District Court of Western Australia Act 1969 (WA), s 64

District Court Rules 2005 (WA), r 42A

The first defendant to pay the plaintiff's costs to be taxed if not agreed

Cooper Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36 (S)

Ellingsen v Det Skandinaviske Co [1919] 2 KB 567

Harding v Essey [2005] WASCA 30 (S)

Hughes v St Barbara Ltd [2011] WASCA 234 (S)

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 65 ALJR 151

Ng v Sevastos by His Guardian Ad Litem Vanessa Vershaw [2024] WADC 75 (S)

Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Sulub v Tyres4U Pty Ltd [2018] WADC 139 (S)

1. These reasons concern the proper costs orders to be made following the plaintiff's success in the proceedings brought against the first defendant and the plaintiff being unsuccessful in his case against the second defendant.

1. The default position in which the court's discretion should be considered in relation to an award of costs is that generally the successful party to any action recovers its costs.[1]
2. The discretion as to the award of costs must be exercised judicially but is otherwise not confined.[2]
3. The starting position in this case is that the plaintiff should recover his costs against the first defendant.
4. An issue arises as to whether the plaintiff should pay the costs of the second defendant in circumstances where he was unsuccessful but where the defendants were represented by the same lawyers. This issue is further complicated by the fact that the two defendants were in practical effect, the State.
5. The parties are unable to reach any agreement regarding the appropriate costs order to be made in these proceedings.
6. The fundamental matters in dispute between the parties are as follows:

(a) Issue One: Is the plaintiff entitled to an award of costs taxed between a law practice and its client because the first defendant refused an offer of compromise made pursuant to r 42A of the District Court Rules 2005 (WA) (DCR)?

(b) Issue Two: Should an award of costs be made in favour of the second defendant given that the claim brought was unsuccessful but where the defendants were represented by the same lawyers and both defendants were effectively the State?

(c) Issue Three: What separate costs orders, if any, should be made in relation to the interlocutory proceedings that took place during the trial where no costs orders were made at that time and in relation to a countermand application?

Issue One: Offer of compromise and r 42A District Court Rules 2005 (WA)

1. The plaintiff relies on an offer of compromise made on 4 June 2024 ('offer') in seeking an order that the defendants pay the plaintiff's costs on a party and party basis (including any reserved costs) prior to the date of the offer and on a law practice and its client basis from the date of the offer.[3]
2. The defendants contend that the court should exercise its discretion to disallow these indemnity costs by otherwise ordering, pursuant to r 42A(4) DCR, that all of the plaintiff's costs are taxed on a party and party basis.
3. It is not in issue that an offer was made pursuant to r 42A DCR prior to the trial. Nor is it in issue that the plaintiff obtained judgment in a sum no less favourable to the plaintiff than the terms of the offer, such that the requirements of this rule are satisfied.
4. Rule 42A DCR provides that:

(a) if an offer is made by a plaintiff pursuant to the rule; and

(c) the plaintiff obtains judgment on terms no less favourable than the offer;

then, unless the court otherwise orders, the plaintiff's costs are taxed between a law practice and its client for the period after the offer is refused and on a party and party basis before then.

1. The question to be determined is whether this court should 'otherwise order' that the plaintiff's costs be taxed on a party and party basis even though the plaintiff did obtain an award of damages that was on terms no less favourable than the offer.

Relevant legal principles - when will a court 'otherwise order'

1. In Cooper Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service,[4] Gething DCJ (as his Honour then was) identified the principles which have been established by the authorities dealing with the phrase 'unless the court orders otherwise' as follows:[5]

(a) the purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest;

(b) the discretion to replace the rule is a judicial one, requiring that the private and public purposes of the rule be borne in mind;

(c) the prima facie consequence of non-acceptance will be that the rule will be enforced against the non-accepting party;

(d) in any ordinary case the rule should be applied in its terms;

(e) the rule should only be departed from for proper reasons which, in general, only arise in an exceptional case;

(f) to the extent that a party seeks an exercise of discretion to vary the ordinary operation of the rule, it is for that party to demonstrate that there are adequate reasons to justify the exercise of the discretion;

(g) the aim is to oblige the offeree to give serious thought to the risk involved in non-acceptance;

(h) lying behind the rule is the common knowledge that litigation is inescapably chancy;

(i) the offer cannot be viewed in isolation from the circumstances in which it was made;

(j) the mere fact that it was reasonable for the offeree to take the view that it did in rejecting the offer is not enough to displace the rule;

(k) the offeree is put on notice that unless it accepts the offer there is a significant risk that the order provided for by the rule may follow;

(l) in declining to accept the offer, the offeree undertakes the risk and consequences that naturally flow from that risk;

(m) the general factors which apply in most, if not all, cases such as hardship and difficulty predicting the result of the trial cannot support the exercise of the discretion in favour of the party who rejected the offer; and

(n) the ordinary operation of the rule is not to be displaced just because the case is a difficult one.

1. The cases referred to by Gething DCJ considered the phrase 'unless the court orders otherwise' in the context of O 24A r 10 RSC which he considered was sufficiently similar to make the principles analogous.

