FORBES SERVICES MEMORIAL CLUB LTD v HODGE

JURY - jury trial - discharge of jury - exercise of discretion - whether discretion miscarried by reference to impermissible considerations - whether judge discharged jury by reference to general inconvenience of jury trial or matters specific to the particular case - held: No error was shown. The judge discharged the jury by reference to the particular problems of persisting with a jury trial in the particular case. Pambula District Hospital y Herriman (1988) 14 NSWLR 387 (CA) explained and applied - comment made by Cole JA on dissenting opinion in Pambula District Hospital vy Herriman.

PRACTICE AND PROCEDURE - District Court - jury trial - application to discharge jury - reference to delays and inconvenience which would be occasioned if matter proceeded as jury trial - whether impermissible reference to considerations relevant to jury trials generally and whether such comments conflict with Parliament's provision of the privilege of jury trial - held: Discretion did not miscarry. Jury was discharged by reference to factors specific to the particular case

• appeal dismissed. Pambula District Hospital y Herriman (1988) 14 NSWLR 387 (CA) applied; Peck v Email Ltd (1987) 8 NSWLR 430 (SC) approved.

COSTS - indemnity costs - availability in Court of Appeal - whether offer of compromise - offer to accept judgment $129.24 less than verdict of $30,129.24 appealed from - whether true "compromise" - held: In the circumstances of the case, having regard to (a) the slight prospects of success in the appeal; (b) the amount of the judgment; (c) the means of the successful parties; and (d) the full terms of the offer, an offer of compromise had been made which, being not accepted, gave rise to an entitlement to an order for indemnity costs. Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721 (CA); Tickell v Trifleska Pty Ltd and Anor (1991) 25 NSWLR 353 (SC) applied.

District Court Act 1973, s79A. Supreme Court Act 1970, s89(1). Supreme Court Rules Pt52A R22. ORDERS Appeal dismissed with costs, paid on an indemnity basis from 27 August 1994. Kirby P Before the Court is an appeal from a judgment entered in favour of

Mrs Margaret Hodge (the respondent) against the Forbes Services Memorial Club Ltd, (the appellant).

JUDGMENT IN A DAMAGES CASE AND APPEAL Judgment was entered in the sum of $30,129.24. It was entered by Madgwick DCJ sitting at Forbes on 8 April 1993.

The judgment arose out of an injury sustained by the respondent to her right shoulder in the course of her employment with the appellant. The judgment was recovered upon the basis of the respondent's claim, which was based upon s36 of the Factories. Shops and Industries Act. 1962. This section limits to 16 kilograms the amount of weight which an adult female may be allowed or required to lift in a factory. See Medved v Dunlop Olympic Ltd (1991) 66 ALJR 178 (HC).

Madgwick DCJ found that the club was a "factory" for the purposes of the Act, that the weight which the respondent was required to lift (and which caused the injury to her right shoulder) exceeded the statutory amount and that she was entitled to damages.

Those findings have not been specifically challenged in the appeal. Nor has the appellant, in terms, challenged the respondent's entitlement to recover a judgment. The appeal is concerned with two points, the first of which is supported by a summons for leave to appeal:

(1) A challenge to the interlocutory decision of Madgwick DCJ to dispense with the jury which the appellant had summoned to try the case, with the consequent request that the action be returned for trial in the District Court before a jury, as the appellant at all times wished; and

(2) Alternatively, a challenge to the amount of general damages and interest thereon awarded by his Honour.

Originally this appeal was listed in the running damages list to be heard by two judges. However, when the first ground was detected, accompanied by the summons for leave to appeal, it became clear that the matter could not proceed before two judges. It therefore had to be heard by the Court constituted as at present. It is unfortunate that neither party drew to the Court's attention the unsuitability of the proceedings for hearing in the damages list, leaving it to the Court to discover the situation. The Court looks to the parties and their legal representatives to prevent problems such as this arising. They could, in other circumstances, have led to delay in the hearing of the appeal. As it happens, the Court was able today to be constituted as it is to dispose both of the summons and of the appeal.

