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[2004] VSC 480
Supreme Court of Victoria
2004-11-25
Ashley, J
Original judgment source is linked above.
Costs - Claim and Counterclaim - Multiple parties - Many causes of action pleaded on claim - Some plaintiffs successful on some causes of action against some defendants - Some plaintiffs wholly unsuccessful - Some defendants wholly successful - Few amongst many causes of action established - Plaintiffs successful on a minority of issues joined - Offers of compromise -Some successful plaintiffs obtaining by judgment less than amount offered - Single order for part costs made in favour of defendants on the claim - Acceptance of offer of compromise on Counterclaim - Whether order otherwise should be made under R. 63.24 - Delay in acceptance of offer - Costs consequences - Provision for set-off as between damages and costs.
3 I go to the areas of disagreement. Concerning the claim, counsel for the plaintiffs submitted that -
Ms Gross and Ms Colson should be ordered to pay the defendants' costs from 9 July 2003, being the costs attributable to those plaintiffs being parties in the proceeding.
6 Upon the counterclaim, counsel for the defendants to counterclaim submitted that his clients should pay costs up to the day after the offer was made; and that thereafter his clients should have their costs. Some defendants to counterclaim were not plaintiffs. They had to be represented until the offer was accepted. Costs pertinent to the counterclaim had been incurred in the period until 1 December 2003. The offer was such as should quickly have been accepted.
7 Counsel for the plaintiffs by counterclaim submitted that his clients should have their costs up to 1 December 2003. Rule 26.03(7) did not preclude it.[12] The offer had been made in the course of a long and difficult trial. The plaintiffs by counterclaim and their advisers had needed time to consider it. Further - this was at least implicit in counsel's submissions - the court had power to, and should, order that costs be paid on the Supreme Court Scale.
8 I go to my conclusions. In my opinion there is no entirely satisfactory way of determining the costs of the claim. There would be room for criticism whatever order was made. That said, I consider that the plaintiffs, between them, should pay 40% of the defendants' total costs of the claim. I consider that the costs should be paid on the Supreme Court Scale, and on a party and party basis. I further consider that the individual liability of the plaintiffs for costs should be as follows:
Those percentages, as can be seen, accumulate to 40%. They can readily be recalculated as true percentages - that is, taking the 40% as being 100%. By way of example, as a true percentage McFadzean's liability would be for 15% of the costs allowed in favour of the defendants on the claim.
10 On the counterclaim, I consider that the plaintiff by counterclaim should have their costs up to and including Sunday 23 November 2003 on the Supreme Court Scale; and that the defendants to counterclaim should have costs referable to the counterclaim on the Supreme Court Scale thereafter to and including Sunday 30 November 2003.
11 Set-off arises in three connections. First, it could be expected to be the consequence of the cross orders for costs on the counterclaim. Second, in the unlikely event that the costs of the defendants to counterclaim were to exceed the costs of the plaintiffs by counterclaim it could be expected that there should be a set-off of such excess against the costs payable by the plaintiffs to the defendants on the claim. The first, and probably the second of those matters lies within the jurisdiction of the Taxing Master. Third, I consider that I should order that the costs payable to the defendants on the claim be set-off against the damages payable by them to the successful plaintiffs - but only to the extent, in each case, of the proportionate responsibility of such plaintiff for costs; and that any nett costs payable to the plaintiffs by counterclaim be able to be set-off against the damages payable by them as defendants on the claim. I do not think that I could oblige the latter set-off even though it might well be the course which the plaintiffs by counterclaim would want to take.
12 I must explain my conclusions, which depart from the submissions made on behalf of the parties. I should say at the outset that I have kept carefully in mind the propositions, within the general discretion as to costs, that costs follow the event, that a plaintiff who is successful overall should not ordinarily be obliged to pay costs, and that a successful defendant rarely should not get his or her costs. There are, however, features about this proceeding that in my opinion require the orders which I intend to make.
13 First, save for Mr Arbuthnot, all plaintiffs and defendants - on the claim and the counterclaim - were commonly represented. All the work was done - for many plaintiffs and many defendants - by the same firms of solicitors and counsel. Add the circumstances that:
and the desirability of single orders for costs on the claim and counterclaim is in my opinion emphasised. Such orders, I focus particularly on the claim, would the more readily facilitate taxation of costs, which could otherwise become a task of extraordinary complexity; and, importantly, could be tailored to reflect the substantial outcome of the proceeding. Such a reflection is compatible with costs following the event.
