GARNETT -v- QANTAS AIRWAYS LTD [2019] WADC 89 (29 October 2019) - WADC 2019 case summary — Zoe

[19]

First, Skystar argues that in interpreting cl 6.2(c) regard should be had to cl 6.1 which deals with indemnities. The indemnity expressly does not cover Karratha for liabilities caused or contributed to by Karratha. It does not extend to claims arising from the negligence of Karratha.
Karratha argues that the clauses should be read separately and that the intent of the insurance clause is to protect both parties for their various types of risk, including public liability, whereby one or both of them may be negligent.
Secondly, Skystar argues that the rights and interests referred to in cl 6.2 are limited to the rights and interests of Karratha pursuant to the lease. The lease is concerned with the lease of an office space within the airport terminal. The demised premises and land does not extend to the apron of the airport and accordingly the subject matter of the lease is nothing to do with the operations of Karratha airside at the airport.
Karratha argues the permitted purpose for the lease is for 'ground handling, office and ramp functions'.[118] Those ground handling and ramp functions are carried out airside and in the terminal building. It was always understood by the parties that Skystar employees would be engaged to perform their duties on parts of the airport not contained within the demised premises. The only legal basis upon which Skystar employees were to be on the airside of the terminal was pursuant to the rights granted to it in the lease. In those circumstances Karratha argues that the only reasonable basis for construing cl 6.2(c) is that it was intended to cover both Skystar and Karratha in respect of all Skystar operations at the airport including in areas not part of the demised premises or the land. In support of its argument it refers to cl 6.2(d) the requirement to effect employees' indemnity insurance in respect of the lessee's employees and cl 6.2(e) a policy of motor vehicle insurance and third party cover in respect of the lessee's vehicles.

[38]

In cl 10.3 the lessee is obliged to indemnify the lessor from any cost expense loss or other liability caused by the lessees own act, neglect or omission. Release of the lessor from liability expressed in cl 10.4 excludes the case where the loss or damage is caused by the negligence of the lessor. The clauses are clearly to be read together.
The indemnity in cl 6.1 expressly does not cover Karratha for liabilities caused or contributed to by Karratha. It does not extend to claims arising from the negligence of Karratha. I am satisfied in accordance with the reasoning in Erect Safe, the promise to procure insurance in cl 6.2 should be construed as supporting that limited right of indemnity and going no further. I am fortified in that view by the plain reading of the lease. Clause 6.1 is immediately adjacent to cl 6.2 and under the leading insurances and indemnities. That there is a second indemnity clause at 10.3 of the lease demonstrates 6.1 is not to be read as a stand-alone clause. Applying that construction, the promise to insure in cl 6.2 did not require Skystar to effect insurance covering Karratha for its own negligence.
The construction urged by Karratha would involve requiring a tenant occupying a space of a little over 48 square metres of the airport terminal to effect insurance covering Karratha for claims arising from its negligence over its entire operations at the airport. I am satisfied that no reasonable person in the position of the parties to this lease would have considered that the promise to insure had that meaning.
If I am wrong on that point, I go on to consider the commercial purpose of the lease.
Clauses 6.1, 6.2 and 6.3 are contained under the heading Insurances and Indemnities. In determining the meaning of those terms in the lease it is necessary to ask what a reasonable business person would have understood those terms to mean. The inquiry requires consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purposes or objects to be secured by the contract.
In this case the commercial purpose of the contract was the lease of premises inside the terminal. The permitted use for the purpose of the lease of those premises was ground handling, office and ramp functions. The 'rights and interests' referred to in cl 6.2 are limited to the rights and interests of Karratha pursuant to the lease. That permitted use cannot in my view extend to an interpretation of the insurance clause that requires Skystar to enact public liability insurance to cover Karratha for any occurrence outside of the demised premises, in this case on the tarmac. The tarmac and the construction and maintenance of structures thereon was the sole responsibility of Karratha. It is beyond the ambit of the lease.
The workers' compensation insurance point raised by Karratha also, with respect, must fail. The 'airside' activities of Skystar employees were governed by the ground handling agreement with Qantas which has specific workers' compensation insurance requirements for Skystar employees working airside. This issue was not raised in the course of the trial and was not pleaded by Karratha.
I do not accept Karratha's argument that the permitted use in the lease created the legal basis for Skystar employees to work airside. The authority for Skystar to perform its ground handling function is derived from the ground handling agreement with Qantas.[119] In any event this issue was not raised on the pleadings by Karratha nor was any evidence led at trial in relation to it. This argument must fail.
Skystar has pleaded that Karratha has waived its rights to assert a breach of cl 6.2. In light of my findings that there has been no breach by Skystar it is not necessary to consider this issue however for the sake of completeness I will address it briefly. Waiver means the unilateral abandonment of a right or claim. It may apply where a party to a contract represents, by its conduct or inaction, that it will not enforce a right under the contract and the other party alters its position. Therefore, by express statement, one party may waive a term of the contract and can no longer effectively assert that right and demand its performance.
For a waiver to occur there needs to be unequivocal words or conduct, including a deliberate failure to assert a right up to the latest possible time. I do not accept that by failing to demand evidence of insurance policies that waiver has occurred in this case.
In conclusion Karratha's claim for breach of contract by failing to insure pursuant to the lease is dismissed.

[50]

Care must be taken to avoid an automatic or rigid application of the ordinary cumulative criteria for determining whether a term should be implied in a written contract to a case where the contract is oral or partly oral or where it is apparent that the parties have never attempted to reduce their agreement to complete written form ... The cases in which those criteria were laid down or accepted as the cumulative ingredients of an overall test were concerned with the question whether a term should be implied in a formal contract which was complete upon its face: see, in particular, B.P. Refinery (Westernport) Pty. Ltd. v. Hastings Shire Council ((1977) 52 A.L.J.R. 20, at p. 26); Secured Income Real Estate (Australia) Ltd. v. St. Martin Investments Pty. Ltd. ((1979)144 C.L.R. 596); Codelfa Construction Pty. Ltd. v. State Rail Authority of N.S.W ((1982) 149 C.L.R. 337). In such cases, the insertion of an additional term effectively involves an alteration to what the parties have formally accepted as the complete written record of the compact between them. As the judgment of Mason J. in Codelfa ((1982) 149 C.L.R., at pp. 345-347) (Stephen and Wilson J. concurring with his Honour's comments on this aspect of the case) clearly indicates, the cumulative criteria formulated or accepted in such cases cannot be automatically applied to cases such as the present where the parties have not attempted to spell out all the terms of their contract but have left most or some of them to be inferred or implied. Where that is so, there is no question of effectively altering the terms in which the parties have seen fit to embody their agreement; the function of a court is, as Lord Wilberforce pointed out in Liverpool City Council v. Irwin ([1977] AC 239, at p. 254): 'simply ... to establish what the contract is, the parties not having themselves fully stated the terms.' In the performance of that function, considerations of what is 'reasonable', 'necessary to give business efficacy to the contract' and 'so obvious that 'it goes without saying '' ... may be of assistance in ascertaining the terms which should properly be implied in the contract between the parties. There will not, however, be the need or the justification for the law to refuse to imply any imputed term which does not clearly satisfy all such requirements. This is particularly so where, as here, the contract has passed from the executory stage and has been executed by one or both parties, (emphasis added)

[53]

