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Legislation Cited: Civil Liability Act 2002 (NSW), ss 5L, 5M, 5N
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.1

Cases Cited: Bullock v London General Omnibus Co [1907] 1 KB 264
Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176
Dominello v Dominello (No 2) [2009] NSWCA 257
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75
Moore v Keane [2026] NSWSC 475
Sanderson v Blyth Theatre Co [1903] 2 KB 533
Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561; [2016] NSWCA 370

Category: Costs

Parties: David Edward Moore (Plaintiff)
Jeffrey Keane (First Defendant)
Greg Brand (Second Defendant)

Representation: Counsel:
R Sheldon SC with E Anderson (Plaintiff)
E Cox SC with J Smith (First Defendant)
J Turnbull SC with J Sleight (Second Defendant)
Solicitors:
Law Partners (Plaintiff)
Kemp & Co Lawyers (First Defendant)
McInnes Wilson Lawyers (Second Defendant)

File Number(s): 2023/00124981

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: This matter returned to me on 15 May 2026, as directed, for the purpose of finalising the calculation of Mr Moore’s damages and considering the question of the costs of Mr Moore’s unsuccessful claim against Mr Brand. In the events that occurred, a further question has arisen concerning whether any costs ordered to be paid to Mr Brand should be assessed on the indemnity basis by reason of the offers of compromise served in the proceedings.

2. With respect to the first matter, it is agreed among the parties, having regard to my reasons for judgment, that Mr Moore’s damages are $1,114,933.40. I will make an order to that effect.

3. A familiarity with my principal judgment in Moore v Keane [2026] NSWSC 475 is assumed for present purposes.

4. With respect to the remaining matters, the parties’ submissions are as follows.

Mr Keane’s submissions

5. In summary, Mr Keane’s position was that:

(a) No Bullock or Sanderson order should be made. Mr Moore chose to sue Mr Brand and failed against him. The costs of that claim should follow the event as between Mr Moore and Mr Brand. Mr Keane neither said nor did anything that could justify shifting the burden of those costs onto him. (b) Whatever may be the effect of the offers of compromise as between Mr Moore and Mr Brand, none of them attracts an order for indemnity costs against Mr Keane. The offers fall into three groups:

(i) inter-defendant offers about the cross-claims (which cannot found a Sanderson order or any indemnity costs against Mr Keane on Mr Moore’s claim); (ii) Mr Brand’s separate offer to Mr Moore, which was a walk-away offer, was not a genuine compromise, and in any event was beyond Mr Keane’s control; and (iii) joint offers by Mr Keane and Mr Brand to Mr Moore, which were not beaten, were incapable of separate acceptance, and did not represent any real compromise of Mr Moore’s case.

6. The starting point is that costs follow the event: UCPR 42.1. In the present case, Mr Moore sued two defendants and succeeded against one. The unsuccessful defendant is not, without more, liable for the successful defendant’s costs. Mr Moore should bear that liability as the consequence of his own forensic decision to join both Mr Keane and Mr Brand.

7. Two orders allow the Court to depart from that position:

(a) a Bullock order (Bullock v London General Omnibus Co [1907] 1 KB 264), by which an unsuccessful defendant indemnifies a plaintiff for the costs the plaintiff is ordered to pay the successful defendant; and (b) a Sanderson order (Sanderson v Blyth Theatre Co [1903] 2 KB 533), by which an unsuccessful defendant pays the successful defendant’s costs directly.

8. All parties referred to these principles and Mr Keane helpfully summarised the way in which they have been considered and applied in Australia.

9. The principles governing the making of Bullock and Sanderson orders are the same: Dominello v Dominello (No 2) [2009] NSWCA 257 at [5]-[8]. The test was authoritatively described by Gibbs CJ in Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75 at 229–230:

“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. … ‘[T]here 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’.”

10. That two-stage test (reasonableness of joinder, plus conduct that makes it fair to shift the costs) was reaffirmed by the Court of Appeal in Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 at [47]. The Court emphasised that:

“… the mere fact that the joinder of two defendants was reasonable on the plaintiff’s part is insufficient to support the making of an order that the unsuccessful defendant should pay, directly or indirectly, the costs of the successful defendant.”

