New South Wales Supreme Court CITATION : Spaulding v Commonwealth of Australia (No. 2) [2006] NSWSC 81 HEARING DATE(S) : Written submissions JUDGMENT DATE : 27 February 2006 JUDGMENT OF : Bell J at 1 DECISION : Costs are to be costs in the cause CATCHWORDS : Costs judgment Civil Procedure Act 2005 Limitation Act 1969 (NSW) LEGISLATION CITED : Motor Accidents Act 1988 Supreme Court Rules 1970 Uniform Civil Procedure Rules 2005 Donald Campbell & Co Ltd v Pollak [1927] AC 732 CASES CITED : Commonwealth of Australia v Smith [2005] NSWCA 478 Hally v Dennis (1955) 95 CLR 661 Holt v Wynter [2000] NSWCA 143; 49 NSWLR 128 PARTIES : Barry Thomas Edward Spaulding (Plaintiff) Commonwealth of Australia (Defendant) FILE NUMBER(S) : SC 20768/01 COUNSEL : John Sharpe (Plaintiff) G Laughton SC / D Brogan (Defendant SOLICITORS : Hollows Solicitors (Plaintiff) Australian Government Solicitor (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION BELL J 27 February 2006 20768/01 Barry Thomas Edward Spaulding v Commonwealth of Australia (No. 2) JUDGMENT – on costs 1 BELL J: On 10 February 2006 I made an order pursuant to s 60G(2) of the Limitation Act 1969 (NSW) extending the limitation period for the cause of action in these proceedings. The parties were given leave to make submissions concerning the costs of the application. I have subsequently received written submissions from each of the parties. Neither of the parties sought to have the proceedings re-listed for oral submissions on this issue. 2 The application was filed on 12 September 2001. A number of the submissions filed on the plaintiff's behalf refer to the provisions of Pt 52A of the Supreme Court Rules 1970 (the SCR). The proceedings were determined after the commencement of the Civil Procedure Act 2005 (the CPA) and the Uniform Civil Procedure Rules 2005 (the UCPR). 3 Provision is made for the Court to make orders dispensing with the requirements of the UPCR (including with respect to orders for costs) in a case in which proceedings were commenced before commencement of the CPA (Cl 5(2) of Sched 6). 4 Where anything has been begun before the commencement of the CPA under a provision of the old legislation for which there is a corresponding provision in the CPA the proceedings may be continued and completed under the old legislation as if the CPA had not been enacted (cl 10 of Sched 6). 5 The plaintiff's submissions did not address the provisions of the CPA or the UCPR and were directed to the reasons why Pt 52A r 17 of the SCR is not of application to proceedings for an extension of the limitation period: Commonwealth of Australia v Smith [2005] NSWCA 478. 6 Neither party invited me to approach the matter on the basis that the general saving provisions of Sch 6 cl 10(a) or (b) are of application. Neither party invited me to make orders dispensing with the requirements of the UCPR pursuant to Sch 6 cl 5(ii). I deal with the determination of costs pursuant to the provisions of the CPA and the UCPR. 7 Section 98(1) of the CPA provides: 98(1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. 8 The provisions of Pt 42 r 42.1 of the UCPR provide: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 9 In the respondent's submission, Pt 42 r 42.1 expressly permits the Court to depart from the general principle that costs follow the event. In its submission the Court may refrain from ordering costs in favour of a successful party, but that it must be satisfied that it is appropriate to do so in the particular circumstances: Donald Campbell & Co Ltd v Pollack [1927] AC 732; Hally v Dennis (1955) 95 CLR 661 at 664. It was appropriate to do so in this case since the application was to extend the limitation period. The respondent relied on the decision of the Court of Appeal in Holt v Wynter [2000] NSWCA 143; 49 NSWLR 128 per Sheller JA (with whom Meagher and Handley JJA and Brownie AJA agreed) at 147-148; [121]: In relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable. In the alternative, the respondent submitted that costs should abide the outcome of the trial. 10 The plaintiff submits that his application was successful and that costs should follow the event. In written submissions the plaintiff relied on the reasoning of Santow JA in Smith at [160] and [161]. His Honour, after referring to the passage in Holt v Wynter that I have extracted above, said (at [160]): However, there is no rule that binds the judge to deny costs to an applicant for extension of the limitation period. A costs order for such an application is a matter of practice and procedure within the discretion of the primary judge. In view of the Commonwealth's failure in so many of these extension cases over six years [para 133] the judge would have been entitled to find that the Commonwealth acted unreasonably in opposing an extension in this case and should pay the applicant's costs. It has not been shown that the primary judge erred in the exercise of his discretion so as to warrant the interference of an appellate court (Citations deleted). His Honour went on in the succeeding paragraph to refer to the overriding purpose rule in s 56(3) of the CPA, suggesting that it may have afforded an alternative basis for declining to interfere with the primary judge's costs order given that the Commonwealth had relied on submissions based on the unavailability of documentation, which had frequently been found insufficient to constitute significant prejudice. 11 The respondent opposed the grant of the extension of the limitation period upon the basis that the applicant did not pass the threshold posed by s 60I(1)(a) and (b) of the Limitation Act and, in the event that he did, that it was not just and reasonable that the period be extended because it would be prejudiced in meeting his claim. The application was heard before the judgment of the Court of Appeal in Smith was delivered. In addition to submissions that the applicant had failed to establish his absence of awareness of the matters set out in s 60I(1)(a)(i) to (iii), the respondent contended that the applicant ought to have become aware of these matters at a time earlier than three years before the application was made. While it did not succeed in making good that contention, I am not of the opinion that it was wholly unreasonable to advance it. 12 Among the matters of actual prejudice identified by the respondent in opposing the extension was the absence of witnesses who were in a position to comment on any apparent changes in the applicant's conduct in the period immediately following the collision, the absence of any medical records relating to the applicant for a period of nine years and the absence of records of the applicant's income in the period 1965 to 1974. I do not conclude the respondent's conduct in opposing the extension of the limitation period on these grounds to have been wholly unreasonable. 13 The plaintiff submitted that the provisions of s 60L of the Limitation Act are indicative of a legislative intent that the usual order in a case such as the present is that a plaintiff will recover his costs of the application (WS at [10]). Section 60L of the Limitation Act provides: Without effecting any discretion that a court has in relation to costs, a court hearing an action brought as a result of an order under subdivision 2 or 3 may reduce the costs otherwise payable to a successful plaintiff, on account of the expense to which the defendant has been put because the action was commenced outside the original limitation period. Section 60L deals with the costs of the action. I do not consider that it provides support for the plaintiff's contention. I do not read the judgments in Smith as providing support for the proposition that a successful applicant for an extension of the limitation period ought usually to recover his or her costs of the application. 14 I note that Holt v Wynter involved an application under s 52(4) of the Motor Accidents Act 1988 for leave to commence proceedings out of time for injuries suffered in a motor vehicle accident. Ms Holt had allowed herself to get out of time. In Smith Basten JA observed that, on one view, the principle in Holt v Wynter may be limited to cases in which the intention to make the claim arose within time, but was not effected within the limitation period (at [217]). 15 The applicant did not allow himself to get out of time. The CPA and the UCPR do not require that a successful applicant for an extension of the limitation period pay the costs of his or her application. I have concluded that the appropriate order in this case is that the costs of the application be costs in the cause. This does not preclude the respondent from reliance on s 60L of the Limitation Act in the event that the applicant is successful in his claim. ORDER The costs of the application are costs in the cause. ******* 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.