Karamanlidis v Nominal Defendant & Motor Accident Commission (No 2) - [2009] SADC 118

District Court of South Australia
(Civil)
KARAMANLIDIS v NOMINAL DEFENDANT & MOTOR ACCIDENT COMMISSION (No 2)
[2009] SADC 118
Judgment of His Honour Judge Beazley (ex tempore)
23 October 2009
PROCEDURE - COSTS
Costs - Motor vehicle accident - Plaintiff successful in proceedings against both defendants - finding that plaintiff unimpressive witness on issue of damages - procedural irregularities involving two sets of proceedings - Plaintiff seeks order for costs of action on party and party basis - Defendants submit that the plaintiff ought receive only a proportion of his costs to reflect procedural irregularities and issues upon which the plaintiff failed, or alternatively costs on the Magistrates Court scale to reflect the fact that eventual award less than half the jurisdiction limit of the Magistrates Court - Plaintiff entitled to costs of action on party and party basis on the District Court scale.
District Court Act 1991 s 42(1), referred to.
Cretazzo v Lombardi (1975) 13 SASR 4; Duke Group Ltd (in Liquidation) v Pilmer (No 8) (1998) SASC 6699; Robinson v Australian Association of Social Workers Limited (2000) 210 LSJS 73; Burnie Port Corporation Pty Ltd v Bank of Western Australia (No 3) (2003) 12 Tas LR 325; Ewins v BHP Billiton Ltd (No 2) [2005] SASC 164, applied.

KARAMANLIDIS v NOMINAL DEFENDANT & MOTOR ACCIDENT COMMISSION (No 2)
[2009] SADC 118
Introduction

On 16 October 2009 I published my reasons with respect to the issues of liability and quantum, and entered judgment for the plaintiff, in the sum of $38,804.64.
I reserved the question of costs.
The plaintiff now seeks an order that the defendants pay to him the costs of the action on a party/party basis. Mr Warren, who appeared as counsel for the plaintiff, acknowledged that there were some unusual procedural matters which might be best considered by a taxing Master in the event that the quantum of costs could not be agreed. He identified those as:
·The fact that two sets of proceedings were issued, and that this may arguably have increased the initial costs of the defendants, and
·That potential conflicts for the plaintiff’s initial solicitors became apparent at an early stage, because they could not act for both the plaintiff and his wife.
Additional evidentiary material
The defendants tendered by consent an affidavit sworn by John Michael Ward on 22 October 2009. Mr Ward is the solicitor representing the Nominal Defendant. In that detailed affidavit, he deposed to the history of the action, and set out in a chronological form, the relevant events since the date of the accident on 16 September 2003.
Defendants submissions
In their respective submissions, Mr Austin and Mr James counsel for the defendants. submitted that no general order for party/party costs ought to be made. Their submissions were wide ranging however can be distilled to four principal arguments.
·The first ground related to the fact that two sets of proceedings were issued. The first set of proceedings was issued by the plaintiff and his wife against the Nominal Defendant. The second set was brought by the plaintiff against his wife. The defendants submitted that the issuing of two sets of proceedings had adverse costs consequences for both defendants and their respective conduct of the action thereafter.
The first set of proceedings were issued in this Court on 23 February 2006 by the plaintiff and his wife as plaintiffs against the Nominal Defendant as defendant. It was an odd decision by the plaintiff’s wife to be included as a joint plaintiff. They were issued in this Court despite the fact that on 18 June 2005, namely 8 months earlier, Fiona Karamanlidis had, in fact, compromised her claim against the Nominal Defendant On that latter date she had executed a release and discharge document for a disclosed sum of money for damages and costs arising out of the subject accident. Given that history no proceedings ought to have been instituted on behalf of Mrs Karamanlidis. One set of proceedings ought to have been issued by the plaintiff, against the Nominal Defendant and Mrs Karamanlidis. Although neither counsel addressed the issue, it seems clear that the error is one that principally should be sheeted home to Fiona Karamanlidis rather than the plaintiff. The plaintiff at all times, particularly having regard to my findings, was entitled to issue proceedings against the Nominal Defendant on 23 February 2006. He did so presumably on the basis that he believed that the Nominal Defendant was solely responsible.
