1. Karratha and Skystar entered into a lease for office space in the airport terminal for a period of five years commencing 1 June 2012 (the lease).[115]
2. Karratha counterclaims against Skystar and says that pursuant to cl 6.2(c) of the lease Skystar was obliged to effect a public liability policy on behalf of Skystar and Karratha for their respective rights and interests. Karratha claims that Skystar has breached the obligation to insure by failing to take out a public liability policy as required and claims damages for breach of the lease contract for an amount equivalent to any liability Karratha may be found to have to the plaintiff and costs.

1. The leased premises are defined as a 48.7 sqm area forming part of the airport terminal.[116]
2. The lease contains a reference to the land described in item 2 of sch 1 as 'that portion of reserve 30948 known as Lot 5 Hood Way as shown on the annexed site plan'. It is common ground between the parties that the land comprises the area upon which the terminal sits and does not include the tarmac or the area where the plaintiff's accident occurred.[117] It is not suggested that the common areas referred to in the lease include either the tarmac or the pathways leading to and from the tarmac to the terminal.
3. Section 6.1 of the lease is in the following terms:

(1) The Lessee occupies the Premises at the risk of the Lessee in all respects.

(2) Except to the extent caused or contributed to by the Lessor, the Lessee releases and agrees to indemnify the Lessor and keep the Lessor indemnified from all costs, claims, actions, proceedings, demands, expenses, judgments, damages or losses of any kind including any relating to loss of life of or personal injury to any person or damage to any property (wherever occurring) resulting from or attributable to anything occurring on or in the vicinity of the Premises by any act, neglect, default or omission by the Lessee or any of the Lessee's Employees and Visitors.

(1) Throughout the Term the Lessee must effect and keep current a public insurance office approved by the Lessor [acting reasonably], on behalf of the Lessee and the Lessor for their respective rights and interests;

(a) a policy to cover the Lessee's fixtures, fittings plant and equipment and stock in the Premises to their full insurable value against all usual risks against which in the opinion of the Lessor from time to time a tenant should ordinarily insure;

(b) a policy to cover all plate glass in the Premises against damage or destruction for its full replacement value;

(c) a public liability policy with a cover of not less than $10,000,000 (or any greater sum which the Lessor may from time to time specify) in respect of any one occurrence; and

(d) a policy of employee's indemnity insurance in respect of the Lessee's employees; and

(e) a policy of motor vehicle insurance and third party cover in respect of the Lessee's vehicles.

(a) immediately expend all money recovered in respect of any insurance under subclause (1) in the satisfaction of the payment of damages or the reinstatement or replacement of the items for which that money is received to the extent that that money is sufficient for that purpose; and

(b) on demand make up for the Lessee's own money any insufficiency of money for that purpose.

(a) pay all insurance premiums on any policies referred to in clause 6.2 not later than the due date for payment specified in the first premium notice or demand for payment; and

(b) on demand produce to the Lessor proper evidence of the policies and their renewal.

1. 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.
2. 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.
3. 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.
4. 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.

1. The principles when considering a clause such as the one in this case are well recognised.
2. Buss JA (as he then was) in Westina Corporation Pty Ltd v BGC Contracting Pty Ltd [2009] WASCA 213 described them at [48] in the following terms:

The construction of a written contract is concerned with ascertaining what a reasonable person would have understood the parties to mean. Consideration should ordinarily be given not only to the language of the document, but also to the surrounding circumstances known to the parties, and the apparent purpose and object of the transaction. See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:

This Court, in Pacific Carriers Ltd v BNP Paribas ([2004] HCA 35; [2004] HCA 35; (2004) 218 CLR 451), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at 461 - 462 [22]) [40].

1. Skystar referred to the decision of Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; (2008) 72 NSWLR 1 in support of its submission that the indemnity and insurance clauses should be read together. At (166) McLellan CJ said:

... The approach taken in each of these decisions is that, in the absence of express words, the obligation under an insurance clause in a contract which is provided to support an indemnity clause will not require the subcontractor to maintain insurance against loss occasioned by the Head Contractor's negligence.

