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[2007] VSC 8
Supreme Court of Victoria
2007-02-02
WILLIAMS J
Original judgment source is linked above.
COSTS - Award of damages not exceeding one-half of jurisdiction of County Court - Application for order under r 63.24 that the plaintiff's entitlement to costs not be limited to those recoverable if claim brought in County Court - Whether special circumstances warranting departure from r 63.24 in exercise of Court's discretion - Whether refusal of County Court registry to accept initiating process amounts to special circumstances - Whether timing of delivery of judgment amounts to special circumstances - Application refused
1 Judgment was given in favour of the plaintiff in this matter on 31 July 2006. The plaintiff succeeded in his claim for repayment of a debt under a loan agreement made between himself and the defendants. The defendants were ordered to pay the plaintiff's costs of the proceeding.
2 The plaintiff now applies for an order under r. 63.24 of the Supreme Court (General Civil Procedure) Rules 2005 that he be entitled to costs calculated in accordance with the applicable scale for a proceeding brought in the Supreme Court. The plaintiff makes the application because he recovered only $98,045.12 : being an amount less than $100,000.00, or half the amount to which the jurisdiction of the County Court was limited at the relevant time. The amount recovered was comprised of the sum of $30,000, together with simple interest to the date of judgment.
3 The plaintiff contends, and it is not disputed, that he would have been entitled to the sum of $100,000 some six and a half months after 31 July 2006, had judgment been given on that later date.
4 The applicable r 63.24 is in the following form:
(1) Subject to paragraph (1.1), ... where in a proceeding for debt or damages (other than a proceeding in which the jurisdiction of the County Court is unlimited) the plaintiff recovers by judgment or otherwise an amount (exclusive of costs) not exceeding one-half of the amount to which the jurisdiction of the County Court is limited, the plaintiff shall, unless the Court otherwise orders, be entitled only to the costs to which the plaintiff would have been entitled if the plaintiff had brought the proceeding in the County Court less an amount equal to the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the Supreme Court instead of the County Court, but shall not be required to pay to the defendant any amount by which the additional costs exceed the costs payable to the plaintiff.
The Court's discretion
5 In making an Order under r. 63.24 the Court must be satisfied that "special circumstances" exist to warrant a departure from the rule; see O'Doherty v McMahon[1].
6 The plaintiff argues that special circumstances warranting the exercise of the discretion in his favour exist. He relies upon the following:
(a) the plaintiff's unsuccessful attempt to file a claim in the County Court seeking payment of an amount of $214,475.94 which exceeded the then $200,000 jurisdictional limit of the County Court;
(b) the quantum of the judgment debt being dependant upon the date of judgment, which could not be ascertained by the plaintiff in advance; and
(c) the complexity of the factual and legal issues considered by the Court.
7 The defendants respond that the plaintiff chose to commence proceedings for an amount which exceeded the jurisdiction of the County Court. They argue that the plaintiff simply failed in his claim for the amount of the debt and compound interest sought and has demonstrated no special circumstances warranting the favourable exercise of the discretion under r. 63.24.
The County Court rejection argument
8 Counsel for the plaintiff first relies upon the County Court registry's rejection of his claim for an amount exceeding the jurisdictional limit of that Court. I am not persuaded that any special circumstances are established by reason of the County Court's rejection of his documents. The operation of the rule relates to the outcome of the proceedings which were properly commenced in this Court and a claim which exceeded the jurisdiction of the County Court.
The quantum argument
9 The quantum of the amount awarded to a successful plaintiff which includes an interest component calculated to the day of judgment will obviously vary according to the date upon which judgment is delivered. The plaintiff contends that this case is unusual because he would have been entitled to the sum of $100,000 at the judgment date, if:
(a) he had delayed the commencement of the proceedings;
(b) he had been allocated a later trial date; or
(c) the Court had taken longer to deliver its judgment.
10 The date of commencement of proceedings is entirely a matter for the plaintiff. The likely impact of the dates of the commencement of the trial and the delivery of judgment are also matters which the plaintiff's professional legal advisors could have taken into account when deciding where the proceeding should be commenced.
11 In O'Doherty v McMahon[2] Menhennitt J explained how the terms of the predecessor to r 63.24 in effect provided a margin for error by a party or a party's legal representatives in relation to the decision to commence proceedings in one court rather than another. His Honour said, in a passage relied upon by the defendants :
In this connection, the first thing that is pertinent is that the rule itself already has an in-built mechanism for the protection of both parties in relation to this matter on the basis that it is a matter recognised as incapable of accurate estimation. In providing that, unless the judge otherwise orders, the plaintiff is entitled only to such costs as are applicable in the lower Court where he recovers not more than half of the amount to which the jurisdiction of the lower Court is limited, the rule itself has provided a wide margin for differences of opinion and errors of judgment. It is only where the error has gone to the extent of anticipating twice or more than twice the amount actually recovered that it will operate. Accordingly, the provisions of the rule itself tend to point to the conclusion that what has already been taken into account specifically should not be again considered in the exercise of the discretion.[3]
12 I am not persuaded that exceptional circumstances justifying the exercise of the discretion in the plaintiff's favour exist because of any difficulties resulting from the plaintiff's inability to ascertain the date of judgment in advance.
The complexity argument
13 Finally, notwithstanding the reference to Gillard J's recognition in Bantick v Ross Properties Pty Ltd (No. 2)[4] that "[complexity] of either law or fact usually is a justification for the exercise of the discretion in favour of the plaintiff", I am not persuaded that such complexity has been demonstrated in this case.
14 Although Senior Counsel was engaged by the defendants, I do not consider the factual or legal issues in this case to be so complex that they could not have appropriately been agitated in the County Court.
15 As was noted in the judgment[5], the issue of credit was significant to the outcome of the case. The plaintiff claimed to have lent the sum of $30,000 to the defendants : as individuals. The defendants denied executing a written loan agreement and claimed that the plaintiff had agreed to lend money to a company, rather than to them as individuals. Alternatively, they alleged that they had executed the written agreement relied upon by the plaintiff, as a result of a misrepresentation by him. They claimed that the loan was statute barred, in any event, and alleged that an additional repayment had been made. They argued that the term of the agreement requiring them to pay interest was void for uncertainty and severable. In my view, such matters were appropriate for consideration by the County Court.
Conclusion
16 In my view, the plaintiff has failed to establish the existence of "special circumstances" warranting the exercise of the discretion under r 63.24 in his favour.
17 The application should be refused.
I certify that this and the five preceding pages are a true copy of the reasons for Judgment of Williams J of the Supreme Court of Victoria delivered on 2 February 2007.
DATED this 2nd day of February 2007.
[1] [1971] VicRp 75; [1971] VR 625 at 628 per Menhennitt J who delivered the judgment of the Full Court.
[2] [1971] VicRp 75; [1971] VR 625.
[3] [1971] VicRp 75; [1971] VR 625 at 629.
[4] [2000] VSC 165 at [42].
[5] [2006] VSC 279 at [10].
Morton
Elgin-Stuczynski & Anor [2007] VSC 8