Makaroff v Nepean Blue Mountains Local Health District (No 2)

In the case of Makaroff v Nepean Blue Mountains Local Health District (No 2), the plaintiff, Makaroff, sought damages for injuries sustained in a motor vehicle accident involving a vehicle owned by the defendant, the Nepean Blue Mountains Local Health District. The dispute reached the court as the plaintiff was unable to pay the costs of litigation, necessitating a determination of whether a gross sum award of costs was appropriate. The matter was heard in the Supreme Court of New South Wales.

The central legal issue before the court was whether it should exercise its discretion to order a gross sum award of costs, given the plaintiff's financial circumstances. The court was required to consider whether the plaintiff's inability to pay the costs of litigation constituted a sufficient ground for such an award. Additionally, the court needed to assess the fairness of such an award, given the plaintiff's inability to contribute towards the costs.

In its decision, the court recognised the plaintiff's financial hardship and determined that the award of costs should reflect the plaintiff's means. The court noted that the principle of proportionality in legal costs, while generally favouring a detailed assessment, could be appropriately set aside when a party's impecuniosity is evident. The court concluded that a gross sum award was warranted to ensure the plaintiff's access to justice was not impeded by financial constraints. The court found that the award of costs should be set at an amount that was reasonable and just, considering the plaintiff's financial situation.

The court ordered that a gross sum award of costs be made in favour of the defendant, the Nepean Blue Mountains Local Health District. The amount was set to reflect the plaintiff's financial inability to contribute, ensuring that the plaintiff's access to the legal process was not hindered by the costs of litigation. This decision balanced the principles of fairness and proportionality with the practical necessity of ensuring that justice could be pursued regardless of financial status.