Meimaropoulos v Cheum (No. 2)

[2014] NSWDC 76

District Court

New South Wales

Medium Neutral Citation:

Meimaropoulos v Cheum (No. 2) [2014] NSWDC 76

Hearing dates:

27 June 2014

Decision date:

27 June 2014

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

(1) Mr S Brennan (barrister - as amicus) is excused from further attendance.

(2) The Plaintiff pay the Defendants' costs of Notice of Motion heard 3 August 2012 to vacate hearing dates of 27 and 28 August 2012, and costs thrown away by reason of vacation of hearing dates of 27 and 28 August 2012.

(3) The Plaintiff pay the Defendants' costs of 20 November 2012, 8 February 2013 and costs of Plaintiff's Notice of Motion dismissed 17 April 2013.The Plaintiff pay 25% of the Defendants' costs of the hearing.

(4) The Plaintiff pay the Defendants' costs of Notice of Motion filed 23 April 2014 and heard 27 June 2014.

(5) The costs payable by the Plaintiff to Defendant be set off against the judgment sum payable by Defendants to the Plaintiff.

Catchwords:

TORT - Costs - application by unsuccessful defendants for costs of interlocutory proceedings and hearing - costs of earlier hearing vacated at the request of the plaintiff - costs of a dismissed motion brought by the plaintiff - whether an order for costs following the event should be refused pursuant to UCPR r 42.35 - whether plaintiff should pay a proportion of the defendants' costs pursuant to s 98 Civil Procedure Act 2005 (NSW)

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 60 and 98
Uniform Civil Procedure Rules 2005 (NSW), r 42.35

Cases Cited:

Anglo-Cyprian Trade Agencies v Paphos Wine Industries [1951] 1 All E R 873
Arian v Nguyen [2001] NSWCA 5
Baychek v Baychek [2010] NSWSC 987
Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326
Ji v Firth [2013] NSWSC 148
Maestrale v Aspite [2014] NSWCA 182
Shield Mercantile Pty Ltd v Citigroup Pty Ltd [2013] NSWSC 287

Texts Cited:

-

Category:

Costs

Parties:

Plaintiff: Antonia Meimaropoulos
First Defendant: Sorn Cheum
Second Defendant: Muy Lim Hay
Third Defendant: Heang Lay

Representation:

Plaintiff: Mr S Brennan (amicus curiae)
Defendants: Mr A M Gruzman
Plaintiff: Brydens Compensation Lawyers
Defendants: Di Lizio & Associates

File Number(s):

2011/36909

Publication restriction:

None

Judgment

The timetable for costs issues following judgment in these proceedings

1. These are proceedings for damages for personal injury after the plaintiff suffered injuries arising from the conduct of the defendants' dog. I heard the proceedings in January 2014 and gave judgment for the plaintiff on 27 March 2014 for $28,458.77.

1. During the hearing the defendants foreshadowed applications for costs orders under s 98 Civil Procedure Act 2005 (NSW) ("the Act") and Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 42.35 and requested me to reserve the issue of costs. In order 2 of my orders following judgment I reserved costs, with liberty to apply within 28 days of judgment. The plaintiff has made no application for costs orders, but the defendants by, Notice of Motion filed on 23 April 2014 seek the following costs orders:

(a)   That the plaintiff pay the defendants' reserved costs;

(b)   That the plaintiff pay 50% of the costs incurred by the defendants; and

(c)   That the plaintiff pay the costs of this Motion.

1. The defendants rely upon the affidavit of Mario Fiorenzo Di Lizio sworn 22 April 2014.

1. Mr Brennan of Counsel appeared for the plaintiff on the application, but only, he informed the court, as amicus curiae. The sole purpose of his appearance was to advise that Messrs Brydens ("Brydens"), who are still on record for the plaintiff, propose to file a Notice of Ceasing to Act, and that a Holding Summons filed in the Court of Appeal filed by Brydens on behalf of the plaintiff had now been withdrawn. Mr Brennan then asked to be excused, stating that the plaintiff has consulted other solicitors, and that she is aware of the orders sought in the application before me for hearing today but had given no instructions to Brydens to appear.

1. The Notice of Motion was served on Brydens two months ago. During the intervening period, the plaintiff was able to give Brydens instructions in relation to both lodging and withdrawing the Holding Summons in the Court of Appeal.

1. Mr Brennan does not seek an adjournment, and I do not propose to grant one. I am satisfied that the plaintiff has been on notice that this application would be brought as the proposed applications were raised in the course of the hearing, and I reserved the issue of costs of the hearing for this reason. I am satisfied that the plaintiff has been provided with the Notice of Motion by her solicitors during the past two months, and that she knows that this application is listed for hearing today but has elected not to be represented.

1. Mr Gruzman of counsel has refined the orders sought to a series of four separate claims:

(a)   Costs thrown away by the plaintiff's application on 3 August 2013 to vacate the hearing dates of 27 and 28 August 2012;

(b)   Costs of the plaintiff's motion to join the defendant's insurer, which application was dismissed on 17 April 2013; and

(c)   The defendants' application that there should be no costs payable by them for the hearing on 28 - 31 January and 7 February 2014; and

(d)   The defendants' application that the plaintiff, notwithstanding having recovered a verdict, should pay 25% of their costs.

1. The relevant provisions are ss 60 and 98 Civil Procedure Act 2005 ("the Act") and Uniform Civil Procedure Rules 2005 ("UCPR") r 42.35.

1. In his helpful submissions, Mr Gruzman draws my attention to the case management principles necessary to ensure costs are proportionate to "the importance and complexity of the subject matter in dispute": Craigcare Group Pty ltd v Superkite Pty Ltd [2014] NSWSC 326 at [279], citing Baychek v Baychek [2010] NSWSC 987 at [8] - [17]. This is particularly the case in the present circumstances, where the amount recovered by the plaintiff falls below the threshold in r 42.35(1)(a), and where her conduct of the proceedings both before and during the hearing resulted in substantial wasting of court time, as well as incurring extra costs for the defendants.

(a) Costs incurred by the vacating of the first hearing date

1. The defendants' application for costs incurred by the vacating of the first hearing date is straightforward. The asserted reason for the vacating of the order was that the plaintiff suffered a stroke in April 2012 and was referred to a neurologist on 7 July 2012, following which her solicitor advised it was "anticipated" (Exhibit L to the affidavit of Mr Di Lizio) that a report would be obtained to confirm whether this was causally linked to the circumstances in which she fell following the accident the subject of this litigation. The neurologist did not express this opinion and refused to provide a report. The application to vacate the hearing date was brought so that the neurologist's file could be obtained under subpoena.

1. The solicitors for the defendants very sensibly agreed to the vacating of the hearing date, which saved considerable costs, and only sought an order for costs to be reserved.

1. The only person who connected the stroke to the accident was the plaintiff herself. There was no medical evidence connecting the plaintiff's stroke with the circumstances in which she tripped on the edge of the footpath after seeing the defendants' dog run around her. No claim was made for such as link at the trial. To the contrary, there was clear evidence that the plaintiff had had high blood pressure for years, and was at risk for strokes for this reason.

1. This was not a case where the adjournment was sought because of new medical evidence. The plaintiff's solicitors sought an adjournment because the plaintiff's treating doctor had refused to express the opinion sought, and refused to provide a report. The purpose of the adjournment was not to obtain a second opinion, but to subpoena the treating doctors' notes to find out what he had written, which was perilously close to being a fishing expedition. There was no medical evidence of any kind to connect the stroke with her fall and the Second Further Amended Statement of Particulars filed on 17 July 2013 made no such claim.

1. While an application to adjourn a hearing where new medical evidence or a change in the plaintiff's medical condition may be reasonable, this was not the case here. The plaintiff's application to adjourn the hearing was unmeritorious. The defendants, who agreed to these costs being reserved at the time, are entitled to an order in their favour for the costs thrown away by reason of the vacating of the hearing date.

(b) The plaintiff's application to join the defendants' home insurer

1. After the hearing date was vacated, further delays were occasioned by the plaintiff seeking to join the defendants' home insurer. The proceedings were adjourned on 20 November 2012 and 8 February 2013, resulting in an order for the plaintiff to pay the costs of the defendants for the second adjourned date. When the motion was filed, the hearing was adjourned first to 15 February 2013 and then to 15 March 2013, but the plaintiff was not ready to proceed and had to be adjourned to 4 April 2013. The defendants were served with a subpoena to produce documents relating to the insurance of the property and seeking information about their finances. Although these documents were supplied, the plaintiff was still not ready to proceed on 4 April 2013. The plaintiff's motion was dismissed on 17 April 2013 and the proceedings stood over to 7 August 2013, when the hearing date of 28 January 2014 was allocated.

1. The application to join the insurer was misconceived. In addition, six months were wasted due to the unreadiness of the plaintiff to file and serve it, and to proceed with the motion when it was before the court. The plaintiff should pay the defendants' costs in relation to this motion, including not only reserved costs but also costs for those occasions when no order was made.

(c) Costs of the hearing

1. This application falls into two parts. The first issue is whether the costs should follow the event, having regard to the provisions of UCPR r 42.35. The second is whether the plaintiff is guilty of conduct that makes it appear to the court that some other order should be made: Maestrale v Aspite [2014] NSWCA 182 at [79], citing Anglo-Cyprian Trade Agencies v Paphos Wine Industries [1951] 1 All E R 873 at 874 per Devlin LJ. The defendants have modified the orders sought on this basis, and now seek orders that the plaintiff pay 25% of their legal costs.

