Norris v McGeachy

[2010] TASSC 20

[2010] TASSC 20

COURT:  SUPREME COURT OF TASMANIA

CITATION:  Norris v McGeachy [2010] TASSC 20

PARTIES:  NORRIS, Robert James
  v
  McGEACHY, Sarah Margaret

FILE NO/S:  1081/2009
DELIVERED ON:                30 April 2010
DELIVERED AT:                 Hobart
HEARING DATE:                15 March 2010
JUDGMENT OF:                 Wood J

CATCHWORDS:

Procedure – Costs – Security for costs – Poverty – Lack of means – Impecunious appellant – Relevant considerations.

Aust Dig Procedure [668]

REPRESENTATION:

Counsel:
             Appellant:  C J Gunson
             Respondent:  R B Webster
Solicitors:
             Appellant:  Hilliard & Associates
             Respondent:  Dobson Mitchell & Allport

Judgment Number:  [2010] TASSC 20
Number of paragraphs:  30

Serial No 20/2010
File No 1081/2009

ROBERT JAMES NORRIS v SARAH MARGARET McGEACHY

REASONS FOR JUDGMENT  WOOD J

30 April 2010

1. This is an application for an order that Mr Norris be ordered to provide security for costs in the sum of $5,000 in connection with a pending appeal to the Full Court.  He opposes the application.

1. Mr Norris was a pedestrian struck by a motor vehicle driven by the defendant, Ms McGeachy on 4 November 2004.  He filed a writ in October 2008, claiming the accident was caused by the defendant's negligent driving giving rise to damages for personal injuries.  The filing of the writ occurred approximately 11 months after the three year limitation period had expired. He brought an application to this Court for an extension of the limitation period pursuant to the Limitation Act 1974 ("the Act"), s5(3).

1. On 16 December 2009, Crawford CJ delivered a decision dismissing the application for an order extending time, Norris v McGeachy [2009] TASSC 110. Mr Norris appealed that decision to the Full Court by notice of appeal filed on 21 December 2009. An application for security for costs relating to that appeal has been brought by the Motor Accidents Insurance Board standing in the shoes of the defendant (Motor Accidents (Liabilities and Compensation) Act 1973, s14). It is convenient to refer to Mr Norris as the plaintiff and the driver of the motor vehicle as the defendant.

1. The Supreme Court Rules 2000, r681, provides that security for costs of an appeal is not required unless the Court or a judge otherwise orders. The Court's power to make orders for the provision of security for costs is twofold, derived from either the Supreme Court Rules, r828, or the Court's inherent jurisdiction.  In bringing this application, counsel for the defendant relies on the Court's inherent jurisdiction, and it is conceded that r828 does not apply.

1. In this case, a key reason for bringing the application for an order for security for costs is that it appears that Mr Norris is impecunious.  He has not paid the defendant's costs relating to the application to extend time.  It is also argued that he does not have a strong argument on appeal.

1. In support of the application an affidavit has been filed by Mr Damon Symes of Messrs Dobson, Mitchell & Allport having carriage of the matter on behalf of the MAIB.  In that affidavit Mr Symes provided information and stated various matters, including:

·     Mr Norris was declared bankrupt on 16 December, 2009;

·     evidence that Mr Norris was in receipt of a disability support pension;

·     a failure to respond to correspondence from Dobson Mitchell & Allport relating to costs, and enclosing a consent memorandum as to costs.

1. Mr Symes was not cross-examined and the factual matters contained in the affidavit are not disputed.  No affidavit material was presented for Mr Norris.  Submissions were made on behalf of the parties, with both counsel acknowledging the Court's unfettered discretion, and relying on well settled authorities to support their respective positions.

General principles

1. The Court has a broad unfettered discretion to order security for costs and the "circumstances in which the discretion should be exercised in favour of making an order cannot be stated exhaustively": Spiel v Commodity Brokers Australia Pty Ltd (1983) 35 SASR 294 at 300. What should be done in each case depends entirely on the circumstances of the case. The governing consideration is what is required by the justice of the matter: Merribee Pastoral Industries Pty Ltd v Australian and New Zealand Banking Group Ltd (1998) 155 ALR 1, per Kirby J at 10 – 11. The burden rests on defendants to persuade the court to make the order: Jovanovic v Law Society of Tasmania [2003] TASSC 116 at par[8].

1. It is conceded on behalf of the defendant that as a general principle, security for costs should be ordered against natural persons only in exceptional circumstances: Shannon v Australia and New Zealand Banking Group Limited (No 2) [1994] 2 Qd R 563.

1. Guiding considerations that may be relevant in the exercise of the Court's inherent jurisdiction have been identified in cases and are well established: KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197 – 198, Daley v Brooks B44/1992 (upheld by the Full Court in A15/1993) at 3.  Counsel for the parties are in agreement about these guiding considerations and I turn to consider those that arise in this case. 

Considerations relevant to this case

Impecuniosity

1. While impecuniosity is integral to the rationale for security for costs orders, it is also acknowledged that the impecunious should have access to the courts.  As a general principle it is well established that impecuniosity on the part of a plaintiff is not sufficient, of itself, to warrant an order for security for costs: see Mentyn v Law Society of Tasmania (No 2) [2004] TASSC 127.

1. Mr Norris has been declared bankrupt and he is in receipt of a disability pension.  He has not paid the defendant's costs relating to the application to extend time, although he is not yet under an obligation to do so, as an order has not been made.  As contended on behalf of the defendant, I infer that if he is ordered to pay the costs of the appeal, he will be unable to do so. 

Impecuniosity brought about by the defendant

1. It might reasonably be thought that in this case the plaintiff's impecuniosity results from the alleged act of the defendant, which is the subject of the litigation to give security for costs.  The injuries that resulted from the collision are claimed to be incapacitating.

Whether the order for security will frustrate the claim

1. I expect that if the order sought is made and the plaintiff is required to pay $5,000 as security for costs, there is a strong prospect that it will bring his appeal to an end.  This would effectively shut him out of "relief according to law in circumstances where his impecuniosity is itself a matter which the litigation may help to cure": Merribee at 10 – 11. This factor weighs against granting the order.

Proportionality

1. It is appropriate to compare the quantum of the plaintiff's claim, if successful, and the amount of the defendant's costs of the appeal if they cannot be recovered, see St Helen's Area Landcare and Coastcare Group Inc v Break O'Day Council [2005] TASSC 46 at par[17].

1. The hearing of the appeal will not be lengthy and the scope of the issues is relatively  confined.  The amount of $5,000, sought by way of security, is an indication of the defendant's costs of the appeal and is a proportionately small amount compared to the quantum of the plaintiff's claim, which is potentially a substantial amount, depending on medical assessments (see Crawford CJ in Norris v McGeachy at par[35]).

Delay

1. There has been no delay in bringing this application for security.  It was filed promptly after the defendant's solicitors became aware of Mr Norris' bankruptcy, and well in advance of the listing of the appeal. 

Public interest

1. The appeal does not raise matters of public importance over and above the interests of the parties. As noted in submissions for the defendant, it is an appeal against the exercise of a discretion which will now be exercised with diminishing frequency, given the amendments to the Act, s5A, effective on 1 January 2005. This factor weighs in favour of the order.

An appeal

1. In the case of an impecunious appellant who appeals from a decision of one court to a higher court, the fact that the appellant has been unsuccessful before the court of first instance is a factor weighing in favour of the ordering of security: St Helens Area Landcare and Coastcare Group Inc v Break O'Day Council (supra) at par[24].

Merits

1. A further consideration is the prospect of the appeal succeeding.  While it is appropriate for me to take into account the strength of the grounds of appeal, it is neither necessary nor desirable that I undertake a close assessment of them.  The approach I should take at this stage is to gain an impression, or a tentative evaluation, of the merits of the appeal (Environmental Defenders Office (Tas) Inc v Chipman [2003] TASSC 72 at pars[3] and [12] – [15]) and not to study the issues in an extensive fashion with a view to predicting the outcome of the appeal.

1. Counsel for the parties made submissions regarding the grounds of appeal and the prospects of the appeal succeeding.  It is argued for the defendant that the appeal does not have a strong prospect of success. At this stage I have reached a tentative evaluation that while the appeal does not appear to have a strong prospect of success, it is at least arguable.  It is not hopeless or misconceived. My reasons for this view are as follows.

1. Standing away from the reasons for the decision under appeal, and looking at the case for the application to extend time, it can be seen that this was not a clear-cut case for exercising the discretion in favour of the defendant:

·     it was 11 months outside the limitation period;

·     the plaintiff's then solicitor was at fault and erroneous legal advice was given that could be seen as explaining delay;

·     there was a strong case of negligence against the defendant although also a strong case for contributory negligence;

·     the quantum of damages was potentially substantial;

·     there was no actual prejudice to the defendant in extending time;

·     it was not clear that evidence that became unavailable (witness Jessie Harvie) leading to some of the indeterminable prejudice was available while the limitation period was running.

1. The grounds of appeal are as follows:

"1The learned Chief Justice erred in law by failing to differentiate the importance between delay occurring within the primary limitation period and delay occurring after the expiry of the primary limitation period.

2The learned Chief Justice erred in law by taking into account delay between the commencement of the proceedings and the filing of an interlocutory application to extend time.

3The learned Chief Justice erred in law in giving the weight that he did to the possibility of prejudice to the respondent, in that he found that both specific and indeterminable prejudice to the respondent was a possibility, however, made no finding that such prejudice constituted significant prejudice to the respondent nor that the respondent would be denied a fair trial by reason of such prejudice if an extension of time was granted.

