HILL v MCDONALD [2026] SASC 71

On Appeal from MAGISTRATES COURT OF SOUTH AUSTRALIA (MAGISTRATE HODDER) AMCCI-19-3371, [2024] SAMC 24 Appellant: TRACEY LEE HILL Counsel: MR J WARREN KC WITH MR C LIND - Solicitor: PALIOS MEEGAN & NICHOLSON Respondent: MEGAN MCDONALD Counsel: MR B ROBERTS KC WITH MR W ERICSON - Solicitor: JONES HARLEY TOOLE Hearing Date/s: 08/08/2024 File No/s: CIV-24-003124 B SUPREME COURT OF SOUTH AUSTRALIA (Magistrates Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. HILL v MCDONALD [2026] SASC 71 Judgment of the Honourable Justice McDonald 20 May 2026 MAGISTRATES - ORDERS AND CONVICTIONS - COSTS - DISCRETION OF COURT PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS - POWER TO AWARD GENERALLY COURTS AND JUDGES - COURTS - JURISDICTION AND POWERS - RULES OF COURT - POWERS OF COURT IN RELATION TO RULES INTERPRETATION - GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS - WHERE INCONSISTENCIES - IN GENERAL This is an appeal against an order for costs made in the Magistrates Court in favour of the appellant on a party/party basis. On 5 September 2023, the appellant sought an order for costs, including a component for costs on an indemnity basis because the amount awarded after trial exceeded a valid filed offer made by the appellant. The Magistrate refused the application for indemnified costs on the basis that s 127C of the Motor Vehicles Act 1959 (SA) does not allow the court to exercise a discretion to grant higher costs awards than the rules allow, except where ‘exceptional circumstances’ exist. The Magistrate found that no exceptional circumstances were established and declined to make the costs order sought by the appellant. The appellant relied on two grounds of appeal, which were distilled into four contended errors. The first two errors raised issues with the Magistrate’s approach to the application of s 127C, in that her Honour construed the section to expressly remove any discretion from the Court to award costs on any basis other than the applicable Magistrates Court costs scale. The second two errors were based on the Magistrate failing to find exceptional circumstances to justify the award of additional costs in excess of party/party costs. -- 1 of 25 -- A further issue was whether the now-repealed Magistrates Court (Civil) Rules 2013 (SA) or the Uniform Civil Rules 2020 (SA) were to be applied in relation to the costs order. The two rules provided differing basis for costs, as well as different tests to be applied. The Magistrate applied the Magistrates Court (Civil) Rules because the formal offer was made prior to the commencement of the UCR. The appellant argued that the correct approach is an exercise of judicial discretion, then a check to ensure the discretion complies with s 127C. The appellant contended that Magistrate failed to recognise an antecedent discretion to be exercised and read s 127C as though it was a sole costs order point. Much of the appellant’s criticisms of the Magistrate’s reasoning fell on the use of the phrase ‘covering the field’. The respondent contended that the Magistrate did not err in her approach in the application of s 127C. Held, granting leave to appeal: 1. Ground 2 is dismissed. 2. Ground 4 is allowed. For the purposes of s 127C of the Motor Vehicles Act 1959 (SA), exceptional circumstances have been established. 3. The respondent pay the appellant’s costs calculated pursuant to the Uniform Civil Rules 2020 (SA). Uniform Civil Rules 2020 (SA) rr 1.4(1)(b), 1.5, 2.1(1), 132.10, 132.10(1), 132.10(2), 132.10(3), 132.11, 132.11(2), 132.11(3)(a), 132.11(3)(c), 132.11(4)(a), 132.11(4)(c), 192.2(2), 193.2, 193.2(1), 193.2(4), 213.1(1)(c); Magistrates Court (Civil) Rules 2013 (SA) rr 2(1), 3(1)(a), 58, 106(4); Motor Vehicles Act 1959 (SA) ss 127C, 127C(1)(a), 127C(1)(b); Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013 (SA) sch 2 cl 18; Magistrates Court Act 1991 (SA) s 37(1); Civil Liability Act 1936 (SA) s 56A(4); Australian Constitution s 109; Income Tax Assessment Act 1936 (Cth); Corporations Act 2001 (Cth) s 1318, referred to. R v Kelly (Edward) [2000] QB 198; Saraswati v R (1991) 172 CLR 1; Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1; Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152; Goodwin v Phillips (1908) 7 CLR 1; Butler v Attorney-General (Vic) (1961) 106 CLR 268, discussed. Adelaide Marble Specialists Pty Ltd v Ragunath [2023] SASC 139; Treffers v Phung [2021] SASC 38 ; Calderbank v Calderbank [1975] All ER 333, considered. -- 2 of 25 -- HILL v MCDONALD [2026] SASC 71 Magistrates Appeal: Civil McDONALD J. 1 This is an appeal against an order for costs that was made in the Magistrates Court, in favour of the appellant on a party/party basis. On 5 September 2023, the appellant sought an order for costs that included a component for costs on an indemnity basis because the amount awarded after trial exceeded a valid offer that she had filed, in accordance with the Uniform Civil Rules 2020 (SA) (‘the UCR’), or alternatively the Magistrates Court (Civil) Rules 2013 (SA) (‘the MCC Rules’). The respondent opposed the order on the basis that s 127C(1)(b) of the Motor Vehicles Act 1959 (SA) (‘the MV Act’) precluded such an order, as it provided that the Court “must not award in favour of the claimant costs in respect of the proceedings in excess of the costs applying under the designated scale unless the court is satisfied that there are exceptional circumstances justifying the award of additional costs”.1 It was contended that this meant that absent exceptional circumstances, the only costs available to the appellant were on a standard cost basis in accordance with the Magistrates Court scale. The respondent submitted that there were no exceptional circumstances. 2 The Magistrate accepted the respondent’s argument as to the effect of s 127C of the MV Act, found that there were no exceptional circumstances and declined to make the costs order sought by the appellant. The grounds of appeal 3 The grounds of appeal and purported error relied upon by the appellant relate both to the statutory construction of s 127C of the MV Act and the finding that exceptional circumstances had not been established.2 4 The appellant initially relied on five grounds of appeal, however, these were not pursued in their original form. The two remaining grounds pressed are:3 2. The learned Magistrate erred in finding that s127C of the Motor Vehicles Act 1959 (SA) removes the discretion from the Court to award costs on any basis other the Magistrates Court costs scale except in exceptional circumstances and failing to find that the operation of s127C of the Motor Vehicles Act is to ensure that an applicant cannot avoid the operation of s127C in claims which exceed $60,000 by bringing proceedings in the District Court. 4. The learned Magistrate erred in failing to find that there were exceptional circumstances within the meaning of s127C(1)(b) to justify the award of additional costs. 1 Motor Vehicles Act 1959 (SA) s 127C(1)(b). 2 FDN 1. 3 FDN 1. -- 3 of 25 -- [2026] SASC 71 McDonald J 2 5 By the time of the hearing, the two remaining grounds were effectively distilled down to four errors that it was contended had been made by the Magistrate. These were:4 1. In construing s 127C of the MV Act as covering the field of costs in motor vehicle accident personal injury claims (to which it relates); 2. In construing s 127C of the MV Act as expressly removing any discretion from the Court to award costs on any basis other than in accordance with the applicable Magistrates Court costs scale in relevant personal injury cases, except if the Court is satisfied that there are exceptional circumstances justifying a higher award; 3. In concluding that circumstances giving rise to an award of solicitor client or indemnity costs for bettering a filed offer under the rules of Court could not amount to exceptional circumstances for the purposes of and within the scope of s 127C(1)(b) of the MV Act or by failing to consider whether it could and did in the circumstances of the case; 4. In concluding that there were no exceptional circumstances justifying the award of additional costs in excess of the amount of party/party costs applying under the Magistrate Court cost scale. 