White v State of South Australia (No 2)
[2010] SASC 185
•24 June 2010
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
WHITE & ORS v STATE OF SOUTH AUSTRALIA (No 2)
[2010] SASC 185
Judgment of The Honourable Justice Anderson
24 June 2010
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
Prior to trial each plaintiff had made an offer to consent to judgment pursuant to the Rules of Court - offers were out of time - defendant challenged the validity of the Rules offers - plaintiffs each received an individual award of damages - three plaintiffs received less than their Rules offer - plaintiffs sought costs to be calculated on a global basis on the total award of damages in the case - indemnity costs sought in respect of each plaintiff.
Whether Rules offers are valid and effective - whether costs should be calculated on a global basis or on an individual basis - whether costs to be awarded on an indemnity basis, if awarded, and from what date.
Held: Rules offers are valid and effective and can be taken into account - in the alternative, offers can be taken into account as equivalent to Calderbank letters - costs should be calculated on an individual basis, not on a global basis, because each plaintiff took their own action; there was no class action - indemnity costs are awarded for the seven plaintiffs whose award exceeds their Rules offer, from 14 days after the date when the offers were filed - the other three plaintiffs are awarded party and party costs on the Supreme Court scale.
PROCEDURE - COSTS - RECOVERY OF COSTS
Whether four of the ten plaintiffs should receive any costs at all because the amount awarded does not exceed $75,000.
Held: Those plaintiffs are not disentitled to costs merely because their award does not exceed $75,000, by operation of the Court's discretion under r 40 - the case was complex factually and legally and involved a challenge to the actions of the State of South Australia - this justified the actions being brought in this Court.
PROCEDURE - COSTS - SCALES OF COSTS - SCALE APPLICABLE
Defendant submitted that if costs were to be awarded, they ought to be awarded on the District Court scale due to the quantum of the awards.
Whether nature of the case justified bringing the action in this Court and which scale of costs is applicable.
Held: It would not have been in the public interest for the actions of the ten plaintiffs to be split and brought partly in the District Court and partly in this Court - the nature of the case justified it being brought wholly in this Court - costs, where awarded, will be awarded on the Supreme Court scale for each plaintiff.
Supreme Court Act 1935 (SA) s 40(1); Supreme Court Rules 1987 r 28, r 73, r 187(2), r 263(2)(h), r 263(3); r 264 and r 264(5)(c), referred to.
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Sheahan v Hertz Australia Pty Ltd (1995) 181 LSJS 147; Flinders Diamond Ltd v Tiger International Resources Inc (No 2) [2006] SASC 180, applied.
White & Ors v State of South Australia [2010] SASC 95, discussed.
Calderbank v Calderbank [1976] Fam 93, considered.
WHITE & ORS v STATE OF SOUTH AUSTRALIA (No 2)
[2010] SASC 185Civil
ANDERSON J:
Background
On the 9 April 2010 I delivered judgment in this matter and awarded damages to each of the 10 plaintiffs: see White & Ors v State of South Australia [2010] SASC 95.
The amounts I awarded were, respectively,
(1)Lucinda White $95,110.00 inclusive of interest.
(2)Matthew Bonner $71,100.00 inclusive of interest.
(3)Isabella Brown $66,000.00 inclusive of interest.
(4)Stephanie Conway $95,050.00 inclusive of interest.
(5)Marcel de Bie $53,000.00 inclusive of interest.
(6)Ian Foster $77,000.00 inclusive of interest.
(7)Samuel Hoffmann $77,300.00 inclusive of interest.
(8)Jamie Holland $83,000.00 inclusive of interest.
(9)Emily Johnston $89,000.00 inclusive of interest.
(10)Helen Gowans $18,000.00 inclusive of interest.
Prior to the trial commencing, each of the plaintiffs had offered to consent to judgment pursuant to the Rules of Court. Eight of the ten plaintiffs lodged offers in the amount of $60,000 inclusive of interest. I use the word “lodge” because the rules require that the offer be filed in a suppressed file and must not be disclosed to the trial judge. Therefore it is not strictly filed. Mr Holland offered to accept the amount of $90,000 inclusive of interest and Ms Gowans offered to accept $30,000 inclusive of interest.
The issues
The issues on this application for costs are:
(i)Should four of the plaintiffs receive any costs at all because the amount awarded does not exceed $75,000? – see r 263(2)(h).
(ii)Are the rules offers filed by the plaintiffs valid and effective? – see r 187(2).