1. Erect Safe Scaffolding (Australia) Pty Ltd v Sutton was considered in GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 13. At [136] Gleeson JA said the statement of McLellan CJ in Erect Safe is not to be understood as a statement of principle, but merely an observation concerning the 'approach' taken in a number of authorities when construing the obligation under an insurance clause which is provided to support to an indemnity clause. His Honour's observation was also qualified by the need to have regard to the express words of the insurance clause under consideration.
2. As noted by Hoeben JJ in Pritchard v Trius Constructions Pty Ltd [2011] NSWSC 749 [109], although Giles JA and McLellan CJ were not entirely in agreement in Erect Safe as to how to interpret the indemnity clause under consideration, both agreed on the relevant principle of construction:

The operation of any contractual indemnity must be found in the application to the facts of the words of the relevant clause, construed as part of the contract as a whole. Decisions on the question of contractual indemnities in different words and different contracts are likely to be of limited assistance. (Giles JA) (5)

The resolution of any disagreement about a particular clause in a contract must be approached by considering the terms of the relevant document. Although the resolution of disputes in other cases may provide guidance, each dispute must be resolved by the application of the accepted principles of construction to the particular contract. (McClellan CJ at CL) (154)

1. The distinction between the terms to be construed in Erect Safe and GIO were explained by Gleeson JA at [137] - [143]. Both Erect Safe and GIO dealt with the construction of contracts involving obligations between subcontractors and principals. The critical issue of construction in Erect Safe concerned the meaning to be given to the words 'arising out of the performance of the subcontract works' in a contractual indemnity afforded by the subcontractor to the head contractor against all damage, expense or liability of any nature suffered or incurred by the head contractor. In GIO the terms of the agreement were different from that in Erect Safe. In that case the terms of the indemnities afforded by Advantage to Centennial under the standard conditions were clear. There was an express carve out from those indemnities where the relevant claim has arisen as a result of Centennial's negligence or breach of contract. In GIO the requirement to insure clause was located immediately adjacent to the indemnity clause and was supplemented by a special insurance requirement and indemnity clause in related site regulations. It was necessary to read all of those provisions together in a harmonious manner.
2. In this case it is necessary to consider the specific provisions in the context of the contract which in this case was the lease. Clause 6.1 is not the only reference to an indemnity clause contained in the lease. Clause 10.3 which is contained within the portion of the lease dealing with lessee's environmental obligations provides:

(1) The Lessee must indemnify the Lessor, against any cost, expense, loss or other liability resulting from:

(a) any damage to the Premises or other property; or

caused by the presence of Contamination, Pollution or Environmental Harm in on or under the Premises caused or contributed to by the act, neglect or omission of the Lessee.

(2) The Lessee indemnifies and must keep indemnified the Lessor, from and against all claims, proceedings, suits, writs, demands and expenses relating to, or in respect of, the remediation or Contamination, Pollution or Environmental Harm required under any Environmental Notice, by any written law or by any Local or Public Authority as a result of any Contamination, Pollution or Environmental Harm emanating on, or from, the Premises as a result of, or relating to, the use or occupation of the Premises by the Lessee.

The Lessee releases to the full extent permitted by law the Lessor from:

(a) any liability which may arise in respect of any accident or damage to property or death or injury to, or illness of, any person, of any nature in or near the Premises;

(b) loss of or damage to fixtures or personal property of the Lessee; and

(c) all claims, actions, loss, damage, liability, costs and expenses arising from or connected with (directly or indirectly) the presence of any Contamination, Pollution or Environmental Harm in, on or under the Premises at any time throughout the Term,

except to the extent that such loss or damage is caused by the negligence of the Lessor.

1. 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.
2. 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.
3. 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.
4. If I am wrong on that point, I go on to consider the commercial purpose of the lease.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. In conclusion Karratha's claim for breach of contract by failing to insure pursuant to the lease is dismissed.

(a) Was a term implied into the agreement between Karratha and Qantas (Airport Agreement) to the effect that Karratha would provide safe access for passengers to disembark aircrafts and access the terminal building at Karratha Airport? (The implied term)

(b) In the alternative was a term implied into the Airport Agreement to the effect that Karratha promised or warranted that access to the terminal building for disembarking passengers from Qantas aircraft was as safe as reasonable care and skill on the part of Karratha or anyone could make it. (The alternative implied term)

1. It is common ground as between the parties that there was an agreement between Karratha and Qantas with respect to Qantas' use of Karratha Airport for aircraft flying in and out of the airport. That agreement was not formally documented. It was partly in writing in the form of correspondence and partly to be implied. The agreement had been in place since before 2009. Correspondence between Qantas and Karratha in 2009 records negotiation and consequential increase in fees and rates to be paid by Qantas for:[120]

(a) passenger service charge for each arriving and departing passenger;

(c) a safety and security charge per departing passenger; and

1. The general principles of law are agreed between the parties in relation to implied terms. They are usefully set out in pars 12 - 18 of the outline of closing submissions filed by Qantas as follows:

1. Terms may be implied into a particular contract in fact (as opposed to in law) based on the presumed intention of the parties: Servcorp WA Pty Ltd v Perron Investments Pty Ltd [2016] WASCA 79 at [66] (Buss JA, with Martin CJ and Murphy JA agreeing).
2. Where there is a formal written contract, the criteria necessary to ground the implication of a term in fact are those summarised by the majority of the Privy Council in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 282-283:

(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.

1. These criteria have subsequently been adopted and applied by the High Court on numerous occasions: see, for example, Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 605-606; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 351-352, 404.
2. However, different considerations apply where there is no formal contract, and the contractual terms have been left largely unarticulated by the parties.
3. In Hawkins v Clayton (1988) 164 CLR 539, Deane J explained (at 570):

In these circumstances [where the parties have left the contractual terms largely unarticulated], it is necessary to identify two distinct stages in the ascertainment of relevant terms. Those stages may well overlap and it will often be unnecessary to distinguish between them in practice. The first stage is essentially one of inference of actual intention: what, if any, are the terms which can properly be inferred from all the circumstances as having been included in the contract as a matter of actual intention of the parties? The second stage is one of imputation: what, if any, are the terms which are, in all the circumstances, implied in the contract as a matter of presumed or imputed intention?

1. Deane J continued (at 571-572) in relation to the second stage of imputation as a matter of presumed or imputed intention:

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)

The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case.

The High Court has subsequently confirmed that this is the appropriate approach to the implication of terms into informal contracts: see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422 (Brennan CJ, Dawson and Toohey J), 442 (McHugh and Gummow JJ); Breen v Williams (1996) 186 CLR 71 at 90-91 (Dawson and Toohey JJ), 123-124 (Gummow J); Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd [2000] HCA 25; (2000) 202 CLR 588 at 610.

1. 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).
2. 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.
3. 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.
4. 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.
5. 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.
6. 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?
7. 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.
8. 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.
9. 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.
10. 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.
11. It meets the more stringent criteria set out in BP Refinery and that set out in Hawkins v Clayton by Deane J.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. Such a term is clearly reasonable (and indeed necessary) in the circumstances, including that:

(a) neither Qantas nor any ground handler engaged by it to marshal passengers could affect any structural changes to the access route; and

(b) Qantas was paying Karratha to access and use the airport.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. I am satisfied that safe access for disembarking passengers is essential to the Airport Agreement.
8. Karratha submits that a properly advised party would not have agreed to the implied term.
9. 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.
10. 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.
11. I will hear the parties as to the appropriate orders and on costs.

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

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

CITATION : GARNETT -v- QANTAS AIRWAYS LTD [2019] WADC 89 (S)

Practice and procedure - Costs - Application for costs - Special orders - Whether costs should be taxed on an indemnity basis - Whether rejection of Calderbank offer was reasonable

Civil Aviation (Carriers Liability) Act 1959 (Cth)

Civil Aviation (Carriers Liability) Act 1961 (WA)

District Court of Western Australia Act 1969 (WA)

Bullock v London General Omnibus Co [1904-7] All ER Rep 44

Coastal Hire Pty Ltd v Ewers [2009] WASCA 36(S)

Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225

Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1

Garnett v Qantas Airways Ltd [2019] WADC 89

Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435

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

Sanderson v Blyth Theatre Co [1903] 2 KB 533

Starshore Pty Ltd v Kellas [2018] WADC 113(S)

Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129(S)

Woodley v Woodley [No 2] [2017] WASC 94(S)

1. On 4 July 2019 I published my reasons for decision on the question of liability in relation to this matter: Garnett v Qantas Airways Ltd [2019] WADC 89. The parties requested time to consider the judgment and to confer before moving for orders. The matter was adjourned for further hearing at 9.00 am on 8 August 2019.
2. On 8 August 2019 a minute of consent orders was filed by the parties programming the filing of minutes of proposed orders and submissions on costs. The parties have now filed those documents. By agreement the determination of the orders to be made in respect to judgment and costs is to be made on the papers without further hearing.
3. In these reasons I will refer to the parties, other than the plaintiff, by name.
4. There are four issues requiring determination by me in respect of orders to be made and costs:
   1. Should the third party action between Qantas and Karratha be heard separately and following the main action for assessment of damages between the plaintiff and Karratha?
   2. Should the parties to the main action and the parties to the third party action be ordered to attend mediation or should the matter be listed before a registrar for directions?
   3. Should the plaintiff pay Skystar's costs? If so should they be paid on a reduced rate of 35% or on an indemnity basis?
   4. If the plaintiff is ordered to pay the costs of the proceedings between the plaintiff and Skystar, should Karratha be ordered to indemnify the plaintiff in respect of his liability to pay those costs by way of a Bullock order or Sanderson order?

1. 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)).
2. 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].
3. 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].
4. 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.
5. 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].
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.

1. The plaintiff opposes an order being made that the parties to the main action and the third party action attend a mediation conference on the assessment of damages before a registrar. The plaintiff submits that the preferable course is for an order to be made that the action between the plaintiff and Karratha proceed to a directions hearing before a registrar on a date and time to be fixed by the court.
2. I am satisfied that this matter would benefit from mediation with a view to resolving the outstanding issues. I reach that view having had the benefit of presiding over the liability trial where a number of issues were resolved between the parties at the commencement of, and in the course of, the trial. The plaintiff has now given evidence which will no doubt assist the parties in the assessment of damages phase in relation to credibility. Accordingly I will order that the parties liaise with listings to arrange a suitable date and time for mediation to take place before a registrar of the court. If the mediation is unsuccessful in resolving the outstanding issues the same registrar can make the appropriate directions for the programming of the main action and third party action for trial.
3. I now turn to the issue of whether any special orders should be made in respect of costs.

1. 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.
2. 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).
3. 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.
4. 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).
5. The discretion of the court is to be exercised in accordance with the justice of the case.
6. 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.
7. 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.

Indemnity costs - Should the plaintiff pay Skystar's costs? If so should they be paid on a reduced rate of 35% or on an indemnity basis?

1. 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.
2. 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.
3. 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.
4. 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]
5. 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.
6. This defence was pleaded in the Skystar defence filed and served on 5 November 2015.
7. The plaintiff subsequently changed solicitors to his current solicitors Bradley Bailey Legal on 16 November 2015.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.

1. The principles upon which indemnity costs orders should be made are well established. They were set out in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129(S) [10] where the court said:

The principles applicable to the making of indemnity costs orders in litigation may be briefly summarised, as follows:

1. A superior court, in its inherent jurisdiction, may make an indemnity costs order (see also Supreme Court Act 1935 s 37, and Legal Profession Act 2008 s 280).
2. An indemnity costs order departs from the usual costs disposition order, whereby costs are awarded on a party/party basis: EMI Records Ltd v Ian Cameron Wallace Ltd [1938] Ch 59.
3. The court's discretion as to the making of an indemnity costs order is a discretion that must be exercised judicially. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397, 400 Woodward J said:

Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases, where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way'. (emphasis added)

1. To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) [1993] FCA 70; (1993) 46 IR 301 at 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:

It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.

1. Furthermore, in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Unreported, FCA, 3 May 1991) (referred to by Ipp J in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191), French J observed:

The categories in which the discretion may be exercised are not closed.

1. Competing principles need to be balanced in assessing the making of a potential award of indemnity costs. In Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7] Wheeler J observed:

On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear the increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct a rise to the costs should bear them in full.

1. An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate-Palmolive Company v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233 (Sheppard J), referred to by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
2. A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling: see Flotilla [20] - [24].
3. An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance: Flotilla [11]. In Unioil (No 2) (193), Ipp J observed:

However, counsel for the plaintiffs was unable to identify any costs so incurred that would not be covered by an order for party and party costs. An order for indemnity costs on this ground is therefore not warranted.

1. Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:

A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.

1. Pritchard J in Woodley v Woodley [No 2] [18] added the following additional principle:

... an order for costs on an indemnity basis may be made on the grounds that an action was 'hopeless' in the sense that the action was 'commenced or continued in circumstances where the plaintiff, properly advised, should have known that the action had no prospect of success. An action which appears to have been commenced or continued in circumstances where the applicant, properly advised, should have known that he or she had no chance of success, may be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of known facts or the clearly established law.

1. The principles in relation to Calderbank offers and indemnity costs were recently summarised by Glancy J in Starshore Pty Ltd v Kellas [2018] WADC 113(S) [29] - [32]:

Rejection of a Calderbank offer may justify an award of indemnity costs if its rejection was unreasonable: Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115 [16]; [2009] WASCA 115; (2009) 41 WAR 1. The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable: Ford Motor Co of Australia Ltd v Lo Presti [18].

The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in his or her favour.

The exercise of the court's discretion in relation to applications for indemnity costs and other special costs orders draws on the trial judge's knowledge of how the parties approached the litigation, and of the reasonableness of the parties' conduct in all of the circumstances. Deciding whether conduct is 'reasonable' or 'unreasonable' always involves matters of judgement and impression: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 [24].

Factors which are considered by the court in considering whether to award indemnity costs following the rejection of a Calderbank offer were set out in Ford Motor Co of Australia Ltd v Lo Presti [19] citing Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [25] as follows:

(a) the stage of the proceedings at which the offer was received;

(b) the time allowed for the offeree to consider the offer;

(d) the offerees prospect of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed; and

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offerees rejecting it.

1. 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.
2. 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.
3. 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:

As I have observed, the court's discretion as to costs exists to enable the court to do justice between the parties in the particular circumstances of the case. In my view, therefore, where a Bullock or Sanderson order is sought ultimately the question must always be whether it is just that, as between the plaintiff and the unsuccessful defendant, the unsuccessful defendant should bear the burden of the successful defendant's costs. The exercise of the relevant discretion is not amenable to hard and fast rules, but, in my opinion, normally a Bullock or Sanderson order will be made only where:

1. the plaintiff's claims against two or more defendants are substantially connected or interdependent;
2. the plaintiff acted reasonably in suing the successful defendant; and
3. 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.
4. For the reasons that follow I am not persuaded that a Bullock order or Sanderson order is appropriate in this case.
5. The plaintiff's claims against Karratha and Skystar were substantially connected. This is apparent from the issues and evidence led at trial.
6. 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.
7. 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.
8. 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:

In relation to any involvement of Skystar Airport Services Pty Ltd, we advise that we are unable to assist with the provision of any documents as their contractual relationship was with Qantas (as the agent of Qantas), and not our client. We would however draw your attention to sections 33 and 34 of the Act as regards to any claim by your client against Skystar Airport Services Pty Ltd.

1. Skystar argues that it warned the plaintiff of the limitation period and the plaintiff proceeded in spite of that warning and therefore no costs order should be made.
2. In relation to the conduct of Karratha the plaintiff outlines the pleadings and argues that Karratha maintained its denial of liability, occupancy and responsibility for the management and control of the plinth and asserted that liability for the plaintiff's damages claim rested with Qantas and/or Skystar throughout to the conclusion of the trial.
3. I am satisfied that the plaintiff acted reasonably in suing Skystar for the reasons I have already outlined at [51] - [53] hereof.
4. As to the unreasonableness of the conduct of Karratha there is nothing contained within the materials to suggest that Karratha did anything more than repeatedly state its client's position. It did nothing to induce the plaintiff to sue Skystar. To the contrary. It warned the plaintiff of the limitation period. I am not satisfied that there was any conduct on the part of Karratha which makes it just to remove the burden of Skystar's cost from the plaintiff to Karratha.
5. I propose to make the following orders. I will give the parties seven days liberty to apply in respect of the form of the proposed orders.

