Hooker v Gilling [2007] NSWCA 214 | Case summary

Hooker v Gilling [2007] NSWCA 214 | Case summary | Zoe

[13]

1 IPP JA: I agree with McColl JA. 2 McCOLL JA: The Court delivered judgment in this matter on 1 May 2007: Hooker v Gilling [2007] NSWCA 99 ("Hooker No 1"). The background can be gleaned from that judgment. This judgment deals with the appropriate costs orders in relation to the appeal and the hearing at first instance. 3 In Hooker No 1, I said (with the concurrence of Ipp and Basten JJA): "69. The question of the costs of the application has occasioned me some difficulty. The claimant has succeeded but only because of considerable indulgence on the part of the Court. However the opponent understood before the primary judge, in my view, that the MAC Act did not apply to a claim based on a progressive injury (Transcript, 25/5/06 at pp 47 - 48). While, as Allsop J said in White v Overland , the opponent's legal representatives did not owe any duty to the claimant, they, too, owed a duty to the Court to ensure it discharged its functions in accordance with the overriding purpose. As I have indicated the progressive injury claim sufficiently emerged from the oral argument below and, if it was not appreciated during the hearing of the Motion, having regard to the presumed absence of transcript, should have emerged when the opponent's legal representatives reviewed the transcript in preparation for the hearing of the appeal. Commonsense at least indicates, one might have hoped, that the parties could have avoided the costs of the appeal if sensible steps had been taken to ensure that that case was reflected in the pleadings. 70. In those circumstances, my preliminary view is that each party should bear his and her own costs of the leave application and the appeal. I would, however, grant either party leave to apply with written submissions within seven days of judgment if either seeks a variation of this order." 4 The parties have exercised the liberty to apply in relation to costs. 5 The respondent was represented on the leave application. She has prepared her written submissions on the costs issues without the assistance of counsel. As well as making submissions in relation to costs, she has sought to overturn the substantive orders disposing of the appeal. The latter submissions exceed the liberty to apply granted on 1 May and will not be considered. 6 As to costs the respondent has submitted that either the appellant or his legal representatives, Mr Azzi, his counsel or Mr Weller, his solicitor, should pay the costs of the appeal and that the costs order made in her favour by the primary judge, O'Toole DCJ, should not be disturbed. 7 The respondent contended that the appellant and/or his legal representatives should pay the costs of the appeal because the necessity for the appeal arose from the failure of counsel for the appellant clearly to explain the nature of the case he wished to pursue before the primary judge. She argued that it was unjust to burden her with costs in circumstances where it appeared that counsel had not complied with the Rules of Court concerning pleadings. 8 The appellant resisted the respondent's application. He argued that the Court should make the following costs orders sought in the Notice of Appeal filed pursuant to order 2 made on 1 May 2007: "4. Set aside the order made by O'Toole DCJ on 26 May 2006 directing the claimant to pay three quarters of the opponent's costs of the Motion.

[15]

