The NSW Court of Appeal recently considered the circumstances in which defendants in the NSW District Court might be deemed to have consented to the extension of the court's jurisdiction from $750,000 to $1,125,000.
On 2 August 2004, Danielle Richards (the plaintiff) sustained an injury while performing a 'work trial'. She was unloading a pallet from a truck using a tailgate loader when she fell a distance of over one metre from the end of the tailgate loader to the ground below and injured her right knee.
In an ordinary case the NSW District Court's jurisdiction is limited to $750,000. In motor accident cases and cases where the parties consent to extended jurisdiction this limit does not apply. In some cases however, consent to a partial extension of jurisdiction is 'deemed' to have occurred.
Section 51 of the District Court Act, 1973 provides:
- This section applies to an action or cross-claim that, but for this section, the court would not have jurisdiction to hear and dispose of by reason only of the fact that the amount claimed exceeds the jurisdictional limit of the court as at the time the action was commenced
- The court has, and may exercise jurisdiction to hear and dispose of an action or cross claim to which the section applies:
- If a party to the action or cross-claim files a memorandum of consent in respect of the action or cross-claim, or
- If no objection to the court's jurisdiction has been raised by any of the parties prior to three months before the trial of the action commences
- The maximum amount for which judgment may be given in relation to an action or cross-claim that is dealt with ursuant to subsection 2(b) is an amount equivalent to 50% above the jurisdictional limit of the court as at the time the action was commenced' (emphasis added).
At trial the plaintiff's damages were assessed at $959,670, exceeding the District Court's jurisdictional limit of $750,000.
The plaintiff argued that the amount claimed in her October 2005 Statement of Claim exceeded $750,000 and that as the defendants had not objected to extended jurisdiction three months prior to the trial they were deemed to have consented to extended jurisdiction (50% of its jurisdictional limit - $1,125,000) pursuant to s51.
An Amended Statement of Particulars was also filed over nine months before the trial date. However, Murrell DCJ held that the amount claimed in the Statement of Claim and Amended Statement of Particulars was ambiguous'.
Her Honour held that the defendants had not been put on notice that the plaintiff's claim exceeded $750,000. She was not satisfied 'the amount claimed' by the plaintiff exceeded 'the jurisdictional limit of the Court as at the time the action was commenced'. As a result, judgment was given in the sum of $772,818, being $750,000 plus interest.
NSW Court of Appeal
The plaintiff's appeal was upheld by the NSW Court of Appeal.
Basten JA, who delivered the leading judgment, considered that it would be necessary for the information regarding the amount claimed by the plaintiff to be supplied to the defendant at least three months prior to the commencement of the trial to reveal that the claim was above the jurisdictional limit,
so that if the plaintiff was successful, the jurisdictional limit might be exceeded and the defendant would have the opportunity to object within the required time.
Implicit in the decision is that the words 'as at the time the action was commenced' does not refer to the time the amount was claimed but rather provides a reference point in time which is to be used to identify the jurisdictional limit which is then applied.
Basten JA noted that the questions in dispute resolved themselves into:
- What were the necessary or permissible mechanisms by which a defendant was to be put on notice that the claimed amount exceeded the jurisdictional limit?
- Did that occur at the relevant time in the present case?
He was of the view that the Her Honour's decision that the amount claimed is to be determined at the commencement of the action was 'too constrained and inflexible' and that although it was open to consider the claims in the pleading, it was wrong to limit consideration to the original Statement of Claim. He took the view that in unliquidated claims for damages, it was almost inevitable that the details of the amount claimed will be dealt with in a Statement of Particulars. This might also be done at a later stage when an Amended Statement of Particulars is served.
When determining whether a claim exceeds the jurisdictional limit, the statement (whether it be the Statement of Claim, Statement of Particulars or any further amendments) should be read through the eyes of the defendants, or their insurers, or legal advisors. It is not a question of statutory construction, but a 'consideration of the effect of the statement on the intended reader'.
In the present case, the defendants were served with an Amended Statement of Particulars (claiming damages over $750,000) more than nine months prior to the trial date. The Court of Appeal took the view that this was adequate to put the defendants on notice, in the absence of an express statement, that the plaintiff was claiming an amount in excess of the jurisdictional limit of the Court.
This decision has serious implications for defendants in personal injury claims in the District Court. Previous decisions on s51 had confined the application to claims made in the original pleadings. Defendant lawyers will now need to be vigilant whenever updated material or particulars are served to ensure that revised claims have not increased to a point where the extended jurisdictional provisions might be enlivened.
Importantly, the pleadings themselves need not specify the total sum claimed as the Court will presume that insurers and / or legal representatives will exercise their skill to determine an approximate calculation of damages based on the matters alleged. Unfortunately the decision ignores the reality that in many cases plaintiffs statements of particulars and schedules of damages are either vague or wildly inaccurate, making the exercise a difficult one for all concerned.
Ultimately insurers will need to assess each matter on a case by case basis given that in many cases refusal to accept extended jurisdiction in the District Court will lead to increased costs if proceedings are then transferred to the Supreme Court of NSW.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.