Middleton v Erwin

ACQ v Cook (No 2); Aircair Moree v Cook (No 2); Cook v Country Energy (No 2); Country Energy v Cook (No 2) [2008] NSWCA 306 Almeida v Universal Dye Works Pty Ltd (No 2) [2001] NSWCA 156 Bullock v London General Omnibus Co [1907] 1 KB 264 Gould v Vaggelas [1985] HCA 85; (1984) 157 CLR 215 CASES CITED : Great Lakes Shire Council v Dederer; Roads & Traffic Authority of NSW v Dederer [No 2] [2006] NSWCA 336 Roads and Traffic Authority of NSW, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) [2005] NSWCA 140 Sanderson v Blyth Theatre Co [1903] 2 KB 533 Steppke v National Capital Development Commission (1978) 21 ACTR 23 Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179 The Nominal Defendant v Swift; Wollondilly Shire Council v Swift [2007] NSWCA 56

Glen Stuart Middleton (Plaintiff) PARTIES : Alan John Erwin (First Defendant) Iveco Trucks Australia Limited (Second Defendant)

D A Wheelahan QC with A R G Johnson (Plaintiff) COUNSEL : R R Bartlett SC with J V Gooley (First Defendant) R A Cavanagh (Second Defendant)

Baldock Stacy & Niven (Plaintiff) SOLICITORS : TL Lawyers (First Defendant) Moray & Agnew (Second Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20238/06 Glen Stuart Middleton v Alan John Erwin & Iveco Trucks Australia Limited (No 2)

JUDGMENT 1 HIS HONOUR: On 5 March 2009 I delivered judgment in the principal proceedings: see [2009] NSWSC 108. The plaintiff succeeded against the first defendant but not against the second defendant. There is no argument that the first defendant should pay the plaintiff's costs or that the second defendant's costs should be paid by someone. The issue for determination is whether the plaintiff or the first defendant should pay the second defendant's costs. 2 The facts of the case are adequately described in the principal judgment. Briefly the plaintiff was injured when the steering of the first defendant's truck failed and it crossed onto the incorrect side of the road and collided with the plaintiff's vehicle. The first defendant was found to be negligent for failing adequately to maintain the steering mechanism of the truck that led to the failure. The plaintiff sued the second defendant as the manufacturer of the truck alleging that it was defectively designed. That claim failed. Each defendant cross-claimed against the other. 3 All parties provided me with detailed and helpful submissions on this question. The facts were not relevantly in dispute. There was understandable argument upon the way in which the facts should be considered in the light of the authorities. It is convenient therefore to review these authorities before turning to the facts of the case at hand. 4 The seminal statements are to be found in Sanderson v Blyth Theatre Co [1903] 2 KB 533 and Bullock v London General Omnibus Co [1907] 1 KB 264. They are adequately referred to and restated in the authorities since then to which detailed reference appears below. See also Steppke v National Capital Development Commission (1978) 21 ACTR 23, cited in the paragraph that follows. 5 The principles that apply are most frequently drawn from the judgment of Gibbs CJ in Gould v Vaggelas [1985] HCA 85; (1984) 157 CLR 215 at 229-230 as follows: "It is sometimes said that the court may make an order of that kind - a Bullock order - where it was reasonable in all the circumstances for the plaintiff to bring the action against two or more defendants: see The Supreme Court Practice (U.K.) 1982, par.62/2/39 and Halsbury, 4th ed., vol.37, par.219. There are some statements in the authorities which appear to support that view, including the judgment of Latham C.J. in Johnsons Tyne Foundry Pty. Ltd. v. Maffra Corporation [1948] HCA 46; (1948) 77 C.L.R. 544, at p.556. In my respectful opinion, however, the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.

The ground on which a Bullock order may be made is, in my opinion, more accurately stated in a passage in Sanderson v. Blyth Theatre Company (1903) 2 K.B. 533, at p.539, which was cited with approval in Bullock v. London General Omnibus Company (1907) 1 K.B. 264, at p.272 and Hong v. A. & R. Brown, Ld. (1948) 1 K.B. 515, at p.522, viz., that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed 'are ordered to be paid by the unsuccessful defendant, on the ground that ... those costs have been reasonably and properly incurred by the plaintiff as between him and the (unsuccessful) defendant.' In Johnsons Tyne Foundry Pty. Ltd. v. Maffra Corporation, Williams J., at pp.572-573, stated the principle in a similar way and Starke and Dixon JJ., in giving their reasons for making a Bullock order, both relied on the circumstance that the attitude adopted by the successful defendant had induced the plaintiff to join the other defendant: see at pp.559-560, 566. In my respectful opinion the true position was clearly stated by Blackburn C.J. in Steppke v. National Capital Development Commission (1978) 21 A.C.T.R. 23, at pp.30-31, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant'." 6 The Court of Appeal considered the issue in Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179. At par [128] the applicable principles are summarised by Mason P in the following terms: "[128] Judge Curtis referred to the leading cases on Bullock and Sanderson orders (GBk 7-11). One of them was the decision of Asche CJ in Lackersteen v Jones (No 2) (1988) 93 FLR 442 which contained the following summary at 449:

1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.

2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.

3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.

4. Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful." 7 The matter is also taken up by his Honour at pars [134] - [136]: "[134] Judge Curtis concluded (GBk 14):

'In general terms SIFC blamed the employers and their conduct was such as to make it prudent for the plaintiff to join all employers, including SEAL.

The conduct of SIFC relating to the joinder of AEWL sufficient to justify a Bullock order was the denial of a duty by SIFC and the submission that 'in the special circumstances of this case' AEWL owed a duty of care to the plaintiff. In circumstances where the plaintiff was facing a denial of duty or breach by all defendants this denial made it reasonable to find that as between the plaintiff and SIFC, where the plaintiff's injuries arose from transactions in which both SIFC and AEWL were intimately involved (employees of each had faced direct and repeated complaints by the men working with asbestos), it is just that SIFC bear the cost of the successful defendant, AEWL. If SIFC had not denied duty the joinder of AEWL would not have been necessary.'

[135] In my view these reasons amply supported the Sanderson orders.

[136] SIFC submits that nothing that it did made it reasonable for the plaintiff to proceed against the unsuccessful defendants. Such arguments as were advanced by SIFC about the liability of those defendants were, it was submitted, only raised in final addresses and were defensive and contingent upon the claims still being pressed by other parties. In my view this does not show that discretion miscarried, because SIFC's own denials of any duty of care to the plaintiff, which preceded the filing of the claim, necessarily contributed to the plaintiff becoming enmeshed in complex litigation of uncertain outcome and remaining enmeshed (to this day)." 8 In Almeida v Universal Dye Works Pty Ltd (No 2) [2001] NSWCA 156 Priestly JA said the following at pars [7] - [8]: "[7] It was not in dispute that the court had a discretion to make such orders but it was also recognised that this discretion was subject to some limitations. For Mrs Almeida it was submitted that the way in which the discretion should be exercised had been accurately stated by Giles J in Sved v Council of the Municipality of Woollahra (1998) NSWConvR 55-842 at 56,605 where he considered the authorities (the references to all but one of which I omit in the following quotation) and said:

'It is not sufficient for the making of a Bullock order that it was reasonable for the plaintiff to bring the proceedings against both defendants, although sometimes the condition for making a Bullock order is stated in that way ... One statement of principle is that the order may be made where the costs have been reasonably and properly incurred by the plaintiff as between it and the unsuccessful defendant ...; it has also been said that the conduct of the unsuccessful defendant must have been such as to make it fair to impose some liability on it for the costs of the successful defendant, or that the conduct of the unsuccessful defendant must show the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought ... The difference in formulations is probably more apparent than real, as reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant. Such conduct was found in Lackersteen v Jones (No 2) in the unsuccessful defendant denying the authority of its agent whereby the plaintiff joined the agent who became the successful defendant, and more widely has been found in the unsuccessful defendant telling the plaintiff in one way or another that it should look to the successful defendant for its remedy ...'

[8] That this was a correct distillation of the position from the current authorities was not disputed by Universal. However, Universal then sought to limit the "conduct" spoken of by Giles J in a way which was disputed. For Universal it was said that the "conduct" spoken of by Giles J was conduct either at the time the plaintiff's intended litigation was known to the other party or conduct after the litigation commenced. I do not agree that "conduct" should be limited in this way. In my view any conduct by the defendant or state of affairs in which the defendant is an integral part which makes it fair and reasonable for other parties to be joined as defendants will be relevant to deciding on fair costs orders. The first respondent submitted that there was no relevant conduct by it which made it proper that the other defendants be joined or that it should bear the costs of the successful defendants." 9 Santow JA also dealt with the issue at pars [38] - [40]: "[38] Like Priestley JA, I would not agree that "conduct" in the sense used by Giles J in Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55-842 at 56-605, has as narrow an ambit as was contended for by Universal, the First Respondent head contractor. Universal argued that the conduct spoken of could only be conduct at the time the Plaintiff's intended litigation as was known to the other party or conduct after the litigation commenced. I would certainly consider relevant in that regard the unsuccessful defendant's (First Respondent's) conduct in denying that it was the head contractor. That denial would encourage a rational Plaintiff to sue the other Respondents when one takes also into account the factual context of their enmeshment earlier described (7 above), as each Respondent is intrinsically capable of being the head contractor. That enmeshment includes the common directorship and shared holding company between First and Third Respondents, coupled with the fact that the First Respondent also owned all the shares in the Third. Then there is the common role of Mr Montebello as representing all three Respondents in dealings with Mr de Sylva on behalf of the sub-contractor. I would however treat that enmeshment, not as conduct but rather as the factual context which leads a rational plaintiff to seize on the conduct of the First Respondent (denying it was the head contractor) to sue the Second and Third Respondents.

