Plaintiff v First Defendant

2 In 2015, the plaintiff engaged Waller Legal Pty Ltd ('Waller Legal'), the first defendant, as his solicitors in a claim against the Trustees for the Christian Brothers ('the Christian Brothers'). That claim settled. In 2019, the plaintiff engaged Knowmore Legal Service Ltd ('Knowmore Legal'), the second defendant, in relation to an application by him for redress under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) ('the National Redress Scheme Act', or 'the Act'). As a result of amendments made shortly prior to the time that he made that application, s 27QA of the Limitation of Actions Act 1958 would have allowed the plaintiff to apply to the Court to have his earlier settlement set aside and, if that succeeded, then to commence another proceeding against the Christian Brothers for further damages, but this would not be possible if he were to accept an offer of redress made under the National Redress Scheme Act. The plaintiff applied for redress and entered into correspondence with the Operator of the National Redress Scheme. The relevant correspondence was expressed to be an offer of redress by the Operator and an acceptance of that offer by him and it resulted in the plaintiff receiving some counselling paid for under that Scheme.

3 Initially, Waller Legal was the only defendant and the plaintiff's case was that Waller Legal was negligent in the advice it gave in relation to, and in the formulation of, the claim against the Christian Brothers. In its defence, Waller Legal alleged that the plaintiff could apply under the Limitation of Actions Act 1958 to have the earlier settlement set aside and, if that succeeded, then bring another claim against the Christian Brothers. It also included a plea that the plaintiff had failed to mitigate his loss by failing to bring such an application. Neither pleading referred to the plaintiff's application under the National Redress Scheme. Waller Legal said, and I accept, that at the time it made this plea in mitigation it was not aware that the plaintiff had applied for and received redress under the National Redress Scheme.

4 The plaintiff then added Knowmore Legal as the second defendant, introduced allegations that he had applied for redress under the National Redress Scheme, and alleged that Knowmore Legal had given him negligent advice in relation to that application. It was implicit, if not explicit, that the plaintiff was alleging that by his making that application and accepting an offer of redress he had lost the right to seek to recover more damages from the Christian Brothers.

5 Knowmore Legal's defence was specific. It alleged that the communications between the Operator of the National Redress Scheme were such that no 'offer of redress', as that phrase in the National Redress Scheme Act was to be understood, was made or accepted with the result that the plaintiff had not lost the opportunity to pursue a further claim against the Christian Brothers.

6 Waller Legal then filed a defence to the amended statement of claim in which it added, as an alternative particular, that the plaintiff had also failed to mitigate his loss by accepting the offer made to him under the National Redress Scheme and thereby foreclosing the possibility of his obtaining further damages from the Christian Brothers.

7 The plaintiff applied to have the question of whether he was in fact now precluded from seeking to bring another claim against the Christian Brothers determined in advance of trial. So that any order made would be binding on the Christian Brothers, the plaintiff added the Christian Brothers as the third defendant. This was an appropriate step to take also so that there would be a contradictor to the position taken by the first and second defendants. After that was done, three questions were framed and set down for preliminary determination. The first two dealt with whether on a proper construction of the National Redress Scheme Act and the relevant communications, the plaintiff had 'accepted' an 'offer of redress' such that he could no longer seek to recover any more damages from the Christian Brothers. The third concerned an argument put by the plaintiff that Knowmore Legal was estopped from presenting the argument it wished to present. I determined the first two in the plaintiff's favour and determined that it was unnecessary to answer the third.[1]

8 The plaintiff seeks its costs of the determination of the preliminary questions from Knowmore Legal, with those costs to include its costs of joining the Christian Brothers. The plaintiff accepts that the claim against the Christian Brothers should now be dismissed and submits that the Christian Brothers' costs should also be paid by Knowmore Legal (and not the plaintiff). Waller Legal seeks its costs from Knowmore Legal, alternatively an order that it bear its own costs (and not pay anyone else's costs). Knowmore Legal submits that the costs of the first two questions should be reserved until after the trial and the plaintiff should not have any costs in relation to the third question. The Christian Brothers seeks its costs from the first defendant and the second defendant.

B. The first two questions - statutory construction and interpretation of correspondence

9 The Christian Brothers succeeded in their argument that by reason of the operation of the National Redress Scheme Act the plaintiff could not seek to recover any further damages from them. The plaintiff sought the same answers as the Christian Brothers. They both succeeded.

10 Knowmore Legal's pleading raised in clear terms the issue that was agitated and decided against it. The criticisms it makes of the plaintiff's pleading have some merit, but to my mind are not consequential in deciding costs because the issue to be resolved by the answers to the first two questions was well understood. I reject its submission that the plaintiff was seeking 'judicial advice' if by that it is suggesting that the plaintiff was acting improperly; the plaintiff was only seeking 'judicial advice' in the sense that the plaintiff sought to have a discrete issue determined prior to trial and that was entirely appropriate be determined prior to trial.

