Garner v Rohanna Pty Ltd
[1999] WASCA 178
•21 SEPTEMBER 1999
GARNER -v- ROHANNA PTY LTD [1999] WASCA 178
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASCA 178 | |
| THE FULL COURT (WA) | |||
| Case No: | CIV:1713/1999 | 16 AUGUST 1999 | |
| Coram: | MALCOLM CJ IPP J PARKER J | 21/09/99 | |
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | ANTHONY ALAN GARNER ROHANNA PTY LTD |
Catchwords: | Costs Intersection collision between vehicles Apportionment of liability Claim and counterclaim set off with balance of damages in favour of plaintiff Local Court Magistrate ordered defendant to pay costs of claim and plaintiff to pay costs of counterclaim Order set aside on appeal to District Court Costs awarded on balance due to plaintiff after set off Where claim and counterclaim arise out of same incident or transaction and counterclaim in nature of defence damages awarded should be set off Party entitled to balance entitled to costs on the balance |
Legislation: | Local Courts Act 1904 (WA), s 107(3), s 107(4) Rules of the Supreme Court 1971, O 64 r 4(1), r 4(2) Local Court Rules 1961, O 37 r 4(3) |
Case References: | Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 Cassella v Bradshaw, unreported; FCt SCt of WA (Malcolm CJ, Kennedy and Owen JJ); Library No 970717; 22 October 1997 Clarke v National Westminster Finance Australia Ltd, unreported; FCt SCt of WA; Library No 6920; 13 November 1987 Gallo v Dawson (1990) 64 ALJR 458 Godden v Alford [1960] WAR 235 Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88 Millican v Tucker [1980] 1 All ER 1083 Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344 Rendell Holdings Pty Ltd v Athans & Taylor, unreported; FCt SCt of WA; Library No 7942; 15 November 1989 Smith v Madden (1946) 73 CLR 129 Van Den Bergh v Whitbread [1960] WAR 33 Winluck Foods v Lay Choo Lim [1989] WAR 358 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : GARNER -v- ROHANNA PTY LTD [1999] WASCA 178 CORAM : MALCOLM CJ
- IPP J
PARKER J
- Appellant (Defendant)
AND
ROHANNA PTY LTD
Respondent (Plaintiff)
Catchwords:
Costs - Intersection collision between vehicles - Apportionment of liability - Claim and counterclaim set off with balance of damages in favour of plaintiff - Local Court Magistrate ordered defendant to pay costs of claim and plaintiff to pay costs of counterclaim - Order set aside on appeal to District Court - Costs awarded on balance due to plaintiff after set off - Where claim and counterclaim arise out of same incident or transaction and counterclaim in nature of defence damages awarded should be set off - Party entitled to balance entitled to costs on the balance
(Page 2)
Legislation:
Local Courts Act 1904 (WA), s 107(3), s 107(4)
Rules of the Supreme Court 1971, O 64 r 4(1), r 4(2)
Local Court Rules 1961, O 37 r 4(3)
Result:
Application dismissed
Representation:
Counsel:
Appellant (Defendant) : Ms A Dowley
Respondent (Plaintiff) : Mr R G Walton
Solicitors:
Appellant (Defendant) : Butcher Paull & Calder
Respondent (Plaintiff) : Bostock & Ryan
Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394
Cassella v Bradshaw, unreported; FCt SCt of WA (Malcolm CJ, Kennedy and Owen JJ); Library No 970717; 22 October 1997
Clarke v National Westminster Finance Australia Ltd, unreported; FCt SCt of WA; Library No 6920; 13 November 1987
Gallo v Dawson (1990) 64 ALJR 458
Godden v Alford [1960] WAR 235
Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88
Millican v Tucker [1980] 1 All ER 1083
Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344
Rendell Holdings Pty Ltd v Athans & Taylor, unreported; FCt SCt of WA; Library No 7942; 15 November 1989
Smith v Madden (1946) 73 CLR 129
Van Den Bergh v Whitbread [1960] WAR 33
Winluck Foods v Lay Choo Lim [1989] WAR 358
Case(s) also cited:
Nil
(Page 3)
1 MALCOLM CJ: This was an application for an extension of time within which to make an application under s 107(3) of the Local Courts Act 1904 and O 64 r 4(1)(a) of the Rules of the Supreme Court 1935 for leave to appeal from a judgment of the District Court dated 7 May 1999 by which Nisbet DCJ allowed an appeal from a decision of the Local Court on a question of costs.
