South American Stores (Gath and Chaves) Limited [1936] 1 KB 382
Totalisi PLC v The Motley Fool Ltd and Interactive Investor Ltd [2001] EWCA Civ 1897Category: Interlocutory applications Parties: Bibi Fatima (Plaintiff)
Mount Pritchard & Community Club Limited (Defendant)Representation: Mr J.E. Rowe (Plaintiff)
Ms E. Elbourne (Defendant)
Gajic & Co (Plaintiff)
McCabe Terrill Lawyers Pty Limited (Defendant)
File Number(s): 2010/368160
Judgment
HIS HONOUR: This is an application by the defendant for a stay of proceedings pursuant to s 67 of the Civil Procedure Act 2005 until payment of costs ordered to be paid by the plaintiff to the defendant in matter number 1599 of 2009 be paid.
The plaintiff alleges that, some time between 3 am and 3.45 am on 9 August 2008 whilst she was present on the club premises occupied by the defendant, she was struck on the head by an assailant with a glass bottle after there was some altercation or melee involving a group of people in the club premises. The plaintiff's action is in negligence, not in trespass.
On 17 April 2009 the plaintiff filed a summons which was assigned plaint number 1599 of 2009 in this Court, seeking discovery pursuant to UCPR 5.3. That order was made by the Registrar on 8 May 2009.
On 12 June 2009, the defendant, who was the respondent to the summons, moved the Court for a costs order against the plaintiff. The Judicial Registrar reserved her decision. She gave it on 18 June orally. She ordered the plaintiff to pay the current defendant's costs of the summons on the ordinary basis, and ordered the plaintiff to pay the defendant's costs of complying with the order for preliminary discovery. The Judicial Registrar ordered that the affidavit relied upon by the plaintiff be returned and noted that the "proceedings are finalised".
The plaintiff then commenced these proceedings by way of statement of claim filed on 5 November 2010. The defendant filed a notice of appearance on 14 January 2011, but has not yet filed a defence. Whilst the Judicial Registrar made the costs order on 18 June 2009, the defendant's solicitor did not deliver to the plaintiff's solicitors an assessment of its costs until 13 January 2010. The defendant assessed its costs as being $6,899.20. The letter of 13 January 2010 requested payment of costs within twenty-eight days.
On 25 February 2010, the plaintiff's solicitors wrote to the defendant's solicitors, outlining the plaintiff's financial position and stating, inter alia, this:
"Our client's position is that she is not in a position to contribute to the legal costs that are sought by your client in respect of the proceedings brought to date."
The letter went on to point out to the defendant's solicitors that advice had been obtained from counsel that there were prospects of success in an action against the defendant. Presumably, it was on that advice that the statement of claim was filed on 5 November 2010.
The application of the stay is opposed. The costs order made by the Judicial Registrar was made pursuant to UCPR 5.8. There is provision in the rules for a stay of proceedings in respect of unpaid costs in certain circumstances. The first provision is UCPR 12.4, which provides for a stay of further proceedings to secure costs of discontinued proceedings where the further proceedings are on the same, or substantially the same, cause of action. There is a similar provision in UCPR 12.10, which provides for a stay of proceedings to secure costs of proceedings that have been dismissed where the second set of proceedings are based on the same, or substantially the same, cause of action. However, there is no provision in UCPR Pt 5 for a stay of proceedings commenced after the giving of preliminary discovery where the proceedings are commenced against the same person for whom preliminary discovery was sought. It would have been very easy for the rule makers to make a provision similar to those provisions in UCPR Pt 12 if the policy was that proceedings should be stayed until the costs of preliminary discovery were paid. In other words, one can draw an inference from the fact that there are certain provisions providing for a stay where there is a second set of proceedings based on the same, or substantially the same, cause of action, and where there is no provision concerning the unpaid costs of preliminary discovery. In other words, the Court can look to the principle expressio unius, exclusio alterius. However, the Court does have a general discretion under s 67 of the Civil Procedure Act to grant a stay at any time and from time to time, but subject to the rules of Court.
The plaintiff submits that, in essence, the preliminary discovery should be seen as an interlocutory step in the current proceedings, and therefore the Court would not grant a stay because of the principle enshrined in UCPR 42.7 that, where costs are made on an interlocutory basis, they do not become payable until the conclusion of proceedings, although it is always possible for the Court to make an order for the interim assessment and payment of costs. Where the person who gives preliminary discovery is the same person as the person eventually sued, one can accept that the interlocutory principle is analogous, although strictly the matter is not interlocutory because the proceedings were only commenced by the filing of the statement of claim and not by the summons. Once upon a time, if proceedings were commenced by way of preliminary discovery the statement of claim would often be filed with the same plaint number, avoiding the payment of two sets of filing fees, but that was not possible in the current matter because of the notation made by the Judicial Registrar.
