Hanssen v Commonwealth of Australia (No 2)

[2019] SASC 90

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

HANSSEN v COMMONWEALTH OF AUSTRALIA & ORS (No 2)

[2019] SASC 90

Judgment of The Honourable Justice Stanley

3 June 2019

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS

Application for costs in relation to two interlocutory applications.

On 12 April 2019 this Court granted permission to the plaintiff to amend his second statement of claim. As a result, the Commonwealth discontinued its application pursuant to Supreme Court Rule (SCR) 211 seeking a preliminary hearing of the application for an extension of time within which to bring the proceedings.

The Commonwealth seeks that the plaintiff pay its costs thrown away by reason of the amendments, its costs of the application to amend and its application pursuant to SCR 211. The plaintiff does not oppose an order for costs thrown away but opposes the remaining orders sought. The plaintiff seeks that his costs of the application to amend, the SCR 211 application and the supporting affidavits filed by the Commonwealth be paid by the plaintiff.

Held:

1.  The plaintiff is to pay the Commonwealth its costs thrown away by reason of the amendments to the plaintiff’s second statement of claim permitted by the orders of the Court on 12 April 2019.

2.  The plaintiff is to pay the costs of and incidental to the plaintiff’s application to amend the second statement of claim.

3.  The plaintiff is to pay the costs of the Commonwealth’s application pursuant to SCR 211 save and except half the costs of the supporting affidavit of Rodger James Prince affirmed 30 August 2018.

Supreme Court (Civil) Rules 1987 (SA) r 211, r 263(1), r 263(2); Limitation of Actions Act 1936 (SA) s 48; Supreme Court Act 1935 (SA) s 40, referred to.
Raedel & Raedel v Shahin (No.2) [2018] SASC 119, applied.

HANSSEN v COMMONWEALTH OF AUSTRALIA & ORS (No 2)
[2019] SASC 90

Civil.

1. STANLEY J:         The Commonwealth brought an application pursuant to Supreme Court Rule (SCR) 211 for a separate trial of the issue whether the plaintiff could establish that he had ascertained a material fact within the meaning of s 48 of the Limitation of Actions Act 1936 (SA) (LTA). The plaintiff brought an application to amend his statement of claim to replead the material facts alleged. On 12 April 2019 I granted permission to the plaintiff to make the amendment as sought. As a result, the Commonwealth no longer pressed the SCR 211 application. The Commonwealth now seeks an order that the plaintiff pay its costs thrown away by reason of the amendments to the second statement of claim. The plaintiff does not oppose such order.

2. The Commonwealth also seeks orders that the plaintiff pay its costs of the application to amend the second statement of claim and its application filed pursuant to SCR 211.  The plaintiff opposes these orders.  He seeks the costs of the application to amend, the SCR 211 application and the costs of the supporting affidavits filed by the Commonwealth, namely, affidavits of Rodger James Prince dated 30 August 2018 and affidavits of Erin Louise Shriner dated 1 April 2019 and 10 May 2019.

3. An award of costs is an exercise of the Court’s discretion.  The Court’s discretion in relation to costs is unfettered save that the discretion must be exercised judicially and for reasons connected to the litigation.[1]  The general rule is that costs follow the event.[2]  However, SCR 263(2) qualifies the general rule by, inter alia, the following exceptions (which are subject to the Court’s order to the contrary): 

   (a)the costs of an amendment are to be awarded against the party making the amendment;

   …

   (c) the costs of an application that should have been (but was not) made at an earlier stage of proceedings are to be awarded against the applicant.

   [1]    Supreme Court Act 1935 (SA) s 40.

   [2]    SCR 263(1). 

4. The plaintiff contends that he was successful on the argument to amend his statement of claim.  He says that the application to amend was opposed by the Commonwealth.  In these circumstances he submits that he is entitled to his costs.  I do not accept this submission. 

5. In Raedel & Raedel v Shahin (No. 2)[3] Hinton J considered applications by both parties to proceedings in this Court for costs orders in relation to an application for the reinstatement of lapsed appeals.  Those applications for reinstatement were successful.  The appellants contended that in view of their success on the applications for reinstatement there was no reason to depart from the general rule that costs follow the event.  In addition, they submitted they should have their costs as the respondent’s opposition to the applications was never likely to succeed.  The respondent contended that the applications were filed because of the appellants’ inaction.  Nothing done by the respondent contributed to this.  The appellants had no option but to seek an indulgence from the Court.  In addition, it was submitted that the respondent’s opposition to the applications was reasonable.  Hinton J ordered the appellants to pay the respondent’s costs.   His Honour held that through no fault of the respondent the appellants were required to seek an indulgence from the Court due to their failure to comply with the Rules of Court.  His Honour was not persuaded that the respondent’s opposition to the applications disentitled him to an award of costs.  Even though the respondent unsuccessfully opposed the applications, Hinton J held it would be inappropriate to order that the parties bear their own costs.  The time and expense incurred by the parties as a consequence of the applications could have been avoided had the appellants complied with the Rules or applied at the appropriate time for an extension of time. 

   [3] [2018] SASC 119.