2 The relevant question of costs arose in the context of an action in the Local Court in which the appellant was the defendant and the respondent was the plaintiff. The action arose out of an accident which occurred on 16 February 1994 at the intersection of Fulham Street and Abernethy Road in Belmont. The respondent, who was driving a motor vehicle, collided with the appellant who was riding his motor cycle. The respondent claimed for the costs of repairs to his vehicle and the appellant counterclaimed for the cost of repairs to his motor cycle. Each of the parties claimed the other was liable in damages for negligence for the cost of repairs to their respective vehicles.
3 The learned Magistrate found the respondent 60 per cent to blame and the appellant 40 per cent to blame for the collision and assessed the respondent's damages at $5566.46 before apportionment. The amount of the appellant's damages does not appear. It seems, however, that the learned Magistrate had ordered that the appellant pay 40 per cent of the respondent's taxed costs and the respondent pay 60 per cent of the appellant's taxed costs. There was an appeal against that decision and a direction for a re-hearing regarding the proper basis for the assessment of damages. At the re-hearing the learned Magistrate re-assessed the damages of the appellant at $3086. The assessment of the damages of the respondent was apparently confirmed in the sum of $5566.46. The learned Magistrate then proceeded to enter judgment for the respondent in the sum of $374.98. This was the net amount due to the respondent after setting off the amounts each was entitled to recover from the other. The respondent was entitled to 40 per cent of $5566, namely $2226.58. From this amount was deducted 60 per cent of the $3086 damages of the appellant, a sum of $1851.60, leaving a balance of $374.98.
4 The learned Magistrate then proceeded to make a costs order to the following effect:
"The [appellant] shall pay the [respondent's] costs of action to be taxed on complex scale Division 2 and it is noted again for the taxing officer that the [respondent] shall be allowed $140 in respect of the assessor's fee.
(Page 4)
- The second order is that the [respondent] shall pay the [appellant's] costs of the counterclaim to be taxed on the complex scale Division 2 …"
5 It was agreed before Nisbet DCJ that the effect of these orders was that the respondent's costs were taxed on the sum of $5566.46 and the appellant's costs on the sum of $3086. That is to say, on the amount of damages assessed for each of the parties before apportionment of liability and before set-off.
6 Before the learned Magistrate the respondent argued that it should have the costs of the whole action and that the appellant should not be awarded any costs. The appellant urged the learned Magistrate to apply O 37 r 4(3) of the Local Court Rules 1961 which provides that:
"Where a counter-claim is raised and tried, unless the magistrate otherwise orders, the scale upon which the costs of the parties are to be taxed shall be determined as follows:
…
(3) both parties are successful, by the amounts which they recover on their respective claims; and if both claims fail, by the amount claimed by the opposite party."
7 When the matter was before the learned Magistrate the respondent relied upon the decision of the Full Court in Godden v Alford [1960] WAR 235. In that case the judgment of the Court (Jackson SPJ, Virtue and Hale JJ) was delivered by Hale J. The Full Court set aside a finding that the learned Magistrate was in error in finding the parties equally to blame, and found that the proper apportionment was 75 per cent against the [defendant] respondent and 25 per cent against the [plaintiff] appellant. The amount recovered by the appellant was set off against the amount which the respondent was entitled to recover which left a balance in favour of the appellant. The Court concluded that judgment should be entered in the Local Court in favour of the appellant for the difference and that the appellant should be awarded costs in the Local Court taxed on the scale appropriate to the difference. This was in accordance with the order made by the Full Court in Van Den Bergh v Whitbread [1960] WAR 33. The Court also said at 236:
"The court was, however, asked by counsel to give some more express guidance to local courts on the appropriate order for costs in this type of case in view of doubts which had been
(Page 5)
- expressed by different magistrates. It is normally not desirable that a court should deal with points which do not arise in the case actually before the court, but it is proper that reasons should be given for the making of any order in fact made, and in order to explain the order now made, it appears not improper that some comment should be made on the general question of costs.
In the first place, it must be emphasised that under s 81 of the Local Courts Act the question of costs is essentially in the discretion of the magistrate, and it would be entirely wrong for this Court to purport to lay down any rules which might be thought to restrict the exercise of the judicial discretion which is vested in the magistrate and in nobody else. There are, however, some principles which it would seem proper to apply in the normal type of case in order that there may be some degree of uniformity where there are no special circumstances."