11 I also reject Knowmore Legal's submission that the questions did not resolve any issues in dispute: they did; they resolved the question as to whether the communications between the Operator of the National Redress Scheme and the plaintiff had the effect that the plaintiff was unable to seek any further damages from the Christian Brothers. There is no need to await a final determination of the plaintiff's 'loss of opportunity claim' before making orders relating to the determination of one central and discrete aspect of that claim.

12 Costs should follow the event and Knowmore Legal should pay the plaintiff's and the Christian Brothers' costs of the first two questions. The costs payable to the plaintiff should include the plaintiff's costs of adding the Christian Brothers as a defendant. This is otherwise a situation where it is more appropriate to order Knowmore Legal to pay the Christian Brothers' costs directly, rather than order the plaintiff to pay those costs to the Christian Brothers and then recover them from Knowmore Legal,[2] because it was Knowmore Legal's defence that squarely raised an issue that appropriately resulted in the Christian Brothers being added, and the construction issue that was then determined was fought principally between those two entities.

13 As noted above, Waller Legal did not introduce any allegations in relation to the National Redress Scheme until after Knowmore Legal had alleged that the offer of redress made to the plaintiff was not, on a proper construction, an offer of redress under the National Redress Scheme, and the only allegations it introduced was an alternative particular that the plaintiff by applying for redress had failed to mitigate his loss. There is nothing in its pleading that picks up Knowmore Legal's argument and although it attended the hearing of the preliminary questions, it did not present submissions on how they should be answered. In those circumstances, and even though it might have benefited from answers in accordance with Knowmore Legal's submissions, it did not separately seek to agitate the construction point. It should not be ordered also to pay the plaintiff's costs or the Christian Brothers' costs.

14 Waller Legal should, however, bear its own costs of the first two questions.

15 The third question was an estoppel question that was included at the plaintiff's request, in circumstances where it was made clear to the parties that the preliminary questions were only being ordered on the basis that they could be determined by reference to the legislation and correspondence and would not depend on contested oral evidence. In the course of argument, it was accepted by the plaintiff that the estoppel question could not be answered by reference to the legislation and correspondence and would depend on contested oral evidence. Accordingly, it was not answered.

16 The third question was included for no good reason and in determining the costs that are payable some allowance must be made for this. The estoppel that the plaintiff sought to have explored applied only to Knowmore Legal and neither the Christian Brothers nor Waller Legal made any submissions on it. Accordingly, it is safe to assume that the existence of the third question did not materially add to the Christian Brothers' costs or to Waller Legal's costs. Accordingly, there is no need to alter the order that Knowmore Legal pay the Christian Brothers' costs or the order that Waller Legal bear its own costs.

17 The situation with the plaintiff and Knowmore Legal is different. Some allowance must be made for the fact that the plaintiff should not recover from Knowmore Legal any costs that relate to the third question that would not have been incurred in any event in relation to the first and second questions, and Knowmore Legal should be able to set off against its costs liability to the plaintiff any costs that it incurred in relation to the third question that it would not have incurred in any event in relation to the first two questions. One possibility would be to leave this to a taxation, but that would, in my view, add unnecessary cost to that procedure.[3] It is in the interests of justice, and in accordance with the principles of the Civil Procedure Act 2010 and r 63.04(2) of the Supreme Court (General Civil Procedure) Rules 2025,[4] that I instead make some allowance for these matters. Doing the best I can, and bearing in mind that it is only the 'non-common' element that matters, and that it is a matter of impression and evaluation rather than mathematical precision,[5] I consider that substantial justice between the parties is achieved if Knowmore Legal is ordered to pay 80% of the plaintiff's costs.

18 I will order, in addition to the answers to the questions as set out in my earlier decision, that:

(a) The proceeding against the third defendant be dismissed and the third defendant be removed as a party.

(b) The second defendant pay:

(i) the third defendant's costs;

(ii) the plaintiff's costs of adding the third defendant; and

(iii) 80% of the plaintiff's costs of the application for and the determination of the preliminary questions ordered by Tsalamandris J on 23 April 2025;

(c) The costs referred to above be taxed in default of agreement on the standard basis.

(d) There be no order as to the costs of the first defendant.

[1] Young v Waller Legal & Ors (Preliminary Questions) [2025] VSC 522.

[2] That is, a 'Sanderson order' rather than a 'Bullock order'. See: Sanderson v Blyth Theatre Co [1903] UKLawRpKQB 161; [1903] 2 KB 533; Bullock v London General Omnibus Co [1906] UKLawRpKQB 151; [1907] 1 KB 264.

[3] Cf, eg, McFadzean v Construction, Forestry, Mining and Energy Union [2007] VSCA 289; (2007) 20 VR 250, 291 [158] (Warren CJ, Nettle and Redlich JJA);

[4] Which provides: 'Where the Court makes an order [for costs in relation to a particular question in or a particular part of a proceeding], the Court shall by order fix the proportion of the total costs of the proceeding which is attributable to the particular question in or the particular part of the proceeding.

[5] See, eg, Chen v Chan [2009] VSCA 233, [10] (Maxwell P, Redlich JA and Forrest AJA)