Separately and clearly in consequence both of the complaints from the solicitors representing the Nominal Defendant, and presumably facing the risk that his wife may be found solely liable, the plaintiff, one day before the time for commencing proceedings lapsed on 15 September 2006, instituted proceedings against Fiona Karamanlidis as defendant in the Elizabeth Magistrates Court. At this time there were thus two subsisting sets of proceedings in the name of the plaintiff. The Motor Accident Commission made application to strike out the proceedings against Mrs Karamanlidis. Although the Commission was unsuccessful in that application, orders for costs in some form were made in its favour in the Elizabeth Magistrates Court. It is not clear from the affidavit of Mr Ward as to what matters were argued in the Magistrates Court nor what matters were considered by the Magistrate in making such an order for costs.
These matters can be considered by the taxing Master, in the event that an agreement is not reached.
In my opinion, at best the plaintiff could only be entitled to one set of costs on a party/party basis. He is not entitled to the costs of both sets of proceedings at least until the order for consolidation of the proceedings was made on 26 July 2007.
Ultimately by no later than 11 October 2007 the pleadings were consolidated. As and from the time of consolidation there was, in effect, one set of proceedings, albeit that both of the defendants’ solicitors had commenced to act separately for their respective clients.
In his affidavit Mr Ward deposed to a practice amongst the defendants to the effect that generally there would not be a separate representation whenever claims are made against both the Motor Accident Commission and the Nominal Defendant. I accept that there is such a general practice, and that it is designed to ensure that costs are saved for the respective defendant’s statutory funds.
The facts of this case were however somewhat unusual and would have presented significant practical difficulties in the event that there were no separate representation. This was because of the position of the plaintiff’s wife as a defendant. There was always a risk, that she would attempt to blame somebody else for the accident and that there would accordingly be a real conflict between the Motor Accident Commission and the Nominal Defendant. As it transpired there was such a conflict with Mrs Karamanlidis asserting that the cause of the accident was the unidentified driver represented by the Nominal Defendant, and that the Nominal Defendant ought be solely responsible.
In paragraph 16 of his affidavit, Mr Ward referred to a meeting having taken place between the defendant on 4 June 2008, after the orders for consolidation were made. Notwithstanding the asserted practice, a decision was made by the defendants that each should be separately represented at the trial of the action. Mr James, counsel for the Motor Accident Commission, explained that this occurred because the defendants had already committed themselves in the action, because they had already been separately represented. In my opinion there was an obvious conflict between the two defendants, which inevitably would have led to separate representation. The decision made by them on 4 June 2008 was entirely justified and as I say it was inevitable that they be separately represented.
Alternatively the defendants submitted that additional costs were incurred by them in consequence of the plaintiff’s initial solicitor’s conflict. I cannot envisage that any such losses could be sheeted home to the plaintiff rather than the plaintiff’s wife. However that issue can be left to the taxing Master.
In my opinion save for that issue of the costs flowing from the apparent conflict, thereafter the defendants were committed to separate representation, and thus as and from the date of the orders for consolidation, no blame for any additional expense to the defendants can be sheeted to the plaintiff in that respect.
In summary on this first ground, subject to the matters which follow, the costs of the plaintiff up to the date of consolidation should be determined by the taxing Master so as to ensure that the plaintiff only receives one set of costs up to the date of consolidation. Insofar as there were any additional costs incurred by the defendants, to the date of consolidation then that is a matter that can be offset by the taxing Master. I repeat that do not immediately see that there could be any such costs. Any difficulty was caused by Mrs Karamanlidis rather than the plaintiff. As I say it was inevitable that the defendants would be separately represented.
·The second ground raised by the defendants, is based upon my finding that the plaintiff was an unsatisfactory witness in many respects and that in consequence thereof, there was a need for the defendants to incur the cost of, interalia, a surveillance film. That film was shown to the various doctors who had to re-assess their opinions in the light thereof. It was submitted that because of the conduct of the plaintiff, and the impact of the film upon his credit, special orders for costs ought to be made.
It was submitted that justice would be done if the plaintiff received only a proportion of his costs. Alternatively the defendants received only a proportion of his costs. Alternatively the defendants should have the costs on those issues of credit upon which they succeeded.
There is no doubt, of course, that the court has a very wide discretion on the question of costs. But the authorities are quite clear that this discretion must be exercised judicially.
