The plaintiff claimed damages against the State of New South Wales for two wrongful arrests resulting in his false imprisonment, and for malicious prosecution. I gave judgment on the claim on 27 April 2023: Murphy v The State of New South Wales [2023] NSWSC 407. I directed that the plaintiff should bring in Short Minutes to reflect my reasons, and I adjourned the proceedings to hear submissions on costs.
In my principal judgment I determined that the plaintiff was wrongly arrested on two separate occasions and falsely imprisoned for periods of time following each of those arrests. I determined that the plaintiff was unsuccessful on his claims of malicious prosecution.
I assessed the plaintiff's damages for the wrongful arrests and false imprisonment at $30,000 plus interest. The parties have agreed interest at $9,148.64, with the result that the plaintiff is entitled to a judgment against the defendant in the sum of $39,148.64.
The plaintiff submitted that he should receive his costs of the proceedings subject to a one third reduction to take into account time spent on the malicious prosecution claim. The defendant submitted in the first place that the plaintiff should pay 75 percent of the defendant's costs, but as a fall-back position submitted that each party should bear its own costs of the proceedings. Both parties drew attention to r 42.34 of the Uniform Civil Procedure Rules 2005 (NSW). That rule provides:
42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court
(1) This rule applies if -
(a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and
(b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants.
(2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied that -
(a) for proceedings that could have been commenced in the District Court - the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted, or
(b) for proceedings under Part 2 of Chapter 7 of the Industrial Relations Act 1996 - the commencement and continuation of the proceedings in the Supreme Court, rather than the Local Court, was warranted.
The defendant submitted that, having regard to the end result, this was a Local Court case, and that the default position under that Rule should be that no order for costs should be made. The defendant submitted that, viewed as a whole, the plaintiff's case was overwhelmingly unsuccessful, with the issues on which he was unsuccessful requiring most of the Court's time and cost.
The defendant submitted that, so far as the plaintiff was successful, he was successful in claims which were either not added until the commencement of the trial (being compliance with s 202 of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW) (LEPRA) or, if they were advanced from the beginning, were not particularised (absence of a suspicion on reasonable grounds in respect of the second arrest).
The plaintiff submitted that, by reason of the hypothetical calculation of damages, which with interest, would have resulted in an award of approximately $650,000, it was appropriate that the proceedings were commenced in this Court rather than the District Court, because the assessment of his damages may well have exceeded the jurisdiction of the District Court.
In my opinion, commencement of the proceedings in this Court was warranted. If the plaintiff had been successful in his claim for malicious prosecution, his damages are likely to have exceeded $500,000, by reason of the hypothetical quantum I indicated in my principal judgment together with an amount for economic loss which the State appears to have accepted in its submissions at the trial, and interest on all of these figures. There is a small prospect that the plaintiff's damages might have exceeded the then jurisdictional limit of the District Court ($750,000), taking into account that, if the matter had been heard by another judge, a different assessment might have been made. At the time of instituting the proceedings, no-one would know which judge would be allocated to hear the matter.
I have also had regard to what was said by Tobias JA in State of New South Wales v Quirk [2012] NSWCA 216 at [170] to [171] in a not dissimilar case to the present. In the same way, the factual issues in the present case were significantly complex to warrant the proceedings being commenced and continued in this Court.
Further, there is almost no chance that the proceedings would have been transferred to the District Court under s 146 of the Civil Procedure Act 2005 (NSW) if such an application had been made by the defendant by reason of the potential quantum of the damages. I note, in any event, that no such application was made.
In Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40,748 Toohey J said at p.48,136:
1. Ordinarily costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order - Ritter v Godfrey [1920] 2 KB 47.
2. Where a litigant has succeeded only on a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed - Forster v Farquhar [1893] 1 QB 564.
3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law - Cretazzo v Lombardi (1975) 13 SASR 4 at 12.
In Waters v P C Henderson (Aust) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328 Mahoney JA (with whom Kirby P and Priestley JA agreed) approved Toohey J's observations in Hughes ([22] above) and went on to say:
[34] Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called "discrete issues", for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter.