1. The third and fourth applications rely on the same factual basis in relation to each of these issues, namely that this was a very simple claim of a trip or fall following the plaintiff being frightened by the defendants' small, fluffy dog barking and running around her, and the only complication was the wide range of injuries and disabilities claimed by the plaintiff when her injuries were in fact in very limited compass.

1. The provisions of UCPR r 42.35 contain two prerequisites. The first is that the plaintiff recovers less than the sum of $40,000, and the second is that the plaintiff is otherwise entitled to an order for costs. In those circumstances, an order for payment of those costs will not ordinarily be made unless the court is satisfied that both the commencement and continuation of the proceedings in this court, rather than the Local Court, are warranted.

1. The plaintiff has made no submissions on this issue. The judgment court must be affirmatively satisfied that proceedings in this court were warranted and, if not, the rules must be applied to disentitle the successful party: Shield Mercantile Pty Ltd v Citigroup Pty Ltd [2013] NSWSC 287 at [18] - [24]; Ji v Firth [2013] NSWSC 148 at [18] - [30].

1. Although the onus of establishing entitlement to costs lies on the plaintiff in such circumstances, I do not intend to determine this application simply on that basis. If the plaintiff were here, the argument would undoubtedly be put that the potential judgment amount, even if only part of the plaintiff's claim were accepted, would exceed the threshold amount. Counsel for the plaintiff abandoned nearly all of these claims during the hearing. That is not uncommon, and should not count against the plaintiff either.

1. The reason why I consider that no costs order is warranted is that, as is set out below (as well as in my judgment at (at [86] - [127]), I am satisfied that the plaintiff knowingly made dishonest claims throughout the litigation in order to inflate her modest injury (suitable for Local Court proceedings) into a substantial claim. As set out in more detail below, this included giving false answers to requests for particulars (affidavit of Mr Di Lizio, paragraphs 6 - 9) and providing false information about her injuries and symptoms.

1. In those circumstances, I am not satisfied that either the commencement or continuation of these proceedings in the District Court was warranted and even if they were, given the smallness of the damages sum, I would not be prepared to exercise the discretion UCPR r 42.35 conveys ("may be made, but will not ordinarily be made") to make an order for costs to follow the event.

(d) The plaintiff to pay 25% of the defendants' hearing costs

1. Beazley JA explained the applicability of s 98 of the Act to applications for costs to be awarded contrary to the principle that costs follow the event in Maestrale v Aspite, supra, at [79] - [80]:

"[79] A successful party may be deprived of costs if guilty of conduct that makes it appear to the court that some other order should be made: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries [1951] 1 All E R 873 at 874 per Devlin J; Oshlack v Richmond River Council [1998] HCA 11 ; 193 CLR 72. The conduct may relate directly to the litigation or to the circumstances leading up to the litigation: see Oshlack at 97 per McHugh J.

[80] Conduct in the litigation that may cause a court to exercise the discretion to make some other order than costs follow the event includes where the successful party "unnecessarily protracts the proceedings": Oshlack at 97 per McHugh J. Although McHugh J dissented in the decision in Oshlack there was no disagreement in the High Court as to these general principles: see Mannix v Loumbos [2000] NSWCA 32 at [14] per Foster AJA."

1. Beazley JA went on to refer to Arian v Nguyen [2001] NSWCA 5 as an example of the applicability of these principles. The plaintiff in those proceedings, despite successfully bringing a personal injury action, was held not to be a credible witness, in that he had deliberately not told the truth and had exaggerated his symptoms. Although overturning the decision on other grounds, the Court of Appeal approved the reasoning of the judge who had displaced the usual costs order on this basis (Maestrale v Aspite, supra, at [81]).

1. The facts in Arian v Nguyen were similar to the present; the plaintiff grossly exaggerated symptoms from a minor accident. As I have set out in my judgment at [86] - [127], the plaintiff similarly attributed a wide range of symptoms to her fall for which there was either no medical/optometric evidence, or the evidence was based on dishonest or exaggerated claims.

1. However, the plaintiff in these proceedings went much further. The claim for psychiatric/psychological injury in the report of Dr Anantharaman, who attributes a range of physical conditions (including stroke, blood clot and foot injury) outside her expertise and a range of psychological problems as attributable to the accident when they were known by her to be attributable to other causes. But for a copy of her report outlining the true causes of the plaintiff's problems being provided under subpoena by another medical provider, this untruthful evidence would not have come to light. Dr Anantharam's report was relied upon by other medical practitioners, notably Dr Glancey, who took the plaintiff at face value when she claimed to him to have had a happy family life and physical health before her encounter with the defendants' dog.