6. In my view, similar considerations apply to this case. The plaintiff’s plea invoking s 48 failed to accurately reflect the contents of Dr Raeside’s report. That was the reason for the application to amend. But for that deficiency in pleading, there is no reason to think the Commonwealth would have brought the SCR 211 application. I see no reason to depart from the approach enshrined in SCR 263(2)(a). Like Hinton J in Raedel, I do not consider that the Commonwealth should be deprived of its costs of the application to amend because its opposition to the amendment, in the circumstances where it had already brought the application pursuant to SCR 211, was unsuccessful. The plaintiff was seeking an indulgence. The application to amend could have been brought earlier. It did not have to await the SCR 211 application brought by the Commonwealth. SCR 263(2)(a) warrants an order for the payment by the plaintiff of the Commonwealth’s costs of the application to amend. As the SCR 211 application would have been unnecessary but for the defect in the plaintiff’s s 48 plea I consider it should also pay the Commonwealth’s costs of that application.

7. The Commonwealth is entitled to an order that the plaintiff pay its costs of the application to amend the second statement of claim and the Commonwealth’s application pursuant to SCR 211.  That leaves the issue of whether the Commonwealth should be deprived of part of its costs of that application, being the costs of the supporting affidavits of Mr Prince and Ms Shriner. 

8. I reject the plaintiff’s submission that the costs of the two affidavits of Ms Shriner should be excluded from the costs order in favour of the plaintiff on the SCR 211 application. Having considered the contents of those affidavits I am satisfied they are relevant. The real issue is the Prince affidavit. This is a lengthy affidavit of some 160 paragraphs and 51 pages without exhibits. The exhibits run to two and a half volumes and 501 pages. The plaintiff submits that overwhelmingly the contents of the affidavit are directed to putting before the Court evidence that the plaintiff was aware that he suffered a psychiatric condition prior to reading Dr Raeside’s report. He submits that this evidentiary material is misconceived because for the purpose of s 48 of the LTA the plaintiff relies upon the ascertainment by him of the fact that Dr Raeside considered in his expert opinion that the plaintiff suffered from the psychiatric conditions now pleaded in the third statement of claim. The plaintiff submits that whether he ascertained that he suffered from a psychiatric condition at an earlier time is irrelevant. He contends that the overwhelming majority of the Prince affidavit accordingly is irrelevant as it is concerned with the ascertainment of this latter fact rather than the former fact. It is the former fact which is relevant, not the latter fact.

9. For the purpose of considering this submission by the plaintiff I have read the Prince affidavit. 

10. A consideration of the Prince affidavit indicates that most of the contents of the affidavit is relevant to the SCR 211 application and is not infected by any misunderstanding or misconception of the basis of the plaintiff’s plea in paragraphs 47 and 48 of the second statement of claim that he ascertained a material fact for the first time on or about 6 May 2011 by reading a medical report of Dr Raeside of 30 April 2011 that Dr Raeside was of the opinion that the plaintiff suffered adjustment disorder with a depressed mood; the plaintiff was likely to require ongoing treatment by way of in-depth psychological therapy and the plaintiff was likely to suffer permanent psychiatric disability and impairment which would impact in his occupational and social functioning to a significant extent.

11. Much of the Prince affidavit is directed to setting out the background to the SCR 211 application and setting out matters which might be relevant to consideration of that application, for example, the procedural history of the matter and the likely cost and length of a trial.  The affidavit also sets out the material upon which the Commonwealth relied on the SCR 211 application to establish that the plaintiff had not ascertained the particular facts pleaded in the second statement of claim.  The exception to relevance I consider to be set out in paragraphs 141 to 146 of the Prince affidavit. 

12. Paragraph 141 of the Prince affidavit canvasses post-detention records relevant to diagnosis of the plaintiff’s psychiatric conditions.  In my view this is irrelevant to the issue that was to be agitated on the SCR 211 application as it seeks to establish that prior to reading the Raeside report the plaintiff was aware that he was suffering from various psychiatric conditions.

13. Paragraph 142 is directed to the existence of post-detention records relevant to the need for therapy or prognosis.  In my view the matters set out in paragraph 142 are infected by the same defect as applies to paragraph 141.

14. Paragraphs 143 to 145 concern the plaintiff’s legal representation. Likewise, paragraph 146 is concerned with evidence that the plaintiff was aware of legal rights and was prepared to exercise them at an earlier time. In my view this material is irrelevant to the question of whether the plaintiff ascertained the pleaded material fact for the purpose of the SCR 211 application. It could only be relevant to question of the exercise of the Court’s discretion pursuant to s 48 of the LTA. I do not understand that to have been the basis upon which the SCR 211 application was brought. That is reinforced by the terms of paragraph seven and 157 of the Prince affidavit.

15. Much of this material in the Prince affidavit is exhibited to the affidavit.  It is difficult to be precise but I would estimate that half the exhibits relate to the contents of the Prince affidavit to which I have just referred.  For the same reasons that I consider the contents of these parts of the Prince affidavit to be irrelevant, so is the material exhibited to it in support.  Doing the best I can I would estimate that this constitutes about half the affidavit material.  In the circumstances I would exclude from the order that the plaintiff pay the Commonwealth’s costs of the SCR 211 application half the cost of the Prince affidavit.

    Conclusion

16. I would order that the plaintiff pay the Commonwealth its costs thrown away by reason of the amendments to the plaintiff’s second statement of claim permitted by the orders of this Court on 12 April 2019; the costs of and incidental to the plaintiff’s application to amend the second statement of claim; and the Commonwealth’s application pursuant to SCR 211 save and except half the costs of the supporting affidavit of Rodger James Prince affirmed 30 August 2018.