8 The Court went on to consider at 236-237 a case where the claim and counter-claim raised essentially different issues, as well as a case where there was no real contest as to the claim advanced by one party and the trial was in truth concerned only with the claim of the other. Their Honours said at 237:
"Where the claim and counter-claim do not involve separate issues …, but in truth arise out of the one transaction or incident, so that the counterclaim is in its nature a defence to the claim, then if the plaintiff is on balance entitled to some amount, he should be given judgment for that amount only with costs appropriate to the amount which he in fact recovers: see for instance Hanak v Green [1958] 2 QB 9; [1958] 2 All ER 141. It will be seen that Van Den Bergh's Case, supra, follows that principle and indicates by necessary inference that the typical motor car collision case falls within this principle in that the claim and counter-claim are inextricably mixed.
It follows from the principle of the Hanak and Van Den Bergh Cases that if, on balance, the defendant recovers against the plaintiff the defendant should have the costs of the claim on the basis of the amount claimed and costs on his counter-claim on the basis of the amount actually recovered by him. This is so because he is brought into court by the plaintiff to meet a claim which turns out to be unfounded. He is, therefore, entitled to
(Page 6)
- his costs of successfully meeting that claim and also to his costs of establishing his own surplus claim against the plaintiff. It will be noted that this principle was applied by the magistrate in the present case, and if the magistrate's apportionment of liability between the parties were upheld, we would consider that his judgment regarding costs should also be upheld.
Finally, [there is a] necessity for the judge always to look at the particular facts of the case and not to feel bound by any rule as to what he must do merely because the case before him happens to fall into one or other of the categories mentioned above …
The guiding principle, and in fact the only rule which can justly be called a principle, is that the court should carefully examine the realities of the case in hand, and should so frame its order that justice shall, so far as costs are concerned, be as nearly as possible done between the parties."
9 In Van Den Bergh v Whitbread it was found by the Full Court on appeal that liability should be apportioned 75 per cent as against the defendant and 25 per cent as against the plaintiff following a collision between two motor vehicles at an intersection. The defendant had failed to give way to the right. It was also held that a set-off judgment should be entered for the plaintiff for the difference between his claim and the defendant's counter-claim, and that the defendant should pay the plaintiff's costs on the scale applicable to the amount so recovered.
10 These two decisions have stood for nearly 40 years and have no doubt been applied on many occasions in the Local Court. The policy behind them is clear. In situations where motor vehicle accidents occur as a result of the fault of one or other or both parties, as a matter of public policy the principles to be applied in relation to costs depending on the outcome should be very clear, namely that in the absence of special circumstances, the party who on balance recovers against the other party should have their costs. Such a policy is calculated to promote the settlement of litigation.
11 As noted above, it appears that when the matter was first before him, the learned Magistrate ordered that the appellant pay 40 per cent of the respondent's taxed costs and that the respondent pay 60 per cent of the appellant's taxed costs. It further appears that this decision was set aside on appeal on the basis that it was an error in principle to award costs in terms of the apportionment of blame. The learned Magistrate nonetheless
(Page 7)
- considered that the way in which the court decided the issue of blame was relevant as was the way in which the eventual money result fell. His Worship also said:
"… I don't think it very helpful simply to look at this case as if it were the case of the counter-claim because it's simply a defence to the claim because in the result as far as apportionment is concerned and responsibility it achieves a greater eminence than that. It might have been a hazard to know who should begin the action first; whether the [appellant] should be the counter-claimant or the original claimant. The question is: how should this Magistrate's discretion best be exercised and what is just in all the circumstances.
In my view and having regard to everything I think it is a just exercise of discretion in the present circumstances to award the costs as suggested by O 37 r 4(3). Both parties were successful … and on their respective claims each will have an order for costs."
13 On the appeal in the District Court, the learned Judge referred to the decision in Godden v Alford and rightly regarded it as consistent with the principles stated in such cases as Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88; Smith v Madden (1946) 73 CLR 129; and Millican v Tucker [1980] 1 All ER 1083. The learned Judge then said:
"The central issue where there is a claim and counter-claim is whether or not the claim and counter-claim arose out of the same incident and if that issue is determined affirmatively then it follows that the counter-claim is to be viewed for practical purposes as a defence."
- His Honour went on to say that:
"… a judicial discretion has to be exercised judicially, that is to say by reference to authority and in this case there was in my opinion clear and binding authority indistinguishable on the facts, namely Godden v Alford (supra)."