Qantas submits that the term sought to be implied would meet the more stringent criteria of terms to be implied into formal contracts as set out in BP Refinery. It argues that it would have been obvious at the time of entry into the airport agreement that Karratha was required to provide safe access for Qantas' passengers to disembark aircraft and access the terminal building. Qantas could not safely and effectively use Karratha Airport unless Karratha provided safe access for disembarking passengers as Qantas had no rights under the agreement to itself effect structural changes to the access route (in the form of barriers around the plinth).
In those circumstances, it argues Qantas could not reasonably or effectively use Karratha Airport unless Karratha provided an appropriate access route or path for disembarking passengers to move from the nominated aircraft parking bay to the arrivals area of the terminal building. Further, Qantas could not reasonably or effectively use Karratha Airport unless this access route was safe for its passengers.
Qantas argues that the implied term was necessary for the reasonable and effective operation of the Airport Agreement in the circumstances. It can thus be implied into the Airport Agreement pursuant to the test formulated by Deane J in Hawkins v Clayton (1988) 164 CLR 539 for the implication of terms into informal contracts.
It argues the term was either an inferred term based on the actual intention of the parties or an implied term based on the presumed intention of the parties. The term was capable of clear expression, fair and equitable and not inconsistent with the (limited) express terms of the contract.
Qantas points to the evidence of change to the area surrounding the plinth in June 2012; the evidence of the plaintiff in regard to the lighting; the evidence of Mr Swetman and Mr Milk as to the responsibility of the AROs to observe any dangers airside and take action in respect of any matter that affects passenger safety. It argues that from June 2012 until 5 November 2012 when the plinth was painted and star pickets re-installed Karratha failed to provide safe access for passengers. During this period the plinth posed a tripping hazard. Karratha had breached the implied term by failing to provide safe access. Had it not breached the term then Qantas would not have incurred liability to the plaintiff.
Karratha argues that such a term is neither reasonable nor equitable. What is being sought to be imposed is a requirement that Karratha strictly indemnify Qantas in respect of any acts or omissions on the part of Karratha arising from passenger disembarkation. It asks firstly why would Karratha agree to indemnify Qantas for all acts and omissions even where there may have been negligence on the part of Qantas? Secondly, why would Karratha agree to indemnify Qantas for accidents that may have occurred in the course of disembarking the passengers where there was an arm's length arrangement between Qantas and an experienced ground handling contractor which provided that Skystar were to perform that duty?
Karratha argues that an arrangement had existed for more than 10 years whereby it provided AROs who ensured that the tarmac was safe for aircraft to land on and depart from, including ensuring there were no wildlife to impede the aircraft and no detritus on the airside of the terminal. Skystar was responsible for the safety of disembarking passengers and getting them to the terminal, not Karratha. In these circumstances it argues that is not reasonable or equitable to impose 'broad and uncertain' terms on Karratha.
In terms of the criteria in BP Refinery Karratha argues the implied term is not necessary to give business efficacy to the contract. The contract had worked without incident over many years until the incident involving the plaintiff.
It argues the term sought to be implied is 'not so obvious it goes without saying' as it is too broad and seeks to impose an indemnity on Karratha which no properly advised party would have ever entered into.
I accept the arguments of Qantas and am satisfied that the term sought to be is not too broad and it is necessary for the reasonable or effective operation of the Airport Agreement.
It meets the more stringent criteria set out in BP Refinery and that set out in Hawkins v Clayton by Deane J.
As to the reasonableness of the term, it is incorrect to say that Qantas is seeking to have an indemnity implied into the Airport Agreement. The implied term is for Karratha to provide safe access for disembarking passengers. If Karratha breaches the implied term by failing to provide safe access, then the breach will sound in damages. That is the consequence of breaching a contractual term; it does not make the term an indemnity.
Karratha owns, operates and controls the airport. I find it a reasonable and equitable that it be responsible for providing a safe access route for an airline's disembarking passengers when that airline is paying to access and use the airport.
The fact that Qantas contracted Skystar to marshal passengers, and that Skystar had contractual obligations to do so safely, does not undermine the reasonableness (or necessity) of the term that Karratha would provide safe access.
There is no evidence that the terms of the Standard Ground Handling Agreement between Skystar and Qantas were in place when the Airport Agreement was formed, or that the terms of the ground handling agreement were mutually known circumstances to Karratha and Qantas at that time. Therefore, Skystar's engagement and the terms of the ground handling agreement cannot be relevant to the implication of a term (based on the presumed intention of the parties) into the Airport Agreement.
Qantas does not allege that Karratha was obliged to provide passenger marshalling services under the Airport Agreement. It accepts that Qantas had to either marshal passengers itself or engage a ground handler to do so. It further accepts that whoever undertook the passenger marshalling would have to do so safely. These matters do not undermine the reasonableness of Karratha being required to provide safe access under the Airport Agreement.
Qantas contends for a term that Karratha (as the owner, occupier and controller of the airport and airside infrastructure) would ensure that there was a safe access route or pathway for disembarking passengers.
Such a term is clearly reasonable (and indeed necessary) in the circumstances, including that:

