Browning v Bitupave Limited

Browning v Bitupave Limited [2008] NSWSC 19 Fennell v Supervision and Engineering Services Holdings Pty Ltd and Santos Ltd (1988) 47 SASR 6 LEGISLATION CITED : Gould v Vaggelas (1984) 157 CLR 215 Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140 Schipp v Cameron (Supreme Court of New South Wales, Einstein J, 12 October 1998, unreported)

Annette Trudie Browning (Plaintiff) PARTIES : Bitupave Limited t/as Boral Asphalt (First Defendant) Cessnock City Council (Second Defendant) Boral Insurance Pty Limited (Third Cross Defendant)

P Doherty SC (Plaintiff) COUNSEL : D Mallon (First Defendant and Third Cross Defendant) R Sheldon (Second Defendant)

Whitelaw McDonald (Plaintiff) SOLICITORS : Griffin Hilditch Lawyers (First Defendant and Third Cross Defendant) Phillips Fox (Second Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20137 of 2005 Annette Trudie Browning v Bitupave Limited trading as Boral Asphalt and Cessnock City Council (No 2)

JUDGMENT Introduction 1 On 31 January 2008 I published my reasons for the principal judgment in this matter: see Browning v Bitupave Limited [2008] NSWSC 19. I entered a verdict for the plaintiff against the first defendant for $2,140,000, and ordered the first defendant to pay the plaintiff's costs. The amount of the verdict was erroneously overstated by $100,000 and by agreement I confirm that the correct sum should have been $2,040,000. With respect to the balance of the orders that I proposed, I invited argument at a time convenient to the parties. 2 The plaintiff succeeded against the first defendant but did not succeed against the second defendant. Senior Counsel for the plaintiff sought a Bullock order against the first defendant and proposed the following order for that purpose: "3A Order the plaintiff to pay the second defendant's costs of defending the plaintiff's claim against the second defendant." 3 Counsel for the first defendant did not oppose the form of that order but did oppose the plaintiff's application that the costs for which it provided should be paid by the first defendant. Counsel for the second defendant made no submissions concerning either the orders that I had originally proposed, or proposed order 3A.

Discussion 4 Senior Counsel for the plaintiff relied upon Schipp v Cameron (Supreme Court of New South Wales, Einstein J, 12 October 1998, unreported), and Gould v Vaggelas (1984) 157 CLR 215. In the former case, Einstein J had this to say at page 27: "Giles J in Sved said:

'Costs are in the discretion of the Court: Supreme Court Act s76. The discretion is to be exercised judicially, and a Bullock order is a well recognised manner of exercising it. A Bullock order may be made when a plaintiff has succeeded against one defendant but failed against another, its effect being that the unsuccessful defendant bears the costs payable by the plaintiff to the successful defendant. It is not sufficient for the making of a Bullock order that it was reasonable for the plaintiff to bring the proceedings against both defendants, although sometimes the condition for making a Bullock order is stated in that way (eg Johnson's Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544 at 556; Altamura v Victorian Railways Commissioners (1974) VR 33 at 35).

One statement of principle is that the order may be made where the costs have been reasonably and properly incurred by the plaintiff as between it and the unsuccessful defendant (eg Johnson's Tyne Foundry Pty Ltd v Maffra Corporation at 572-3; Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd (1984) 157 CLR 149 at 163; Gould v Vaggelas (1984) 157 CLR 215 at 247, 229); it has also been said that the conduct of the unsuccessful defendant must have been such as to make it fair to impose some liability on it for the costs of the successful defendant, or that the conduct of the unsuccessful defendant must show that the joinder of the successful defendant was reasonable and proper to ensure of recovery of the damages sought (Steppke v National Capital Development Commission (1978) ACTR 23 at 30-31; Gould v Vaggelas at 229; Fennell v Supervision and Engineering Services Holdings Pty Ltd (1988) 47 SASR 6 at 7-8, 15; Lackersteen v Jones (No 2) (1988) 93 FLR 442 at 449).