In Cretazzo v Lombardi (1975) 13 SASR 4 at para.11 Bray CJ said:
‘The general discretion is absolute and unfettered except it must be exercised judicially, not arbitrarily or capriciously and it cannot be exercised on grounds unconnected with the litigation.’
That dicta has been adopted in various jurisdictions.
In Hughes v Western Australian Cricket Association in 1986 Toohey J said:
‘A successful party who has failed on certain issues may not only be deprived of the cost of those issues but may be ordered as well to pay the other party’s costs of them. In that sense “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.’
In Cretazzo’s case, Jacobs J expanded somewhat upon the remarks of the Chief Justice, saying:
“Trials occur daily in which the party who in the end is wholly or substantially successful nevertheless fails along the way on particular issues of fact or law. The ultimate end of justice may not be served, if a party is dissuaded, by the risk of costs, from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case including, in particular, the severability of the issues and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes, ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded based merely upon his success in those particular issues.’
That latter dicta was adopted and applied by Mullighan J in Duke Group (In Liquidation) v Pilmer (No 8) (1998) SASC 6699; in Robinson v Australian Association of Social Workers Limited (2000) SASC 239, and in Burnie Port Corporation v Bank of Western Australia (No 3) (2003) 12 TAS LR 325.
In my opinion, the facts of this case reflect the very sort of case which Jacobs J had in contemplation. The reason I say that is that in most cases involving damages for personal injuries, questions of credit arise which questions ultimately affect the quantum of damages. The Rules of Court provide a mechanism by which parties may file offers reflecting what they say is the true damage sustained by a plaintiff.
In my Reasons for Judgment I referred to the detailed cross-examination by the respective counsel for the defendants. The fact remains that their success on those issues could have been reflected in the filing of an appropriate offer. In the proper exercise of my discretion I am of the opinion that the issues raised by the defendants ought not be reflected in an award of costs in favour of the defendants nor in any reduced order in favour of the plaintiff.
·The third and fourth grounds relate to the fact that the judgment sum was for less than half the jurisdictional limit of the Magistrates Court. I accept, notwithstanding the provisions of s42 of the District Court Act, that there is a discretion to award costs on the lesser Magistrates Court scale. The defendants submitted that not only did the judgment sum total less than half the jurisdictional limit, but as the chronology makes clear, various offers were made by the defendants from time to time. One of the offers totalled $30,000 however was inclusive of costs. It was not suggested by either counsel that such an offer was an adequate sum in the event. In my opinion, such an argument would inevitably fail in light of the dicta of the Chief Justice in the case of Ewins v BHP Billiton No.2 (2005) SASC 164. His Honour noted in that case that there was a procedure for filing an offer and that procedure was not employed by the defendants. In any event the series of offers could not be said to be adequate in any sense.
The question which remains is whether because the judgment sum represents less than half the jurisdictional limit of the Magistrates Court, I ought to make an order for costs on the lower scale of the Magistrates Court. In many cases I would have little hesitation in making such an order especially, as here, when one set of the proceedings was commenced in the Magistrates Court. However, in the subject case, very serious allegations were made against the plaintiff. These allegations included a pleading effectively that he had fraudulently claimed that he was in the vehicle at the time of the collision. I make it clear that I do not criticise either defendant for that pleading. The allegation was properly pleaded and was based upon the deposition of two independent witnesses at the time. However, in light of those serious allegations, it was a proper matter to be dealt with by this Court rather than the Magistrates Court.
Accordingly the costs to be awarded to the plaintiff will be on this Court’s scale of costs rather than that in the Magistrates’ Court.
Conclusion
For the above reasons I am of the opinion, notwithstanding, the forceful submissions of the defendants, that the plaintiff ought generally receive the costs of action on a party/party basis. I repeat that up until the orders were made on 26 July 2007 for the consolidation of the two sets of proceedings, the taxing Master must ensure that the plaintiff only receives one set of costs. The taxing Master must also determine whether any additional costs borne by the defendants, if any, up to the date of consolidation were caused by any conflict problems initiated by the plaintiff, as opposed to his wife, and whether they ought properly be reflected in any taxation.
I give liberty to the parties to return to me if a problem arises in consequence of these orders upon a taxation.