4The learned Chief Justice erred in law in giving the weight that he did to the appellant's failure to adequately explain the delay in commencing proceedings.

5The learned Chief Justice erred in law in giving the weight that he did to the appellant's conscious decision not to sue and the communication of that fact to the respondent's solicitors, in that the learned Chief Justice failed to take into account or attribute appropriate weight to the fact that such decision was not a deliberate and informed decision by the appellant to allow the limitation period expire.

6The learned Chief Justice erred in law in failing to undertake a proper weighing and balancing process of the arguable case, delay, the reasons for the delay and prejudice to the respondent in order to determine if, in the circumstances, he was satisfied that it was just and reasonable to extend time for the appellant to bring the proceedings."

1. The appeal to the Full Court relates to an order made in the exercise of a judicial discretion as to whether in all the circumstances it was just and reasonable to extend the time period of three years.  Permissible appeals from the exercise of a judicial discretion are limited in scope (Supreme Court Civil Procedure Act 1932, s45). The Full Court will not intervene unless the appellant shows an error in the sense described in the joint judgment in House v R (1936) 55 CLR 499. 

1. In assessing the prospects of the appeal succeeding, it is relevant to take into account how the Full Court might find error in decisions of this kind. The exercise of the discretion to extend time under the Act, s5(3), involves a weighing and balancing process of three matters: the explanation for delay, the nature of any prejudice suffered by the defendant by delay, and whether the plaintiff has an arguable case in negligence. Appeal grounds 3 - 6 address the weight the Chief Justice gave to the possibility of prejudice to the defendant, and failure to explain delay and related facts. A legitimate ground of appeal that could lead to the Full Court overturning the decision is the weight attributed to factors that have been properly taken into account: Hill v Iluka Corporation Ltd [2002] TASSC 113, Marr v Green (1993) 14 Tas R 317. Another consideration affecting the prospects of the appeal succeeding is that on appeal, error may be found by the Full Court in the balancing process even if the weight allocated to a factor is not expressly stated, but the conclusion indicates that too much weight was given to a factor that did not warrant it. The Full Court may find error by concluding that there was error by the judge at first instance about the weight attributed to factors properly taken into account by the judge. The error could be found if the Full Court disagrees about the weight those factors deserve in the circumstances of a particular case.

1. It follows that in this case the Full Court could conclude that there was error in the weighing and balancing process even though the reasons provide, in all respects, a correct statement of the law.   It might be discerned from the reasons that too much weight was allocated to delay; it could be considered that the erroneous advice from the solicitor did provide an explanation for delay, even though the plaintiff did not positively assert in his evidence that this was the reason why he did not institute proceedings within time; the Full Court may glean that prejudice to the defendant (general and not specific) was accorded too much weight, and did not amount to "significant" prejudice to the defendant, and was not such that it would have deprived the defendant of a fair trial: Holt v Wynter [2000] NSWCA 143.

1. As indicated, I consider that there are arguable grounds of appeal asserting errors of law.  It is not necessary for a more thorough evaluation of the merits of the appeal to be undertaken. 

Personal injuries cases

1. Counsel for the plaintiff submitted that personal injuries cases are in a special category and that the courts have been very reluctant to make security for costs orders in such cases.  This reluctance has been observed in a number of decisions, and in one case it was described as a long-established practice, and "practically unheard of for a plaintiff appellant to be ordered to provide security": Daniel Rory de Groot (an infant by his tutor Arlena Van Oosten) v The Nominal Defendant [2004] NSWCA 88. Whether they are in a special category, or whether the absence of security for costs orders is simply the result of applying the usual considerations set out above, is not clear. See McVicar v S & J White Pty Ltd [2006] SASC 233 at par[24]. Typical features of personal injuries cases would point against the making of security for costs orders. These features are that the plaintiff's impecuniosity results from the conduct of the defendant, and the comparison between the quantum of the plaintiff's claim and the costs of the appeal would mean that the factor of proportionality would often apply.

1. Counsel for the defendant noted that this treatment of personal injury cases as belonging to a special category, does not mean that there may never be cases of personal injuries in which an order for security would be appropriate: McVicar at par[26], Kingston v QBE Insurance Ltd [2001] TASSC 83.

Conclusion

1. In this case it is not necessary for me to decide the question of whether personal injury cases are in a special category.  The application of the usual considerations leads me to the conclusion that security for costs should not be ordered.  In particular, the prospect that the appeal might succeed, and the fact that to make the security for costs order may stifle the appeal when the costs of the appeal are small in comparison to the quantum of the claim for damages, outweigh the considerations that favour the order being made.  Accordingly, I refuse the application.