Christopher Chapman was successful in proceedings for damages for negligence against Annette Patrick and Justin Dickinson. Mr Chapman seeks an order for costs, which, save for one aspect, is not disputed. That aspect concerns an unsuccessful strike out application Mr Chapman made prior to trial. [1] Costs of that application were reserved.
The costs of the strike out application are sought by Mr Chapman on an indemnity basis. The defendants, Ms Patrick and Mr Dickinson, also seek costs of the application, not on the indemnity basis, and costs thrown away by reason of the motion. If there are costs thrown away, they seem to be incidental to the motion.
The real dispute is who should pay the costs of the strike out application, and if the defendants should pay, should it be on an indemnity basis.
The defendants also seek a stay of the proceedings, as they intend to appeal the result in the proceedings. The plaintiff accepts a stay in respect of part of the judgment sum, but submits that some amount should be paid and the stay should not preclude an assessment of costs.
[2]
The unsuccessful application
Judgment in the unsuccessful strike out application is found in Chapman v Dickinson. [2] The primary matter argued there [3] was that the defendants acted in an abuse of process in maintaining in these proceedings that Mr Chapman was a worker after having maintained in other proceedings that he was not. That argument was unsuccessful, so that the relevant parts of the defence were not struck out, and the defendants were allowed to maintain the defence in these proceedings. [4] Ultimately, at trial, the defence was unsuccessful. [5]
It was material to the defendants' success on the application that they had maintained their claim, although only in part, [6] from a time prior to the other inconsistently pleaded proceedings. [7] It was also relevant that the two proceedings were conducted by two different insurers; each motivated to protect their own interests in the separate proceedings. [8]
It is one thing to allow the defendants to maintain inconsistent defences in separate proceedings. It is another to order the plaintiff to pay the costs of the application permitting the defendants to do so, even when the defences were ultimately unsuccessful.
The defendants assert that they were successful in "the event", which they assert is the motion.
The plaintiff was successful in the proceedings and would ordinarily be entitled to the costs of those proceedings, [9] including reserved costs. [10] Generally, "the event" refers to the practical result of a particular claim. [11] But the event is not limited to the proceedings as a whole, or particular causes of action.
The defendants recognised this uncertainty, submitting in the alternative that the plaintiff ought not to get his costs of the motion. I accept that this point has force - the plaintiff generally ought not to recover their costs, or all of them, where they have unreasonably maintained a separate point and failed.
Three aspects here seem significant. The strike out application was accompanied by an application by the defendants to amend their defence. [12] The price of an amendment in some instances might include an order for costs against the amending party.
Secondly, the defence's reliance on the definitions of "deemed worker" and "worker" were central to the amendment, to the application and at trial. The defence ultimately failed.
Thirdly, the second defendant maintained and initially succeeded with the inconsistent position - that the plaintiff was not a worker - in the Workers Compensation Commission. As that decision was made without jurisdiction, I am disinclined to give it any weight on costs. But the maintaining of a defence here inconsistent with a defence between the plaintiff and second defendant in another court made it reasonable for the plaintiff to raise the issue in these proceedings, even if the defendants were permitted to maintain the defences. [13]
Generally, it is not appropriate to maintain separate proceedings alleging inconsistent positions. [14] Yet it was permitted here because the defence in the separate proceedings was maintained by different insurers. That is something of an indulgence granted for the benefit of the defendants, to enable the issue properly to be ventilated, but the plaintiff should not be penalised on costs.
However, some of the arguments advanced by the plaintiff on the application other than that based on an abuse of process had no merit, such as Anshun estoppel [15] and issue estoppel. [16] Those matters should also be considered on the question of costs.
Were an argument about costs heard at the conclusion of the motion, and despite r 42.7, I might have been inclined to allow the defendants' costs, and 50% of the plaintiff's costs, to be costs in the proceedings. The judgment in favour of the plaintiff does not weaken that inclination. In my view, the plaintiff should be awarded 50% of his costs of the application, not on an indemnity basis.
[3]
Stay
Section 156 of the District Court Act 1973 empowers the Court to stay proceedings. Such a stay is defined to include a stay of enforcement of a judgment. [17] The Court has a separate power to prohibit enforcement of a judgment for a period. [18]
In order to justify a stay, an applicant "must identify the circumstances that warrant a departure from the general rule that the judgment below should be presumed to be correct and is appropriate to be enforced" [19] though these circumstances need not be special or exceptional. [20] An appellant's ability to identify arguable grounds of appeal is highly relevant, [21] but not necessarily sufficient to justify a stay. [22] Its absence is likely determinative against the stay application. [23]
Another circumstance sufficient to justify a stay is where the refusal would render the appeal futile. Where the judgment monies paid will become irrecoverable if the appeal is successful may be similar. [24] It is often appropriate to require an undertaking to repay, including from the respondent's solicitors. [25]
Two months have passed since the judgment. The defendants have filed a Notice of Intention to Appeal, and although they have not formally identified their grounds of appeal, an affidavit of their solicitor was read which lists findings that will be challenged. [26] Four of those findings listed concern the quantum of damages, [27] two challenge negligence and one challenges the credit finding. I am not persuaded that any of these matters constitute arguable grounds of appeal so as to substantially affect the enforcement of at least part of the judgment. But the affidavit also indicates that the findings that there was no contract between the plaintiff and the second defendant and that Mr Chapman was not a worker or deemed worker will also be challenged. [28] This matter was stated in an earlier judgment to be arguable. [29] The plaintiff accepted as much, [30] and the final judgment, whilst rejecting the argument, does not suggest that the point was unarguable. Thus, the appeal when lodged may be arguable.
