Grigoriadis v Sidiropoulos & Anor

Competing submissions of the parties

1. The plaintiff submitted that the appropriate order for costs was that the first defendant pay her costs as well as the costs of the second defendant on the ordinary basis, as agreed or assessed, and that the first defendant pay the plaintiff's costs of the earlier hearing date that was vacated by the List Judge on 6 December 2016.
2. The first defendant conceded liability for the plaintiff's costs of her claim against the first defendant. The first defendant submitted that the plaintiff should pay the second defendant's costs of her claim against the second defendant, and that the plaintiff should also pay the first defendant's costs thrown away by the vacated hearing that was to commence on 6 December 2016, as vacated by the List Judge.
3. The second defendant submitted that as a successful party, following that outcome, it should be entitled to have its costs paid by the plaintiff pursuant to UCPR r 42.1. In the alternative, the second defendant submitted that in the event the Court was satisfied that it is appropriate that a party other than the plaintiff, namely the first defendant, pay the second defendant's costs, then the more efficient costs outcome would be for a Sanderson order to be made: Sanderson v Blyth Theatre Co [1903] 2 KB 533.

Legislation

1. Section 98(1) of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion in determining which costs should be paid by whom and to what extent. In that regard, in appropriate cases, costs need not simply follow the event of success or failure of a party in the litigation.

Principles

1. The principle behind a Bullock order for costs is that the unsuccessful defendant reimburse the plaintiff for any costs to be paid to a successful defendant: Bullock v London General Omnibus Co [1907] 1 KB 264.
2. The principle behind a Sanderson order for costs is that it has a more direct effect where the unsuccessful defendant pays the costs of the successful defendant, a course which eliminates the need to involve the plaintiff in the assessment process: Sanderson v Blyth Theatre Co [1903] 2 KB 533.
3. The principles identified in those longstanding authorities have been referred to and applied in numerous cases as cited in the submissions of the respective parties.
4. The exercise of discretion on costs must be guided by the salient facts and findings that have led to the costs dispute.

Relevant factual circumstances and determination of costs

1. It is convenient to commence the analysis by identifying the reason as to why the second defendant was joined to the proceedings and why the List Judge vacated the hearing that was scheduled to commence on 6 December 2016.
2. All parties ultimately considered it necessary to obtain expert evidence to support and advance their respective positions for the trial. Before that course was taken the plaintiff formulated a relatively simple case of negligence against the first defendant, the driver of the vehicle from which she had alighted immediately before her accident.
3. In order to resist that claim, the first defendant engaged Dr Andrew McIntosh, an expert accident reconstruction engineer to consider the factual circumstances of the accident. Dr McIntosh identified a view that there was a factual basis for arguing that the accident in which the plaintiff was injured could have involved an unidentified motor vehicle which might have struck her and then left the accident scene. This raised an arguable scenario that the plaintiff may have been injured through no fault on the part of the first defendant.
4. That theory, although ultimately rejected as speculative, became embedded as an issue to be addressed in the case. On a prospective view, it was therefore reasonable for Dr McIntosh's comments to be seriously considered by the plaintiff's representatives in order to deal with the risk that her case might fail against the first defendant for the reason advanced by Dr McIntosh. This added a layer of costs to the proceedings.
5. The introduction of the theory of the unidentified motor vehicle justifiably led to the plaintiff seeking a vacation of the hearing date of 6 December 2016 and then joining the Nominal Defendant as a second defendant to the proceedings. The proceedings therefore became more complicated, prolonged, and more costly to the plaintiff.
6. In my view, on the array of facts known to the parties prior to the hearing, as canvassed and determined in the principal judgment, it would have been unwise if not foolhardy for the plaintiff to simply ignore Dr McIntosh's expressed view without seeking evidence to rebut it, notwithstanding that it was based on speculative considerations. As that theory had been raised by an expert whose report was served in the proceedings, it was reasonable that it be given serious consideration by the plaintiff's representatives as that view required rebuttal for the plaintiff to succeed, as has occurred. The joinder of the Nominal Defendant stemmed from those underlying circumstances.
7. In my view, it is no answer for the first defendant to submit, that the plaintiff could have simply proceeded with her case against the first defendant after considering and comfortably rejecting Dr McIntosh's unidentified motor vehicle theory as speculative. In my view, that submission should be seen as being a convenient, but nevertheless, meritless hindsight analysis which must be rejected.
8. Whilst the parties cited a series of authorities which provided examples of how courts, including appellate courts, dealt with costs arguments that involved the costs incurred in an unsuccessful joinder of a party such as has occurred in this case, those decisions must be seen to have been based on the exercise of discretion according to the particular underlying factual circumstances of those cases, and as such, those decisions do not fetter or bind the discretion required to be exercised in other cases. The proper approach is to identify the reasoned basis for the exercise of discretion in each particular instance: House v The King (1936) 55 CLR 499; [1936] HCA 40.
9. It is relevant to note that the first defendant did not have to join the Nominal Defendant in order to avoid a liability to the plaintiff. Nor did he have to file a cross-claim against the Nominal Defendant. It was sufficient for the first defendant's expert to simply articulate the unidentified motor vehicle theory. Once that occurred, this necessarily required the plaintiff to engage with and rebut that theory. This not only required a factual analysis but it also required enlisting the services of expert evidence to seek to test and to resist Dr McIntosh's argued theory.
10. In my view, it was therefore reasonable for the plaintiff to join the Nominal Defendant in those circumstances. As it was the first defendant's expert who identified that distracting issue, and because the first defendant did not isolate or eschew that issue as an irrelevant consideration, it remained in the mix of issues which the plaintiff had to meet. It is therefore only fair and reasonable that the first defendant should bear the entire cost of that distracting debate alongside the cost liability the first defendant has to the plaintiff as the losing party.
11. It follows that those costs should also include the costs thrown away by the vacated hearing that was to commence on 6 December 2016. The vacation of that date was required in order that the plaintiff forensically prepare to deal with the opinion of Dr McIntosh and to seek a basis in the expert evidence to argue against an acceptance of Dr McIntosh's opinions.
12. The plaintiff has succeeded on all of those endeavours. It is therefore only fair, just and reasonable that the plaintiff be compensated for the cost consequences of having to contest those issues: Gould v Vaggelas (1984) 157 CLR 215; [1985] HCA 85.
13. The inherent fairness of that approach stems from the conclusion that the plaintiff has acted reasonably in joining the Nominal Defendant. This is in circumstances where the actions of the first defendant provided the genesis for that course by asserting that he was not liable to the plaintiff, and by advancing an alternative theory through an expert witness who had been engaged for that purpose, and whose report was relied upon without reservation or qualification: Dominello v Dominello & Anor; Dominello v The Nominal Defendant & Anor [No 2] [2009] NSWCA 257, at [19]-[20].
14. If the first defendant had indicated that he would not rely on Dr McIntosh's unidentified vehicle theory of liability, it is most likely that the case could have proceeded on 6 December 2016, without the complications that ensued. I therefore consider that the plaintiff's liability for the Nominal Defendant's costs be borne by the first defendant on the ordinary basis.
15. I accept as reasonable and appropriate the second defendant's costs submissions, as adopted by the plaintiff, namely that the most efficient costs order in the described circumstances, is a Sanderson order. That order avoids duplicated or overlapping costs assessments.

Orders

1. I make the following orders: 1. The first defendant is to pay the costs of the plaintiff and the second defendant on the ordinary basis as agreed or assessed; 2. The first defendant is to pay the plaintiff's costs of the hearing vacated on 6 December 2016 on the ordinary basis as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 December 2019