Brian Moore v LE Stewart t-as Southern Highlands Taxi Service

1 In this matter, the applicant has applied for his costs following judgment and orders by the Court in the applicant's favour with regard to proceedings under s 106 of the Industrial Relations Act 1996 (the Act): Brian Moore v LE Stewart Investments Pty Ltd t/as Southern Highlands Taxi Service [2010] NSWIRComm 50. 2 The orders made in the judgment, consequent upon the finding that the impugned contract was unfair were in the following terms: 1. The bailment agreement signed by the applicant on 5 November 1999 as to Clause 29 thereof is declared void as from 28 May 2009 (except as to monies already paid); 2. The respondent shall pay the application $16,670.00 representing four months gross salary based on an annual income of $50,000; 3. The respondent shall pay interest on the amount specified in Order 2 above in accordance with Schedule 5 of the Uniform Civil Procedure Rules 2005. The interest shall be payable from the date of filing of the amended summons for relief on 20 August 2007 until the date of judgment; 4. The proceedings are set down for a directions hearing at 9.45am on Thursday, 29 April 2010 in relation to the issue of costs. 3 The reason for Order 4 was set out in the judgment (at [157]): The applicant was only successful on one of his claims that the bailment agreement was unfair, although the claim of unfairness upon which he succeeded with regard to the circumstances of his termination was undoubtedly his principal claim. Nevertheless, I propose, at this stage, not to make an order for costs, but to hear the parties on the issue at a later stage. 4 The parties duly forwarded written submissions on the matter. The respondent's submissions proceeded upon the basis that there were five claims of unfairness advanced by the applicant, but he succeeded on only one of those claims. It was also contended by the respondent that the unsuccessful claims of unfairness occupied a substantial portion of hearing time, although the Court notes that no analysis of the transcript of proceedings was undertaken by the respondent to support the contention. Given the conduct of the proceedings and the ultimate result of the proceedings (as reflected in the Court's Orders) the respondent applies for an order that the applicant should pay 25 per cent of the respondent's costs, or "in the alternative", the Court should make no order as to costs. 5 The applicant took a different approach to the question of costs, focusing on his success on "issues" in the case. These "issues" included the jurisdictional issue (whether the contract of bailment was one whereby work was performed by the applicant), whether the applicant resigned or was terminated by the respondent, and, whether the contract was unfair. The applicant's resort to the term "issues", the Court understands to refer to the disputed questions of fact and law, as opposed to its use in the technical pleading sense: see for example McFadzean & Ors v Construction Forestry Mining and Energy Union & Ors [2007] VSCA 289 at [156]. 6 Before considering the parties' respective submissions, reference should be made to some leading propositions which offer guidance in relation to costs applications in civil proceedings. 7 The ordinary rule is that costs follow the event. That ordinary rule may be departed from if, "it appears to the court that some other order should be made as to the whole or any part of the costs": Uniform Civil Procedure Rules 2005, r 42.1 (UCPR), (as applied to the Industrial Court by Clause 18A Civil Procedure Regulation 2005). Whether such a departure may be warranted is a matter for the discretion of the Court. The discretionary powers of the Court in this regard are wide and should be liberally construed: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [8] citing with approval State of New South Wales v Stanley [2007] NSWCA 330 at [18]. How the discretion may be exercised in circumstances where a case involves mixed outcomes was the subject of comment in the Federal Court in Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) and Another v Lane Industries Pty Ltd (1993) 26 IPR 261 (per Gummow, French and Hill JJ) at 272: Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation. His Honour's determination that in this case there should be no order as to costs was explicitly based upon his rough assessment of the time occupied at trial by the various issues in dispute. No reason for overturning the exercise of that discretion has been demonstrated and the court is satisfied that the appeal fails on this ground also. 8 Dodds Family Investments concerned a claim by the appellants and a cross-claim by the first respondent. The parties at first instance were successful and unsuccessful on various issues. The Full Court of the Federal Court (Gummow, French and Hill JJ) dismissed an appeal against an order of the trial judge that there be no order as to costs. 9 In Elite Protective Personnel, one ground of appeal (out of seven grounds of appeal) concerned an issue of contributory negligence, which was resolved in the respondent's favour. The Court of Appeal determined that the respondent should not have to pay the costs of that issue and made an order that the respondent should bear only 75 per cent of the costs of the appeal. In so determining, the Court of Appeal took into account the following matters (at [6] to [9]): Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 (at [18]) per Hislop J (with whom Beazley JA and Tobias JJA agreed). In the Court's view, the contributory negligence issue was a separable issue from the damages issue on which the appellants succeeded. A separable issue for these purposes can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James and Ors v Surf Road Nominees Pty Ltd and Ors [No 2] [2005] NSWCA 296 (at [34]). 10 The propositions taken into account by the Court in Elite Protective Personnel were also adopted and applied by the Full Bench in Cretney v Director General, New South Wales Department of Education and Training (No 4) [2010] NSWIRComm 17 at [8]. 11 In the present proceedings, there were a number of issues between the parties upon which the Court was called to decide. One issue was the jurisdictional issue which was resolved in the applicant's favour: [35] to [70]. A second issue ventilated during the proceedings was whether the applicant resigned on 17 February 2006 or his engagement was terminated at some later stage by the respondent. This issue was also resolved in the applicant's favour: at [71] to [86]. The latter issue, it seems to the Court, without having recourse to the transcript of proceedings in great detail, occupied a substantial amount of hearing time, as well as being the subject of comprehensive written submissions by both parties. The jurisdictional issue was the subject of both written and oral submissions, of some substance. 12 As set out in the judgment (at [87] to [119]) the applicant's claim that the impugned contract was unfair was primarily directed to the issues arising out of the circumstances of his termination, including the failure of the contract to contain reasonable provisions with respect to sufficient notice and the failure of the contract to make provision for fair and appropriate procedures in the event of termination at the instigation of the respondent. This issue was also resolved in the applicant's favour. 13 The contract was also alleged to be unfair because it failed to provide the applicant with certain benefits referred to as "TARA payments", and because it failed to provide the applicant with uniforms, as well as permitting the respondent to require the applicant to pay for costs associated with damage to taxi vehicles operated by the respondent. These three heads of unfairness were incorporated into the applicant's summons for relief by way of amendment. They were claims pressed by the applicant during the proceedings. The respondent was required to cross-examine the applicant with regard to these matters which it did at some length. None of these claims were successfully resolved in the applicant's favour. 14 According to the respondent, the claims were "futile" and "untenable". The applicant disagreed, preferring to characterise the claims as "subsidiary" to the primary claim of unfairness which related to the circumstances of termination. 15 It does not seem to me to be entirely accurate to characterise the three claims as "subsidiary". Certainly, as is evident from the judgment, the applicant's primary head of unfairness involved the circumstances which gave rise to the termination of his engagement with the respondent. The other three claims were separate claims pressed throughout the proceedings and the subject of vigorous contest. 16 It is the Court's view, for reasons sought to be made clear in the judgment (at [120] to [148]) that the applicant had little prospects of success with regard to the other three heads or claims of unfairness. A similar conclusion is warranted with respect to the applicant's claim of compensation for psychological injury, distress and damage to reputation. It was not the subject of any submission by the applicant and no reliance was placed upon the claim by him, although it was never formally abandoned. The respondent did not cross-examine the applicant on the claim. The latter three heads of unfairness however, did occupy a significant portion of the evidence and submissions and some allowance should be made in the order for costs to reflect this. 17 Toohey J, in Hughes v Western Australian Cricket Association (Inc) (1986) 40-748 at 48,136, set out some considerations relevant to the exercise of discretion to award costs: 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order ... 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which it has failed ... 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law ... 18 The considerations identified by Toohey J in Hughes, in the passage extracted above, his Honour noted, were subject to the further consideration, identified by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at p12, namely, "that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case" (at 271). On the other hand, Dodds Family Investments also referred to, "the demands of the community for greater economy and efficiency in the conduct of litigation (which) may be properly reflected in a qualification of the presumption that a successful party is entitled to all its costs" (at 272). A similar consideration persuaded Wilcox J in Commissioner of Australian Federal Police v Razzi and Others (1991) 101 ALR 425 at 430 to remark: I do not think that courts should be reluctant to recognise the existence of exceptional cases. In these days of extensive court delays and high legal costs the courts should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation. If parties come to realise that they will not necessarily recover the whole of their costs, even though they have unsuccessfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take. 19 Bearing in mind these principles, and the matters I have taken into consideration with regard to the unsuccessful heads of unfairness pressed by the applicant, namely those concerning the TARA payments, uniforms and damage to taxis, it is the Court's view that a departure from the general rule is warranted in this case. 20 The applicant relied on Domanko v Business Catalyst International Pty Ltd (No 3) [2010] NSWIRComm 54 as supporting his submission that he should be entitled to the whole of his costs. As the authorities, to which I have referred, suggest however, the Court has a wide discretion when awarding costs. Here, the applicant was unsuccessful with respect to four out of five heads of unfairness. The summons for relief was amended to incorporate three additional heads of unfairness. All heads of unfairness were pressed by the applicant during the proceedings. All but one, the Court has found, had little prospects of success. The three heads of unfairness incorporated into the summons at a later stage by amendment occupied a considerable part of the proceedings and were the subject of vigorous challenge as is evident from a perusal of the transcript of proceedings. Those three heads of unfairness were also entirely separable from the applicant's primary head of unfairness. Orders 21 The order with respect to costs will be that the respondent pay 85 per cent of the applicant's costs of the proceedings as agreed or as assessed. ________________________

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Judgment (11 paragraphs)

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Cases Cited (12)