[56]

This term would not require Karratha to either marshal passengers or supervise the marshalling of passengers. However, it would require Karratha to take action to alleviate safety hazards if deficiencies in the access pathway or route - constituted by Karratha's infrastructure - were resulting in an unsafe system of passenger marshalling being employed.
As to the submission that the implied term was not necessary because hundreds of thousands of passengers had landed at Karratha Airport without incident until the plaintiff's accident. No evidence was lead in support of that contention at trial.
The only evidence as to prior incidents (or the lack thereof) related to reported incidents at the plinth (and indeed this evidence was of limited value given the changes to the plinth area in mid-June 2012). There was no evidence regarding the history of other accidents or incidents.
I am satisfied from the evidence that Karratha was responsible for airside infrastructure, the safety of the airport and providing safe access for passengers. I accept the argument of Qantas that if the airport agreement was working perfectly well until the plaintiff's accident it is because Karratha was complying with the implied term. It was in the period June 2012 to November 2012 when the plinth was exposed that the safety of disembarking passengers was put at risk.
Karratha also submits that the term was not necessary because it had its own obligations to passengers under the OLA. Karratha can owe separate (and partly overlapping) obligations to entrants under the OLA and to Qantas in contract. I accept Qantas' argument that the co-existing obligation to entrants is not a reason to deny the implication of a contractual term owed to Qantas by Karratha.
Karratha's obligations to passengers do not detract from the fact that the Airport Agreement would not operate reasonably or effectively without an implied term that Karratha would provide safe access. Qantas could not use the airport for the intended purpose of the contract without assurance of safe access, and only Karratha (with sole control over the airport infrastructure) could provide a safe access route.
I am satisfied that safe access for disembarking passengers is essential to the Airport Agreement.
Karratha submits that a properly advised party would not have agreed to the implied term.
I accept the argument that at the time of contracting, it is difficult to see the basis upon which Karratha could, and would, legitimately have considered or contended that: (i) Karratha would allow Qantas to access and use the airport in exchange for fees and charges; (ii) Karratha would continue to control the airside infrastructure and would not permit Qantas to make permanent or structural changes; (iii) but Karratha would not agree to provide a safe access route for disembarking passengers.
In conclusion I find there was a term implied into the Airport Agreement between Karratha and Qantas to the effect that Karratha would provide safe access for passengers to disembark aircrafts and access the terminal building at Karratha Airport. Karratha breached that term during the period June 2012 to 5 November 2012 by the exposed plinth creating a tripping hazard. Qantas is entitled to damages for the breach of the implied term to be assessed. In light of these findings it is not necessary to imply the alternative implied term into the Airport Agreement.
I will hear the parties as to the appropriate orders and on costs.

[76]

In the main action the plaintiff claimed against Qantas pursuant to the Civil Aviation (Carriers Liability) Act 1959 (Cth) (CACLA) (as incorporated by Civil Aviation (Carriers Liability) Act 1961 (WA)).
In the third party action Qantas claimed against Karratha and Skystar for its potential liability to the plaintiff. On 14 May 2018 judgment was entered by consent for the plaintiff against Qantas: Garnett v Qantas [5].
On 21 May 2018 judgment was entered by consent for Qantas in its third party action against Skystar for 50% of Qantas' liability to the plaintiff: Garnett v Qantas [6].
Qantas continued its claim against Karratha seeking damages in the amount of $272,500 being 50% of the judgment entered for the plaintiff against Qantas and 50% of the costs ordered for the plaintiff against Qantas.
I found that there was a term implied into the airport agreement between Karratha and Qantas to the effect that Karratha would provide safe access for passengers to disembark aircrafts and access the terminal building at Karratha airport and that Karratha breached the term entitling Qantas to damages to be assessed: Garnett v Qantas [7], [208].
Qantas submits the assessment of damages and costs in the third party action should be heard separately from, and after determination of, quantum in the main action and that the costs as between Qantas and Karratha be reserved. The plaintiff agrees to those orders being made.
Qantas argues that the assessment of the plaintiff's damages in the main action will necessarily involve consideration of the medical and other evidence with respect to his injuries and damages. It is not yet known whether Karratha contends that the quantum of the damages sustained by the plaintiff by reason of his injury is less than the $500,000 paid by Qantas to the plaintiff under the CACLA and if so, that it was unreasonable for Qantas to settle with the plaintiff for $500,000. Issues of this nature, Qantas argues, may fall away once the plaintiff's damages claim has been heard and assessed.
Karratha has filed submissions dated 11 September 2019 in opposition to the plaintiff's application for a Bullock order or Sanderson order against it. It does not make any submissions in respect of the orders sought by Qantas in respect to the third party action.
I interpret from Karratha's silence on the orders sought by Qantas in respect of the third party action that it does not oppose the orders being made.
In any event I will give all parties seven days following receipt of these reasons liberty to apply to be heard in respect of the form of the orders I propose to make.
I am satisfied that it is appropriate that the third party action be heard after the main action for the reasons outlined by Qantas. To require Qantas to participate in the main action will incur unnecessary costs as it will play no active part in those proceedings. The issues on the third party action are discrete and should be heard separately.

[78]

The principles regarding the award of costs are well settled. The power to award costs is a statutory power and its exercise is discretionary: s 64(1) of the District Court of Western Australia Act 1969 (WA). Where no order as to their payment or apportionment is made the default position is that costs shall abide the event: s 64(1) District Court of Western Australia Act.
That statutory discretion is not unqualified and must be exercised judicially in accordance with established principle and factors directly connected with the litigation. The most important factor which guides the exercise of the costs discretion is the result of the litigation: Woodley v Woodley [No 2] [2017] WASC 94(S) [14] (footnotes omitted) (Pritchard J).
Order 66 r (1) and r (2) of the Rules of the Supreme Court 1971 (WA), which apply by operation of s 87 of the District Court of Western Australia Act, provide that without limiting the discretion, the court will generally order that a successful party recover its costs. Order 66 r (2) provides that a court may deprive a successful party of its costs in whole or in part or order costs be paid in whole or in part by the successful party to the unsuccessful party if the conduct of the successful party has resulted in unnecessary or unreasonably incurred costs.
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 the 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: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [67] (McHugh J).
The discretion of the court is to be exercised in accordance with the justice of the case.
A party entitled to costs may apply to the court for an order that costs awarded in their favour be paid other than as between party and party.
To warrant a departure from the ordinary rule that costs should be paid on a party and party basis there should be some special or unusual feature in the case. The question must always be whether the particular facts and circumstances of the case warrants the making of an order for payment of costs other than on a party and party basis: Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233 - 234.

[80]

