Supreme Court New South Wales

• Medium Neutral Citation: Reid v Wright (No 2) [2013] NSWSC 1972
• Hearing dates: On written submissions
• Decision date: 23 December 2013
• Before: McCallum J

Decision

Parties ordered to pay their own costs of and incidental to the notices of motion dated 28 February 2011 and 1 March 2011 and of the resolution of the dispute as to costs arising from the determination of those motions

• Catchwords: COSTS - where proceedings commenced in this Court transferred to the Supreme of Queensland on the application of the defendants
• Cases Cited: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
• Category: Costs
• Parties: Dillon Thomas Reid by his tutor Hannah Foster (first plaintiff); Hannah Foster (second plaintiff); Dr Thomas Wright (first defendant); Ramsay Health Care Limited (second defendant)
• Representation: Counsel: D E Graham (for the plaintiffs); J K Kirk SC (for the first defendant); M Windsor SC (for the second defendant); Solicitors: David Landa Stewart (for the plaintiffs); Tress Cox (for the first defendant); Minter Ellison (for the second defendant)
• File Number(s): 2010/312116
• Publication restriction: None

Judgment

1 HER HONOUR: Dillon Reid suffered brain injury as a result of complications that occurred during his birth at Cairns Private Hospital in the State of Queensland. He claims damages in negligence from Dr Wright (the obstetrician and gynaecologist consulted by his mother during her pregnancy) and from the operator of the hospital. Dillon's mother claims damages for physical and psychiatric injuries allegedly suffered by her as a result of the same events.

2 On 25 September 2012, I acceded to an application by the defendants to have the proceedings transferred to the Supreme Court of Queensland (in the Cairns Registry) in accordance with rule 44.5(b) of the Uniform Civil Procedure Rules 2005: see Reid v Wright [2012] NSWSC 1149. This judgment determines the costs of that application.

3 In my primary judgment at [41], I noted that the defendants had sought their costs of the applications. The plaintiffs had not been heard on that aspect of the application. Accordingly, I noted in the judgment that, if the application for costs was pressed, it would be necessary to hear the parties. However, on the day on which the judgment was published, the parties did not seek to be heard on that issue, indicating that they would attempt to resolve it by negotiation.

4 On 13 November 2012, the solicitor for the second defendant wrote to my associate providing written submissions as to costs and requesting that the issue be determined on the papers. However, that course was opposed by Mr Roger Betts, the solicitor for the plaintiffs. He wrote to my associate on 14 November 2012 stating that the parties had been negotiating appropriate orders since the publication of the judgment and that those negotiations were continuing. Mr Betts's letter stated that the plaintiffs expressly declined consent to have the matter determined on the papers.

5 The next correspondence with my chambers was on 1 March 2013, by which time the file had been transferred to the registry of the Supreme Court of Queensland. On that date, Mr Betts wrote to my associate stating that the parties had not reached any agreement on the issue of costs; enclosing an affidavit for filing and requesting the Court to resolve the complexity as to how that affidavit should now be filed; enclosing written submissions and inquiring whether the matter would be determined on the papers or whether there would be a further hearing.

6 Leaving aside the administrative difficulty of obtaining access to the relevant material from a file in the Court of another State, I considered that I had residual authority to determine the costs of the applications I had heard, notwithstanding the fact that the matter of costs was not brought back before me until after the file had been transferred.

7 In the circumstances, it would have been more convenient to determine the matter in court but it proved difficult to find dates convenient to all counsel. All parties ultimately consented to have the issue determined on written submissions. The written submissions closed with a short submission in reply from the plaintiffs dated 6 August 2013.

8 The affidavit sworn by Mr Betts was provided to my associate only by email. As already noted, by the time it was received, the file was no longer a file of this Court. Mr Betts requested the Court to address the complexity as to how the affidavit should now be filed. In my view, the appropriate order is to accept the original affidavit for filing upon its delivery to my chambers, whereupon it can be sealed in chambers and transferred between courts as an addendum to the file that has already been transferred.

9 Reflecting the general rule that costs follow the event, the order sought by the first defendant is that the plaintiffs pay his costs of his application to have the proceedings transferred. The second defendant seeks an order that the plaintiffs pay not only its costs of its application but the costs of and incidental to the proceedings (presumably up to the date of transfer). The first defendant expressly does not join in that wider application (see second defendant's written submissions dated 13 November 2012 at paragraph 3 and first defendant's written submissions dated July 2013 at paragraph 1).

10 It is convenient first to deal with the second defendant's wider application for its costs of and incidental to the proceedings. Mr Betts's affidavit establishes that those costs are considerably greater than just the costs of the motion to have the proceedings transferred. That is because, quite appropriately, a significant number of expert reports on both liability and quantum were obtained on behalf of the plaintiffs prior to the commencement of the proceedings.

11 Mr Graham SC, who appears for the plaintiffs, submitted that there is no power or jurisdiction to make an order for the costs of the proceedings (as opposed to the costs of the motion). He noted, correctly in my view, that the transfer of the proceedings does not quell the dispute between the parties so as to bring the proceedings to a final determination of the plaintiffs' action. The proceedings remain on foot, but are to be determined by a different court. The legal services provided before the commencement of the proceedings in obtaining expert medical reports remain relevant.

12 The second defendant submitted, conversely, that it would be contrary to rule 42.1 not to make the order sought. That is the rule which provides that costs generally follow the event. The second defendant submitted that the "event" within the meaning of that rule is a reference to the practical result of a claim. It was submitted that, since the practical result of the order transferring the proceedings is that there is "nothing left for this Court to do (except deal with the issue of costs)" the costs of the proceedings should now be finalised in this jurisdiction.