6 The first two issues raised relate to the Magistrate’s approach to the application of s 127C of the MV Act. The appellant contends that in the event that it is determined that the Magistrate erred in the manner suggested, the appropriate outcome is for the matter to be remitted to the Magistrates Court for further consideration, in light of the reasons provided. It would follow that it would be unnecessary to consider the remaining issues raised which relate to the question of whether exceptional circumstances had been established. 7 It is the respondent’s position that the Magistrate adopted the correct approach to the application of s 127C of the MV Act. In the event that is accepted, it will be necessary to address the remaining purported errors that resulted in the Magistrate finding that no exceptional circumstances had been established. It was however the respondent’s submission that in embarking on that process the court should remain fully cognisant that the Magistrate was uniquely placed to make such an assessment and there should be a reticence by an appellate court to too readily intervene. Brief factual overview 8 The appellant was involved in a motor vehicle accident on 12 December 2016. 4 FDN 4 at [6]. -- 4 of 25 -- [2026] SASC 71 McDonald J 3 9 On 22 February 2019, the appellant commenced legal proceedings in the District Court claiming damages for injuries and loss that she had suffered as a result of the accident. In about August 2019, the appellant successfully applied to transfer the proceedings to the Magistrates Court, where the jurisdictional limit for an award of damages is $100,000. 10 In September 2021, following a five-day trial, the Magistrate found in favour of the appellant. The appellant’s damages were assessed at $103,371.34 and judgment was entered for the jurisdictional limit of $100,000.5 11 There was no dispute that the appellant was entitled to an order for costs, the issue that arose related to the quantification of costs. The respondent calculated that they were liable for costs in the order of $62,000 on a party/party basis.6 12 The appellant sought costs in the sum of $146,357.34 which allowed for indemnity costs to be paid for the period from 14 days after a formal offer had been made by the appellant. It follows that the claim for costs was calculated on a standard party/party basis from 8 April 2017 until 11 October 2019 (that being the date of the expiry of the appellant’s formal offer filed on 27 September 2019) and on an indemnity basis thereafter. This figure was calculated on the basis of the UCR, which the appellant contended were the relevant rules at the time. Settlement offers 13 Throughout the course of proceedings various offers had been made by the parties in an endeavour to settle the matter. • 7 August 2019, the respondent made a “without prejudice” offer by letter in the amount of $3,390 with no contribution for costs or disbursements. • 8 August 2019, an informal settlement conference was convened. At the commencement of the conference, the appellant made a settlement offer in the amount of $152,025 plus costs and disbursements. • 12 August 2019, the respondent filed a formal offer in the District Court in the amount of $10,010 all inclusive. • 27 September 2019, the appellant filed an offer in the Magistrates Court in the amount of $60,000 all inclusive (‘the filed offer’). • 29 April 2020, the respondent conveyed a verbal offer in the amount of $15,000 all inclusive. 5 Tracey Lee Hill v Megan McDonald [2022] SAMC 155 at [100] and [101]. 6 $62,000 has been paid by the respondent to the appellant on the basis that is the sum to which she is entitled. -- 5 of 25 -- [2026] SASC 71 McDonald J 4 • 16 October 2020, the respondent filed a formal offer in the amount of $15,000 all inclusive. • 9 March 2021, the respondent wrote to the appellant making a Calderbank7 offer in the amount of $15,000 all inclusive. • 16 July 2021, the appellant wrote to the respondent and made a Calderbank offer in the amount of $50,000 all inclusive. Relevant rules and legislation 14 This appeal concerns the construction, application and interplay of s 127C of the MV Act, s 37(1) of the Magistrates Court Act 1991 (SA) (‘the MC Act’), and either the former MCC Rules or the UCR (‘the Rules’). The Magistrates Court Act 1991 (SA) 15 Section 37(1) of the MC Act provides the Court with a broad discretion in relation to costs. It reads: (1) Subject to this Act and the rules, costs in any civil proceedings will be in the discretion of the Court and may be awarded against any person (whether a party to or a witness in the proceedings or not). 16 This discretion is subject to two general constraints (putting to one side s 127C of the MV Act). These are that the discretion should be exercised judicially,8 according to law and the ability to regulate the operation of the discretion though the Rules; the Rules being a form of delegated legislation that provide a means of regulating what is otherwise a plenary discretion. The applicable Rules 17 In issue before the Magistrate was the question of whether the applicable rules were the MCC Rules or the UCR. This was a matter of some importance as there was a different costs basis provided under the MCC Rules as compared to the UCR, as well as different tests to be applied. The appellant’s claim for indemnity costs was based on a reliance on the application of the UCR as opposed to the MCC Rules, which only provided for solicitor/client costs in circumstances of a bettered pretrial offer. 18 The Magistrate determined that the MCC Rules regime applied in large part because she found that the making of the formal offer was a “step in the proceedings” as defined in the transitional provisions of the UCR,9 and consequently, as the offer was made before the commencement of the UCR, the MCC Rules applied. For that reason, the Magistrate considered that if the appellant was successful, the Court may order that she was entitled to costs against the 7 Calderbank v Calderbank [1975] 3 All ER 333. 8 Hill v McDonald [2024] SAMC 24 at [17]. 9 Uniform Civil Rules 2020 (SA) r 1.4(1)(b). -- 6 of 25 -- [2026] SASC 71 McDonald J 5 respondent on a solicitor/client basis from 14 days after service of the filed offer in accordance with those rules. 19 Initially the determination by the Magistrate that the MCC Rules were the relevant rules was the subject of the first ground of appeal, however that ground was abandoned on the basis that although it potentially remains a live issue, it is not pursued in furtherance of the relief sought. 20 The appellant maintains that the Magistrate was in error in her finding that the MCC Rules applied and contends that this will be a matter that needs to be addressed in the event that the question of costs is to be considered afresh.10 21 There are a number of aspects of the Rules that are relevant to the arguments on this appeal. The purpose of the MCC Rules and the UCR are expressed in similar terms. 22 Under r 3(1)(a) of the MCC Rules, it was the duty of the Court in interpreting, applying and enforcing the observance of the rules, to promote the expeditious, economical and just conduct and resolution of an action or proceeding by negotiated agreement or judicial determination. The express purpose of the UCR is to facilitate the just, efficient, timely, cost-effective and proportionate resolution or determination of the issues in proceedings.11 23 Both the MCC Rules and the UCR create a regime to encourage the early resolution of litigation, rewarding those parties who put forward realistic offers in order to make genuine attempts to reach a compromise. The MCC Rules 24 The MCC Rules defined ‘costs’ as meaning party/party costs unless a contrary intention appeared in the rules.12 Rule 106 was a suite of rules relating to costs which included: (4) Where proper cause exists the Court may order that a successful party is entitled to costs on a solicitor client basis. 