11. It was again applied by Leeming JA in Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561; [2016] NSWCA 370 at [229], where his Honour identified “the true principle” as the proposition that there must have been some conduct on the part of the unsuccessful defendant that would make it fair to impose liability on it for the costs of the successful defendant.

12. Importantly, the “something more” required of the unsuccessful defendant cannot be a mere denial of liability, since a denial “would be present in every case brought against two or more defendants”: Dominello (No 2) at [19]. It “will typically involve a positive assertion, express or implied, that the relevant defendant is not liable because the other is”: Dominello (No 2) at [20].

13. Three further presently relevant propositions emerge from the recent authorities:

(a) In Dominello (No 2) itself, no Bullock or Sanderson order was made, even though it was “entirely reasonable” for the plaintiff to sue both defendants and would have been “most unwise” not to: at [11], [15]. The unsuccessful defendant’s argumentative denial of liability and its “gratuitous advice” to the plaintiff to continue against the other defendant alone were “not enough”: at [17]. The decision turned on the conclusion that the claims were “independent and not alternative”: at [26], [29]. (b) In Turano (No 2), the Court refused a Sanderson order against the unsuccessful defendant (Sydney Water) in favour of the successful defendant (the Council) despite the joinder of both being reasonable: at [47]-[49]. The Court held that “where there is no basis for suggesting that [the unsuccessful defendant] caused the [successful defendant] to incur costs other than those it would have incurred in the course of defending the issues which arose on the Statement of Claim, there is no basis upon which it would be fair to order [the unsuccessful defendant] to pay part of the [successful defendant’s] costs”: at [48]. (c) In Zhang, a (partial) Sanderson order was made, but only because the unsuccessful defendant insurer had wrongfully denied cover, which left the plaintiff with no solvent defendant unless he joined the other defendant. That specific wrongful denial of cover supplied the “something more” the principle requires: at [228], [230].

14. Mr Keane submitted that Zhang stands as an illustration of the kind of positive conduct that the test requires which he maintained is conspicuously absent in the present case.

15. Taking account of these principles, Mr Keane emphasised six propositions.

16. First, the claims against Mr Keane and Mr Brand were independent, not alternative. Each was sued for his own conduct as the helmsman of his own vessel. Mr Moore could and did succeed against Mr Keane on Mr Keane’s own breach of duty without any adverse finding against Mr Brand.

17. Secondly, Mr Keane never said, either expressly or by implication, that Mr Brand alone caused the collision. That is the very feature identified in Dominello (No 2) at [20] as the kind of conduct that typically justifies a Bullock or Sanderson order. The opposite was true here. Mr Keane’s pleaded denials of liability were directed to his own conduct (no breach of duty, ss 5L, 5M and 5N of the Civil Liability Act 2002 and want of causation), not to an allegation that Mr Brand was solely to blame. Moreover, Mr Keane’s cross-claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 proceeded on the footing that both he and Mr Brand were concurrent tortfeasors, not that Mr Brand was solely responsible. He accepted that there was fault on both sides and that they were equally morally responsible.

18. Thirdly, Mr Keane did not create any circumstances of uncertainty about the identity of the proper defendant or Mr Brand’s culpability and Mr Moore has never suggested that he was misled by Mr Keane about whom to sue. Mr Moore’s decision to sue both defendants was his own.

19. Fourthly, this case fits squarely within the very pattern in which a Bullock order in Dominello (No 2) was refused, where the plaintiff was injured in a single accident with two possible causes. The Court held that it was “entirely reasonable” for her to have sued both defendants, and unwise not to do so, but no Bullock or Sanderson order was made, because the claims were independent and not alternative and the unsuccessful defendant had not created the uncertainty, and a denial of liability was “not enough” to make it fair to shift the costs. Mr Moore’s decision to sue both defendants reflected his own assessment of the evidence and his own forensic strategy. Mr Keane did nothing to deflect Mr Moore from the proper defendant or to create any uncertainty as to liability.