The draft Notice of Appeal in the White Book did not identify the orders sought (see Hooker No 1 at [68]). As now framed they are imprecise, but orders 5,7 and 8 are presumably intended to seek costs orders in the appellant's favour. 9 The appellant submitted that he should have his costs of the hearing of the Motion at first instance, and of the application for leave to appeal and of the appeal because the Court should apply the general rule that costs follow the event: UCPR 42.1. He argued that such an order must "necessarily follow" given his success in having the primary judge's orders set aside, the fact that the costs were reasonably incurred in defending the Motion filed by the respondent and that there were no circumstances militating against such an award. 10 The appellant opposed the respondent's application that he pay the costs of the appeal. He argued that, despite this Court's dissatisfaction with the clarity with which his written summary of argument sought to identify the issues on appeal, the draft Notice of Appeal and the oral argument on appeal accurately encapsulated his argument that the car assault paragraphs (Hooker No 1 at [3]) pleaded a progressive injury claim rather than one which attracted the operation of the Motor Accidents Compensation Act 1999 (the "MAC Act"). In that light he contended that the respondent's criticisms of the manner in which his case was conducted in this Court and before the primary judge were unfounded. 11 Secondly, the appellant submitted he should be awarded his costs because of what he argued was a "separate error" on the primary judge's part in not considering the "temporal point". This was a reference to the proposition that in order for the definition of "injury" in either the Motor Accidents Act 1988 or the MAC Act to apply, it is necessary that the plaintiff's injury occur at a fixed point of time: Hooker No 1 at [35]. He argued that the primary judge focused on the causation requirement, and had not appreciated the significance of the temporal requirement: see Hooker No 1 (at [39]). The appellant contended that he was entitled to his costs because, notwithstanding the deficiencies in the pleading and in the manner in which his counsel presented his argument before the primary judge, her Honour's failure to appreciate the significance of the temporal requirement was sufficient to impeach her judgment. 12 Thirdly, the appellant argued that the Court's conclusion (Hooker No 1 at [55]) that it was incumbent upon Mr Azzi, counsel for the appellant below and on appeal, to seek leave to amend the Amended Statement of Claim ("ASC") to make the progressive injury claim clear once he appreciated that the primary judge did not accept his submission about reading the ASC "in totality", imposed an unreasonable obligation on the appellant given that the primary judge delivered an ex tempore judgment. 13 A number of the appellant's submissions canvassed this Court's decision in Hooker No 1. Thus he argued that "the nature of the claimant's case as a claim for progressive injury was asserted clearly and repeatedly before O'Toole DCJ" (cf Hooker No 1 at [56]) and that the appeal was necessary, notwithstanding the observations (Hooker No 1 at [57]) that the appellant could have sought leave to amend the ASC after the primary judge had struck out the relevant paragraphs of the ASC. He contended that such an application had only a "remote chance" of success.

[21]

