Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Others; GIO General Ltd and GIO Workers Compensation

LEGISLATION CITED: Civil Liability Act 2002 (NSW) Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW)

CA 40308/05 Booksan Pty Ltd, Jaymay Constructions Pty Ltd (Appellants) Bilal Wehbe (First Respondent) GIO General Ltd (Second Respondent) GIO Workers Compensation (NSW) Ltd (Third Respondent) CA 40118/05 Booksan Pty Ltd, Jaymay Constructions Pty Ltd (Appellants) Salah Eldin Elmir (First Respondent) GIO General Ltd (Second Respondent) GIO Workers Compensation (NSW) Ltd (Third Respondent) CA 41031/04 GIO General Ltd (Appellant) Booksan Pty Ltd (First Respondent) Jaymay Constructions Pty Ltd (Second Respondent) GIO Workers Compensation (NSW) Ltd (Third Respondent) Bilal Wehbe (Fourth Respondent) PARTIES: CA 41032/04 GIO General Ltd (Appellant) Booksan Pty Ltd (First Respondent) Jaymay Constructions Pty Ltd (Second Respondent) GIO Workers Compensation (NSW) Ltd (Third Respondent) Salah Eldin Elmir (Fourth Respondent) CA 41046/04 GIO Workers Compensation (NSW) Ltd (Appellant) Bilal Wehbe (First Respondent) Jaymay Constructions Pty Ltd (Second Respondent) Booksan Pty Ltd (Third Respondent) GIO General Ltd (Fourth Respondent) CA 41047/04 GIO Workers Compensation (NSW) Ltd (Appellant) Salah Eldin Elmir (First Respondent) Jaymay Constructions Pty Ltd (Second Respondet) Booksan Pty Ltd (Third Respondent) GIO General Ltd (Fourth Respondent)

FILE NUMBER(S): CA 40308/05; 40118/05; 41031/04; 41032/04; 41046/04; 41047/04

Booksan Pty Ltd, Jaymay Constructions Pty Ltd: M Einfeld QC/D Brogan GIO General Ltd: D Nock SC/R Beasley COUNSEL: GIO Workers Compensation (NSW) Ltd: J M McIntyre SC/J L Sharpe Bilal Wehbe: J P Gormly SC/D Kelly Salah Eldin Elmir: L King SC/M Daley

Booksan Pty Ltd, Jaymay Constructions Pty Ltd: J P Gould GIO General Ltd: Phillips Fox SOLICITORS: GIO Workers Compensation (NSW) Ltd: Thompson Cooper Lawyers Bilal Wehbe: Turner Freeman Salah Eldin Elmir: P D Bannister

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40308/05 CA 40118/05 CA 41031/04 CA 41032/04 CA 41046/04 CA 41047/04 DC 13160/01 DC 819/04

GILES JA IPP JA TOBIAS JA

Thusday 25 May 2006 BOOKSAN PTY LTD & 1 OR v Bilal WEHBE & 2 ORS BOOKSAN PTY LTD & 1 OR v Salah Eldin ELMIR & 2 ORS GIO GENERAL LTD v BOOKSAN PTY LTD & 3 ORS GIO GENERAL LTD v BOOKSAN PTY LTD & 3 ORS GIO WORKERS COMPENSATION (NSW) LTD v Bilal WEHBE & 3 ORS GIO WORKERS COMPENSATION (NSW) LTD v Salah Eldin ELMIR & 3 ORS Judgment No 2 (ON COSTS)

2 IPP JA: The matters giving rise to the arguments regarding costs

3 On 21 February 2006 this Court delivered its reasons for judgment in six appeals to which, collectively, all of the appellants and respondents were parties (see [2006] NSWCA 3).

4 The Court made the following orders: "(1) The defendants' appeals against the finding that the plaintiffs were not guilty of contributory negligence are upheld. The damages awarded to each plaintiff should be subject to an apportionment of 15 per cent.

(2) Jaymay's appeal against the decision that it is not entitled to an indemnity from GIO General is upheld. GIO General is liable to indemnify Jaymay.

(3) All other appeals and cross-appeals are dismissed.