25 The most relevant MCC Rules were r 55 to r 58, that addressed offers to consent to judgment. In particular, r 58 provided for circumstances in which a plaintiff obtained judgment greater than their filed offer. It read: 58. (1) In making an order as to costs at the trial of an action, the Court must take into account any offer to consent to judgment, or any payment of a sum of money to the Registrar, and any refusal or failure to accept such offer or payment. (2) Unless the Court for special reasons orders otherwise – 10 FDN 4 at [63]-[65]. 11 Uniform Civil Rules 2020 (SA) r 1.5. 12 Magistrates Court (Civil) Rules 2013 (SA) r 2(1). -- 7 of 25 -- [2026] SASC 71 McDonald J 6 (a) A plaintiff who obtains final judgment for a sum of money that is more than the amount of its offer plus the costs and interest due at the time of the offer is entitled to costs on a solicitor and client basis after the expiration of 14 days from the date the notice of the offer was served. (b) A plaintiff who obtains final judgment for a sum of money that is equal to or less than the amount of any such offer or payment by the defendant (plus costs and interest due at the time of payment) is not entitled to costs after the expiration of 14 days from the date the notice of offer or the notice of payment was served and thereafter the defendant is entitled to solicitor client costs. The UCR 26 There are a number of rules in the UCR that relate to costs and more particularly, the awarding of costs in circumstances in which a formal offer has been made by one of the parties.13 Ch 16, part 2 of the UCR relates to costs scales and r 193.2 sets out the scale of costs in Magistrates Court proceedings. Rule 193.2(1) provides that, as a starting point, costs between the parties “are to be determined on the standard costs basis and in accordance with the Magistrates Court costs scale”. 27 Pursuant to r 193.2(4), the Court may however “order that costs are payable on another scale, including the Higher Courts costs scale, or another basis, including the indemnity basis or the solicitor/client basis”. 28 Rules 132.10 and 132.11 relate to costs orders that may be made in circumstances in which a formal offer for resolution has been made by one party and not accepted by the other party. The costs implications are dependent upon whether a formal offer satisfies the criteria of a “relevant offer”.14 For current purposes it is not necessary to discuss the criteria to be satisfied for a “formal offer” to amount to a “relevant offer”. Suffice to say that if a “relevant offer” is made, the consequences in relation to costs may be more extreme. Rules 132.10(2) and (3) provide that where a relevant offer is made by a party, and is not accepted by the other party, and the offeror obtains judgment that is no less favourable (in the case of an applicant), or less favourable (in the case of a respondent), the offeror is entitled to an order against the other party on an indemnity basis from 14 days after the service of the formal offer, subject to the overriding discretion of the Court. 29 In circumstances in which there has been a formal offer that does not amount to a relevant offer, the UCR are not so prescriptive. Rule 132.11(2) provides that if a “formal offer” is made and not accepted, and judgment is granted on terms no less favourable to the offeror, then the Court is to take into account the offer and its terms on the question of costs. 13 See Uniform Civil Rules 2020 (SA) r 132.10 generally. 14 Uniform Civil Rules 2020 (SA) r 132.10(1). -- 8 of 25 -- [2026] SASC 71 McDonald J 7 30 Without endeavouring to limit the generality of the discretion, r 132.11(3) and r 132.11(4) of the UCR provide examples of the manner in which a formal offer may impact on the exercise of the discretion as to costs. These include an order that the offeree pay the costs of the offeror in respect of the action or the part the subject of the offer from 14 days after service of the formal offer,15 or that a party that unreasonably rejects a formal offer bear its own costs.16 The discretion however remains broad with the Court retaining a discretion to “make such other or further order as to costs as it thinks fit”.17 31 As is apparent, both the MCC Rules and the UCR regimes attempt to strike a balance between the encouragement of the early resolution of proceedings by providing an incentive to make/accept reasonable offers, and the retention of an overriding discretion in the Court. The Motor Vehicles Act 1959 (SA) 32 Section 127C of the MV Act was inserted by the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013 (SA) (‘LSS’), sch 2, cl 18 and commenced operation on 1 July 2013. It provides: 127C—Control of legal costs (1) Subject to subsection (3), a court before which proceedings are brought in respect of a claim for which a person is insured under this Part must comply with the following provisions as to costs in relation to the claimant: (a) if the total amount recovered in respect of the claim does not exceed $25 000—the court must not award in favour of the claimant costs as between party and party unless the court is of the opinion that there are exceptional circumstances justifying the award of such costs; (b) if the total amount recovered in respect of the claim exceeds $25 000 but does not exceed $100 000—the court must not award in favour of the claimant costs in respect of the proceedings in excess of the costs applying under the designated scale unless the court is satisfied that there are exceptional circumstances justifying the award of additional costs. (2) A court before which proceedings are brought in respect of a claim for which a person is insured under this Part must comply with the following provisions as to costs in relation to the defendant: (a) if the total amount claimed does not exceed $25 000—the court must not award in favour of the defendant costs as between party and party unless the court is of the opinion that there are exceptional circumstances justifying the award of such costs; (b) if the total amount claimed exceeds $25 000 but does not exceed $100 000— the court must not award in favour of the defendant costs in respect of the proceedings in excess of the costs applying under the designated scale unless 15 Uniform Civil Rules 2020 (SA) r 132.11(3)(a). 16 Uniform Civil Rules 2020 (SA) r 132.11(4)(a). 17 Uniform Civil Rules 2020 (SA) r 132.11(3)(c), r 132.11(4)(c). -- 9 of 25 -- [2026] SASC 71 McDonald J 8 the court is satisfied that there are exceptional circumstances justifying the award of additional costs. (3) If proceedings are brought before a court in order to obtain approval of a compromise or settlement that relates to a person who is under a legal disability, subsection (1)(a) does not apply so as to prevent an award of costs as between party and party insofar as the costs are directly related to obtaining that approval. (4) In this section— designated scale means the scale of costs that apply in relation to civil proceedings in the Magistrates Court of South Australia (even if the claim against the insurer is for an amount that exceeds the jurisdictional limit of that court), subject to any modifications made by the regulations for the purposes of this section.18 33 There is no dispute that s 127C of the MV Act has application to the appellant’s claim, the ambit of the contest is the manner in which it is to be applied. The Magistrate’s decision 34 The Magistrate refused the application for indemnified costs on the basis that s 127C of the MV Act does not allow for a Court to exercise a discretion to grant higher costs awards in accordance with the rules, or on any basis, except where the Court is otherwise satisfied that exceptional circumstances exist.19 35 The Magistrate accepted that s 37(1) of the MC Act confers on the Court an “absolute and unfettered” discretion, however, considered that it was evident from its terms that Parliament intended by s 127C of the MV Act to expressly remove the discretion from the Court to award costs on any basis other than in accordance with the applicable Magistrates Court costs scale in motor vehicle accident personal injuries cases. That is, with the single exception of a finding of exceptional circumstances justifying a higher award.20 36 The Magistrate noted that s 127C was one of a number of provisions inserted into the MV Act at the same time as other amendments were made to the Civil Liability Act 1936 (SA). Consistent with the purpose of the amendments made by the LSS more broadly, the new section seeks to “control” the awarding of legal costs in proceedings of this nature. 