Willment v Sellars (No 2)

[2014] SADC 112

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

WILLMENT v SELLARS & ANOR (No 2)

[2014] SADC 112

Judgment of His Honour Judge Tilmouth

27 June 2014

PROCEDURE - COSTS

Consideration as to the appropriate order for costs with respect to appeal from a Master on an interlocutory application where both sides succeeded on some isues.  No order for costs made.

Motor Vehicles Act 1959 (SA) s 125; District Court Civil Rules 2006 (SA) r 98(1)(b)(i), DCR 6R 217, DCR 6R 263(1)&(2); Latoudis v Casey (1990) 170 CLR 534; Salena Estate Wines Pty Ltd v Devito (2005) 92 SASR 360, referred to.

WILLMENT v SELLARS & ANOR (No 2)
[2014] SADC 112

The issue

1. This judgment deals with questions of costs, following a judgment of 2 June 2014, when an appeal from a decision of a Master of this Court was allowed and certain consequential orders were made.[1]  This case has an extensive history over what is a relatively narrow legal point.  It arose in this way.

   [1]    Willment v Sellars & Anor [2014] SADC 94.

   Summary of proceedings

2. The underlying actions are claims for damages for personal injuries. The defendant was subrogated by Allianz Australia, the third party property claims manager of the Motor Accident Insurance Commission of South Australia, pursuant to s 125 of the Motor Vehicles Act 1949 (SA).  Rule 98(1)(b)(i) of the District Court Civil Rules 2006 (SA) provides that the solicitor representing a party must endorse a pleading ‘with a certificate … certifying that the pleading has been prepared in accordance with the party’s instructions’.  The certificate in this case specified that the defence was ‘put forward in accordance with the instructions of Allianz Australia’.

3. The Master considered the rule required the solicitors to discriminate, in effect, between the source of instructions as between the defendant and the insurer, so he held the certificate was non-compliant and struck it out.  He directed that a fresh certificate be refiled that was compliant.

   The interlocutory appeal

4. The matter first came before me on appeal in early October 2013, when an application was made on behalf of the insurer to refer the appeal to the Full Court pursuant to s 44 of the District Court Act 1991 (SA). It was bluntly asserted on behalf of the insurer that ‘if your Honour is against us I can tell your Honour that we are instructed to appeal further until this matter ultimately gets to the Full Court’.[2]  In the end, partly motivated by a desire to avoid another tier of costs, I referred a number of questions to the Full Court for its consideration which were, to summarise:

   1.   Whether the certificate was compliant with 6R DCR 98(1)(b)(i);

   2.   Whether the plaintiff’s were entitled to cross-examine the defendant on the defence or whether that option was precluded or curtailed by the certificate; and

   3. Whether the certificate in the form quoted above was inconsistent with the insurer’s statutory right to conduct their defence under s 125 of the Motor Vehicles Act 1959 (SA).

   [2]    T2.10-.13, 2 October 2013.

5. The Full Court declined to answer these questions on the basis they did not ‘involve any question of law’, and made an order ‘that the costs of the referral to this court be costs in the cause’.[3]

   [3]    Transcript 7 February 2012, T23.24-.28, 27.35-.36.

6. In the judgment of 2 June 2014, I considered that although the Master misconstrued 6DCR 6R 98(1)(b)(i), it was nevertheless ‘intractable’.  Accordingly I upheld the Master on the basis of non-compliance with it.[4]  However, given that the problem derived from the exercise of the statutory right of subrogation, that compliance might be impractical, and that the capacity to cross-examine the defendant was not otherwise impinged, compromised or frustrated, I made an order pursuant to DCR 6R 217 dispensing with compliance with it.

   [4] Above [18].

7. It can be seen then that in the result, although the insurer succeeded, it did so on the narrow ground of exemption, albeit that its principal argument as to the proper construction of the rule was accepted.

   The position of the parties

8. The insurer seeks costs of the original interlocutory application the plaintiffs to strike out the defence, of 3 June 2013.  Of course as a prima facie position, costs should follow the event pursuant to DCR 6R 263(1), the event falling successfully on the insurer’s side.  It also might be added that a successful party has a reasonable expectation of obtaining an order for costs: Latoudis v Casey.[5]

   [5] (1990) 170 CLR 534, 569 and 557.

9. The plaintiffs submit that the costs should be in the cause, or alternatively, there should be no order as to costs.  They stress that the insurer contended the issues raised matters of general and practical importance to the due conduct of the compulsory third party insurance scheme, and that it steadfastly adhered to the position that the certificate was compliant.

   Costs analysis

10. In considering the question of costs, one commences with the application made by the plaintiffs to strike out the defence.  In the result this was unsuccessful.  However the back-up position of the insurer on which it ultimately succeeded, namely that an exemption from the Rules of Court should be made, was very much one made in the background.  It did not occupy very much time during argument on appeal or before the Master. 

11. The two primary issues taking most time in the debate, were the proper construction of 6 DCR 98(1)(b)(i) in light of the decision of the Full Court in Salena Estate Wines Pty Ltd v Devito,[6] and in the corresponding submission that the certificate as filed severely impinged the capacity to cross-examine the defendant on the defence pursuant to DCR 6R 217.  The court held in favour of the insurer with respect to both issues.  It was those determinations which to a large extent ultimately informed the exercise of the discretion to exempt from the Rules.

    [6] (2005) 92 SASR 360.

12. On the basis of these conclusions, the most appropriate course from the insurer’s point of view was to bring an application for an exemption from the Rules rather than attempt to uphold the certificate.  The primary effect of DCR 6R 263(2) is to exempt from the general rule that costs follow the event, applications involving indulgences of the court.  Although the type of application we have here does not expressly fall within any of the sub-rules, it is akin to ‘an application that should have been made (but was not made) at an earlier stage of the proceedings’ within the meaning of DCR 6R 263(2)(c).  In any event, in keeping with the structure and intent of the rule, costs of interlocutory proceedings for exemptions, should ordinarily be awarded against the applicant.

13. On the other hand, one cannot avoid the conclusion that even if the application for an exemption had been made or given more prominence, as it should have been, the plaintiffs’ application to strike out the defence would have been maintained, so that much of the time taken over the wider aspects of the application would have been occupied on those issues anyway.

    Conclusion and orders

14. Assessing and weighing the matter at large, the ultimate outcome is that each side was more or less equally successful.  In the combined circumstances the appropriate order is therefore that there be no order for costs of the interlocutory proceedings to strike out the defence, both before the Master and on appeal.  That is to say each party ought to bear their own costs.