1. The process of obtaining reports from medical practitioners who do not then need to attend court for cross-examination is predicated upon those medical practitioners acting in accord with the spirit of the Code of Conduct. Courts have to be able to take these reports on trust and breach of that trust by a party in litigation should result in an appropriate costs penalty. This is particularly the case for treating doctors such as Dr Anantharam, who do not have to acknowledge the Code of Conduct. Her report certainly does not show any familiarity with the Code's contents.

1. Additionally, the plaintiff, in answers to particulars, stated that she had not suffered any prior accidents (affidavit of Mr Di Lizio, paragraph 6). In fact the plaintiff had suffered a similar fall for which she had suffered a facial injury and broken her glasses (affidavit of Mr Di Lizio, paragraphs 7 - 9). The very substantial claims for foot and ankle injuries were acknowledged during the trial to be unrelated to her fall. Other claimed disabilities were simply not referred to in closing submissions.

1. Other aspects of the plaintiff's claim for damages were exaggerated or misleading. The amount claimed for plaintiff's past out-of-pocket expenses was almost double the actual sum. The plaintiff's claim for home care, which turned upon her son having given up his job to care for her, was not proceeded with in submissions after he agreed in cross-examination he was in fact running a business from home. According to the (genuine) treatment notes of Dr Anantharam, far from this being at the plaintiff's request, she was opposed to his having given up his job and wanting to work from home, and listed this as one of the issues on which she wanted counselling. Even the past out-of-pocket expenses, which are generally the subject of agreement in personal injury proceedings, were grossly inflated.

1. As a result of the plaintiff's untruthful and exaggerated claims, the defendants were put to considerable additional expense in obtaining medical evidence in reply, in an exhaustive analysis of the plaintiff's out-of-pocket expenses, and in issuing subpoenae to discover the material that the plaintiff had kept hidden, including her claim for damages from her 2001 fall, her real reasons for consulting Dr Anantharaman, and the real reasons for her stroke and foot problems.

1. This was always a modest claim for aggravation to the plaintiff's shoulder cuff problems, with the possibility of damage to the trigeminal nerve, albeit not causative of any harm. The plaintiff's overreaction to having a small, fluffy dog run around her meant that the potential for contributory negligence was likely. The plaintiff had required no home care sufficient to reach the threshold and had no claim for economic loss. The subject matter of the claim - a fall following being frightened by a dog - was, as I have found, eminently suitable to the Local Court.

1. The circumstances in these proceedings giving rise to the application before the court are of the same exceptional nature as those decisions discussed by the Court of Appeal in Arian v Nguyen, supra. Although the plaintiff suffered a genuine injury as a result of being frightened by the defendants' dog, I am satisfied that the plaintiff's claims of injury and disabilities, home care requirements and past out-of-pocket expenses have been grossly exaggerated. Not only has the plaintiff been less than truthful with medical experts such as Dr Glancey, but she has put forward reports from her treating psychologist the contents of which must be of deep concern to the court.

1. In determining the percentage of the costs to be awarded, I have had regard to the Court of Appeal's analysis of the appropriate costs order to make in Arian v Nguyen, supra. That decision was, however, handed down before s 98 was enacted. The requirement for proceedings to be "just, cheap and quick" (s 56) and proportional to the issues (s 60) are intended to prevent flagrant dishonesty of the kind that occurred in these proceedings. Nevertheless, 50% of the costs of the whole proceedings would be too heavy a burden for the plaintiff to bear. A more appropriate order would be for the plaintiff to pay 25% of the costs of the hearing. The pre-hearing costs are suitably adjusted by reason of the orders I shall make in relation to the vacated hearing and the plaintiff's unsuccessful motion to join the insurer. In addition, I propose to make an order for set-off of these costs against the judgment sum.

Orders

(1)   Mr S Brennan (barrister - as amicus) is excused from further attendance.

(2)   The Plaintiff pay the Defendants' costs of Notice of Motion heard 3 August 2012 to vacate hearing dates of 27 and 28 August 2012, and costs thrown away by reason of vacation of hearing dates of 27 and 28 August 2012.

(3)   The Plaintiff pay the Defendants' costs of 20 November 2012, 8 February 2013 and costs of Plaintiff's Notice of Motion dismissed 17 April 2013.The Plaintiff pay 25% of the Defendants' costs of the hearing.

(4)   The Plaintiff pay the Defendants' costs of Notice of Motion filed 23 April 2014 and heard 27 June 2014.

(5)   The costs payable by the Plaintiff to Defendant be set off against the judgment sum payable by Defendants to the Plaintiff.

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Decision last updated: 01 July 2014