Morrison v Hudson[2006] QCA 170

SUPREME COURT OF QUEENSLAND 

[1]  WILLIAMS JA:  The circumstances giving rise to this application are fully set out in the reasons for judgment of Keane JA; I agree with all that he has said therein and with the orders proposed.

[2] I would, however, add one further observation.  Keane JA has referred to the fact that at first instance the judge was influenced by the circumstances that "a number of the medical reports which were relied upon were obtained after the mandatory final offer was made".  When dealing with an offer to settle pursuant to the rules of court and an application for indemnity costs based on the fact that the plaintiff recovered more than the offer to settle, this Court in Castro v Hillery [2003] 1 Qd R 651 held that where there was a substantial change in the case after the offer was made, costs should not be ordered on an indemnity basis.  As the court there pointed out, an offer to settle could only be evaluated in the light of the circumstances disclosed in the documents in the proceedings at the time the offer was made.  I can see no reason why a similar approach should not be adopted when an application for indemnity costs is made because a plaintiff recovered more than the mandatory final offer referred to in s 51C of the Motor Accident Insurance Act 1994 (Qld).

[3] As already stated, I agree with the orders proposed by Keane JA.

[4]  KEANE JA:  The applicant was the plaintiff in an action for damages for personal injuries suffered in a motor vehicle accident on 10 December 2002.  On 14 October 2005, the learned primary judge gave judgment for the plaintiff against the respondents for $159,775.  The plaintiff thereafter applied for an order for costs on the indemnity basis on the Supreme Court scale by reason of the circumstance that the award of damages exceeded the applicant's mandatory final offer made under s 51C of the Motor Accident Insurance Act 1994 (Qld).  On 9 November 2005, the primary judge determined the question of costs on the footing that the respondents pay the applicant's costs of and incidental to the action to be assessed, such costs to be limited to the costs which would have been recoverable if the action had been instituted in the District Court. 

[5] On 13 December 2005, the primary judge heard argument on the applicant's application for leave to appeal against the decision in relation to costs.  That application had been filed on 2 December 2005.  That application was necessary because of the provisions of s 253 of the Supreme Court Act 1995 (Qld) ("the Act").  No notice of appeal had been filed within the time limited by the rules, so that, by the time the primary judge heard the application for leave, the applicant required an extension of time within which to appeal even if leave to appeal was granted by the primary judge.  His Honour took the view that whether or not an extension of time to appeal should be granted is a question for this Court. 

[6] Accordingly, his Honour made no order other than to adjourn the application for leave to appeal to enable the applicant to seek an extension of time to appeal from this Court.  It is this latter application which this Court must decide.

[7] It should be said immediately that it is clear that the primary judge was correct in taking the view that, unless this Court orders otherwise, a notice of appeal must be filed within 28 days after the date of the decision under appeal.  That is what r 748 of the Uniform Civil Procedure Rules 1999 (Qld) ("UCPR") provides.

[8] The issues which have been debated on this application may be grouped under two headings.  The first concerns the desirability of the course taken by the primary judge in not making a decision as to whether leave should be granted conditionally on the basis that this Court would then address the question whether an extension should be granted.  The second rubric under which the contentions of the parties may usefully be collected is whether this Court should grant an extension.  I shall discuss these points in turn.

A conditional grant of leave?

[9] The applicant criticises the approach taken by his Honour below, in that the applicant contends that the primary judge should have come to a preliminary view as to the merits of the application for leave to appeal against the order for costs.  If his Honour came to the preliminary view that it was reasonably arguable that his decision was wrong, that the case was sufficiently important and that there were no overriding countervailing considerations, his Honour should have, so it is submitted, given leave to appeal conditional on the grant by this Court of an extension of time to appeal under r 748 of the UCPR.  Such a course has some, albeit guarded, support in the observations of Chesterman J in Emanuel Management Pty Ltd (In Liquidation) & Ors v Foster's Brewing Group Ltd & Ors and Coopers & Lybrand & Ors.[1]  It was regarded, tentatively at least, as open by Mackenzie J in Di Carlo v Dubois & Ors.[2]

[10]  In Emanuel, Chesterman J, when considering whether there is power in a primary judge to grant leave under s 253 of the Act on this conditional basis, stated: "I am not … convinced that the power does not exist.  I doubt that it does."[3]  No doubt the same concern as to the existence of such a power informed the course taken by the primary judge in this case.

[11]  It may be said that, if there is such a power, the course indicated by Chesterman J in Emanuel is a convenient course as a matter of practice and procedure.  This course ensures that, in cases with no sufficient grounds to warrant the grant of leave, leave will be refused without further ado.  In cases where the balance of relevant considerations favours the grant of leave, only one appearance before the primary judge will be necessary; and this Court will usually be able to approach the question whether an extension of time should be granted on the assumption that the grant of an extension of time will not serve merely to prolong an expensive futility without having to come to a preliminary view of the merits of the proposed appeal by its own close assessment of the factual and legal issues which are said to arise.