37 The Magistrate correctly identified that it was common ground between the parties that if there is any inconsistency between s 127C of the MV Act and the Rules generally, the MV Act prevails. Central to the contest was a dispute about whether there was such an inconsistency. It was the appellant’s contention that 18 In the period prior to the commencement of the UCR, that was prescribed in r 106 of the MCC Rules to mean Cost Scale 1 or 3 in the Third Schedule. That cost scale continued to apply to the period preceding the commencement of the UCR despite its repeal (r 192.2(2) of the UCR). In the period following the commencement of the UCR, the scale of costs that applied to the Magistrates Court was prescribed in r 192.2(1) to mean that fixed by sch 6, pt 3 of the UCR. 19 Hill v McDonald [2024] SAMC 24 at [20]. 20 Hill v McDonald [2024] SAMC 24 at [17]. -- 10 of 25 -- [2026] SASC 71 McDonald J 9 there was no inconsistency between s 127C and the Rules and that they can and should be read together harmoniously given their common objective. That is s 127C should be read as a reference to costs “in the usual course”, which would allow for the application of the Rules in relation to the bettering of a filed offer.21 38 The Magistrate rejected that argument. The Magistrate found that there was no reason to give the word “costs” in s 127C(1)(b) of the MV Act anything other than its literal meaning, and that it was evident from the terms of the section that Parliament intended to expressly remove any discretion from the Court to award costs on any basis other than in accordance with the applicable Magistrates Court costs scale, except if satisfied that there are exceptional circumstances that justified a higher award. Further, the Magistrate found that:22 … The imperative words that the court ‘must comply’ and ‘must not award’ brook no uncertainty and there is no ambiguity – as the respondent’s counsel contends, it is difficult to see how Parliament could have made that intention any plainer. 39 The Magistrate did not accept that it is necessary to interpret s 127C of the MV Act in a way to accommodate the operation of the Rules regarding settlement offers. The Magistrate went on to say:23 … Parliament must be presumed to be aware of the various costs rules, practices and principles, including those relating to formal and informal offers, which bear upon the manner in which the court may exercise its discretion in a given case. I consider it is evident that Parliament intended to remove that discretion in this context. To adopt the primary test used in determining questions of inconsistency under s 109 of the Constitution, the evident intent of s 127C is to ‘cover the field’ of costs in motor vehicle accident personal injury claims and to leave the court with no discretion in that arena except where exceptional circumstances exist. 40 The Magistrate found that the only way in which the relevant rules regime for filed offers could potentially still have operation in this case was if bettering the filed offer amounted to exceptional circumstances.24 For reasons that I will come to, it is important to note that in making this observation, the application that the Magistrate was considering was made in the context of the issues arising in that case. That is, in circumstances in which there was no dispute that there should be a costs order in favour of the appellant and that the ordinary presumption that costs follow the event would apply. The only matter for the Magistrate to determine was whether those costs should be awarded on a higher indemnity or solicitor/client basis because the appellant had bettered the filed offer. 41 The Magistrate summarised her decision in the following terms:25 In summary, I have concluded that s 127C of the MV Act removes from the court the discretion to award costs in a relevant personal injuries motor vehicle accident claim on 21 Hill v McDonald [2024] SAMC 24 at [11]. 22 Hill v McDonald [2024] SAMC 24 at [17]. 23 Hill v McDonald [2024] SAMC 24 at [18]. 24 Hill v McDonald [2024] SAMC 24 at [19]. 25 Hill v McDonald [2024] SAMC 24 at [28]. -- 11 of 25 -- [2026] SASC 71 McDonald J 10 any basis other than in accordance with the Magistrates Court civil scale, unless the court is satisfied there are exceptional circumstances justifying a higher award. In particular, s 127C does not allow the court to make a higher award of costs based on the rules regime pertaining to bettering filed offers at trial. 42 On the facts of the case, the Magistrate was not satisfied that there were exceptional circumstances. Her Honour accepted the submission made by the respondent “that bettering an offer at trial cannot, of itself, amount to an exceptional circumstance”.26 43 The Magistrate also considered whether the bettering of a filed offer as comprehensively as occurred in this case, could amount to exceptional circumstances. However, her Honour concluded:27 … that Parliament cannot have contemplated that there could be a sliding scale of cases where bettering the filed offer by a particular amount is an exceptional circumstance and not where it is a lesser amount. 44 Whilst the Magistrate accepted that exceptional circumstances may exist in a case where, for example, the claim was unreasonably defended, or there was unreasonable conduct by the other party, she rejected that the circumstances that were put forward in this case satisfied the test. 45 In discounting these matters as amounting to exceptional circumstances, the Magistrate observed:28 … The respondent’s defence of the claim was not unreasonable and there is otherwise no unreasonableness in their conduct of the proceedings. Whether the applicant met the various legal thresholds for damages in this case to a large degree depended on the court’s conclusions about her and her witnesses’ reliability and credibility, and resolution of evidence that diverged on various points from reputable experts. These matters were ultimately resolved in the applicant’s favour but it was not unreasonable for the respondent to maintain their defence of the claim in the face of the available evidence. Further, the fact that the trial had earlier been adjourned, either of itself or in combination with any other factor, in this case does not amount to an exceptional circumstance for the purpose of costs. 46 The Magistrate also considered whether the fact that she had assessed the damages at slightly above the jurisdictional limit could be an exceptional circumstance. The significance of that was that if the proceedings had remained in the District Court and that Court had quantified the damages in the same amount, s 127C(1)(b) of the MV Act would not apply, and the appellant could maintain her claim for indemnity costs in accordance with the Rules. 47 The Magistrate rejected that contention. 26 Hill v McDonald [2024] SAMC 24 at [19]. 27 Hill v McDonald [2024] SAMC 24 at [19]. 28 Hill v McDonald [2024] SAMC 24 at [23]. -- 12 of 25 -- [2026] SASC 71 McDonald J 11 Leave to appeal 48 Rule 213.1(1)(c) of the UCR provides that the appellant requires leave to appeal on the basis that the appeal is against a judgment and order that relates to costs. 49 The respondent took an ambivalent position on the question of leave. Whilst conceding that their position was to not oppose leave, senior counsel made a submission reminding the Court of the significant body of authority that supports the proposition that there should be a reluctance by an appellate Court to intervene on issues relating to costs.29 50 The appellant relied on three matters in support of the grant of leave. The first was the importance of the proceedings to the appellant. The shortfall between the costs that the appellant has been awarded and from those that she contends that she is entitled to, is substantial and somewhere in the order of $86,000. The significance of that sum is particularly apparent when considered in the context of a judgment sum of $100,000. 