Some assistance is given, however, on the question of principle by the decision of the English Court of Appeal in Totalise PLC v The Motley Fool Limited and Interactive Investor Limited [2001] EWCA Civ 1897. To understand what had happened in that case it is necessary to refer to some of the facts which are outlined in the judgment of Aldous LJ. Commencing at [1], his Lordship said this:
"1. This is the judgment of the Court in an appeal brought by the second defendant, Interactive Investor Limited, with the permission of this Court against that part of the order of Owen J of 23 February 2001...which ordered them to pay costs of 4,817.
2. Interactive were an operating subsidiary of a company listed on the London Stock Exchange. Since the hearing before the judge, they have become part of an Australian Group and have changed their name to Ample Interactive Investor Limited. Their principal business is the provision of financial information to individual investors through their website. One service they offer consists of a series of 'discussion boards' relating to particular companies on which users of the website can post information and opinions likely to be of interest to other investors. Before a user can make a posting on interactive discussion boards, the user must register and enter into a contract containing Interactive's standard terms. These proceedings arise out of use of that service. Another service is the provision of a portfolio tracker system through which the individuals can track their investments without professional help.
3. On 31 January 2001, Interactive were sent a letter by solicitors acting on behalf of the claimants Totalise PLC. That letter complained about the content of a number of postings on Interactive's website by a person using the nickname 'Zeddust'. The letter alleged that the postings contained defamatory statements and that both individually and, when taken together, were maliciously designed to call into question the competency and integrity of Totalise's management team, the solvency of Totalise and generally cause as much damage to Totalise's reputation as possible. The letter went out to inform Interactive that solicitors had written to the first defendant's, The Motley Fool Limited, to complain about similar postings made by Zeddust. The letter requested confirmation that the postings would be removed, that Zeddust postings rights be immediately withdrawn, and that the identity and registration details of Zeddust be disclosed."
Interactive was concerned as to whether it was entitled to reveal the identity of Zeddust under the Data Protection Act 1998 (UK). Totalise then commenced what is referred to as a Norwich Pharmacal application in order to obtain disclosure or the identity of Zeddust. That application is based on the decision of the House of Lords in Norwich Pharmacal Co v The Customs and Excise Commissioners [1974] AC133. The Norwich Pharmacal application was entertained by Owen J in chambers, who made an order granting the relief sought, but ordering Interactive Investor Limited to pay the costs of Totalise PLC. His Lordship also assessed those costs in the sum of 4,817.
Commencing at para 18, Aldous L J said this:
"18. Mr Patrick Moloney QC, who appeared on behalf of Totalise, reminded us that this was an appeal on costs alone. He drew our attention to CPR rule 44.3, which provides that, as a general rule, the 'unsuccessful party' should pay the costs of the 'successful' party. Important as that principle is, it cannot apply to Norwich Pharmacal applications. That was made clear by Lord Reid and Lord Cross. Such applications are not really inter partes disputes to which rule 44.3 is specifically directed. Interactive did not resist the Court making the order and therefore cannot properly be called an 'unsuccessful' party. A closer analogy is with applications for preaction discovery, to which rule 48.1 applies.
19. Mr Moloney submitted that the judge was not wrong in the way he exercised his discretion and therefore it was not appropriate for this Court to interfere...The basis of that submission is correct. But we believe that the judge failed to take into account relevant matters which may have been the result of a failure to bring the relevant matters to his attention. That being so, the Court must look again at what should be the correct order. It is sufficient at this stage of the judgment to draw attention to the failure by the judge to consider the attitude of Interactive separately from that of the first defendant; the failure to consider the effect upon Interactive of voluntarily disclosing confidential details and the fact that Totalise could recover the costs from Zeddust if they were to bring a successful action for libel ." [My emphasis]
At [29], his Lordship said this:
"Norwich Pharmacal applications are not ordinary adversarial proceedings, where the general rule is that the unsuccessful party pays the costs of the successful party. They are akin to proceedings for pre-action disclosure, where costs are governed by CPR rule 48.23. That rule, we believe, reflects the just outcome and is consistent with the views of Lord Reid and Lord Cross in the Norwich Pharmacal case. In general, the costs incurred should be recovered from the wrongdoer, rather than from the innocent party. " [My emphasis]
The principle, therefore, is that, where preliminary discovery is given, it is a cost which a successful litigant can pass on to the 'tortfeasor'. Here, the person who gave preliminary discovery is in fact the alleged tortfeasor. The defendant before me says that the costs to be paid by the plaintiff to it could not be passed on to it in the event that the plaintiff be successful, but I do not believe that to be a correct statement of principle. If some other party had given preliminary discovery, such as, for example, the Police Force, then the Police Force's costs would be akin to witnesses' costs which could be passed on to the tortfeasor as though it were a disbursement. Therefore, aligning that principle with the fact that here the person who gave preliminary discovery is in fact the alleged tortfeasor, the costs can be seen to be as if they were interlocutory costs, so that the principle enshrined in r 42.7 should be applied.
