Hudspeth v Scholastic Cleaning (Ruling No. 1)

[2010] VSC 495

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE		Not Restricted

COMMON LAW DIVISION

S CI  2009 9222

LINDA HUDSPETH	Plaintiff
v
SCHOLASTIC CLEANING & CONSULTANCY SERVICES PTY LTD	First Defendant
and
THE ROMAN CATHOLIC TRUST CORPORATION FOR ARCHDIOCESE OF MELBOURNE	Second Defendant

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JUDGE:	WILLIAMS J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 October 2010
DATE OF JUDGMENT:	29 October 2010
CASE MAY BE CITED AS:	Hudspeth v Scholastic Cleaning & Ors (Ruling No. 1)
MEDIUM NEUTRAL CITATION:	[2010] VSC 495

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PRACTICE & PROCEDURE – Costs -Adjournment on first day of trial –Amendment of statement of claim – Separate proceedings in County Court - Costs on solicitor and client basis – Application for order for costs against plaintiff’s solicitors.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J B Richards SC with Mr A D B Ingram	Clark Toop & Taylor
For the First Defendant	Mr W R Middleton SC with Ms J M Forbes	Minter Ellison
For the Second Defendant	Mr T J Casey QC with Mr D Masel	Wotton & Kearney Insurance Lawyers
For the Victorian WorkCover Authority	Mr A J Moulds	Russell Kennedy

HER HONOUR:

1. The trial of this proceeding was adjourned on 18 October 2010. Ms Hudspeth, the plaintiff was ordered to pay the defendants’ costs of the adjournment and costs thrown away on a solicitor and client basis.  The first defendant, ‘Scholastic Cleaning’, made an application for an order that those costs be paid by Ms Hudspeth’s solicitors; I refused that application.  These are my reasons for making the costs orders and refusing to order that they be paid by Ms Hudspeth’s solicitors.

The adjournment application

1. Ms Hudspeth commenced this proceeding by a writ filed on 24 September 2009, claiming damages for injury to her lumbar spine and left hip and consequential psychological injury when she slipped and fell at work on 27 April 2005.  She was a cleaner at a Roman Catholic regional college and was employed by Scholastic Cleaning.  Ms Hudspeth worked on premises occupied by the second defendant, ‘the Roman Catholic Trust’.

1. Almost two months earlier, on 26 June 2009, the solicitors who issued this action had issued proceedings on Ms Hudspeth’s behalf in the County Court.  In the County Court, Ms Hudspeth claimed damages for injuries which included the aggravation of injury to her lumbar spine.  She alleged that she had sustained them when an automatic door closed on her foot at Fountain Gate Shopping Centre in December 2007.  I am informed that the County Court proceeding is due to be heard in late November this year.

1. Senior counsel for the Roman Catholic Trust described the background to his instructors becoming aware of the County Court proceeding.  He told the Court that, on 19 June 2010, Ms Hudspeth had answered on oath an interrogatory from his client enquiring as to whether, after 2005, she had suffered any injury to any body part injured in the 2005 workplace incident.  She had sworn in response that she had suffered no further spinal injury and then took an objection. Further and better answers to the interrogatory were sought.  On 18 September 2010, Ms Hudspeth gave an answer referring to the Fountain Gate incident, saying that a glass door had closed on her right foot, twisting her ankle and that she had slipped with resulting right shoulder pain.  She said nothing of aggravation of her spinal condition.  Subsequently, the solicitors discovered the County Court proceeding where the description of spinal injury in the pleadings seemed inconsistent with the answer to the interrogatory in this proceeding.  That discovery led to the issuing of subpoenas to the doctors who had treated her for the 2007 injury.

1. On the first day of the trial in this Court, a preliminary issue arose as to whether those subpoenaed reports were privileged, notwithstanding that they had been produced in the County Court proceeding.  The issue was resolved. 

1. Counsel for Ms Hudspeth then raised the prospect of the County Court proceeding being uplifted to be heard together with the action in the Supreme Court.  During submissions, senior counsel for Ms Hudspeth submitted that the proceeding in this Court would be a difficult one for her unless both matters were heard together and she could put her allegations about the cause of her injuries in the alternative in the one proceeding. 

1. Ms Hudspeth also subsequently sought leave to further amend the statement of claim in this proceeding to include claims relating to the alleged injuries to her right knee, foot and ankle and right shoulder and in respect of the aggravation to degenerative changes in her cervical spine as a consequence of the incident at Fountain Gate.  They were to be added on the basis that the additional injuries resulted from the incapacity caused by the 2005 injury.  She then sought an adjournment to enable her to take all necessary steps.