[39] Priestley JA puts the test for what is relevant conduct in these terms: "… any conduct by the defendant or state of affairs in which the defendant is an integral part which makes it fair and reasonable for other parties to be joined as defendants will be relevant to deciding on fair cost orders." [my emphasis]. I would prefer to treat "state of affairs" as factual context rather than conduct. Thus I differentiate conduct from a purely passive state of affairs, the latter merely providing context for appraising any actual conduct that bears on fairness. In making that distinction, I would acknowledge that conduct can include deliberate acts of omission, so that the distinction between conduct and context is not always clear-cut. By treating context as relevant to the appraisal of conduct, going to fairness of Bullock orders, the practical result is usually likely to be the same, save where there is no overt conduct at all on the unsuccessful defendant's part associated with the litigation that went to fairness. That would be so here if the unsuccessful defendant had not denied it was the head contractor.

[40] Finally, I would exclude from consideration conduct which bears only upon a ground of the plaintiff's claim which failed against all Respondents, namely that each or any of them were occupiers, liable as such, either in an undefined or statutory sense. In that sense also, I would reach the same result as Priestley JA but by a narrower route." 10 In Roads and Traffic Authority of NSW, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) [2005] NSWCA 140 the plaintiff succeeded against two defendants but not against the RTA in a suit alleging failure to construct or to maintain a country road that had been resealed shortly before the plaintiff's vehicle lost control on loose aggregate. At par [30] Giles JA referred to the passage from his own decision from Sved (quoted above at par [8]), and at pars [31], [34] - [36] said this: "[31] In Almeida v Universal Dye Works Pty Ltd (No 2) [2001] NSWCA 156 Priestley JA accepted a wide view of relevant conduct of the unsuccessful defendant, saying (at [8]) that 'any conduct by the defendant or state of affairs in which the defendant is an integral part which makes it fair and reasonable for other parties to be joined as defendants will be relevant to deciding on fair costs orders'. In that case all three defendants were under common control, and his Honour thought it relevant that the unsuccessful defendant had so arranged its affairs that the plaintiff was uncertain who was the occupier or head contractor in charge of work on the site on which the injury occurred. Santow JA preferred to regard the arrangement of affairs as background to the conduct of the unsuccessful defendant in denying that it was the head contractor, that conduct causing a rational plaintiff to join the other defendants."

[34] The plaintiff relied on the wide view of conduct in Almeida v Universal Die Works Pty Ltd (No 2). She said that it was an RTA road, the work was funded by the RTA, the Council and Pioneer were aware of the arrangements by which control over the road works were to be judged, but the Council and Pioneer denied liability to the plaintiff and made no admissions as to control. The Council and Pioneer each cross-claimed for contribution, and at least on appeal the Council submitted that the RTA was liable to the exclusion of the Council. In these circumstances, it was said, there was conduct of the Council and Pioneer which made it not only proper but essential for the plaintiff to join the RTA as defendant and maintain her claim against it.

[35] It may have been reasonable for the plaintiff in her own interests to join the RTA as a defendant, but I do not think that there was conduct which made it just that the Council, and still less Pioneer, pay the costs payable by the plaintiff to the RTA. Neither the Council nor Pioneer created any circumstances of uncertainty as to who was the proper defendant. They were not obliged to concede liability or make admissions in order to remove the RTA from contention, there being a respectable argument that the RTA was liable, and there is no reason to think that short of effective capitulation by the Council and Pioneer the plaintiff would not have maintained her claim against the RTA. In my opinion, conduct has not been shown such as to make it fair to impose on the Council and Pioneer liability for the costs of the RTA.

[36] Accordingly, I do not think that the costs order for which the plaintiff applies should be made." 11 In Great Lakes Shire Council v Dederer; Roads & Traffic Authority of NSW v Dederer [No 2] [2006] NSWCA 336 Ipp JA reviewed some of the facts of the case in the following paragraphs: "[6] On 30 March 1999 Mr Dederer's solicitors wrote to the Council asking it to advise whether it was the authority 'responsible for the bridge and for the signs positioned at each end of the bridge and along its length'. On the same date they wrote to the RTA in the same terms.

[7] On 14 April 1999 the Council replied stating that the bridge was 'owned by and under the care and control of the [RTA]'. On the same date, the RTA replied as well, stating that it was 'responsible for the [bridge] and for the signs positioned at each end of the bridge and along its length'.

[8] Mr Dederer's solicitor stated in an affidavit filed in these proceedings:

'As a result of the information that I received from both the RTA and the Council I was of the view that the only appropriate defendant in any proceedings would be the RTA. There was at that time no evidence to suggest liability on the part of the Council.'

[9] The New South Wales Government, in March 2002, announced that it proposed to make amendments to the law of negligence. These amendments were likely to affect Mr Dederer's rights. This precipitated the commencement of Mr Dederer's action. On 3 April 2002, Mr Dederer commenced proceedings against the RTA only.

[10] On 20 August 2002 the RTA filed a defence admitting that it was the authority 'responsible for' the bridge and the signs 'positioned at each end and along the length of the bridge'. On 6 December 2002 the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) commenced.

[11] The trial was listed for hearing on 8 September 2003. In the week prior to that date, the RTA advised Mr Dederer that it proposed to seek an adjournment of the hearing to enable it to join the Council as a cross-defendant in the proceedings. This was the first indication that the RTA believed that the Council had any responsibility for Mr Dederer's injury. The RTA's application was granted and, in September 2003, the trial date was vacated and the defence amended. The amendment inserted the following paragraphs 2(b) and 2(c) in the defence:

'(b) [The Council] had responsibility as the Roads Authority for the regional roads in the area, including Main Road 111 of which the Bridge was part and had the benefit of a block grant from the RTA for this purpose; and

(c) In respect of the pedestrian way and 'No Diving' [pictograph] signs, the Council had the immediate control, day to day management and supervision, including but not limited to, the risk management of the Bridge ….'

[12] Significantly, the RTA, in its amended defence, continued to admit that it was the authority responsible for the bridge. The point of the amendment was to assert that the Council had joint responsibility for the bridge.

'Until September 2003, I did not consider it appropriate to join the [Council] to the proceedings. At that stage I had no information from the RTA, or from any other source, to confirm any potential liability on behalf of the Council. Were it not for the application by the RTA on 5 September 2003 that would have remained the position and the matter would have proceeded against the RTA only. …

The course that [Mr Dederer] took in these proceedings against the [Council] was as a result of information from and assertions by the RTA of the potential liability of the [Council]. In the absence thereof I would have not advised [Mr Dederer] to join the [Council]. Equally, if the RTA had not delayed for over four years in making the assertions it did in September 2003, the action against the Council would have been commenced prior to 5 December 2002.'

[14] Mr Dederer's solicitor stated that, once the RTA had made allegations implicating the Council, he considered it to be necessary that Mr Dederer join the Council in the proceedings. Thus, by leave granted on 5 September 2003, Mr Dederer amended his statement of claim by making the Council the second defendant. He thereby sued both the RTA and the Council. On 14 July 2004 the RTA filed a cross-claim against the Council.

[15] On 21 September 2004 Mr Dederer filed a further amended statement of claim which alleged in paragraph 2:

'On 31 December 1998 and at all material times the [RTA] was the controlling authority for the Forster/Tuncurry bridge and the responsible authority for the erection of signs approaching and upon the bridge.

(a) Further, the [RTA], by its predecessor in law, the Department of Main Roads, was the authority responsible for the design and construction of the said bridge.'

[16] On 7 October 2004 the RTA filed a defence to the further amended statement of claim. In answer to paragraph 2 of that document, the RTA pleaded that 'road' (as defined by the Roads Act 1993 (NSW)) included any bridge, and s 145 (of that Act) vested in the Council ownership of Main Road 111, of which the bridge was a part. The defence admitted that, under s 64 of the Roads Act , the RTA was given the statutory power to exercise the function of a road authority for Main Road 111, irrespective of whether the RTA was the road authority with respect to the bridge. The defence went on to assert that the Council had responsibility as the road authority for Main Road 111 'of which the bridge was part'. It asserted that the Council had 'immediate control, day to day management and supervision' in respect of the pedestrian way and 'no diving" pictograph signs on the bridge. The defence pleaded that the RTA did not admit paragraph 2(a) of the further amended statement of claim and, otherwise, denied 'the balance of the allegation [sic] contained in paragraph 2'.

