Central Goldfields Shire v Haley & Ors

Court of Appeal (Vic)|2009-06-24|Before: NEAVE and REDLICH JJA and PAGONE AJA

COSTS - Whether Bullock or Sanderson order should be made against unsuccessful defendant for costs of trial or appeal - Whether successful defendant reasonably joined - Relevance of conduct of unsuccessful defendant.

1 I agree with the costs orders proposed by Redlich JA for the reasons he gives.

3 At trial, over the Council's objection, the plaintiff had obtained a ruling from the trial judge that the Council was not acting in the capacity of a highway authority and that the Council was an occupier of the footpath. Furthermore the plaintiff successfully opposed the council's submission that the Council's duty of care was that formulated in Brodie v Singleton Shire Council.[1] The trial judge accordingly instructed the jury that the Council was an occupier of the footpath and that it had a duty of care as 'occupier' pursuant to s 14B Wrongs Act 1958.

4 The Council successfully appealed against these rulings and the consequential directions given to the jury. It is now necessary to determine what orders as to costs are appropriate with respect to the trial and the appeal, the hoteliers having joined with the plaintiff, in seeking to uphold the jury verdict on appeal.

5 Written submissions have duly been filed by the Council the plaintiff and the hoteliers. Each party consented to determination of the question of costs on the basis of these submissions, without further oral argument, but advanced the following different positions as to costs:

1. The Council, as the successful appellant, seeks the costs of the trial and the appeal. It submits that the plaintiff and the hoteliers should pay its costs of the appeal. As to the costs of the trial it submits that the plaintiff and hoteliers or alternatively, only the plaintiff pay its costs of the County Court proceedings to be taxed in default of agreement on County court scale D.

2. The plaintiff does not dispute the Council's entitlement to its costs of the trial and the appeal. The plaintiff seeks the benefit of a Bullock or Sanderson order against the hoteliers for the Council's costs of both the trial and the appeal. She seeks the grant of an indemnity certificate pursuant to s 4(1) of the Appeal Costs Act 1998.

3. The hoteliers submit that the plaintiff alone should pay the Council's costs of the trial and appeal, as a Bullock or Sanderson order is not appropriate. Alternatively they submit that the Council should bear its own costs of the trial and appeal. They also seek a certificate under the Appeal Costs Act 1998.

6 As the successful defendant on appeal, the Council seeks an order for the costs of the appeal and trial. In the ordinary case, costs would follow the event. It is convenient to first deal with the hoteliers' argument that the Council should bear its own costs of the trial and appeal. The hoteliers say that the issue of whether the appellant was an occupier was a mixed question of fact and law and should have been dealt with as a preliminary point. They also say that the appellant 'failed to persuade the trial judge with cogent argument and authority that the Council was not an occupier'. This submission is without any merit. If the resolution of the issue did depend on any question of fact, all of the facts would not necessarily have been known until the conclusion of the evidence. The Council made a clear submission that it was a highway authority, that it could not be an occupier and that the duty in Brodie applied. It maintained that position during the course of protracted debate over some days. There was no conduct of the Council which disentitled it to its costs of the trial and the appeal.

7 The determination of costs is in the court's absolute and unfettered discretion, but it must be exercised judicially.[2] Where a plaintiff succeeds against only one of the defendants, the court may in the exercise of its discretion as to costs order that in addition to paying the plaintiff's costs the unsuccessful defendant reimburse the plaintiff for the costs of the successful defendant (a 'Bullock' order[3]) or order the unsuccessful defendant to pay the costs of the successful defendant directly to the successful defendant (a 'Sanderson' order).[4]

8 It must be reasonable and just for such orders to be made.[5] An assessment of whether such an order will do justice to the unsuccessful party, usually commences with an inquiry as to whether it was reasonable for the plaintiff to have joined the successful defendant.[6] I doubt that it is always necessary to show that it was reasonable on the facts known at the time of the joinder. Subsequent events may demonstrate that the joinder was reasonable. The circumstances of the case may require that the decision should be adjudged by the conduct of the defendants after the joinder of the successful defendant and even up to date the court makes its decision.[7]

9 If it was reasonable to have joined the successful defendant, that will not by itself be sufficient to warrant the making of the order.[8] The plaintiff's claims against each defendant must be interconnected or in a real sense alternatives[9] and the conduct of the unsuccessful defendant must be such as to make it fair to impose some liability on it for the costs of the successful defendant.[10] Such conduct will be found where the unsuccessful defendant tells the plaintiff in one way or another that it should look to the successful defendant for its remedy[11] or has done something to induce the plaintiff to maintain its suit against the successful defendant.[12] Where these requirements are satisfied, the making of Bullock or Sanderson orders will further the objective that the law should discourage a multiplicity of actions by providing an appropriate incentive for the plaintiff to join potential defendants.[13]

10 Notwithstanding the conclusions each member of the court expressed in their reasons for judgment that the Council was not an occupier, the hoteliers did not submit that it was unreasonable of the plaintiff to have joined the Council. Rather, the hoteliers contended that the claim made by the plaintiff against the Council was not interdependent with the claims against them and that they had done nothing to induce the plaintiff to join or maintain her claim against the Council. I reject the hoteliers contention that the claims against the two defendants were not interdependent or that the hoteliers did nothing in the conduct of their defence to warrant a Sanderson or Bullock order.[14]

11 The conduct of the trial demonstrated that the plaintiff's claims against the two defendants were in the relevant sense interdependent or alternative and that the conduct of the hoteliers made it fair to impose on it, the liability for the Council's costs of the trial. The hoteliers in their pleaded defence admitted that a permit was obtained from the Council but denied they occupied the footpath. It was open on the pleadings to infer that the hoteliers were arguing that it was the Council that was the occupier of the footpath area. The hoteliers served a Notice of Contribution on the Council and argued during the course of the trial that the Council as the occupier of the footpath exercised control over the footpath and was negligent. The hoteliers also joined with the plaintiff in submitting that the Council was not acting in its capacity as a highway authority in exercising control over the footpath but was doing so pursuant to some other statutory responsibility, so that the immunity under s 37A of the Transport Act 1983 did not apply.[15] Eventually during the trial the hoteliers admitted that they were occupiers but maintained that it was the Council that was primarily responsible for controlling the footpath.[16] These were not insignificant issues in the trial. By the end of the trial, the plaintiff and the hoteliers had joined together to wrongly persuade the trial judge that the Council was an occupier.

12 The circumstances in which this court in Berrigan Shire Council v Ballerini[17] refused to make such orders, is not, as the hoteliers contend, analogous with the present case. In Berrigan there were separate duties owed to the plaintiff arising from different facts. Both Chernov and Nettle JJA were satisfied that there was no conduct of the unsuccessful defendant which made it fair that the unsuccessful party should bear the costs of the successful defendant.[18]

13 I would make the Sanderson order sought by the plaintiff, requiring the hoteliers to pay the Council's costs of the trial.

14 The Council submits that an order for the costs of the appeal should be made against both the plaintiff and the hoteliers. Neither the plaintiff or the hoteliers, in their submissions as to costs, adverted to any particular considerations which related to the appeal. Their submissions focussed upon matters which they contended were relevant to the trial. They each asserted that the other should bear the Council's costs of the appeal. Neither of these bare contentions has any merit. On the appeal the plaintiff, with the continued support of the hoteliers, again maintained that the Council was an occupier. In addition, the hoteliers changed their position from the trial and joined with the plaintiff in arguing that the duty as formulated in Brodie did not apply to the Council. The plaintiff and hoteliers both actively pursued these contentions on the appeal and failed. I can see no reason why costs should not follow the event of the outcome of the appeal.[19] Both respondents should be responsible for the Council's costs of the appeal. I would make the order for costs which the Council seeks.

15 Both the plaintiff and the hoteliers seek an indemnity certificate pursuant to s 4(1) of the Appeal Costs Act 1998. The purpose of the legislation in providing for indemnity is to confer a remedy upon the unsuccessful respondent, who through no fault of their own may otherwise be liable to meet a costs order.[20] Although the trial

judge was led into error by plaintiff and the hoteliers and they have sought to uphold the trial judge's decisions on appeal, it cannot be said that the quality of the respondent's conduct should disentitle them to indemnification. There being no other consideration that militates against the granting of a certificate I would make the orders sought by the respondents.

2. As to the orders made in County Court proceeding number

(a) Orders 1 and 2 be varied by removing the reference to the fourth defendant;

3. Judgment be entered for the appellant against the first respondent.

4. The respondents pay the appellant's costs of the appeal.

5. The second, third and fourth respondents pay the appellant's costs of the County Court proceeding to be taxed in default of agreement on County Court Scale D.

The respondents be granted an indemnity certificate pursuant to s 4 of the Appeal Costs Act 1998.

[3] Bullock v London General Omnibus Company [1907] 1 KB 264.

[4] Sanderson v Blyth Theatre Co [1903] 2 KB 533.

[5] Sanderson, Reid and Gould v Vaggelas [1984] HCA 68; (1984-5) 157 CLR 215.

[6] Johnsons Tyne Foundry Pty Ltd v Maffra Corporation [1948] HCA 46; (1948) 77 CLR 544, 556, 572-3; Altamura v Victorian Railways Commissioners [1974] VicRp 4; (1974) VR 33, 35; Sanderson, Reid and Gould v Vaggelas [1984] HCA 68; (1984-5) 157 CLR 215, 247, 229.

[7] Altamura v Victorian Railways Commissioners [1974] VicRp 4; [1974] VR 33, 35 (Kaye J).

[8] Law of Costs - Dal Pont - 2nd ed - 11.21; Hong v A R Brown Ltd [1948] 1 KB 515, 523 (Lord Greene MR); Stevedoring Industry Finance Committee v Gibson (2000) NSWCA 179 [128] (Mason P, Stein and Heydon JJA agreeing); Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 [16].

[9] Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd [1984] HCA 59; (1984) 157 CLR 149, 163; Berrigan Shire Council v Ballerini & Anor [2006] VSCA 65 [41] (Nettle JA).

[10] Sanderson, Reid and Gould v Vaggelas [1984] HCA 68; (1984-5) 157 CLR 215, 230 (Gibbs CJ and Brennan J); State of Victoria v Horvath (No 2) [2003] VSCA 24 (Vincent JA with whom Winneke P and Chernov JA agreed); Berrigan Shire Council v Ballerini & Anor [2006] VSCA 65.

[11] Altamura v Victorian Railways Commissioners [1974] VicRp 4; [1974] VR 33; Sanderson, Reid and Gould v Vaggelas [1984] HCA 68; (1984-5) 157 CLR 215; Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6.

[12] Steppke v National Capital Development Commission (1978) ACTR 23, 30-31; Sanderson, Reid and Gould v Vaggelas [1984] HCA 68; (1984-5) 157 CLR 215, 229; Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6, 7-8, 15; Fimiston Mining NL v Western Reefs Ltd (1996) 14 WAR 387.

[13] Lackersteen v Jones (No 2) [1988] NTSC 72; (1988) 93 FLR 442, 449.

[14] Reid v Campbell Wallace Moule [1990] VicRp 76; [1990] VR 859, 879 (Tadgell J); Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd [1984] HCA 59; (1984) 157 CLR 149, 163.

[15] See Central Goldfields Shire v Haley & Ors [2009] VSCA 101 [31].

[17] Berrigan Shire Council v Ballerini & Anor [2006] VSCA 65.

[18] Ibid [22]-[24] (Chernov JA), [40]-[44] (Nettle JA).

[19] Law of costs - Dal Pont -2nd ed- [20.2]

[20] Law of Costs- Dal Pont- 2nd Ed- [21.49]

Court (General Civil Procedure) Rules 2005

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