Inspector Orr v Perilya Broken Hill Limited; Inspector Orr v Perilya Limited

District Court of NSW|2018-04-13|Before: Mr J

Solicitors: Norton Rose Fulbright instructed by the Prosecutor; Colin Biggers and Paisley instructed by the Defendant File Number(s): 2014/176345 (Perilya Broken Hill Limited)2014/176265 (Perilya Limited)

Judgment

On 28 February 2018, I found Perilya Broken Hill Limited (PBHL) guilty of a Category 2 offence under s 32 of the. I found Perilya Limited (Perilya) not guilty. Both matters fall for ruling on costs.

Perilya costs

Perilya was successful in the proceedings. It would ordinarily be entitled to an order for costs. I think it should have its costs.
The prosecutor submits that Perilya should not have its costs because of its conduct.
The prosecutor sought to establish that Perilya was a person conducting a business or undertaking. It failed.
The prosecutor submitted that there was material to justify depriving Perilya of its costs. The material includes a large body of documentary evidence in which Perilya stated that it owned and operated the mine and that it had obligations in relation to the HSE system at the mine. In the absence of contradictory evidence, there would be no sound basis for concluding that Perilya did not own and operate the mine or that it was not a PCBU.
The prosecutor submitted that as it was not in a position to anticipate that two of Perilya's personnel (Mr O'Connor and Mr Marinko) and one of PBHL's personnel (Mr Lean) would give evidence contrary to the terms of the documents of Perilya and PBHL that is a circumstance that justifies depriving Perilya of its costs.
Further, the submission proceeded, the documentary evidence relied on by the prosecutor was clearly admissible. Perilya did not acknowledge that and time was taken up and some extensive argument undertaken as to its admissibility. That submission is clearly correct.
The prosecutor says it was entitled to rely on the documentary material of Perilya and PBHL and it acted reasonably and in conformity with its duty. Therefore, it is submitted, the usual order should be departed from. The prosecutor says each party should pay its own costs of the proceedings as they relate to Perilya.
Perilya's riposte is that there was material in the arena before Mr O'Connor and Mr Marinko were called. This is so. There was, for example, Exhibit PX 1, Vol 14, Tab 399 which referred to PBHL as the operator of the mine. There was also Tab 400, the Powerpoint presentation document, revealing the devolution of HSE responsibility from Perilya to PBHL. There was also the evidence of Mr Lean in the course of the proceedings.
Ownership and operation of the mine were always issues in the proceedings. In light of a number of documents coming from Perilya and statements of Perilya officers, it cannot have been unreasonable for the prosecutor to proceed. The fact that Perilya had oral evidence that assisted it and that that evidence was not known to or anticipated by the prosecutor is not enough, in my view, to deprive it of its entitlement to costs in respect of that part of the case related exclusively to its liability.
Perilya should have an order for its costs.
The next issue is what those costs include. Perilya submitted it is entitled to 55% of the costs of running the case. There are two components to that. The first is 10%, that being an appropriate apportionment of time devoted to the Perilya aspect of the proceedings. The other is 45%, being half the remainder of 90%.
As to the 10%, the prosecutor has done a calculation that indicates the figure is a little over that. After some deductions it reduces to about 7%. In the end, I do not understand the parties to be at issue and that a fair assessment is 10%. In any event, that is my finding.
As to the 45%, that is determined by applying what is called "the rule of thumb". Einstein J considered the rule of thumb with some care and detail and wrote about it likewise in Currabubula & Paola v State Bank NSW [2000] NSWSC 232. Nonetheless, the Court of Appeal queried the correctness of what he wrote in King Network Group Pty Ltd v Club of the Clubs Pty Ltd (No 2) [2009] NSWCA 204.
The "rule of thumb" operates where a plaintiff is successful against one defendant, but not others. It operates on the basis that the defendants are liable for the joint costs in mounting the defence. Perilya says that was the case here. Apart from the aspect of the proceedings limited to it, it also, along with PBHL, mounted the defence to the proceedings so that they both defended what was the 90% of the proceedings after the Perilya aspect of the proceedings (10%) is excluded. The rule of thumb then operates in a way that prevents Perilya from claiming the whole of the costs of defending the balance (90%) of the proceedings and allows it to recover half of that cost. In this way, Perilya claims 45%.
There is, in my view, a flaw in Perilya's submission. It proceeds on an unstated assumption that Perilya was successful, not only in that part of the case devoted exclusively to it, but in the balance of the case it defended with PBHL. It was not successful in that. There was no determination in respect of that part of the case so far as Perilya was concerned.
There were two aspects of the balance of the case (the 90%) that affected Perilya. One was factual. That needed evidence to be called and tendered. It was and it was the same evidence called and tendered against PBHL. It was that evidence that occupied most of the hearing. To the extent that there were findings of fact against PHBL, those findings would have been findings against Perilya had that step been reached. The other aspect of the balance of the case was a legal one. What conclusion was to be drawn from that evidence and the findings of fact? That aspect of the case occupied next-to-no time with the prosecutor submitting that Perilya would be liable to the same extent PBHL was and Perilya submitting that the evidence would not support a breach of duty because the steps to be taken to comply with the duty were not practicable because of Perilya's limited manpower and resources.
I do not think the rule of thumb applies. I do not think its application would produce a just and fair result. I consider that in the Perilya proceedings, Perilya is entitled to its costs so far as the proceedings were devoted to the case against it.

