Matthews v Christie (No 2) No. DCCIV-99-817

[2001] SADC 17

MATTHEWS  V  CHRISTIE (NO 2)

[2001] SADC 17

1................ JUDGE BURLEY......... These reasons deal with the question of costs of the trial of the plaintiffs’ claim whereby the plaintiffs were successful in recovering damages for trespass to land.  On 23 January 2001 I ordered that the plaintiffs recover from the defendants the sum of $17,000.00 and published reasons for my decision.  It is not necessary for me to repeat the matters as set out in those reasons in any detail.

1. It is sufficient to say that the defendants contended that there were four aspects to the plaintiffs’ claim and the plaintiffs were successful in respect of only two of those four aspects.  In my view that is not an appropriate way to characterise the claim brought by the plaintiffs.  They sought damages for trespass to land and sought to recover damages for diminution in the value of the property, damages for loss of enjoyment of amenities, damages for mental and emotional anguish and distress, damages for psychological injury to the second plaintiff and exemplary or aggravated damages.  It has been correctly pointed out by Mr Ross-Smith, counsel for the defendants, that the plaintiffs failed to recover damages for diminution in value of the property and damages for psychological injury.  That does not mean, as contended by Mr Ross-Smith, that the plaintiffs were unsuccessful in two out of their four claims.  Rather, it means that the plaintiffs were unsuccessful in recovering damages under two of the heads of damage sought.

2. The defendants contended that not only should the plaintiffs not recover costs in respect of the aspects of the claim where they failed, but also they should be ordered to pay the defendants’ costs in respect of those matters.  Reliance was placed upon the decision of the Full Court in Cretazzo v Lombardi (1975) 13 SASR 4, where the leading judgment was delivered by Bray CJ. Reliance was also placed on the judgment of Nyland J in Junius and Kumar v Messenger Press and Ors, an unreported decision [1999] SASC 199. That matter went on appeal on the question of costs but it has not been suggested that her Honour, in her reasons, did other than correctly set out the law relating to the trial Judge’s discretion as to costs.

3. Nyland J referred to a number of decisions, including the decision of French J in Inn Leisure Industries Pty Ltd v McCloy Pty Ltd (No 2) (1991) 28 FCR 172. She said at page 2 of her reasons:

   “... In the latter decision, French J, after referring to the general discretion under s43(2) of the Federal Court of Australia Act 1976 to award costs, said (at 173):

   ‘As Toohey J said in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134 at 48,136, the discretion must be exercised judicially. His Honour referred in a summary way to the effect of decisions of Australian and English courts and made the following points:

   (1)... Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.

   (2)... Where a litigant has succeeded only upon a portion of his claim the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.

   (3)... A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them.  In this sense, issue does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.

   Those principles are subject to the caveat referred to by his Honour and expressed by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 12, where it was said that trials occur daily in which a party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law:

   “The ultimate ends 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 on his success in those particular issues.” ’ ”

4. I would also refer to the decision of Bray CJ in that case where his Honour made the observation:

   “Order 65, rule 1 provides generally that all costs shall be in the discretion of the court or judge, subject to a proviso irrelevant for the present purpose.  Time and again attempts have been made to fetter that general discretion by the imposition of judge-made rules.  Time and again those fetters have been released by appellate courts.  I think the guiding principle still stands as it left the House of Lords in the famous case of Donald Campbell & Co v Pollak [1927] AC 732, that the general discretion is absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and that it cannot be exercised on grounds unconnected with the litigation.”

5. As a result of the application for costs made by the defendants, I have to consider whether or not in the exercise of my discretion, I should award costs to the defendants on the two aspects of the case where the plaintiffs failed, or at the very least, deprive the plaintiffs of their costs in respect of those matters.

6. As to the plaintiffs’ failure to recover damages specifically in relation to the psychological injury sustained by Mrs Matthews, I do not consider that this is a severable component of the plaintiffs’ case.  The evidence was called to support a case for damages in respect of psychological injury sustained, but it was equally relevant to the question of whether or not the plaintiffs should recover aggravated or exemplary damages.  Given that the plaintiffs were successful in recovering such damages, I cannot see that the plaintiffs should be deprived of their costs in that regard let alone that an award of costs should be made in favour of the defendants.

