Raad v State of New South Wales (No 2)

[2017] NSWDC 94

District Court

New South Wales

Medium Neutral Citation:	Raad v State of New South Wales (No 2) [2017] NSWDC 94
Hearing dates:	24 April 2017
Date of orders:	02 May 2017
Decision date:	02 May 2017
Jurisdiction:	Civil
Before:	Dicker SC DCJ
Decision:	(1) The parties should bring in Short Minutes of Order reflecting the award of 4% per annum interest on the damages amount of $20,000; (2) Order 3 of the orders made on 23 March 2017 is vacated; (3) The defendant is to pay 90% of the plaintiff’s costs of the proceedings as agreed or assessed.
Catchwords:	Interest - pre-judgment – tort of false imprisonment – whether the court rates should be used or rates similar to those for non-economic loss   Costs – where plaintiff has not succeeded on some aspects of case including some torts alleged – whether the defendant should be ordered to pay only a proportion of the plaintiff’s costs of the proceedings
Legislation Cited:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules
Cases Cited:	Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 306 Metropolitan Meat Industry Board v Williams (1991) 24 NSWLR 54 Moran v State of New South Wales [2017] NSWDC 19 MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 Shield Mercantile v Citigroup [2013] NSWSC 287 State of New South Wales v Abed [2014] NSWCA 419
Category:	Costs
Parties:	Johnny Raad (Plaintiff) State of New South Wales (Defendant)
Representation:	Counsel: A Canceri (Plaintiff) M Hutchings (Defendant)   Solicitors: O'Brien Solicitors (Plaintiff) Henry Davis York (Defendant)
File Number(s):	2015/00119450

Judgment

1. In these proceedings, after a trial lasting eight days, I handed down reasons for decision on 23 March 2017. In paragraph 274 of those reasons I set out the orders to be made in the proceedings as follows:

“(1)   There is to be judgment for the plaintiff;

(2)   Liberty to the parties to bring in short minutes of order reflecting the mathematically agreed judgment sum including interest;

(3)   The defendant is to pay the plaintiff’s costs of the proceedings as agreed or assessed;

(4)   Liberty to the parties to apply to vary the costs order in (3) above;

(5)   The exhibits may be returned after 28 days.”

2. The parties sought an opportunity to make submissions to the court in relation to the question of the rate of interest, if any, to be awarded on the $20,000 damages for false imprisonment (see paragraph 273 of the reasons for decision) and the question of costs.

Interest

3. Section 100 of the Civil Procedure Act 2005 (NSW) provides as follows:

“100   Interest up to judgment

(1)  In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit:

(a)  on the whole or any part of the money, and

(b)  for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect.

(2)  In proceedings for the recovery of a debt or damages in which payment of the whole or a part of the debt or damages has been made after the proceedings commenced but before, or without, judgment being given, the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit:

(a)  on the whole or any part of the money paid, and

(b)  for the whole or any part of the period from the time the cause of action arose until the time the money was paid.

(3)  This section:

(a)  does not authorise the giving of interest on any interest awarded under this section, and

(b)  does not authorise the giving of interest on a debt in respect of any period for which interest is payable as of right, whether by virtue of an agreement or otherwise, and

(c)  does not authorise the giving of interest in any proceedings for the recovery of money in which the amount claimed is less than such amount as may be prescribed by the uniform rules, and

(d)  does not affect the damages recoverable for the dishonour of a bill of exchange.

(4)  In any proceedings for damages, the court may not order the payment of interest under this section in respect of the period from when an appropriate settlement sum was offered (or first offered) by the defendant unless the special circumstances of the case warrant the making of such an order.

(5)  For the purposes of subsection (4), appropriate settlement sum means a sum offered in settlement of proceedings in which the amount for which judgment is given (including interest accrued up to and including the date of the offer) does not exceed the sum offered by more than 10 per cent.”

4. The purpose of an award of interest to a plaintiff is to compensate that plaintiff for loss suffered by being kept out of money to which the plaintiff is entitled during the relevant period in question: MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663. The question of interest lies in the discretion of the court but it is a matter in relation to which the court must exercise its discretion judicially.

5. The plaintiff submits that interest should be awarded on the $20,000 damages for the tort of false imprisonment under the court rates referred to in Part 36.7 of the Uniform Civil Procedure Rules (“UCPR”). There are examples where this approach has been adopted in this court: see for example Moran v State of New South Wales [2017] NSWDC 19 at paragraph 56.

6. The defendant submits that interest should be awarded at the rate of 2% by analogy with the appropriate rate of interest to apply at common law for damages for non-economic loss relying on Gogic, above, in the High Court, and Metropolitan Meat Industry Board v Williams (1991) 24 NSWLR 54 at 58-59. In those cases a 4% per annum figure for interest was used but an award of interest was only given at 2% per annum because damages for non-economic loss are seen as being spread over the period both before and after trial. In Gogic the High Court held that it was inappropriate to apply commercial rates of interest to awards for non-economic loss where no investment risk is involved: Gogic at 663-4.