CHALLENGING INTERLOCUTORY ORDERS ON APPEAL AGAINST A FINAL JUDGMENT

When the summons was first called on a question arose as to whether leave to appeal was strictly necessary to present the appellant to raise the first point. It has an appeal as of right on the second. It is an established principle that, where an interlocutory decision has been made on the way to a final judgment and a party has an entitlement to appeal against that final judgment, the party can raise, in opposition to the final judgment, challenges to earlier interlocutory orders. See Crowley v Glissan (1905) 2 CLR 402,403; Bunning v Cross (1978) 141 CLR 54,82; Sugden v Lord St Vincents [1876] 1 PD 154. 208; Smith v Tabain (1987) 10 NSWLR 562 (CA), 566.

The question is presented as to whether an interlocutory order of the kind made here, namely, one affecting the whole mode of trial, is one which falls within that established principle. It is not necessary for the Court to determine that question in this case. This is because the Court is of the view that it was appropriate, in

URJ FORBES SERVICES MEMORIAL CLUB LTD v HODGE (Kirby P) 3

any event, to grant leave, if leave be required. Accordingly, the Court has proceeded directly to the substance of the two points which are now before it in the appeal.

I turn first to the ground of appeal which concerns Madgwick DCJ's order dispensing with the jury. The reason given by his Honour for that order is to be found at 20 to 24 of the Appeal Papers. To avoid repetition, I incorporate those reasons in this judgment without setting them out.

The relevant factors which affected his Honour were, in short, that the respondent had commenced her proceedings in the District Court by way of a statement of claim in June 1991, setting the venue at Forbes. The grounds of defence were filed on behalf of the appellant in July 1991. The appellant requisitioned a jury, as was its right by law. The matter was listed for hearing before Madgwick DCJ at the sittings in Forbes commencing on 29 March 1993. It was the second case in the March list for trial by jury. The list was a two weeks civil sittings list.

A jury panel was summoned, as is the practice in such lists, for the Wednesday of the first week of the sittings. The summons was issued by the Registrar of the District Court and the local Sheriff's Officer. The jury panel duly attended.

The first case in the list was a defamation case. Madgwick DCJ was told on the morning of the hearing that this case had no prospects of settling. It was predicted that the case would take several days. Upon empanelling the jury for the hearing of the defamation case, the judge indicated to the remaining members of the jury panel that they would not be required again to attend the sittings. His Honour explained that he did this for the reason that, if a second jury case had been embarked upon this would have meant, in effect, that no other cases in the list would be capable of being heard. He was properly determined to reduce inconvenience to the other members of the jury panel.

As it happened, in the way of the world, the defamation case was settled. Madgwick DCJ was thereupon told that the respondent wished to have her case heard, if that was possible. This was an unremarkable wish on her part. Urgent steps were then taken by the Sheriff's Officer to collect again the available members of the original jury panel in waiting. They were asked to come back to the court on Monday, 5 April 1993 so that a jury might be formed to hear the respondent's case. Of the eight persons who came ready to serve as jurors in this way, it transpired that four were members of the appellant club and two were regular patrons of the club.

Counsel for the respondent then submitted that there could be a reasonable possibility of an appearance of bias on the part of members of the jury if they were members of the appellant party. Madgwick DCJ was inclined to agree with that submission. Accordingly, there were in the panel in waiting an insufficient number of persons to form a jury to conduct a trial of the respondent's action.

It was at this point that counsel for the respondent made an oral application for an order by his Honour to dispense with the jury. The application was advanced upon a number of grounds. There is no doubt as to the power of Madgwick DCJ to provide by order that the jury be dispensed with: see District Court Act 1973, s79A. He did so.

