Pryor v Windsor
[1992] TASSC 123
•16 October 1992
Serial No B46/1992
List “B”
CITATION: Pryor v Windsor [1992] TASSC 123; B46/1992
PARTIES: PRYOR, David James
PRYOR, Valerie Betsy
v
WINDSOR, Robert
EDWARDS, Andrew tas EDWARDS WINDSOR FIRST NATIONAL
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NOS: 1232/1989
DELIVERED: 16 October 1992
HEARING DATES: 6 October 1992
JUDGMENT OF: Crawford J
CATCHWORDS:
Costs—Departing from the general rule—Nature of proceedings—Damages recovered small—Action which should have been brought in inferior court—Acceptance of sum paid into court—"Sum recovered" in an action.
Supreme Court Civil Procedure Act 1932, s13.
Rules of Court, O24, r2(5).
Parr v Lillicrap (1862) 32 LJ Ex 150, 11 WR 94; Boulding v Tyler (1862) 32 LJ QB 85; Parkes v Knowles [1957] 3 All ER 600; McKeon v Myer Southern Stores Pty Ltd [1979] Tas R 307 (NC) Unreported 51979, applied.
REPRESENTATION:
Counsel:
Plaintiff: R Sugden
Defendant: S McElwaine
Solicitors:
Plaintiff: Finlay Watchorn
Defendant: Zeeman Kable and Page
Judgment category classification:
Court Computer Code:
Judgment ID Number: B46/1992
Number of paragraphs: 17
Serial No B46/1992
List "B"
File No 1232/1989
DAVID JAMES PRYOR and VALERIE BETSY PRYOR v ROBERT WINDSOR and ANDREW EDWARDS tas EDWARDS WINDSOR FIRST NATIONAL
REASONS FOR JUDGMENT CRAWFORD J
16 October 1992
In this action commenced in 1989 the plaintiffs sued the defendants for damages for negligence and breach of contract. Stating it simply the basis of the claim was as follows. The plaintiffs engaged the defendants as real estate agents to sell a city property. The property was affected by a restrictive covenant limiting the use to which the property could be put. The defendants found a purchaser who entered into a contract to purchase the property for a price of $330,000. Subsequently the purchaser refused to complete the contract because he had not been given notice of the restrictive covenant. The plaintiffs resold the property to another purchaser for $300,000. The plaintiffs claimed that the defendants were at fault, in negligence and contract, by failing to advise the first intending purchaser of the existence of the covenant, by not ensuring that the contract contained a term requiring the purchaser to take the property subject to the covenant and by obtaining a contract which was unenforceable.
The statement of claim was amended a number of times. By the time the trial of the action was about to commence damages were claimed on two alternative bases. Under the first basis the damages claimed totalled almost $68,000. The elements claimed included $30,000 "loss on resale", various sums including interest and associated expenses paid in respect of borrowed money until the later sale was completed, interest on a mortgage loan secured over the property until late completion, loss of use of money and $410 for "solicitors costs of aborted sale". Under the second basis the damages claimed totalled a little over $40,000, the elements being similar to those under the first basis except that the principal figure of $30,000 was replaced by a figure of $15,000 (because it would seem that between the first and second contracts referred to above there may have been a person willing to purchase the property for $315,000), with the other figures being adjusted as a result of that aspect. The damages claimed under the second basis also included $410 for "solicitors costs of aborted sale".
Eventually after a number of interlocutory hearings and pre–trial conferences the action was due to be heard before me at 10 am on 6 October 1992 but upon the convening of the court at that hour I was informed that the plaintiffs had that day accepted the sum of $500 which had been paid into court by the defendants with a denial of liability on 28 September 1992. The question now to be determined is what if any order for costs should be made.