7. The defendant also relies on various matters which it submits are relevant to the court’s discretion as to whether any interest should be allowed and if interest is allowed, at what rates. The defendant relies in particular on the failures of the plaintiff to succeed in allegations of fabrication of evidence by Senior Constable Blades, the tort of malicious prosecution and the claim for damages for the tort of battery for intentionally/negligently inflicted injuries.

8. In my view, the percentage of interest which should be applied to the damages award is 4% per annum. First, the award of damages for false imprisonment is, in my view, different to an award of damages for non-economic loss in a personal injuries case. There the damages are commonly awarded to reflect non-economic loss both in the past and in the future. However, an award of damages for false imprisonment is focused on the false imprisonment at the time and there is generally not a component for future loss.

9. In addition, in State of New South Wales v Abed [2014] NSWCA 419 Gleeson JA (with whom Bathurst CJ and Macfarlan JA agreed on this point) stated as follows at paragraphs [239]-[242]:

“[239] The Court has power to award interest up to judgment in proceedings for the recovery of money, including damages, to be calculated at such rate as the Court thinks fit on the whole or any part of the money and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect: s 100(1) Civil Procedure Act 2000 (NSW).

[240] Prior to 1 July 2010 the default rate of pre-judgment interest was equivalent to the rate of post-judgment interest as specified by UCPR r 36.7(1) and as set out in UCPR Sch 5. From 1 July 2010 the default rate of pre-judgment interest allowed for periods after 30 June 2010 is no longer equivalent to the default rate of post-judgment interest. Rather, UCPR r 6.12(8) provides that the rate of interest (that is taken to be claimed if no other rates are specified) is 4% above the cash rate published by the Reserve Bank in December and June each year.

[241] In her written submissions on appeal, Ms Abed’s claim for interest in respect of damages for trespass and false imprisonment seems to be calculated using the default rate of pre-judgment interest. However, it is generally accepted that an appropriate interest rate to allow on pre-trial non-economic loss is 4%, subject to the right of a trial judge to adopt a different rate in the circumstances of a particular case: MBP (SA) Pty Ltd v Gogic [1991] HCA 3; 171 CLR 657 at 664 and 666; Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 288–289. No submission was advanced by Ms Abed as to why an interest rate of 4% should not be applied here.

[242] Accordingly, Ms Abed should be awarded interest at 4% on the amount of $10,000 for trespass and $10,000 for false imprisonment, in each case from 8 December 2006 to the date of judgment (27 September 2013). This amount in each case is calculated as $2,724.38 ($10,000 x 4% p.a. x 2486 days).”

10. The view which I had formed as to the appropriate interest rate is thus confirmed by this approach in the Court of Appeal. Abed has not been questioned on this issue by later appellate authority in this State.

11. Accordingly, interest should be allowed at 4% on the $20,000 award from the date of the false imprisonment to today.

Costs

12. In relation to the issue of costs, the plaintiff relies on the written submissions of his counsel dated 24 April 2017 and the oral submissions made on 24 April 2017. The defendant relies on the oral submissions made on its behalf by its counsel on 24 April 2017.

13. The plaintiff submits as follows:

1. The order made in the reasons for decision should stand. The plaintiff should have an order for his costs of the proceedings as agreed or assessed;

2. The general rule is that costs follow the event (Part 42.1 of the UCPR). The plaintiff was the successful party in the proceedings having obtained a judgment in his favour, and accordingly he is entitled to his costs of the proceedings;

3. It is accepted that the plaintiff did not win on all issues in the matter;

4. The plaintiff relies on the comments of Ward J (as her Honour then was) in McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 306 at [21] where her Honour stated as follows:

“[21]It has been said that the discretion to apportion costs is one to be exercised only in the most exceptional of circumstances (Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 28 ALR 201; (1979) 42 FLR 213; (1979) ATPR 40-141) and, as noted above, in Cretazzo v Lombardi (1975) 13 SASR 4, at 12, Jacobs J recognised the need for the court to be mindful not to discourage litigants from canvassing all material issues for fear of an adverse costs order (and see Stena Rederi Aktiblag v Austal Ships Sales Pty Ltd [2007] FCA 1141, at [12]).”

5. Her Honour later stated at paragraph [43] as follows:

“[43]Overall, I am not satisfied that this is a case in which fairness demands an apportionment of the costs referable to separate issues in the proceedings and, in saying this, I am mindful of the caution that the ultimate ends of justice may not be served if a party is dissuaded by risk of costs from canvassing all issues which may be material to the determination of the case, to paraphrase from what was said by Jacob J in Cretazzo (at 12).”