15 In specifying the causes of action pleaded by each plaintiff, which succeeded and which failed, I have treated the plea of false imprisonment by each plaintiff as raising a single cause of action by that plaintiff against all the defendants. Likewise the pleas of public nuisance and intentional infliction of harm. Thus:
General Allegations of Assault (para 15 of statement of claim)
17 So to characterize the outcome, in my opinion, does no disservice to either side. It might be said for the plaintiffs that such an approach tends to obscure the fact that evidence led in support of one cause of action often enough was also led in support of another cause of action. Moreover, it might be argued, false imprisonment (for example) was really a single "issue". But there would be substantial countervailing arguments. So, it might be said, I have treated the claims in false imprisonment as being only 11 in number; whereas the allegation that the defendants were joint tortfeasors required an investigation of the individual conduct of each defendant - in which case the plea of false imprisonment by each plaintiff involved investigation of the conduct of 15 defendants. Moreover, it might be argued, the question whether each plaintiff had made out his or her claim in false imprisonment depended in part upon circumstances personal to that plaintiff - for example, the person's physical capacity to leave through the bush. Again, it might be said, I think with great force, that the conduct alleged to constitute the false imprisonment was no single issue, but rather multi-faceted, in truth raising a large number of issues for determination in the case of each plaintiff.
18 Third, it can be seen from the table above that even the plaintiffs who succeeded on a cause or causes of action failed upon other causes of action; and, moreover, that all of those plaintiffs failed upon the cause of action which dominated the trial - that is, whether the plaintiffs had been falsely imprisoned. The high-water mark of success by a plaintiff was achieved by Ms Jackson. She succeeded on two of the four causes of action pursued by all the plaintiffs. Ms Dawson also succeeded on two causes of action; but she failed on three of the four causes of action pursued by all plaintiffs. Greig was at the other extreme amongst the successful plaintiffs. He pursued nine causes of action, and succeeded upon one.
19 The table also shows that amongst those plaintiffs who failed altogether, Dwan, McFadzean and Fowkes failed upon the most causes of action. Dwan alleged, and failed upon, seven causes of action, McFadzean and Fowkes six each. Contrast Bowles and Ms Epstein, each of whom unsuccessfully alleged four causes of action.
20 Fourth, 12 of the pleaded causes of action - involving allegations of assault, battery and trespass to goods - were essentially distinct from the main pleas raised by the plaintiffs. The circumstance that some or all of the evidence called in connection with most of those 12 causes of action was called in aid by all or some of the plaintiffs on the principal causes of action does not mean that such evidence, and the issues to which it went, were not readily identifiable.
21 Fifth, whilst it is true that a good deal of the evidence led was relevant to what I have called the principal causes of action, it does not follow that the evidence pertaining to issues raised by particular causes of action was incapable of dissection. So, for example, evidence led in support of the plea of public nuisance - which was founded upon the defendants' alleged obstruction of Seaview Ridge Road between 25-29 January - also addressed one aspect of the alleged false imprisonment. That evidence was readily identifiable. The fact that it addressed a number of issues joined on the plea of false imprisonment did not make it the less so. So also, for further example, evidence called in support of the allegation that there were loggers' patrols in the bush, directed in the first instance to the plea of false imprisonment, was also relied upon in the Wilkinson v Downton claims.[13] Evidence adduced in support of the issue raised was readily identifiable. Those two examples might be multiplied many times.
22 Sixth, in determining the claims raised by the plaintiffs it was necessary to resolve many, many disputed issues. By "issues" I mean - as where I have used the word earlier in these Reasons - issues in the sense of disputed questions of fact rather than issues in the technical pleading sense. Their resolution, for the most part, involved consideration of matters broader than the narrow confines of specific allegation and denial. So, as a single example, a question as to the general reliability of a witness's evidence arose in almost every instance; and assessment of such reliability required consideration of the evidence given by the witness with respect, most often, to a large range of issues. Nonetheless, it remains entirely possible to identify the disputed issues which I had to resolve, and the evidence adduced specifically with respect to each of them.
23 Seventh, in the context of there being an ability to identify disputed issues, if a count was to be made of the issues which I decided in the course of my Reasons for Judgment, the proportion determined favourably to the plaintiffs on their claims would be substantially less than the proportion represented by eight successes on 63 causes of action. Counsel for the defendants was correct, moreover, in submitting that even where I found for the plaintiffs upon a disputed issue, I quite often rejected aspects of the evidence which they adduced in connection with that issue.
24 Eighth, as counsel for the plaintiffs rightly submitted, it is a commonplace that plaintiffs plead more than one cause of action, succeed upon some, fail on others, yet get their costs. But for the most part that happens where the same facts are given multiple legal characterizations. This case was far from being that simple. Moreover, even in cases where the same facts are given multiple legal characterizations, the commonplace is not the inevitable.