(Page 8)
- the respondent's costs of the action on a sum in issue of $374.98 to be taxed upon the complex scale Division 1.
15 The consideration of both the extension of time to make the application for leave and the application for leave itself must start from the premise that, as a matter of policy, appeals as to costs only are to be discouraged. For example, s 60(1)(e) of the Supreme Court Act 1935 provides that, without the leave of the Judge making the order, an appeal may not be brought from an order by a Judge of the Supreme Court as to costs only which are by law left to his or her discretion. Where leave is granted the Court is entitled to review the exercise of discretion on the same grounds as it will review any other discretionary order: Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 at 399 per Stephenson LJ. The Court will be slow to interfere with the exercise of judicial discretion in a matter relating to costs: Rendell Holdings Pty Ltd v Athans & Taylor, unreported; FCt SCt of WA; Library No 7942; 15 November 1989.
16 In the present case the application for leave to appeal was made pursuant to O 64 r 4(1)(a) and (2). The appellant wisely elected to make the application upon notice by originating summons in accordance with O 64 r 4(2). The application for leave should have been made no later than 28 May 1999. The application to extend time was filed on 29 June 1999, some 32 days out of time. It appears that the reason for the delay was that the appellant's solicitor who appeared in the District Court had concluded there was no prospect of an appeal to the Supreme Court. The expressed reason for this was that the learned Judge and the respondent's solicitor had said that this case would not be permitted to go on appeal to the Supreme Court as it was an appeal from a decision of the Local Court on a question of costs only. Subsequently, the appellant's solicitors advised the appellant that there was no prospect of an appeal to the Supreme Court. Later, a senior partner in the appellant's firm of solicitors expressed doubt about the proposition that the Supreme Court could not entertain such an appeal. The appellant's solicitors then undertook some research in relation to the matter and subsequently briefed counsel to advise. Instructions were eventually obtained and the application prepared and filed on 29 June 1999.
17 This explanation for the delay is unsatisfactory. The availability of an appeal by leave from the District Court is not a matter of any difficulty. It was hardly a matter on which it was necessary to brief counsel. Appeals from the Local Court are provided for in s 107(3) of the Local Courts Act 1904 by leave of the Supreme Court or a Judge thereof.
(Page 9)
- Section 107(4) refers the reader to the Rules of the Supreme Court regarding the time and manner for an appeal. The relevant provisions are contained in O 64. As McHugh J said in Gallo v Dawson (1990) 64 ALJR 458 at 459:
"Lack of legal knowledge is a misfortune and not a privilege."
"Leave is required, and that reflects a policy. The policy, I think, is this: you are dealing with the cases heard in the Local Court.
They are generally modest in the amount of money involved in them, necessarily so, to bring it within the jurisdiction of the Local Court. The policy is to give one appeal as of right from decisions in Local Courts, and thereafter an appeal with leave, the policy then being that finality generally will be achieved by the decision of the District Court on appeal, and leave will be granted only if it can be shown that there is an error made by the District Court which requires correction. No doubt if there are important questions of law which are true questions of law involved in the case which are of general importance, leave will be granted, but leave ought not generally to be granted to give the appellant a second opportunity to dispute questions of fact.
If you have a concurrent finding of fact in the two courts below, leave will be difficult to obtain unless there is something else within the case. It is different, I think, when you have a party who was successful in the Local Court and unsuccessful on appeal, but where the party has failed at trial and failed on appeal, this Court will need to be persuaded that there is something within the case which justifies it being heard yet for a third time."
19 Although this is a case in which the appellant was in the relevant sense successful before the learned Magistrate, the decision of the
(Page 10)
- Magistrate was inconsistent with the decisions of this Court in Van Den Bergh v Whitbread and Godden v Alford. This was clearly a case in which those decisions were to be applied. The appellant's counter-claim in the Local Court was made in respect of a case in which the claim and counter-claim arose out of the one incident and the counter-claim was in the nature of a defence. There was nothing in the particular facts or circumstances which justified a departure from the decisions in those earlier cases. In Van Den Bergh v Whitbread the learned Magistrate had found the defendant solely responsible. In the Full Court it was held that the defendant was 75 per cent responsible and the plaintiff was 25 per cent responsible. It was held that the plaintiff was entitled to recover by a set-off judgment the difference between the claim and the counter-claim and the costs of the action on the scale appropriate to the amount recovered. The disparity between the degrees of negligence in that case was much greater than in the present case.