(iii)Are the plaintiffs, or some of them, entitled to indemnity costs, and if so, from what date?
Discretion as to costs
The court has a wide discretion in relation to costs and, as a general rule, costs follow the event. By reason of s 40(1) of the Supreme Court Act 1935 (SA), the court has a wide and unfettered discretion which includes a power to award costs on an indemnity basis. Generally there must be some special or unusual features to justify an award of indemnity costs instead of the usual award of costs on a party-party basis (see Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225). In exercising its discretion the court may have regard to any offer to consent to judgment or any other attempt to settle the action or an issue involved in the action (r 263(3)).
Within the court’s discretion, the basis for awarding costs is broad. Costs can be awarded on whatever basis the Court considers appropriate. The court can also award costs by way of a lump sum. Rule 264 generally covers the basis for an award of costs.
No costs for certain plaintiffs
The defendant has argued that because of r 263, four of the plaintiffs are not entitled to any costs. Rule 263(2)(h) states:
In an action founded on a claim for damages or any other monetary sum (other than a motor accident claim or a claim for defamation), general costs of action are not to be awarded in favour of the successful plaintiff unless the amount awarded exceeds $75 000.
The four plaintiffs who received less than that amount are Mr Bonner, Ms Brown, Mr de Bie and Ms Gowans. The defendant submits that the plaintiffs elected to run their individual actions and should instead have considered a test case to save costs. It argues that the amounts of the individual judgments cannot be aggregated to avoid the operation of the rule.
The defendant further submits that each plaintiff was a separate litigant and must be treated accordingly. The defendant does concede in its submissions that the matter was complex, both factually and legally. It further concedes that the difficult issues extended to questions of both liability and quantum.
The plaintiffs submit that r 263(2)(h) refers to an “action” and that an action is defined in r 28 and r 73 to include multiple parties. It is by this means that the plaintiffs seek to avoid r 263(2)(h) by saying that the plaintiffs properly joined in “an action” and that they were awarded in excess of $75,000.
I have not found it necessary to decide whether that point applies in this matter because I have formed a view that the plaintiffs’ alternative submission is correct. This submission relies on s 40 of the Supreme Court Act and the overall discretion of the court, even if a judgment is less than $75,000, to award costs, either the whole or part of the costs, because it is just in the circumstances of the case.
These plaintiffs sued the State of South Australia for the conduct of the State’s police force. They chose to sue in the highest court in the State and were successful. The amount of the judgments in four cases happens to be less than $75,000.
The case was fought with some profile and given considerable publicity. It was a case which involved senior officers of the South Australian Police Force, where several of those officers were criticised for their conduct by a police inquiry. The matter attracted public interest because of the alleged conduct of some police officers. The plaintiffs therefore decided to bring their actions in the Supreme Court, and in the circumstances I do not criticise them for doing so.
In addition, the plaintiffs’ counsel submitted that unfavourable comments were required to be made in the course of the trial against government officials, and this necessitated bringing the action in this Court. I agree with that submission.
Counsel for the plaintiffs submitted that it would have been a waste of resources to either run a test case, as suggested by the defendant, or to split the case between the District Court and this Court. It would be counterproductive and lacking in common sense to require two judges, one in this Court and one in the District Court, to deal with six plaintiffs on the one hand and four in another place.
Ms Nelson QC submitted that this was always a District Court matter and that there is a reason for the rule which provides a threshold for actions in this Court.
Although I agree that the rule is intended to serve the purpose of sifting cases into jurisdictional amounts appropriate for each jurisdiction, there is a further consideration, namely, that of the public interest, which is also relevant in where litigants bring their actions.
When the police force of the State is challenged as it was for its actions on the day of the protest, and where the issues are complex factually and legally, which is common ground, it is my view that no penalty should be imposed on plaintiffs who seek to have their actions heard in the Supreme Court.
For the reasons I have already given, I find that it was appropriate for all the plaintiffs to bring this matter in this Court, and I do not enforce r 263(2)(h) in respect of the four plaintiffs I referred to earlier.
Rules offers out of time
There is a question as to whether the offers lodged by the plaintiffs are valid because they were not lodged within the time prescribed by the Rules.
Offers of settlement must be filed 21 days before the first date fixed for the trial to commence. This is pursuant to r 187(2). The formal offers of settlement were served on the plaintiffs three days outside the time allowed and filed in court four days outside the time allowed. The plaintiffs point to the broad power which the court has to extend or reduce time generally in relation to the taking of a step in a proceeding. That is always subject to the specific facts of each case and what the reason for the lateness is and whether any prejudice results.
