Edwards and Ors v Endeavour Energy and Others; Precision Helicopters Pty Limited v Endeavour Energy and Ors; Endeavour Energy v Precision Helicopters Pty Limited and Anor

Supreme Court of NSW|2014-02-12|Before: Johnson J, Mr J

Judgment 1JOHNSON J: On 19 December 2013, I delivered my primary judgment in this matter: Edwards and Ors v Endeavour Energy and Others; Precision Helicopters Pty Limited v Endeavour Energy and Ors; Endeavour Energy v Precision Helicopters Pty Limited and Anor (No. 4) [2013] NSWSC 1899. At the conclusion of the primary judgment (at [469]-[471]), I indicated that the parties would be given an opportunity to consider the question of appropriate orders to be made flowing from the judgment, including as to costs. 2Written submissions were furnished concerning outstanding issues and oral submissions were made yesterday concerning areas remaining in contest. 3At the conclusion of this judgment, I will make orders with respect to three sets of proceedings: (a)Proceedings 2008/289264 commenced by members of the Edwards family ("the 2008 Proceedings"); (b)Proceedings 2009/297468 commenced by Precision Helicopters Pty Limited ("Precision") ("the 2009 Proceedings"); (c)Proceedings 2010/147165 commenced by Endeavour Energy ("Endeavour") ("the 2010 Proceedings"). 4There is no dispute concerning the orders to be made with respect to the 2008 Proceedings. 5There is a dispute between Precision and Endeavour only concerning costs orders to be made with respect to the 2009 and 2010 Proceedings. 6Finally, Endeavour has indicated an intention to appeal with respect to orders made in each of the 2008, 2009 and 2010 Proceedings, and seeks a stay for the purpose of an appeal. Telstra Corporation Ltd ("Telstra") opposes the grant of a stay. Other affected parties do not oppose Endeavour's stay application.

Contested Costs Orders With Respect to the 2009 and 2010 Proceedings 7The area of contest between Precision and Endeavour with respect to the 2009 and 2010 Proceedings relates to the question of costs. 8Put shortly, Mr Lloyd, counsel for Precision, submits that the costs of the 2009 and 2010 Proceedings, as between Precision and Endeavour, should be resolved by one or other of the following approaches: (a)an order that Endeavour pay Precision's full costs in both the 2009 and 2010 Proceedings, upon the basis that Precision was the practical victor in both proceedings which overlapped very substantially; (b)alternatively, if the Court approached the matter upon the basis of an overall costs order in the 2009 and 2010 Proceedings, then Precision was the overall successful party as against Endeavour, and an order should be made that Endeavour pay (say) 90% of Precision's costs of the 2009 and 2010 Proceedings; (c) alternatively, if a costs order was made in the 2010 Proceedings in favour of Endeavour against Precision, then any liability of Precision to Endeavour as a result of that costs order should be included in the scope of Precision's indemnity from Endeavour, arising from Precision's successful contractual indemnity claim in the 2009 Proceedings. 9Mr McIlwaine SC, for Endeavour, submits that an order for costs should be made in favour of Endeavour against Precision in the 2010 Proceedings, as Endeavour succeeded against Precision in those proceedings and costs should follow the event. 10Mr McIlwaine SC opposes the making of a percentage costs order in favour of Precision in the 2009 and 2010 Proceedings (Precision's second alternative). He submitted, as well, that the Court should not adopt Precision's third alternative. It was submitted that Precision's contractual indemnity claim in the 2009 Proceedings ought not extend to Precision's liability to Endeavour in respect of costs for the 2010 Proceedings. 11Costs are in the discretion of the Court and the Court has full power to determine by whom, to whom and to what extent costs are to be paid: s.98(1) Civil Procedure Act 2005. Costs should follow the event unless it appears to the Court that some order should be made as to the whole or any part of the costs: Rule 42.1 Uniform Civil Procedure Rules 2005. 12The identification of the event, for the purpose of this rule, is to be undertaken in a practical manner: Holt v TCN Channel Nine Pty Limited (No. 2) [2012] NSWSC 968; 82 NSWLR 293 at 297 [14]. Regard should be had to the practical effect of the outcome in the litigation, and not just the bare form of the orders to be made. 13The exercise of the Court's discretion as to costs ultimately requires an assessment of what is fair in all the circumstances: McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306 at [22]. 14At first glance, Order 1 to be made in the 2010 Proceedings (see [39] below) suggests that Endeavour has succeeded against Precision in those proceedings. 15However, three observations should be made in this respect. 16Firstly, there was a very substantial overlap in the issues to be litigated in the 2009 and 2010 Proceedings. This is supported by aspects of the pleadings. See paragraph 42 of Precision's Second Further Amended Statement of Claim filed 18 May 2012 in the 2009 Proceedings, and paragraph 4 of Precision's Amended Defence filed 18 May 2012 in the 2010 Proceedings, as confirmed by the discussion which took place in the hearing surrounding these amendments (T230-233). 17Secondly, Endeavour failed very substantially on the principal issues litigated as between Endeavour and Precision at the hearing: (a)Endeavour failed on the aviation issues; (b)Endeavour failed on the contractual issues; (c)Endeavour succeeded against Precision on the question whether Mr Edwards was a "passenger" under the Civil Aviation (Carriers Liability) Act 1967 (NSW); (d)Endeavour achieved a limited measure of success on the helmet issue, with Endeavour bearing 85% of the responsibility for that failure, and Precision 15%; (e)on the apportionment issue, Endeavour having very limited success against Precision on the helmet issue only, the overall apportionment to Precision was calculated at 10%, with 90% to Endeavour. 18Thirdly, I accept that a consequence of Precision's success on the contractual indemnity claim in the 2009 Proceedings would extend to, and include, any liability of Precision to Endeavour in the 2010 Proceedings in respect of costs. 19An order was made that the 2008, 2009 and 2010 Proceedings be heard together. No order for consolidation of the proceedings was made. Accordingly, they remained separate proceedings. The ordinary approach would involve the making of separate orders (including orders as to costs) in each of the three proceedings: Tomanovic v Global Mortgage Equity Corporation Pty Limited (No. 2) [2011] NSWCA 256; 288 ALR 385 at 397 [67] ("Tomanovic"). 20However, this practice is not immutable and, in the exercise of discretion, the Court may make a single overall costs order in two proceedings in an appropriate case: Tomanovic at 399 [78]-[80]. 21It would not accord with the justice of the case for Endeavour to obtain a costs order against Precision in the 2010 Proceedings. Nor, in my view, should Precision obtain a full costs order against Endeavour made expressly in the 2010 Proceedings. 22I accept Mr Lloyd's submission, in support of his second alternative, that Precision may be characterised as the overall successful party in the issues litigated as between Endeavour and Precision in the 2009 and 2010 Proceedings. On the issues litigated, Endeavour achieved a very limited success on the helmet issue, accompanied by success on the "passenger" issue (which, in my view, has little bearing on the resolution of the costs question). 23In the result, I am satisfied that the appropriate course is to apportion costs to be awarded in favour of Precision against Endeavour in both the 2009 and 2010 Proceedings. The apportionment process involves the exercise of discretion and is impressionistic: Hawes v Dean [2013] NSWSC 1246 at [36]. Detailed analysis of time spent on issues is likely to give a "false air of mathematical precision", with mathematical precision being illusory: Tomanovic at 400 [84]. 24By broad reference to the issues litigated as between Precision and Endeavour, their significance, the time occupied in the hearing on the various issues and the coverage of those issues in my primary judgment, I am satisfied that an appropriate course is to make a single order that Endeavour pay 90% of Precision's costs in the 2009 Proceedings and the 2010 Proceedings.

Endeavour's Stay Application 25Mr McIlwaine SC foreshadowed an appeal by Endeavour which would challenge findings made concerning Endeavour's contractual breach, the extent of Endeavour's indemnity in favour of Precision in respect of the action under s.151Z Workers Compensation Act 1987, the aviation negligence finding in favour of Precision, the finding of no breach by Telstra and the construction and rejection of Endeavour's express contractual indemnity claim. 26The foreshadowed appeal identified topics for challenge, rather than identification of grounds of appeal, let alone submissions in support of any grounds. In these circumstances, it is difficult for the Court to form a view as to whether there is a serious question to be tried on the appeal: Taheri v Vitek [2013] NSWCA 438 at [4]. 27Mr McIlwaine SC contended that the balance of convenience favoured the grant of a stay in circumstances where the process of costs assessment is likely to be complex, and ought not proceed pending resolution of Endeavour's appeal. 28Mr Downing, counsel for Telstra, opposed the grant of a stay, noting that Telstra had succeeded in all respects and was entitled to the fruits of its victory. He submitted that no basis had been articulated at this point for a stay of orders favourable to Telstra. 29Mr Lloyd did not oppose the grant of a stay of orders to be made pending determination of any appeal, upon an undertaking on behalf of Endeavour that an appeal would be filed and would be prosecuted diligently. 30In the circumstances of the case, I expressed the view yesterday that I was minded to grant a stay for a period to enable Endeavour to lodge an appeal, with the continuation of the stay being a matter to be determined by a Judge of Appeal in light of the grounds of appeal relied upon by Endeavour. 31I note Mr Downing's submission that it is possible that costs could be agreed as between the parties, so that the complications surrounding costs assessment may not arise. However, I do not think that the theoretical possibility as to agreement as to costs excludes the real prospect that a complex process of costs assessment may be required in this case. The balance of convenience operates in favour of the grant of a stay, at least on a temporary basis in these circumstances. 32The appropriate course, in my view, is to grant to Endeavour a stay of the relevant orders, with the stay to operate for a period of eight weeks from the date upon which Endeavour files and serves a Notice of Appeal in the Court of Appeal.

Outstanding Issues to be Determined in the Claim by the Edwards Children 33There remains to be heard, as part of the 2008 Proceedings, an assessment of damages with respect to the Second Plaintiff, Connor Edwards, and the Third Plaintiff, Rubyanna Edwards. 34Rubyanna Edwards is presently 15 years of age. In a report dated 22 July 2011, Dr Phillips, psychiatrist, recommended that Rubyanna's final prognosis should be deferred until after she completed her secondary education. A further consultation has been arranged for Rubyanna with Dr Phillips on 24 June 2014. 35In these circumstances, Mr Andrews, counsel for the Edwards children, seeks an adjournment of the 2008 Proceedings to 29 August 2014 for directions. All other parties to the proceedings consent to that order.

Orders 36In light of the matters agreed between the parties, and the resolution of disputed matters considered in this judgment, I make the following orders. The 2008 Proceedings 37In the 2008 Proceedings, I make orders as follows: Primary Proceedings (1) Verdict for the Third Defendant (Telstra) in the action as against the Second Plaintiff (Connor Edwards) and the Third Plaintiff (Rubyanna Edwards). (2) Proceedings listed for directions before Johnson J at 2.00 pm on 29 August 2014. (3) Liberty to apply on two days' notice. First Cross-Claim (Telstra) (4) First Cross-Claim dismissed. Second Cross-Claim (Endeavour) (5) Verdict for the Second Cross-Defendant (Telstra) on the Second Cross-Claim as against the Cross-Claimant (Endeavour). Costs (6) Costs reserved. The 2009 Proceedings 38In the 2009 Proceedings, I make the following orders: Primary Proceedings (1) Judgment for the Plaintiff (Precision) against the First Defendant (Endeavour) in respect of the hull and loss of business claims in the sum of $490,000.00. (2) Judgment for the Plaintiff (Precision) against the First Defendant (Endeavour) on the contractual indemnity claim. (3) Verdict for the Second Defendant (Telstra) as against the Plaintiff (Precision). (4) Plaintiff (Precision) to pay Second Defendant's (Telstra's) costs of the action. Cross-Claim (Endeavour) (5) Judgment for the First Cross-Defendant (Precision) on the Cross-Claim as against the Cross-Claimant (Endeavour). (6) Verdict for the Second Cross-Defendant (Telstra) on the Cross-Claim as against the Cross-Claimant (Endeavour). (7) Cross-Claimant (Endeavour) to pay the First Cross-Defendant's (Precision's) costs and the Second Cross-Defendant's (Telstra's) costs of the Cross-Claim. (8) I declare that the indemnity referred to in Order (2) above includes an indemnity from Endeavour to Precision in respect of the following matters: (a) any liability of Precision to the Second Plaintiff in Proceedings 2008/289264; (b) any liability of Precision to the Second Plaintiff in proceedings 2008/289264 in respect of costs; (c) any liability of Precision to the Third Plaintiff in proceedings 2008/289264; (d) any liability of Precision to the Third Plaintiff in proceedings 2008/289264 in respect of costs; (e) Precision's liability to pay the judgment and interest to Endeavour in proceedings 2010/147165. The 2010 Proceedings 39In the 2010 Proceedings, I make the following orders: (1) Judgment for the Plaintiff (Endeavour) against the First Defendant (Precision) for an indemnity pursuant to s.151Z Workers Compensation Act 1987 in the sum of $3,130,000.00 plus interest. (2) Verdict for the Second Defendant (Telstra) as against the Plaintiff (Endeavour). (3) Plaintiff (Endeavour) to pay the Second Defendant's (Telstra's) costs of the action. Costs as Between Precision and Endeavour in the 2009 and 2010 Proceedings 40I make a single order that Endeavour pay 90% of Precision's costs of the 2009 and 2010 Proceedings. Stay of Orders 41Upon the undertaking of Endeavour to file a Notice of Appeal and to prosecute the appeal diligently, I stay the orders made in each of the 2008, 2009 and 2010 Proceedings until 5.00 pm on a date eight weeks after the filing and service by Endeavour of a Notice of Appeal to the Court of Appeal in the 2008, 2009 and 2010 Proceedings. 42For more abundant caution, I note that Orders 2 and 3 in the 2008 Proceedings are excluded from the stay.

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: 13 February 2014

Civil Aviation (Carriers Liability) Act 1967(NSW)

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