51 The second consideration relied on by the appellant in support of leave is that this appeal raises matters of general importance, particularly in relation to proceedings in which the award of damages is $100,000 or less. It was contended that the appeal raises issues in relation to the utility of plaintiff-filed offers, and its utility in achieving the goal of early settlement in the event that there is no longer the incentive of solicitor/client costs in circumstances in which a plaintiff betters a filed offer to consent to judgment. 52 The final matter relied on by the appellant in support of the grant of leave was the merits of the appeal. It was submitted that the appeal is at least reasonably arguable, which garners weight from the broader interest in the outcome of the appeal. 53 In my view, taking all of the matters advanced by the appellant into account, this is an appropriate case, albeit it relates to the issue of costs, in which to grant leave to appeal. The arguments advanced by the parties on the construction of s 127C of the Motor Vehicles Act 1959 (SA) (Errors 1 and 2) 54 In order to best understand the competing submissions, it is convenient to first deal with the respondent’s submissions, which accord with the position arrived at by the Magistrate. Respondent 55 It was the respondent’s submission that the Magistrate did not err in the approach that she adopted to the application of s 127C(1)(b) of the MV Act, but 29 T4. -- 13 of 25 -- [2026] SASC 71 McDonald J 12 rather that the Magistrate correctly recognised that the general power to award costs, which is otherwise at the discretion of the Court, has been circumscribed in circumstances in which s 127C is enlivened.30 Section 127C(1) provides that the Court must comply with the provisions of the section. The effect of s 127C is that there is now a cap as to costs to be awarded, subject to a finding of exceptional circumstances. In circumstances in which the total amount recovered does not exceed $25,000, the norm will be that no costs will be awarded to the claimant,31 and where the amount recovered falls between $25,000 and $100,000, the ordinary course will be costs calculated on the designated scale, regardless of the jurisdiction in which proceedings are brought.32 The language is clear and the section contains its own proviso of “exceptional circumstances”. 56 The respondent contended that the policy underpinning s 127C is clearly directed towards limiting or reducing insurance costs referable to third party insurance in the context of motor vehicle accidents.33 In particular, the jurisdictional ambit of s 127C encompasses the minor civil action equivalent (s 127C(1)(a)) and the Magistrates Court cap equivalent (s 127C(1)(b)).34 It was the respondent’s submission that regardless of which Court the proceedings are brought in, the legislative intent is that: 35 If you’re in that sort of relatively small claim territory, there is a limit on the costs that can be recoverable by order of the court as between party and party in order to minimise the drain on statutory policy of insurance that stands for third party bodily injuries under the registration scheme. 57 The respondent further submitted that “the policy inherent in the provision is to limit the amount of the drain on the insurer for a policy reason that, right, wrong or indifferent, parliament has elected to prioritise over plaintiff’s claims to that end”.36 58 The respondent relied by way of analogy upon a number of the Civil Liability Act 1936 (SA) provisions that were also introduced by the LSS as having a consonant legislative purpose. By way of example, s 56A(4) provides that in a claim for economic loss as a consequence of sustaining an injury in a motor vehicle accident, damages are to be assessed and then discounted by 20 per cent, reflecting a legislative intent to prioritise the need to reduce the cost of the scheme, over what an individual may actually be entitled to according to ordinary principle. This section, like s 127C, evinces Parliament’s intent that there should be a curtailment on the drain of statutory funds relied upon under the motor vehicle personal injury scheme. 30 FDN 6 at [14]. 31 Motor Vehicles Act 1959 (SA) s 127C(1)(a). 32 Motor Vehicles Act 1959 (SA) s 127C(1)(b). 33 FDN 6 at [29]. 34 T46. 35 T47. 36 T49. -- 14 of 25 -- [2026] SASC 71 McDonald J 13 59 It was the respondent’s contention that s 127C of the MV Act is pellucid in that the general power to award costs has been circumscribed when s 127C is enlivened.37 Section 127C does not provide for the order of costs. The power to award costs in the Magistrates Court remains generally within the discretion of the Court but the rate at which costs might be ordered is limited by the Magistrates Court scale. Whilst the intent is that awards of indemnity or solicitor/client costs are precluded, the provision does not nullify completely the effect of filed offers as the successful party still receives their costs. The respondent submitted that there remains a discretion to be exercised within the ordinary operation of the designated scale under the rules.38 It follows on this argument that the Court may award no costs, or merely a percentage of costs. It cannot, however, order “in excess of the costs applying under the designated scale” unless exceptional circumstances can be established.39 It is a mandatory constraint of a particular species. 60 It was submitted that this is a straightforward example of subsequent legislation curtailing the broader discretion created by an earlier Act. There is nothing unusual about a more specific act of Parliament regulating the extent of the more general power that might otherwise be exercised.40 61 In support of this argument, the respondent relied upon the maxim generalia specialibus non derogant, and the enunciation of that principle in the following terms in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia:41 … When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power. 62 Although the decision refers to the two provisions as being “in the same instrument”, that principle has been applied to reconcile two separate enactments of the same legislature. In particular, in Deputy Commissioner of Taxation v Dick,42 the New South Wales Court of Appeal drew on the “Anthony Hordern principle” by way of analogy to determine whether two enactments of the same legislation were capable of mutual accommodation.43 63 In the context of considering the impact of the specific provisions of the Income Tax Assessment Act 1936 (Cth) on the operation of s 1318 of the Corporations Act 2001 (Cth), Sandow JA observed:44 37 FDN 6 at [26]. 38 T58. 39 FDN 6 at [14]. 40 T46. 41 (1932) 47 CLR 1 at 7. 42 (2007) 242 ALR 152. 43 Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152 at [120]-[121]. 44 Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152 at [130]. -- 15 of 25 -- [2026] SASC 71 McDonald J 14 The maxim generalia specialibus non derogant thus operates in a context where, if the general provisions (s 1318), were to apply, it would neutralise the specific provisions of Divs 8 and 9 of the ITAA. Compare O’Connor J in Goodwin v Phillips (1908) 7 CLR 1 at 14; [1908] HCA 55: Where there is a general provision which, if applied in its entirely, would neutralize a special provision dealing with the same subject matter, the special provision must be read as a proviso to the general provision, and the general provision, in so far as it is inconsistent with the special provision, must be deemed not to apply. 64 In applying that principle, Sandow JA concluded:45 … A proper process of statutory construction reveals the former [the ITAA] to be a code and that code to be exhaustive, leaving no room for s 1318 to apply. They each operate as parallel universes with no intersection between them. Any general presumption to the contrary from the fact that the two sets of legislation emanate from the same Commonwealth legislature is displaced by the implied contradiction between the two sets of provisions. 65 Although there is no suggestion that s 127C is a code, it is contended that it is a mandatory restriction on the otherwise broad discretion created by the MC Act. 66 In summary, it was the respondent’s submission that the discretion to award costs remains enlivened under the MC Act. The order is not made under the MV Act. The remit of the MV Act is to constrain the rate at which costs may be ordered. It imposes a cap on the scale to which costs might be ordered if they are awarded, absent a finding of exceptional circumstances. 67 Although the Magistrate referred to the MV Act as “covering the field”,46 this was an obvious mischaracterisation as s 127C provides no basis for an entitlement to costs but rather places a cap on what is otherwise a relatively broad discretion. Appellant 68 It is useful to commence with a consideration of the manner in which the appellant suggests that the MC Act, the MV Act and the Rules should operate together, before coming to the criticisms of the approach adopted by the Magistrate. 69 It was the appellant’s contention that the interplay between the legislation and the Rules requires the Court to employ a three-step process. The first is for the Court to exercise the usual broad discretion as to costs, applying the MC Act and the Rules which would inevitably take into account the rules surrounding filed offers. Having undertaken that exercise, the second step involves a consideration of whether the costs arrived at are in excess of those permitted under s 127C of the 45 Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152 at [132]. 46 Hill v McDonald [2024] SAMC 24 at [18]. -- 16 of 25 -- [2026] SASC 71 McDonald J 15 MV Act, that is, whether the sum arrived at is “in excess of the costs applying under the designated scale”, relevantly the Magistrates Court scale.47 70 In the event that the amount arrived at in the exercise of the Court’s usual discretion exceeds the sum calculated on the Magistrates Court scale, the Court would need to consider and make an evaluative judgement as to whether there are exceptional circumstances warranting the ordering of the costs.48 It follows that in making that determination one of the matters that the Court would take into account is that under the usual exercise of the discretion employing the relevant rules, the appellant would have been entitled to a higher costs order calculated on a solicitor/client or indemnity basis.49 71 The position advanced by the appellant is that what is required is an exercise of the judicial discretion and then a check to ensure that the exercise of the discretion would result in compliance with s 127C.50 It was contended that to adopt such an approach maximises the operation of s 37(1) of the MC Act and leaves work for the MV Act.51 72 It is the appellant’s position that the primary error of the Magistrate was the failure to recognise that there was an antecedent or anterior discretion to be exercised and to instead read s 127C as though it was the sole costs order point.52 The error was said to be that in the approach that she adopted, the Magistrate did not exercise her discretion as required under the MC Act and Rules.53 73 Much of the criticisms of the Magistrate’s reasons was founded on her Honour’s use of the term “cover the field” in analysing the legislative intent behind s 127C. It was the appellant’s contention that the Magistrate was in error in construing s 127C of the MV Act so as to be inconsistent with s 37(1) of the MC Act on the basis that s 127C did not “cover the field” as to costs, and there was no necessary implication requiring s 127C to be so construed.54 It was submitted that it is possible to adopt a construction of s 127C that allowed both s 37(1) of the MC Act and s 127C of the MV Act to operate within their given sphere.55 74 It was the appellant’s submission that s 127C of the MV Act and s 37(1) of the MC Act are not inconsistent and should be read together, retaining the full effect of the “filed offer” regime under the UCR.56 It was submitted that there is no discernible policy or purpose in or underpinning the utility of s 127C of the MV Act in derogating from the filed offer regime under the UCR. That was said to be 47 FDN 4 at [9] and [36]. 48 FDN 4 at [9]. 49 FDN 4 at [10]. 50 T15. 51 T16. 52 T57. 53 T27. 54 FDN 4 at [7] and [44]. 55 FDN 4 at [7.2]. 56 FDN 4 at [7] and [8]. -- 17 of 25 -- [2026] SASC 71 McDonald J 16 particularly so given that both s 127C and the UCR are aimed at “facilitating the just, efficient, timely, cost-effective and proportionate resolution” of proceedings.57 To read them as in conflict defeats the cost saving purposes of filed offers. 75 As a starting point the appellant relies upon the text of s 127C of the MV Act which does not expressly state that it covers the field of costs in motor vehicle accident claims to which it relates.58 Additionally, s 37(1) of the MC Act provides only that “subject to this Act and the rules, costs in any civil proceedings will be at the discretion of the Court…”. It is not expressed to be subject to any other Act.59 76 It was also submitted that s 37(1) of the MC Act and s 127C of the MV Act are not so inconsistent or repugnant that they cannot be read together.60 Further, that to adopt such a construction fails to recognise the strong presumption that the legislature did not intend to contradict itself but intended for the relevant sections of both Acts to operate in conjunction.61 In support of an argument that it should not necessarily be implied that it was intended that s 37(1) of the MC Act is derogated from by s 127C of the MV Act, based on the presumption that the legislature would not intend to contradict itself, the appellant relied upon Goodwin v Phillips,62 Butler v Attorney-General (Vic),63 and Saraswati v R.64 As Gaudron J explained in Saraswati:65 It is a basic rule of construction that, in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. There must be very strong grounds to support that implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other: see Butler v. Attorney-General (Vict.), per Fullagar J., and per Windeyer J. More particularly, an intention to affect the earlier provision will not be implied if the later is of general application (as is the provision by which indecent dealing is constituted an offence under the Act) and the earlier deals with some matter affecting the individual (as does the limitation provision in s. 78). Nor will an intention to affect the earlier provision be implied if the later is otherwise capable of sensible operation. The position was stated by Lord Selborne in Seward v. The “Vera Cruz”, as follows: “where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of a particular intention to do so.” 57 FDN 4 at [8] and[29]. 58 FDN 4 at [42]. 59 FDN 4 at [40]. 60 FDN 4 at [44]. 61 FDN 4 at [44]. 62 (1908) 7 CLR 1 at 10. 63 (1961) 106 CLR 268 at 276. 64 (1991) 172 CLR 1. 65 (1991) 172 CLR 1 at 17-18. -- 18 of 25 -- [2026] SASC 71 McDonald J 17 (Citations omitted) 77 It was the respondent’s submission that s 37(1) of the MC Act does not defeat the purpose of s 127C of the MV Act (or vice versa). The Acts are directed at two different things: an entitlement and basis for costs (s 37(1)) and then a cap on the quantum (s 127C). In those circumstances the respondent submitted it is an incorrect approach to treat s 127C as “covering the field” in relation to costs and then apply an evaluative judgement as to whether exceptional circumstances exist. 