25 Ninth, I must make it clear that I have not ignored the fact that Brian Wheeler and Benson succeeded against all plaintiffs. Nonetheless, I have considered that in the unusual circumstances of this case it is best that their success be subsumed into the single order for costs on the claim.
26 Tenth, I have not ignored the "rule of thumb" by which, according to Currabubula, there are different costs consequences, on taxation, in the case where some plaintiffs succeed and others fail, and in the case where a plaintiff succeeds against some but not all defendants. In the former situation, it is said, the order for costs against an unsuccessful plaintiff means that such person must pay the additional costs of the defendant attributable to that plaintiff being a party, the successful plaintiff(s) being entitled to the core costs of the proceeding. But I have concluded that to make orders which would have such an operation in this proceeding, and otherwise to make orders in favour of the successful plaintiffs, would work a serious injustice. By reason of the substantial failure of the successful plaintiffs - whether assessed by reference to causes of action or issues - and as well the complete failure of the other plaintiffs, I consider that it would be quite wrong for the successful plaintiffs to recover the core costs of the claim. On the plaintiffs' argument, to emphasize the point, nearly all the core evidence could be said to relate to the Wilkinson v Downton cause of action.
27 Eleventh, it could ordinarily be expected that if the plaintiffs were ordered to pay the defendants' costs of the claim, each plaintiff should be liable for the costs to the full extent thereof. But I have concluded that there should be a different outcome, by which each plaintiff should be liable for only a proportion of the defendants' costs. My intent has been to best reflect, by the proportions, matters such as the number of causes of action alleged by a particular plaintiff, whether such plaintiff succeeded at all, what proportion of the claims made by each successful plaintiff were established, the range of issues addressed by each plaintiff, and the extent to which I rejected the evidence of that plaintiff. I add that the orders which I propose on the claim do, for the most part, impose a greater proportionate liability for costs on the wholly unsuccessful plaintiffs. The exception is Greig, who brought many causes of action, but succeeded only upon one.
28 Twelfth, I have given consideration to whether I should order that the unsuccessful plaintiffs - amongst whom I include Ms Gross and Ms Colson, each of whom will recover by judgment a lesser amount than was offered by offer of compromise made 9 July 2003 - should pay costs on an indemnity or solicitor and client basis from the time that the offers of compromise were made.
29 It is certainly the case that I made many findings adverse to many of the plaintiffs which bore upon their credibility as witnesses; and that I rejected much evidence which they gave. It is also the case that my rejection of a deal of the evidence given by some plaintiffs implied that the same had been concocted. Nonetheless, viewed overall the contest raised numerous hotly-contested issues of fact, some of which were resolved in favour of the plaintiffs - even those plaintiffs who failed to establish any cause of action which they pleaded. Further, I consider that counsel for the plaintiffs was correct in submitting that a second offer of compromise by the defendants, made on 31 October 2003, required even the wholly unsuccessful plaintiffs to yield more than judgment against them will achieve.
30 Considering not only the circumstances to which I have just referred, but also the broad range of matters pertinent to orders for costs on the claim, I have not been persuaded that separate orders for costs against wholly unsuccessful plaintiffs should be made, and that on an indemnity or solicitor and client basis in part.
31 Thirteenth, because I do not propose to make any discrete orders in favour of the wholly successful defendants, no question arises whether such costs should be awarded on an indemnity or solicitor and client basis rather than a party and party basis; nor whether a Bullock or Sanderson order should be made.
32 Fourteenth, why 40%? The answer is that it is my best attempt at synthesis of a series of considerations pertinent to the plaintiffs' claim: The success of some plaintiffs on some causes of action; the failure of some plaintiffs altogether; the success of some defendants altogether; the fact that even the successful plaintiffs failed upon many causes of action; the fact that the causes of action upon which some plaintiffs succeeded represented only a small fraction of the causes of action which were pleaded; the fact that there were very many issues joined upon which the plaintiffs failed, including issues pertinent to most of the causes of action upon which some plaintiffs ultimately succeeded; the fact that the plaintiffs succeeded upon some issues joined even though that did not always mean that a cause of action was established; and the fact that any additional costs payable by the plaintiffs to Mr Arbuthnot's estate would involve, in the overall scheme of things, a very small amount.
33 Fifteenth, turning to the counterclaim, counsel for the plaintiffs by counterclaim sought an order for Supreme Court costs. Counsel for the defendants to counterclaim submitted that there was no reason to depart from the costs consequences of R. 63.24. He pointed out that three additional parties had been brought to this Court to meet a claim the quantified damages of which were small.