[17] The effect of the defence to the further amended statement of claim was to withdraw the admission that the RTA had previously made in its defence and amended defence to the effect that it was the authority responsible for the bridge and for 'signs positioned at each end and along the length of the bridge'.

[18] As is noted in [177] of my reasons in [2006] NSWCA 101, during argument in the appeal, senior counsel for the RTA conceded that the RTA was to be regarded as having created the bridge, that the bridge structure was 'always the responsibility of the RTA', and that for the purposes of this case 'there has been no issue that [the RTA was] generally responsible for the structural integrity of the bridge and its maintenance in that sense'. Senior counsel in fact said:

'We don't cavil with his Honour's finding in his judgment that the [RTA] was the Roads Authority in respect of the Road and that includes, generally, the whole of the bridge.'

[19] The trial judge, in fact, did not find that the RTA was the road authority for the bridge and nor did this Court. Nevertheless, as I observed in [177], senior counsel's observations and the way in which the appeal was conducted amounted to an acceptance that the RTA owed Mr Dederer a duty of care.

[20] The written argument made on Mr Dederer's behalf submitted that it was in September 2003 that the RTA withdrew its admission that it was the relevant road authority. This proposition enabled Mr Dederer to argue that he joined the Council as a defendant in September 2003 because of the withdrawal of the admission. The argument must fail, however, as the RTA only withdrew its admission when it filed its defence to the further amended statement of claim on 7 October 2004. By then the Council had been joined for more than a year.

[21] Next, it was submitted on Mr Dederer's behalf that the RTA did nothing prior to September 2003 to alert Mr Dederer to its contention that there was liability on the part of the Council. It was said that had the RTA advanced this contention before then, Mr Dederer would have commenced proceedings against the Council 'well prior to the commencement of the Civil Liability Act '. The relevance of this submission is that the ground on which Mr Dederer failed against the Council (according to the reasons of the majority, with whom Handley JA agreed on this point) was that the Council was exempted from liability by s 5L of the Act as the risk of the recreational activity in which Mr Dederer was engaged was 'obvious'.

[22] There was no obligation on the part of the RTA, before the commencement of the Civil Liability Act , to advise Mr Dederer of the possible liability of the Council. I would add that the potential liability of the Council was obvious. See [138] and [140] of [2006] NSWCA 101. There was no need for Mr Dederer to rely on the RTA to ascertain whether or not the Council was a relevant road authority. This argument must be rejected.

[23] Finally, it was submitted on Mr Dederer's behalf that if the assertions that were made in the amended defence and further amended defence had not been made then Mr Dederer would not have commenced proceedings against the Council. While this may be factually correct, it is not to the point. Mr Dederer commenced proceedings against the Council at a time when the RTA was admitting that it was the relevant road authority. I have pointed out that the amended defence and further amended defence did not withdraw this admission. The admission was withdrawn on 7 October 2004, more than a year after Mr Dederer had joined the Council. I would add that nothing the RTA said about the Council was factually wrong; the RTA did not mislead Mr Dederer nor did it conceal from him anything he could not with reasonable effort have found out himself.

[24] It was submitted on Mr Dederer's behalf that, after the RTA had amended its defence in September 2003, 'it was reasonable and essential for [Mr Dederer] to join the Council as a defendant in the proceedings.' I accept that it was reasonable for Mr Dederer to join the Council. But that is not enough to warrant a Sanderson order. It must, in addition be shown that the conduct of the unsuccessful defendant was such as to make it fair to impose some liability on it for the costs of the successful defendant. That has not been established.

[25] I would dismiss Mr Dederer's application with costs." 12 Then in The Nominal Defendant v Swift; Wollondilly Shire Council v Swift [2007] NSWCA 56, Santow JA said this at pars [99] - [102]: "[99] I consider that the trial judge's determination of damages does not warrant appellate intervention, save that I conclude that no damages are payable by the Council to the respondent, given that the Council's appeal as to liability should wholly succeed. I consider that the appeal by the Nominal Defendant should be dismissed with costs, as should its cross-claim against the Council. I consider, however, that the respondent was justified, even prompted, in bringing proceedings against the Council, by reason of the Nominal Defendant denying liability as it did disputing, inter alia , that it was an 'unidentified vehicle'. That action made inevitable the joining of the Council by the respondent. The cost orders I have proposed are intended to reflect that outcome on broad terms, including in particular order 3. This is by way of Bullock order reflecting Council's success on liability and failure on damages and the action of the Nominal Defendant in taking the stance it did. To my mind what was said by Priestley JA in Almeida v Universal Dye Works Pty Ltd (No. 2) [2001] NSWCA 156 at [9] and [13] can be drawn on in support of that conclusion; here the threshold issue was the status of the driver as unidentified (as distinct from who was the occupier of premises).

