Pickering v Nrma Insurance Limited [2003] ACTSC 75 (12 September 2003)

Last Updated: 14 October 2003

AMANDA PICKERING v NRMA INSURANCE LIMITED

[2003] ACTSC 75 (12 September 2003)

COSTS - reserved costs of motion - oversight - application after entry of judgment

Gardner v Marshall (1845) 14 Sim. 575

Fritz v Hobson (1880) 14 Ch. D. 542

British Natural Premium Provident Association v Bywater [1897] 2 Ch 531

Chessum and Sons v Gordon [1901] 1 QB 694

Melbourne Harbour Trust Commissioners v Cuming Smith & Co Pty Ltd [1906] VLR 192

McLaughlin v The City Bank of Sydney (1916) 16 NSWR 491

Ford v Newton [1949] St. R. Qd. 119

No SC 451 of 1999

Coram: Master Harper

Supreme Court of the ACT

Date: 12 September 2003

IN THE SUPREME COURT OF THE )

) No SC 451 of 1999

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: AMANDA PICKERING

Plaintiff

AND: NRMA INSURANCE LIMITED

Defendant

ORDER

Coram: Master Harper

Date: 12 September 2003

Place: Canberra

THE COURT ORDERS THAT:

1. The costs of the notice of motion dated 4 March 2002 which were reserved on 8 March 2002 be costs in the cause.

2. The defendant's costs of this application be paid by the plaintiff.

1. This is an application by the plaintiff for an order in respect of reserved costs. The application is made some three months after the entry of consent judgment which appeared to have disposed finally of the action.

2. A notice of motion filed by the solicitors for the plaintiff came before Master Connolly, as his Honour then was, on 8 March 2002. The plaintiff sought orders for further discovery of specified documents, following the inspection of documents during an earlier part of the discovery process. Ms Walker of Counsel appeared for the plaintiff and Mr Hausfeld for the defendant. The application was opposed. It appears that in the course of argument, amendments were made by hand to the list of documents set out in the Notice of Motion. Ultimately, the Master made a consent order that the defendant identify with particularity documents in respect of which the defendant had claimed privilege and had described in only the broadest of terms. No order was made in respect of a large number of categories of documents in respect of which the plaintiff had sought discovery. The argument in relation to the notice of motion commenced at 12:14pm on Friday 8 March 2002, and concluded at 1:18pm. Counsel for the plaintiff sought an order for the costs of the application. The Master, without calling on the defendant, ordered that the costs of the application be reserved until the matter was before the Court on a future occasion and the outcome of the discovery process was known.

3. There was thereafter a great deal of activity in the action, including further applications by notice of motion on other issues, but in the event, neither party brought the matter back before the Court for the purpose of dealing with the reserved costs of the application for further discovery.

4. The action was listed for hearing but was settled prior to the hearing commencing. The action came before me on 19 May 2003, and terms of settlement were handed up. Judgment was entered by consent in the plaintiff's favour for $220,000, and the defendant was ordered to pay the plaintiff's costs of the action. No mention was made of the reserved costs in the terms of settlement, or orally on behalf of the parties, and I am satisfied that either the question was overlooked or it was not appreciated that the costs would not be recoverable in the absence of a special order.

5. Judgment was entered on 19 May 2003. When it came to the quantification of costs, the solicitors for the plaintiff became aware that the costs in question were not covered by the order in respect of the general costs of the action, and would not be recoverable unless the Court could be persuaded to make a special order. To that end, the plaintiff has applied by notice of motion for an order that the defendant pay the costs of the notice of motion heard on 8 March 2002, and also the costs of the present application.

6. The application is opposed by the defendant, on whose behalf it is submitted that once consent judgment was entered, the action was complete, and such an application is no longer competent.

7. A difficulty would arise if the order required the setting aside of the consent orders previously made. However, in my view this would not be a necessary consequence of making the order sought. The order is not inconsistent with the consent orders and is capable of standing with them.

8. I have been directed to a quantity of case law, extending over a century, none of it recent and none of it arising in a decision of or binding upon this Court. I shall go through the cases chronologically.

9. The principle that reserved costs were not part of the costs of the suit was apparently settled by the time of Gardner v Marshall (1845) 14 Sim. 575. In that case, Shadwell VC held that the reservation of the costs of the suit was not a reservation of the costs of a motion previously made in it, and that, as the decree at the hearing was silent as to those costs, he must infer that the Court did not think fit to make any order respecting them; and that consequently, that the plaintiff was not entitled to recover them. In Fritz v Hobson (1880) 14 Ch. D. 542, a motion for an interim injunction had been adjourned to the trial of the action. No order was made as to costs, and liberty to apply was not expressly reserved. At the trial, the plaintiff was successful but counsel omitted to ask for the costs of the adjourned motion, and no express provision was made for them. Liberty to apply was expressly reserved. After the judgement had been drawn up, passed and entered, the plaintiff applied for the judgment to be varied or corrected by giving him the costs of the adjourned motion. Fry J held that the Court had jurisdiction to make the order sought, either under the liberty to apply reserved by the judgment, or under the liberty to apply implied in the order adjourning the motion, or by virtue of the slip rule. His Lordship held that in every order of the Court, liberty to apply is implied, without any necessity for it to be expressly reserved. A separate order was made, directing the taxation and payment of the plaintiff's costs of the motion.