20 It is acknowledged that the general principle is that where the plaintiff succeeds on the claim and a defendant succeeds on a counter-claim, both parties are entitled to the costs incurred on their claim and counter-claim, respectively: Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344. That was a judgment by tenants against their landlords for damages for wrongful distress. There was a counter-claim for rent. The claim did not arise out of the same incident or the same transaction. The defendants claimed that there had been a lease of land to put up advertising hoardings and they were entitled to distress for non-payment of rent. The hoardings were held to be fixtures and the plaintiffs were entitled to damages for wrongful distress. The defendants were entitled to judgment on the counterclaim for rent. As Buckley LJ (with whom Kennedy LJ and Joyce J agreed) said at 349-350:
"A point has been raised upon the counter-claim; it is a point of no substance. It is agreed that a sum of 151l. is due to the defendants for rent; there must on the counter-claim be judgment for the defendants for that amount. The costs of the action must be the plaintiffs', and the costs of the counter-claim the defendants'. Is this a case for the application of the principle of set-off? The defendants put in their distress on January 23, between the passing and the confirmation of a resolution for the voluntary winding up of the plaintiff company.
The plaintiffs say, and with truth, that the defendants committed a tort and took away the plaintiffs' goods and got their money. But the distress, though wrongful, was in respect of rent, or a
(Page 11)
- payment resembling rent, which was undoubtedly due and owing from the plaintiffs to the defendants. If the case is to be treated as one of set-off, the result would be that the damages for wrongful distress, which form part of the assets of the plaintiff company, would be pro tanto applied in payment of rent, and a particular creditor would get twenty shillings in the pound. Ought we by our order to bring about this result? Clearly not. Our order should be such that the damages for wrongful distress will be part of the plaintiff company's assets, while the defendants must prove in the liquidation for the amount of their judgment on the counter-claim. The parties should agree to the amount of damages."
21 The damage was agreed at 75 pounds. It is apparent in that case that but for the consequence that a set-off would result in a preference to a particular creditor, the principle in Godden v Alford would have applied.
22 In my opinion there was nothing in the facts of this particular case which justified any departure from the approach adopted in Godden v Alford. The decision of the learned District Court Judge was clearly right. The proposed grounds of appeal contend that the learned Judge erred in applying Godden v Alford to the circumstances of this case. There is nothing in those grounds which identifies the nature of the error or why the decision should have been otherwise. There is no substance in the point concerning O 37 r 4(3) of the Local Court Rules. It follows that the proposed appeal has no prospect of success. For these reasons I would refuse the application for an extension of time.
23 IPP J: I have read the reasons to be published by Parker J. I agree with them and his Honour's conclusions. I have nothing further to add.
24 PARKER J: The applicant seeks leave to appeal from a decision of a Judge of the District Court given on 7 May 1999 and also an extension of time within which to do so.
25 The decision of the District Court was made on appeal from a Stipendiary Magistrate sitting in the Local Court in Perth on 17 September 1998. The only issue raised, both on the appeal to the District Court and before this Court, concerns the order made in the Local Court with respect to costs.
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26 The action in the Local Court arose out of a motor vehicle collision at a suburban intersection in 1994 when the respondent's vehicle collided with the appellant who was riding a motorcycle. The respondent (plaintiff) sued for the recovery of the cost of repairs to its vehicle which were assessed at $5,566.46. The applicant (defendant) counterclaimed in the same proceedings for the costs of repair to his motorcycle which were ultimately assessed at $3,086. A significant issue at trial was the question of liability for the collision. The learned Magistrate held that the applicant was 40 per cent responsible for the collision and that the driver of the respondent's vehicle was 60 per cent to blame. On these findings the learned Magistrate entered judgment for the respondent in the sum of $374.98. This sum was the balance after set-off of 40 per cent of $5,566.46, namely $2,226.58, and 60 per cent of $3,096, namely $1,851.60.
27 Without reciting the full terms of the orders made by the learned Magistrate with respect to costs, their effect in summary was that each party received an award of costs against the other, those costs to be taxed respectively on the amount of damages awarded to each party, ie two distinct sets of costs. We are told that the practical effect of these costs orders was that after each set of costs was set off the applicant was required to pay the respondent a little in excess of $200 on account of costs.