'[9] What was submitted for Mrs Almeida was that the conduct of the Universal which justified the orders she was seeking was the position of the Universal vis-a-vis the other two respondents and the uncertainty that their relationships created as to whether it was safe to do other than proceed against all three. The specific incidents of conduct relied on were that Universal had accepted the quotation for the roofing work done by Mr Almeida's employer, that Universal and Newtown had a common directorship and that Mr Montebello had conducted business on behalf of all three respondents with Mr de Sylva the person in charge of the work being done at the time Mr Almeida fell to his death'.

'[13] Looked at from the point of view of the plaintiff, she was faced with the task of proving that some party was an occupier of the factory roof, either in an undefined sense or in a statutory sense; she had joined what she had some reason to believe was the company which had contracted to have the work done, the company lessee, and the company owner of the premises. The questions of occupation and whether Universal was the head contractor were put in issue by Universal. This alone would in my opinion have been sufficient conduct on the part of Universal to warrant the making of the orders against it which Mrs Almeida now seeks .' [emphasis added]

[100] I recognise a difference between this case and Almeida (supra) though I do not consider it a sufficient basis of distinction. The ground sought to render the Council concurrently liable, was the state of the road or more precisely trench or gutter; whilst the Nominal Defendant was sought to be rendered liable on the basis that the unidentified driver had (by veering across to Mr Swift's side of the road) caused Mr Swift to take the evasive action that led to his accident. In Almeida it might be said that there was a closer connection between the two defendants and the precipitating events of the accident. It was a question which of the two was the occupier. But even there, Universal was also sought to be rendered liable as head contractor.

[101] In Balesfire Pty Ltd t/as the Gutter Shop & Ors v Jamie Adams & Ors [2006] NSWCA 112 Almeida was followed. It was again a building case. Gutter Shop was a guttering firm that had contracted to supply and install gutters on the property. It had engaged the plaintiff as a subcontractor to do the installation which led to the plaintiff's injury by reason of the unsafe state of the roof for an installer, particularly by reason of the setback of a safety fence. The Bullock order was made against Gutter Shop, which it sought to displace on appeal. Gutter Shop disputed it was liable, forcing the plaintiff to join as defendants the owner and her husband in addition to their building company. Their respective roles in the workplace were distinct, though not, it might be said, wholly independent. Mason P observed:

'[107] There is an air of unreality in Gutter Shop challenging the Bullock order while in the same breath arguing that Mr and Mrs Ekonomou [the owner and her husband] and Jemm [their building company] were in truth always liable to the plaintiff and therefore ought to contribute to any substantive verdict awarded against Gutter Shop. In any event, the substantive disposition of this appeal means that the trial costs orders have to be revisited as regards Mr and Mrs Ekonomou.

[108] There was no dispute about the relevant principles concerning a Bullock order and in particular the need for the plaintiff to show that it was reasonable to have joined the successful defendants. ……'

[102] Here to my mind there would be a similar air of unreality in resisting a Bullock order. The Nominal Defendant not only denied liability but sought to argue that the Council was always liable to Mr Swift, as clearly evinced by the Nominal Defendant's cross-claim against the Council. It was in my view wholly reasonable for Mr Swift as plaintiff to have joined the Council, though the latter was ultimately successful." 13 Finally for present purposes the Court of Appeal considered this question in ACQ v Cook (No 2); Aircair Moree v Cook (No 2); Cook v Country Energy (No 2); Country Energy v Cook (No 2) [2008] NSWCA 306. Campbell JA's comments at pars [29] - [34] should be noted: "[31] If a Bullock Order, (named after Bullock v London General Omnibus Co [1907] 1 KB 264) were to be made in the present case, the costs of each appeal, and the costs in the court below, would follow the event, but any costs that Mr Cook was ordered to pay to NorthPower would be part of the costs that he was entitled to recover from ACQ and Aircair. If a Sanderson Order (named after Sanderson v Blyth Theatre Co [1903] 2 KB 533) were to be made in the present case, there would be no order for Mr Cook to pay any costs to NorthPower, but Aircair and ACQ (or one of them) would be ordered to pay NorthPower's costs.