The difference in formulations is probably more apparent than real, as reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant. Such conduct was found in Lackersteen v Jones (No 2) in the unsuccessful defendant denying the authority of its agent, whereby the plaintiff joined the agent who became the successful defendant, and more widely has been found in the unsuccessful defendant telling the plaintiff in one way or another that it should look to the successful defendant for its remedy (Altamura v Victorian Railways Commissioner, Gould v Vaggelas; Fennell v Supervision and Engineering Services Holdings Pty Ltd)'." 5 His Honour also cited a passage at page 28 from Fennell v Supervision and Engineering Services Holdings Pty Ltd and Santos Ltd (1988) 47 SASR 6 in the judgment of King CJ at 7 as follows: "The principle of justice upon which the Bullock order rests may, in my opinion, be stated thus. The unsuccessful defendant has caused the litigation by his wrongful act and by disputing liability for it. He therefore ought to pay all costs reasonably incurred by the plaintiff in connection with the litigation. If it was reasonable, as between plaintiff and unsuccessful defendant, for the plaintiff to sue the successful defendant, the unsuccessful defendant ought therefore in justice be liable to indemnify the plaintiff against the costs of so doing, including those which he is ordered to pay to the successful defendant. In many cases the basis for the plaintiff's claim of reasonableness in joining the successful defendant will be the conduct of the unsuccessful defendant in placing the blame on the successful defendant. That conduct is however secondary to the underlying principle of justice indicated above." 6 His Honour also said at page 28 that there must be something about the conduct of the unsuccessful defendant in relation to the plaintiff's claim as to make it fair to impose some liability on him for the costs of the successful defendant: see Gould v Vaggelas per Gibbs CJ at 230. The costs will be so incurred where the conduct of the unsuccessful defendant in relation to the plaintiff's claim shows that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought: see Gould v Vaggelas per Brennan J at 260. 7 The proceedings were commenced by the plaintiff against the first defendant on 5 May 2005. The first defendant filed its defence on 1 February 2006. The first defendant filed a cross claim against the second defendant seeking contribution and indemnity with respect to the plaintiff's claim against it. 8 By letter dated 16 March 2006 the solicitors for the plaintiff requested information from the solicitors for the first defendant. In that letter the solicitors for the plaintiff asked for "a copy of the evidence upon which you rely in joining Cessnock City Council as a cross defendant". The solicitors for the plaintiff wrote a second letter on 29 May 2006 that included the following: "We further note that the Consent Orders handed up at the status conference on 20 April 2006, provided in Order no. 1, that you would reply to our correspondence dated 16 March 2006 in respect of the evidence upon which you relied in joining Cessnock City Council to this action, by 3 May 2006.

More than 3 weeks have elapsed since 3 May 2006 and we still do not have that information despite now being served with a second cross claim by the Council in respect of substantially the same issues.

The Consent Orders also placed various impositions upon the plaintiff in terms of a joinder of the Council, and the plaintiff is unable to comply with its obligation to the Court in the absence of that information which you previously agreed to supply and which should have been received over 3 weeks ago." 9 By letter dated 6 June 2006 the solicitors for the first defendant provided the following response: "The evidence we rely upon, which we are prepared to provide you, is a copy of the following:

• Tender documents . . . * Bituminous spray sealing record dated 10 May 2005 in respect of the relevant section of road, which has been found by Phil Lord of Council; * Diary entry of K Parsons, employed by our client, for 10 & 11 May 2002; * File note of Phil Lord dated 13 February 2003 (x3); * File note of J Hayes dated 18 February 2003; * Council time sheets in relation to signs; * 3 photographs taken by Council signed "operator Phil Lord" on 10 May 2002;

We are instructed that upon completion of the works, our client contacted Phil Lord of Council. He came to the site at about 1.30pm and signed the Spray Sealing Guide.

At about 2.15pm on 10 May 2002, at the western end of the resurfacing works a "P" plate driver said he swerved to avoid hitting a kangaroo. As a result of this Phil Lord and two other Council representatives attended the site.

We are instructed that Phil Lord indicated to our client he was happy with the seal and condition of the new work.

Based on the above we have issued a Cross Claim against Council alleging it was:

1. The Road Authority; 2. The Superintendent for the works; 3. Responsible for erection and maintenance of temporary warning signs; 4. Responsible for inspection of the works upon completion. 5. It inspected the works upon completion and again following an incident on the new work on 10 May 2002. 10 The plaintiff and the first defendant attended a pre-trial conference on 24 May 2007. In an undated affidavit sworn by Terence John Howard in the context of an application by the plaintiff to extend the time to join the Cessnock City Council as a second defendant to the proceedings, the following deposition appears: "20. At that conference I was informed that [the first defendant's] claim for contribution or indemnity against the Council was founded, inter alia, upon the assertion that the Council at all times maintained a significant degree of control over the relevant roadworks and that three Council persons had inspected the roadway on the afternoon before the plaintiff's accident and had then approved the quality of the road surface.

21. I was also informed that this inspection and approval by the three people from the Council was such as to support a submission in due course that it represented a novus actus sufficient to break the chain of causation between any deeds by [the first defendant] and the plaintiff's injuries.

22. The extent to which the Council in fact controlled the works (contrary to what seems to be the terms of the contract) and whether the Council's alleged inspection and approval on the afternoon before the plaintiff's accident could in all the circumstances be a novus actus , the plaintiff is unable to say.