The reasons given by his Honour refer to several factors which seemed relevant to his Honour. These included:

(1) That the respondent was a working woman with no apparent income and only modest means which were shared with her husband. It would not be until 1994, that is to say a year later, that her case could otherwise be heard in Forbes before a jury if an entirely new jury panel were summoned;

(2) That the respondent did not accept the appellant's suggestion that, to avoid this delay and inconvenience, the matter should be sent to a venue other than Forbes. Madgwick DCJ was not attracted to the notion of changing the venue for the trial. He pointed out that to do this would, amongst other things, displace a case elsewhere which would not be fair to the parties in the case so displaced;

(3) That the respondent had suffered a later injury in about 1988 whilst still employed by the appellant. There were likely to be worker's compensation proceedings about that injury. There was a possibility of an estoppel being determined in the present action which would materially narrow the issues in that case; and

(4) Great difficulty and considerable expense going beyond party and party costs, would be involved in securing the attendance of orthopaedic specialists at the trial of the proceedings before the jury. As it happened in the present case the three orthopaedic specialists who practise in this State west of the Great Dividing Range had been retained by the two parties.

There was a possibility that one, two, or three of them might be called upon to give oral evidence if the matter were tried before a jury. This would involve not only inconvenience to the medical practitioners concerned but, more importantly, to their patients. There was a prospect of disrupting the conduct of their presumably busy practices if they were summoned either to the jury trial in Forbes or to give evidence in another venue to the Court however constituted.

The reasons given by Madgwick DCJ went on to recount the various difficulties to which I have referred. They then came to their conclusion when his Honour referred to the decision of this Court in Pambula District Hospital v Herriman (1988) 14 NSWLR 387 (CA). He said:

"T do not overlook that, following the Pambula Hospital case, and other cases, the Parliament of New South Wales has not seen fit to amend the law to vary the effect of those decisions, and so it is the will of Parliament that, only in cases where there are special factors pertaining to the matter itself, should the important right of a party to trial by jury be interfered with. Nevertheless I think that, taken together, there are special circumstances in this case and that they justify an interference with that right of the defendant."

The complaint of the appellant is that Madgwick DCJ erred in taking into account impermissible general considerations inherent in a jury trial, as such. He thus departed from the requirements of the Pambula decision. His discretion to dispense with the jury therefore miscarried. If that were established it would authorise this Court to intervene and, in a proper case, to set aside his Honour's order, set aside the judgment and order a re-trial in order to uphold the complaining party's choice of trial by jury assured to it by law.

The particular objections of the appellant were to two considerations which affected his Honour's decision. They were:

(1) The reference to the inconvenience to the medical practitioners who had been retained by the parties and who would be required to give evidence before the jury; and

(2) The reference to problems which arose from the earlier administrative order and the difficulty of empanelling a new jury.

URJ FORBES SERVICES MEMORIAL CLUB LTD v HODGE (Kirby P) 5

So far as the first of those considerations is concerned, I see no offence to the Pambula principle. It will be remembered that in Pambula, the Court acknowledged that particular circumstances relevant to a particular case and to the inconvenience of a jury trial in a particular case, would warrant an order such as Madgwick DCJ made in this case. Specific mention was made, with approval, to the order which Clarke J had made in Peck v Email Ltd (1987) 8 NSWLR 430 (SC) where his Honour dispensed with a jury by reason of the serious illness of the plaintiff and the risk that, whilst awaiting trial by jury, the plaintiff may die, or become very ill.

The point which Pambula was designed to uphold, Parliament having reserved a facility of jury trials in certain cases, was that judges asked to dispense with a jury should not do so upon a footing that it was necessary to show that a case was, as such, singular or suitable for jury trial. That was the reason given by the trial judge in Pambula (Cole J) for ordering that the case proceed to trial without a jury before a judge sitting alone. Pambula holds that it is not permissible to challenge the fundamental assumption which Parliament has acted upon, namely, that jury trials in proceedings at common law will continue to be permitted where a party with the right to do so has lawfully requisitioned a jury.

Considerations of a general or universal character have to be put out of account for the reasons which Samuels JA and I discussed in Pambula.

This case has demonstrated that in the application of the principles in Pambula, universal considerations and particular attributes of the particular case will sometimes merge into each other. In each case a matter of judgment is called upon. A discretion of the judge, asked to dispense with the jury, is invoked. That exercise of discretion cannot be avoided because of the terms in which the power to dispense with the jury is expressed, both in the District Court Act 1973, s79A and in the Supreme Court Act 1970 s89(1). Pambula merely forbids the application of a rule of a general character anchored in the supposed inconvenience, delay, or cost of a jury trial as such. With every respect to those of a different view, Pambula merely states an elementary rule that a statutory power must be exercised by a donee of the power only for the purpose that is afforded and not to contest that purpose.