28 On appeal to the District Court from this costs order the learned District Court Judge set aside the Magistrate's orders as to costs and instead ordered that the defendant pay the plaintiff's costs in the Local Court of the action on a sum in issue of $374.98. He also gave directions as to the appropriate scale on which those costs were to be taxed. The practical effect of this order we are told is that a sum for costs exceeding $2,000 is payable by the appellant to the respondent in respect of the costs of the proceedings in the Local Court. The respondent was, of course the party who was 60 per cent responsible for the collision.
29 The principles governing the grant of leave to appeal to this Court from a decision of the District Court which is in turn on appeal from a local court have been considered in decisions of this Court and do not require significant elaboration. As was said in Winluck Foods v Lay Choo Lim [1989] WAR 358, in the decision of the Full Court, at 361:
"It will not normally be sufficient that the decision appealed from is apparently wrong or attended with doubts. Something more will need to be shown. It may well be that in some cases
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- it will be sufficient to show that there is a significant question of law to be considered. In others it may be possible to point to some other feature which requires the consideration of this Court to avoid a substantial injustice if leave is not granted."
- The observations of the Chief Justice in Cassella v Bradshaw, unreported; FCt SCt of WA (Malcolm CJ, Kennedy and Owen JJ); Library No 970717; 22 October 1997 should be borne in mind.
"The policy, I think, is this: you are dealing with the cases heard in the local court.
They are generally modest in the amount of money involved in them, necessarily so, to bring it within the jurisdiction of the local court. The policy is to give one appeal as of right from decisions of local courts, and there after with leave, the policy then being that finality generally will be achieved by the decision of the District Court on appeal and leave will be granted only if it can be shown that there is an error made by the District Court which requires correction. No doubt if there are important questions of law which are true questions of law involved in the case which are of general importance, leave will be granted, but leave will not generally be granted to give the appellant a second opportunity to dispute questions of fact …"
31 For reasons which I will deal with in the course of this decision I am persuaded that the question whether the learned District Court Judge correctly considered the application of the decision in Godden v Alford and its effect in this case is one of sufficient general importance for very many cases that arise, in particular in local courts, as to warrant a grant of leave to appeal in this case.
32 There is also the question of an extension of time. I will not detail the circumstances that have been fully and frankly set out in the affidavits
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- filed on the part of the solicitors who represented the appellant at all material times. There were deficiencies in the appreciation by those solicitors of the applicants right to bring an appeal by leave to this Court which led to delay. Once that deficiency was corrected this application has proceeded with reasonable expedition. There is no fault on the part of the applicant himself and the respondent has not suffered any significant disadvantage from the limited delay which has occurred. In these circumstances I am of the view it is appropriate that time be extended for the bringing of this application for leave.
The merits
33 At the hearing of this application for leave the Court indicated that the full merits of the appeal should be argued as well as the question of leave.
34 The significant issue raised turns on the decision of this Court in Godden v Alford. That was a decision on appeal from a local court in a case arising from a motor vehicle collision. On appeal, liability was apportioned on the basis that the respondent was three-quarters responsible for the collision and the appellant one-quarter. The Full Court emphasised that while the question of costs is essentially one for the discretion of the Magistrate trying the case; nevertheless in order that there should be some degree of uniformity in many typically occurring situations such as motor vehicle collision cases which involve claim and counterclaim, observations were made and what were described as principles were expressed to guide an appropriate exercise of that discretion in the absence of special circumstances. At 236 - 237 Hale J, who delivered the reasons of the Full Court, said:
"Where the claim and the counter-claim raise essentially different issues and where, for instance, the plaintiff succeeds on the claim and the defendant on the counter-claim, there should be separate judgments on claim and counter-claim with the plaintiff having the costs of the claim and the defendant having the costs of the counter-claim: see for instance Chell Engineering Ltd v Unit Tool and Engineering Co Ltd [1950] 1 All ER 378. It is, however, … desirable that a Judge should consider whether a special order should be made as to costs because the issues are often very much interlocked and the usual order as indicated above does not always give a just result ….
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- In a case where there is no real contest as to the claim advanced by one party and the trial is in truth concerned only with the claim of the other party, then even though it is the counter-claim which is litigated the successful counter-claiming defendant should have the general costs of the action ….