10. The same issue arose in British Natural Premium Provident Association v Bywater [1897] 2 Ch 531, and it seems that the problem was not an uncommon one. Byrne J announced that the judges of the Chancery Division had decided to give a direction about the costs of interlocutory applications, for the guidance of the registrars and taxing masters. The practice decided upon by the judges was that where an interlocutory application had been adjourned to the trial, and not mentioned to the judge, the costs of the application were to be treated as part of the costs of the action, and did not need special mention. On the other hand, where an interlocutory application had been disposed of , but the costs had been reserved, those costs were not to be allowed on taxation without a special order. His Lordship granted the application before him, but noted that in the future, it could be expected that reserved costs not mentioned at the trial would be allowed only under very special circumstances.

11. The problem continued to arise from time to time. Chessum and Sons v Gordon [1901] 1 QB 694 was an appeal from a decision of a single judge who had ordered that referee's fees should be recoverable in circumstances where the assessment of damages had been referred by the Court to a referee, and the Court had subsequently entered judgment for the amount assessed plus costs, without making any special order about the referee's fees. The alteration to the original order was made under the slip rule. The decision was unanimously affirmed by the Court of Appeal. The omission of the referee's fees was an accidental slip or omission which could be corrected at any time, even after the judgment had been drawn up and entered (at 699 per A L Smith MR).

12. The more recent authorities are Australian. In The Melbourne Harbour Trust Commissioners v Cuming Smith & Co Pty Ltd [1906] VLR 192, evidence had been taken on commission in England with the costs of the examination being reserved until the trial of the action. There was no application for a special order in relation to those costs when judgment was delivered in the action. On later application for a special order, Hood J admitted to some hesitation at the submission that the costs should have been dealt with at the trial and that he now had no jurisdiction, as the trial was long since over. He was, after consideration of the English authorities, persuaded that he had power to make the order sought, and that the complicated nature of the case and the length of hearing constituted special circumstances excusing the failure to bring the matter to the attention of the Court at the trial. Because the application was made necessary by the oversight of the plaintiffs, he ordered that the costs of the application be paid by them.

13. The defendant relies upon a decision of P W Street J in McLaughlin v The City Bank of Sydney (1916) 16 NSWR 491, as authority for the proposition that it is too late for a party to ask for an order such as the plaintiff seeks after judgment has been entered, even if it would have been appropriate had application been made earlier. It does not seem to me that McLaughlin stands for that proposition. In the headnote to the case the learned reporter has expressed the ratio of the decision in the following terms:

An omission to ask for a special direction as to reserved costs, due either to inadvertence or to a belief on the part of counsel that the order made included such costs, may be remedied by having the decree corrected, provided there is no undue delay disentitling a party to such order. But if all costs have been dealt with in a decree which has been passed it is too late to ask for any other order as to costs, and the Court cannot then make any further order as to costs even through it would have done so had application been made before the decree was passed.

14. I cannot find anything in the reasons for decision of Street J to the effect of the second sentence quoted; and even the first sentence seems to put rather too strongly the principle upon which his Honour's decision was based. His Honour in fact granted the application, which related to reserved costs of an application for interrogatories, saying that he did not think there had been any culpable delay disentitling the applicant to the order. Consistently with Melbourne Harbour Trust, his Honour noted that the application had been rendered necessary by the applicant's own neglect, so that the applicant must pay the costs of the summons.

15. The last of these authorities is Ford v Newton [1949] St. R. Qd. 119, where counsel for the defendant through oversight had not applied for the costs of a motion which had been reserved. The plaintiff opposed the application on the ground that the Court had no jurisdiction by that stage. The judgment had not yet been taken out when the application was made. Mansfield SPJ said that if application had been made at the trial for the reserved costs he would have made the order. On the basis of the authorities outlined above, his Honour considered that the Court had jurisdiction to make the order asked for, and he proceeded to do so. As to costs, he noted that the application had been occasioned by the defendant's oversight, but that the application had been unsuccessfully opposed by the plaintiff, and thought it proper in those circumstances to make no order as to the costs of the application.

16. I did not have the benefit of hearing the application for further discovery, the costs of which were reserved and are now sought by the plaintiff. Nor did I learn anything of the issues by hearing the action itself. The original application succeeded in part, but the then Master was not minded to make an immediate order for costs in the plaintiff's favour, or to deal with submissions about costs immediately: time constraints may well have been a factor, and it also appears that the Master had an expectation that the parties would be coming back to the Court to deal with further issues before the process of discovery was completed. Having regard to the plaintiff's degree of success on the application, it seems to me likely that the worst outcome as to costs that the plaintiff could have expected was that the costs of the application were to be costs in the cause. If an order had been made in those terms, the costs would have been recoverable as part of the general costs of the action.

17. In summary, I am satisfied that the reserved costs of the application for further discovery were not made the subject of a specific order at the time of settlement, by reason of oversight; that at worst on application the plaintiff would have obtained an order that those costs be costs in the cause; that the plaintiff has been guilty of no culpable delay in bringing this application, and that in the circumstances, the making of the order sought will do justice between the parties.

18. At the same time, the present application was necessary because of an oversight on the part of those representing the plaintiff, who should not be charged for the application as between solicitor and client; and the defendant, whose counsel was of considerable assistance to the Court by way of provision of authorities and argument, should have its costs of the application.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Decision herein of Master Harper.

Associate:

Date: 12 September 2003

Counsel for the plaintiff Ms K T Oldfield

Solicitor for the plaintiff Blumers

Counsel for the defendant Ms M C McNamara

Solicitor for the defendant Minter Ellison

Date of hearing 29 August 2003

Date of decision 12 September 2003