13 I accept, as submitted by the second defendant, that the "event" within the meaning of rule 42.1 is a reference to the practical result of a claim. However, I do not accept the second defendant's characterisation of the relevant "event" or practical result in this case. The defendants' applications to have the proceedings transferred were interlocutory applications. The matter brought forward by those applications for the Court's determination was the issue of where the action should be heard. The main game, if I may call it that, is the underlying action, which very much remains to be determined. Without making any determination one way or the other as to the question of power raised by Mr Graham, I consider that there would be a measure of injustice in regarding the costs of the proceedings to date as falling within the scope of the costs of the two applications to have the proceedings transferred. I do not think it would be fair to exercise my discretion as to costs to make such an order.

14 It remains to determine the appropriate order as to the costs of the two applications. The Court has full power to determine costs: s 98 of the Civil Procedure Act 2005. The defendants were successful on the applications. The defendants accordingly submitted that costs should follow the event: rule 42.1; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67].

15 The plaintiffs submitted that the appropriate order in this case, notwithstanding the fact that their opposition to the application was unsuccessful, should be that each party bear their own costs of and incidental to the application, for the following reasons.

16 First, it was noted that, although it was my determination on all of the evidence that it is in the interests of justice that the proceeding be determined by the Supreme Court of Queensland (in the Cairns Registry), the jurisdiction of this court was regularly invoked and the defendants could have consented to its exercise, the reasons not to consent evidently being ones of personal convenience or forensic advantage. Mr Graham went so far as to contend that the applications were akin to seeking an indulgence.

17 With unfeigned respect to Mr Graham, I think the suggestion that the defendants sought an indulgence must be rejected. The test in determining such an application is whether it is in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory. I do not think it can be correct to say that it is an indulgence to seek an order ultimately found to be in the interests of justice.

18 Secondly, and more pertinently, the plaintiffs noted that a factor in my determination was the proffering of undertakings by the defendants, which were not given until the day of the hearing. The second plaintiff had submitted that she would face significant prejudice if the proceedings were transferred due to the combined effect of the pre-litigation provisions of the Personal Injuries Proceedings Act 2002 (Qld) and the Limitation of Actions Act.

19 I dealt with that submission at [37] to [39] in my earlier judgment, where I said (emphasis added):

I considered a similar argument in Kok at [25]-[41]. For the reasons there stated, I concluded that any disadvantage should not be considered a factor against transfer of the proceedings. The plaintiffs submitted, however, that my reasoning in that case should not apply in the present case. It was submitted that there would be irremediable prejudice to the second defendant in the present case if any non-compliance is unable to be remedied, since the consequence would be that the proceedings would be a nullity: Horinack v Suncorp Metway Insurance Ltd [2001] 2 Qd R 266 at [20]; Nicholls v Brisbane Slipways & Engineering Pty Ltd [2003] QSC 193. The prejudice in that event would be that the second plaintiff's claim would be statute-barred. No consideration was given to that issue in Kok.

The defendants responded by providing undertakings (MFI 1) waiving any reliance upon those considerations in the event that the plaintiffs are required to re-commence their claims due to non-compliance with the Personal Injuries Proceedings Act. Importantly in that context, s 31 of the Limitation of Actions Act does not operate so as to extinguish a time-barred claim. It follows that reliance upon the limitation period by way of defence can be waived: Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394. It has expressly been waived by both defendants in this case.

In those circumstances, I am satisfied that the prejudice apprehended by the plaintiffs is not such as will defeat the second plaintiff's claim. Accordingly, I am satisfied that it is appropriate to take the approach I took in Kok. In that case, I held (at [40]) that to accede to the plaintiff's argument would be to prefer the interests of the plaintiff over those of the defendants, to whom the reciprocal argument was equally open.

For those reasons, I think the alleged prejudice is properly viewed as a neutral factor.

20 Mr Betts's affidavit notes that the undertakings referred to in the underlined words above were given on the day of the hearing and required revision over the course of the day's argument. His affidavit describes the giving of the undertakings as "the decisive factor" in my decision. It was not that. I was required to consider all of the interests of justice. As noted on behalf of the defendants, I identified a number of other relevant factors. But the difficulty cured by the undertakings was certainly an important consideration for both parties.

21 The second plaintiff was, in effect, compelled to resist the relief sought without the protection obtained upon the giving of the undertakings. Since she is the first plaintiff's tutor in the proceedings, their positions stood together. Mr Betts states in his affidavit (which has not been disputed) that no undertakings were ever provided to him prior to the day on which the applications were heard.

22 Further, a strong consideration in my judgment was the strain that would be placed on health services in the relatively small community of Cairns if the proceedings were not transferred. I expressed the view that the interests of justice are not well served if seen to impose a burden on already strained health services. Whilst I considered that to be a matter relevant to the determination of the application, the interests of justice are conversely not well served if persons in the position of the plaintiffs in this case wear alone the burden of such considerations.

23 In all the circumstances, I am persuaded that the appropriate order, notwithstanding the defendants' success in the relevant "event" of having the proceedings transferred, is that the parties pay their own costs of the two applications. As submitted by the first defendant, the parties should also pay their own costs of the resolution of the dispute as to the costs determined in this judgment.

24 The orders are:

(1) that the plaintiffs have leave to file the affidavit of Mr Roger Betts sworn 27 February 2013 by delivering it to the chambers of McCallum J.

(2) that the parties pay their own costs of and incidental to the defendants' notices of motion dated 28 February 2011 and 1 March 2011 and of the resolution of the dispute as to costs arising from the determination of those motions.

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Decision last updated: 08 January 2014