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District Court 26 May 2022

SMD v JDW (No.2)

[2022] NSWDC 172

Sexual offences
COSTS AND INTEREST

Citation: SMD v JDW (No.2) [2022] NSWDC 172
Court: District Court of New South Wales
Date: 26 May 2022
Judge: Gibson DCJ

Background

The plaintiff brought proceedings against her brother for damages arising from a series of sexual assaults committed against her during her childhood and adolescence. On 12 May 2022, Gibson DCJ awarded damages of $534,000 and granted liberty to apply on the questions of interest and costs.

The defendant had previously indicated he would not oppose any orders sought by the plaintiff, including those relating to interest and costs. The court proceeded to determine the appropriate amounts on written submissions filed by the plaintiff's solicitors.

  • Whether pre-judgment interest should be awarded on the general and aggravated damages components, and at what rate and over what period
  • Whether interest on past economic loss should be awarded, and how it should be calculated
  • Whether a gross sum costs order was appropriate, and if so, what sum was appropriate

Decision

Interest on general and aggravated damages

Under s 100 of the Civil Procedure Act 2005 (NSW), the court has a discretion to award interest on damages. Because victims of child sexual assault commonly wait many years before bringing proceedings, the court adopted the approach taken in LT v RT [2013] NSWDC 251 of attributing two-thirds of the general and aggravated damages to the pre-judgment period. This fraction reflects the long-term, ongoing nature of the harm suffered from such offending.

The court accepted a rate of 2% as appropriate, consistent with recent District Court decisions in similar cases (P v D [2018] NSWDC 277; SA v CH & LH [2022] NSWDC 140). The court fixed the relevant period at 20 years, having regard to the plaintiff's extreme youth when the offending began and the extended duration of her suffering. Applying those figures, interest on general damages was calculated at $53,333 and on aggravated damages at $26,666.

Interest on past economic loss

Interest on past economic loss of $150,000 was calculated at 4.35% (being 4% above the then-current Reserve Bank cash rate of 0.35%, as required by District Court Practice Note DC (Civil) No 15) over 20 years, producing a sum of $130,500.

Gross sum costs order

The court considered whether to make a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) rather than requiring a formal costs assessment. The two principal factors favouring a gross sum order were the parties' desire for finality and the probable inability of the defendant to satisfy a costs liability. Total solicitor-client costs were calculated at $70,833. A 30% reduction was applied to arrive at a party-party equivalent, producing $49,583.10. The court declined to make a further deduction for the savings avoided by not pursuing a formal assessment, finding the sum sought was appropriate on the materials before it.

Orders Made

  • Judgment for the plaintiff varied to a total of $744,499, including $210,499 in interest
  • The defendant ordered to pay the plaintiff's costs in the gross sum of $49,583.10

Key Takeaways

  • The District Court confirmed that, in child sexual assault cases, two-thirds of a general and aggravated damages award may properly be attributed to the pre-judgment period for the purpose of calculating interest under s 100 of the Civil Procedure Act 2005 (NSW), reflecting the typical delay before victims come forward.
  • A pre-judgment interest rate of 2% has been consistently applied in this court to awards for sexual abuse claims, which is lower than the range applied in defamation matters.
  • The length of the interest period is discretionary and will be calibrated to the facts of the individual case; here, the plaintiff's young age at the time offending commenced and the extended duration of harm justified a 20-year period.
  • Under s 98(4)(c), a gross sum costs order is well-suited to cases where the defendant is unlikely to be able to meet a formally assessed costs liability and where both parties have a clear interest in finality.
  • Where solicitor-client costs are reduced to a party-party equivalent by way of discount, courts retain a further discretion to reduce the gross sum to account for savings from avoiding the assessment process, though the extent of any such reduction will vary with the circumstances of each case.

Legislation and Cases Referenced

Legislation
- Civil Procedure Act 2005 (NSW), ss 98 and 100
- District Court Practice Note DC (Civil) No 15

Cases
- Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863
- Hamod v State of New South Wales and Anor [2011] NSWCA 375
- Harrison v Schipp (2002) 52 NSWLR 738; [2002] NSWCA 213
- LT v RT [2013] NSWDC 251
- P v D [2018] NSWDC 277
- Palladium Consulting Pty Ltd [2013] NSWSC 92
- Penson v Titan National Pty Limited (No 3) [2015] NSWCA 121
- Rayney v State of Western Australia (No 4) [2022] WASCA 44
- SA v CH & LH [2022] NSWDC 140
- Star Diamond v Diamond (No 4) [2013] NSWCA 811
- Wilkie v Brown [2016] NSWCA 128