Li v Toyota (Costs Ruling)
[2012] VSC 196
•14 May 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 609 2012
| JAMES LI | Plaintiff |
| v | |
| TOYOTA MOTOR CORPORATION AUSTRALIA LTD | Defendant |
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JUDGE: | J FORREST J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 May 2012 | |
DATE OF RULING: | 14 May 2012 | |
CASE MAY BE CITED AS: | Li v Toyota (Costs Ruling) | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 196 | Amended 15 May 2012. |
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COSTS – Costs of and incidental to the discharge of a jury – Referral under Rule 63.51 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Costs “of and incidental to the discharge of the jury” – Costs consequential upon the discharge of the jury – Accident Compensation Act 1985 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A D B Ingram | Clark Toop & Taylor |
| For the Defendant | Ms R N Annesley | Minter Ellison |
HIS HONOUR:
Introduction
This application raises the question as to what costs are payable by Toyota to Mr Li as a result of my orders discharging the jury on Friday 1 October 2010 and requiring Toyota to pay the “costs of and incidental” to the discharge of the jury.[1]
[1]“the costs order”.
Subsequent to the termination of that trial, the case proceeded before Beach J as a cause. His Honour gave judgment on Thursday 14 October 2010.[2] Mr Li was successful, but by reason of the provisions of the Accident Compensation Act 1985 (Vic)[3] obtained no order as to costs.
[2][2010] VSC 458.
[3]“the Act”.
The Judicial Registrar has now referred the question of the appropriate allowance to me pursuant to r 63.51 of the Supreme Court (General Civil procedure) Rules 2005[4] for directions.
[4]“SCR”.
Factual Background
The trial
Mr Li’s claim against Toyota arose out of injuries sustained by him in 2005 as a result of his employment with Toyota. The trial commenced on 23 September and was in its seventh day on 1 October when the jury was discharged.
The evidence concluded on 29 September. Counsel for Toyota addressed the jury on 30 September and after argument on 1 October the jury was discharged.
The reasons for the discharge of the jury are set out in my ruling of 1 October 2010[5] and essentially turned upon irrelevant references in counsel’s address to Mr Li’s entitlement to workers’ compensation payments.
[5][2010] VSC 448.
Having determined to discharge the jury I made the following costs orders:
(2)The defendant pay the plaintiff’s costs of and incidental to the discharge of the jury.
(3)The matter be referred for mention to Beach J for hearing as a cause on 4 October 2010 at 2.15pm (emphasis added).
It was not argued on that occasion that the provisions of the Act[6] prevented the making of such orders. On this application, it was accepted by Toyota that those provisions only apply when the final outcome of the proceeding is known.[7]
[6]Sections 134AB(27), (28) and (28A).
[7]O’Neill v T D Williamson (No 2) [2008] VSC 430 [7], [10], [14] and [24]; Gianakos v SPC Ardmona Operations Ltd [2011] VSCA 121 [126].
The retrial
On 4 October 2011, a directions hearing before Beach J was held and the trial occupied two sitting days: 5 and 7 October 2010.
In his Honour’s reasons for judgment (of 14 October 2010), the following summary of the course of the re-trial was provided:
During the course of the jury trial, various exhibits were tendered and some reports were read. It was agreed between the parties that the reports read and exhibits tendered before the jury would form part of the evidence in the present trial. Similarly, the parties agreed that the transcripts of the evidence of the witnesses called before the jury would stand as evidence of those witnesses in the present trial. Additionally, the parties agreed that the plaintiff would give further viva voce evidence before me and be cross-examined further.
The conduct of the re-trial
Pursuant to the parties' agreement, the evidence given during the jury trial was relied upon by both sides; the reports read to the jury (Dr Cheung and Mr Shimmin) were taken as having been read into evidence; the exhibits before the jury (P1 to P10 and D1 to D7) were re-tendered; the plaintiff gave evidence-in-chief, was cross-examined and re-examined again; and an additional exhibit (D8), a DVD film of the plaintiff taken on 21 April 2009, was tendered.