[12]  As to whether there is power under s 253 to grant leave conditionally upon the grant of any necessary extension of time by this Court, there are, I think, a number of points which tend to allay the doubt expressed by Chesterman J.  These points were not debated in argument, and I have come to the view that the application for an extension should be refused in any event.  It is, therefore, neither necessary nor appropriate to determine whether these points are correct.  I will, therefore, mention them only briefly.

[13]  Section 253 of the Act provides:

"No order made by any judge of the said court by the consent of parties or as to costs only which by law are left to the discretion of the judge shall be subject to any appeal except by leave of the judge making such order."

[14]  Section 253 of the Act was previously s 9 of the Judicature Act 1876 (Qld).  The Judicature Act also included the provision that was once s 4(8) of the Judicature Act, but which is now contained in s 244(9) of the Act.  This provision is central to the reforms enabling the rules of law and equity to be administered by one Supreme Court.  Section 244(9) of the Act, it may be noted, is located in the same part of the Act in which s 253 is located.  The terms of s 244(9) are relevantly as follows:

"The said court and every judge thereof in the exercise of the jurisdiction conferred by this part in every cause or matter pending before them respectively shall have power to grant and shall grant either absolutely or on such reasonable terms and conditions as to them shall seem just all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them respectively in such cause or matter so that as far as possible all matters so in controversy between the said parties respectively may be completely and finally determined and all multiplicity of legal proceedings concerning any of such matters avoided." (emphasis added)

[15]  A condition on a grant of leave to appeal is apt to avoid the "multiplicity of legal proceedings", in that it will avoid the need for two appearances before a primary judge in relation to the question of leave in cases such as the present.  It is arguably within the letter of the section, in that an appeal is itself "remedy", at least in the context of a legislative package which, from its inception as the Judicature Act, has always included reference to the "remedy" afforded by the right of appeal. 

[16]  It is, therefore, arguable that leave to appeal for the purposes of s 253 of the Act may be granted on "reasonable terms and conditions".  A condition of the kind in question is arguably reasonable and relevant to the grant of leave.  The real question at this point is whether s 253 of the Act contemplates a grant of leave where, at the time of the grant, an appeal would be incompetent because of the effluxion of time. 

[17]  In Johns v Johns,[4] it was held by Williams J, with whom the other members of the Full Court agreed, that O 70 r 34 of the then Rules of the Supreme Court (which provided that an appellant by leave from the District Court was obliged to institute the appeal within the time limited by the District Court Rules) required that leave be obtained before the appeal was commenced, "otherwise it cannot be said that there is an appeal by leave".

[18]  One may acknowledge the force of this consideration, which clearly weighed with Chesterman J in Emanuel.[5]  Legislation which provides for the granting of leave to appeal may readily be construed as speaking of leave to bring an appeal which is competent as such at the time when leave is granted.  Nevertheless, the language of s 253 does not in terms prohibit the commencement of an appeal without leave:  rather, it provides that an order "shall not be subject to any appeal except by leave".  That language is arguably sufficiently broad to bear the construction that an order as to costs is not to be susceptible to effective challenge on appeal unless leave has been granted before the appeal is heard and determined.

[19]  As I have said, it is neither necessary nor appropriate to seek to resolve these arguments on this application. 

Should this Court extend time?

[20]  In my view, this Court should refuse the application to extend time.  I turn to explain my reasons for this conclusion.

[21]  First, it must be said that the present application has been necessitated by the applicant's failure to observe the requirements of the law regulating the commencement of appeals.  The issue is whether the applicant has shown good reason to exempt him from those requirements.  That is no easy task bearing in mind the special nature of the decision against which the applicant wishes to appeal.

[22]  As Chesterman J rightly said in Emanuel:[6]

"The evident purpose of s 253 is to limit appeals ‘as to costs only.’ This is because decisions on costs afford a prime example of a discretionary judgment which parliament has recognised should be left to the trial judge."

[23]  Similar affirmations of the restrictive policy of the law in relation to appeals on questions of costs only may be found in the decisions of Ryan J in McCasker v Darling Downs Co-Operative Bacon Association Ltd,[7] Dowsett J with whom McPherson JA agreed in Grundmann v Georgeson,[8] and by Mackenzie J in Di Carlo v Dubois & Ors.[9]

[24]  In the light of this well established policy, this Court should not, in an application for an extension of time, be astute to accept an invitation to determine issues which properly attend the question whether leave to appeal should be granted.  That question is plainly intended by the legislature to be decided by the primary judge.  Whether leave to appeal should be granted will usually depend on the primary judge's view as to the balance of competing arguments, whether those arguments relate to matters of legal principle or disputed questions of fact, the importance and difficulty of such arguments, and, on occasion, the amount of money involved.

[25]  When this Court determines an application for an extension of time within which to appeal, it will usually have regard, inter alia, to the applicant's prospects of success, albeit in a general way.  It is, in my respectful opinion, undesirable that this Court should enter upon a consideration of, and express its preliminary views as to the likelihood that leave will be granted to enable the appeal to proceed.  As I have said, that is a matter to be addressed and determined by the primary judge.  This is not to say, however, that there may not be cases where the prospects of an appeal are so poor that this Court can readily give effect to that consideration in exercising its discretion under r 748 of the UCPR.  The present is, in my view, such a case. 

