State of New South Wales v Gebethner

[2009] NSWCA 237

New South Wales

Court of Appeal

CITATION:	State of New South Wales v Gebethner [2009] NSWCA 237
HEARING DATE(S):	29/07/2009
JUDGMENT DATE:	29 July 2009
JUDGMENT OF:	Giles JA at 14, 16; Macfarlan JA at 15; Handley AJA at 1
EX TEMPORE JUDGMENT DATE:	29 July 2009
DECISION:	1. That leave to appeal be granted, 2. That filing of a notice of appeal and further compliance with the rules be dispensed with, 3. That the appeal be allowed with costs, and 4. That the order as to costs in the District Court be set aside and that there be substituted an order that the plaintiff pay the defendant’s costs of the proceedings in the District Court on the ordinary basis.
CATCHWORDS:	COSTS - discontinuance - plaintiff unable to meet damages threshold - defendant prima facie entitled to costs of action.
LEGISLATION CITED:	Civil Liability Act, s 26C Suitors’ Fund Act.
CASES CITED:	House v The King 55 CLR 499
PARTIES:	State of New South Wales - Applicant Ben Gebethner - Respondent
FILE NUMBER(S):	CA 40062/2009
COUNSEL:	S Norton SC and G Mahony - Applicant Respondent in Person
SOLICITORS:	I V Knight Crown Solicitor - Applicant
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 383/06 (Newcastle)
LOWER COURT JUDICIAL OFFICER:	Tonner SC, DCJ
LOWER COURT DATE OF DECISION:	10.12.08

CA 40062/09

GILES JA
MACFARLAN JA
HANDLEY AJA

WEDNESDAY 29 JULY 2009

STATE OF NEW SOUTH WALES v BEN GEBETHNER

Judgment

1 HANDLEY AJA: This is an application for leave to appeal from a decision of Judge Toner SC who ordered that each party should pay his or its own costs of proceedings in the District Court brought by the present respondent. The proceedings arose out of an accident which occurred on 3 November 2003 while he was detained in St Heliers Correctional Centre, Muswellbrook pursuant to a sentence for contempt imposed by the Family Court.

2 The proceedings were commenced in the District Court on 14 August 2006. Section 26C of the Civil Liability Act, which was in force at the relevant time, provided that no damages could be awarded unless the injury in question resulted in the death of the offender or in a degree of permanent impairment of the offender of at least fifteen per cent. An Appeal Panel ruled on 5 September 2008 that the degree of permanent impairment of the plaintiff as a result of the accident was zero per cent. This established that the plaintiff’s case was without substance and could not possibly succeed.

3 The plaintiff filed a notice of motion on 26 November 2008 in which orders were sought that the proceedings be dismissed and that each party should pay its own costs. The matter came before Judge Toner on 10 December 2008 and after hearing the parties his Honour gave concise reasons and ordered each party to pay his or its own costs of the action and of the motion. It is not clear whether his Honour granted leave to discontinue under UCPR 12.1(1) or dismissed the proceedings under other rules but the costs position under the rules appears to be the same. The relevant rules are UCPR rr 42.19(2) and 42.20(1).

4 There is no evidence of the amount of costs involved but Ms Sharron Norton SC informed the Court that the amount that would be claimed was upwards of $70,000. The statement of claim was filed on 14 August 2006, a defence on 14 February 2007 and a number of medical reports were obtained by the Crown Solicitor on different aspects of the plaintiff’s medical condition. The Court can safely proceed on the assumption that the amount involved is substantial even though it is in no position to form any view as to the actual amount.

5 The judge’s reasons for making the order he did were summarised in a short passage at pp 2 and 3 of his reasons. He said:

“It seems to me that in circumstances where there was competing medical opinion at the time that the claim was commenced, and in circumstances where the plaintiff subsequently did receive an assessment which would have entitled him to maintain his action, it was only subsequently after an appeal in relation to that assessment that an amended assessment arrived which disentitled the plaintiff from maintaining his claim that those are circumstances where in my opinion and in the circumstances of a case such as this the justice of the case demands that each party pay its own costs.”

6 The proceedings were commenced when the plaintiff had no firm medical evidence that the degree of his permanent impairment exceeded fifteen per cent. In the end the Appeal Panel found that he had no impairment as a result of this accident.

7 The only evidence of the plaintiff’s impairment at the commencement of proceedings is in the affidavit of Jill Felicity Borrie of 25 November 2008. She said in para 5,

“From my perusal of the file I can say that medical evidence obtained from hospital clinical notes and treating doctors was sometimes equivocal but tended to support the plaintiff’s assertion that he had suffered a closed head injury and a severe traumatic brain injury in the accident.”

8 The clinical notes of the hospital and the treating doctors were not in evidence although they were listed in the report of Dr Donaldson who was qualified on behalf of the Crown. The Court does not know what they contained. The relevant list appears at pp 37 and 38 of the white book. It must therefore be said on the evidence that the plaintiff had a very flimsy basis for commencing the proceedings if damages were to be recovered.

9 Section 26C does not operate to prevent proceedings being commenced. It operates at the point of judgment by prohibiting the award of damages. The plaintiff no doubt commenced proceedings when he did to avoid the looming three year limitation period. The fact is however that the proceedings were commenced without any firm evidence, so far as the Court has been shown, that damages could be recovered because the degree of permanent impairment exceeded fifteen per cent.

10 In any event the plain fact is that the plaintiff commenced proceedings which ultimately failed and were dismissed because they had no possible prospects of success. This creates an immediate prima facie entitlement to costs. There is an expectation that the successful party is entitled to his costs, whether the proceedings were commenced with or without good cause. If the proceedings ultimately fail the unsuccessful party must expect in all but extraordinary circumstances to have to meet the costs of the successful party.

11 In these circumstances the applicant has brought this case within the principles established in House v The King 55 CLR 499, 504-5 where the factors listed which entitle an appellate court to intervene and re-exercise a judicial discretion include a mistake as to the facts and the application of a wrong principle.

12 The primary judge, with respect, was not entitled to find, on the evidence before him, that medical evidence was available to the plaintiff when the action was commenced which supported the view that fifteen per cent impairment could be established. The reasons he gave for exercising his discretion demonstrated that he failed to take into account the prima facie principle that an unsuccessful party in litigation must expect in normal circumstances to have to pay the costs of the successful party.

In these circumstances I would propose,
1. That leave to appeal be granted,
2. That filing of a notice of appeal and further compliance with the rules be dispensed with,
3. That the appeal be allowed with costs, and
4. That the order as to costs in the District Court be set aside and that there be substituted an order that the plaintiff pay the defendant’s costs of the proceedings in the District Court on the ordinary basis.

13 The respondent is to have a certificate under the Suitors’ Fund Act.

14 GILES JA: I agree.

15 MACFARLAN JA: I agree also.

16 GILES JA: Those will be the orders of the court. Thank you Ms Norton, thank you Mr Gebethner.

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