6. The plaintiff has succeeded on a number of the important factual issues in the case. While the plaintiff has failed on some factual issues and the cause of action in malicious prosecution, it was necessary for the false imprisonment cause of action to undertake a detailed review of the facts. The hearing would have been only modestly shorter if the malicious prosecution cause of action had not been brought or if the attacks on the credit of Senior Constable Blades had not been made;

7. What needed to be undertaken at any hearing was a detailed examination of the events of 10 June 2012. By necessity, this would have involved the calling of most of the factual witnesses including the police officers. A substantial part of the hearing was taken up by dealing with the defence of lawful justification raised by the defendant in relation to the claims for false imprisonment and battery;

8. The factual matters raised concerning the allegation that the proceedings were instituted maliciously and without reasonable and probable cause were matters which were raised in the context of the plaintiff’s claims for false imprisonment and battery;

9. There was a very substantial and lengthy cross-examination of the plaintiff;

10. The defendant raised in its submissions other defences not raised on the pleadings which could not be pursued by the defendant;

11. There is no reason to disturb the usual rule that costs should follow the event.

14. The defendant submits as follows:

1. The plaintiff failed in his attack on Senior Constable Blades that he fabricated parts of his evidence;

2. The plaintiff failed in his claim in the tort of malicious prosecution;

3. The plaintiff failed in establishing that the battery occurred with an intention to cause injury to the plaintiff;

4. There were findings that Senior Constable Blades thought that he was doing the right thing in arresting the plaintiff in the circumstances. There was no finding that Senior Constable Blades was acting mala fides;

5. Very serious allegations had been made against police officers which needed to be dealt with thoroughly and examined in detail;

6. The findings made by the court were quite contrary to the plaintiff’s case on the facts;

7. The plaintiff’s view of the film evidence was peculiar and not justified in the light of the objective film evidence;

8. Although it could not be said that the plaintiff’s case was “technical”, the matters put in issue were far in excess of what should have been a simple and much shorter case;

9. A detailed cross-examination needed to be undertaken of the plaintiff to show his unreliability;

10. On the damages issues, Dr Drummond was preferred to Dr Le and this was a separate part of the case;

11. It was appropriate in the light of the authorities to make a proportionate finding as to the time spent on the issues which the plaintiff failed on: see Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 at [25]; Shield Mercantile v Citigroup [2013] NSWSC 287 at [29];

12. In all the circumstances the plaintiff should be awarded only 50% of his costs of the proceedings as agreed or assessed.

Consideration

15. The starting principle is that set out in Part 42, Rule 1 of the UCPR that usually an order for costs follows the event.

16. In the present case the plaintiff has obtained judgment in the proceedings and will obtain an order for damages including interest.

17. The question therefore arises as to whether some other order should be made by the court in its discretion.

18. In particular, the question arises as to whether the court should order costs of the proceedings as a whole to the plaintiff without attempting to differentiate between particular issues on which the plaintiff may or may not have succeeded or whether a different costs order should be made taking into account the matters on which the plaintiff has failed. An incorrect approach is to make a detailed analysis of the time taken in relation to particular issues as this is often difficult to achieve and questionable in result.

19. The better approach is to stand back and look at the whole of the proceedings and make a decision as to whether some different costs order should be made such that the plaintiff does not obtain all of his or her costs of the proceedings.

20. The court has a discretion in relation to the question of costs. In exercising that discretion I take into account:

1. The submissions made by the parties;

2. The general rule in Part 42, Rule 1 of the UCPR;

3. The need to identify a proper reason to depart from the usual rule;

4. The areas in which each party was successful in the proceedings;

5. The lengthy time taken in cross-examination of the plaintiff;

6. The fact that most of the events of 10 June 2012 were disputed by the parties;

7. The defendant’s success on the malicious prosecution and intentional/negligent battery issues;

8. The parties various successes on different factual issues;

9. That a detailed examination of the facts would have been required even if malicious prosecution was not pressed;

10. The limited time taken up with the medical issues;

11. The fact that there were substantial written and oral submissions in relation to the facts and the lawful justification issue.

21. Taking into account all of these matters, in my view, the time spent on the medical evidence relating to the intentional/negligent battery issue and the malicious prosecution issue was limited but distinct. The intentional/negligent battery issue was the monetary focus of the plaintiff’s claim for damages.

22. In exercising my discretion as to costs in all the circumstances of the case, I would make a contrary order and order that the defendant pay to the plaintiff 90% of the plaintiff’s costs as agreed or assessed. In my view the negligent battery issue, the medical evidence issues and the malicious prosecution issue had a degree of distinction and importance that warrants a different order. However, I do not believe that the time taken up with these issues was extensive and therefore I reduce the plaintiff’s costs only by 10%.

23. I do not consider that a separate costs order should be made as to this application. Although the parties have both enjoyed a degree of success, the plaintiff has been the more successful.

Disposition

24. Accordingly, I make the following orders:

1. The parties should bring in Short Minutes of Order reflecting the award of 4% per annum interest on the damages amount of $20,000;

2. Order 3 of the orders made on 23 March 2017 is vacated;

3. The defendant is to pay 90% of the plaintiff’s costs of the proceedings as agreed or assessed.

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Decision last updated: 05 May 2017