[26]  The issue resolved by the primary judge was the proper disposition of the costs of the action.  That was a matter within the special discretion of the trial judge.  Indeed, strictly speaking, the question was not even whether the costs of the case were rightly awarded to the applicant, but whether the costs were awarded on a sufficiently generous basis.  It is thus the strongest example of the kind of case which s 253 of the Act is designed to filter out of the appeal process.  In an endeavour to present the issue as one more readily susceptible of appellate review, the applicant emphasises that the case arises in the context of the Motor Accident Insurance Act 1994 (Qld).  No doubt, the proper resolution of the issue must occur with regard to that important legislative framework, but the issue which was determined remains a matter of discretion.

[27]  In the primary judge's reasons for making the costs order under challenge, his Honour noted that:

"[w]hilst the plaintiff relies upon section 51C(10) of the [Motor Accident Insurance] Act, he does not contend that there is any prima facie statutory entitlement to indemnity costs on this or any other legislative basis including the [UCPR].  He seeks those costs on general principles in light of the fact that the award is greater than what he was prepared to accept."

[28]  The proposed appeal will not turn on any question of statutory construction or any contention that the primary judge failed to address relevant legal principles.  The applicant drew attention to the divergence of approach to s 51C(10) of the Motor Accident Insurance Act between Philippides J in Kenny & Anor v Eyears & Anor[10] and Douglas J in Monement v Faux & Anor.[11]  But any divergence of view in this regard did not lead the primary judge in this case to proceed on a principle which was arguably unfavourable to the applicant. 

[29]  His Honour was clearly influenced by the circumstance that "a number of the medical reports which were relied upon were obtained after the mandatory final offer was made".  In the end, the applicant's contention comes down to the proposition that his Honour gave too much weight to the late delivery of medical reports in the exercise of his discretion.  In this regard, it cannot be said that his Honour's decision was so unreasonable that no reasonable mind could have come to the conclusion that this circumstance should lead to a more modest basis for the assessment of the applicant's costs.  There is no apparent basis on which this Court would overturn the primary judge's exercise of discretion.[12]

[30]  Notwithstanding the efforts of senior counsel for the applicant to suggest that the resolution of the difference of approach in the cases to which I have referred may have some bearing on the outcome of the appeal, it is clear that, in truth, the applicant must contend that the primary judge simply gave too much weight to the delivery of some medical reports after the mandatory final offer had been made.  The applicant's prospects of success on this point are very poor indeed.  As Kent J of the United States District Court said in Bradshaw v Unity Marine Corporation Inc:[13]  "… at the end of the day, even if you put a calico dress on it and call it Florence, a pig is still a pig."

[31]  In summary, the difficulty in respect of which the applicant seeks the Court's indulgence arises from his failure to comply with the requirements of the law relating to the commencement of appeals.  The applicant has not deigned to explain why that failure occurred.  The matter at issue on any appeal will be the margin between one measure of cost recovery and another, more generous, level of cost recovery.  The difference between these measures has not been estimated by the applicant.  It is not apparent that this "game is worth the candle", much less that a serious injustice has been done to him.  It is readily apparent that the applicant has poor prospects of ultimate success on appeal.  The applicant has not demonstrated a sufficient case to warrant relieving the applicant from his failure to comply with the requirements of the law regulating the commencement of appeals.  The application should be dismissed.

Conclusion and orders

[32]  I would refuse the application for an extension of time.

[33]  I would order that the applicant pay the respondents' costs of the application to this Court to be assessed on the standard basis.

[34]  WHITE J:  I agree with all that Keane JA has written in his reasons for judgment and with the orders which he proposes.

[35]  I have also noted Williams JA’s reference to Castro v Hillery [2003] 1 Qd R 651.  I agree with his Honour that a similar approach to that adopted in that case should be made when an application for indemnity costs is made where a plaintiff recovered more than the mandatory final offer referred to in s 51C of the Motor Accident Insurance Act 1994 (Qld). 

[36]  The changed circumstances in that case after the offer to settle by the plaintiff was made were quite significant and had some concerning features not here present.  Within months of the offer (under the then Rules of the Supreme Court) being made and rejected additional claims more than doubling the amount of the offer to settle were made.  Williams JA concluded that the offer to settle was not genuine.  The plaintiff’s legal representatives had information about the plaintiff’s needs which they had not disclosed to the other party.  As Williams JA observed at 665 the offer to settle procedure would be open to abuse if the offer were not evaluated in the light of circumstances disclosed to the other party at the time.

[37]  Here Dr Gillett’s favourable report on behalf of this applicant was obtained well after the mandatory final offer and was, as the learned trial judge found, important in the assessment of the applicant’s damages.  There was no suggestion that it had been withheld but it did mean that the respondent was not in possession of all the facts necessary to make a considered evaluation of that offer.  This, as Keane JA has commented, is very much in the realm of the discretion of the trial judge understanding, as he did, the significance of that report to the overall assessment of damages and does not readily lend itself to appellate review.