When I look to the way in which Madgwick DCJ in this case dealt with the anticipated inconvenience to the medical practitioners retained by the parties, I see no offence against the principles in Pambula. His Honour referred to this consideration as the last of several which he was taking into account, all of which were particular to this case. He was careful to address the inconvenience to the medical practitioners in the context of the other considerations to which he had referred. He was also, as I understand his reasons, pointing to the fact that it was an unusual feature of this particular case that the three medical practitioners, being the only specialists in orthopaedic surgery who practise West of the Great Dividing Range, had been retained by the parties. That would not, one might infer, be a normal condition of litigation whether in cases to be tried by jury or judge alone.

I see no offence to the Pambula principles in the first consideration to which the appellant has objected. It was not one challenging jury trial as such. It was one concerned with the fact that three busy medical practitioners were involved whose attendance at court in this case might be necessary because of the conduct of the trial before a jury, generally by oral evidence.

The second consideration related to the suggested problems of empanelling a new jury. It was urged that what had occurred was an administrative order of the court which should not deprive the appellant of the right to a jury trial, which Parliament has reserved for it. This consideration was only taken into account by Madgwick DCJ in the circumstances in which he came to the exercise of his discretion. It was an indisputable fact that the defamation case had commenced, that the order excusing remaining jurors had been made, that order being reasonable in the circumstances, and it was then difficult to procure a fresh jury comprised of sufficient numbers of persons unassociated with the Club. These events produced the necessity, in effect, to delay the trial, if it were to proceed before a jury to the next sittings of the civil list of the District Court in Forbes, ie about a year later. All of these were facts particular to the case. They were not facts which were relevant to the supposed general inconvenience of a jury trial as such.

I therefore see no offence to the Pambula principles in the consideration of the events which had transpired.

Once one puts out of account complaints about the two aspects of Madgwick DCJ's reasons, to which I have referred, this Court is faced with nothing more than the exercise of a judicial discretion. The limitations upon the disturbance of such an exercise are well known. They are stated in such decisions as Norbis v Norbis (1986) 161 CLR 513, 517f. I see no discretionary error in the order which Madgwick DCJ made.

I would therefore reject the first ground of appeal.

So far as the second ground related to damages is concerned, Madgwick DCJ accepted the report of Dr David Meachin, who had been qualified for the appellant. His evidence was as follows:

In my opinion this woman sustained a muscular ligamentous neck strain as a result of a pulling or wrenching injury at work on 26 June 1985. According to her it has not settled down since then an she had a flare up some time in 1987 or 1988 but no further injury. It was noted that she continued to work in spite of this strain.

On my examination today, there was little to find apart from some tenderness and some slight restriction of movement on looking form side to side. It is my opinion that this woman has sustained an acute neck strain in 1985, but it is not as bad as she makes out in view of the fact that she continued working over the ensuing years. It is a little hard to describe all her symptoms on an orthopaedic basis alone. On my examination today she appears to have some tenderness in her neck, minimal spondylosis consistent with her age.

Nevertheless she did have a neck strain and I feel she will be unfit for work which involves working above shoulder height or doing heavy work such as pre-accident employment. She will be fit for other work if she would care to look for it. I am sure that her prognosis is that she will continue to complain of the above symptoms."

The components of the judgment entered by Madgwick DCJ were as follows:

1. Past economic loss Nil
2. General damages - past - $12,500.00 General damages - future $12,500.00

URJ FORBES SERVICES MEMORIAL CLUB LTD v HODGE (Priestley JA) 7 3. Interest on past general $1,875.00 damages 4. Out of pocket expenses $754.24 5. Future economic loss $2,500.00 Total $30,129.24

The only components challenged by the appellant in this appeal were those for past and future general damages. The appellant contended that these should each be reduced to $7,500 with the consequential reduction of interest on past economic loss to $1,125. This would produce an overall judgment of $19,379.24. It will be observed that the stake in contest in this appeal, upon the premise that the matter was rightly tried before Madgwick DCJ alone, is only $10,000.

