Second Respondent (Second Defendant) : Ms B A Mangan

Second Respondent (Second Defendant) : Phillips Fox

Automatic Weighing Machine Co v Combined Weighing and Advertising Machine Co (1889) [1886-90] All ER Rep Ext 1343

Burnet v Francis Industries PLC [1987] 1 WLR 802

Eastman v Wilson [1938] VR 83

Grant v The Banque Franco-Egyptienne (1878) 3 CPD 202

Joskovitz v Bonnick [1964] VicRp 83; [1964] VR 654

Marine and General Mutual Life Assurance Society v Feltwell Fen Second District Drainage Board [1945] KB 395

Ruffles v Chilman & Anor (1997) 17 WAR 1

Ruffles v Chilman & Anor, unreported; FCt SCt of WA; Library No 980314; 12 June 1998

Stevens v Economic House Builders [1938] 1 All ER 654

T C Trustees & Anor v J S Darwen (Successors) Ltd [1969] 2 QB 295

1 MALCOLM CJ: At the conclusion of the argument on this appeal on 18 May 1998 the Court granted leave to appeal and allowed the appeal setting aside the order of a Master of this Court providing for a stay of execution in respect of costs. The reasons to be published by Steytler J adequately express my own reasons for joining in the making of those orders.

2 IPP J: I have read the reasons to be published by Steytler J. I agree with them and his Honour's conclusions. I have nothing further to add.

3 STEYTLER J: The appellant has appealed against the decision of a Master of this Court whereby he ordered, on the application of the respondents, a stay of execution in respect of an order for payment of the costs of an appeal which had been ordered to be paid by the respondents to the appellant in respect of an appeal which had been successfully brought by the appellant against the decision of a judge of the District Court. After submissions had been heard in respect of the appeal against the learned Master's order, the court granted leave to appeal and allowed the appeal, setting aside the stay. We said that we would publish our reasons for reaching that conclusion in due course. These are my reasons for joining in the making of those orders.

4 The appellant was, in 1996, the plaintiff in a claim for damages for personal injury arising out of two motor vehicle accidents. The respondents were the defendants in those proceedings. The matter came on for trial in April 1996. Various occurrences took place which resulted in the appellant inviting the trial Judge to disqualify himself upon the grounds of ostensible bias. He refused to do so and the appellant, being dissatisfied with the judgment which was given at the conclusion of the trial, appealed. He was, as will be apparent from what I have already said, successful in the appeal and the decision of the learned trial Judge was quashed and the matter remitted to the District Court for a new trial before another Judge. The question of costs was stood over for later argument.

5 Some months later, after the Full Court had heard further argument, the respondents were ordered to pay the appellant's costs of the appeal to be taxed. The costs of the first trial were reserved until a decision had been given in the retrial.

6 Thereafter, by notice of motion, the respondents applied to stay the order requiring them to pay the appellant's costs of the appeal to be taxed.

7 Two affidavits were filed by the respondents in support of the application for a stay. The first of these was one sworn on 6 October 1998 by Mark Lewis Williams, a solicitor acting for the respondents. In it he said that the District Court had listed the retrial for hearing between 2 and 25 November 1997, but that the appellant had successfully applied for an order that the trial dates be vacated on 27 October 1997. He exhibited an affidavit sworn by Robert John Butcher, a solicitor acting for the appellant, which had been lodged in support of the application to vacate the trial dates. That affidavit set out something of the history of the matter.

8 The appellant had been involved in two motor vehicle accidents in respect of which proceedings were, as I have said, instituted by him. Pretrial conferences were held on various dates between 1992 and 1994 before the matter was ultimately listed for hearing between 15 May 1995 and 2 June 1995. The trial began on 15 May 1995 and a number of preliminary matters were dealt with. However, because the respondents amended their defences, the matter was adjourned so as to enable the appellant's solicitors to make enquiries as regards a number of new allegations which had been made in the amended defences.

9 The matter was thereafter relisted for trial commencing on 9 April 1996. There followed a number of days of hearing interrupted for medical reasons relating primarily to the psychiatric health of the appellant's wife who had herself brought a claim arising out of the motor vehicle accidents and who was a witness in the proceedings.

10 The trial was eventually completed and a decision was given on 12 July 1996. The appellant was awarded an amount of $45,000 by way of damages, $40,000 of which was awarded against the first respondent and $5,000 of which was awarded against the second respondent. This was less than an amount of $70,000 which had been offered to him by the first respondent in an attempt to settle the action prior to the commencement of the trial.

11 There followed the successful appeal to the Full Court to which I have earlier referred and the subsequent award of costs in favour of the appellant. Those costs were ultimately taxed and allowed in an amount of $26,142.12.

12 Mr Butcher, in his affidavit exhibited to that of Mr Williams, deposed to the fact that there was uncertainty whether or not legal aid would be granted to the appellant for the purpose of securing representation at the retrial. He said that if aid was not to be forthcoming the appellant would be unable to procure legal representation for himself.

