Choukor v Spiroski

Background

1. The background to this matter is as follows. The parties were involved in a motor vehicle accident which occurred on 27 April 2013. Notice of a claim to be made by the plaintiff was not provided by the plaintiff to the defendant's insurer until 20 August 2015. A first explanation by the plaintiff for her delay was not provided until 11 December 2015.
2. The defendant filed a Notice of Motion on 20 July 2016 for orders that the proceedings be dismissed pursuant to Section 73(5) of the Motor Accidents Compensation Act 1999 (NSW) ("MACA"). The application arose out of proceedings commenced by the plaintiff in this Court on 24 May 2016.
3. The issue in the Notice of Motion was whether the plaintiff had provided a full and satisfactory explanation for a delay by her in making a claim in relation to the accident. The defendant submitted that a full and satisfactory explanation for the delay had not been provided by the plaintiff. The plaintiff submitted that she had provided such an explanation and that, in any case, the defendant had not rejected the explanation provided by the plaintiff within two months after receiving the explanation for the delay and thus lost the right to reject the claim on the ground of delay under Section 73 of MACA.
4. The Motion was heard on 5 December 2016 and took up most of that hearing day. In the judgment dated 13 December 2016 the plaintiff was successful on both of the grounds relied on by her: [2016] NSWDC 358.
5. The defendant sought an opportunity to make submissions that the order made as to costs on 13 December 2016 should be vacated and that an order be made that the costs of the Notice of Motion be costs in the cause of the proceedings.
6. Directions were made in relation to the filing of written submissions and written submissions have been received on behalf of both parties. Those written submissions are detailed and have helpfully set out both the principles applicable and the matters relied upon in support of the parties' positions. The plaintiff submits that the order made on 13 December 2016 that the defendant is to pay the plaintiff's costs of the Notice of Motion filed 20 July 2016 should not be disturbed.
7. It is important to note that in the present proceedings the plaintiff was not aware for a lengthy period that she had the right to make a claim for the injuries which she received in the accident. Accordingly, the position was not that the plaintiff realised that she had a right to make a claim or that it was governed by some time limitation but she chose not to make the claim for some reason.

Legislative provisions

1. There is no specific provision in the MACA which deals with the question of costs of such an application so as to mandate a particular costs order.
2. Under Section 98 of the Civil Procedure Act 2005 (NSW) the costs of the application are in the discretion of the court. Part 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides as follows: "42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

Legal principles applicable

1. Counsel for the defendant makes the following submissions in relation to the legal principles applicable: 1. In the area of limitation law, orders contrary to Part 42.1 of the Uniform Civil Procedure Rules have regularly been made; 2. Such orders have been made as the courts recognise that costs have been incurred by a defendant that would not otherwise have been incurred if the plaintiff had commenced his or her action within time or lodged his or her claim in time; 3. In Holt v Wynter (2000) 49 NSWLR 128 at [121] the Court of Appeal held in relation to the proper order for costs in the circumstances where the plaintiff's application was successful, that ordinarily a successful applicant who has allowed himself or herself to get out of time should pay the costs of the application unless the respondent's opposition was wholly unreasonable; 4. In Commonwealth of Australia v Smith [2005] NSWCA 478 at [219]-[221], Basten JA stated that it would seem to follow that where opposition is reasonable there should either be no order as to costs or the prospective defendant should have its costs, although unsuccessful. His Honour stated that it would seem that the applicant should not get his or her costs unless the respondent had acted in a manifestly unreasonable fashion. Absent unreasonable conduct on the part of the respondent, the costs of the application might be allowed to lie where they fall, or the costs should be the respondent's costs of the action. 5. In The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 McColl JA (with whom Bell JA agreed) held at [111] that the matter of costs was within the primary judge's discretion in the light of the manner the defendant resisted the extension application. Basten JA held that an applicant for an extension is not seeking an indulgence where the applicant was unaware of material facts until after the expiration of the limitation period. However, his Honour held that it did not follow that the respondent should be required to pay the applicant's costs of the application, on the assumption that the respondent had not acted unreasonably or inappropriately in resisting the application. In such a case, his Honour held, the preferable order may be that the costs of the Motion be the applicant's costs of the proceedings: at [147]-[150]; 6. The case law reveals that the court retains a wide discretion in relation to costs of an application to extend the limitation period and/or excuse a delay and that the discretion should be exercised by reference to the reasonableness or otherwise of each party's actions in respect of the application.
2. The plaintiff in her counsel's written submissions generally adopted these submissions as correct. However, it was submitted that the authorities did not suggest that costs are otherwise than wholly within the discretion of the court nor that a plaintiff seeking the indulgence of the court should inflexibly be denied costs: Smith v Grant [2006] NSWCA 244 at [79].

