Fleming v South Australian Housing Trust (No 2)

[2011] SADC 95

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

FLEMING v SOUTH AUSTRALIAN HOUSING TRUST (NO 2)

[2011] SADC 95

Reasons for Decision of His Honour Judge David Smith

1 July 2011

PROCEDURE - COSTS

Damages Verdict – Personal injuries arising from accident other than a motor vehicle -  plaintiff’s award less than defendant’s filed offer to consent to judgment – consideration of grounds to relieve plaintiff of consequence of filed offer under Rule 188 of District Court Rules 2006 – discussion of considerations relevant to the exercise of that discretion.

Held: grounds existed for exercising discretion to relieve plaintiff from consequences of obtaining a judgment less than the filed offer - plaintiff awarded costs of action against defendant on the Magistrates Court scale applicable to a judgment in the sum of $19,332.25.

District Court Act 1991 s 42(2); District Court Rules 2006 r.188, r.263(1) and (2)(h), referred to.
Maitland Hospital v Fisher No 2 (1992) 27 NSWLR 721; NSW Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100; Morgan v Johnson (1998) 44 NSWLR 578; O'Sullivan v Farrer (1989) 168 CLR 210; Cretazza v Lombardi (1975) 13 SASR 4, considered.

FLEMING v SOUTH AUSTRALIAN HOUSING TRUST (NO 2)
[2011] SADC 95

1. In this action on 13 April 2011 I entered judgment for the plaintiff against the defendant in the sum of $19,332.25 inclusive of pre-judgment interest. Liability had been agreed and the judgment resulted from an assessment of damages.

2. First of all I confirm that although the judgment sum was substantially less than the jurisdictional limit of the Magistrates Court, it did exceed the threshold sum of $15,000 as prescribed in the Rules.[1] Therefore although the plaintiff could and should have prosecuted her action in the Magistrates Court, the quantum of the judgment was sufficient to prevent her being deprived of costs.

   [1] See s 42(2) of the District Court Act1991 and r 263(1) and (2)(h) of the District Court Rules 2006.

3. I note in the argument before me that the defendant accepted that, subject to the outcome of the argument relating to the costs consequences of the judgment being less than the filed offer, the plaintiff was entitled to the costs of her action.

4. I now turn to the question of whether the plaintiff is to suffer the consequence in costs prescribed by Rule 188 for having obtained a judgment less than the filed offer to consent.

5. On 26 August 2008 the defendant filed and served a Notice to Consent to Judgment in the sum of $50,000. Accordingly, pursuant to Rule 188(6) and (7) of the District Court Rules 2006, the plaintiff is not entitled to recover her costs incurred after 14 days after the service of the offer and further is obliged to pay the defendant’s costs incurred after that time “… subject to the court’s order to the contrary…”.  The defendant seeks an order for costs under the Rule and the plaintiff seeks an exercise of discretion relieving her from the enforcement of dual sanction in the Rule.

6. The purpose underlying rules such as Rule 188 has been explained in a number of leading cases.[2]  The discretion to “… order to the contrary …” is constrained by the scope intent and purpose of the legislation and it must be exercised judicially not arbitrally or capriciously.[3]

   [2]    See Maitland Hospital v Fisher No 2 (1992) 27 NSWLR 721; NSW Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 and Morgan v Johnson (1998) 44 NSWLR 578.

   [3]    See O’Sullivan v Farrer (1989) 168 CLR 210 at 216; See also Cretazza v Lombardi (1975) 13 SASR 4 per Bray CJ at 11.

7. I now turn to the circumstances of this matter.  I confirm my findings as to the plaintiff’s credibility and reliability.  She was 10 years old at the time of the accident, 18 years old when this action was instituted and had just turned 20 years old at the time of the trial.  I considered her to be an honest witness but very much under the influence of and conditioned by her family to accept and play a sick role. She unconsciously exaggerated her injury and its consequences in compliance with the expectation she had grown up with since the age of 10.

8. Further there was some medical support for the injury being moderately serious from the Orthopaedic Surgeon, Mr Adrian Munyard. The Orthopaedic Surgeon called by the defendant, Mr David Marshall, as evidenced by his pre trial reports, held views which were not that far removed from those of Mr Munyard. I infer that those advising the plaintiff took an optimistic view of her entitlement. But even putting aside that optimism and bearing in mind what I have said about the medical evidence, as it stood prior to trial, there was an arguable basis upon which the offer of the defendant of $50,000 might have been regarded as inadequate. I emphasise here that I do not regard the proposals which, as I understand it, were made by the representatives of the plaintiff, of $85,000 and $100,000 as in any circumstance reasonable.

9. Further what was new and emerged for the first time in the trial was the film and the final position taken by Mr David Marshall, the medical witness whom I preferred. As I have indicated his view, initially, was not far removed from that of his colleague Mr Munyard. However in evidence, as I have made clear in the judgment, his view hardened and his strong position was that the plaintiff was not permanently disabled. No doubt seeing the film contributed to his final view.

10. So two new matters emerged in the trial. First the film, secondly the change in the position of Mr Marshall. It seems to me also relevant, that on my assessment, the plaintiff was in a position akin to that of an infant, in the sense that she was very much dependant on the advice of her lawyers and I infer, input from, in particular, her mother.

11. So the above are matters or considerations which I consider to be relevant to the exercise of the discretion from the plaintiff’s point of view.

12. From the defendant’s perspective, I direct myself that in determining whether there is a proper basis on which I could make “… an order to the contrary …” I must have regard to the clear purposes underlying Rule 188 addressed in the authorities to which I have referred, including, the need to encourage litigants to give serious consideration to compromising proceedings. The defendant did all it could to protect itself from the ongoing expenditure of costs.

13. Nonetheless I consider that there is a proper basis to exercise the discretion in the rule to relieve the plaintiff against the consequences of the filed offer.

14. Justice will be served if the plaintiff has her costs of action to be agreed or taxed on the Magistrates Court scale. I so order.