(4) The defendants are to file written submissions in regard to costs within 21 days of the delivery of this judgment and all other parties are to file their written submissions in reply within 21 days thereafter."

5 The parties have filed written submissions in regard to costs, the last submission being undated submissions by Mr Wehbe received in April 2006. The positions taken by the parties on appeal

6 Each of appeal CA 40308/05 and CA 40118/05 consisted of two parts. The first part involved the appeals of Booksan and Jaymay as to their liability to Mr Wehbe and Mr Elmir. The second part consisted of the appeal by Jaymay against the order that GIO General was not liable to indemnify it.

7 The contentions of Booksan and Jaymay in the first part of appeals CA 40308/05 & CA 40118/05 (against Mr Wehbe and Mr Elmir) were to the effect that:

(b) Booksan and Jaymay had not breached any statutory duties.

(c) Mr Wehbe and Mr Elmir were each guilty of contributory negligence.

8 GIO General and GIO Workers Compensation ("GIOWC") sought to support Booksan's proposition (advanced in the first part of these appeals) that it was not negligent by raising grounds that, according to Mr Wehbe and Mr Elmir, had not been argued at the trial. Mr Wehbe and Mr Elmir challenged the standing of GIO General and GIOWC to advance these grounds.

9 GIOWC supported the argument of Booksan and Jaymay that Mr Wehbe and Mr Elmir were each guilty of contributory negligence.

10 Mr Wehbe filed a notice of contention raising a number of issues. These involved what became known as the "mutual agency argument" issue and arguments that Booksan and Jaymay had breached certain regulations additional to those that the trial judge found to have been breached.

11 Mr Elmir filed a notice of contention to the effect that the trial judge had erred in not accepting certain evidence of Mr Elmir, in not finding that Booksan and Jaymay had breached additional regulations, in failing to find in favour of the mutual agency argument and in finding that the Civil Liability Act 2002 (NSW) and the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) had relevant retrospective effect.

12 GIO General and GIOWC supported Mr Wehbe and Mr Elmir on the mutual agency argument.

13 In the second part of appeals CA 40308/05 and CA 40118/05 (which, as I have noted, was against GIO General and GIOWC) Jaymay contended, principally, that the trial judge had erred in construing the relevant policies.

14 GIOWC conditionally supported the appeals of Jaymay against GIO General in CA 40308/05 and CA 40118/05.

15 In appeal CA 41031/04 GIO General appealed against the order that it was liable to indemnify Booksan. In this appeal, apart from raising arguments concerning insurance policy issues, GIO General supported Booksan's argument (raised in appeal CA 40308/05) that it had not been negligent as regards Mr Wehbe.

16 In appeal CA 41032/04, GIO General supported Booksan's argument (raised in appeal CA 40118/05) that it had not been negligent as regards Mr Elmir.

17 In appeal CA 41046/04, GIOWC appealed against the finding that it was liable to indemnify Booksan. GIOWC, also, in this appeal, supported Booksan's argument (raised in appeal CA 40308/05) that it had not been negligent as regards Mr Wehbe.

18 In appeal CA 41047/04, GIOWC supported Booksan's argument (raised in appeal CA 40118/05) that it had not been negligent as regards Mr Elmir.

19 Booksan and Jaymay succeeded in obtaining an order that Mr Wehbe and Mr Elmir were guilty of contributory negligence. Jaymay succeeded in establishing that it was entitled to an indemnity from GIO General. GIOWC's support for both these orders was therefore successful.

20 All other issues (including the issues in the notices of contention) raised by the parties (save for part of Mr Elmir's argument in relation to the retrospective application of the Civil Liability Act and the Civil Liability Amendment (Personal Responsibility) Act) failed. A broad approach

21 The positions of the parties set out above are those as finally taken at the end of the oral argument on appeal. The complexity of the skein of issues described is self-evident. This complexity is exacerbated by the fact that, during the course of argument on appeal, positions changed, loyalties altered and grounds shifted. None of the written submissions as to costs, understandably, attempts the laborious - and almost impossible - task of tracing the position taken at various times by each of the parties. This militates against a detailed examination of what precisely occurred during the course of argument.

