Necia Joy Moccatta (Respondent) v Joachim Dehousa Leal (Appellant) No. SCGRG 92/2347 Judgment No. 4537 Number of Pages 7 Costs Departing from the General Rule

[1994] SASC 4537

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Costs - departing from the general rule - nature of proceedings - damages recovered small - Appeal against award of costs to the plaintiff/respondent in an action in the civil jurisdiction of the District Court - action commenced prior to District Court Act coming into effect - under the superseded Local Court Rules and s 42District Court Act due to amount awarded to plaintiff/respondent she was not entitled to an order for costs unless the Court otherwise ordered, which it did - observations as to relevant considerations related to the exercise of that judicial discretion - in the circumstances material existed which justified the award of costs to the plaintiff/respondent. District Court Acts42; Local Court Rules R176 and Statutes Repeal and Amendment (Courts) Act 1991 s 19(2). Stevens v Chandler
(1988) 46 SASR 541; Scott v Municipal Tramways Trust (1920) SALR 442; Bunker v James (1981) 26 SASR 286 and Silverblade v Nelson (1980) 24 SASR 310, applied.

HRNG ADELAIDE, 20 April 1994 #DATE 10:5:1994

Counsel for appellant:     Mr M G Steele

Solicitors for appellant:    Ward and Partners

Counsel for respondent:     Mr M L B Ardlie

Solicitors for respondent: Wallmans

ORDER
Appeal dismissed

JUDGE1 OLSSON J This is an appeal, by leave, against an order for costs made by Taylor DCJ in relation to an action in the civil jurisdiction of the District Court. It is necessary, in order to understand the issue involved, to address the history of the proceedings.

2. On 28 November 1991 the respondent issued a summons in the District Court claiming damages for personal injuries said to have been sustained by her as a consequence of a running down accident, which occurred on 30 October 1985. The statement of claim sought an extension of time, pursuant to section 48 of the Limitation of Actions Act, 1936, ("the statute") within which to institute the proceedings. It was pleaded that the respondent had been a pedestrian, who was struck by a vehicle driven by the appellant. As I understand the situation, prior proceedings had been initiated, but abandoned, because those had, for reasons not now relevant, nominated the incorrect defendant or defendants.

3. The action duly came on for trial before Taylor DCJ. On the evidence before him, he held both parties to blame for the accident, but apportioned 90% responsibility to the respondent. He assessed damages as under:-
    Past economic loss             $3,000.00
    Future economic loss            $     -
    Beck v Farrelly allowance         $500.00
    Special damages                 $717.60
    Non economic loss             $30,000.00
   $34,217.60

4. However, the learned trial judge held that, on the evidence, it was inappropriate to grant an extension of time pursuant to section 48 of the statute. Accordingly, judgment was entered for the appellant on 8 October 1992.

5. Such outcome precipitated an appeal and cross appeal to the Full Court of this Court. On 27 August 1993 that Court held that an extension of time ought to have been granted, but confirmed the findings as to liability and the quantum of the assessment made. It ordered, by majority, that the judgment entered be set aside and that there be substituted for it a judgment in favour of the respondent in the sum of $3,422, being 10% of the damages assessed. It also ordered payment by the then respondent to the then appellant of 80% of the costs of the appeal, to be taxed. However, it directed that the question of the costs of trial be remitted to the learned trial judge for further consideration and determination by him.

6. This issue came before Taylor DCJ on 10 December 1993, at which time the parties were in dispute not only as to merit, but also as to the legal basis on which the matter fell to be decided.

7. From and after 6 July 1992, the relevant statutory provisions bearing upon the allowance of costs in District Court proceedings were those found in section 42 of the District Court Act 1991 ("the Act"). So far as is material, that section stipulated as follows:-
    "42.(1) Subject to subsection (2) and the rules, costs in
    any civil proceedings will be in the discretion of the
    Court.
    (2) If -
    (a) an action for the recovery of damages or any other
    monetary sum is brought in the Court;
    (b) the action might have been brought in the Magistrates
    Court;
    and
    (c) the plaintiff recovers less than an amount fixed by the
    rules for the purposes of this paragraph, no order for costs
    will be made in favour of the plaintiff unless the Court is
    of the opinion that it is just in the circumstances of the
    case that the plaintiff should recover the whole or part of
    the costs of action."

8. As from 6 July 1992 the Magistrates Court had vested in it jurisdiction to hear and determine actions of the type of that presently under consideration where the amount claimed did not exceed $60,000. The sum fixed by the rules of court for the purposes of subsection 2(c) above was $12,500. Prior to 6 July 1992 the statutory jurisdictional limit of the precursor of the Magistrates Court (the Local Court) was $20,000.

9. It will be noted that subsection (1) of section 42 confers upon the District Court an unqualified discretion to award costs, subject only to the restriction imposed by subsection (2).