At the conclusion of the plaintiff's evidence on the re-trial, the defendant sought time to consider whether it would call any further evidence. After a short adjournment, the defendant advised the Court that it did not propose to seek to call any further evidence. However, immediately before the commencement of final addresses on the re-trial the defendant tendered another exhibit (D 9) headed "Agreed Summary Machine/Line Breakdown for the 5A Line". This exhibit set out in summary form the days in November and December 2004 (and 2 days in January 2005) where there had been more than 15 minutes downtime in addition to certain planned breaks.[8]
[8][2010] VSC 458.
His Honour gave judgment on 14 October 2010 in favour of Mr Li, but with a reduction of 25% for contributory negligence. His Honour’s orders were as follows:
1.Judgment for the plaintiff in the sum of $451,516 together with damages in the nature of interest in the further sum of $33,166 making a total $484,682 less $126,731 pursuant to s. 134AB(25) of the Accident Compensation Act [1985], making a total of $357,951 reduced by 25 per cent for contributory negligence, making a total of $268,463.
2. No order as to costs.
There was no order as to costs by reason of the provisions of ss 134AB(27), (28) and (28A) of the Act. In this case, sub-s 28(d) was engaged in that Mr Li recovered less under the judgment than 90% of his statutory offer made under s 134AB(12) of the Act.
It was not contended on this application that Beach J’s order affected Mr Li’s entitlement to costs as provided in the costs order.
The referral by the Judicial Registrar
On 6 February 2012, Mr Li issued a summons for taxation of costs which came on for hearing before the Judicial Registrar on 13 March 2012.
The bill of costs prepared by Mr Li’s solicitors amounts to $119,441.70. It includes a number of items relating to the preparation for the trial as well as all of the trial costs (including counsel’s fees).
Toyota’s objection was expressed as follows:
The entitlement to costs is limited to:
A. The defendant pay the plaintiff’s costs of and incidental to the discharge of the jury.
It sought a preliminary hearing to determine the extent of its costs liability to Mr Li
The Judicial Registrar referred the proceeding pursuant to r 63.51 of the SCR which permits the Costs Court to “refer to a Judge of the Court for directions any question arising on a taxation”.
Submissions
The submissions made on behalf of Mr Li were put in the alternative. In fact, neither submission was consistent with the calculations within the bill of costs filed with the Costs Court.
Counsel argued that Toyota’s conduct resulted in the aborting of the jury trial and then reasoned that if the trial had been heard as a cause it would have occupied approximately three to four days of court time and that Mr Li is entitled to all costs incurred from 29 September onwards in addition to the jury fees paid by him – in fact none were paid by him. Alternatively, it was argued that if I had continued to hear the case as a cause it would have been completed by 1 October and that any costs incurred on 4, 5 and 7 October should be allowed together with an allowance for the trial proceeding by jury rather than as a cause.
Toyota argued that the words “of and incidental to” in the costs order only permitted the costs of the discharge of the jury. It says, accordingly, that the only costs that should be allowed related to those incurred on 1 October 2010 which, on its argument, amount to $10,804. It further argues that the costs of retrial should not be allowed as, if the proceeding had continued before a jury, then the same amount of time (i.e. a further 2 days) would have been occupied and therefore no loss has been occasioned by the discharge.
Analysis
The purpose of the order referring to costs “of and incidental to the discharge of the jury” was to ensure that Mr Li received reimbursement for his costs reasonably connected with the discharge. It is to be distinguished from an order for “costs thrown away” which relates to work done by a party which is demonstrated to be wasted.
I think these two forms of orders operate in different ways where a jury is discharged. The costs order requires the Court to look at what occurred subsequent to the discharge whereas a costs thrown away order requires a court to look at what occurred prior to the discharge and identify what costs, if any, have been wasted - presumably in the light of the re-trial.
In my opinion, both Mr Li’s submissions turn on a false presumption – namely, that any calculation of the costs should be premised upon the matter proceeding (at different points of time) as a cause rather than a jury. I do not understand the contention. Toyota, as it was entitled to, requested a jury trial. It was not suggested at any time during the course of the hearing that it was inappropriate for a jury to determine Mr Li’s claim. The problem with its continuation as a jury trial arose as a result of counsel’s address – not the mode of trial sought by Toyota.