The primary judge had the advantage, conventionally regarded as most important, of seeing the respondent give evidence. He described her as stoical. He was, I think, impressed by her perseverance and persistence. His reasons suggest that he did not consider that she had exaggerated her symptoms in any untoward way. He indicated that she had suffered a loss of the amenities of life which, in her circumstances, was "significant".

Such an opinion is sustained by the evidence. This indicated that the respondent complained of pain in performing housework, eg in doing heavy work with her right arm such as cleaning, washing, vacuuming, bed making, working above shoulder height. All of these were considerations which Madgwick DCJ was entitled to take into account. They appear to be entirely consistent with the report of Dr Meachin. His Honour was inclined to think that the respondent exaggerated some of her symptoms a little. But she had certainly suffered a tear injury to the shoulder which caused her disability, inconvenience and pain for the eight years prior to the trial. At her stage in life, and in her condition, this was significant to her, which was as Madgwick DCJ found.

I do not consider that the appellant has shown the allowance made by Madgwick DCJ for general damages was wrong. Put in the way that that conclusion is generally expressed, I do not consider that the appellant has shown that the allowances made by his Honour for either the components challenged, or the resulting judgment were outside the bounds of a sound quasi discretionary judgment to such an extent as to permit, or to require, this Court to disturb the judgment which his Honour entered: cf Moran v McMahon (1985) 3 NSWLR 700 (CA), 720f.

Accordingly, both of the grounds ventilated in this appeal having failed, I would propose that the appeal be dismissed with costs.

Priestley JA In regard to the first of the two matters argued in this appeal, which concerns the dispensation with the jury by the trial Judge, I have formed the opinion, after some vacillation on my part, that the Judge's reasons sufficiently demonstrate the exercise of his discretion under s79A of the District Court Act by reference to matters genuinely particular to the case before him and not by matters of general application to all jury trials. If I am right in my understanding of his Honour's reasons, then his exercise of discretion fell within the approach laid down by this Court in Pambula District Hospital v Harriman (1988) 14 NSWLR 387. On this basis I think the first point argued fails.

On the second ground of appeal argued I agree with what the President has said. In my opinion the appeal should be dismissed with costs.

Cole JA Unless and until the decision in Pambula District Hospital v Harriman (1988) 14 NSWLR 387 is revisited and the dissenting judgment of Mahoney JA, with which not surprisingly I agree, becomes dominant I am obliged to apply the principles enunciated in that decision.

The learned President has remarked that this case indicates that there are occasions when the particular and universal attributes will sometimes merge together in deciding whether a matter should be heard by a jury. In my view every particular decision in relation to factors affecting the conduct of a trial inevitably affect all other litigants. The application of particular considerations in one case is but a subset of the application of matters particular to all litigants. However, applying as I am obliged the majority view in Pambula District Hospital, in my view no error or departure from the orders enunciated by the majority in that case has been demonstrated and accordingly the first ground fails.

For the reasons advanced by the President I agree that the second ground fails.

KirbyP. The order of the Court therefore is that the appeal is dismissed with costs.

(Counsel addressed in relation to an offer of compromise made by the respondent.)

Kirby P: The Court has just given judgment in proceedings between Forbes Services Memorial Club Ltd (the appellant) and Mrs Margaret Hodge (the respondent).

The Court unanimously dismissed the appeal upon the two grounds which were argued. The first argued that the primary Judge, Madgwick DCJ, had dispensed with a jury without proper authority of law. The second was that his Honour awarded general damages which were excessive. The judgment amount was quite modest. The total judgment which his Honour entered on 5 April 1993 was $30,129.24. By its order this Court has confirmed that judgment.

Immediately upon the announcement of the order of the Court dismissing the appeal counsel for the respondent rose to apply for indemnity costs. He did so pursuant to the provisions of Pt52A R22 of the Supreme Court Rules. This Court has held that the Rules of the Supreme Court relating to offers of compromise apply to the Court of Appeal: Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721 (CA), 726. That holding was not challenged, in these proceedings.

