New South Wales Supreme Court CITATION : Wood v The Commonwealth of Australia [2006] NSWSC 157 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 22/02/06 JUDGMENT DATE : 20 March 2006 JUDGMENT OF : Patten AJ at 1 DECISION : See paragraph 21 Limitation Act 1969 LEGISLATION CITED : Civil Procedure Act 2005 Motor Accidents Act 1988 Commonwealth of Australia v Smith (2005) NSWCA 478 Holt v Wynter (2000) 49 NSWLR 128 CASES CITED : Gretton v The Commonwealth (2005) NSWSC Spaulding v The Commonwealth (2006) NSWSC 81 Sydney City Council v Zegarac (1998) 43 NSWLR 195 State Rail Authority v Gaudron (Court of Appeal, 12 August 1997 unreported) PARTIES : John Edward Wood - Plainitff The Commonwealth of Australia - Defendant FILE NUMBER(S) : SC 209231 of 2001 COUNSEL : Mr P Hennessy SC with S Gow- Plaintiff Mr C Barry SC with I McLachlan SOLICITORS : Hollows - Plaintiff Australian Government Solicitor - Defendant LOWER COURT DATE OF DECISION : 02/23/2006 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Patten AJ 20 March 2006 209231 of 2001 John Edward Wood v The Commonwealth of Australia. JUDGMENT 1 In a reserved decision on 8 December last, I extended the period for the Plaintiff to commence the proceedings under s 60 G of the Limitation Act. I also ordered the Plaintiff to pay the costs of the motion to extend time, but on the application of the solicitor who then appeared for the Plaintiff, I gave leave to apply in respect of the costs order as the matter had not been argued during the hearing. 2 On 22 February the matter of costs was argued, Mr Hennessy SC with Mr Gow appearing for the Plaintiff and Mr Barry QC with Mr McLachlan for the Defendant. 3 Mr Hennessy submitted that the Plaintiff, being successful on the motion, should have his costs. He referred to the relevant rules and to the decision of the Court of Appeal in Commonwealth of Australia v Smith (2005) NSWCA 478. 4 Mr Barry, on the other hand, submitted that following Holt v Wynter (2000) 49 NSWLR 128, the Plaintiff should pay the costs of the motion. He also referred to the decision of McDougall J in Gretton v The Commonwealth (2005) NSWSC 437. 5 A few days after I reserved judgment the solicitors for the Plaintiff sent me a copy of the decision of Bell J in Spaulding v The Commonwealth (2006) NSWSC 81. 6 Section 98 of the Civil Procedure Act confers upon the Court "full power to determine by whom to whom and to what extent costs are to be paid". Uniform Civil Procedure rule 42.1 prescribes that costs should 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". 7 In Holt v Wynter a District Court judge had refused an application to extend time for commencing proceedings under s.52 (4) of the Motor Accidents Act. There was a successful appeal to the Court of Appeal (Priestley JA, Meagher JA, Handley JA, Sheller JA and Brownie AJA). All 5 judges agreed that the appeal should be upheld and the extension granted. Priestley JA dealt with the question of the applicant's costs at first instance in these terms: "A question arises as to Miss Holt's costs at first instance. I am not aware of any settled practice concerning the costs of a successful applicant. It seems to me that the appropriate order in such cases must depend very much on the circumstances of the case. The only instances of which I have any knowledge occurred in two cases in which I sat on the appeals: State Rail Authority v Gaudron (Court of Appeal, 12 August 1997, unreported) and Sydney City Council v Zegarac (1998) 43 NSWLR 195. In the first, Dent DCJ found in favour of the plaintiff and ordered that costs of the application be costs in the cause. The appeal from his judgment was dismissed. (I do not recall any argument about his costs order.) In the second case, Kirkham DCJ also ordered that the costs of the plaintiff, successful before him should be costs in the cause. His judgment was reversed in this court, making it unnecessary for this Court to consider his costs order. However, so far as I can recall, no complaint was made about it at the hearing. The same order seems to me to be appropriate in the present case." 8 Meagher J A agreed "with the orders proposed by Priestley JA for the reasons given by Sheller JA." 9 Handley J A and Brownie AJA simply agreed with Sheller JA who was of the opinion that the appeal should be upheld and an extension of time granted. Regarding costs, His Honour said: "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. Although Judge Cantrill was satisfied that the evidence explained and excused the applicant from any responsibility for the delay, the fact remains that one or more of the solicitors she retained were responsible for the delay. The respondent was not. In the circumstances, particularly having in mind the question raised about the availability of medical records, I do not regard the respondent's decision to resist the application as unreasonable." 10 In the result the plaintiff was ordered to pay the defendant's costs at first instance. 11 It is noteworthy that both the cases referred to by Priestley JA in the passage quoted above, namely State Rail Authority v Gaudron and Sydney City Council v Zegarac concerned applications for an extension of time under the Limitation Act. In Gaudron, the application under S 60G was made on the basis that at relevant times the plaintiff was not aware of the connection between his personal injury and the defendant's act or omission. 12 Zegarac was a case where the applicant claimed to have been injured when he slipped and fell in a toilet at Redfern. Just before the expiration of the relevant limitation period he sued the Council of the City of South Sydney. After the expiration of the limitation period it was found that the correct defendant was the Council of the City of Sydney. This led to an application for an extension of the limitation period under s 60 C, a section similar in terms to s 60G, although adopting different criteria. The need for the application under s 60C was the failure of the applicant or his solicitors to identify the correct defendant, a circumstance was in no way attributable to the respondent. 