20. Fifthly, this is not a Zhang-type case. The conduct that justified a Sanderson order in Zhang was the unsuccessful defendant’s wrongful denial of insurance cover, which left the plaintiff with no solvent defendant unless he joined another: at [228], [230]. There is no analogous conduct in this case.

21. Sixthly, as between Mr Keane and Mr Brand, costs are adequately dealt with in the cross-claims. By order (5), Mr Brand has already obtained an order for his costs against Mr Keane. The existence of the cross-claim cannot justify a Sanderson order: see Turano (No 2) at [48].

Mr Brand’s submissions

22. Mr Brand submitted that his costs should be borne entirely by Mr Keane. That submission is to some extent curious in the first instance, given that the ordinary rule would see Mr Brand’s costs paid by Mr Moore as the unsuccessful plaintiff. It becomes even more curious when one considers that there must be some doubt, having regard to the propositions propounded by Mr Keane, that Mr Moore’s costs liability to Mr Brand ought legitimately to be to Mr Keane’s account in accordance with Bullock/Sanderson considerations in any event. The submission is otherwise explicable upon the basis that Mr Brand and Mr Moore are presumably friends with a history of sailing together on Brand X and that Mr Brand does not wish to see Mr Moore out-of-pocket in the circumstances if there is any possibility that Mr Brand’s costs might be met by Mr Keane or more particularly by his insurer. However, Mr Brand’s commendable disinclination to see Mr Moore out-of-pocket cannot operate detrimentally to Mr Keane to influence the determination of the issues I have presently to decide.

23. The matter is to some extent complicated by the fact that Mr Brand served offers of compromise on Mr Moore and Mr Keane, in each case proposing a settlement of Mr Moore’s claim and both cross-claims on a walk-away basis with no order as to costs. Subject to the argument that the offers were offers to capitulate and not genuine attempts to compromise the claim or the cross-claims, Mr Brand’s offers would otherwise appear on their face clearly to trigger an entitlement to indemnity costs in his favour. However, for the reasons referred to below, I am not satisfied that Mr Moore should be required to pay Mr Brand’s costs as a successful defendant on an indemnity basis.

Mr Moore’s submissions

24. Mr Moore submitted that Mr Brand’s costs should be paid by Mr Keane. It was contended valiantly by Mr Sheldon for Mr Moore that his ability to release Mr Brand from the proceedings was somehow constrained by the fact that Mr Brand had become and remained as a cross-defendant at the suit of Mr Keane.

25. The transcript records the way in which this argument was developed:

“SHELDON: And in a sense that was when it coalesced and if there was recognition on the part of the first defendant as to the weakness of the case involving the second defendant, including on the first defendant’s cross-claims, the second defendant would have been released, we submit, on the basis of this material, in early 2024. A similar proposition emerges from the joint offer of compromise, which are annexures G and H to Ms Cheong’s affidavit, which, interestingly, propose a judgment in favour of the plaintiff in the sum of $200,000, of which the second defendant is to contribute $75,000. Now, what the plaintiff did in response to that is to be seen as annexure I. He wrote and asked whether he could accept or whether the $75,000 was capable of being accepted in its own right.

So, it’s clear that more than a year later, so nearly two years after that initial offer of compromise, the plaintiff was still contemplating and, in our respectful submission, open to letting the second defendant go, except that the offer of compromise which prompted that letter was said in the email which is annexed to Ms Cheong’s affidavit at J. So, it wasn’t capable of acceptance in that way.

HIS HONOUR: The plaintiff could of course have­­

SHELDON: I’m sorry, your Honour?

HIS HONOUR: The plaintiff could have taken steps in one form or another to encourage the second defendant. Sorry, you could have discontinued on some basis against the second defendant at any time, though, could you not?

SHELDON: Yes, your Honour, we could have. But it wouldn’t have got rid of the cross-claim.

HIS HONOUR: No, but­­

SHELDON: As my learned friend Mr Sleight points out.

HIS HONOUR: But you weren’t a party to the cross-claim.

SHELDON: Well, we weren’t, your Honour, up to a point. But it is, in our respectful submission, cute to submit, as the first defendant does, that that concession which is extracted in full at para 9 of the submissions which the first defendant has put on in any way demonstrates that the first defendant was behaving reasonably or consistently with it being the plaintiff's problem that the second defendant remained in the proceedings.”