34 I have concluded that costs should be ordered on the Supreme Court Scale. The plaintiffs by counterclaim were brought to this Court on claims by the plaintiffs that it was commonly agreed were properly brought here. It would have been madness for the defendants to the claim to have brought their counterclaim elsewhere. A second long trial, involving many of the witnesses called before me, and an almost inevitable increase in the overall costs burden, would have eventuated. It is necessary, in the circumstances, to order otherwise for the purposes of R. 63.24. The Court is not precluded from making such an order by R. 26.03(7).
35 Sixteenth, the Court has power to make orders as to costs in respect of the period from when the offer was made until it was accepted. In this case I have concluded that the plaintiffs by counterclaim should have their costs up to and including Sunday 23 November. That, in effect, allows the costs of two court days and of any work that might have been done with respect to the counterclaim in the succeeding weekend. I have thought it reasonable to allow the plaintiffs by counterclaim to have their costs for such period because the offer was made in the course of a court week, in the context of a heavy proceeding which was then substantially advanced, where counsel and instructing solicitors were necessarily involved in preparation for cross-examination of the plaintiffs and other plaintiffs' witnesses who had yet to be called, and where the counterclaim (it involved seven counterclaimants) was only partly for quantified compensatory damages. Something more than a day in which to consider the offer was definitely required.
36 On the other hand, I have concluded that the defendants to counterclaim should have costs referable to the counterclaim in the period commencing Monday 24 November and ending Sunday 30 November 2003. Throughout that period the solicitors and counsel for the defendants to counterclaim were obliged to prepare for and address issues raised by the counterclaim. Witnesses gave evidence pertinent to the counterclaim. I have not considered it adequate simply that the plaintiffs by counterclaim not have their costs for the week in question.
37 Seventeenth, the costs orders which I intend to make on the counterclaim will run for and against the parties to the counterclaim generally. I have not considered it appropriate, an offer of compromise having been made, as I understand it, by all defendants to counterclaim, and having been accepted by all plaintiffs to counterclaim, to make orders that particular parties pay only defined fractions of the costs.
38 Eighteenth, in consequence of my costs' orders on the claim, each plaintiff will become liable to the defendants for a certain part of the defendants' costs. Further, the likely consequence of my costs' orders on the counterclaim is that each of the defendants to counterclaim, including plaintiffs entitled to damages on the claim, will become liable for a nett balance of costs to the seven defendants who are the counterclaimants. I cannot say whether the amount payable as damages in the case of any plaintiff on the claim will exceed that person's liability for costs upon the claim and counterclaim.
39 I have concluded that in this case the damages payable to each successful plaintiff on the claim and the costs which are payable by such plaintiff to the defendants on the claim and (if the plaintiffs by Counterclaim so choose) to the plaintiffs by counterclaim should be set-off one against the other; the nett balance standing in favour of that plaintiff or in favour of the defendants being payable by the one to the other. I think that it would be unsatisfactory if the successful plaintiffs were now to be paid their damages in circumstances where such damages could be dissipated before the quantum of the entitlement to costs against such plaintiffs was ascertained, and where it is uncertain whether any such plaintiff would be otherwise able to meet such costs. I add that counsel for the plaintiffs did not argue against set-off; although it is fair to say that on his submissions no successful plaintiff should have faced an adverse order for costs - at least on the claim.
40 Nineteenth - it is relevant to set-off - counsel for the defendants proposed and counsel for the plaintiffs accepted that there should be no actual payment of damages pending resolution of the costs issue. The only debate was how to ensure that such damages were secured in the interim. A number of alternatives were proposed by the parties.
41 I have concluded that the appropriate order in all the circumstances is that the amounts of damages payable to the successful plaintiffs as at the date of judgment be paid into court within 60 days of that date, to be individually invested by the Senior Master in the names of those plaintiffs; and that such amounts, together with any interest thereon, be paid out only in accordance with the further order of the Court.
42 This should be added: The ordinary consequence of damages not being paid immediately to a successful plaintiff is that statutory interest runs. I do not regard payment of damages into Court, in this case, as being equivalent to payment of damages to the particular plaintiff. Any set-off as between damages and costs should therefore be calculated by reference to the damages entitlement, including accrued interest on judgment, as at the date of set-off. In the interim, viewed from the defendants' standpoint, the money paid into Court will be earning interest.
McFadzean
Construction, Forestry, Mining & Energy Union
(1946) 73 CLR 129