Rodd v Hall (No 2)

HIS HONOUR:

Both parties have sought a special costs order. The plaintiff seeks an order that the defendants pay her costs on an ordinary basis to 17 July 2019 and thereafter on an indemnity basis. The defendants seek an order that there be no order as to costs or alternatively, that there be no order as to costs up to and including 16 July 2019 and thereafter that the defendants pay the plaintiff’s costs on an indemnity basis.

This judgment is directed to that costs dispute.

A chronology of the proceedings is helpful. Proceedings were initially commenced in the District Court. A defence was filed which included an objection to an extension of the jurisdictional limit of the District Court. By letter dated 26 June 2018, the defendants’ solicitors objected to the jurisdictional limit of the District Court being extended.

On 24 July 2018, the plaintiff sought the leave of this Court to transfer the proceedings to it from the District Court. That application was heard by the Common Law Registrar on 2 August 2018. The defendants’ solicitors neither consented to nor opposed that application. The Registrar was satisfied on the material before him that the claim might exceed the jurisdictional limit of the District Court. As a result, the matter was transferred to this Court. It can, therefore, be inferred that had objection not been taken to the extension of the jurisdiction of the District Court, the proceedings would have been heard in that court.

On 17 July 2019, the plaintiff served on the defendants’ solicitors an Offer of Compromise. That Offer of Compromise offered to compromise the proceedings for a payment of $425,000 plus costs. The offer was made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005 (UCPR). No challenge has been made to the form of the Offer of Compromise. The alternative order sought by the defendants implicitly accepts that the Offer of Compromise is in accordance with r 20.26 UCPR.

The defendants submit that r 42.34 UCPR applies and that accordingly, they should not be obliged to pay the plaintiff’s costs.

Rule 42.34 relevantly provides:

The defendants submit that the clear language of the rule places an onus on the plaintiff to persuade the Court why an order for costs should be made in her favour or alternatively, why the Court should favourably exercise its discretion in her favour. This proposition is clearly correct and was not challenged by the plaintiff.

The defendants submit that r 42.34 UCPR should apply for the following reasons:

I have been able to find little authority on the application of r 42.34 UCPR. It was considered by the Court of Appeal in State of New South Wales v Quirk [2012] NSWCA 216. In that case, the Court of Appeal set aside a judgment in the sum of $175,000 and in lieu thereof, awarded the plaintiff $95,000. The defendant invoked r 42.34 UCPR.

Tobias AJA (with whom Beazley and Hoeben JJA agreed) said:

Rule 42.34 UCPR was also considered by Davies J in Milich v The Council of the City of Canterbury (No 3) [2012] NSWSC 1280. Like these proceedings, the matter had been transferred from the District Court to this Court because of a refusal by the defendant to consent to extended jurisdiction. In other respects, the matter was a relatively straight forward personal injury claim.

Davies J resolved the issue before him as follows:

By way of further background, it should be noted that the assessment of the plaintiff’s damages was $588,363.65. It was reduced to the amount for which judgment was entered because of a finding of 20 per cent contributory negligence. It follows that had there been a lesser deduction for contributory negligence, r 42.34 UCPR would have no application.

In addition, the principal proceedings were not without some complexity. The opinions of the experts were diametrically opposed on the issues of negligence and what was a reasonable response to the foreseeable risk of harm. Similarly, the claim for damages was not one which was straightforward. There was a live issue concerning the extent to which the plaintiff’s disabilities could be related to the consequences of her fall. It should also not be ignored that at the time the matter came before the Common Law Registrar, he was satisfied on the material before him that the claim might well exceed the jurisdictional limit of the District Court. It is also clear on the material before me, that had the plaintiff succeeded entirely on her medical case and received a lesser deduction for contributory negligence, she would have comfortably exceeded the $500,000 limit and might also have exceeded the jurisdictional limit of the District Court.

Finally, the sole reason for the matter being transferred to this Court was the refusal of the defendants to consent to extended jurisdiction. As the defendants submitted, matters such as this are regularly dealt with in the District Court and there is no reason why this matter would not have proceeded satisfactorily in that jurisdiction had the defendants not objected to extended jurisdiction. Like Davies J, I regard it as significant that when the transfer application came before the Common Law Registrar, there was no opposition from the defendants.

In those circumstances, therefore, I am satisfied that the pursuit of these proceedings in the Supreme Court was warranted and that r 42.34 UCPR has no application.

Since there was no issue as to the effectiveness of the Offer of Compromise and the application of r 42.14 UCPR, the plaintiff is entitled to indemnity costs from 17 July 2019.

I make the following orders: