Cambridge v Anastasopoulos

Court of Appeal (NSW)|2013-07-12|Before: Meagher JA, Barrett JA, Ms P, Mr J

Judgment 1MEAGHER JA: The Court delivered judgment in this appeal on 11 December 2012: Cambridge v Anastasopoulos [2012] NSWCA 405. It directed the parties to lodge written submissions concerning the orders that should be made as to the costs of the proceedings before the primary judge and before this Court. Those submissions have now been received.

Background 2The respondent succeeded against the three appellants at the trial and obtained judgments against the first and second appellants for $55,048 plus pre-judgment interest, under s 100 of the Civil Procedure Act 2005, from 10 February 2009 to 11 March 2011, and against the third appellant for $85,416 plus pre-judgment interest for the same period. Following the appeal those judgments have been set aside and judgments entered against the first and second appellants for $18,048.25 plus pre-judgment interest and against the third appellant for $11,415.50 plus pre-judgment interest, in each case for the same period. 3In their notices of appeal and unamended written submissions in this Court, the appellants challenged the primary judge's findings as to liability and damages. At or shortly before the commencement of the hearing of the appeal, the first and third appellants abandoned their appeals on liability issues. The second appellant maintained his challenges to the findings as to liability and damages. He also challenged the primary judge's apportionment between the appellants of liability for the damage sustained to the motorboat on 10 February 2009. 4In October 2012 the respondent made settlement offers to the first and second appellants. Each was made "without prejudice save as to costs" and proposed that the judgments entered against those appellants (in each case $64,093.97 including the pre-judgment interest) be set aside and that judgments be entered against each for $20,000 inclusive of interest to 11 March 2011. The appeals were otherwise to be dismissed, with each party to pay his own costs of the appeal. 5The principal issue debated in this Court, which occupied more than half of the hearing time, was the challenge to the assessment of the damages resulting from the accident on 10 February 2009. The success of that challenge turned upon the admissibility of Captain Kysil's evidence. The appellants were successful on that issue and damages were reduced accordingly. The second appellant's challenge to the liability findings against him failed. 6It is against this background that the parties' submissions as to costs must be considered. I will deal first with the costs of the proceedings before the primary judge. I will then deal with the costs of the appeal.

Costs of the proceedings below 7The respondent submits that the orders made by the primary judge should not be disturbed. The orders made by the primary judge were: " 4. The first defendant [first appellant] to pay the plaintiff's costs of the proceedings on an ordinary basis. 5. The second defendant [second appellant] to pay the plaintiff's costs of the proceedings on an ordinary basis. 6. The fourth defendant [third appellant] to pay the plaintiff's costs of the proceedings on an ordinary basis. 7. Orders 4, 5 and 6 above to apply in relation to the first, second and third defendants on a joint and several basis." Those orders were made on the basis that costs should follow the event. The respondent says that the position remains that he has succeeded against each of the appellants, notwithstanding the reduction in the damages awarded to him. 8The first and third appellants submit that the respondent should pay their costs in relation to the assessment of damages and that no order should be made as to the remaining costs of the trial. They say that a significant amount of the time taken by the trial was occupied in dealing with the evidence of Captain Kysil, which was held by this Court to have been inadmissible. They also contend that had that evidence been rejected at the trial the respondent would have required an adjournment "to strap up its case" which, most likely, would have resulted in a costs order in their favour. For that reason, there should be no order as to the remaining costs before the primary judge. Although their submissions contain no explication as to why that should be so, the appellants' argument seems to be that the costs that would have been ordered in their favour on such an adjournment would have equalled or exceeded the costs incurred by the respondent on the remaining issues and they should have the benefit of some notional set off against those costs with the result that there be no order as to costs. They also submit that if there is to be an order for costs in favour of the respondent (as plaintiff), the liability for it should be apportioned severally between the appellants in the same proportions as their respective liabilities, as determined by this Court, bear to their total liability to the respondent. 9The second appellant also submits that he should have an order for his costs in relation to the assessment of damages and that any liability for costs should be apportioned severally between the appellants. 10The ordinary rule is that costs follow the event unless it appears that some other order should be made as to the whole or any part of the costs: Uniform Civil Procedure Rules 2005 (UCPR), r 42.1. The respondent has obtained judgments against the appellants, as defendants, for an amount which in total exceeds $40,000. For that reason it is not necessary to consider whether the commencement and continuation of the proceedings in the District Court was warranted: cf UCPR, r 42.35. In my view, the fact that a significant aspect of Captain Kysil's evidence was inadmissible, and should have been rejected at first instance, does not justify the making of a separate order in relation to part of the costs incurred below. Reference to the transcript indicates that Captain Kysil's evidence occupied not more than a day and a half of a hearing which proceeded over more than 11 days. The issues which occupied most of that hearing time were the liability issues. In addition, Captain Kysil gave admissible evidence in relation to questions of liability and in relation to some damages questions. That evidence was not the subject of criticism or challenge on appeal. In the circumstances, there is no good reason shown for departing from the ordinary rule. 11Each of the appellants had an interest in the resolution of each of the issues as to liability and damages. The first and second appellants were said to be liable in respect of the three incidents which resulted in damage to the motorboat. The third appellant was only alleged to be liable in respect of the third. However, because of the need to apportion liability for the damage between the appellants, the third appellant was also indirectly interested in the liability and quantum issues as between the first and second appellants and the respondent. For that reason it is not possible to apportion responsibility for particular costs incurred by the respondent in prosecuting his claim to a particular appellant or appellants. The costs orders made by the primary judge should not be disturbed.