10. These provisions fall to be contrasted with those contained in Rule 176 of the pre-existing Local Court Rules. That Rule reads as follows:-
    "176. (1) If on the hearing of an action in the full
    jurisdiction trial list the plaintiff recovers a sum that
    does not exceed the prescribed amount, the plaintiff shall
    have judgment to recover that sum only and no costs unless
    the judge trying the action otherwise orders.
    (2) If the trial judge is of the opinion that having regard
    to such reasons it is just that the plaintiff should recover
    costs on a specified scale or some amount for costs, the
    judge may order the defendant to pay such costs to the
    plaintiff.
    (3) For the purposes of this rule 'the prescribed amount'
    shall be:
    (a) In an action upon a liquidated claim, the sum of
    $20,000;
    (b) In an action upon a wholly or partly unliquidated claim,
    the sum of $12,500."

11. The respondent's action was, of course, pending at the time when the Act came into operation on 6 July 1992. By virtue of section 19(2) of the Statutes Repeal and Amendment (Courts) Act 1991, the action was to be "continued and completed before the District Court".

12. As I understand his ex tempore reasons Taylor DCJ approached the issue before him as being one for decision within the four corners of section 42 of the Act, although the situation is somewhat confused by his reference to "special reasons" - a phrase which he seems to have used interchangeably with the phrase "special circumstances".

13. He summarised his final conclusions in these terms:-
"Of course, s.42 of the Act provides me with a discretion if
    I think there are sufficient reasons to vary from the rules.
    It's been put to me that the special circumstances in this
    case are that the plaintiff because of her having no
    detailed memory of the circumstances of the accident in
    which she suffered her injuries now, that she had no means
    of assessing before trial what percentage the judgment might
    be on liability. I note that the judgment on assessment is
    of course, above the amount referred to in the rules,
    judgment on the assessment of the damages was $34,217.60
    which of course is above the limitation. I find in this
    case that there are special reasons because of the problems
    that a counsel would have in advising a plaintiff in these
    circumstances because of her lack of memory of the
    circumstances leading to the event. That it was appropriate
    having regard to the assessment, that the matter be brought
    in this trial in this court and therefore I exercise my
    discretion and the plaintiff will have their costs on the
    judgment sum at the District Court scale."

14. The appellant now appeals against that decision, the stated grounds of appeal being as under:-
    "1. That the learned trial Judge wrongly exercised his
    discretion as to costs in ordering that the plaintiff have
    the costs of the trial at the District Court scale in that:
    (a) prima facie pursuant to the District Court Act and the
    Rules of Court the plaintiff was not entitled to any award
    of costs in her favour;
    (b) the fact that the plaintiff had no memory of the
    accident was insufficient justification for awarding the
    plaintiff her costs of trial:
     (i) The actions of the plaintiff and defendant at the
     scene of the accident were witnessed by several
     independent witnesses whose statements were recorded by
     the police and available to the plaintiff and her counsel
     in the ordinary course of events;
     (ii) It was open to the plaintiff's counsel to proof all
     such witnesses prior to giving advice to the plaintiff as
     to the institution of the proceedings and the appropriate
     jurisdiction for any claim.
    (c) The principles of case flow management now embraced by
    the courts require the most efficient utilisation of the
    resources of the courts of each jurisdiction and it is
    simply insufficient for the District Court to be hearing
    matters in which judgment are ultimately recorded for such
    small amounts.
    (d) The judgment ultimately recorded was very close to being
    within the Small Claims jurisdiction of the Local Court
    existing at the time of the issue of the proceedings
    ($2,000.00).
    (e) The order fails to give effect to the clear intention of
    the District Court Act and Rules to discourage the bringing
    of actions in an inappropriate jurisdiction.

15. Given the clear policy of the Act, as to which the conceptual reasoning of King CJ in Stevens v Chandler (1988) 46 SASR 541 (albeit in the context of a different statutory setting) remains pertinent, the discretion conferred upon a trial judge is not fettered. It remains for consideration, on a case by case basis, whether it is nevertheless just, in all of the relevant circumstances, that relief ought properly to be given from the otherwise Draconian provisions of the Act.

16. Clearly, a proper exercise of judicial discretion demands that those circumstances be such as to remove the case from the general run of situations upon which, prima facie, the prohibition upon recovery of costs is intended to operate.