1. The defendants submit that the documents discovered by the plaintiff and the anticipated evidence to be adduced on behalf of and otherwise by the plaintiff at the time that the offer was made, fell well short of the evidence that was adduced at trial.
2. They argue that it was not obvious to them from these materials that the plaintiff would be able to:

(a) establish the nature and extent of the sexual abuse that occurred following his return to GN on 14 April 1989; nor

(b) establish that the plaintiff was sexually abused by his father MB and that he could corroborate that account by the evidence of SL.

1. The strength of this submission, even if it did provide a proper basis to depart from the default statutory costs position, is dependent upon whether there was a sound basis for the defendants to expect that the plaintiff's case was weak and that there would be gaps in the evidence that could not be overcome at trial.
2. The defendants rely in particular upon contended deficiencies in the scope, content and detail of a witness statement made by the then 12-year-old plaintiff to police in 1991 and, inter alia, upon asserted inadequacies in expert materials.

19 A flaw in the defendants' submission in this regard is their failure to pay sufficient regard to the pleadings at the time the offer was made.[6]

1. Through the statement of claim, the defendants were on notice that the plaintiff was asserting that upon his return to GN on 14 April 1989, GN subjected him to abuse, constituting child sexual abuse under the Civil Liability Act 2002 (WA).
2. This abuse was particularised as follows:
   1. Forcing the plaintiff to engage in sexual acts with the plaintiff's younger sister, CB, comprising performing oral sex upon and molesting her.
   2. Forcing the plaintiff to watch GN sexually abuse CB in the form of oral sex, molestation and penetration.
   3. Sexually abusing the plaintiff by oral sex and anal penetration by GN's penis and fingers.
   4. Perpetrating emotional and physical abuse upon the plaintiff which heightened and increased the plaintiff's vulnerability to being exploited by GN for sexual abuse and allowing the plaintiff to be so abused.
3. The defendants say because of the plaintiff's police statement (made when he was 12) and a psychological and psychiatric report[7] that they anticipated the plaintiff could not prove many of his assertions.
4. They further draw attention to the contended unexpected event, namely that the plaintiff made allegations at trial that were not made to his psychiatrist in 2021.
5. Implicit in the defendants' submission is that it was reasonable for them to expect that no further evidence of abuse, beyond what was in existence at the time of the mediation, would emerge by the time of or during the trial.
6. The State and experienced lawyers acting for the State should anticipate that a plaintiff making multiple allegations of childhood sexual assault may provide an account at trial that was more detailed or forthcoming than the accounts given on earlier occasions. This is particularly obvious where the plaintiff must have been the source of the instructions regarding the abuse that resulted in the specific pleadings found in the statement of claim.
7. Further, it should have been apparent to the defendants and their lawyers, that a young boy in State care would be unlikely to disclose to the police at the age of 12 everything of a sexual nature that had happened to him. The defendants cannot have been unaware of the high likelihood that a scared and vulnerable 12-year-old child may be less forthcoming to a police officer regarding sexual abuse than as an adult to a lawyer and a court.
8. The defendants appear to have failed to have sufficient regard to the well documented fact that many children who are victims of child sexual abuse will not disclose sexual abuse promptly, or at all, and that when disclosure does occur it will often emerge in stages.
9. Indeed, the Royal Commission into Institutional Responses to Child Sexual Abuse (the Royal Commission),[8] determined that victims and survivors take on average 23.9 years to disclose child sexual abuse. Further, men take five years longer than women on average to disclose such abuse.[9] This was noted by the then Prime Minister, Malcolm Turnbull, in his statement at the time to parliament following the release of the Royal Commission's findings namely:

More than half of the survivors were aged between 10 and 14 years when they were sexually abused. Now victims often do not disclose sexual abuse until many years later and survivors in the private sessions took around 24 years, on average, to tell somebody about their abuse.

1. The defendants were on notice from the pleadings that the plaintiff would be giving evidence of significant abuse. The defendants and their legal team should have had regard to the well documented materials pertaining to the nature and effect of child sexual abuse. It was in these circumstances unreasonable to assume that a failure by the plaintiff to disclose various acts of sexual abuse when aged 12 to police, departmental workers and counsellors would be an important matter in leading a court to find against the plaintiff.
2. This was a case brought against the State of Western Australia relating to historical child sexual abuse which occurred while the child was in State care. Accordingly, the defendants themselves had access to most of the documentary evidence adduced at trial as this was in the form of State records. The State must have known that its records could only be as accurate and detailed as the level of record-keeping by the Department for Community Services in the 1980s and 1990s.
3. A reasonable defendant in the position of the State should be mindful of the possibility that a plaintiff had not yet told his story in full. The nature of memory and the trauma associated with recalling and recounting sexual abuse as a child inevitably gives rise to the realistic possibility of details of the abuse emerging over time.
4. I reject the defendants' submission that they were reasonably taken by surprise in relation to the evidence given by the plaintiff at trial regarding the extent of sexual abuse that had occurred to the plaintiff in his childhood. If they were taken by surprise, it was not reasonable. I am particularly mindful that the defendants are the State and that the State should, more than any other defendant in these circumstances, be aware of the difficulties a child victim may experience in telling their story.
5. The costs order sought by the defendants is one that would only arise in an exceptional case.[10] This is not such a case.
6. There is no proper basis here to depart from the default costs position.