[32] Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215 concerned an action brought by the purchasers of a business against the vendor, alleging they had been induced to purchase the business by misrepresentations. In the alternative, they sued accountants who had advised them before purchase concerning the financial standing of the business. They succeeded against the vendors, but failed against the accountants. The trial judge made a Bullock Order relating to the costs the purchasers were ordered to pay the accountants. The Queensland Full Court set aside that order. The High Court in turn restored it. Gibbs CJ, at 229-230 said: (citation omitted - see par [5] above)

[33] Wilson J (with whom Murphy J agreed on this point), at 247, stated the test for when the making of a Bullock Order was permissible as being:

'… where the costs in question have been reasonably and properly incurred by the plaintiff and between him and the unsuccessful defendant.'

[34] Brennan J, at 260, stated the test as being that the order can be made:

'… in an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiff's claim against showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought.' The present case 14 The plaintiff relied upon material deposed to in an affidavit sworn by his solicitor. It is clear that a mechanical failure was identified at an early stage as the cause of the loss of control that resulted in the collision. In its defence filed on 8 August 2005 the first defendant said that the "occurrence" referred to in the statement of claim "was caused by a mechanical defect in the [first defendant's] vehicle, not known to or discoverable by the owner and/or the driver of that vehicle". Shortly before 22 August 2005 the plaintiff determined to join the second defendant to the proceedings and filed a notice of motion bearing that date for that purpose. It was supported by an affidavit of Peter Francis Moore that included a paragraph in the following terms: "A review of all information in my file, together with documents and other materials obtained under subpoena, coupled with the Defence filed by the [first defendant], has led me to the conclusion that the Plaintiff's case can only be properly presented by the joinder of two additional Defendants to cover that circumstance alleged by the [first] Defendant, namely that his steering failed. Upon advice obtained from Counsel, the two additional Defendants are…" 15 The first defendant maintained its defence based upon mechanical failure following the joinder of the second defendant in terms identical to those referred to earlier. The defence to the amended statement of claim and to the second and third amended statements of claim filed by the plaintiff also contained a paragraph that said "The First Defendant says that he is not liable to pay damages and interest claimed by the plaintiff against him in the [relevant statement of claim] or at all". 16 In October 2005 the first defendant cross-claimed against the second defendant in which he pleaded the same manufacturing and design defects against the second defendant as the plaintiff had pleaded against the second defendant in the statement of claim. These allegations were maintained with only minor amendments up to the hearing. 17 The first defendant prepared a statement of issues dated 19 June 2007 that included the following: "1. Whether the incident … was caused by the negligent driving of the First Defendant or by a mechanical defect in the First Defendant's vehicle which was reasonably known to, or discoverable by, the First Defendant.

2. If the accident was caused by a mechanical defect in the First Defendant's vehicle, whether such defect was brought about by the negligent design and manufacture of the First Defendant's vehicle." 18 A statement in reply by the plaintiff disputed the first defendant's formulation of the issues in this way and instead relevantly proposed the following: "(b) Whether the First Defendant was negligent in the maintenance of the vehicle. In particular the Plaintiff says that 'knowledge' or 'discoverability' are not material. The Plaintiff states that the issue is whether the First Defendant had a reasonable and proper system of maintenance of the vehicle". 19 The first defendant also referred to matters of historical interest in the course of the litigation. This included reference to a letter dated 22 July 2005 written by the plaintiff's (then) solicitors to the solicitors for the first defendant which was relevantly as follows: "We note that we duly provided you with a copy of the material produced by the NSW Police via our letter dated 24 June 2005.

Our client is anxious that the matter proceed without further delay and we would therefore be obliged if you would urgently advise when you will be in a position to file your defence and in particular whether you have instructions to admit breach of duty of care." 20 By letter dated 30 September 2005 the first defendant sought particulars from the plaintiff with respect to the bases upon which the plaintiff's claim against the second defendant was to be made out. No relevant reply to that letter is in evidence. 21 The second defendant filed its statement of issues dated 21 April 2008. The issues that it identified, which related to the second defendant's part in the proceedings, were as follows: "1.1 Whether the second defendant manufactured the first defendant's vehicle;

1.2 Whether the second defendant manufactured the part that failed in the first defendant's vehicle;

1.3 Whether the part that failed in the first defendant's vehicle was an original part of the first defendant's vehicle or was a substituted part inserted into the vehicle at a later date;

1.4 Whether the incident on or about 21 November 2002… was caused by the second defendant's negligent manufacture and/or design of the failed part; . . ." 22 The second defendant indicated in the same document that it intended to establish facts that in effect answered those issues favourably to it. The plaintiff contended that issue 1.4 identified by the second defendant was wider than the second defendant had expressed it. Consideration 23 What if anything did the first defendant say or do in this case that arguably led the plaintiff to sue the second defendant? The first defendant denied liability at all times up until the hearing and even then only conceded breach of duty but not causation. It was entitled to do so. The denial may have served to discomfort the plaintiff and his legal advisers but that was a normal and natural consequence of the litigious process. There was nothing in that position, which the first defendant was entitled to adopt, that necessarily, as opposed to cautiously or conservatively, led the plaintiff to cast wider in search of a possible additional or alternative defendant. Neither the plaintiff nor the first defendant suggested that there was not a respectable argument that the second defendant was or may have been liable. The first defendant was not obliged to concede liability or to make admissions in order to remove the second defendant from contention: see Palmer at par [35] (supra). 24 I do not think that there was any conduct on the part of the first defendant that can be identified or characterised as conduct that makes it fair to impose any liability upon it for the costs of the second defendant. Even taking the wider view of the conduct of the first defendant as any conduct by him or state of affairs in which he was an integral part, none appears to me to be conduct that alone made it proper, or fair and reasonable, that the second defendant be joined to the proceedings. Put another way, there was not in this case any sufficient relationship between the plaintiff's decision to join the second defendant and anything that the first defendant did or refrained from doing. The fact that the plaintiff's decision to do so may have been given some encouragement or support from the first defendant's adoption or endorsement of the plaintiff's allegations against the second defendant in its cross-claim cannot for present purposes be converted by the plaintiff into conduct that caused him to join the second defendant to the proceedings in the first place. 25 The first defendant did not mislead the plaintiff in any way, nor did he conceal anything from the plaintiff, that made it imperative that the second defendant be joined. The statement by Mr Moore in paragraph 3 of his affidavit, that he reached the conclusion that the plaintiff's case could only be properly presented by the joinder of two additional defendants to "cover" the first defendant's allegation that his steering had failed, was no more than a forensic decision based upon an appreciation of the possibility that the first defendant may have had a complete defence to the plaintiff's claim against him. As discussed earlier, and as emphasised by the first defendant in his submissions, defending the plaintiff's case was something that the first defendant was entitled to do and for which he cannot in the present context be criticised. Mr Moore's evidence only supports a conclusion that it may have been reasonable to join the second defendant. However, it must in addition be shown that the conduct of the first defendant was such as to make it fair to impose some liability on him for the costs of the second defendant. I do not consider that it would be fair to do so. 26 The matter can be tested in the following way. What did the first defendant not do that he should have done, or what did he do that he should not have done, whether in the context of the litigation or at any other relevant time, that led to the plaintiff's decision to join the second defendant? The answer in my view is nothing. It is pertinent to observe that Mr Moore was influenced in his decision to join the second defendant by the first defendant's neutral contention that his steering failed, not by a weighted contention that it did so by reason of a design (or any other) fault on the part of the second defendant. Whilst I do not suggest that a contention of the second type would have meant that the plaintiff's present application would necessarily have succeeded, the distinction serves to emphasise that the first defendant did no more than foreshadow a reliance upon what in due course turned out to be accepted by all parties and their experts. Although it may seem like a harsh counsel, whatever the plaintiff decided to do was clearly a forensic decision that he made, or that was made on his behalf, but not a decision that was caused by the conduct of the first defendant. Senior counsel for the plaintiff spoke during his submissions of "the aura of responsibility [on the part of the first defendant] for denying liability causing a plaintiff . . . to look elsewhere for his remedy". As I have already indicated, the first defendant was entitled to deny liability and the plaintiff's search for another defendant was his choice. It was not "caused" in any relevant sense by the first defendant. Conclusions 27 It follows that the plaintiff should pay the costs of the second defendant. Orders 28 I have been informed that the quantum of the plaintiff's damages has been agreed. It is appropriate that my final orders include a verdict for the agreed amount. I therefore make the following orders: 1. Verdict for the plaintiff against the first defendant for $3,200,000.

2. Order the first defendant to pay the plaintiff's costs.

3. Verdict for the second defendant on the plaintiff's claim.

4. Order the plaintiff to pay the second defendant's costs.

5. Dismiss the first defendant's cross-claim against the second defendant with costs.

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.