78 It was contended by the appellant that the costs referred to in s 127C of the MV Act are “costs in the usual course”, that is costs are calculated in accordance with the Rules and under the broad discretion of the MC Act. The construction said to be preferred by the appellant is that the MC Act and the UCR provide for the entitlement to costs, the basis of the costs and the scale of the costs, and s 127C of the MV Act provides a limit on the quantum of those costs unless the test of exceptional circumstances can be satisfied.66 79 In summary the approach advocated for by the appellant would involve the usual exercise of discretion based on the MC Act and UCR, with s 127C of the MV Act providing a means to measure whether the costs arrived at exceed those that may be awarded under the designated scale. That is, whether the amount awarded is compliant with s 127C. If not, it would then be necessary to consider whether there are exceptional circumstances to warrant those costs. Consideration 80 The statutory purpose underlying the introduction of s 127C of the MV Act is plain. It was introduced at the same time as other amendments to the Civil Liability Act 1936 (SA), for the purpose of “controlling” the liability for legal costs in motor vehicle personal injury proceedings.67 It reflects a public policy decision that insurance costs that are mandatorily imposed by statute and which are ultimately met by all drivers of registered vehicles should be minimised by the curtailment of legal costs associated with claims.68 81 In my view the language employed by s 127C of the MV Act is equally plain. Against a backdrop of the absolute and unfettered discretion contained in s 37(1) of the MC Act, the legislature has intended by s 127C(1)(b) to expressly remove any discretion for the court to award costs other than in accordance with the Magistrates Court scale, except in circumstances that are exceptional such that would justify payment of a higher sum. The terminology employed in the section is imperative - “must comply”, “must not award”. It is hard to see how the legislature could have made its intention any clearer. 82 There is nothing unusual about there being two acts of Parliament, one general and one specific, and the specific act of Parliament regulating the extent 66 FDN 4 at [45], [49]. 67 Hill v McDonald [2024] SAMC 24 at [6]; FDN 6 at [19]. 68 FDN 6 at [19]. -- 19 of 25 -- [2026] SASC 71 McDonald J 18 of the power that might otherwise be exercised. Here, the later targeted legislation curtails the general discretion, it does not abrogate it. Adopting the approach relied on by the respondent does not cut across the presumption that the legislature would not have intended to contradict itself. It has not. It is simply placing limitations on the extent of the discretion in a certain legislative context. 83 Other than in exceptional circumstances, legal costs in respect of claims for which there has been an award of less than $100,000 are to be kept to a minimum.69 Accordingly, whilst costs remain within the Court’s discretion the rate at which they may be ordered, within the bands specified in s 127C, are subject to a ceiling. 84 As I have said, the appellant’s criticisms of the Magistrate’s reasoning process focused on her employment of the phrase “covering the field”. It was submitted by the appellant that, if taken literally, it would mean that s 127C is the only legislation that applies to costs orders made in claims of this nature.70 If that was so, there would be no basis to determine how and when a defendant may be entitled to costs. In addition, it would follow that if s 127C created an entitlement to costs, a defendant may otherwise get costs in excess of what they are entitled to.71 85 In my view these arguments demonstrate a misunderstanding of the manner in which the Magistrate was endeavouring to explain her reasoning. 86 In order to understand the Magistrate’s reasons, it is necessary to consider the context in which the term “cover the field” was used. I set out the relevant paragraph in full:72 I do not agree with the applicant that it is necessary to interpret s 127C of the MV Act in a way to still accommodate operation of the rules regarding settlement offers. There is no incompatibility between a stated intent to ‘control … legal costs’ and precluding an award of costs on a higher basis even if a filed offer is bettered at trial. It is not necessary for the interpretative exercise to undertake any degree of analysis of whether in fact it would ‘save’ legal costs (assuming that is the same as ‘control’) when weighed against removing the potential inducement to settle proceedings because of a filed offer. Parliament must be presumed to be aware of the various costs rules, practices and principles, including those relating to formal and informal offers, which bear upon the manner in which the court may exercise its discretion in a given case. I consider it is evident that Parliament intended to remove that discretion in this context. To adopt the primary test used in determining questions of inconsistency under s 109 of the Constitution, the evident intent of s 127C is to ‘cover the field’ of costs in motor vehicle accident personal injury claims and to leave the court with no discretion in that arena except where exceptional circumstances exist. (Emphasis added) 87 It is important to also consider that this observation was made in circumstances in which there was no dispute that the appellant was entitled to 69 Motor Vehicles Act 1959 (SA) s 127C(1)(b). 70 FDN 4 at [42]. 71 FDN 4 at [46], [47]. 72 Hill v McDonald [2024] SAMC 24 at [18]. -- 20 of 25 -- [2026] SASC 71 McDonald J 19 receive her costs, and the only issue was whether she should receive those costs on a higher scale. This was reflected when the Magistrate went on to say:73 For these reasons, in my view the words and intent of s 127C of the MV Act are clear, and s 127C does not allow for a court exercising a discretion to grant higher costs awards in accordance with the court rules, or on any basis, except where the court is otherwise satisfied that exceptional circumstances exist. 88 It is apparent when considering the entirety of the Magistrate’s reasons that her Honour was addressing the submission made by the appellant that the Rules continued to apply, permitting costs in excess of the Magistrates Court scale. The Magistrate was in effect saying that the two provisions cannot be read together in that manner because s 127C “trumps” the MC Act and the Rules, in terms of the relevant scale.74 I agree with counsel for the respondent who referred to the “inelegance” of the Magistrate when describing s 127C as “covering the field”, 75 but her Honour did so in the context of and in response to the submissions made by the appellant. I take the Magistrate to have meant no more than that s 127C deals comprehensively with the scale of costs that may be awarded. 89 For the reasons that I have provided, I find that the first two errors relied upon have not been established. Exceptional circumstances (Errors 3 and 4) 90 I propose to also deal with purported errors 3 and 4 together as both relate to the question of what amounts to be exceptional circumstances and in particular the finding by the Magistrate that no exceptional circumstances could be established on the facts of this case.76 91 In determining whether to award costs in an amount in excess of those provided for under s 127C of the MV Act, the Magistrate was required to embark on a two-stage process. The first was an evaluation of whether exceptional circumstances had been established. The second was a consideration of whether those circumstances justify a higher award of costs. The latter question must be determined by having regard to the legislative intent behind the enactment of s 127C. The Magistrate however, did not need to consider the second question on the basis that she did not make it through the initial gateway of a finding that exceptional circumstances had been established. 92 As to the meaning of “exceptional circumstances” the Magistrate relied on the decision in R v Kelly (Edward),77 in which Lord Bingham of Cornhill CJ summarised “exceptional circumstances” as:78 73 Hill v McDonald [2024] SAMC 24 at [20]. 74 T50. 75 T50. 76 Hill v McDonald [2024] SAMC 24 at [21]. 77 [2000] QB 198. 78 R v Kelly (Edward) [2000] QB 198 at [208]. -- 21 of 25 -- [2026] SASC 71 McDonald J 20 … It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered… 93 There was no issue taken with that statement of principle, nor with the Magistrate applying that test. That being so, it is difficult to see that there is any foundation for the complaint that the Magistrate was in error in finding that “bettering an offer at trial cannot, or itself, amount to an exceptional circumstance”.79 It is commonplace that offers from both sides of the bar table may be bettered at trial. It is the nature of the process. 