Issue Two: Costs in relation to the second defendant

1. The second defendant seeks a costs order against the plaintiff given that the plaintiff was unsuccessful against the second defendant.
2. Curwood DCJ in Ng v Sevastos by His Guardian Ad Litem Vanessa Vershaw,[11] usefully outlined the following relevant general principles that assist in considering this submission:[12]
   1. By O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC) the court operates from the starting position that the successful party should recover their costs.
   2. In determining who is the successful party, the question to be answered is who was successful in the 'underlying, real contest' between the parties.
   3. The fundamental principle guiding cost decisions is fairness and justice between parties based on each case's specific circumstances. Generally, the court operates from the starting position that the successful party should recover their costs.
   4. The exercise of the court's discretion to make a costs order to reflect the limited success of a party should be approached broadly and as a matter of impression, rather than as an exercise in mathematical precision.
   5. Where a party unreasonably rejects a Calderbank offer, the court may award indemnity costs against that party, or order that party who is seemingly 'successful' to pay the notionally unsuccessful party's costs.

1. There is authority for the principle that where a plaintiff is unsuccessful against one of two defendants who have the same lawyers, the unsuccessful defendant at best can only be compelled to pay the costs which exclusively relate to him or her, and half the costs of the proceedings taken jointly for both defendants.[13]
2. The fact that the plaintiff was unsuccessful against the second defendant does not however lead to an automatic finding that the costs payable by the first defendant should be limited. The court has a broad discretion regarding costs in these circumstances.
3. The defendants were the State itself and a ministerial State body. The need for the plaintiff to bring proceedings against both defendants arose because of an imprecision in the law that gave rise to an uncertainty as to the precise legal structure and the proper entity who was liable where a ward of the state suffered harm by reason of the negligence of the Department for Community Services.
4. Aside from issues of pleading and some narrow legal issues, there was little difference in how the trial was run against the first defendant as against the second defendant. In particular, the same evidence was adduced against both defendants.
5. In these circumstances I consider that a proper exercise of discretion in the specific circumstances of this case is that the first defendant should pay the costs of the plaintiff and no costs order in favour of the second defendant should be made.

1. The defendants seek costs for various interlocutory applications heard during the course of the trial. They also seek the costs of a countermand application made where costs were reserved at the time of the application.
2. No costs orders were sought by any party in relation to the interlocutory matters heard during the trial.
3. It is helpful to have regard to the observations of McHugh J in Oshlack.[14] His Honour noted that:

The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

1. Further, because specific orders were not sought at the time, it is not possible to go back through all of the individual skirmishes that took place during the trial to award costs pertaining to specific arguments or applications which formed part of the trial. Rather the costs should be dealt with in a broadbrush manner guided by the fact the plaintiff was the successful party.
2. In relation to the countermand application which was made on 14 December 2023 I note that the costs were reserved at the time the application was dealt with.
3. The defendants and the plaintiff have provided lengthy submissions with polar-opposite positions regarding the factual matrix giving rise to the circumstances surrounding that application.
4. The court cannot now be expected to wade through the precise circumstances of who was at fault and who won and lost that application. No determination one way or the other was made by the court at the time regarding costs. They were reserved.
5. I am not persuaded there is a proper basis to separate this particular matter from the balance of the lengthy and protracted litigation in this action and to now make a separate costs order in favour of the defendants.
6. I consider that this is a clear example of where the costs should simply follow the event.

1. The first defendant pay the plaintiff's costs of the action including reserved costs to be taxed:

(a) on a party and party basis up to 3 June 2024; and

(b) as between a law practice and its client from 4 June 2024.

1. The first defendant pay the plaintiff's costs of this application to be taxed as between a law practice and its client.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

[1] Order 66 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC); District Court of Western Australia Act 1969 (WA) s 64.

[2] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21], [22], [134] (Oshlack); Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164; Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 540, 558, 562, 568; [1990] HCA 59; (1990) 65 ALJR 151; Hughes v St Barbara Ltd [2011] WASCA 234 (S).

[4] Cooper Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36 (S) (Ellis).

[6] The relevant version of the statement of claim at the time of the offer is dated 26 April 2024.

[8] Commonwealth, Royal Commission into Institutional Responses to Child Sexual Abuse, Final Report (vol 4, 2017).

[9] Commonwealth, Royal Commission into Institutional Responses to Child Sexual Abuse, Final Report (vol 4, 2017) 30.

[10] Ellis; Sulub v Tyres4U Pty Ltd [2018] WADC 139 (S).

[11] Ng v Sevastos by His Guardian Ad Litem Vanessa Vershaw [2024] WADC 75 (S) (Sevastos).

[13] Harding v Essey [2005] WASCA 30 (S); Ellingsen v Det Skandinaviske Co [1919] 2 KB 567, 570.

[14] Oshlack (97), [67] - [69] (McHugh J).