BTM1 v Scout Association of Australia New South Wales Branch (No.2)

1. [1]

   On 28 April 2023, for the reasons which I then published, I ordered that the claims by the plaintiff against the defendant contained in the Second Further Amended Statement of Claim filed on 25 July 2022, be permanently stayed: BTM1 v Scout Association of Australia New South Wales Branch [2023] NSWSC 431.

2. [2]

   One of the orders which was made was that the plaintiff pay the defendant’s costs of the proceedings including the costs of and incidental to the Notice of Motion filed 28 October 2021, which was the Motion by which the defendant sought the orders upon which it succeeded.

3. [3]

   The Court noted that if any party sought a different order for costs, then that would be dealt with by the Court on the papers, after allowing for further written submissions.

4. [4]

   The solicitors for the plaintiff on 10 May 2023, sought an order that, in lieu of the order made as described in [2] above, each party pay their own costs of the proceedings.

5. [5]

   By submissions filed on 22 May 2023, the defendant opposed the variation of the original order for costs and submitted that the Court had made the appropriate orders.

Relevant Legislation

1. [6]

   Section 98 of the Civil Procedure Act 2005 (“the Act”) provides the Court with a plenary power to make orders for costs. Section 98(1)(a) provides that costs are in the discretion of the Court. Section 98(1)(b) provides that the Court has full power to determine by whom, and to what extent, costs are to be paid. The Court is able also to determine whether costs are to be awarded on the ordinary basis or an indemnity basis: s 98(1)(c).

2. [7]

   Rule 42.1 of the Uniform Civil Procedure Rules 2005 (“UCPR”) (which are made pursuant to s 9 of the Act), provides:

3. [8]

   The effect of the application of the plaintiff is that costs should not follow the event, and that the Court should, within the meaning of r 42.1, make “some other order”.

Plaintiff’s Submissions

1. [9]

   The plaintiff submits that the Court should make “some other order” because of the following matters:

Defendant’s Submissions

1. [10]

   The defendant submitted that the matters advanced by the plaintiff were insufficient reason for the Court to vary its order that costs should follow the event.

2. [11]

   In particular, the defendant submitted that the plaintiff was fully informed of the evidence upon which the defendant would rely to seek the order in the Notice of Motion many months before the hearing occurred. The defendant submits that this fact had the consequence, since the plaintiff fully resisted the order for a stay, that the ordinary costs order would be made.

3. [12]

   As well, the defendant submits that the impecuniosity of the plaintiff, or else the financial consequences to him if the order for costs was made, are wholly irrelevant to the exercise of the discretion to order costs.

Legal Principles

1. [13]

   In Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25, the High Court considered the decision of the Court of Appeal of the Supreme Court of the Northern Territory with respect to costs. In that decision, the High Court said this:

2. [14]

   The High Court went on to deal with whether, of itself, the impecuniosity of an unsuccessful party was a relevant consideration of decisive quality in the exercise of the discretionary power to make a costs order.

3. [15]

   The Court said:

Discernment

1. [16]

   In the course of the Motion and when he applied for an order that each party pay their own costs of the proceedings, the plaintiff did not adduce any evidence about his financial status. He provided no material which set out his assets and liabilities, and did not attempt to identify what financial resources of any kind were at his disposal.

2. [17]

   In his submissions, his solicitor asserted that an order for costs would bring him to “financial ruin”. If the ground of impecuniosity was to be relied upon, as a ground of substance, then it needed to be established by evidence. It was not. Nevertheless, even assuming that such a ground was established by evidence, in the particular circumstances of this case, it would not be a sufficient basis for exercising the Court’s discretion to make an order other than the costs follow the event.

3. [18]

   An order for costs is not a punitive order but is made to compensate the successful party for the costs and expenses it has incurred in responding to the litigation which the plaintiff has brought against it.

4. [19]

   In 2003, in the course of his judgment in New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 at [1], Gleeson CJ said, with respect to a claim made against a school authority for damages occasioned by the sexual abuse of a pupil by a teacher in its employ, this:

5. [20]

   Claims of the kind made by the plaintiff here, namely for damages for sexual assault made against a party which did not itself perpetrate the sexual assault but rather is being sued for its failure to prevent the sexual assault occurring, or alternatively, as being vicariously liable for the damages which would be payable by the perpetrator because of its relationship to that perpetrator, are not capable of being regarded as always likely to succeed. Accordingly, plaintiffs embarking upon litigation which, depending upon the facts and circumstances, may have varying prospects of success are taking a risk that they may not succeed and may be subject to the usual order for costs. No doubt, when they initiate litigation in such circumstances, a diligent solicitor acting for them will have ensured that the risks of the litigation and the financial consequences of it are fully and properly explained.

6. [21]

   As well in the course of litigation, it is always open to a plaintiff when new facts emerge, or circumstances change, to review the question of whether they should continue the proceedings or not.

7. [22]

   The fact that a plaintiff may have an apparently good cause of action and on that basis commences proceedings is something which is common to all plaintiffs, regardless of the cause or causes of action sued upon.

8. [23]

   The matters advanced by the plaintiff here seem to suggest that by reason of the events which occurred, the plaintiff had an entitlement to compensation which was to be vindicated by bringing proceedings at common law against a party who was not the perpetrator but against whom a right to recover damages was asserted.

9. [24]

   The plaintiff’s claim in fact was a proceeding which was one attended by all of the usual risks of litigation. The interlocutory proceedings brought by the defendant were available to the defendant providing it could establish, by evidence, that it was unable to respond to the proceedings, that it would not have had a fair trial and that the proceedings were, in accordance with the authorities, of an exceptional kind sufficient to warrant a grant of relief by way of permanent stay.

10. [25]

    Whilst it may be accepted that the plaintiff did not know of the evidence upon which the defendant would rely at the time he commenced proceedings, it is certainly clear that for some significant period of time before the Motion was heard, the plaintiff was in possession of all of the defendant’s evidence and its submissions. The plaintiff, together with his solicitor, had sufficient time to review that material, review the risks associated with the litigation being continued at that stage and to make a decision with respect to it. The plaintiff chose at that point to continue the litigation.

11. [26]

    The order for costs that was made was that costs follow the event. As indicated earlier, the plaintiff now seeks that the Court otherwise order within the meaning of r 42.1 of the UCPR.

12. [27]

    The matters advanced by the plaintiff, namely the entitlement to bring the proceedings, the reasonableness of the cause of action pleaded, the lack of knowledge of the evidence advanced by the defendant in support of its Motion for a permanent stay until some months prior to the hearing, and his impecuniosity are neither individually nor in combination matters which would cause this Court to otherwise order.

13. [28]

    In those circumstances, I refuse the plaintiff’s application that each party should be ordered to pay his and its own costs of the proceedings. The order for costs made on 28 April 2023 will remain.

Orders

1. [29]

   The Court makes the following order:

   1. (1)

      The application by the plaintiff for a revised order for costs is dismissed.