Morton v The Transport Appeal Board & Anor

P: Stephen James Morton PARTIES : D1: The Transport Appeal Board D2: Sydney Ferries Corporation

P: D. Cowan SC; D. Knoll COUNSEL : D1: D2: P.J. Newall

P: Diamond Conway Lawyers SOLICITORS : D1: D2: Sparke Helmore Solicitors

1 The Plaintiff brought proceedings in this Court against the second Defendant, following his dismissal from the position of a Ferry Master in their employ. He sued on two bases: * firstly he sought judicial review of a decision of a Transport Appeals Board constituted under the Transport Appeals Board Act 1980 following their dismissal of his appeal against the second Defendant's decision to terminate his employment; * secondly he claimed damages for breach of contract.

2 The hearing in this Court extended over six days, finishing on 10 December 2007. On 12 December 2007 I found in the Plaintiff's favour as regards the judicial review aspect of his case, but against him in relation to the claim that the contract of employment between the Plaintiff and the second Defendant had been breached (see Morton v The Transport Appeals Board & Anor (No1) [2007] NSWSC 1454).

3 I made no order as to costs as the parties indicated they wished to make further submissions on that issue. Submissions have now been received and this judgment deals with that issue. I have decided, for the reasons I will indicate below, that the appropriate order as to costs is that the second Defendant pay the Plaintiff's costs as agreed or assessed.

4 The usual order for costs is of course that they follow the event unless the successful litigant has engaged in some sort of disentitling conduct (see Oshlack v Richmond River Council (1998) 193 CLR 72 at 96 - 98 per McHugh J). However the second Defendant submits that there should be some apportionment of costs in this case because of its success on one of the issues raised.

5 The appropriate order as to costs is very much within my discretion but that is not to say that my discretion is unguided. It must be remembered that costs are not awarded to punish an unsuccessful party but rather to indemnify the successful party against that which is reasonably incurred in enforcing that party's rights, (see Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and [68], per McHugh J).

6 As regards apportionment, in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 Toohey J said: 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.

There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 at 16. His Honour sounded what he described as 'a note of cautious disapproval' of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented: But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.

7 Reference should also be made to Dodds Family Investment Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271: … justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues that might be material to the decision in the case: Cretazzo v Lombardi (1975) 13 SASR 4 at 12. In Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213; 28 ALR 201, Fisher J regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally … the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs.

and Waters v PC Henderson (Australia) Pty Ltd (NSWCA, 6 July 1994, unreported): Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupy the bulk of time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is particularly dominant or separable, it would ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.

8 Another approach is to be found in cases such as Mok v Minister for Immigration, Local Government and Ethnic Affairs (No2) (1993) 47 FCR 81 at 84 where Keeley J said In my opinion the Court's power to order a successful applicant to pay the costs in respect of an issue raised by the applicant, on which the applicant has failed, ought to be exercised only where the Court, on a consideration of all the circumstances, has concluded that the raising of that issue by the applicant was so unreasonable that it is fair and just to make the order

9 With these principles in mind let me turn to the present case.

10 Although the two issues raised by the Plaintiff were quite separate legally, the evidence relevant to those issues was almost identical. Many of the legal submissions made by the Plaintiff and the second Defendant also related to both of the Plaintiff's claims.

11 It is worth noting that on 3 August 2007 Rothman J refused an application by the second Defendant for separate hearings in relation to the two matters raised by the Plaintiff. In refusing that application his Honour said, inter alia:

"there are issues, it seems to me, that would necessarily arise in the contract of employment case that would impact upon the issues before the Transport Appeal Board and vice versa"

12 His Honour's expectation proved to be correct. One of the matters raised by the Plaintiff (on which it succeeded) concerned a submission that the decision of the Transport Appeals Board was unreasonable (see Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223). As part of that claim I was required to consider a considerable amount of evidence concerning the conduct of the Plaintiff and employees of the second Defendant. Some of that evidence concerned an investigation carried out, and a report prepared by, a Mr David Thus, an employee of the second Defendant. It was that conduct which was said by the Plaintiff to have breached the contract of employment. The resolution of that part of the Plaintiff's claim, on which he failed, required only very minor further evidence beyond that already, appropriately, considered by me in determining that part of the Plaintiff's claim on which he did succeed.

13 The breach of contract claim did of course require evidence relating to damages suffered and legal submissions which went beyond those made in relation to the judicial review claim, but these were relatively confined.

14 Further, those aspects of the judicial review part of the case on which the second Defendant succeeded also required little further evidence or consideration beyond that necessarily given to those aspects of the judicial review case where the Plaintiff succeeded, in particular the successful assertion that the decision was unreasonable.

15 This was not a case where the second Defendant has succeeded on issues which occupied the bulk of the time taken by the proceedings, nor where the issues on which the Plaintiff has failed particularly dominant or separable and it could certainly not be said that the bringing of the contract case, or those aspects of the judicial review case on which it failed, by the Plaintiff were unreasonable.

16 It is for those reasons that I make the order, foreshadowed above that: The second Defendant is to pay the Plaintiff's costs as agreed or assessed.

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