Before leaving consideration of Totalise PLC v The Motley Fool Limited and Interactive Investor Limited , I should refer to the English rules that govern preliminary discovery. CPR 48.2 concerns costs orders in favour of, or against, non-parties, and CPR 48.3 concerns costs payable pursuant to a contract. That is what it says, so obviously Aldous LJ has misnamed the rule.
CPR 48.1(2) and (3) are:
(2) "The general rule is that the Court will award the person against whom the order is sought his costs:
(a) of the application; and
(b) of complying with any order made on the application.
(3) The Court may, however, make a different order, having regard to all the circumstances, including:
(a) the extent to which it was reasonable for the person against whom the order was sought to oppose the application; and
(b) whether the parties to the application have complied with any relevant pre-action protocols."
I believe that to be the rule that is referred to by Aldous L J in the case that I have cited.
Another way of approaching the current matter is this consideration: the plaintiff, being a natural person, cannot be required to give security for costs. However, in essence, what the defendant seeks is essentially that the plaintiff's proceedings be stayed until she pays a certain amount of money to the defendant which, pro tanto, amounts to giving security for costs. In any event, it is clear that a stay will be refused if it leads to oppression. That line of authority commences with McHenry v Lewis (1882) 22 Ch D 397, Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225, which was approved by the High Court of Australia in Maritime Insurance Company Limited v Geelong Harbour Trust Commissioners (1908) 6 CLR 194. The principle is best summarised in the judgment of Scott L J in St Pierre v South American Stores (Gath and Chaves) Limited [1936] 1 KB382 at 398. His Lordship said:
"(1) A mere balance of convenience is not sufficient ground for depriving a plaintiff of the advantages of prosecuting his action in an English Court if it is otherwise properly brought. The right of access to the King's Court must not be lightly refused.
(2) In order to justify a stay, two conditions must be satisfied, one positive and the other negative:
(a) the defendant must satisfy the Court that the continuance of the action worked an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the Court in some way; and
(b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant."
Here, it has not been established how the continuation of the plaintiff's case would be oppressive or vexatious to the defendant. Furthermore, the evidence persuades me that to stay the proceedings would cause an injustice to the plaintiff because of her impecuniosity.
The plaintiff is in receipt of a Disability Support Pension. She receives a pension of $716.10 per fortnight. That is a weekly income of $358.05. She lives with her sister in her sister's home. Her sister is a single mother, the mother of a boy currently aged twenty-one and a girl aged nine. The plaintiff and her sister had living with them their mother until she unfortunately died in or about November 2009. The plaintiff does not pay rent to her sister. However, she does pay the gas bill, the water bill, the Optus account, the Local Government rates, and the electricity bill. There are also some other regular outgoings to which the plaintiff contributes. She has been diagnosed as a diabetic and suffers from high cholesterol. She regularly takes medication, and part of the evidence before me are prescriptions for Prothiaden Teflex, Atacand, Diabex, Kalvea and Lipitor. There is a also a prescription for Periactin. It is estimated the plaintiff's average monthly expenditure on the outgoings that she pays for the property in which she lives are $372.22 per month, but her average medication amounts to $143.85 a month, and that she contributes $50 per week towards groceries, and that accounts wholly for her average weekly income. The document provided to the plaintiff by Centrelink indicates that she has $101 in the bank, $10 worth of shares, $600 in household and personal effects and a motor vehicle of a declared value of $7,000. The plaintiff told me, and I accept, that the car in fact belongs to her sister, and that it is registered in the plaintiff's name in order to obtain a concession on the registration cost of the vehicle because of the plaintiff's status as a Commonwealth pensioner. The plaintiff essentially is impecunious. To order her to pay costs which the defendant assesses at nearly $7,000 would be impossible and would essentially operate as a permanent stay of proceedings.
Furthermore, there are other grounds for refusing the relief sought. Those are the grounds of the failure of the defendant itself to pursue its remedies. For example, the defendant has not sought an agreement as to what the costs are, albeit the plaintiff is unable to pay those costs. The defendant has not sought to have the costs assessed by a costs assessor. The defendant has not sought to enter judgment against the plaintiff for the costs as assessed, and the plaintiff could always cross-claim for those costs in the current proceedings.
Furthermore, the current defendant has not filed a defence to the statement of claim, and the time within which the defence ought to have been filed has well and truly expired. It was submitted from Bar table that the plaintiff's case is weak, although there is no evidence before me, because of objections taken by Counsel for the defendant, to tell me anything about the nature of the cause of the action. It may be that the defendant will not file a defence and the plaintiff will obtain default judgment against the defendant. In the circumstances, the application for a stay of proceedings is refused. I order the defendant to pay the plaintiff's costs of the motion.
**********
Amendments
21 November 2012 - Amended title - surname of plaintiff only
Decision last updated: 21 November 2012
0
1
2