Where the claim and counter-claim do not involve separate issues as they did in the Chell Engineering case, but in truth arise out of the one transaction or incident, so that the counter-claim is in its nature a defence to the claim, then if the plaintiff is on balance entitled to some amount, he should be given judgment for that amount only with costs appropriate to the amount which he in fact recovers: see for instance Hanak v Green [1958] 2 QB 9 … It will be seen that Van den Bergh's case (Van den Bergh v Whitbread [1960] WAR 33) follows that principle and indicates by necessary inference that the typical motor car collision case falls within this principle in that the claim and counter-claim are inextricably mixed.
It follows from the principle of the Hanak and Van Den Bergh cases that if, on balance, the defendant recovers against the plaintiff the defendant should have the costs of the claim on the basis of the amount claimed and costs on his counter-claim on the basis that the amount actually recovered by him. This is so because he is brought into court by the plaintiff to meet a claim which turns out to be unfounded. He is, therefore, entitled to his costs of successfully meeting that claim and also to his costs of establishing his own surplus claim against the plaintiff …
Finally, in illustration of the necessity for the Judge always to look at the particular facts of the case and not to feel bound by any rule as to what he must do merely because the case before him happens to fall into one or other of the categories mentioned above, we would refer to Nicholson v Little [1956] 2 All ER 699, where, although at first sight the case appeared to fall within the Child's type of case (Childs v Blacker [1954] 2 All ER 243) the Court of Appeal upheld a judgment for costs in the Hanak form, holding that the particular facts of the case were sufficient to support the discretion actually exercised by the county court judge.
The guiding principle, and in fact the only rule which can justly be called a principle, is that the Court should carefully examine
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- the realities of the case in hand, and should so frame its order that justice shall, so far as costs are concerned, be as nearly as possible done between the parties."
35 In the local court, having referred to these passages accurately and fully the learned Magistrate observed:
"The question is: how one should wisely exercise one's discretion in the circumstances. I do think it important to have regard to the whole substance of the case and how it felt out as a result in the end. I think it can be artificial on occasions simply to look to see where the balance of the money goes … In justice there will be cases, and I think this is one of them, where one should pay particular attention to the responsibilities for the incident that ultimately brought the litigation into court.
…
Regarding what they then did is when they look at it at two levels: first of all the way the court decided the issue of blame; the next the way the money balance falls out. The court in my view should look at everything, the whole course of the litigation as well as the eventual money result. …
And I don't think it very helpful simply to look at this case as if it were the case of the counter-claim because it's simply a defence to the claim because in the result as far as apportionment is concerned and responsibility, it achieves a greater eminence than that. It might have been a hazard to know who should begin the action first; whether the defendant should be the counterclaimant or the original claimant. The question is: how should this Magistrate's discretion best be exercised and what is just in all the circumstances."
36 In my view these reasons make it clear that the learned Magistrate commenced from what was described in Godden v Alford as the guiding principle of that decision by which the realities of the case in hand were to be considered so that an order is framed so that justice is done between the parties as nearly as possible in the matter of costs. The observations as to whether the respondent might have been claimant or counter-claimant in my view are clearly directed to the illustration given in the passages quoted above from Godden v Alford of the consequence of the Hanak and Van den Bergh cases that if, on balance, the defendant recovers against the plaintiff the defendant should have the costs of the
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- claim and the costs on the defendant's counterclaim. As is explained at 237 this is because the defendant was brought into court by the plaintiff to meet a claim that turns out to be unfounded.
37 The reasons of the learned Magistrate indicate that he was well conscious of what I would describe as the usual rule or principle in respect of costs in a case involving a claim and counterclaim arising out of a motor vehicle collision, as set out in Godden v Alford, and he well recognised that his ultimate responsibility was to exercise a discretion so as to do justice as nearly as possible with regard to costs as between the parties.
38 It was in the exercise of that discretion that the learned Magistrate was led to conclude that in the circumstances of this particular case the interests of justice required a departure from the usual rule so that instead of ordering costs to be paid by the plaintiff which, on balance, ultimately recovered an award after claim and counterclaim were set-off, the Magistrate was persuaded in the way indicated to make distinct costs orders in respect of the claim and the counterclaim.
39 In these circumstances it seems to me that the real question which emerges is whether there was some aspect of the particular circumstances of this case which justified the conclusion of the Magistrate in the exercise of his discretion that it was just, as between the parties, that there should be an order for costs which differed from the usual rule. As the reasons reveal, the learned Magistrate reasoned that in a case such as this there was artificiality in simply looking to "see where the balance of the money goes" he felt that in a case such as this it is also necessary to "pay particular attention to the responsibilities for the incident". This line of reasoning led the learned Magistrate to look first at the decision on the issue of blame and next at the way the money balance fell out. To those two issues the learned Magistrate added that the court should look at "everything, the whole course of the litigation". His Worship further considered that it was not very helpful in this case to approach it on the basis that the counterclaim was simply in the nature of a defence to the claim. His reason for that appears to be that this was a case that involved an apportionment of responsibility so that the counterclaim, as he saw it achieved a greater eminence than if it were merely a counterclaim in some other type of case.