Equally so, Toyota’s restrictive interpretation of the costs order, confining it to merely some of the costs incurred by Mr Li on the day of the discharge, should be rejected. If the costs order had been limited to the costs of the discharge then those words would have been used. There was a purpose behind the use of the word incidental: The Oxford Dictionary defines the word “incidental” as meaning “happening as a result of” – this was the purpose for which it was used in the costs order. The order was intended to cover not only the costs associated directly with the discharge of the jury but also any costs incurred in connection with its discharge.
I do not accept either parties’ argument that the appropriate allowance is to be determined by reference to an alternative hypothetical scenario: for Mr Li it is that of the action proceeding as a cause at particular points of time; for Toyota it is that of the matter proceeding as a jury trial to verdict and then making the appropriate allowance for any differential. I think that the real issue is determining, in practice, what costs are reasonably connected to the discharge.
As Megarry VC said in Re Gibson’s Settlement Trusts[9] of these words “of and incidental to”:
The words seem to me to be words of extension rather than words of restriction. The litigant is to have the costs "of" the proceedings and also the costs "incidental to" the proceedings. This phrase cannot mean that the costs "of" the proceedings are to be included only if they are also "incidental" to them.[10]
[9](1981) 1 Ch 179.
[10]Ibid, 184-185.
Counsel for Toyota relied upon what was said by Pinkus J in Re Hudson; Ex parte Citicorp Australia Ltd where his Honour doubted that the addition of the words “in connection with” to the word “of” often makes much difference.[11] However, his Honour went on to say in the context of the taxation of a bill of costs that:
The taxing officer must consider, with respect to each item in the bill, whether it is reasonably connected with that proceeding or hearing; he should disallow it if no sufficient connection appears.[12]
[11](1986) 11 FCR 141, 144.
[12]Ibid, 144.
It is the same here. If a cost has been incurred by Mr Li which is reasonably connected with the discharge of the jury then he is entitled to recover that cost. Costs incurred in the adducing of evidence in the course of the trial are not connected to the discharge – that evidence was, sensibly, adopted in the course of the hearing before Beach J.[13] However, the discharge of the jury did mean that further costs were incurred in two respects associated with the discharge of the jury. First, in relation to the application for discharge of the jury at the trial and second, the extra work in terms of addressing issues and adducing evidence on the re-trial. In my opinion, the costs order means that Mr Li is entitled to his costs of the trial and the re-trial as now set out.
[13]Extracted at [9] above.
From my perusal of the transcript, much of what occurred on the morning of 30 September was directed to the finalisation of counsel’s addresses and matters which could or could not be put to the jury. The afternoon was taken up with the address of counsel for Toyota. The address of counsel for Toyota commenced at approximately 2.30pm on 30 September and concluded at 4.15pm on that day. The application to discharge the jury was made on 1 October and proceeded over the course of that morning. The incurring of costs by Mr Li of 1 October can be properly treated as being connected to the discharge of the jury and within the scope of the costs order. However the costs of 30 September (although related to the events which precipitated the discharge) are not costs reasonably connected with the subsequent discharge of the jury.
The directions hearing on the following Monday, 4 October, before Beach J was a direct consequence of the discharge of the jury and also falls within the ambit of the costs order.
Finally, there is the question of the costs associated with the hearing before Beach J and thus connected to the discharge. The hearing before his Honour occupied two days.
On the first day of the hearing, 5 October, it was necessary, at least for part of the day, to acquaint his Honour with the evidence which had been given at the trial. His Honour was “brought up to speed” in relation to the issues and the evidence and, presumably, the transcript of the trial. Mr Li was examined and cross-examined. These costs are reasonably connected to the discharge.
On the second day, 7 October, both counsel made final submissions and his Honour reserved his decision. These costs are a consequence of the discharge and should be allowed.
Conclusion
It follows that, pursuant to the costs order, Mr Li is entitled to his costs of 1 October, 4 October, 5 October 2010 and 7 October but no more.
I propose to make orders consistent with this conclusion and direct, absent agreement that the proceeding be referred to the Judicial Registrar for determination of the appropriate quantum of such costs.
To hopefully bring an end to this debate and avoid any more wasting of costs, I will direct that by 27 July 2012, the solicitors meet to discuss and attempt to resolve the appropriate amount of costs in accordance with these reasons. Absent agreement, I will direct that they prepare a statement for the Costs Court setting out the areas of agreement and disagreement.
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