Johnson v DOCS [1999] NSWSC 1251 | Case summary

HIS HONOUR: 1 In reasons I gave on 2 December 1999, I upheld the appellant's appeal against the refusal of Master Harrison to extend the time under the Limitation Act 1969 to enable the appellant to bring proceedings against the respondents, and I ordered the respondents to pay his costs of the proceedings before Master Harrison and of the appeal. I was satisfied, pursuant to Part 52 rule 13, that it was appropriate to make that cost order in all the circumstances of the case. 2 The appellant then sought an order pursuant to Part 52A rule 9(1), which provides:- "Where before the conclusion of any proceedings, other than proceedings entered in the Commercial List or the Construction List, the Court makes an order for the payment of costs or a motion is refused with costs, the costs shall not, unless the Court otherwise orders, be payable until the conclusion of the proceedings." 3 The appellant submitted that it was appropriate for the Court to order that the costs the respondents have been ordered to pay be assessed and paid immediately upon assessment. He submitted that the proceedings for extension of time under the Limitation Act, albeit of an interlocutory nature and part of the ultimate proceedings, were a discrete part thereof and that, save for a successful appeal against my decision, these are costs of which he will not be deprived. The further submission was made that the appellant was not in a strong financial position and was receiving financial assistance to prosecute these proceedings against respondents, which are obviously adequately funded. A further submission was made that it is obvious from the posture taken by the respondents, which is said in no critical way, that these proceedings will be fought to the end, the respondents taking the view that the appellant is not entitled to succeed having regard to the decision in Williams v Minister, Aboriginal Land Rights Act 1983 (1999) 25 FamLR 86. In these circumstances, the submissions continued, that the appellant may well be left without the continuance of financial assistance, unless the costs to which I have found he is entitled are paid forthwith. 4 It should be noted, immediately, that the appellant offered no evidence as to his financial position, although I am prepared to infer, and the contrary was not argued, that it is weak. But, perhaps more importantly, he offered no evidence of the financial assistance he is receiving and whether it would be in any way prejudiced by the failure to make the order which is now sought. It is also necessary to bear in mind that the making of the order the appellant now seeks will have the effect of recompensing him for some of the costs incurred in fighting the Limitation Act issue and, it may be, that this will replenish whatever monetary fund there is available to continue with the main proceedings. However, as I have said, there was no evidence of these arrangements or that effect. 5 In these circumstances I think the evidence only enables me to infer that the appellant does not enjoy a financial position sufficient to enable him to fully fund this litigation and that the respondents are able to fund it. 6 I should also note that whilst my decision was given on 2 December 1999, the respondents had not, as at 15 December 1999, made a decision as to whether they would seek leave to appeal. The respondents take the view that they have until 30 December 1999 to file a Summons for Leave to Appeal, subject to any time that may run during vacation. 7 The respondents submitted, firstly, that this is not an appropriate case to make the order sought by the appellant as the appellant has already obtained a cost advantage by reason of the orders I have made pursuant to Part 52 rule 13. That, if I may say so with respect, does not seem to me to be a valid answer to the point now raised by the respondents, because I have decided that that is the basis on which the appellant is entitled to costs. The question then becomes, relevantly for present purposes, when those costs should be paid. 8 Secondly, the respondents submitted that by the grant of the extension of time they were prejudiced, in the sense that they will have to defend the appellant's proceedings. Any prejudice, as appears from the reasons of the Master and my reasons, is presumptive and, in my opinion, is irrelevant to the matter I am now called upon to determine. 9 Thirdly, and correctly, the respondents submitted that an order extending the limitation period is an interlocutory and not a final order: Merton Enterprises Pty Limited v Nelson (1988) 13 NSWLR 454. In that case the Court of Appeal refused leave to appeal from Wood J's order dismissing an appeal from a Master's decision extending time. In doing so, their Honours held that no appeal lay as of right from the learned Judge's decision but only by leave of the Court; that leave to appeal should be refused; and that the defendant should bear the plaintiff's costs of the defendant's proceedings in the Court of Appeal. 10 It was submitted by the respondents that as the application is interlocutory in nature it is "part of the proceedings in relation to the Plaintiff's cause of action which is no longer statute barred". 11 In my opinion many circumstances where an order for costs is made in which it is appropriate to consider Part 52A rule 9(1) will be in consequence of decisions in interlocutory proceedings, because they are the decisions made prior to the conclusion of the proceedings and, accordingly, I think that the rule must be looking towards, at least amongst other situations, costs made in interlocutory proceedings. Therefore, in so far as the respondents rely upon the fact that the order is interlocutory in nature, I am of the view that that does not enable them, of itself, to resist the order sought by the appellant. 12 The respondents referred to the decision in Thunderdome Racetiming and Scoring Pty Limited v Dorian Industries Pty Limited (1992) 36 FCR 297. At p.312 Olney J said, in referring to the equivalent Federal Court Rule:- "The rule does not suggest any particular criteria by which the Court should be guided in approaching such an application, and accordingly I take the view that the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from" the general rule.