26. On that basis it was somehow submitted that Mr Moore was entitled to a Bullock or Sanderson order so that any costs for which Mr Moore had become liable to pay Mr Brand as a successful defendant should be paid by Mr Keane as the unsuccessful defendant, still locked in cross-claims with Mr Brand.

Consideration

27. This is a case in which it was both inevitable that Mr Moore would sue Mr Keane and in which it would have been unwise or imprudent not also to sue Mr Brand. When the proceedings were commenced, all the parties were faced with the curious but nevertheless influential conclusion of the Race Committee that Mr Keane and Mr Brand were equally responsible for the collision. I have since decided otherwise. However, it is highly likely, if not certain, that Mr Moore’s decision to sue Mr Brand was significantly, and not unreasonably, inspired or influenced by that earlier outcome.

28. As the submissions of the parties acknowledge, Mr Keane and Mr Brand were responsible for separate and independent acts. Mr Brand’s alleged acts or omissions formed no part of those for which Mr Keane was held liable. Nor was Mr Keane’s failure to keep a proper lookout anything for which Mr Brand could have been responsible. Their respective cross-claims for contribution did not assert otherwise.

29. In order for Mr Keane to be held responsible for the costs incurred by Mr Brand’s successful defence of Mr Moore’s claims, the authorities direct attention to the delictual relationship between Mr Keane and Mr Brand and to Mr Keane’s conduct in defending the proceedings, including Mr Brand’s cross-claim.

30. In the first respect, Mr Moore could have sued only Mr Keane in the hope of succeeding against him alone. It was no necessary part of Mr Moore’s case against Mr Keane that Mr Brand should be successfully inculpated in some way for what occurred. My decision reflects that reality.

31. In the second respect, there is nothing to which Mr Moore can point to support a proposition or argument to the effect that he only joined Mr Brand as the result of something, or even anything, done or said by Mr Keane. Mr Brand was already a party to the proceedings at the suit of Mr Moore by the time he was sued by Mr Keane for contribution. Mr Moore’s decision to sue Mr Brand was in that sense not caused or encouraged, and certainly not necessitated, by what Mr Keane did. As Mr Keane has submitted, he did nothing to deflect Mr Moore from the proper defendant or to create any uncertainty as to liability that would have necessitated the joinder of Mr Brand. Mr Moore made his choice.

32. It would in my view be unfair, in the sense described in Gould v Vaggelas, to impose some liability on Mr Keane for Mr Brand’s costs, other than those relating to the cross-claims. It becomes unnecessary in these circumstances to consider the question of whether Bullock or Sanderson costs can or should be payable on an indemnity basis.

33. Nor failing an order that Mr Keane pay Mr Brand’s costs is there any principled basis I can detect upon which Mr Moore could escape the inevitability of an order that he should personally do so. Mr Brand had made it clear from very early in the piece that he was prepared to be released from the proceedings with no costs consequences for Mr Moore. Mr Moore did not take advantage of that offer at the time and did not pursue a similar outcome much later when Mr Brand unambiguously intimated that he would be amenable to reviving the same outcome. Mr Brand should not be deprived of his costs as a successful defendant by an order such as that Mr Moore and Mr Brand pay their own costs of the case between them. Mr Moore did not release Mr Brand from the proceedings when given the opportunity to do so and took the forensic risk that he might not succeed against him. That is what happened and the costs of that contest should follow the event.

Offers of compromise

34. On 5 March 2024, the solicitors for Mr Brand wrote to Mr Moore’s solicitors enclosing an offer of compromise offering to settle the proceedings between Mr Brand and Mr Moore upon the basis that there would be a judgment for Mr Brand with no order as to costs. The offer was on its face made in accordance with UCPR 20.26 with which it clearly complied. The offer was not accepted by Mr Moore whose claim against Mr Brand failed entirely. That outcome was unarguably less favourable to Mr Moore than the terms of the rejected offer.

