[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
Judgment
THE COURT: In this matter, on 10 August 2016 the Court by majority upheld the appellants' appeal and directed that submissions in relation to the question of costs of the appeal and of the proceedings below be filed by the parties with the intent that costs orders be made on the papers. The respective parties have since filed submissions as to costs.
There is no issue between the parties as to the costs of the appeal. Both sides are agreed that the appropriate order is that the respondent should pay the appellants' costs of the appeal in accordance with the ordinary rule that costs should follow the event. That order will be made.
Where there is a divergence between the parties is as to the costs of the proceedings in the court below.
The appellants submit that the proceedings at first instance should be viewed as being proceedings against one party rather than two (even though they were unsuccessful at first instance against the second defendant and did not appeal from that part of the primary judge's decision). They have proposed orders in which they accept that they should pay the costs of the first instance proceedings to the extent that the second defendant incurred costs separate from those of the first defendant in defending the proceedings but otherwise that the State pay their costs of the proceedings below against both defendants.
In support of that submission the appellants point to the length of the litigation, which involved a number of interlocutory steps; to the fact that at all stages of the litigation the defendants were jointly represented; and say that, up until the exchange of witness statements in the lead up to the trial, no evidentiary version (of events) of the second defendant was filed or served. They further assert (which the State disputes) that it was at the commencement of the trial for the first time that counsel representing both defendants announced that the first defendant indemnified the second defendant in respect of the proceedings. The appellants argue that, that at all stages, the first defendant (now respondent) was the primary defendant. They maintain that the arguments throughout were identical or almost identical against both defendants.
The appellants submit that from a costs perspective the situation in respect of the first instance proceedings is more akin to that of litigants having failed on a subsidiary issue against one party than having succeeded against one party and failed against the other. The appellants submit that there would be a manifest injustice if they were to be deprived of half of their first instance costs.
The appellants accept that it is appropriate for the costs order made by the primary judge in the second defendant's favour to stand to the extent provided for in the orders made by this Court on 10 August 2016. However, for the benefit of any costs assessor who may be involved in a determination of costs, the appellants request that this Court clarify that that limited costs order is directed at the appellants paying such of the second defendant's costs as were personally incurred by her in the proceedings (as opposed, in effect, to the appellants paying half of the costs of the two defendants of the proceedings, which they argue could be an available interpretation of the orders made on 10 August 2016).
The respondent, in response to the appellants' request for clarification, maintains that there is no basis for any qualification of the orders of the court below in relation to the costs of the second defendant and seeks the removal or excision of the parenthetical words in order 2 of the orders made on 10 August 2016 (either pursuant to r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) or as an appropriate response to the appellants' submissions on the costs issue).
The respondent submits that there was nothing in its conduct of the proceedings that would make it fair for this Court to impose liability on it for the costs of the successful defendant (the second defendant) of the proceedings at first instance, referring to the principles articulated in Gould v Vaggelas [1985] HCA 75; (1985) 157 CLR 215 at 229-230 (per Gibbs CJ) and Whitbread v Rail Corporation of New South Wales [2011] NSWCA 130 at 163-266 (per Whealy J with whom Giles and McColl JJA agreed). In that regard, the respondent argues that it made considerable efforts to persuade the appellants to discontinue the proceedings against the second defendant (and has included copies of correspondence and an offer of compromise apparently made to the appellants in support of that submission). The respondent submits that there is no aspect of the exercise of the primary judge's discretion in relation to costs that would justify interference in respect of the order that the plaintiffs pay the costs of the second defendant.
[3]
Determination
As to the clarification sought in respect of order 2 of this Court's previous orders, and the respondent's submission that there should be a variation of that order, neither should be accepted. The intent of the carve-out from the setting aside of the primary judge's earlier orders should be plain. There remains extant an order that the plaintiff in each of the proceedings pay the second defendant's costs but only to the extent that those costs were incurred by the second defendant separately from the costs of the first defendant in defending the proceedings. To the extent that costs were incurred in the litigation that would have been incurred by the first defendant in any event (i.e., which did not relate to the particular position of the second defendant) then those are costs of the first instance proceedings for which, as successful parties on the appeal involving the first defendant, the appellants should not be liable.
Similarly, the proposition that the respondent should be liable for the appellants' costs of the first instance proceedings as against the successful second defendant should not be accepted. There were significant differences as between the position of the second defendant and that of the first defendant, which led to the different outcomes as between the plaintiffs and each of those defendants. Clearly a forensic decision was made to join the second defendant as a party to the proceedings. It is unnecessary to take into consideration the steps unsuccessfully taken to persuade the plaintiffs not to pursue their claims against the second defendant as an individual. The fact remains that they did pursue those claims and the claims were unsuccessful. No basis has been established for the making of what is commonly referred to as a Bullock order (i.e., that the respondent indemnify the appellants for the costs they are liable to pay to the second defendant) (Bullock v London General Omnibus Co [1907] 1 KB 264). Nor has it been established that the respondent should be liable for the respective appellants' costs of the unsuccessful proceedings each brought against the second defendant.
The Court therefore makes the following additional orders to those made on 10 August 2016:
1. The respondent pay the appellants' costs of the appeal.
2. In each of proceedings 2008/00289325 and 2008/00289326, the first defendant pay the plaintiff's costs of the proceedings against the first defendant.
[4]
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Decision last updated: 31 August 2016