Skystar seeks orders that the plaintiff pay its costs of the main action to be taxed on a party and party basis to 24 September 2015 and thereafter on an indemnity basis (or alternatively on an indemnity basis from 18 May 2018 when Skystar's Calderbank offer was made and rejected). It relies on an affidavit of its solicitor, Mark Andrew Grey Spencer, sworn 29 August 2019 attaching various correspondence between the solicitors for the parties and its submissions in response to in plaintiff's action and defences to the third party actions in the liability trial dated 8 May 2018.
The plaintiff submits there should be no order as to costs of the proceedings between the plaintiff and Skystar. Alternatively Skystar's recovery of costs from the plaintiff should be limited to no more that 35% of the costs of the action brought against it by Skystar. It opposes any order for indemnity costs.
I found that the plaintiff's claim against Skystar was extinguished, the plaintiff having failed to bring an action within the requisite two-year period provided for by s 34 of the CACLA. This followed upon my finding that Skystar was the agent of Qantas for the purposes of s 33 of the CACLA: Garnett v Qantas [135]. I then went on to consider the issue of the plaintiff's claim in negligence against Skystar and found that Skystar was negligent for the reasons outlined at [149] and, but for my finding that Skystar was the agent of Qantas, would have apportioned liability between Skystar and Karratha as to 50% Skystar and 50% to Karratha.
Skystar argues that it advised the plaintiff's former solicitors Messrs Friedman Laurie Singh & D'Angelo in writing as early as 24 September 2015 that Skystar was the agent of Qantas for the purpose of s 33 of the CACLA and that the plaintiff's claim was extinguished because it had not been brought within the requisite two-year period.[121]
In this correspondence it put the plaintiff's former solicitors on notice that if he continued with his claim, Skystar would make an application for indemnity costs if successful.
This defence was pleaded in the Skystar defence filed and served on 5 November 2015.
The plaintiff subsequently changed solicitors to his current solicitors Bradley Bailey Legal on 16 November 2015.
On 14 March 2016 Skystar wrote to the plaintiff's current solicitors reiterating that the claim was extinguished and requested that the plaintiff discontinue his claim against Skystar.
On 18 May 2018, being the fifth day of the trial which commenced on 14 May 2018, Skystar's solicitors served the plaintiff's solicitors with a Calderbank offer for judgment in favour of Skystar on a 'each party pay and bear their own costs' basis. Skystar's solicitor advised the plaintiff's solicitors that they would seek indemnity costs if that offer was rejected, which it was.
Skystar argues that the position that it was Qantas' agent and the plaintiff's claim against it was extinguished had not altered from 21 September 2015. That position was repeatedly conveyed to the plaintiff's former and current solicitors who were reminded that Skystar would seek indemnity costs if the claim against Skystar was pressed. They argue the plaintiff's conduct in prosecuting the claim was unreasonable because his claim was always extinguished and he knew or ought to have known that from his solicitors.
The plaintiff submits that it did not bring an action under the CACLA against Skystar. Its action was in negligence, which claim was litigated at the trial. If Skystar had been found not to be an agent of Qantas then the provisions of the CACLA would not have applied and the plaintiff would have succeeded in its action in negligence against Skystar. The plaintiff was successful on the issue of negligence at trial but unsuccessful on the issue as to whether Skystar was the agent of Qantas for the purpose of s 33 of the CACLA.
The plaintiff argues that Skystar denied negligence and pleaded contributory negligence in its defence filed 11 June 2016 and points to the fact that Qantas did not admit or deny in its defence filed 11 July 2016 that Skystar was an independent contractor as pleaded by the plaintiff, nor did it admit that Skystar was its agent in proceedings between Qantas and Skystar.[122] Accordingly, Skystar was put to the cost of proving it was the agent of Qantas by both the pleadings of Qantas and the plaintiff.
The plaintiff argues:
1. That the negligence action was not statute barred.
2. There was merit in his action of negligence which has been confirmed by the court's findings.
3. The claim that Skystar was not the agent of Qantas for the purpose of s 33 of the CACLA had merit and was clearly arguable. It is not a case where the plaintiff had wilful disregard of known facts or the clearly established law or where properly advised he should have known he had no chance of success in his negligence action or where he persisted in what should on a proper consideration be seen to be a hopeless case or there was some ulterior motive because of some wilful disregard or known fact or the clearly established law.
The plaintiff points out that the proceedings between Qantas and Skystar remained on foot until after the commencement of the trial when those parties reached settlement part way through the trial on 21 May 2018. Accordingly, Skystar conducted a defence of the negligence issue pleaded against it by Qantas identical to its defence of negligence pleaded against it by the plaintiff.
The plaintiff argues that where there are multiple issues in a case the court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. In this case it says the difficulty of the agency issue is evidenced by the fact that it remained in dispute between Qantas and Skystar at the commencement of the trial.
The plaintiff submits that there should not be an order as to costs of the proceedings as between the plaintiff and Skystar or alternatively Skystar's recovery of costs from the plaintiff should be limited to no more than 35% of the costs of the action brought against it by the plaintiff. The plaintiff does not elaborate on how it reaches the percentage of 35% in its submissions.
In relation to the Calderbank offer, the plaintiff argues that it was made on the fifth day of the trial and required the plaintiff to capitulate at a time when the plaintiff was committed to the trial, therefore to make the alternative costs order sought by Skystar would not be fair and reasonable in the circumstances of this case.

