New South Wales Court of Appeal CITATION : Hoban v Mathieson [No 2] [2002] NSWCA 232 FILE NUMBER(S) : CA 40722/01 HEARING DATE(S) : 10 July 2002 JUDGMENT DATE : 10 July 2002 Laurel Jane Hoban PARTIES : v Gail Julia Mathieson JUDGMENT OF : Handley JA at 1 LOWER COURT JURISDICTION : District Court LOWER COURT DC 6365/01 FILE NUMBER(S) : LOWER COURT Walmsley DCJ JUDICIAL OFFICER : COUNSEL : Appellant - S G Campbell Respondent - P Moore, Solicitor SOLICITORS : Appellant - Hunt & Hunt Newcastle Respondent - Brazel Moore & Daly Gosford CATCHWORDS : RESTITUTION - INTEREST - COSTS LEGISLATION CITED : Supreme Court Act 1970 (NSW) DCR Pt 39A r 25 subr 6 CASES CITED: TCN Channel 9 Pty Limited v Antoniadis [No 2] (1999) 48 NSWLR 381 DECISION : Orders made IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40722/01 DC 6365/01 HANDLEY JA 10 July 2002 Laurel Jane HOBAN v Gail Julia MATHIESON [No 2] Judgment 1 HIS HONOUR: On 3 July this Court delivered its reserved judgment in an appeal by the defendant from an assessment by Walmsley DCJ of the damages suffered by the plaintiff as a result of a motor vehicle accident. This Court set aside his assessment of the plaintiff's damages in the sum of $155,500 and directed that there be substituted a judgment for $26,840. 2 The judgment of the District Court had been enforced pending the appeal and the plaintiff received the judgment debt on 17 October 2001. 3 The matter is before me again today to make final orders dealing with restitution, interest and costs. The first matter that arises for consideration is the order for costs made in the District Court. It is common ground that an offer of compromise was made by the defendant to the plaintiff on 23 January 2001 in an amount greater than the judgment entered by this Court. As a result prima facie DCR Pt 39A r 25 subr 6 applies to adjust the costs of the District Court proceedings. Mr Moore has appeared this morning on behalf of the plaintiff and asks that the Court not make the order prima facie indicated by subr 6 but make one more favourable to the plaintiff. 4 The first matter to which he draws attention is the fact that there was an aborted trial before English DCJ which could not proceed because the plaintiff was so distressed as a result of witnessing the death of a young man in a motor vehicle which caught on fire outside her home. There is no suggestion that English DCJ acted otherwise than perfectly properly in deciding to abort the trial and order a new trial. While the aborted trial has increased the costs of the proceedings in the District Court, and this is most unfortunate, if the offer of compromise had been accepted those costs as well as the costs of the ultimate trial would have been avoided for the benefit of both parties. 5 Walmsley DCJ ordered the defendant to pay the costs of the aborted trial and in the circumstances that have now arisen it seems to me that the appropriate course envisaged by the Rule is to order that the plaintiff pay those costs. I should add that English DCJ reserved those costs to the judge disposing of the proceedings and hence they are a matter for consideration by this Court. 6 The rule provides a prima facie cost result. If an offer of compromise is rejected and the plaintiff ultimately recovers less than the amount then offered the Rule provides: "unless the Court in an exceptional case and for the avoidance of substantial injustice otherwise orders" the prima facie cost position provided by the Rule will take effect. The Rule is intended to encourage the compromise of proceedings and this Court has on a number of occasions enforced the Rule and reversed orders made in the District Court where in this Court's opinion a District Court Judge had ordered otherwise on insubstantial grounds. 7 It is unfortunate that the amount of costs in issue in these proceedings has been substantially inflated as a result of the aborted trial which occurred without the fault of any party but costs are ordered by courts not as a punishment but as an indemnity, although an incomplete one, for costs properly incurred by the successful party. As I say it is unfortunate that the burden of the costs' orders on the plaintiff will be increased by the aborted trial. It is not her fault but neither is it the fault of the defendant and while the case is exceptional because there was an aborted trial I cannot see consistently with the principles on which the Court orders costs to be paid in litigation that there will be substantial injustice on the plaintiff in having to pay those costs any more than there was substantial injustice on the defendant having to pay those costs as a result of the judgment of Walmsley DCJ. 8 The principles upon which the Court orders restitution with interest are as set out in TCN Channel 9 Pty Limited v Antoniadis [No 2] (1999) 48 NSWLR 381. There is no basis on which the Court can deprive the successful appellant of interest at court rates on the amount paid over to the plaintiff. After all if she used the money sensibly she would have earned interest on the amount she actually received. In any event the defendant has been deprived of the use of the money as a result of the plaintiff electing to enforce her judgment and run the risk of an order for restitution if an appeal were to succeed. 9 The parties did not advert to the availability under s 6A (1)(c) of the Suitors Fund Act of the possibility of obtaining a certificate from English DCJ for the costs of the aborted hearing and I will reserve liberty to either party to apply to English DCJ for a certificate under that section. 10 Accordingly, I make orders in terms of paragraph 1 of the short minutes handed up by Mr Campbell; paragraph 2 changing the date from 16 January 2001 to 23 January 2001. I make orders in terms of paragraph 3 substituting $139,349.03 for the judgment sum including interest pursuant to s 94 of the Supreme Court Act from 17 October 2001 to today's date in the sum of $10,689.03 by way of restitution for overpayment made pursuant to the former judgment of the District Court. I make order 4 adding at the end with respect to the costs in this Court and I make order 5 granting liberty to either party to apply to English DCJ for a certificate under s 6A (1)(c) of the Suitors Fund Act. They are the orders of the Court. 11 Mr Moore has asked me to stay this judgment pending consideration being given by the plaintiff 's advisers to the filing of an application for special leave to appeal to the High Court. In the situation created by the plaintiff 's insistence on enforcing her judgment despite a foreshadowed appeal, and the defendant's failure to apply for a stay in this Court after the refusal of a stay by Walmsley DCJ, it seems to me that the appropriate course is to grant the plaintiff a short stay without seeking to impose conditions up to a period of seven days after the time for lodging an application for special leave in the High Court. I am not prepared to grant an unconditional stay until the special leave application is heard as on my understanding this would involve a delay of one year or more at the present time. 12 If the plaintiff is willing and able to either grant security for the full amount of the judgment debt, or to make a partial repayment and grant security for the balance, I would be disposed to continue the stay until the hearing of any special leave application the plaintiff may be advised to file. In that event the parties should be able to agree on the provision of appropriate security without further costs having to be incurred in debating the matter in Court. 13 I therefore grant a stay until and including 6 August 2002, such stay to lapse if a special leave application is not filed on or before 31 July. The stay will in any case lapse on 7 August unless continued either by me or by consent. There is liberty to apply to me on three working days' notice for a continuation of the stay after 7 August in the event that the parties are unable to agree on the terms on which this could be done. 14 Costs of the proceedings today, costs in the appeal. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.