22 Another factor that makes the determination of the appropriate costs orders difficult is the fact that argument on appeal did not proceed by reference to the separate and distinct notices of appeal filed by the various parties. Rather, the appeals, in effect, were split into two parts, namely, "liability issues" and "insurance issues". Liability issues occupied almost two and a half days and insurance issues the balance of the time. When dealing with the liability issues, all parties made submissions, taking differing stances, even though not all were parties to the particular notices of appeal raising liability issues.

23 In these circumstances, I consider that this Court should determine the appropriate costs orders by applying a broad approach. CA 40308/05 and CA 40118/05

24 In CA 40308/05 and CA 40118/05 Booksan and Jaymay submitted that Mr Wehbe and Mr Elmir should each pay 80 per cent of the costs of the first part of the appeal in which each was personally concerned.

25 Booksan and Jaymay submitted that, although they failed on the duty of care issue: "[Booksan and Jaymay] succeeded on the contributory negligence issue and in their challenge to the finding of breach of statutory duty; and Wehbe and Elmir failed on their respective Notices of Contention/Cross-Appeals. It is appropriate in these circumstances that Wehbe and Elmir pay the costs (if not, a substantial portion of the costs) of Booksan and Jaymay of this part of the appeals".

26 As regards the second part of appeals CA 40308/05 and CA 40118/05, Jaymay submitted that, as Jaymay had succeeded in obtaining an order that GIO General indemnify it, GIO General should pay its costs of the appeal.

27 In proceedings CA 40308/05 and CA 40118/05 GIO General submitted that Booksan and Jaymay should be ordered to pay the costs of Mr Wehbe and Mr Elmir respectively. GIO General accepted that it should pay the costs of Jaymay in relation to its successful appeal relating to the indemnity issue.

28 As regards the liability issue in CA 40308/05 and CA 40118/05, GIO General supported the notices of contention of Mr Wehbe and Mr Elmir and submitted that Booksan owed no duty of care to them. To this extent GIO General failed in these appeals.

29 GIOWC's submission was that "the costs of each appeal should follow the event in the usual way". GIOWC claimed a favourable costs order in CA 40308/05 and CA 40118/05. Booksan and Jaymay made GIOWC a party to these appeals even though in the notices of appeal of Booksan and Jaymay no specific relief was sought against it. GIOWC was successful in these appeals to the extent that it supported the argument of Booksan and Jaymay that Mr Wehbe and Mr Elmir were guilty of contributory negligence. In other respects, where it supported the notices of contention of Mr Wehbe and Mr Elmir and submitted that Booksan owed no duty of care, it failed.

30 Mr Elmir submitted that in appeal CA 40118/05 Booksan and Jaymay should pay his costs of the appeal. He submitted that he was substantially successful in that appeal as he maintained his verdict against both, save only for a reduction of 15 per cent for contributory negligence.

31 Mr Elmir submitted that Booksan and Jaymay succeeded on the issue of contributory negligence on the ground that was not the basis of the original notice of appeal, and this should have some effect on costs.

32 Mr Elmir submitted that GIO General was not in a position to argue that the plaintiffs were guilty of contributory negligence. GIO General did not, in fact, argue the contributory negligence issue (although GIOWC did).

33 In regard to Booksan and Jaymay's contention that the plaintiffs pay 80 per cent of their costs, Mr Elmir submitted that he was ultimately successful and the additional costs involved in arguing contributory negligence were relatively minor. Mr Elmir submitted that the costs order should reflect the proportionality of the result obtained by Booksan and Jaymay and Booksan and Jaymay ought to be ordered to pay 85 per cent of Mr Elmir's costs of the appeal.

34 If Mr Elmir is ordered to pay any costs he submits that a certificate under the Suitors Fund Act 1951 (NSW) be issued.

35 Mr Wehbe, in CA 40308/05 adopted and relied on Mr Elmir's submissions. CA 41031/04 and CA 41032/04

36 In appeal CA 41031/04 (GIO General's appeal in relation to the indemnity order in respect of Booksan's liability to Mr Wehbe), Booksan submitted that it is entitled to an order for costs against GIO General; that appeal having failed.

37 Similarly, in appeal CA 41032/04 (GIO General's appeal in relation to the indemnity order in respect of Booksan's liability to Mr Elmir), Booksan contended that it is entitled to an order for costs against GIO General; that appeal having failed.

38 GIO General accepted that, in CA 41031/04 and CA 41032/04, it should pay the costs of Booksan.

39 Mr Elmir contended that, in appeal CA 41032/04, GIO General should pay his costs of that appeal. He submits that in that appeal he was wholly successful in regard to those matters that applied to him.

40 Mr Wehbe adopted and relied on Mr Elmir's submissions. He sought an order that in CA 41031/04, GIO General pay his costs. CA 41046/04 and CA 41047/04

41 In appeals CA 41046/04 and CA 41047/04 (which were appeals by GIOWC against the finding that it was obliged to indemnify Booksan against Mr Wehbe and Mr Elmir), Booksan submitted that GIOWC should pay the costs of those appeals.

42 Mr Elmir contended that, in appeal CA 41047/04, GIOWC should pay his costs. He submitted that, in that appeal, he was wholly successful in regard to those matters that applied to him.

43 Mr Wehbe adopted and relied on Mr Elmir's submissions. He sought an order that in CA 41046/04, GIOWC pay his costs.

44 GIO General submitted that GIOWC should be ordered to pay the costs of CA 41046/04 and CA 41047/04 "as unsuccessful appellant" but did not indicate expressly to which parties those costs should be paid. I infer that the submission is that GIOWC should be ordered to pay the costs of Booksan.

45 GIOWC accepted that in CA 41046/04 and CA 41047/04 "the usual order would prevail" against it, but did not indicate whether it accepted that that order should be made in favour of Booksan alone, or in favour of Mr Elmir and Mr Wehbe as well. Submissions regarding issues between the insurers and the plaintiffs

46 GIO General submitted: "No order should be made that GIO General pay the costs of the plaintiffs Mr Wehbe and Mr Elmir on appeal. Any costs which Booksan and Jaymay may be ordered to pay to these plaintiffs will be met under the terms of the policies that are now required to respond to the claims. As there has been no apportionment between Booksan and Jaymay as to their liability to meet the claims it would be unfair to order either of the two insurers to meet the costs of the Plaintiffs other than in respect of their liability under the terms of the policy. The findings of the Court mean that in respect of Booksan, the principle of dual or double insurance applies between the two insurers to whatever liability Booksan may eventually have. It is for that reason that no order should be made by the Court that the Plaintiffs' costs be borne by the insurers."

47 Mr Elmir argued that, in view of the determinations on indemnity under the policies of insurance, the beneficiaries of the finding that the plaintiffs' verdict be reduced by 15 per cent for contributory negligence will not ultimately be Booksan and Jaymay, but GIO General and GIOWC (who are required to indemnify Booksan and Jaymay). The two insurers should not, it was submitted, be the ultimate beneficiaries of a point they did not take.

Contrary to this submission, GIOWC did take the point.

48 Mr Elmir submitted that the policies of insurance are matters between Booksan and Jaymay on the one hand and the insurers on the other, and gave rise to issues that were collateral to the determination of the costs to which Mr Elmir would be entitled. Costs of the trial

49 In supplementary submissions, to which none of the other parties responded, Booksan and Jaymay submitted that orders should be made "as to the costs of the trial as between Booksan and Jaymay and the two insurers on the Cross-Claims". They submitted: "The effect of the Court's Judgment delivered on 21 February 2006 is that Booksan and Jaymay succeed on their cross-claims against the respective Insurers, from which they are now entitled to indemnity".

Contrary to this submission, Booksan succeeded at trial on its indemnity claims. On appeal, Jaymay succeeded only against GIO General.

50 Booksan and Jaymay submitted that the Court should order that the insurers pay Booksan's and Jaymay's "costs of the cross-claims at the trial (leaving the Trial Judge to make orders as to the costs of the trial as between Booksan and Jaymay on the one hand and the respective plaintiffs on the other)". Disposition

51 At the outset, I should say that I accept that the indemnity insurance provided by GIO General and GIOWC to Booksan and Jaymay should be regarded as collateral to any decision as to costs. I do not think that the existence of that insurance should have any bearing on any costs order. I would add that GIO General and GIOWC acted in their own right as independent and separate parties in the litigation and they were treated as such by the others.

52 The appeal was argued over three days. Liability issues occupied more than two days of argument. Of the liability issues, contributory negligence played a minor part in terms of time (I would say, in the region of approximately 20 per cent). The major part of the liability issues concerned unsuccessful arguments by Booksan and Jaymay (supported in limited respects by GIO General and GIOWC) and unsuccessful arguments advanced by Mr Wehbe and Mr Elmir in support of their notices of contention (also supported in limited respects by GIO General and GIOWC).

53 I think that the unsuccessful arguments by GIO General and GIOWC on some issues supporting Booksan and Jaymay, and on other issues supporting Mr Wehbe and Mr Elmir, in effect cancel each other out. That is to say, in regard to the liability issues, neither Mr Wehbe and Mr Elmir nor Booksan and Jaymay should obtain costs orders against GIO General and GIOWC.

54 In the same way, the unsuccessful arguments by Booksan and Jaymay as to liability (apart from the contributory negligence issue) have to be weighed against the unsuccessful arguments by Mr Wehbe and Mr Elmir on the liability issues. In my view, broadly speaking, these cancel each other out as well.

55 What remains is the contributory negligence issue. As mentioned, I assess the time spent on that as constituting 20 per cent of the first part of the appeals. Accordingly, I would order Mr Wehbe and Mr Elmir to pay 20 per cent of the costs of Booksan and Jaymay in respect of the first part of appeals CA 40308/05 and CA 40118/05.

56 As regards the second part of appeals CA 40308/05 and CA 40118/05 relating to Jaymay's claim for indemnity from GIO General, I would order GIO General to pay Jaymay's costs. I would make no other order in regard to this part of the appeals.

57 In appeal CA 41031/04 I would order that GIO General pay Booksan's costs of GIO General's appeal, that appeal having failed. I would similarly order GIO General to pay Booksan's costs of appeal in CA 41032/04. I would make no further order as to the costs of these two appeals.

58 In appeals CA 41046/04 and CA 41047/04 I would order that GIOWC pay Booksan's costs. I would make no other order as to costs in these matters.

59 It will be noticed that I have concluded that Mr Elmir and Mr Wehbe are not entitled to costs orders in their favour in relation to any of the insurance appeals. I have come to this conclusion principally because of my view that insurance issues are collateral to the claims of Mr Wehbe and Mr Elmir against Booksan and Jaymay. I also regard their participation in those appeals as being insignificant.

60 I turn to the submissions that this Court should interfere with the trial judge's costs orders made arising out of the insurance disputes. At trial the judge held that GIO General was liable to indemnify Booksan but not to indemnify Jaymay. Her Honour held that GIOWC was obliged to indemnify Booksan. Jaymay's claim for an indemnity against GIOWC failed at trial and this finding was not challenged on appeal. The only order relating to the insurance claims that was altered on appeal to this Court was Jaymay's appeal against the dismissal of its claim for an indemnity from GIO General.

61 I do not think that this Court is in a position to determine how Jaymay's success on appeal on the indemnity issue should affect any order that the trial judge made. I would propose that the matter be remitted to the trial judge to determine this question.

62 In summary therefore I propose the following orders:

(a) Mr Wehbe and Mr Elmir pay 20 per cent of the costs of Booksan and Jaymay in respect of the first part of appeals CA 40308/05 and CA 40118/05.

(b) Mr Wehbe and Mr Elmir have a certificate under the Suitors Fund Act 1951 (NSW), if otherwise entitled.

(c) GIO General is to pay the costs of Jaymay in regard to the second part of appeals CA 40308/05 and CA 40118/05.

(d) The issue as to whether, and, if so, how, Jaymay's successful appeal on the indemnity issue should affect the costs of the trial is remitted to the trial judge.

(e) GIO General is to pay the costs of Booksan in CA 41031/04 and CA 41032/04.

(f) GIOWC is to pay the costs of Booksan in CA 41046/04 and CA 41047/04.

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