13 The second of the affidavits filed on behalf of the respondents in the proceedings before the learned Master was one sworn on 14 October 1998 by Robert Wayne Creswick. It added little to what had previously been said. Mr Creswick is a claims manager employed by the Insurance Commission of Western Australia, the compulsory third party motor vehicle insurer of the first respondent and of the estate of the second respondent. He said, in his affidavit, that the offer made by the first respondent was "a commercial one made in an attempt to avoid the cost of proceeding to trial rather than to reflect the merit of the appellant's case or potential quantum of his claim".

14 The appellant filed only one affidavit in opposition to the respondents' application. This was an affidavit sworn by Mr Butcher on 12 October 1998. He confirmed, in that affidavit, that the appellant "is not a person of means". He said that the appellant had obtained two opinions from counsel regarding the quantum of the appellant's claim, one of these being from senior counsel. That opinion was given prior to the first trial and was to the effect, Mr Butcher said, "that the claim was worth a sum which was in excess of the First Respondent's ... offer". The second opinion was provided by junior counsel following the trial in the District Court and Mr Butcher said junior counsel "was also of the view that the Appellant's ... claim had a greater value than the sum offered by the First Respondent ...". He said that the learned trial Judge's assessment of $45,000 by way of damages was based on a number of findings which were disputed by the appellant.

15 The learned Master, in his reasons for decision, summarised the history of the matter before saying that that history indicated that "the situation with respect to costs in the District Court proceedings is uncertain". However, he said, there "must ... be a strong prospect that the respondents would be entitled to part, if not all, of their costs of some of the District Court proceedings that have taken place to date". He went on to say:

"It therefore seems to me that simply to pluck the costs of the appeal out of this morass and have them paid by the respondents is unwise, perhaps unfair and, in the circumstances, unwarranted. This is, in my view, a case where there are special circumstances and where it is inexpedient to enforce the costs order. In reaching that conclusion I am very much influenced by the fact that the appellant is insolvent, or if not technically insolvent, certainly not in a position to meet any significant costs award that may be made against him.

Were it otherwise, were it the case that there was no question but that if the respondents were successful in obtaining a costs order against the appellant and if it was equally apparent that the costs order would be met, then the result may have been different. However, in my view, there are special circumstances in this case and I ought to order a stay of execution."

16 The sole ground of appeal is that the learned Master erred in law in ruling that there were special circumstances that justified the granting of a stay of execution.

17 There is no doubt, from what was said by the learned Master, that the principal factor in the exercise of his discretion was, as he saw it, the "strong prospect" that the respondents would be entitled to part, if not all, of their costs of some of the District Court proceedings to date. His comments to that effect must be read together with a comment earlier made by him in the course of his reasons to the effect that, because the appellant received an order of damages which was less than the amount of the offer made to him prior to the commencement of the trial, it would "seem to follow that part at least of the costs of the trial would have to be borne by the appellant".

18 However, that may very well not be so. It cannot be assumed from the fact that the appellant's appeal against the trial Judge's judgment succeeded upon the ground that there was a reasonable apprehension of bias rather than upon grounds relating to the quantum of the award that the quantum of any award on a retrial will be the same, or similar, to that earlier ordered.

19 I have mentioned that the appellant's solicitor has deposed to the fact that the amounts awarded at the first trial are, in total, lower than the amount to which the appellant is, in the opinion of his legal advisors, entitled, being an amount greater than the sum of $70,000 previously offered to him by the first respondent. I have also mentioned that findings which have been made by the learned trial Judge are disputed by the appellant. It is, in this respect, noteworthy that the learned trial Judge said, in his reasons for decision, that he did "not accept the plaintiff to be a witness of the truth" and found that the appellant's wife "was generally a most unsatisfactory witness". There must, on a retrial, be some prospect that a different Judge might form a different opinion of the credibility of one or both of the appellant and his wife.

20 There is consequently the prospect, which is very difficult to evaluate at that stage, that the appellant will, on a retrial, obtain an award of more than $70,000. Should that occur, there is also the prospect that he will obtain an order against the respondents for the costs of the first trial if, indeed, there is to be any order for the payment by one or more of the parties of the costs of any other or others of them incurred in respect of the first trial. There is nothing to say, at this stage, that this prospect is any less strong than that referred to by the learned Master.

21 Once that is accepted as, with due respect to the learned Master, it seems to me it must be, it is difficult to see what "special circumstances" there are which should make it inexpedient to enforce the order (as to which see the provisions of O 47 r 13(1) of the Rules of the Supreme Court). The only other matter which was relied upon by the respondents in this respect was the impecuniosity of the appellant. However, the cases establish that the risk of bankruptcy would not ordinarily constitute a special circumstance for the purposes of O 47 r 13(1)(b) (see State Bank of Victoria v Parry [1989] WAR 240 at 245 and the cases there referred to). That being so, there is nothing which should displace the normal starting point which is, as the Chief Justice has said in State Bank of Victoria v Parry (supra), at 244, that a party who has obtained a money judgment is, on the face of it, entitled to proceed to execution without delay.

22 It consequently seemed to me, for these reasons, that leave to appeal should be given and the appeal allowed.