Dargham v Kovacevic

Supreme Court of NSW|2011-06-30|Before: Hislop J

Introduction 1This is a series of costs applications arising from a claim for damages by the plaintiff for personal injuries sustained whilst working on a construction site.

Background 2The parties to the claim were as follows: (a) Fadi Dargham (plaintiff); (b) Radovan Kovacevic, the first defendant, who was sued as the builder/head contractor; (c) Nutalab Construction Pty Limited, the second defendant, which was sued in the alternative as the head contractor; (d) Sibin Djuric, the third defendant, who was sued as an owner/occupier of the site and principal; (e) Mechanical and Construction Insurance Pty Limited t/as Mecon Insurance, the first cross-defendant to the first cross claim and also to the second cross claim, which was an insurer from whom indemnity was sought by the first defendant (second cross claim) and third defendant (first cross claim); (f) Jabbour James Marroun, the second cross-defendant to the first cross claim, who was sued as a subcontract carpenter engaged by the third defendant; (g) Nathanael Celik, the third cross-defendant to the first cross claim, who was a contract carpenter engaged by the second cross-defendant. 3The following orders were made in the substantive proceedings:

The plaintiff 8The plaintiff's specific costs liabilities and entitlements are considered in relation to the individual defendants.

The first defendant 9The first defendant was sued by the plaintiff only. The first defendant succeeded in the action. UCPR 42.1 has application. Prima facie the first defendant is entitled to an order for his costs of the proceedings on the ordinary basis against the plaintiff. The first defendant sought such an order. 10However, the plaintiff has submitted that the circumstances of the case are such that the first defendant should not have an order for costs but that the first defendant should be ordered to pay the plaintiff's costs on an indemnity basis as: (a) The first defendant had made admissions to the WorkCover Authority and pleaded guilty to various offences under the Occupational Health and Safety Act 2000 (NSW) based on agreed facts that were consistent with the first defendant being the builder on the site with the care, control and operation of the work being performed; (b) On the basis of this information, the plaintiff brought these proceedings against the first defendant; (c) The first defendant in these proceedings admitted that his statements to the WorkCover Authority and the agreed facts were essentially untrue; (d) The first defendant did not make the true position clear until he gave evidence in these proceedings; (e) The actions of the first defendant caused the plaintiff to be ambushed as the first defendant's alternative version of events resulted in his exculpation. 11In response to the plaintiff's submission, the first defendant submitted the order sought should be refused as: (a) The first defendant, in his defence dated 9 June 2009, pleaded that he had no duty of care to the plaintiff as he was not involved in any construction on the site; (b) That denial was consistent with the plaintiff's own evidence that he did not see the first defendant on the site nor did he know him; (c) It was the plaintiff's choice to continue to prosecute his claim against the first defendant in the face of the defence, and his own evidence; (d) The plaintiff's legal advisers did not raise any particulars or notice to admit facts directed at the conflict between the defence filed by the first defendant and the WorkCover statements, records of interview and prosecution; (e) The first defendant was not guilty of "misconduct" or an ambush by telling his version of events before the Court consistently with his defence dated 9 June 2009. 12I accept the first defendant's submissions. I reject the plaintiff's application for indemnity costs against the first defendant. The first defendant is, however, entitled to his costs on the ordinary basis as against the plaintiff. 13The plaintiff has sought a Bullock order against the third defendant in respect of his liability to pay the first defendant's costs. In my opinion, it is appropriate that such an order be made having regard to the relationship of the first and third defendants and the lack of clarification thereof by either defendant, which made it reasonable, indeed essential, that both defendants be joined.

The second defendant (Nutalab Construction Pty Limited) 14The second defendant was sued by the plaintiff only. It was in liquidation and took no part in the proceedings. I dismissed the claim against the second defendant at the request of the plaintiff. No order for costs was made. No further order is required.

The third defendant (Mr Djuric) 15The third defendant was sued by the plaintiff only. The plaintiff succeeded against the third defendant. The plaintiff is prima facie entitled to an order for his costs against the third defendant on the ordinary basis - UCPR 42.1. This was accepted by the third defendant. 16However, the plaintiff sought an order that the third defendant should pay his costs on an indemnity basis. He submitted that the third defendant was an admitted liar, as found, and although he was not explicit in his lies to the WorkCover Authority by way of rational inference he still must have been involved with the concoction that took place in order that Mr Kovacevic would take the blame as a builder on the site and protect Mr Djuric from additional liability for not having had a licensed builder at the time when the plaintiff was injured. Again, it was for Mr Djuric to specifically plead the truth of the situation in the pleadings so as to shorten the trial and ensure that the plaintiff did not incur unnecessary expense. For the similar reasons that have been advanced against Mr Kovacevic, he should be ordered to pay the plaintiff's costs on an indemnity basis. 17The third defendant submitted the evidence fell far short of granting any entitlement in respect of indemnity costs. This was a case in which there was a real controversy by a number of witnesses as to the actual events that occurred on the day and, whilst the third defendant was unsuccessful in the proceedings, that fact alone, coupled with the submission made by the plaintiff, does not grant an entitlement to indemnity costs, and the Court should not order that the costs be paid on an indemnity basis. 18I accept the third defendant's submissions and reject the application for indemnity costs. There will be an order that the third defendant pay the plaintiff's costs on the ordinary basis. 19As previously stated, there will be a Bullock order against the third defendant in respect of the plaintiff's liability for the first defendant's costs.