35. In my view, it was unreasonable for Mr Moore to have rejected the offer.

36. First, this was not merely an offer to capitulate in the sense discussed in some authorities, so as not in truth to amount to a genuine offer at all. The proceedings were commenced by statement of claim filed in mid-2023. Mr Brand’s amended defence to the amended statement of claim was filed on 27 June 2024. That defence put in issue all of the defences that I dealt with in my principal judgment. The defence included a denial that the accident was caused by Mr Brand’s negligence.

37. All parties had access to the significant piece of evidence in the form of the video footage of the collision. All parties represented a skipper or crew member on one or other of the yachts. No party was at a tactical or evidentiary disadvantage compared to any other. All parties were equally capable of assessing the competing risks of the litigation.

38. Mr Keane and Mr Brand made later joint offers to Mr Moore on 1 April 2025 and 23 September 2025 in identical terms, offering Mr Moore the sum of $200,000.00 plus costs, to the payment of which sum Mr Brand would contribute $75,000.00. Those offers were also not accepted.

39. It is clear that Mr Brand was at all times asserting that he was not liable to Mr Moore for negligence as alleged against him. The offer to contribute $75,000.00 was clearly a reflection of Mr Brand’s desire to be released from the litigation entirely on commercial terms. The joint offer was however not capable of being accepted only as an offer from Mr Brand. Mr Moore could not therefore accept the offer without discontinuing his claim against Mr Keane.

40. This is clear from the correspondence between the respective solicitors on this issue which continued up until as late as December 2025 and January 2026. For example, on 8 December 2025, Mr Moore’s solicitor wrote to Mr Brand’s solicitor to inquire whether the “offer of $75,000 towards the judgment sum was intended to be capable of acceptance on its own in the offer”. Mr Brand’s solicitor advised on 20 January 2026 that it was “not capable of being accepted in that form”. Mr Brand’s solicitor emphasised in the same letter that Mr Brand saw “no exposure on [his] part in [this] matter”. That opinion was ultimately vindicated.

41. However, it seems to me that at least two things flow from this.

42. First, because the joint offer could not have been accepted by Mr Moore without terminating the whole of the proceedings, it was not capable of acceptance in those terms and so it was otherwise not unreasonable for Mr Moore to reject it. That position is not altered by Mr Brand’s solicitor indicating, in the 20 January 2026 letter, that if Mr Moore wished to make an offer to Mr Brand alone, he was invited to do so, “at which point we can take instructions”. If Mr Brand wanted to make an offer of his own, he should have done so.

43. Secondly, it is in my view a fair reading of all of the correspondence between Mr Brand’s solicitor and Mr Moore’s solicitor that despite the service of the 5 March 2024 offer of compromise which I have concluded would have triggered an entitlement to indemnity costs in accordance with its terms, Mr Brand had in my view by January 2026 at least communicated an intention no longer to rely upon it having regard to the service of the later, more generous, joint offer. It seems to me that it would not be reasonable for Mr Brand to rely upon the earlier offer when at the same time he has amended the terms upon which he was prepared to settle the proceedings. The fact that the joint offer was incapable of permitting a settlement with Mr Brand alone only served to increase the confusion and promote the impression that Mr Brand had discarded the earlier offer.

44. On 5 March 2024, the solicitors for Mr Brand wrote to Mr Keane’s solicitors enclosing an offer of compromise offering to settle the cross-claims between Mr Brand and Mr Keane upon the basis that there would be a judgment for Mr Brand with no order as to costs. The offer was on its face made in accordance with UCPR 20.26 with which it clearly complied. The offer was not accepted by Mr Keane, whose cross-claim against Mr Brand and whose defence of Mr Brand’s cross-claim against him both failed entirely. That outcome was unarguably less favourable to Mr Keane than the terms of the rejected offer.

Conclusions and orders

45. It follows from the above that I should now make these orders:

46. In lieu of order (1) made on 8 May 2026, order that there be judgment for Mr Moore against Mr Keane for $1,114,933.40.

47. Order that Mr Moore pay Mr Brand’s costs of the proceedings on the ordinary basis.

48. Order that Mr Keane pay Mr Brand’s costs of the cross-claims on the ordinary basis up to 5 March 2024 and thereafter on the indemnity basis.

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