23. The extent of retained control by the Council has hitherto been a matter for the cross claims." 11 The plaintiff's argument is straightforward. The plaintiff did not originally join Cessnock City Council as a defendant to the proceedings but decided to do so as the result of information provided to her by the first defendant in its letter of 6 June 2006. The matters contained in that letter continued to influence the plaintiff in her conduct of the proceedings and were at the heart of the matters upon which she relied in her application to join the Council. The plaintiff would not have joined Cessnock City Council to the proceedings if it had not been for the information contained in, and the attitude evinced by, the first defendant's letter in question. The plaintiff argued that the conduct of the first defendant in relation to her claim showed that the joinder of the second defendant was reasonable and proper to ensure recovery of the damages sought. There was something about the conduct of the first defendant in relation to the plaintiff's claim as to make it fair to impose some liability on it for the costs of the second defendant. 12 In response to these arguments the first defendant relied upon Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140 and in particular to the material discussed at par [30] in the following terms: "By a Bullock order, from Bullock v London General Omnibus Co (1907) 1 KB 264, a plaintiff who has brought proceedings against two defendants, and has succeeded against one but failed against the other, may obtain an order that the unsuccessful defendant pay the costs the plaintiff has been ordered to pay to the successful defendant. Many forms of words have been used to explain when the order will be appropriate. In Sved v Council of the Municipality of Woollahra (1998) NSW Con R 55-852 at 55,605 I said -

'It is not sufficient for the making of a Bullock order that it was reasonable for the plaintiff to bring the proceedings against both defendants, although sometimes the condition for making a Bullock order is stated in that way (eg Johnsons Tyne Foundry, Pty Ltd v Maffra Corporation (1948) 77 CLR 544 at 556; Altamura v Victorian Railways Commissioners (1974) VR 33 at 35). One statement of principle is that the order may be made where the costs have been reasonably and properly incurred by the plaintiff as between it and the unsuccessful defendant (eg Johnsons Tyne Foundry Pty Ltd v Maffra Corporation at 572-3; Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA Pty Ltd (1984) 157 CLR 149 at 163; Gould v Vaggelas (1984) 157 CLR 215 at 247, 229); it has also been said that the conduct of the unsuccessful defendant must have been such as to make it fair to impose some liability on it for the costs of the successful defendant, or that the conduct of the unsuccessful defendant must show that the joinder of the successful defendant was reasonable and proper to ensure of recovery of the damages sought ( Steppke v National Capital Development Commission (1978) ACTR 23 at 30-31; Gould v Vaggelas at 229; Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6 at 7-8, 15; Lackersteen v Jones (No 2) (1988) 93 FLR 442 at 449). The difference in formulations is probably more apparent than real, as reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant. Such conduct was found in Lackersteen v Jones (No 2) in the unsuccessful defendant denying the authority of its agent whereby the plaintiff joined the agent who became the successful defendant, and more widely has been found in the unsuccessful defendant telling that the plaintiff in one way or another that it should look to the successful defendant for its remedy ( Altamura v Victorian Railways Commissioners ; Gould v Vaggelas ; Fennell v Supervision & Engineering Services Holdings Pty Ltd )'." 13 The burden of the first defendant's submission was, in effect, that its conduct had not been such as to make it fair to impose any liability on it for the costs of the second defendant and that the plaintiff could not show that the first defendant's conduct made the joinder of the second defendant reasonable and proper to ensure recovery of the damages sought. In Palmer, in which the facts giving rise to the plaintiff's claim were remarkably similar to the present case, no equivalent Bullock order was made. The first defendant contended that there was no relevant dissimilarity between that case and the present case and that a similar result should follow on the question of costs. 14 In response to this argument the plaintiff drew my attention to the discussion at par [35] in Palmer as follows: "[35] It may have been reasonable for the plaintiff in her own interests to join the RTA as a defendant, but I do not think that there was conduct which made it just that the Council, and still less Pioneer, pay the costs payable by the plaintiff to the RTA. Neither the Council nor Pioneer created any circumstances of uncertainty as to who was the proper defendant. They were not obliged to concede liability or make admissions in order to remove the RTA from contention, there being a respectable argument that the RTA was liable, and there is no reason to think that short of effective capitulation by the Council and Pioneer the plaintiff would not have maintained her claim against the RTA. In my opinion, conduct has not been shown such as to make it fair to impose on the Council and Pioneer liability for the costs of the RTA." (Emphasis added). 15 In my opinion the position is different here. At no time prior to 6 June 2006 did the plaintiff give any indication that she proposed, nor did she apparently have any inclination, to join Cessnock City Council as a second defendant in the proceedings. Uncertainty about the appropriateness of that approach flowed solely and directly from the terms of the cross claim filed by the first defendant against Cessnock City Council in the first instance and by the content of correspondence between the plaintiff and the first defendant on that topic which was generated thereafter. I consider that in all the circumstances it was entirely reasonable for the plaintiff to have joined the second defendant but that the costs of the second defendant in defending the plaintiff's claim should be borne by the first defendant. Orders 16 In the circumstances I make the following further orders: 3A. Order the plaintiff to pay the second defendant's costs of defending the plaintiff's claim against the second defendant.

3B. Order the first defendant to indemnify the plaintiff in respect of the costs incurred by the plaintiff in accordance with order 3A.

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.