38 It is rare for a successful party who is guilty of misconduct in the litigation to be ordered to pay the unsuccessful opponent's costs where the misconduct does not lengthen the proceedings unnecessarily, cause unnecessary issues to be canvassed or otherwise cause the costs of the litigation to be increased. Indeed, the court's entitlement to depart from the usual order that costs follow the event has sometimes been said, in effect, to be subject to the qualification that the misconduct in question occasioned unnecessary litigation and expense (see Huxley v West London Extension Railway Company (1899) 14 App Cas 26 at 32-33 per Lord Halsbury LC; Ritter v Godfrey [1920] 2 KB 47 per Atkin LJ at 60). In other cases, however, this qualification has not been mentioned: see for example Donald Campbell & Co v Pollak [1927] AC 732 at 811-812; Thorne v Doug Wade Consultants Pty Ltd [1985] VR 433 at 500; Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271-272; Re Elgindata Limited (No 2) (supra). On balance, it seems to me that while delay and increased expense brought about by improper conduct in the course of the litigation are highly relevant factors in the discretion to depart from the usual order as to costs, they are not essential to the exercise of that discretion. It would, in any event, be very unusual for misconduct of that kind not to cause unnecessary delay and expense." (emphasis added). 22 It is useful to extract the full passage from McHugh J 's reasons in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 which Ipp AJA summarised (at [36]). McHugh J said (at [69]): " 'Misconduct' in this context means misconduct relating to litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings ; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party has already offered in settlement of the dispute." (emphasis added) 23 Further, in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 (at 874) (to which McHugh J referred in Oshlack) Devlin J said that in applying the ordinary rule that a successful plaintiff ought not to be deprived of costs, or made to pay the costs of the other side, unless that party has been guilty of some sort of misconduct: "… [I]t is necessary to decide whether the plaintiff really has been successful , and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a 'successful' plaintiff. In certain cases he may be, eg, where part of the object of the action is to establish a legal right, wholly irrespective of whether any substantial remedy is obtained. To that extent a plaintiff who recovers nominal damages may properly be regarded as a successful plaintiff, but it is necessary to examine the facts of each particular case. " (emphasis added) 24 While it might be accepted that there was no disagreement in the High Court as to McHugh J's observations of general principle, I would also point out that, as I said in Fordyce v Fordham & Anor [2006] NSWCA 274 (at [74], Beazley and Santow JJA agreeing), the majority in Oshlack rejected the proposition that there was any absolute rule with respect to the exercise of the s 98 power such as that "in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party": see Gaudron and Gummow JJ (at [40]), Kirby J (at [134]). I also drew attention (Fordyce v Fordham & Anor at [80]) to observations made by Hodgson JA (with whom Einstein J agreed) in Furber v Stacey & Anor [2005] NSWCA 242 that the "prima facie principle …that costs follow the event" expressed in District Court Rules 1973 Pt 39A r 9 and Pt 21 r 8 was: "…subject to the ability of the Court, referred to in those Rules, to make such orders as it appears to the Court to be made, as the justice of the case may require ." (emphasis added) 25 With those principles in mind it is necessary to consider whether the appellant can properly be regarded as the "successful party" and, further whether even if he can, the Court is warranted in departing from the general rule because of the manner in which the ASC was pleaded and the case conducted before the primary judge and in this Court. 26 The starting point for this consideration is the observation that "[t]he claimant has succeeded but only because of considerable indulgence on the part of the Court": (Hooker No 1 at [69]). The context to that conclusion appears from Hooker No 1 as follows: "7 The argument on the Notice of Motion proceeded over three hearing days. During the hearing Mr J Azzi, who appeared for the claimant, argued that the ASC did not raise a claim or claims which fell within the definition of 'injury' for the purposes of the MAC Act. Rather, he contended the ASC disclosed a claim for damages for injuries caused by a pattern, or series of assaults using a motor vehicle and/or a sledgehammer and that the claimant had suffered damage when all the necessary elements of the tort had been completed (the 'progressive injury claim') (Transcript, 6/4/06, pp 6-7). 8 The parties' contentions that the claims pleaded in the ASC were, or were not, caught by the MAC Act turned on the terms of that legislation. Regrettably, over the three days of hearing Mr Azzi did not take the primary judge through the MAC Act to make good his submissions. ..... 10 The primary judge did not accept that the progressive injury claim emerged from a literal reading of the ASC. Her Honour made it clear to Mr Azzi that as she understood the ASC the claimant was alleging that the opponent had assaulted him 'on specific days and at specific times ... with a motor vehicle' (Transcript, 25/5/06, p 11). 11 Mr Azzi defended the separate pleading of each car assault. He submitted that the Statement of Claim had to be read in totality, rather than singularly (Transcript, 25/5/06, p 42). He also contended he was required by pleading rules to plead each assault singularly as a material fact but that the pleadings should be understood by reference to the intention to rely upon the series of assaults as having given rise to the claimant's injuries (Transcript, 25/5/06, pp 42-43). 12 Mr Azzi did not seek leave before the primary judge to amend the ASC to make clear the claimant's intention to rely upon an injury that was caused by the progressive effect of the car assaults and the other assaults alleged on the claimant. … 14 The primary judge concluded (at [44]) that the car assault paragraphs sought to recover damages in respect of injuries alleged to have been caused by the opponent's 'fault in using and/or fault in operating a motor vehicle as defined in' the MAC Act. It appears tolerably clear that in so doing, her Honour was adhering to the view she had expressed in the course of argument, which found reflection in the passage to which she referred from Dunn v McPhillamy , that the ASC pleaded assaults using a motor vehicle occurring at a fixed point of time. 22 Finally, Mr Azzi conceded that the pleadings were infelicitous and could have been more 'elegantly' framed. He accepted, for example, that the car assault paragraphs could have been pleaded in combination as particulars of an assault in which the motor vehicle was the "weapon". He sought leave to replead the ASC in the event that his primary submission was unsuccessful. 23 Mr J Dupree, who appeared for the opponent, submitted that a plain reading of the ASC indicated that the claimant was pleading injuries arising out of the driving of a motor vehicle at fixed points of time so that each car assault paragraph fell within the definition of "injury" in the MAC Act. He opposed the claimant being given leave to replead without submitting a draft pleading to the Court. …

[23]

