Hammond v Stern (No 2)
[2013] NSWSC 268
•27 March 2013
Supreme Court
New South Wales
Medium Neutral Citation: Hammond v Stern (No 2) [2013] NSWSC 268 Hearing dates: By written submissions Decision date: 27 March 2013 Jurisdiction: Common Law Before: Harrison AsJ Decision: (1) The plaintiff is to pay the defendant's costs as agreed or assessed.
Catchwords: COSTS - declaratory relief sought - whether proceedings related to claim for personal injury damages - proceedings not a claim for damages Legislation Cited: Civil Liability Act 2002
Civil Procedure Act 2005
Legal Profession Act 2004
Uniform Civil Procedure Rules 2005Cases Cited: Certain Lloyd's Underwriters v Cross [2012] HCA 56 Category: Costs Parties: Harry Hammond (Plaintiff)
Terence Leland Stern (First Defendant)
Kevin Pierce (Second Defendant)Representation: Solicitors:
Firths - The Compensation Lawyers (Plaintiff)
Yeldham Price O'Brien Lusk (Defendants)
File Number(s): 2011/168843
Judgment
HER HONOUR: On 13 February 2013, I delivered judgment in this matter and ordered the parties to provide written submissions in relation to the costs of the proceedings.
These proceedings were commenced by summons. The plaintiff was seeking a declaration pursuant to s 75 of the Supreme Court Act 1970. Section 75 reads:
"75 Declaratory relief
No proceedings shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby and the Court may make binding declarations of right whether any consequential relief is or could be claimed or not."
The plaintiff also relied upon s 98(1) of the Civil Procedure Act 2005 (which is reproduced later in this judgment).
The question before me for which Mr Hammond sought declaratory relief, was whether the costs for the professional negligence proceedings were limited to a recovery of 20 per cent of the judgment of $60,000, or $12,000. The costs were so limited. Hence, I made a declaration that the costs of the proceedings the subject of the consent judgment dated 11 October 2010 are regulated by s 338 of the Legal Profession Act 2004.
There had been two sets of prior proceedings commenced by Mr Hammond that had been finalised, one for personal injuries and the other for professional negligence. In the personal injury matter, a verdict by agreement was entered for the defendant in that matter, Rail Infrastructure Corporation. In the professional negligence proceedings, Mr Hammond claimed damages against a solicitor and barrister for the loss of workers compensation rights and loss of opportunity to recover common law damages for a personal injury he had suffered during the course of his employment. The professional negligence proceedings were settled upon acceptance of an offer of compromise by Mr Hammond for $60,000 plus costs.
Section 338 of the Legal Profession Act deals with situations where the amount recovered on a claim for personal injury damages, does not exceed $100,000.
Section 338(1) the Act provides:
"(1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows:
(a) in the case of legal services provided to a plaintiff-maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater,
(b) in the case of legal services provided to a defendant-maximum costs are fixed at 20% of the amount sought to be recovered by the plaintiff or $10,000, whichever is greater."
In Certain Lloyd's Underwriters v Cross [2012] HCA 56, the High Court held at [41] that "personal injury damages" should be construed by reference to the definition in s 11 of the Civil Procedure Act, that a claim for personal injury damages "includes any and every form of claim for damages that relate to the death of or personal or bodily injury to a person". I decided that the professional negligence proceedings was a claim for damages relating to personal injury. The professional negligence claim was a claim for "damages that relate to ... injury to a person" and that therefore the claim in those proceedings was a claim for "personal injury damages" to which s 338 applied.
The plaintiff has submitted that, consistent with my reasons, the current matter before the Court also relates to a claim for personal injury damages and is therefore governed by s 338 of the Legal Profession Act.
The defendant submitted that Division 9 of Part 3.2 of the Legal Profession Act (which includes s 338) only applies in relation to claims for personal injury damages. For the purposes of the Division, "plaintiff" is defined to mean a person who makes or is entitled to make a claim for personal injury damages. "Defendant" is defined to mean a person against whom a claim for personal injury damages is or may be made. "Personal injury damages" is defined to have the same meaning as in Part 2 of the Civil Liability Act 2002. In the Civil Liability Act, "personal injury damages" is defined to mean damages that relate to death of or injury to a person.
The defendant further submitted that Division 9 therefore only applies where damages are claimed or are sought to be recovered. The summons in these proceedings did not seek damages but rather a declaration and costs.
According to the defendant, Division 9, in particular s 338, has no application to the costs of these proceedings. The defendant says that there is no "amount recovered" or amount "sought to be recovered" within the meaning of s 338(1)(a) and (b).
Costs generally
Section 98 of the Civil Procedure Act 2005 relevantly reads:
"98 Courts powers as to costs
(1) Subject to rules of court and to this or any other Act:
(a) costs are in the direction of the court, and
(b) The court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
...
(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:
(a) costs up to, or from, a specified stage of the proceedings, or
(b) a specified proportion of the assessed costs, or
(c) a specified gross sum instead of assessed costs, or
(d) such proportion of the assessed costs as does not exceed a specified amount (...)"
The Uniform Civil Procedure Rules 2005, rules 42.1 and 42.2 read:
"42.1 General Rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
42.2 General rule as to assessment of costs
Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis."
In these proceedings the plaintiff was not making a claim for damages but seeking a declaration in relation to the costs of the professional negligence proceedings. The summons sought declaratory relief, there was no amount of damages recovered or sought to be recovered. In my view, these proceedings are not a claim for damages but proceedings seeking declaratory relief.
Therefore, it is my view that the costs of the proceedings before me are not regulated by s 338.
Costs are discretionary. Normally costs follow the event. The plaintiff was unsuccessful. It follows that the plaintiff should pay the defendant's costs as agreed or assessed.
The Court orders that:
(1) The plaintiff is to pay the defendant's costs as agreed or assessed.
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Decision last updated: 28 March 2013
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