The plaintiffs further submit that even if technically the offers cannot be considered as rules of court offers they can nevertheless be taken into account as part of a Calderbank offer: see r 263(3).
The defendant submits that no proper reason has been advanced by the plaintiffs for the delay in filing their offers. The plaintiffs point to the possible flexibility regarding the starting date for the trial. The defendant submits that the suggestions of settlement negotiation and amendments to pleading which were being contemplated in the pre-trial discussions, together with the possibility of a changed starting date, does not provide an excuse for the offers filed out of time.
There has been no explanation by the plaintiffs other than those matters I just referred to as to why the offers were not filed earlier and in particular after the settlement conference was deadlocked. The proceedings had in fact been on foot since 2003.
These considerations, however, may be more relevant to when any offers should take effect, if they are to operate at all. It seems to me that they are more relevant considerations to this aspect rather than in consideration of whether the offers operate at all.
However, there is no suggestion that the defendant was in any way prejudiced by the filing of the offers three days late. The defendant had plenty of time in which to respond to those offers and chose not to. To the extent necessary, I would be prepared to abridge the time given that no potential prejudice has been pointed out. Whilst it is true that there must be some cut-off point, and that it must be adhered to, in my view there are reasons why strict compliance should be dispensed with. However, there is no suggestion that the defendant was in any way prejudiced by the filing of the offers three days late. The defendant had plenty of time in which to respond to those offers and chose not to. To the extent necessary I would be prepared to abridge the time, given that no potential prejudice has been pointed to. Whilst it is true that there must be some cut-off point and that it must be adhered to, in my view, in the absence of any prejudice, compliance with the rules should be dispensed with.
In the alternative, I would regard the late lodging of Rules of Court offers as equivalent to Calderbank letters for each of the plaintiffs, and act upon those offers in the exercise of my discretion: see Sheahan v Hertz Australia Pty Ltd (1995) 181 LSJS 147 at 155 and Flinders Diamond Ltd v Tiger International Resources Inc (No 2) (2006) SASC 180.
Indemnity costs sought
Each of the plaintiffs has claimed costs on an indemnity basis for the whole of the action. This is based on a submission that there were no reasonable grounds for a defence and that the defendant conducted the case on the basis that the actions of the protesters at the first incident which occurred on that day (the Kaesler/Gornall incident) were the precipitating event. It is submitted that the justification for the actions of the defendant was maintained by the defendant and that in fact there was no evidence capable of substantiating any such justification.
It is also submitted that the defendant was in the position of being able to assess the strength of its evidence from the statements it held from the various police officers, whereas the plaintiffs had no access at all to that information. It was not released to the plaintiffs until after the close of the plaintiffs’ case.
The plaintiffs summarise the reasons why they say they are entitled to costs on an indemnity basis. The reasons are:
(a)the proceedings were commenced or continued for some ulterior motive;
(b)defences were pursued in wilful disregard of known facts and clearly established law;
(c)allegations of justification were made which ought never to have been made;
(d)the case was unduly prolonged by groundless contentions;
(e)the defence was obviously untenable;
(f)there was an imprudent refusal of an offer to compromise.
I do not consider that the defendant continued the proceedings commenced by the plaintiffs for any ulterior motive.
There may be some merit in the suggestion by the plaintiffs that the law was clear and that in some instances the defendant could not hope to establish what it pleaded. The best example is the allegation of rock throwing on the mine land by the plaintiff Lucinda White.
This allegation is also a good example of the attempts by the defendant at justifying its actions on the day. These attempts were not able to succeed because there was no evidence capable of being called as to the precise circumstances of Ms White’s arrest.
As I pointed out in my reasons in White & Ors v SA (No 1), many of the plaintiffs gave an unchallenged version of their arrest and treatment. This was so because there was no police officer who was accountable for the arrest and detention of those plaintiffs. This in turn was because no system existed to record the details as prudent police procedure required.
There were some groundless contentions made by the defendant but in my view that does not lead to the conclusion that the defence was untenable, as claimed by the plaintiffs.
Finally, I do not think that the refusal to negotiate a compromise should be relevant in the decision as to whether to award indemnity costs. I have already penalised the State for the conduct of Mr Foley and Mr Wright in their statements made at the time the mediation was aborted. I have awarded extra damages to the plaintiffs for the conduct of the Ministers.