The question of a stay involves a balancing process between an indigent, somewhat elderly plaintiff in a parlous financial state, living, variously, in a storage unit, in a shed or under a church, [31] who is ordinarily entitled to the fruits of his judgment, which is in a relatively modest sum, and whose resources seem unable to fund the defence of the anticipated appeal by the defendants, against the defendants, who seek to appeal on a point accepted to be arguable and which, if successful, would overturn the decision and without a stay might likely leave the defendants unable to recover the judgment sum. There is clear authority that a stay should be granted if to do otherwise would render the appeal futile or nugatory.
The provision of any undertaking to repay largely removes any utility in Mr Chapman receiving any judgment monies, although were he to use any part to pay his solicitors, an undertaking may be appropriate.
Balancing these competing factors, I am of the view that the plaintiff should receive a small portion of the judgment, but the defendants should be protected against losing the bulk of the judgment and the costs of the proceedings in the event that they are successful on the appeal. This way the plaintiff is not deprived of finding himself appropriate shelter and other necessities, an entitlement based on the judgment. The appeal is not futile since most of the judgment sum and the whole of the costs would be saved if the appeal is successful.
I think the appropriate small portion of the judgment should be 15%. The judgment should be stayed on terms that the defendants pay 15% of the judgment sum to the plaintiff, that the defendants prosecute the appeal with all due expedition, but on the basis that the plaintiff's solicitors undertake to repay (in the event of a successful appeal by the defendants) any funds received on account of their costs in the proceedings.
On this analysis, there is no proper basis to exclude from the operation of the stay the assessment of costs. The circumstances that apply to solicitor's costs are a separate issue from Mr Chapman's dire circumstances, and the costs of an assessment will be wasted if the appeal is successful.
The plaintiff should receive the costs of the application today, as his position more closely reflects the orders made.
[4]
Orders
The orders of the Court are:
1. The defendants pay the plaintiff's costs of the proceedings, such costs to include the costs of the applications determined today and 50% of the costs of and incidental to the applications determined 29 May 2020.
2. The judgment be stayed pending determination of the appeal on terms that:
1. 15% of the judgment sum be paid by the defendants to the plaintiff but only if the plaintiff's solicitors undertake inter partes to repay, in the event of a successful appeal, any moneys received from this part of the judgment on account of their costs to date; and
2. the appeal be prosecuted by the defendants with all reasonable expedition.
[5]
Endnotes
Chapman v Dickinson [2020] NSWDC 269.
[2020] NSWDC 269.
Chapman at [33].
Chapman at [43].
Chapman v Dickinson (No 2) [2020] NSWDC 847 at [77].
See Chapman at [6(2)].
Chapman at [38].
Chapman at [22], [40].
Uniform Civil Procedure Rules 2005, r 42.1.
Uniform Civil Procedure Rules 2005, r 42.7.
Windsurfing International Inc v Petit (1987) AIPC 90-441 per Waddell J, see Ritchie's Uniform Civil Procedure NSW at [42.1.10].
Chapman at [6(2)].
Cf UCPR 14.18 forbidding inconsistency of pleadings in proceedings.
Cf Tomlinson v Ramsey Food Processing [2015] HCA 28 at [24]-[26].
Chapman at [24]-[26].
Chapman at [9]-[23].
District Court Act 1973, s 4(5).
Civil Procedure Act 2005, s 135(2)(c).
Ritchie's at [51.44.15].
Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685.
Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Alexander at p 695.
McBride v Sandland (No 2) (1918) 25 CLR 369 at 374.
Chen v Lym International Pty Ltd [2009] NSWCA 121 at [15]; Trad v Harbour Radio Pty Ltd [2010] NSWCA 41 at [48].
Ritchie's at [51.44.15].
TCN Channel 9 v Antoniadis (No 2) (1999) 48 NSWLR 381 at 385; [1999] NSWCA 104.
Affidavit of John Brophy Renshaw, 17/2/21, at paragraph 19.
Paragraph 19(h)-19(k).
Paragraph 19(a)-19(d), especially 19(d).
Chapman at [42].
Chapman at [41].
Chapman (No 2) at [120].
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Decision last updated: 16 March 2021