It was not suggested that the categories were closed, but that examples may be where the opponent's action has taken the other party, and perhaps, the Court by surprise; where a matter could have been raised earlier and costs have been unnecessarily incurred; where the interlocutory relief is distinct from the primary relief; and where the applicant would not recover costs for a significant period if obliged to wait until the conclusion of the proceedings. The first two points have no part to play in this case. 13 In my opinion the interlocutory relief in this case is, relevantly, distinct from the primary relief. It is the hurdle the appellant had to scale to be entitled to pursue the substantive relief. I see no particular difference between it and, for example, an application to strike out an originating process as failing to disclose a cause of action. Generally, if such an application is made and fails, I would consider it an appropriate exercise of discretion to order the defendant to pay the plaintiff's costs of the Motion. In my view, there are many cases in which it is appropriate that final costs orders should be made on the determination of interlocutory proceedings, rather than reserving the costs or making them, in some way, costs in the proceedings. Certainly I do not know of any rule of practice, which precludes this course. 14 This is also a case where it can be anticipated that the principal proceedings will not be heard for some time. Indeed, as I have noted, the respondents have not, as yet, decided whether there will be an application for leave to appeal from my decision. As some gauge as to the period before which the proceedings will be heard I note that in Williams v Minister, Aboriginal Land Rights Act 1983 & Anor (1994) 35 NSWLR 497, the Court of Appeal heard the application for leave to appeal on 23 August 1994 and delivered judgment on 23 December 1994. Thereafter an application for special leave to appeal to the High Court was filed and either not pursued or dismissed. But the proceedings did not come on for hearing until 1999, so that some four years, or perhaps a little longer, expired from the Court of Appeal's decision until the hearing. There is no reason to think that the present case will come on for hearing any more quickly and, even if the time in Williams was reduced by 25 per cent, the hearing is unlikely to take place for several years. 15 Accordingly, it seems to me, that the appellant has satisfied the third and fourth criteria to which reference is made. 16 I was referred by the respondents to various other cases, although, generally speaking, those set forth in paragraph 7 of the written submissions dealt with some form of misconduct on the part of the party against whom or which the order was sought and, correctly in my view, the respondents have submitted that no such considerations apply to them. 17 Finally, it was submitted by the respondents that an application for an extension of time does not fall within the usual meaning of "discrete" or "separate" issues in the sense of that term as used in Charlie Brown Pty Limited & Anor v Green & Ors (McLelland CJinEq - 3 July 1995 - unreported) and Prebble v Australian Broadcasting Commission (Levine J - 11 July 1997 - unreported). In the first case McLelland CJinEq, in dealing with an application of the type with which I am concerned, said:- "The matters dealt with in the determination of the separate questions were matters fundamental to the relationship of the parties, and raised issues which are quite discrete from any other relief claimed in the proceedings. It was appropriate that those matters should be dealt with separately and, it is in my view also appropriate that now that they have been dealt with, the costs relating to them should be assessable and payable forthwith." 18 In the present case it was submitted by the respondents that they had raised that the appellant should not be granted leave because the decision in Williams (No 2) meant that the case was futile. I appreciate that this was not an application to strike out the Statement of Claim. Rather the submission was that to allow the proceedings to go forward was not justified because, having regard to Williams No 2, the appellant could never succeed. Indeed, it was this submission, in its various manifestations, which took up a substantial part of the hearing time. I determined that those issues could not be resolved until the facts in this case had been found and, to that extent, it seems to me that I was dealing with a discrete issue. As was submitted on behalf of the appellant on the principal hearing the "futility" argument of the respondents was really a demurrer type argument. However one describes it, it required a consideration going to the heart of the litigation and, whilst I appreciate that it will be necessary to consider the matters raised by the respondents in the factual context, the matter proceeded before me on the basis that either irrespective of the facts as proved or because the facts as pleaded were so closely allied with those in Williams No 2, that I was bound to hold that the appellant had no causes of action. I declined, for the reasons I have given, to come to that conclusion. That matter, in my view, relevantly for present purposes, reinforces the conclusion that all the Limitation Act proceeding was in the nature of or raised a discrete issue. 19 In Prebble the motion was to seek to conclude the principal proceedings as an abuse of process. That was resolved in the plaintiff's favour such that "all that in reality remains is the disposition of the plaintiff's case for damages for defamation in the usual way". Levine J referred to the passage from Charlie Brown to which I have referred and to his own judgment in Oliver v Bryant & Ors (15 May 1995 - unreported) and held, in the particular circumstances of that case, that an order should be made pursuant to Part 52A rule 9. 20 Obviously every case will have its own particular factual characteristics and the way in which the wide discretion in relation to costs is to be exercised will be a matter for the individual Judge having heard the proceedings, although informed by the principles to which I have referred. 21 In the present case I have come to the conclusion, essentially because I am satisfied that, relevantly for present purposes, the interlocutory relief is sufficiently distinct from the primary relief, and the appellant will not recover his costs for a significant period if obliged to wait for the conclusion of the proceedings and, finally, because of the particular issues raised on the hearing before me, that it is appropriate, in the exercise of my discretion to make an order pursuant to Part 52A rule 9. I also, of course, have taken account of what was accepted as the appellant's financial position, although that was not ultimately determinative. In doing so I am acutely aware of two things. Firstly, I have to have regard to the fact that there may be a successful appeal from my decision. Secondly, as was much pressed upon me, the Court of Appeal in Williams (No 1) ordered that the costs of the Motion before the trial Judge be costs in the plaintiff's action and that the respondents pay the appellant's costs of the appeal. 22 In order to accommodate the fact that a successful appeal may be brought against my decision, I consider that the order should be tailored so that the costs are not payable until after the Court of Appeal has disposed of the matter and, therefore, any variation in the orders for costs I have made will not be defeated by a prior payment. 23 I order:- 1. that the appellant have leave to have the costs of the application before Master Harrison and of the appeal before me assessed and/or taxed forthwith; and 2. the respondents pay such costs forthwith upon such assessment or taxation, provided that should the respondents seek leave to appeal from my decision of 2 December 1999, such costs shall not be payable until either:- (a) leave to appeal is refused; or (b) if leave to appeal is granted, the appeal is dismissed; or (c) if leave to appeal is granted; there is no variation to the cost order I have made. ******

Johnson v DOCS

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