Costs of the appeal 12The respondent submits that there should be no order as to costs of the appeal taking into account the relative success of the parties on the liability and damages issues. He succeeded on liability issues as against the second appellant and the first and third appellants abandoned their challenge to the liability findings at a late stage in the proceedings - in the case of the first appellant at the commencement of the hearing of the appeal, and in the case of the third appellant, a few days earlier. The respondent also relies upon the offers made to the first and second appellants in October 2012. Finally, he submits that if any order for costs is made, it should take account of the fact that there were multiple appellants relying upon the same or substantially the same argument. On that basis, if there is to be an order for costs, the respondent submits that it should only be in relation to the costs of one appellant. 13The first and third appellants submit that they were successful "on all issues" in the appeal and that, accordingly, the respondent should pay their costs of the appeal. The second appellant accepts that some allowance should be made for his lack of success in relation to the liability and apportionment issues, and submits that the respondent should pay 75 per cent of his costs of the appeal. He also says that he did not act unreasonably in rejecting the Calderbank offer made to him because the judgment sum together with pre-judgment interest which has been recovered against him is less than the $20,000 offered. The position is less clear in relation to the offer made to the first appellant because the judgment sum with pre-judgment interest is likely to exceed the $20,000 offered. However, whilst there is no evidence as to the costs which had been incurred to the point in time when that offer was made, those costs probably exceeded the amount necessary to make the overall offer less advantageous than the outcome ultimately achieved by the first appellant. That this is likely to be the position is conceded by the respondent in his written submissions. 14None of the appellants was wholly successful on the issues in the appeal. The respondent succeeded on liability issues and failed on the damages issues. Because those issues are clearly separable it is appropriate that some allowance be made in favour of the respondent for his costs incurred in relation to the liability issues. Allowance should also be made in favour of the appellants for their costs incurred in relation to the damages issues. Taking account of the written submissions of the parties and the course of oral argument, my rough assessment is that the major part of the hearing was taken up with the damages question and that the time and expense incurred prior to the hearing was equally directed to addressing the liability and damages questions. In light of that assessment, I consider that the respondent should pay 10 per cent of the costs of the first and third appellants of the appeal and that there should be no order as to the costs of the appeal as between the second appellant and the respondent. 15Each of the appellants was represented by separate counsel in the hearings before the primary judge and in this Court. That reflected the fact that their interests were not identical on all issues. To the extent that their interests were common, it is not suggested that there was unnecessary duplication in the written or oral argument, or that costs were unreasonably incurred by any appellant in relation to those issues. In those circumstances it would not have been appropriate to limit the respondent's liability to only one set of costs. 16There is one matter remaining to be addressed. The second appellant submits that he is entitled to an indemnity from the first appellant in respect of any costs that he is ordered to pay to the respondent because his liability as a joint bailee with the first appellant was "vicarious" as he was not directly involved in the incidents which resulted in damage to the motorboat. It is suggested that such a costs order might be made "in accordance with the principles in Sanderson or Bullock". That submission should be rejected. If the second appellant wished to recover an indemnity from the first appellant in respect of his liability as a joint bailee, he should have raised that matter by way of cross-claim in the proceedings at first instance. It is not able to be dealt with by way of the exercise of the discretion as to costs. Costs orders made in accordance with the principles referred to require that an unsuccessful party pay a successful party's liability for the costs of a third party, either directly or indirectly: see Sanderson v Blyth Theatre Co [1903] 2 KB 533; Bullock v London General Omnibus Co [1907] 1 KB 264. That is not this case. The second appellant, as an unsuccessful party, seeks an order that another unsuccessful party bear its liability for the costs of the successful party on the basis that notwithstanding that they have been held to be liable jointly to the successful party, as between themselves one is entitled to an indemnity from the other. 17The orders which I propose be made are: (1)Confirm orders (4), (5), (6) and (7) of the District Court made on 11 March 2011 in relation to the costs of those proceedings as between the first, second and third appellants and the respondent. (2)Order that the respondent pay 10 per cent of the costs of the appeal of the first and third appellants. (3)No order as to the costs of the appeal as between the second appellant and the respondent with the intent that each of those parties is to bear his own costs of the appeal. (4)Note that the costs in orders (2) and (3) do not include any costs which are the subject of existing orders with respect to interlocutory applications in the appeals. 18BARRETT JA: I agree with Meagher JA. 19SACKVILLE AJA: I agree with Meagher JA.

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. Decision last updated: 12 July 2013

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Judgment (5 paragraphs)

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