54 It is apparent from the transcript that Mr Azzi appreciated the primary judge was approaching the case on the basis of a literal reading of the ASC, with the consequence that she regarded it as pleading an injury occurring at each point in time enumerated in the car assault paragraphs. As is apparent, in my opinion, her Honour's reading of the ASC was entirely understandable. She was not taking either an 'overly pedantic or rigidly technical' approach. 55 In my view, once Mr Azzi appreciated her Honour did not accept his submission about reading the ASC 'in totality' and, accordingly, did not accept it pleaded a progressive injury claim, it was incumbent upon him to seek leave to amend the ASC to make the progressive injury claim clear. 56 ... The pleading did not present the claimant's case with reasonable clarity. Even in this Court, the nature of the claimant's case only emerged with any clarity through inquiries from the Court, a point to which I will return. 57 Once her Honour had struck out the relevant paragraphs of the ASC, it was also open to Mr Azzi to seek to amend the Statement of Claim by motion in the District Court. When the Court put this proposition to him, he contended that that course would have been fraught with embarrassment by reason of the decision of the primary judge. For my part, I doubt whether that would be the case. A properly re-pleaded ASC which clearly identified the progressive injury claim and relied upon the authorities which had been drawn to her Honour's attention would, I have no doubt, have received proper consideration from a District Court judge. 58 In my view the primary judge has not been shown to be in error in approaching the case in the manner in which she did. Nevertheless now that the progressive injury claim has been articulated in this Court, it is, in my view, in the interests of justice that the claimant be given leave to amend to plead that case with clarity." (emphasis added). 27 These extracts demonstrate that the appellant's submissions on costs pay little, or no, regard to the manner in which he succeeded on appeal. The Court was of the view that the primary judge's understanding of the ASC was warranted based on the manner in which it was pleaded and the way the appellant's argument was advanced. She made that clear to Mr Azzi (Hooker No 1 at [10]) thus leading to this Court's conclusion that he ought to have sought to amend the ASC to make clear that the case the appellant sought to advance, being based on a progressive injury, was not caught by the MAC Act. This exchange took place the day before her Honour delivered judgment, she having reserved on 25 May to deliver judgement the following day. The appellant's ex tempore judgment point cannot be accepted. 28 Accordingly in my view the Court should not disturb the costs order made by the primary judge. Her Honour was correct in deciding that the ASC disclosed claims which fell within the MAC Act. 29 As to the costs of appeal, again the appellant principally succeeded because the Court saw fit, in the interests of justice, to grant leave to amend the ASC. This, at least, obviated the incurrence of further costs by an application to the District Court for leave to amend in the light of this Court's decision.

[24]

30 Thus while the appellant succeeded in having the orders made by the primary judge set aside, this was not because the Court was persuaded her Honour had erred, but, rather, because the Court was persuaded that a progressive injury claim was not covered by the MAC Act, although of the view the ASC had not pleaded such a claim, and granted leave to amend the ASC. 31 In those circumstances, in my view, it cannot be said that the appellant succeeded on appeal in the manner contemplated by UCPR 42.1: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd. The Court is, accordingly, justified in departing from the general rule in UCPR 42.1. The question is to what extent departure is warranted. 32 I accept the respondent's submission that it was the appellant's conduct in relation to the drafting of the ASC which necessitated both the motion in the Court below and the appeal. However as I also said while the opponent's legal representatives did not owe any duty to the claimant, they owed a duty to the Court to ensure it discharged its functions in accordance with the overriding purpose: Hooker No 1 (at [69]). I was also of the view that commonsense indicated the parties could have avoided the costs of the appeal if sensible steps had been taken to ensure that the case the appellant sought to articulate was reflected in the pleadings. 33 The respondent has not persuaded me that I should depart from my preliminary view that each party should bear his and her own costs of the leave application and the appeal. Should the appellant's legal representatives pay the costs of the appeal? 34 The respondent sought an order that the appellant's legal representatives pay her costs of the appeal. Section 99(1) of the Civil Procedure Act permits such an order to be made if it appears to the court that costs have been incurred: "(a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or (b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible." 35 Section 99(2) permits the Court to make such an order after giving the legal practitioner a reasonable opportunity to be heard. The appellant's submissions did not address the order the respondent sought against the appellant's legal representatives, an omission I am prepared to infer was an oversight rather than an admission. 36 The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised "with care and discretion and only in clear cases": Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; (2005) 63 NSWLR 300 at [92]. 37 In my view, despite the conclusion that the ASC did not comply with the Rules of Court and that counsel for the appellant should have sought leave to amend the ASC in the District Court, it has not been demonstrated that his conduct reaches the threshold contemplated by s 99(1). There is no evidence as to the appellant's solicitor's responsibility for the drafting of the ASC and no basis, accordingly, for contemplating a s 99 order against him.

Hooker v Gilling

At a glance

Court

Decision date

Before

Source

Judgment (26 paragraphs)

Parties

Cases Cited (14)

Cited By (20)