17. It seems to me that the types of consideration adverted to by Poole J in Scott v Municipal Tramways Trust (1920) SALR 442 and reiterated by Zelling J in Bunker v James (1981) 26 SASR 286 at 294 remain pertinent in relation to issues arising under section 42(2). They are:-
    - whether there is some point of general importance
    involved in the case
    - whether there are difficult questions of law involved .
    whether the length and complication of matters of fact is
    out of the ordinary
    - the quantum of damages potentially at issue

18. However, as Cox J illustrated in Silverblade v Nelson (1980) 24 SASR 310, other considerations can well be decisive in individual instances. As he there commented (at 313):-
    "Certainly the terms of the section are very strict. While
    the judge retains a discretion, as I read the section the
    plaintiff is not to get his costs in such a case as this
    unless the court, in the judicial exercise of that
    discretion, finds adequate reason for departing from the
    section's underlying policy. There may well be cases - for
    instance, where a plaintiff has had his assessed damages
    reduced by reason of his own contributory negligence, or
    where there are neurotic complications in the plaintiff's
    own temperament which would obviously make a settlement, or
    even a realistic appreciation of the worth of his claim,
    difficult - where a judge could find his way to relieving
    the plaintiff of the severe consequences of the section's
    operation. It may also be relevant to consider the material
    before the plaintiff and his advisers at the time the
    proceedings are commenced."

19. I do not take the Chief Justice, in Stevens v Chandler, to have dissociated himself from those remarks, when he adverted to the decision in Silverblade v Nelson.

20. As I see the situation the important features which fell to be considered by the learned trial judge in the instant case were these.
    (1) The claim was properly commenced in the District Court
    in the first instance. At the time the jurisdictional limit
    of the Local Court was $20,000 and any damages assessed -
    apportionment of liability aside - were likely to exceed
    that sum.
    (2) As a consequence of the accident the plaintiff had no
    personal memory of relevant events. The issue of liability
    had to be addressed in the light of the conflicting evidence
    of various independent witnesses - the outcome being very
    dependent on the view of that evidence taken by the judicial
    officer before whom the case was tried. Whilst it may have
    been apparent that significant fault could well be
    attributed to the plaintiff, the precise end result was very
    much dependent upon the view taken of the evidence of the
    independent witnesses. It is, of course, easy to be wise
    after the event.
    (3) As time went by, a substantial debate arose in relation
to the issue under section 48 of the statute. It cannot
    escape notice that, in the ultimate result, the Full Court
    was divided on the question and the conclusion of the trial
    judge was overturned by a majority decision. The issue was
    thus by no means clear cut, or simple of resolution. It
    involved a significant question of legal privilege.
    (4) In the event damages were assessed at $34,217.60, a
    figure well above the prescribed sum of $12,500 and also the
    statutory jurisdictional limit of the Local Court at the
    time when the action was commenced. It was only the
    eventual major apportionment of liability against the
    plaintiff which reduced the final judgment sum below the
amount prescribed for the purposes of section 42(2)(c) of
    the Act. In the course of his submissions, Mr Steele, of
    counsel for the appellant, sought to characterise the action
    as an uncomplicated "run of the mill" proceeding, both as to
    liability and quantum, which, he argued, plainly ought to
    have been commenced in the Local Court, or at least
    transferred to the Magistrates Court. He sought to dismiss
    the limitation issue as also being a purely factual
    consideration, not out of the ordinary run. He invited
    attention to the description by Cox J in the Full Court of
    the proceeding as being a "routine third party personal
    injury claim for negligent driving".

21. I do not accept that characterisation any more than did the learned trial judge.

22. In the first place the citation extracted from the reasons of Cox J patently misuses what he said. In employing the above description, that learned Judge was solely directing his attention to the procedural aspects of the action and, in particular, the mishandling of the matter by earlier solicitors who, quite inappropriately, joined unnecessary parties as defendants and generally failed to deal with the litigation in a proper fashion. He was not adverting to the types of factor pertinent to the issues arising for consideration under section 42 of the Act.

23. Secondly, the submissions made by Mr Steele, fail to recognise the substance and weight of the features which I have above described.

24. Moreover, whilst the present appeal arises from the application of the statutory provisions bearing on entitlement to costs, it is, in reality, one which focuses on the exercise of discretion in relation to what is tantamount to a question of practice. Moreover, it is an appeal against the exercise of discretion by the judge who tried the case and therefore had the advantage of an intimate knowledge of the weight, difficulty and gravity of the issues to be addressed.

25. It seems to me that, having regard to the approach adverted to in authorities such as Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc and Anor (1981) 148 CLR 170 at 176-7 and House v The King (1936) 55 CLR 499, this Court ought only to interfere in the plainest of cases, in which it is clear that there has been an undoubted error of a relevant type, accompanied by some obvious injustice to the appellant (Consolidated Gold Mining Areas NL and Ors v Enterprise Gold Mines NL (Receiver and Manager appointed) and Anor
(1992) 165 LSJS 33, Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd and Ors (1984) 58 ALJR 521 at 530.)

26. Whilst I accept that, in his ex tempore reasons, the learned trial judge could, perhaps, have expressed himself in more relevant and definitive terms, the fact remains that, as I have demonstrated, there was material before him upon which he was justified in coming to the conclusion to which he came. Whether I would have made the same order is not to the point. I remain unconvinced that he demonstrably fell into error and incorrectly exercised his discretion. What he did was an option patently open to him.

27. This appeal must, accordingly, be dismissed.