1. I make the following orders:
   1. There be judgment be entered for the plaintiff against the second defendant with damages to be assessed.
   2. The second defendant pay the plaintiff's costs of the liability trial to be taxed if not agreed.
   3. The plaintiff's claim against the third defendant be dismissed.
   4. The plaintiff pay the costs of the third defendant to be taxed if not agreed.
   5. The second defendant's contribution claim against the third defendant be dismissed.
   6. The third defendant's contribution claim against the second defendant be dismissed.
   7. The second defendant's counterclaim in the third defendant's contribution proceedings be dismissed.
   8. There be judgment entered for the first defendant against the second defendant in the first third party proceedings with the assessment of damages and costs to be heard separately from and after determination of quantum in the main action.
   9. Costs between the first defendant and the first third party (in relation to the first defendant's action against the first third party in the third party action) are reserved.
   10. The parties to the main action and the third party action attend a mediation conference on the assessment of damages before a registrar on a date to be fixed.
   11. The first third party's counterclaim against the first defendant in the third party action be dismissed.
   12. The first third party pay the first defendant's costs of the first third party's counterclaim against the first defendant, to be taxed if not agreed.

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

[2] Issues between the plaintiff and Karratha and Skystar dated 16 May 2018. Issues in dispute between the parties dated 21 May 2018.

[3] It is an agreed fact that the plaintiff's trip and fall was an 'accident' within the meaning of the Carriers Act, and the location where it happened was in the course of disembarkation - Issues in dispute between the plaintiff and Karratha.

[4] Karratha airport working plan, exhibit 17.

[7] Exhibit 8 Qantas frequent flyer records of plaintiff 6/6/2010 - 4/11/2012.

[10] Exhibit 30.2 report of Dr Brad E Tucker 2 March 2017.

[29] As marked by Mr Maclagan on exhibit 9.

[41] Exhibit 29.1 purchase order for fence railing 20/5/16.

[43] Exhibit 29.2 AMS invoice dated 16 June 2016.

[44] Exhibits 29.1 and 29.2 show the railings and zebra marking work was done in May - July 2016 at a total cost of $83,580.

[69] ts 224 - 225 and exhibit 17, many method of work plan for the Karratha Airport dated 8 June 2012.

[100] Exhibit 2 - taken during Qantas audit 13 - 15 February 2017 exhibit 22.3, Mr Milk, ts 275.

[101] Mr Maclagan's evidence at ts 159; Mr Wright's evidence at ts 198; Mr Swetman's evidence at ts 253; Mr Milk's evidence at ts 290.

[102] Exhibit 17; Mr Wright's evidence at ts 181.

[103] Mr Wright's evidence at ts 224; Mr Swetman's evidence at ts 257.

[106] Articles 5.6 and 5.12 of the ground handling agreement.

[108] Paragraph 16.13 (C of attachment 6).

[113] Chutter v KLM Royal Dutch Airlines, 132 F. Supp. 611 (S.D.N.Y. 1955); Reed v. Wiser[1977] USCA2 339; , 555 F.2d 1079 (2d Cir. 1977); Julius Young Jewelry Manufacturing Co. v. Delta Air Lines, 67 A.D.2d 148 (N.Y. App. Div. 1979); Waxman v. CIS Mexicana De Aviacion, SA De CV, 13 F. Supp. 2d 508 (S.D.N.Y. 1998).

[119] Ground handling agreement cl 6.2.4.

[121] Annexure MGS-2 to affidavit of Mark Andrew Gray-Spencer, pages 53 - 55.

[122] Defence lodged on 22 December 2017 - papers for the judge, page 81 at par 15.

[124] CJB 14 letter SRB 2FLSD document number 15 of the affidavit of Christopher James Barkley sworn 27 August 2019.