PBHL Costs

The prosecutor seeks an order that PBHL pay the whole of its costs associated with the hearing of the case against it. PBHL submits that the rule of thumb applies and that because there were two defendants jointly defending the case, the costs are to be attributed equally between them. Accordingly, it is submitted, the prosecutor can recover only half its costs as it was successful against one defendant, but not the other. For reasons already given, I do not think the rule of thumb applies.
The ordinary position is that costs follow the event. There are circumstances where a different order may be made. One circumstance is where there are multiple issues and a party succeeds on some issues but fails on others. This is especially so where the unsuccessful party succeeds on issues that were dominant or separable. These matters are well established and summarised in Bulga at [220].
PBHL submitted that there were separate issues on which it succeeded. Its submissions at [18] to [23] of its written submissions break down particulars to a detail that is or becomes artificial.
There are two categories of issues that fall for consideration. One is those issues on which the prosecutor failed. The other is the issues that were not determined or pursued.
The issues on which the prosecutor failed were particulars 12(a), 12(b), 12(c), 13(a), 13(b), 13(c), 14(a) and 14(c). There should be no apportionment of costs recovery by reason of the prosecutor's failure on these issues, because they were not dominant or separable issues within the principles guiding allowance for costs, or the time taken on these issues was so miniscule as to be ignored. Particulars 12(a), 12(b), 13(a), 13(b) and 13(c) were tied up in a consideration of what the appropriate risk assessment process was for the task to be undertaken. Next-to-no time was taken up with particulars 12(c), 14(a) or 14(c). Particulars 12(d) and 13(e) were not pursued and no time was taken up on them.
There were four alternate methods of doing the task which the prosecutor relied on - particulars 11(a)-(d). In the result, they were not determined. The alternate methods were separate issues and dominant in that they involved alternate methods of doing the job, expert witnesses on both sides and an identifiable amount of Court time. PBHL estimates this at 20%. I think 10% is a fairer estimate and I so determine. Evidence was given by some witnesses -for example, Mr Cockbain, Mr Mitchell, Mr O'Donovan. Not a lot of time was taken up in submissions.
PBHL submits that neither side should be required to pay the other's costs on the alternate methods and I think that is the proper position.

Result and orders

In the result, in respect of 10% of the proceedings, Perilya has obtained an order for costs. In respect of another 10% (the four alternate methods), there should be no order in relation to costs. The prosecutor is accordingly entitled to recover 80% of his costs.
I did say during the course of giving my reasons that I did not think the rule of thumb applied and that in the Perilya proceedings, Perilya was entitled to its costs so far as the proceedings were devoted to the case against it. I have earlier estimated 10% as a fair estimate of the time involved in that. Mr Agius SC has put to me that 10% of the time does not necessarily represent 10% of the costs. That is so. It may be more or it may be less, but one can only apply a broad brush and I think it's appropriate to carry the 10% through.

orders

The orders I make are as follows: 1. The prosecutor is to pay 10% of Perilya's costs of the proceedings as agreed or assessed in accordance with s 257G of the Criminal Procedure Act. 2. PBHL is to pay 80% of the prosecutor's costs of the proceedings as agreed or assessed in accordance with s257G of the Criminal Procedure Act.

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: 24 May 2018

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Judgment (8 paragraphs)

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