94 The real issue for consideration on this appeal is the question of whether the Magistrate was in error in finding that exceptional circumstances had not been established on the facts of this case. 95 It is important that when considering this issue I have kept in mind that a determination of exceptional circumstances is an evaluative exercise, which a trial judge is uniquely placed to undertake. It is an assessment made by the trier of fact in the first instance proceedings. It is a process in which an appellate Court should be reticent to interfere. 96 The Magistrate identified a number of matters that may, in certain circumstances, amount to exceptional circumstances. These included when a claim is unreasonably defended, or where there has been unreasonable conduct by the other party.80 The Magistrate also found that exceptional circumstances may exist if “the proceedings involve issues of considerable complexity and/or duration that take it out of the realm of the usual case in the Magistrates Court”.81 The Magistrate determined that this was not such a case. 97 The appellant identified issues relating to the manner in which the respondent had engaged in the litigation, that they contended brought the case within the “exceptional circumstances” category.82 These were: • The trial was initially adjourned because the respondent was not ready to proceed; • The respondent lost on all issues which they contested at trial; • The respondent unreasonably refused to allow the appellant’s expert to be interposed; and 79 Hill v McDonald [2024] SAMC 24 at [19]. 80 Hill v McDonald [2024] SAMC 24 at [22]. 81 Hill v McDonald [2024] SAMC 24 at [24]. 82 Hill v McDonald [2024] SAMC 24 at [22]. -- 22 of 25 -- [2026] SASC 71 McDonald J 21 • The respondent’s position at trial included an irrelevant and unpleaded contention, effectively asserting that the appellant had fabricated her injuries. 98 The Magistrate rejected the suggestion that these considerations amounted to exceptional circumstances. These issues clearly related to matters that the Magistrate was uniquely placed to consider, having presided over the trial. This Court is at a distinct disadvantage in weighing up these considerations, particularly given the limited materials and information available to make this assessment. 99 There were however a number of additional matters relied upon by the appellant. These remained the focus on appeal and were said to amount to exceptional circumstances. These matters related to the appellant bettering the filed offer and receiving an award for damages in excess of the jurisdictional limit. They were the following:83 • That an order for solicitor/client or indemnity costs would have been made by the Court in the exercise of its discretion if s 127C of the MV Act did not apply; • The offer was filed at an early point in time, shortly after proceedings were commenced/transferred to the Magistrates Court; • The offer represented a genuine and substantial compromise ($60,000 all inclusive compared to an assessment of damages only of $100,000); • The appellant’s costs substantially exceed costs on a party and party basis, the vast proportion of which shortfall was incurred after the filed offer and because the filed offer was not accepted. 100 Each of these circumstances obviously relates to the issue at the centre of this appeal, that is, the appellant bettering the filed offer. Although not in precisely those terms, the Magistrate considered these matters in her reasons and rejected them as amounting to exceptional circumstances.84 101 The Magistrate found that even bettering a filed offer by a significant amount is not an exceptional circumstance.85 The Magistrate also considered whether it could be an exceptional circumstance that she assessed damages at slightly above the jurisdictional limit.86 If the proceedings had remained in the District Court, and resulted in the same assessment of damages, s 127C(1)(b) would not apply and the appellant could have maintained her application for indemnity costs. Her Honour observed:87 83 FDN 4 at [62]. 84 Hill v McDonald [2024] SAMC 24 at [19]. 85 Hill v McDonald [2024] SAMC 24 at [21]. 86 Hill v McDonald [2024] SAMC 24 at [25]. 87 Hill v McDonald [2024] SAMC 24 at [25]. -- 23 of 25 -- [2026] SASC 71 McDonald J 22 … In that sense the applicant may be considered to be being ‘punished’ for her, in my view appropriate, decision to have the proceedings transferred to the Magistrates Court and her damages therefore be confined to the $100,000 jurisdictional limit. However, in my view that cannot be the case. The Magistrates Court’s civil jurisdiction in s 8 of the Magistrates Court Act is to hear and determine actions where the amount claimed does not exceed $100,000, and a party brings the proceeding on that basis. Therefore, it cannot be that a case where the court assesses the claim in an amount that exceeds the jurisdiction but enters judgment for the jurisdictional limit, an exceptional circumstance exists for the purpose of s 127C. (Emphasis in original) 102 It is at this point that my views diverge from those of the Magistrate. 103 Although the Magistrate considered the bettering of the filed offer and the jurisdictional limit separately, in determining the issue of whether there are exceptional circumstances it is necessary to consider the combined effect of all of the relevant circumstances. 104 In my view there are a combination of circumstances that together amount to ‘exceptional’ in the manner discussed in R v Kelly (Edward). These are the bettering of the filed offer and the circumstances in which it was made, the extent to which the offer was bettered, and the significant financial disadvantage that will be suffered by the appellant for making the decision to transfer the proceedings to a lower cost jurisdiction (which the Magistrate found to be the correct decision). Whilst these circumstances are not unique to the appellant, they are uncommon and if not remedied will result in her suffering an unintended consequence through no fault of her own. 105 I consider the Magistrate was in error in finding that the matters that I have identified did not amount to exceptional circumstances. 106 I also find that the exceptional circumstances that I have found to exist warrant a higher award of costs that are provided for under s 127C of the MV Act. Which Rules apply? 107 Having made that finding, it is therefore necessary for me to consider which Rules are the applicable rules. 108 As I have said, the Magistrate found that the relevant rules were the MCC Rules for the reasons that I have set out. 109 It was the appellant’s contention that the relevant rules are the UCR, on the basis that an application for costs is a “step in the proceedings” that has taken place since the commencement of the UCR on 18 May 2020. The relevant transitional provision in the UCR, to which I have previously referred, is found at r 1.4(1). It is expressed in the following terms: (1) Unless the Court otherwise orders— -- 24 of 25 -- [2026] SASC 71 McDonald J 23 (a) the Previous UCR apply to— (i) a proceeding commenced; and (ii) a step in a proceeding taken, on or after the commencement date; and (b) the Previous Rules continue to govern a step in a proceeding taken before the commencement date 110 Rule 2.1(1) provides a broad definition of “step”: step in a proceeding or appellate proceeding includes a document filed, process is sued, action taken or order made in the proceeding; 111 In my view the application for costs was the relevant step in the proceedings, and as it took place after the commencement of the UCR, being 5 September 2023, it is these rules that should apply.88 Conclusion 112 I make the following orders: 1. I dismiss ground 2. 2. I allow ground 4 and find that for the purposes of s 127C of the MV Act, exceptional circumstances have been established. 3. The respondent pay the appellant’s costs calculated pursuant to the UCR. 88 The same view was arrived at by Kimber J in respect of a costs argument in Adelaide Marble Specialists Pty Ltd v Ragunath [2023] SASC 139 at [61], and Nicholson J in Treffers v Phung [2021] SASC 38 at [7]. -- 25 of 25 --