Johnson v The State of South Australia (No 2)

[2019] SADC 47

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

JOHNSON v THE STATE OF SOUTH AUSTRALIA (No 2)

[2019] SADC 47

Judgment of His Honour Judge Tilmouth

26 April 2019

INTEREST - RECOVERABILITY OF INTEREST

Whilst ordinarily an award of interest runs from the date proceedings were issued, it was appropriate in this case to calculate interest from when the cause of action arose, because the majority of damages arose at that time.  A lump sum award of interest of $3,000 is made for the period beginning on 14 July 2014 to the present at 4 percent per annum.

District Court Act 1991 (SA) s 39(1), s 39(3), s 39(4)(b); Fire and All Risks Insurance Co Ltd v Callinan (1978) 140 CLR 427; State Government Insurance Office (Queensland) v Biemann (1983) 154 CLR 539, referred to.
Queen Elizabeth Hospital v Curtis (2008) 102 SASR 534; Wheeler v Page (1982) 31 SASR 1; MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657, applied.

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES

As the plaintiff failed to achieve judgment of $60,000 he is not entitled to an award for costs, however the discretion to allow costs in light of the complexity of the issues and because he was unrepresented, renders it is appropriate to make an order for costs in his favour. 

District Court Act 1991 (SA) s 42(2)(b); District Court Civil Rules 2006 r 263(2)(g); White v South Australia (2010) 106 SASR 521; Ramsey v Annelsey College (No 2) [2013] SASC 145; Johnson v State of South Australia [2019] SADC 35, referred to.
District Court Civil Rules r 263(2); Burton v Litton Business Systems Pty Ltd and Data Print (Aust) Pty Ltd (1977) 16 SASR 162, applied.

JOHNSON v THE STATE OF SOUTH AUSTRALIA (No 2)
[2019] SADC 47

The issues

1. On 27 March 2019 the Court indicated it was prepared to enter judgment in favour of the plaintiff in the sum of $24,000, made up of general and aggravated damages of $16,000 plus exemplary damages of $8,000.[1]  The proposed award flows from an unlawful arrest of Mr Johnson at about 10.30 am on Monday 14 July 2014 at Whyalla, during which he was twice threatened with capsicum spray and detained in custody for a period of around three hours.

   [1]    Johnson v State of South Australia [2019] SADC 35, [153].

2. The matter returns to Court to consider the issues of interest and costs, and to enter final judgment.

   Pre-judgment interest

3. The power to award interest derives from s 39 of the District Court Act 1991 (SA). Section 39(1) provides:

   39—Pre-judgment interest

   (1)    Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section.

4. An award of interest is not made to compensate for damage done, but rather to recompense a successful plaintiff for being kept out of the use of money for which he would otherwise have the use and benefit of: Queen Elizabeth Hospital v Curtis.[2]  As a matter of practice the rate of simple interest is 4 percent per annum: Wheeler v Page,[3] MBP (SA) Pty Ltd v Gogic.[4]

   [2] (2008) 102 SASR 534, [87].

   [3] (1982) 31 SASR 1.

   [4] (1991) 171 CLR 657.

5. Ordinarily the period for which interest runs is from the date of the issuing of proceedings, which was in this case on 5 December 2014: Queen Elizabeth Hospital v Curtis.[5]  Nevertheless the court retains a discretion to award interest for a longer or indeed for the whole pre-judgment period, when fairness dictates that a plaintiff will not be ‘fully compensated for being kept out of that part of the damages which relates to detriments incurred before the issue of the writ …’: Wheeler v Page.[6]  This approach is consistent with what was stated by the High Court in Fire and All Risks Insurance Co Ltd v Callinan,[7] and State Government Insurance Office (Queensland) v Biemann,[8] to the effect that a proper exercise of discretion must necessarily involve paying due regard to the time of manifestation and the duration of the various detriments in question.

   [5] (2008) 102 SASR 534, [91].

   [6] (1982) 31 SASR 1, 5.

   [7] (1978) 140 CLR 427, 433.

   [8] (1983) 154 CLR 539, 545-546.

6. On the proven facts of the case, the entitlement to the award of damages arose for the greater part instantaneously upon arrest and for the period of up to three hours whilst Mr Johnson was kept at the Whyalla Police Station before an offer to release him on bail was made.  As pointed out in the principal judgment ‘a significant component in awards for such damages are usually made on account of the initial shock of arrest’: Johnson v The State of South Australia.[9]

   [9] [2019] SADC 35, [137].

7. An award for interest on exemplary damage is however excluded by s 39(4)(b) of the District Court Act. Section 39(3) of the District Court Act provides for a further discretion to award a lump sum of interest ‘without proceeding to calculate interest’. In the present case by exercising this discretion, it is proposed to allow interest for the period from 14 July 2014 to the present time, that is to say for a period of about 4 years and 9 months, on the principal sum of $16,000, in the lump sum of $3,000, pursuant to s 39(3) of the District Court Act.

   Costs

8. So far as costs are concerned, although as a general rule costs are awarded in the unfettered discretion of the court pursuant to s 42(2)(b) of the District Court Act, the Court is precluded from making an order where ‘the action might have been brought in the Magistrates Court’, ‘… unless the Court is of the opinion that it is just in the circumstances of the case that the plaintiff should recover the whole or part of the costs of the action’.

9. Rule 263(2)(g) of the District Court Civil Rules 2006 (SA) provides:

   (g)in an action founded on a claim for damages or any other monetary sum (other than a claim for defamation), general costs of action are not to be awarded in favour of the successful plaintiff unless the amount awarded exceeds $60,000.

   The purpose of this regime is to encourage plaintiffs to issue in the lower court in which the action is otherwise properly entertained: Burton v Litton Business Systems Pty Ltd and Data Print (Aust) Pty Ltd.[10] 

   [10] (1977) 16 SASR 162, 171.

10. Despite this r 263(2) of the District Court Civil Rules subjects this limitation ‘to the Court’s order to the contrary’, thus extending a further discretion to make an order for costs despite the failure to exceed the prescribed jurisdictional limit, where the subject matter of the litigation is complex, or in the public interest as was the case in White v South Australia,[11] and Ramsey v Annesley College (No 2),[12] for example.

    [11] (2010) 106 SASR 521, [481].

    [12] [2013] SASC 145, [33].

11. In this particular case the issues were quite complex and far from straightforward.  Mr Johnson was unrepresented throughout and he cited cases in respect of damages which might yield him much more than the minimum of $60,000, had they applied.  These were distinguished in the principal judgment: Johnson v The State of South Australia.[13]

    [13] [2019] SADC 35, [136]-[137].

12. The circumstances are such that it is in the interests of justice to make an award in favour of Mr Johnson for costs, because of the complexity of the matter and because he was unrepresented and therefore unlikely to fully appreciate the consequences of bringing or maintaining proceedings in this court.  Such an order is likely in any event to impinge very little in monetary terms on the defendant.

    Final orders

13. The formal orders of the court are therefore:

    1Judgment is entered in favour of Mr Johnson against the State of South Australia in the sum of $27,000, which includes a lump sum for interest of $3,000.

    2The plaintiff is to have an order against the State of South Australia for his costs and disbursements to be agreed or taxed on a party/party basis.