[107]

In this case there is no special or unusual feature of the case which would warrant an award of indemnity costs. Nor is there any reason that the plaintiff should not pay the costs of Skystar at all or at a reduced rate of 35% for the following reasons:
1. The agency issue was not straightforward. There was only one single judge decision in Australia on point. The arguments raised at trial by the plaintiff were not without merit. The issue was one of statutory construction and consideration of a number of international authorities: see Qantas v Garnett [90] - [135].
2. Further, the relationship between Qantas and Skystar was defined in the ground handling agreement[123] by the parties as one of principal and subcontractor. This remained an issue as between Qantas and Skystar until the first day of trial.
3. This cannot be said to be a hopeless case nor one where the plaintiff properly advised should have known he had no chance of success. The law in Australia at the time of trial cannot be properly characterised as being clearly established law. An order for indemnity costs from 24 September 2015 is not appropriate.
4. As to whether an indemnity costs order should be made from the date of the Calderbank offer on 18 May 2018, I am not satisfied that such an order is appropriate. The offer was made on 18 May, being the fifth day of trial after the majority of the evidence was heard. It was an offer that the plaintiff abandon his claim with each party to bear its own costs. I accept by that late stage of the trial the plaintiff was committed. The state of the evidence was such that its claim in negligence against Skystar had a sound evidentiary foundation, as is reflected in my findings on that issue. The agency issue remained arguable at that point which is reflected in the lengthy and complex closing submissions (both oral and written) made by the parties. For these reasons I decline to make an order for indemnity costs from 18 May 2018.
5. The plaintiff elected to pursue its argument on the agency issue at trial knowing that its negligence claim was contingent on the success of the argument as to agency. This is not a case where it has been partially successful against Skystar and therefore costs should be apportioned or reduced. I am satisfied that the appropriate order is the plaintiff pay the costs of Skystar to be taxed if not agreed.
The final issue for determination is whether a Sanderson or Bullock order should be made. Such orders may be made where a plaintiff succeeds against one defendant, but fails against another defendant. The effect of such an order is that the costs of the successful defendant are paid directly or indirectly by the unsuccessful defendant. A Sanderson order is an order that the unsuccessful defendant pay the successful defendant's costs of the action: Sanderson v Blyth Theatre Co [1903] 2 KB 533. A Bullock order is an order that the unsuccessful defendant pays for the plaintiff's costs for which the plaintiff is liable to the successful defendant: Bullock v London General Omnibus Co [1904-7] All ER Rep 44.
In Coastal Hire Pty Ltd v Ewers [2009] WASCA 36(S) the relevant principles were set out by Newnes JA with whom Wheeler and Buss JA agreed at [22] - [34]. They were summarised at [34] as follows:

[109]

the plaintiff's claims against two or more defendants are substantially connected or interdependent;
the plaintiff acted reasonably in suing the successful defendant; and
there is something in the conduct of the unsuccessful defendant which makes to just to move the burden of the successful defendant's costs from the plaintiff to the unsuccessful defendant.
For the reasons that follow I am not persuaded that a Bullock order or Sanderson order is appropriate in this case.
The plaintiff's claims against Karratha and Skystar were substantially connected. This is apparent from the issues and evidence led at trial.
As to whether the plaintiff acted reasonably in suing Skystar it argues that Qantas denied liability for the plaintiff's claim until the first day of trial under the CACLA. Further it denied Skystar was its agent for the purpose of s 33.
Further, the issue as to who had responsibility for the management and control of the area where the plinth was located was of critical importance to the outcome of the case, Karratha had from the outset denied legal responsibility to see that the plinth did not present a danger and sought to shift the level of responsibility to Qantas and Skystar. It argues that the plaintiff was in the position where he stood to be under compensated if the recovery of damages was limited to the maximum of $500,000 payable under the CACLA. It refers to the ground handling contract which defined the relationship between Qantas and Skystar as principal and subcontractor, it also points out that the argument that Skystar was not an agent had merit in view of the limited case law in Australia on the point. It argues that apart from the discovery of the ground handling agreement which defined the relationship between Skystar and Qantas the precise arrangements between those parties was not within the knowledge of the plaintiff and it would have been remiss of them not to have joined Skystar as a defendant to the action.
The focus of Karratha's submissions in opposition to Sanderson or Bullock orders being made focuses on the issue as to whether the plaintiff acted reasonably in suing Skystar, it argues that its solicitors had alerted the plaintiff's solicitors to the limitation period under the CACLA prior to proceedings being issued against Skystar on 5 October 2015. It refers to correspondence sent on 13 April 2015.[124] In that letter Mr Richards of SRB Legal said:

Legislation Cited (11)

Aviation (Carriers' Liability) Act 1959

Aviation (Carriers' Liability) Act 1961

Liability Act 2002

Liability Act 1985

Liabilities Act 2002

Aviation (Carrier's Liability) Act 1959

Aviation (Carriers Liability) Act 1959

Aviation (Carriers Liability) Act 1961

Court of Western Australia Act 1969

Court Act 1935

Profession Act 2008

Cases Cited (42)

GARNETT -v- QANTAS AIRWAYS LTD [2019] WADC 89 (29 October 2019)

Adeels Palace Pty Ltd v Moubarak [2009] HCA 48

Air Link Pty Ltd v Paterson [2009] NSWCA 251

Brodie v Singleton Shire Council; Ghantous v Hawkesbury City Council [2001] HCA 29; (2001) 206 CLR 512

Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378

Department of Housing and Works v Smith [No 2] [2010] WASCA 25

Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; (2008) 72 NSWLR 1

GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 13

Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21

Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375

Neindorf v Junkovic [2005] HCA 75

Parkes Shire Council v South West Helicopters Pty Ltd [2019] HCA 14

Povey v Qantas Airways Ltd [2005] HCA 33

Pritchard v Trius Constructions Pty Ltd [2011] NSWSC 749

Reed v. Wiser, [1977] USCA2 339; 555 F.2d 1079 (2d Cir. 1977)

Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19

Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422

Yeomans v Carbridge Pty Ltd (No 2) [2012] NSWDC 20

Sections 5O and 5N are in div 6 (of pt 1A) of the CLA which is headed: 'Assumption of risk'.
Section 5O provides that a defendant does not owe a duty of care to a plaintiff to warn of a risk that is obvious to the plaintiff. An 'obvious risk' is defined in s 5E and s 5F (which is picked up by s 5M) as a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person (who suffers harm). Obvious risks include risks that are patent or a matter of common knowledge, s 5F(2); a risk of something occurring can be an obvious risk even though it has a low probability of occurring, s 5F(3); a risk can be an obvious risk even if the risk (or a condition or circumstance that gives rise to the risk) is not prominent, conspicuous or physically observable.
In the present case, the plaintiff argues that he did not appreciate the risk because he did not see the plinth protruding into his path before he tripped. He saw the lighting tower as he approached it but not the plinth that protruded 2130 mm to the east of the base of the lighting tower. He moved to the right away from the lighting tower as he approached it, however his foot came in contact with the protruding edge of the plinth. He would not have tripped if he had seen the plinth in his path. The risk was not obvious to the plaintiff. He did not detect it at all before he tripped. Accordingly, s 5O has no application: That is only relevant to a duty to warn. The plaintiff says in any event the negligence of Karratha extends beyond a failure to warn the plaintiff of the hazard (before he tripped).

(2001) 206 CLR 512

(2012) 248 CLR 378

(2008) 72 NSWLR 1

(1988) 164 CLR 539

(2001) 207 CLR 21

(2011) 276 ALR 375

(2005) 223 CLR 422

(2004) 219 CLR 165

(2004) 218 CLR 451

(1977) 180 CLR 266

(1979) 144 CLR 596

(1982) 149 CLR 337

(1995) 185 CLR 410

(1996) 186 CLR 71

(2000) 202 CLR 588

(1993) 46 FCR 225

(2009) 41 WAR 1

(2005) 13 VR 435

(1998) 193 CLR 72

(1988) 81 ALR 397

(1993) 46 IR 301

(1997) 18 WAR 190

(2003) 28 WAR 95

GARNETT -v- QANTAS AIRWAYS LTD [2019] WADC 89 (29 October 2019)

At a glance

Court

Decision date

Source

Judgment (134 paragraphs)

Legislation Cited (11)

Cases Cited (42)

GARNETT -v- QANTAS AIRWAYS LTD [2019] WADC 89 (29 October 2019)