The Rules of Court, O24, r2(1) entitled the plaintiffs to accept the money paid into court within fourteen days of the receipt of the notice of payment in, or before the commencement of the trial, whichever was the earlier. It is apparent that the plaintiffs were not given notice of the payment in until eight days before the commencement of the trial. By subr(5) it is provided that a plaintiff who so accepts money paid into court "may, after seven days from payment out, and unless the Court or a judge otherwise orders, tax his costs incurred to the time of payment into Court, and two days after taxation may sign judgment for his taxed costs".
The defendants maintain that the court should otherwise order and they rely on the provisions of the Supreme Court Civil Procedure Act 1932, s13 which, so far as is relevant, is in the following terms:
"(1)Where an action which, having regard to the sum recovered, could have been properly instituted in some inferior court of civil jurisdiction is instituted in the Supreme Court, the Court, a judge thereof, ... may, notwithstanding that the sum recovered does not exceed the jurisdictional limit of the inferior court, make an order allowing the plaintiff the costs of the action.
(2) In any action to which subsection (1) applies –
(a) the Supreme Court or a judge thereof;
...
may allow the costs or any part of the costs of the action on any Supreme Court scale of costs, or any scale of costs in any inferior court of civil jurisdiction, as it or he, as the case may be, thinks fit.
(2A)In considering whether to make an order under subsection (1), the Supreme Court, a judge, or any other person referred to in subsection (2) shall take into account all the circumstances of the case, including (without in any way limiting the generality of this subsection) –
(a) the sum sought to be recovered;
(b) the sum recovered; and
(c) where applicable, any counter–claim, set off, or contributory negligence."
By virtue of the Local Courts Act 1896, s13(1)(a) an inferior court of civil jurisdiction, that is to say the Court of Requests, had jurisdiction to determine a claim of this nature limited to a claim for a maximum of $5,000. By virtue of the Magistrates‘ Court (Small Claims Division) Act 1989, s10, another inferior court of civil jurisdiction, the small claims division of the Magistrates’ Court, had jurisdiction to determine a claim of this nature limited to a claim for a maximum of $2,000.
I should first dispose of a preliminary point. Counsel for the plaintiffs argued that the money which was paid into court and accepted is not a "sum recovered" within the meaning of that expression in s13(1). No authority was cited in support of the argument. It is in fact contrary to authority and I reject it. Money paid into court which is accepted is a "sum recovered" in an action. Parr v Lillicrap (1862) 32 LJ Ex 150, 11 WR 94; Boulding v Tyler (1862) 32 LJ QB 85; Parkes v Knowles [1957] 3 All ER 600; McKeon v Myer Southern Stores Pty Ltd [1979] Tas R 307 (NC) Unreported 51979.
In one regard the provisions of s13(1) are difficult to understand. The court or a judge is given a discretion whether to make an order allowing the plaintiff the costs of the action "notwithstanding that the sum recovered does not exceed the jurisdictional limit of the inferior court". The drafting of the subsection in this way suggests that there co–exists some other law which, if it was not for the provisions of s13(1), would prevent the making of an order for costs in favour of the plaintiffs. But so far as I am aware there is no other law on the subject. Immediately prior to the amendment of s13 by the Supreme Court Civil Procedure Amendment Act 1986, s13(1) provided a prima facie rule for a case such as this that a plaintiff should not be entitled to any costs of the action. But that subsection was omitted and replaced with the subsection in force now and I think that the only explanation for the puzzling terms of it is that the draftsman had in mind the subsection which was being replaced.
Counsel for the plaintiffs submitted that they should be allowed their costs of the action taxed on the basis of Table A in the Rules of Court. Counsel for the defendants submitted that the court should order:
1 That the plaintiffs pay the defendants‘ costs of the action.
2 Alternatively, that the plaintiffs pay some portion of the defendants’ costs of the action.
3 Alternatively, that the plaintiffs should recover no costs of the action from the defendants.
4Alternatively, that the defendants should pay the plaintiffs‘ costs of the action taxed on the scale under the Local Courts Act 1896 appropriate to a claim for $500 or on Table B under the rules of this Court appropriate to a claim for $500.