13 Smith concerned an appeal from a decision of Barr J granting an extension of time under s 60 G of the Limitation Act to a sailor who claimed psychological injuries arising out of the collision between HMAS Melbourne and HMAS Voyager on 16 February 1964, a similar cause of action to that brought in this case. 14 The appeal by majority, (Basten JA dissenting) was dismissed and Barr J's order that the Commonwealth pay the costs was upheld. Handley JA, in a separate judgment agreed with the orders of Santow JA. His Honour did not deal with the question of costs at first instance. Santow JA dealt with those costs in these terms (omitting citations): "156. The primary judge held that because the Commonwealth had fought the application as a discrete issue, and lost, it should pay Mr Smith's costs. 157. The Commonwealth submitted that the primary judge erred in not applying Pt 52 A r17 Supreme Court Rules, which provides; "Where a party applies for an extension of time, unless the Court otherwise order, he or she shall, after the conclusion of the proceedings, pay the costs of and occasioned by the application, or any order made on or in consequence of the application." 158. However, an application for extension of a limitation period is not an application for an extension of time within the meaning of the Rules. Part 52 A rule 17 applies to procedural matters arising under the Rules (for example, an extension of time to lodge a notice of appeal) and has no application to proceedings under a statute for the extension of a limitation period. 15 After referring to the passage from the judgment of Sheller JA in Holt v Wynter quoted above, Santow JA proceeded; "161. 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 [para133] 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 (Micallef v ICI Australia Operations Pry Ltd [2001] NSWCA 274; House v the King (supra ); Lovell v Lovell (1950) 81 CLR 513 at 518-519 and 532-533." Although not relied upon specifically, there is also the overriding purpose rule enjoining the parties to assist the Court in the just, quick and cheap resolution of the real issues in the proceedings; Pt 1 r 3(1), (2) now to be found in s 56(3) Civil Procedure Act 2005. by putting unsuccessful submissions as to prejudice based on the unavailability of documentation when this has so frequently been found insufficient to constitute significant prejudice, and was again so found here, that Rule would support the result that the primary judge's cost order should not be interfered with." 16 Although Basten JA would have upheld the appeal, he said at paragraph 223: "However, even if I had been of a different view, in relation to the merits of this case, I would not be inclined to take account of speculation as to the merit of arguments run by the Commonwealth in other cases: c.f. [160] above. If the appeal is upheld, in accordance with my views of the merits of the application, the Applicant should pay the costs of the proceedings in the Court below and of the appeal. If the Applicant is successful, in my view the order below should be varied so that there is no order as to those costs, but the Commonwealth should pay the costs of the appeal" 17 McDougall J in Gretton, another Melbourne/Voyager collision case extended time but ordered the Plaintiff to pay the Defendant's costs. He relied at least in part on Pt 52 A rule 17 of the Supreme Court Rules which seems to have no counterpart in the Uniform Civil Procedure rules which govern the matter before me. In the result, His Honour ordered the Plaintiff to pay the Defendant's costs "in accordance with Pt 52 A r 17". 18 Bell J in Spaulding, yet another Melbourne/Voyager collision case referred to the fact (as was also the case before me) that neither party had sought an order pursuant to Schedule 6 clause 5 (2) of the Civil Procedure Act rendering Pt 52 A r 17of the Supreme Court Rules applicable. She ordered that costs be costs in the cause suggesting, in effect, that any injustice could be remedied by the trial judge making an order under s 60 L of the Limitation Act. That section empowers a court hearing an action where an extension has been granted to 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. 19 I would respectfully follow what was said by Santow JA in Smith and hold that Pt 52 A r 17 of the Supreme Court Rules did not apply to an application for the extension of a limitation period. There seems to me to be a significant difference between an application for an extension of time under s 60 G of the Limitation Act and an application for relief under provisions such as s 52 (4) of the Motor Accidents Act. In the latter case, there will usually be something akin to default by the applicant or the applicant's solicitor and an absence of any contributing conduct by the respondent. In the former case, particularly where (as in this case) the head of relief relied on is the applicant's lack of awareness of the nature and extent of his or her injury, there is, virtually, by definition, no blame attributable to the applicant. In that situation there seems to me to be no injustice in ordering that the costs of the application to extend time be costs in the cause. 20 With respect, I respectfully favour the approach of Bell J in Spaulding. Although in this case liability has been admitted and an order that the costs of the application for extension be costs in the cause, may confer little benefit on the Defendant, that is, I think on reflection, the appropriate order to make. The trial judge will have power to alleviate injustice by making an order under s 61 L. 21 I make these orders: 1. I vacate the order for costs made on 8 December 2005. 2. I order that the costs of the motion for extension of time be costs in the cause. o0o - 01/05/2006 - Wrong dates supplied. - Paragraph(s) 1 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.