40 I can well understand an initial sense of grievance on the part of an individual litigant who, having been little to blame in a collision in which his actual monetary loss is but a small proportion of the cost of repairing
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- the other vehicle, finds that after litigation he must meet the costs of the party who was much more to blame for the collision. On an impartial analysis, however, in the normal case, where two parties litigate over the one collision in which each suffers monetary loss, there is in truth only one ultimate issue. That is, which party on balance is entitled to recover a sum of money from the other. While the procedure followed in the litigation is by way of claim and counterclaim, unless there is something remarkable about the circumstances or the conduct of the parties before proceedings are commenced, they are in fact in dispute over that one issue. Of course two factors combine to determine what amount is due from each party to the other; those factors are the degree of responsibility of each party for the collision and the amount of damage caused to each party. But they are merely the matters which must be determined to decide what is the one ultimate issue. Where a plaintiff sues in a usual motor vehicle case and recovers an award despite a counterclaim, it is because that one ultimate issue has been resolved in the plaintiff's favour. The usual rule applicable in such a motor vehicle collision case, as set out in Godden v Alford, is appropriate.
41 The reasoning of the learned Magistrate appears, in my respectful view, to involve a rejection of the usual rule in this case. This appears to be a typical example of the ordinary type of case to which the usual rule is appropriate. I am unable to see in the circumstances of this case or in the reasons of the learned Magistrate any identification of any appropriate basis for the view that the interests of justice as between these parties would require a departure from the usual rule.
42 As this Court sought to emphasise in Godden v Alford, costs are always a matter of discretion and the circumstances of a particular case may require the framing of an order so as best to do justice between the parties even though the courts would ordinarily apply some different rule or principle to a case of that type. The value of there being usual rules to guide the exercise of discretion lies in certainty and consistency. In all courts, perhaps particularly so in local courts where the amounts in dispute are generally modest, potential litigants and those advising them should be able to assess with some confidence what are the risks with respect to costs of engaging in proceedings. To facilitate this the interests of justice are significantly served if usual rules to guide the exercise of discretion, which rules have stood the test of time, are observed in the exercise of discretion in the ordinary case. That is what Godden v Alford sought to ensure.
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43 The learned District Court Judge correctly perceived that in this case a proper exercise of discretion by the learned Magistrate would have been in accordance with the appropriate ordinary rule indicated in Godden v Alford. The particular expression of the reasoning of the learned Judge may not have accorded, however, adequate recognition of the primary discretion and of the capacity of the learned Magistrate to depart from the ordinary rule where there was, in the circumstances, some consideration or combination of considerations which in the course of a principled exercise of discretion required or justified a special order. Any such refinement of expression did not, however, affect the correctness of the Judge's decision in this case on that point.
44 Another issue raised before the learned District Court Judge and this Court was whether the learned Magistrate misconstrued O 37 r 4 subrule (3) of the Rules of the Local Court. This arises from the passage in the reasons of the learned Magistrate:
"In my view and having regard to everything I think it is a just exercise of discretion in the present circumstances to award the costs as suggested by O 37 r 4 subrule 3."
- It is apparent from this that it is really immaterial to this appeal whether or not the learned Magistrate correctly construed that subrule. In the exercise of his discretion he thought that justice required costs to be awarded according to what he understood to be the effect of the rule. In no way did he regard himself as bound by the subrule. His assessment of what would be a just order with respect to costs happened to accord with his understanding of the effect of the subrule. In these circumstances there is no need to consider the correct interpretation of that rule for the determination of this appeal.
45 For these reasons I would grant leave to appeal and extend time within which to appeal, but I would dismiss the appeal from the decision of the learned District Court Judge. The effect of this is to confirm the order made by the learned District Court Judge which set aside the learned Magistrate's orders as to costs and substituted orders that:
1. The respondent (defendant) do pay the appellant's (plaintiff's) costs of the action on a sum in issue of $374.98 to be taxed upon the complex scale Division 1.
2. There be no further order as to costs.
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