Counsel for the defendants referred to two English cases in which small sums were recovered by plaintiffs for damages and it was ordered that the plaintiffs pay the defendants’ costs of the actions. The first of those cases was Anglo–CyprianTrade Agencies v Paphos Wine Industries [1951] 1 All ER 873. In that case the plaintiffs claimed £2,028 damages upon the basis that goods sold to them by the defendants were valueless. The full purchase price was claimed together with certain other items. However at the trial Devlin J accepted that the defect in the goods could easily be removed at a cost of £52 and the plaintiffs were given judgment for that sum. Devlin J then ordered that the plaintiffs pay the defendants‘ costs on the basis that the sum recovered was "nominal". Counsel for the defendants in this case submitted that if a sum recovered could be described as "nominal" when it was 2.5 per cent of the amount claimed then in this case a recovery of only about 1 per cent of the amount claimed could equally be considered to be "nominal" and a similar order for costs should be made. With respect I do not agree with Devlin J that the damages recovered before him could correctly be described as "nominal".
The other English case was Alltrans Express Ltd v C V A Holdings Ltd [1984] 1 All ER 685. In that action an assessment of damages occurred following an admission of liability. The plaintiffs sought £82,500 damages but were awarded a truly nominal sum of £2. In those circumstances the order that was made requiring the plaintiffs to pay the defendants’ costs was the only appropriate order.
As a starting point it may be said that if there were no good and sensible reasons for believing that there was a real possibility that damages exceeding $5,000 would be recovered it would be unjust to order that the defendants pay the plaintiffs‘ costs taxed in accordance with Table A. However if there were good and sensible reasons for believing that it would not necessarily determine the question before me.
Upon first reading the particulars of damages claimed by the plaintiffs the question which immediately occurred to me was whether they would only be entitled to recover a small sum by way of damages limited to expenses and losses directly associated with the aborted sale. The same question occurred to Underwood J who conducted a number of pre–trial conferences in this action. He raised it at a conference on 1 August 1991 and again later. Counsel for the defendants informed me that this very point was particularly in mind when payment into court of $500 was made.
Counsel for the plaintiffs made no attempt to explain why it was decided to accept the money paid into court and to abandon virtually 99 per cent of the damages claimed. I was left completely uninformed in this regard. Counsel conceded that as a result of the question concerning damages being raised by Underwood J at the pre–trial conference, research had been conducted into whether the purchaser under the first contract would have entered into the contract for the same price (that is $330,000) or any lesser price if he had been made aware of the existence of the restrictive covenant. Counsel did not state what the result of that research was but in answer to a question from me he stated that it had not been intended to call the original purchaser as a witness at the trial. He submitted that the case was a proper one for institution in this Court because it was complex. He said that it involved the law of restrictive covenants, the effect on a contract of sale of a failure to disclose a restrictive covenant, the effect of a restrictive covenant on the title, the damages that may be recoverable and other matters.
Nothing was put to me on behalf of the plaintiffs to suggest that at any time there were any good and sensible reasons for believing that the plaintiffs had a real chance of establishing damages in a sum greater than about the amount paid into court. I have no reason to doubt that for some time they may have thought that they would be able to recover a sum far in excess of $500. But the only conclusion I can reasonably come to in that regard is that their belief arose out of an erroneous understanding of the law of damages. It would be unfair to damnify the defendants for costs on the highest scale in those circumstances.
The discretion given to the court by s13 is unfettered. There is no longer a prima facie rule disentitling the plaintiff to costs. I take into account that the defendants could have made their payment into court shortly after the action was instituted in 1989 and it is reasonable that to some extent, so far as costs are concerned, they should bear some burden as a result.
The conclusion I have come to is that it is fair and just, and it will be so ordered, that the defendants pay the plaintiffs’ costs of the action incurred to the time of payment into court on 28 September 1992, and that the scale of costs be that applying to a claim made in an action in the Court of Requests under the Local Courts Act 1896 where the amount claimed does not exceed $1,000.
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