1. Senior counsel for Ms Hudspeth submitted that those representing her had only recently realised by that it would be appropriate for the claims to be heard together and for Ms Hudspeth’s claim in this proceeding to be reformulated to include claims arising out of the Fountain Gate incident.

1. The matter was adjourned to allow Ms Hudspeth to prepare the case for trial and to make any necessary amendment to the statement of claim and to give the defendants time to respond to any additional allegations.  

Costs

1. Both defendants submitted that costs thrown away by reason of the adjournment should be awarded on an indemnity basis.  Scholastic Cleaning sought an order that they be paid by Ms Hudspeth’s solicitors.

1. The defendants argued that the adjournment was necessary because Ms Hudspeth had changed her mind about the way in which the proceeding should be run, rather than because there had been any accidental slip or any matter arising through no fault on her part.

1. Counsel for Ms Hudspeth argued that perfection was not the standard to be achieved in the conduct of litigation; all concerned had been using their best endeavours and the proposed method for dealing with the matters together was in the interests of justice and efficient.  Counsel submitted that the Court should compare the resources of the parties and take into account that this litigation arose out of an industrial accident when deciding whether to make the costs orders against Ms Hudspeth.  Counsel reminded the Court of the limits imposed in relation to the recovery of costs by the solicitors for workers under the statutory scheme imposed by the Accident Compensation Act1985.  

1. Ms Hudspeth’s solicitors were invited to obtain separate representation in relation to the application made against them.  They declined, but subsequently sought and were given the opportunity to make submissions.

1. When the matter resumed, counsel for Ms Hudspeth informed the Court that she wished any costs order against her, rather than her solicitors.  Counsel explained her willingness to shoulder the costs burden by referring to the continuing importance of her relationship with her solicitors in the context of the ‘no win, no fee’ basis upon which her case was being conducted.

1. Section 27 of the Supreme Court Act 1986 and r 63.02 of the Supreme Court (General Civil Procedure) Rules 2005 give the Court a wide discretion to award costs in a proceeding.  It is a general rule that costs only depart from the ordinary party and party basis where there are particular or special circumstances.  Those circumstance include where the party against whom costs are sought has behaved unmeritoriously, deliberately, highhandedly or otherwise improperly, so as to deserve the Court’s disapproval and to prevent the other party from being out of pocket.[1] 

   [1]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 223, 232-233 (Sheppard J); see Williams, Civil Procedure Victoria [63.02.180].

Conclusions

1. I am satisfied that this is a case warranting an order for costs on a solicitor and client basis. The same solicitors were engaged to represent Ms Hudspeth in each court.  The relevant materials were available to them, they knew of the allegations in each proceeding.  The issue as to the answer to the interrogatory about subsequent injury ought to have alerted the plaintiff and her advisers to the potential causation issue with regard to the spinal injuries at an earlier stage.  An interlocutory application could have been made earlier, to avoid the expense to the parties and the waste of the Court’s resources as a consequence of an adjournment on the first day of a trial.

1. In the circumstances, Ms Hudspeth’s conduct warranted an order for costs showing the Court’s disapproval of the fact that the trial was not ready to proceed because a significant alteration to the pleading of the claim was required and an adjournment was then necessary to enable the parties to prepare for and meet that altered claim.

1. In reaching this conclusion, I have taken into account that Ms Hudspeth is engaged in industrial accident litigation against her employer and the occupier of the premises where she was injured.  I note that I do have regard to those matters despite there being no other evidence as to her financial position or other relevant matter before the Court.

1. Although the Court has power under r 63.23 to award costs against a third party such as Ms Hudspeth’s solicitors, I am not persuaded that the costs should be paid by them in this instance.  There is no evidence to satisfy me that any forensic or tactical decision relating to the commencement and continuation of proceedings in two courts was made without Ms Hudspeth’s involvement or knowledge.  Even though it would appear that this is a case in which the merit of running the actions in tandem may have only just occurred to those representing her, despite the fact that the same solicitors are acting in each proceeding, I take into account Ms Hudspeth’s wish that no order be made against the firm which is conducting the litigation for her on the basis of a ‘no win, no fee’ arrangement. 

1. For these reasons, the defendants’ costs of and thrown away by reason of the adjournment are to be paid by Ms Hudspeth and calculated on a solicitor and client basis.