The second cross defendant (Mr Marroun) 20The third defendant's cross claim against the second cross defendant was earlier dismissed with no order as to costs. No further order is required in this regard.

The third cross defendant (Mr Celik) 21The third defendant cross claimed against the third cross defendant. The third cross defendant was successful in that cross action. Prima facie the third cross defendant is entitled to an order that the third defendant pay his costs on the ordinary basis. The third defendant accepted such an order should be made. 22However, the third cross defendant sought an order that the third defendant pay his costs on an indemnity basis. He relied upon an offer of compromise served upon the third defendant's solicitors on 26 February 2010. 23The notice of offer of compromise was in the following terms: "1. Pursuant to Pt 20 r 20.26 of the Uniform Civil Procedure Rules 2005, the third cross defendant offers to the cross claimant that the cross claim against the third cross defendant be dismissed and the cross claimant pay the costs of the third cross defendant as agreed or assessed. 2. This offer is made without prejudice and in accordance with Pt 20 r 20.26 of the Uniform Civil Procedure Rules 2005. 3. This offer of compromise is open for acceptance for a period of twenty-eight (28) days from the date on which this offer is made." 24The offer was not accepted by the third defendant. 25It was submitted that the third cross defendant was entitled to an order against the third defendant for the costs incurred by the third cross defendant assessed on an indemnity basis as from 11.00 am on the day following the day on which the offer was made and on an ordinary basis prior to that date. 26I reject the application for indemnity costs as the offer lacks the necessary element of compromise: see The Anderson Group Pty Limited v Tynan Motors Pty Limited (No 2) [2006] NSWCA 120; (2006) 67 NSWLR 706 at [8]. 27The third cross defendant is entitled to an order for his costs on the ordinary basis against the third defendant.

The first cross defendant (Mecon) 28I have held that the first cross-defendant is liable to indemnify the third defendant in respect of his liability in these proceedings. It is thus liable to indemnify the third defendant for the verdict against him and for the costs orders made against the third defendant in respect of the Bullock order in favour of first defendant and the costs of the third cross defendant. 29Mecon conceded that it was also liable to pay the third defendant's costs but submitted those costs should exclude costs (i) incurred by the third defendant in disputing or in proving the facts outlined in para 15(a), (b) and (e)-(m) of the Notice to Admit Facts and Authenticity of Documents dated 4 February 2010 that were served upon the cross claimant on 4 February 2010 from 16 February 2010 to the date of judgment; (ii) thrown away by reason of the incorrect diarisation of the commencement date of the trial by the solicitor for the plaintiff; (iii) Mecon also claimed, pursuant to UCPR 42.8(2)(a), the third defendant pay Mecon's costs on an indemnity basis incurred in proving the facts outlined in para 15 (a), (b), (e)-(m) of the Notice to Admit Facts and Authenticity of Documents dated 4 February 2010 that was served upon the cross claimant on 4 February 2010 from 16 February 2010 to the date of judgment. 30I reject these submissions. I have held that Mecon was liable to indemnify the third defendant. If Mecon had acknowledged its liability to indemnify the third defendant prior to the proceedings commencing, the costs referred to in 29 and (iii) would not have been incurred. As to costs in 29, see below.

The cross defendant to the second cross claim (Mecon) 31I held in the substantive judgment that prima facie the cross defendant to the second cross claim was entitled to a verdict against the first defendant on the second cross claim. This was because the plaintiff had failed to prove liability on the part of the first defendant. 32As the first defendant will receive payment of his costs against the plaintiff from Mecon via the Bullock order obtained by the plaintiff against the third defendant, it appears to me that the appropriate course is to enter judgment for the cross defendant on the second cross claim with no order as to costs.

General 33During the hearing an issue arose out of an incorrect diarising of the hearing date by the plaintiff's solicitor. The hearing of the proceedings was listed for five days commencing on Monday 22 February 2010. The plaintiff's solicitor diarised the commencement date as Friday 26 February 2010. He communicated that date to the first and second defendants who had not been present when the date was fixed. Counsel for the first and second defendants and the plaintiff were given the incorrect hearing dates. 34The incorrect diarising resulted, it is submitted, in some costs being thrown away by the parties. The active parties have sought orders that the plaintiff pay the costs thus thrown away. The plaintiff has made no submissions as to this question. 35In my opinion, the plaintiff should not be entitled to any costs incurred by him or thrown away solely as the result of the diary error. Otherwise, any costs incurred or thrown away as a result of the diary error should be costs in the cause.

Orders 36I make the following orders additional to those made in the substantive proceedings:

The plaintiff is to pay the first defendant's costs on the ordinary basis.
I make a Bullock order in respect of such costs against the third defendant.
The third defendant is to pay the plaintiff's costs on the ordinary basis. Such costs do not include the plaintiff's costs identified in para [35] hereof.
The third defendant is to pay the third cross defendant's costs on the ordinary basis.
The first cross defendant to the first cross claim is to pay the third defendant's costs.
Judgment for the cross defendant on the second cross claim with no order as to costs.

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: 06 July 2011

Occupational Health and Safety Act 2000(NSW)

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