Mr Walters SC submitted that the question of the conduct of the Ministers should be revisited because mediation of disputes has been encouraged by both the Parliament and the courts. He put it that, to walk away from a mediation for reasons unconnected with the quality of the defence for collateral reasons, namely, to teach the protesters a lesson, is a relevant consideration.
As I have said, I have awarded extra damages to all plaintiffs except Miss Gowans by my awards of exemplary damages, which were in effect to teach the State a lesson for the conduct of the Ministers. Costs of the aborted mediation have already been paid by the State. I do not believe that it is a relevant factor in deciding whether I should award indemnity costs.
I have already dealt with the attempts to compromise and the defendant’s refusal to mediate and the related statements by the two Ministers of the government in my reasons delivered on 9 April 2010. See White & Ors v State of South Australia [2010] SASC 95 at [462] to [470].
In a nutshell, the plaintiffs claim that they are entitled to indemnity costs because the defendant must have known that it had no chance of success.
It is my view that although the statements held by the defendant from the various police officers who were to give evidence would have revealed some weaknesses, it would not extend to a conclusion that it had no chance of success. I do not find that the proceedings were continued for any ulterior motive other than an attempt to clear the various police officers for their conduct.
I have decided that indemnity costs are appropriate. That is, for the seven plaintiffs whose offers were exceeded by the amount awarded in the judgment. An important influencing factor in my final decision to award indemnity costs is that there was extensive video footage of most of the incidents which occurred on the day of the protest.
The video footage did not show the police in a good light, whatever explanation was to be given for the actions which they took. I have already highlighted the use of shields, batons and capsicum spray in a situation where, in my view, it was an overreaction. I have set out full details of my views on this in my reasons in White & Ors v SA (No 1). The imprisonment in the shipping container and the welding of mesh to the container whilst the plaintiffs were inside the container would be unlikely, in my view, to provoke any sympathetic reaction to the actions of the defendant from any court.
In my view, some of the matters alleged by the defendant could never be substantiated because there was simply no-one who could give the necessary evidence to contradict the allegations of the plaintiffs. The video footage and its analysis by the State should have prompted the State to make sensible compromise offers.
I do not consider there is any merit in another suggestion by the plaintiffs’ counsel that the combined amount of the plaintiffs’ judgment exceeds the combined amount of the plaintiffs’ offers and that therefore that gives them a global entitlement to indemnity costs. Each plaintiff took their action. There was no class action. Each plaintiff received an individual judgment. I reject that argument.
I do not think in the circumstances it would be appropriate to award indemnity costs across the board but I am prepared to award indemnity costs to seven plaintiffs, who I will identify later, from 14 days after the date when the offers were filed. As I have said, I do not accept the submission that the plaintiffs are out of court on their offers because of the failure to comply with the rules. By the same token, there is nothing before me to substantiate why indemnity costs should be awarded for the whole of each action from 2003.
The plaintiffs Lucinda White, Matthew Bonner, Isabella Brown, Stephanie Conway, Ian Foster, Samuel Hoffmann and Emily Johnston are entitled to indemnity costs from 14 days after the date when the offers were filed.
The plaintiffs Marcel de Bie, Jamie Holland and Helen Gowans are entitled to party and party costs of their actions on the Supreme Court scale.
Orders
1.The Rules of Court offers filed by the plaintiffs are effective, even though lodged out of time.
2.The offers will operate from 14 days after the date they were filed.
3.Seven of the plaintiffs in their offers offered to accept amounts less than the amount they were awarded and are therefore entitled to indemnity costs from 14 days after the date of filing. They are Ms White, Mr Bonner, Ms Brown, Ms Conway, Mr Foster, Mr Hoffmann and Ms Johnston.
4.The other three plaintiffs, being Mr de Bie, Mr Holland and Ms Gowans, are entitled to their costs on a party and party basis. I do not enforce r 263(2)(h) for the reasons I have given.
5.I will deal with the question of all costs by way of a lump sum award pursuant to r 264(5)(c).
6.The plaintiffs provide full particulars of their claims for costs and disbursements to the defendant by 2 July 2010.
7.The defendant advise the plaintiffs’ solicitors by 9 July 2010 whether a Short Form Bill of Costs is required.
8.If required by the defendant, the plaintiffs provide a Short Form Bill of Costs by 23 July 2010.
9.The defendant to provide its formal response to the plaintiffs’ claim for costs by 6 August 2010.
10.Adjourned to a date to be fixed.
11.Liberty to apply at short notice without papers.
12.The costs of the costs application are to be costs in the cause.
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