Betteridge v Wurth

Judgment 1EMMETT JA: I invite Leeming JA to give the first judgment. 2LEEMING JA: This is an application for leave to appeal against the grant of leave to the respondent to discontinue proceedings brought by him with no order as to costs. The application was made to the primary judge, sitting as Common Law duty judge, on Thursday 13 June 2014. His Honour reserved, delivering judgment the following Monday. Leave is required, first, because the subject matter is confined to costs, secondly, because the judgment was interlocutory, and thirdly, because the amount in issue is (considerably) less than $100,000: Supreme Court Act 1970 (NSW), s 101(2)(c), (e) and (r). The costs in issue are, we have been told, in the vicinity of $18,000. 3The applicant for leave has insisted upon an oral hearing; the respondent consented to the application being dealt with on the papers. 4The respondent (as plaintiff) commenced proceedings against the applicant (as first defendant) claiming that as a high school student in 1970 and 1971 he was sexually assaulted by the first defendant more than four decades ago. The first defendant, to a significant extent, admitted those sexual assaults. He also admitted that he had later pleaded guilty to charges arising from those assaults. 5The plaintiff also sued two other teachers and entities associated with the Anglican Church. The proceedings were finalised by consent, following a mediation, in respect of all defendants other than the first defendant, in March 2014. Judgment was entered for the second, fourth and fifth defendants, with no order as to costs, and the plaintiff was permitted to discontinue against the third defendant with no order as to costs. There was no evidence before the primary judge as to whether the plaintiff had received compensation from those other defendants. 6The applicant submits that there are a series of mistakes in the reasons of the primary judge when granting leave to the plaintiff/respondent to discontinue with no order as to costs. 7First, it is submitted that his Honour erred in concluding that the conditional costs agreement pursuant to which the applicant's solicitor and counsel provided legal services to him were not engaged by a discontinuance. This was the third of three matters pointed to in the dispositive section of his Honour's reasons. His Honour's reasons correctly identify the original costs agreements, but do not deal with subsequent exchanges of emails between barrister, solicitor and client, which purported to extend the definition of "successful outcome" to discontinuance of the proceedings. This purported amendment occurred after the motion had been filed seeking leave to discontinue. It is unclear whether consideration was provided for the variation. Further, the respondent points to s 323(3)(c) and (e) of the Legal Profession Act 2004 (NSW) and submits that the absence of signed writing and a five day cooling off period rendered the variation void by reason of s 327. For the reasons that follow, it is not necessary to determine which of those submissions is correct. 8Secondly, the applicant points to what he says were "very strong" limitation defences, to which the primary judge failed to have regard, because his Honour reproduced the pleading from a superseded defence. Although it would seem (and was conceded) that his Honour referred to an earlier form of the pleading, it is plain that the respondent's prospects of ultimate success at all times depended very much on obtaining an order under Subdivision 3 of Division 3 of the Limitation Act 1969 (NSW), given the decades of delay in commencing the proceedings. The primary judge said that he was not in a position to form a view about the strength of the limitation defence. It had been alleged in the pleading that the plaintiff was under a mental disability since the time of the sexual assaults perpetrated on him in 1970 and 1971. It was alternatively alleged that the plaintiff had been under a mental disability since on or before 20 December 2002 and as such an extension of the limitation period was not required. Contrary to the applicant's submissions, there is no error in his Honour forming the view that he did. 9Thirdly, the applicant says that his Honour should have had regard to the respondent's receipt of "unspecified compensation" from the other defendants. The reference is to his Honour's reasons, given ex tempore, on 13 June 2014 in refusing leave to the applicant to cross-examine the plaintiff. It is plain that those reasons cannot be used to support a finding that any payment was made: see Evidence Act 1995 (NSW), s 91. There was no other evidence as to any compensation which had been received. There is no error in this aspect of his Honour's reasons. 10There was no challenge to the evidence that the respondent did not want to go to trial, or that the applicant, who is 70 years old and receives an age pension and who could not afford to attend the hearing, had no assets of any appreciable value. Those considerations were the first and second of the three matters to which his Honour had regard. His Honour said (at [14]-[15]): "Doing the best I can it seems reasonably clear to me that the following matters emerge. First, Mr Wurth does not want to go to trial. This may be because the prospect of doing so is too emotionally difficult for him or because there is no prospect of a successful monetary or financial outcome. It may also be because the risk of Mr Betteridge mounting a successful limitation defence potentially exposes him to an adverse costs order. Secondly, Mr Wurth's fears of any victory that he might achieve being hollow are well founded. Mr Betteridge does not contest the fact that he has no assets of any value and indeed asserts precisely that. The proceedings would in that sense be a complete waste of time. Any further costs that Mr Wurth might incur in proving his case on liability, having regard to the terms of the defence, or of establishing his case on damages, would be wholly wasted whether he were successful or not. Mr Betteridge would also presumably be unable to afford to attend the hearing in just the same way that he has indicated he is unable to afford to attend the hearing of this application." 11The remaining matter to which his Honour had regard was the operation of the contingent fee agreements of the applicant's lawyers. If the respondent is right, and the exchange of emails was insufficient to amend those agreements, then there is no material error shown in the entirety of the dispositive portion of the reasons of the primary judge. 12Importantly, even if the applicant be right about the expanded definition of "successful outcome", then what is at stake is an amount in the order of solicitor/client costs of some $20,000, some fraction of which would be recoverable in the event that the respondent discontinued without leave. That is precisely the class of litigation to which s 60 of the Civil Procedure Act 2005 (NSW) is directed. That section provides: "In any proceedings, the practice and procedure of the Court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute." 13If leave be granted, the additional costs incurred on the appeal, together with the costs of the application for leave, would approach or exceed the amount in issue. It is to be noted that it is the applicant who has insisted upon an oral hearing, and the incurring of additional expense by both parties. In Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32], this Court observed, by reference to earlier authority, that it is important that there be early finality in cases where the costs involved are likely to swamp the money sum involved in the dispute. That is especially important where, as here, the only money sum involved in the dispute is a potential entitlement to costs. 14Only in a case where an applicant could demonstrate a question of general principle, or clear error amounting to substantial injustice, would it be appropriate to grant leave to appeal in a case such as this: see Moon v Mun [2013] NSWCA 217 at [2]-[3]. 15I would propose that the application for leave be dismissed, with costs. 16EMMETT JA: I agree with Leeming JA, for the reasons his Honour has given, that the summons seeking leave to appeal should be dismissed with costs. The orders of the Court therefore are: