Brittain v The Commonwealth of Australia

Court of Appeal (NSW)|2004-11-22|Before: Handley JA, Tobias JA, McColl JA, Mathews AJ, Coll JA

Background 6 The appellant was a seaman on board HMAS Melbourne on the night of 10 February 1964 when it sank HMAS Voyager. He was not physically injured but claimed that he suffered from post traumatic stress disorder ("PTSD"). He sued the Commonwealth for damages in 1995. The limitation period was later extended. The Commonwealth admitted breach of its duty of care to the plaintiff but liability and damages were otherwise in issue. The action was heard with a jury which found a verdict for the plaintiff for $25,028. The largest component in the plaintiff's claim was for loss of a service pension worth $801,902 which he alleged he otherwise could and would have earned by serving in the Navy for 20 years. 7 By October 1964 the plaintiff had become disillusioned with the Navy and wished to leave the service. Shortly afterwards he began to absent himself without leave and was deprived of liberty for disciplinary offences until he was administratively discharged in January 1966. An important issue in the case was whether or not this conduct had been caused by his PTSD. The plaintiff sought a direction from the trial judge in accordance with Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 ("Medlin") that damages could be awarded for the loss of the service pension if his PTSD, otherwise established, was a contributory cause of his decision to leave the Navy. The trial judge refused to give that direction. 8 This Court held that the plaintiff was entitled to the Medlin direction and that there was evidence on which the jury could find that the plaintiff had suffered PTSD as a result of the events of 10 February 1964 so that he was entitled to a new trial. It also held that the issues of liability and damages were so inextricably mixed that the Court should order a new trial on all issues other than breach by the Commonwealth of its duty of care to the plaintiff.

The appellant's submissions 9 The appellant's contention that the special circumstances which warranted departure from the general rule that the costs of the first trial should abide the event of the second trial stemmed from the course of events which led to the Medlin direction being refused. 10 Senior Counsel for the appellant sought the Medlin direction during the first trial, in the course of submissions on legal matters to be dealt with in the summing-up. Senior Counsel for the respondent then indicated that the direction "sounded to be appropriate": see Brittain No. 1 at [19]. 11 The trial judge did not give the Medlin direction by the time the Court adjourned for the day. The next morning Junior Counsel for the appellant repeated the request for the Medlin direction. The following are the Court's findings as to what then occurred: (see Brittain No. 1 at [23] - [25]): "23 The following morning Mr Butcher, junior counsel for the plaintiff raised this direction with her Honour in the absence of the jury and said (915): 'We would seek that your Honour indicate to the jury that causation is established if the plaintiff proves that certain events made a material contribution to, or were a material cause of the subsequent events ... the major content that we would be concerned about would be the plaintiff's decision to leave the Navy ... We would seek a direction that if the plaintiff [has] shown that his accident related problems ... - made a material contribution to that, ... causation is established because it was a material cause.'

24 During the discussion with counsel that followed her Honour said (916): '... it seems to me that the real issue is whether he suffered post-traumatic stress disorder as a result of the events of 10 February ... If he did, then I would have thought ... that this was effectively the reason why he left the Navy. Therefore this is a step in the way rather than part of causation itself.'

25 Mr Branson submitted that it was a factual issue which was "not concerned with the legal concept of causation" (917). During further argument he said that "causation only goes to elements of the completion of the cause of action" (918). After further argument the following discussion took place between her Honour and Mr Butcher (918-9): 'HER HONOUR: ... I think the material contribution goes to causation as part of the element[s] of [the tort of] negligence and this isn't part of the element[s] of negligence, it is simply a factual step in the plaintiff's case, but the causation aspect goes back before this. BUTCHER: Your Honour I haven't brought text to argue with your Honour. I simply submit that my understanding was that the material contribution applied to damages as well, but - - HER HONOUR: You see that becomes a factual assessment for the jury and indeed it is a Malec v Hutton issue that they can find it a 60 per cent possibility and give him 60 per cent ... So I think that Mr Branson is right, that it is not a causation issue and therefore I shouldn't say anything along those lines.' " 12 The appellant contends that during the exchanges referred to above, Senior Counsel for the respondent "resiled from his position of the previous day and objected to such a direction" and persuaded the trial judge not to give the Medlin direction. He argues that the approach adopted by Senior Counsel for the respondent led the trial judge into the error this Court has now rectified by allowing the appeal. He submits that Senior Counsel for the respondent's approach was inappropriate in that:

(b) It involved a reversal, without warning, of a previously adopted position.

(d) It involved leading the Court into an error by failing to provide any relevant authorities. 13 The appellant submitted that as a result, through no fault on his part or the part of his counsel, the appellant:

(a) had lost the advantage of an untainted verdict as to his injury.

(b) had been put to the very considerable expense of a trial that occupied 11 sitting days.

(e) has been exposed to solicitor/client costs of an appeal and two trials rather than one trial.

(f) had been placed at a considerable disadvantage vis-a-vis a respondent with vast resources in that he now risks the costs of two, rather than one, trial(s) should he not be successful. 14 The appellant submits that even if awarded party/party costs of the first trial, he approaches his retrial at a considerable disadvantage bearing in mind the estimated length of that trial and the exhibits involved - all of which will have to be reconsidered upon his retrial. 15 The appellant argues that this Court could rectify, in part, this unfairness by placing him in a position similar to, but not as favourable as, the one in which he commenced the litigation by awarding him indemnity costs in relation to his first trial. The respondent's submissions 16 The respondent submitted that the appellant had not demonstrated any special reasons or circumstances for departure from the general rule that the costs of the first trial should abide the event of the second trial. It also contended that the appellant had erroneously referred to the respective resources of the parties. It also argued that if the appellant was awarded the costs of the first trial, there was no basis for an indemnity costs order. 17 The respondent acknowledged that during the initial submissions made to the trial judge (854 - 5) counsel for both parties were in agreement that the jury should be directed that they needed to consider whether a material cause of the plaintiff's decision to get out of the Navy was his psychiatric illness. The respondent noted that the matter was not further pursued at that time and that Senior Counsel for the appellant made passing reference to Medlin. 18 Next, the respondent contends that at no time did counsel for the plaintiff seek a specific direction by reference to the statements of principle contained at pages 6 and 7 of the joint judgment in Medlin. 19 The respondent submits that no reasons have been advanced as to why neither Senior nor Junior Counsel for the plaintiff took the trial judge to Medlin in detail on either occasion that the matter was debated before her in the absence of the jury. The respondent contends that it would have been far preferable had counsel for the plaintiff brought to the trial judge's attention the particular passages in Medlin that were the focus of analysis and discussion in this Court. The respondent submits that had counsel for the plaintiff taken the "usual course" of both referring the trial judge to the authority claimed to be directly in point and handing up in written form or articulating orally a clear and cogent submission regarding the position for which he contended, the error identified by this Court may well have been avoided. 20 Finally, the respondent submits that the trial judge's misdirection or non-direction was a result of the way in which the trial was conducted by both parties and their counsel and the failure of counsel for the plaintiff to seek a specific and precise direction in terms of the principles enunciated in Medlin.

Consideration 21 In Malpas v Malpas, above, the Full Court of the Supreme Court of Victoria ordered a new trial because of the improper reception of evidence. The appellant had objected to the evidence at the trial, but the respondent had pressed it. The Court referred (at 710 - 11) to the general rule that where a new trial was ordered, the costs of the first trial would abide the event of the second - an order, it noted, which had the effect that the "party who is ultimately successful will receive the costs of the first trial." The Court held on 7 December 1885 that the respondent should pay the appellant's costs of the first trial on the basis that "the petitioner alone is to blame for the miscarriage of the first trial". 22 On the same day the Full Court of the Supreme Court of Victoria, constituted by the same bench which decided Malpas v Malpas, delivered judgment in Stewart v McKinley - an action for libel. In that case a new trial was ordered on the basis that the trial judge had misdirected the jury on the defences of fair comment and qualified privilege. It does not appear from the judgment that the misdirections occurred as a result of counsel's submissions. Counsel for the defendant sought an order that each party bear his and its costs of the first trial contending that was the practice where a new trial was ordered because of a misdirection. Counsel for one of the parties in Malpas v Malpas who was still in Court then contended (see 807) that the same question had arisen in that case. The Court said it would consider laying down a general rule in such cases. 23 The next day, 8 December 1885, the Court held (Stewart v McKinley, above, at 809) that where a new trial was ordered, the costs of the first trial "should as a general rule be made to abide the event of the second". However the Court also contemplated that there may be special circumstances in a particular case which may be a reason for departing from the general rule. In Stewart v McKinley the Court was of the view that there were no special circumstances. However in Malpas v Malpas it held that there were "special reasons for applying a different rule" because, in effect, the respondent was responsible for the miscarriage of the first trial by calling evidence the Full Court held had been rightly objected to. 24 The Full Court applied the general rule the same day in Clutterbuck v Curry (1885) 11 VLR 810 at 815 where it held that the trial judge had erred in directing a verdict for the defendant - a verdict which was presumably sought by the defendant. However, in Ryan v Caelli (1903) 9 ALR 110, where the Full Court of the Supreme Court of Victoria ordered a new trial after judgment had been given in favour of the defendant on his counsel's submission that there was no case on a question of contractual construction, the defendant was ordered to pay the costs of the first trial. There was no discussion of principle. 25 The general rule was applied where a new trial was ordered because of misdirection in Bray v Ford [1896] AC 44 at 56. It was made as a result of "discussion" concerning the appropriate order to be made where it was held a misdirection had occasioned a substantial wrong or miscarriage warranting a new trial. The circumstances in which that order was made appear from the submissions of the amicus curiae (who had been junior counsel for the respondent in Bray v Ford) in Jones v Richards (1899) 15 TLR 398. There was no discussion of principle in either case. 26 In Brownlie v Overend [1979] VR 283 at 287 - 288, the plaintiff who had succeeded at the first trial, albeit in an amount less than a bond lodged in court by the defendant, obtained a new trial order. The new trial was ordered on the basis that the trial judge wrongly rejected evidence, an error which could not be attributed to the fault of either party. After referring to Stewart v McKinley the Full Court of the Supreme Court of Victoria held (at 287 - 288) that it would depart from the general rule and leave the costs of the first trial to the discretion of the judge presiding over the second trial, because it was concerned that following the general rule might work an injustice. 27 In Cutts v Buckley (1933) 49 CLR 189 Rich J (with whom Starke J agreed) was of the view (at 195) that where a new trial was ordered because "the [first] trial proved abortive through the failure of all parties to insist that the legal issues were dealt with as the law requires", the parties should abide their own costs of the first trial and the appeal to the intermediate court of appeal; cf Dixon J (as he then was, at 199) who would have ordered the costs of the first trial should abide the event of the new trial. Evatt J dissented from the costs order saying (at 203) that "such an order places an unfair burden upon the party who will be finally successful, and prevents him from obtaining anything approaching the indemnity for which the whole system of costs is designed". 28 The "general rule" has been applied in a number of cases in New South Wales without any discussion of principle: see Tengdahl v Mason (1961) 62 SR (NSW) 658 (defendant failed in a challenge to a jury's verdict in favour of the plaintiff on liability but obtained a new trial limited to damages - ordered that so much of the costs of the first trial as were referable to liability be paid by the appellant and the costs of the first trial referable to damages abide the result of the second trial); Steffen v Ruban [1966] 2 NSWR 622 (new trial ordered limited to damages on defendant's appeal where plaintiff's damages evidence unsatisfactory and confusing); McLennan v Taylor [1966] 2 NSWR 685 (new trial ordered limited to damages on plaintiff's appeal where quantum of jury verdict inadequate); Colzato v Commissioner for Railways [1967] 2 NSWR 656 (new trial ordered limited to damages on plaintiff's appeal where quantum of jury verdict inadequate because, due to a misunderstanding, the plaintiff was prevented from proving an amount of medical expenses). 29 The "general rule" was applied by Malcolm CJ (with whom Kennedy J agreed) in Monaco v Arnedo Pty Ltd (1994) 13 WAR 522 in circumstances where a new trial was ordered because the case had been decided at first instance "on the basis of a legal proposition which no party had advanced and in respect of which the trial judge had not given anybody the opportunity to make submissions". 30 The logic of the general rule is manifest. While the Court has a plenary discretion concerning costs (s 76 Supreme Court Act), the ordinary principle is that costs follow the event: Part 52A r 11. Where a new trial is ordered the parties' rights have not been finally determined. The identity of the successful party has not been established. The general rule is clearly intended to ensure that the ultimate costs order reflects the ordinary principle when the parties' rights are finally determined. Departures from the general rule are intended to deal with situations where its application would lead to injustice. 31 This Court held (Brittain No. 1, at [32]) that the trial judge's failure to give the Medlin direction was a material matter that was capable of affecting the result of the trial so as to have occasioned a substantial wrong or miscarriage: Supreme Court Rules Pt 51 r 23. The trial judge did not give the Medlin direction because Senior Counsel for the respondent persuaded her to the contrary: see Brittain No. 1 at [25]. 32 In my view the respondent was the cause of the miscarriage of that trial. I do not accept its submission that the position may have been different had the appellant's counsel addressed differently. That is a matter of speculation. What is plain is that the respondent opposed the Medlin direction. The trial judge acceded to the respondent's submission which, in turn, led to error. 33 The effect of the failure to give the Medlin direction was that a substantial issue in the appellant's case was not properly before the jury. It would be unjust, in my view, to deprive him of the costs of the first trial in circumstances where a new trial was ordered because the respondent led the trial judge into error. Further, in the circumstances where the appellant has been put to the expense of a new trial solely because of the failure to give the Medlin direction, it is appropriate that the respondent pay the appellant's costs of the first trial on an indemnity basis: see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 89 [44].

Orders 34 I propose that the respondent pay the appellant's costs of the first trial on an indemnity basis. **********

Last Modified: 11/29/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision 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 or Tribunal in which it was generated.

CITATION : Brittain v The Commonwealth of Australia (No. 2) [2004] NSWCA 427 HEARING DATE(S) : Written submissions JUDGMENT DATE : 22 November 2004

CATCHWORDS : COSTS - indemnity costs - where new trial ordered - special circumstances justifying departure from general rule that costs of first trial should abide the event of the second trial - where respondent caused the miscarriage of the first trial. LEGISLATION CITED : Supreme Court Act 1970 (NSW) s 76 Supreme Court Rules 1970 (NSW) Pt 51 r 23, Pt 52A r 11 Bray v Ford [1896] AC 44 Brittain v The Commonwealth of Australia [2004] NSWCA 83 Brownlie v Overend [1979] VR 283 Clutterbuck v Curry (1885) 11 VLR 810 Colzato v Commissioner for Railways [1967] 2 NSWR 656 Cutts v Buckley (1933) 49 CLR 189 Jones v Richards (1899) 15 TLR 398 CASES CITED : Malpas v Malpas (1885) 11 VLR 670 McLennan v Taylor [1966] 2 NSWR 685 Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 Monaco v Arnedo Pty Ltd (1994) 13 WAR 522 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Ryan v Caelli (1903) 9 ALR 109 Steffen v Ruban [1966] 2 NSWR 622 Stewart v McKinley (1885) 11 VLR 802 Tengdahl v Mason (1961) 62 SR (NSW) 658 PARTIES : Anthony Winston Brittain (Appellant) The Commonwealth of Australia (Respondent) FILE NUMBER(S) : CA 40273/03 COUNSEL : F Douglas QC/A Melick SC/I Butcher (Appellant) C Branson QC/I McLachlan (Respondent) SOLICITORS : James Taylor & Co (Appellant) Australian Government Solicitor (Respondent)

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