7. In my view, the defendants are on stronger ground when they claim costs in respect of the claim for diminution in value of the subject property.  As I understand the law, if the plaintiffs otherwise acted reasonably in adducing such evidence, they may be deprived of their costs of action in relation to that aspect of their claim if it is a severable component of the claim and they have failed in respect of that claim.  If the plaintiffs unreasonably pursued this aspect of their claim, there is justification for awarding costs against them.  As Bray CJ put it in Cretazzo (at 12):

   “... there must be some reason for departing from the settled practice whereby the successful party receives his costs from his opponent.”

8. In my view, there is, in this case, a proper basis for departing from the settled practice referred to: the evidence adduced by the plaintiffs from an expert valuer consisted not of an expression of expert opinion based on recognised principles of valuation, but rather upon an assertion based on experience that the loss of the ivy screen diminished the value of the property overall.  The problem of reliance upon that evidence was compounded by the fact that the valuer declined to say to what extent, in his opinion, the value was so diminished.  In those circumstances, the plaintiffs’ claim for diminution in value was bound to failure upon any objective examination of the evidence adduced from the valuer.  It was, in my view, unreasonable for the plaintiffs to pursue such a claim based on such evidence and in those circumstances I think that the defendants ought to have the costs of the action in relation to that aspect of the plaintiffs’ claim.  Those costs would of course include the costs incurred by the defendants in obtaining and calling valuation evidence to rebut the plaintiffs’ claim.  Those costs ought to be taxed on the District Court scale because the action was brought in the District Court by the plaintiffs.

9. There remains for me to consider the defendants’ contention that, to the extent that costs are awarded against the defendants, those costs should be taxed on the appropriate scale in the Magistrates Court.  The plaintiffs recovered a total of $17,000.00 and the jurisdiction of the Magistrates Court for the cause of action pursued by the plaintiffs is and was at all material times $30,000.00.  The plaintiffs narrowly avoided being deprived of costs entirely  had the judgment recovered by them been $15,000.00 or less (DCR 101.02A(e)).

10. It is undoubtedly correct to say that if a litigant brings an action in the wrong Court, the risk is run that the litigant will be deprived of costs or have those costs limited to the scale appropriate to the Court in which the action should have been prosecuted.  There is a discernible policy in the Rules and the cases which is to encourage litigants to maintain their actions in the appropriate court.

11. The policy is not inflexibly applied.  It can happen that an action which could be brought within the jurisdictional limits of the Magistrates Court, is brought either in the District Court or Supreme Court because it involves some important point of principle or difficult questions of law or fact such that the plaintiff is justified in bringing the action in the higher court.  In this case, I think that the plaintiffs were justified in bringing the action in the District Court because the assessment of damages was always going to be within a range that might have been above or below the jurisdictional limit of the Magistrates Court.  In particular, when dealing with aggravated and/or exemplary damages, these are very much jury questions about which minds may differ in relation to the appropriate quantum.  I am therefore not persuaded that the plaintiffs should be limited to costs taxed on the appropriate scale in the Magistrates Court.

12. Since the plaintiffs have substantially succeeded in resisting the defendants’ application for a special costs order, I think the plaintiffs should have the costs of that application.

13. For the above reasons I make the following orders:

    1...... That the plaintiffs recover from the defendants their costs of action to be taxed or agreed on the scale applicable to District Court actions except for the costs of and incidental to the plaintiffs’ claim for diminution in value in respect of the subject property.

    2...... That the defendants recover from the plaintiffs their costs of action relating to the plaintiffs’ claim for diminution in value of the subject property to be taxed or agreed on the scale appropriate to District Court actions.

    3...... That the defendants pay the plaintiffs’ costs of the defendants’ application for costs to be taxed or agreed on the scale appropriate to District Court actions.