The defendant's submissions

1. In the light of the above authorities, the defendant made the following submissions, in summary, in his written submissions: 1. The key issue was whether or not the prosecution of the Notice of Motion by the defendant was unreasonable; 2. The defendant's conduct in the present case was not unreasonable having regard to the complexity surrounding both the facts and issues for determination in the matter. There was a genuine issue to be tried; 3. It was only during the plaintiff's opening submissions on the day of the hearing of the application that the defendant was informed of the "technical point" to be taken by the plaintiff in relation to Section 73(4)(b) of MACA and Section 161(1)(d) of the Evidence Act 2005 (NSW); 4. There were very real issues as to whether or not the explanation provided by the plaintiff was full; 5. The delay in question in providing the explanation was not insignificant; 6. Whilst the defendant's submissions were not ultimately accepted this did not mean that such submissions were without foundation or unreasonable; 7. The appropriate order is that the costs of the Notice of Motion be costs in the cause of the proceedings. Such an order would do justice between the parties.

The plaintiff's submissions

1. The plaintiff made the following submissions, in summary, in her written submissions. 1. Part 42.1 of the Uniform Civil Procedure Rules enshrines the general common law rule that costs follow the event and that a successful party should generally be awarded costs unless it appears some other order is required; 2. There is no general principle that a plaintiff seeking the indulgence of the court as to a time period should inflexibly be denied costs; 3. The key issue was not whether or not the prosecution of the Notice of Motion by the defendant was "unreasonable". Even where a defendant takes a reasonable approach in disputing a matter, that does not mean that a plaintiff should be denied costs if he or she is successful; 4. The application was without merit because the defendant had lost the right to complain about the delay pursuant to Section 73(4)(b) of MACA; 5. The legislative scheme in respect of late claims is materially different from the usual legislative scheme in respect of limitation periods. Under the late claim provisions of MACA it is clear that the court is only involved as a matter of last resort. The legislative scheme required the defendant to make a decision as to whether he would dispute the full and satisfactory explanation for delay and that decision was made in the present case and was unsuccessful; 6. The plaintiff may fail in the proceedings and should not be required to pay the costs of the application in that eventuality.

Consideration

1. I have taken into account the submissions made by the parties which I have attempted to summarise above. In my view the following matters are particularly significant in exercising my discretion in relation as to the costs of the Notice of Motion: 1. There was a significant delay by the plaintiff in providing her explanation for the delay in making the claim; 2. However, the plaintiff was unaware of her right to make the claim until well after the six month notice period in Section 72 of MACA had expired. No blame can be placed on the plaintiff for that ignorance; 3. The conduct of the defendant in prosecuting the Notice of Motion was not unreasonable in all the circumstances in my view; 4. The Section 73(4)(b) of the MACA point was raised late by the plaintiff. Whilst it is true that the defendant did not seek an adjournment, considerable costs would have been incurred by him by that date; 5. Relevant to the application was the court's assessment of the plaintiff in her evidence provided orally which was in addition to the evidence provided in her affidavit; 6. Whilst it is true that the legislative scheme in the present case is different to other limitation applications due to the onus being placed on the defendant to make the application, the detail in the plaintiff's explanation for the delay was expanded considerably in the affidavit evidence filed by the plaintiff.
2. Taking into account all of these matters and the written submissions provided, in my view in exercising my discretion some alteration to the costs order previously made is warranted in the present circumstances. The defendant did not act unreasonably, the plaintiff expanded her explanation in her affidavit evidence and her oral evidence was significant.
3. Accordingly, I make the following orders: 1. Order 2 made by the Court on 13 December 2016 is vacated; 2. The plaintiff's costs of the defendant's Notice of Motion filed on 20 July 2016 be the plaintiff's costs in the cause. The defendant is to pay his own costs of the application; 3. The parties have liberty to apply on two business days' notice.
4. In my view these orders take into account the particular circumstances of the matter, the fact that the defendant's opposition was not unreasonable, the particular statutory framework under Sections 72-73 of MACA and the timeline of the parties' knowledge of the evidence to be relied upon in the matter.

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