Tuohey v Freemasons Hospital (No 2)
[2012] VSCA 123
•14 June 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| S APCI 2011 0090 | |
| PATRICK TUOHEY | Plaintiff |
| v | |
| FREEMASONS HOSPITAL (NO 2) | Defendant |
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| JUDGES | REDLICH and MANDIE JJA and KYROU AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 16 February 2012 |
| DATE OF JUDGMENT | 14 June 2012 |
| MEDIUM NEUTRAL CITATION | [2012] VSCA 123 |
| CASE STATED IN MATTER | Tuohey v Freemasons Hospital (Unreported, County Court of Victoria, Judge Saccardo, 30 May 2011) |
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COSTS – Special case stated at behest of both parties – Whether costs follow the event – Where judgment favours defendant in case stated – Benefits to both parties in requesting special case – Relevance of Appeal Costs Act 1998 (Vic) s 19 – County Court Act 1958 (Vic) s 76.
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| Appearances: | Counsel | Solicitors |
| For the Plaintiff | Mr J Ruskin QC Ms B Y Knoester | Holding Redlich |
| For the Defendant | Mr J J Noonan SC Mr N Murdoch | Minter Ellison |
REDLICH JA:
Costs of the special case
Following the publishing of the Court’s reasons[1] the defendant sought an order that the plaintiff pay its costs of and occasioned by the hearing of the special case. The plaintiff resisted such an order and applied for an indemnity certificate in respect of his costs of the special case pursuant to s 19 of the Appeal Costs Act 1998.
[1]Tuohey v Freemasons Hospital [2012] VSCA 80 (Redlich and Mandie JJA and Kyrou AJA).
Sub-section 76(2) of the County Court Act 1958 provides that where any question in the form of a special case has been reserved for the opinion of the Court of Appeal it may make ‘such order as it thinks proper as to the costs of and occasioned by the hearing of such a case’. The discretion conferred by sub-s 76(2) being broad, the defendant submits that it contemplates the possibility of a costs order being made against an unsuccessful plaintiff in a special case determined by the Court of Appeal.
The defendant asserts that, as the reserved questions of law have been answered in its favour and in accordance with the position which it took before this Court, it is the successful party. There is no reason to depart from the normal practice that costs should follow the event. The determination of a special case was said by the defendant to be indistinguishable from the situation had the issues raised by the special case been determined at trial and had they been the subject of an appeal which was determined in the defendant’s favour. The defendant would then have been entitled to its costs of the appeal.
I reject the contention that the circumstances are indistinguishable. The special case was not stated at the request or agitation of one party. As the trial judge observed in his ruling, the parties made a joint application during the course of a directions hearing that the proceedings be adjourned and that a question of law be reserved in the form of a special case for the opinion of the appellate court. His Honour further noted:
I am informed by the parties that the trial in this matter will occupy at least two weeks and that the issue which arises as to the way in which s 28F(2) of the Act should be interpreted is of such significance that there is no prospect of the parties being able to resolve the case without the question being determined. Further, both parties have advised me that dependent upon my ruling upon the issue, the party adversely affected would appeal the point.
Accordingly, his Honour was of opinion that it was ‘in the interests of justice’ that he accede to the parties’ request and refer the questions of law for the opinion of the Court of Appeal. Both parties collaborated to provide agreed facts for this Court’s consideration.
The defendant’s submission that ‘costs should follow the event’ wrongly assumes a predisposition to granting costs to the party in whose favour the questions of law have been answered on a special case. The discretionary nature of the power to order costs in such circumstances is entirely unfettered. In some cases it will be appropriate to make no order as to costs notwithstanding that one party’s position on the questions of law has been vindicated.[2]
[2]Chiarellav Accident Compensation Commission [1992] 2 VR 103; The Queen v Rigby (1956) 100 CLR 146; Industrial Equity v Commissioner of Corporate Affairs [1990] VR 780, 787.
I reject the defendant’s contention that the involvement of both parties in jointly asking the trial judge to state a special case was of no relevance to the question of costs. Their joint request and motivation, as explained in the ruling, is a matter of significance. Both parties recognised that there may be substantial savings if the question were resolved before trial. Firstly, to have the question answered would advance their prospects of settling the case before trial as there was a substantial claim of economic loss pleaded. Second, in the event that a trial still ensued, there might be savings in time and costs. Thirdly the resolution of the reserved questions removed a risk that a judgment following a trial might be set aside on appeal and a new trial ordered as a consequence of a subsequent appellate ruling on the questions of law. The multiple purposes of both parties were thus served by the determination of the special case.
The plaintiff relied upon two further considerations to which I should briefly advert in support of his contention that no order for costs should be made. He referred to sub-s 19(1) of the Appeal Costs Act 1998 which provides that where a question of law is reserved in the form of a special case a party to those proceedings may apply to the superior court for the grant of an indemnity certificate in respect of the costs that the party has incurred in respect of the proceedings on the case stated.
The plaintiff thus submitted that it would be inconsistent with the operation of s 19 for the Court to make the ‘usual’ costs order against a party who ‘did not succeed’ because the section enables both parties to be paid by the board an amount equal to that party’s own costs of the proceedings. To order costs against the plaintiff in circumstances where there was provision for the defendant to be indemnified under the Act was, it was submitted, contrary to the objectives of the Act.[3]
[3]The plaintiff referred to the second reading of the Appeal Costs Bill on 10 November 1998 where it was said that a major objective of the Bill was to reduce the impact on litigants of the costs of appeals.
Although the defendant initially sought the grant of an indemnity certificate, it abandoned that application in its written submissions. It stated that as a consequence of sub-s 35A(1) of the Appeal Costs Act1998 it would be precluded from obtaining payment on any indemnity certificate that was granted. It submitted that to construe s 19 of the Appeal Costs Act1998 as the plaintiff contends would be to place an unwarranted fetter on the Court of Appeal’s discretion to award costs pursuant to sub-s 76(2) of the County Court Act 1958. The defendant submitted that the availability or otherwise of an indemnity certificate pursuant to the Appeal Costs Act 1998 was not a relevant consideration.
The plaintiff further contended that as this case was of particular importance to a class of potential plaintiffs who might have substantial economic loss claims, the determination of the case settled a dispute which had not been the subject of previous judicial consideration. The defendant contended that there was no special
public interest in the determination of a special case as there were very few plaintiffs affected by sub-s 28F(2) of the Wrongs Act 1958.
Accepting that there are circumstances in which the clarification of the law for the benefit of others may attract an immunity from an adverse costs order, I do not stay to consider whether there was a special public interest in the determination of the special case and if so, whether that fact should be taken into account in the plaintiff’s favour. Assuming, contrary to the defendant’s submission, that the possible grant of an indemnity certificate may be a relevant consideration, it is unnecessary in the present case that these matters be the subject of any further consideration. The joint reasons of the parties in seeking the stating of a special case provide a sufficient and compelling basis for refusing an order that the plaintiff pay the defendant’s costs. Those reasons identify the benefits which both parties contemplated in seeking a determination of the questions of law before trial.
I would make no order for costs. I would grant the plaintiff an indemnity certificate pursuant to s 19 of the Appeal Costs Act1998.
MANDIE JA
I agree.
KYROU AJA
I also agree.
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