In Permanent Trustee v FAI (unreported, NSWSC, 3 June 1998) Hodgson CJ in Eq also said (at 13):
Apart from that consideration, in general terms I accept that if an issue is raised reasonably and is not disproportionate to the whole case, then normally the successful party should get his or her costs. However, particularly in relation to severable issues, the lesser the strength of the point raised and the greater the proportion it bears to the whole case, the more likely it is that the successful party may be deprived of costs; and if the Court comes to the view that it was unreasonable to raise the issue, then the successful party may have to pay the costs of that issue.
Prima facie, costs follow the event. In the present case, the defendant correctly identifies that there are four events, that is, two wrongful arrests followed by wrongful imprisonment, and two claims of malicious prosecution. However, whether there are four or some lesser number is not to the point. The substance of the matter must be investigated.
The plaintiff has been partly successful in the proceedings, albeit, in that part where the damages are small, namely, false arrest and wrongful imprisonment. However, the questions surrounding the arrests and the subsequent false imprisonment cannot be divorced from consideration of the issues concerning malicious prosecution. In particular, as my principal judgment makes clear at [164] and [173], a determination of the issue in s 99(1)(a) of the LEPRA assists in informing what was identified in A v Sate of New South Wales (2007) 230 CLR 500; [2007] HCA 10 as the fourth element of the tort of malicious prosecution, namely, acting without reasonable and probable cause.
Whilst I can accept that, if the claims made had been confined only to wrongful arrest and false imprisonment, the evidence would not have been so extensive, it would still have been necessary to consider evidence of the matters which are, for example, set out at [106] - [124] of my judgment for AC, and [133] - [150] for SH. There was a great deal of evidence about those issues because that evidence also went to the heart of the malicious prosecution claim. The plaintiff was successful in relation to the s 99(1)(a) issue in relation to SH but not AC.
The defendant submitted that a great deal of pre-court time was spent preparing for the damages issues, particularly the claims of mental harm and the plaintiff's loss of earning capacity through the period. However, the costs of the preparation of that material was not futile, in the sense that I found that, if the plaintiff had been successful on his claims for malicious prosecution, he established that he had sustained mental harm and suffered a loss of earning capacity.
The defendant also pointed to an offer of compromise which it made on 1 June 2022, offering the plaintiff a judgment in the amount of $30,000. There was also an offer, whether by reason of r 42.13A or otherwise, of the payment of the plaintiff's costs as agreed or assessed. The defendant submitted that if a costs order is now made in favour of the plaintiff for less than all of his costs, the plaintiff will not obtain a judgment more favourable than the defendant's offer.
I am not of the opinion that the way that submission is put brings the matter strictly within the provisions of r 42.15, and the defendant does not assert that it does. Ultimately, the submission was directed to the general discretion for determining costs. However, there are two difficulties with it. First, the plaintiff is entitled to a judgment which exceeds $30,000 by reason of the interest which is to be added to the damages assessed. Secondly, there would need to be some adjustment and a setting off of the amount of any costs (if the plaintiff is awarded any costs) against the amount by which the judgment exceeds $30,000. I do not think I should give further consideration to the submission in relation to the offer of 1 June 2022.
In Thiess v TCN Channel 9 Pty Ltd (No. 5) [1994] 1 Qd R 156, the Full Court of the Supreme Court of Queensland said (at 210) that where there has been success by each party on different issues, rather than making two opposing costs orders requiring taxation (or assessment), the better course is to combine the two, so that one party, if appropriate, obtains a costs order which takes account of what the other party would have obtained if a separate costs order had been made in favour of that party.
On that basis, and taking into account the plaintiff's ultimate success in obtaining a judgment against the defendant, including his success on the s 99(1)(a) issue regarding SH and the time taken at the trial relating to the SH matter, but having regard also to the defendant's success on the malicious prosecution claims and the s 99(1)(a) issue regarding AC, I consider that the defendant should pay 1/3 of the plaintiff's costs.
Accordingly, I make the following orders:
1. Judgment for the plaintiff in the sum of $39,148.64.
2. The defendant is to pay 1/3 of the plaintiff's costs.
[2]
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Decision last updated: 22 June 2023