The Court has been informed, without objection, that on 27 August 1993, when the appeal was pending, an offer was made by the solicitor for the respondent to the solicitor for the appellant that the respondent would accept:

(1) A verdict of $30,000 together with interest from the date of the judgment of Madgwick DCJ;

(2) Costs in the District Court and in the Supreme Court to be agreed or taxed; and

(3) The above to be paid within twenty-eight days of the date of offer.

At the time of the foregoing offer, the costs in the District Court and Supreme Court had not in fact been agreed or taxed. However, that component of the offer would have been ascertainable ultimately and, if need be, by taxation. Accordingly, it would seem to me that the offer was a real one. It was one susceptible of acceptance. Specifically, the second item was capable, if necessary, of later ascertainment and determination.

The offer, it will be seen, amounted, at the time it was made, to an offer to accept an amount which was only $129.24 less than the total that the respondent was entitled to receive under the judgment of Madgwick DCJ. That was, she

URJ FORBES SERVICES MEMORIAL CLUB LTD v HODGE (KirbyP) 9

suggested, an element of compromise. There was a further element of compromise in that at the date of the offer made the costs, such as the costs of the briefs on hearing of the appeal, would not have been incurred. Accordingly, if it had been accepted there would have been some saving in the costs of the parties as they now stand.

The appellant has opposed the award of indemnity costs under the rule. It has done so not upon any challenge to the power of the Court to provide for indemnity costs but upon the basis that the rule contemplates a real offer of compromise. It was said that the offer made by the respondent in this case fell short of offering a true element of "compromise". The amount of the offer of compromise, $129.24, even taking into account the saving of costs at the time of the offer, was, so it was argued, illusory. It was put that it is necessary for there to be a true element of compromise. It was submitted that this is made clear in Tickell v Trifleska Pty Ltd (1991) 25 NSWLR 353 (SC) at 355. It was missing in this case: cf Hudderfield Bank v Lister [1895] 2 Ch 285.

Obviously, the amount of "compromise" that will be relevant to a particular case will depend upon the prospects of a party's succeeding or failing in the appeal. It would be difficult for this Court to establish a clear principle consistent with the purpose of the rule, which required in every case an exact elucidation by this Court of the prospects of the appeal, viewed before its determination. It would be difficult for the Court to decide whether, in a particular case, the offer was a genuine one or whether it amounted to a "real" compromise or not. In appropriate cases this could be determined, as it was in Tickell. However, for the operation of the rule, it would appear that the principle contemplates that so long as some actual offer of compromise, short of the full amount payable under the order under appeal, the rule will apply.

When I turn to the present case it does not seem to me that the prospects of the respondent's losing the judgment which she secured by the orders of Madgwick DCJ, viewed prospectively without benefit of the determination of this Court, were very large. It was therefore reasonable in the case that the respondent should make an offer of compromise which reflected that assessment, now confirmed. The respondent, as the evidence in the appeal demonstrated, is a woman of modest means. The offer of compromise was doubtless made with a view to ensuring that she would be protected, as the rule now permits, against those costs which are not recoverable on a party and party basis. The making of offers of compromise has, as this Court has said in earlier cases, become part of the prudent conduct of litigation, in contemporary circumstances.

(a) The fact that the offer made did constitute an agreement to accept something less than was the respondent's then right at law;

(b) The operation and purpose of the rule, as I take it to be intended; and

(c) The fact that the rule has been found to apply to cases in this Court, I consider that it is appropriate that the indemnity costs for which the rule provides should apply. More accurately, it is not appropriate that the Court should relieve the appellant from the consequences of its refusal of the offer of compromise made.

Therefore, to the orders earlier made that the appeal be dismissed with costs, I would add the words "paid on an indemnity basis from 27 August 1993".

Priestley JA Generally for the reasons outlined by the President this seems to me to be an appropriate case for the Court to exercise its discretion by ordering indemnity costs in regard to the appeal.

Cole JA. I agree. Kirby P: The addition to the orders of the Court is, accordingly, as I have provided.

Appeal dismissed with costs, paid on an indemnity basis from 27 August 1994. 10 Counsel for the Appellant: RR Bartlett Instructed by: William K Chambers

Counsel for the Respondent: PJ Doherty Instructed by: Palmers