Roads and Traffic Authority v McGregor & Anor

CATCHWORDS: Costs - Indemnity costs - Offers of compromise - Multiple isues.

Civil Liability Act 2002 LEGISLATION CITED: Suitors' Fund Act 1951

Geoghan v D'Aubert [2003] NSWCA 260 James v Surf Road Nominees Pty Ltd (No2) [2005] NSWCA 296 CASES CITED: Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160

Roads and Traffic Authority - Appellant PARTIES: Anne McGregor - First Respondent Woollahra Municipal Council - Second Respondent

G M Watson SC with A J McInerney - Appellant COUNSEL: M L Williams SC with I A Newbrun - First Respondent D L Davies SC with N J Polin - Second Respondent

McCabe Terrill - Appellant SOLICITORS: Carroll & O'Dea - First Respondent Phillips Fox - Second Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40277/04 DC 2941/02

McCOLL JA M W CAMPBELL AJA BELL J

Friday 16 December 2005 ROADS & TRAFFIC AUTHORITY v ANNE McGREGOR & ANOR (No 2) Judgment 1 THE COURT: The Court delivered judgment in this matter on 11 November 2005 [2005] NSWCA 388. It allowed, in part, an appeal by the RTA and a cross-appeal by the Woollahra Municipal Council against a verdict and judgment in favour of Mrs McGregor in the sum of $234,957. A challenge by the RTA and the Council to Mrs McGregor's verdict was rejected but the damages were reduced by $56,106 being the amount allowed for future domestic assistance. An apportionment made by the trial judge, his Honour Judge Bishop of the District Court, was confirmed. 2 The parties not having agreed on appropriate cost orders, written submissions, including submissions in reply, have been provided as to such orders. 3 No party has submitted that an indemnity costs order made by the trial judge pursuant to Pt 39A r 25(4) of the District Court Rules, should be reviewed or altered. 4 The RTA has submitted that, as the apportionment order was confirmed, the Council, which challenged it in its cross-appeal and presented argument on the issue, should pay the RTA's costs of the cross-appeal. 5 However, the RTA included a challenge to the apportionment in its grounds of appeal, albeit it did not press that ground in its written submissions. It did, however, press the argument that if Mrs McGregor was entitled to a verdict at all it should be solely against the Council. Further, the issue took hardly any time at the hearing. 6 The proper outcome is that the Court should make no order for costs as between the RTA and the Council. 7 The RTA put that Mrs McGregor should pay the RTA's costs of the appeal, but that she should received a certificate under the Suitors' Fund Act 1951 if otherwise entitled. 8 The Council put the same position - pointing out that as regards Mrs McGregor the Council's position was the same as that of the RTA. 9 Mrs McGregor contended that she should have an order for the costs of the appeal on an indemnity basis. 10 Before turning to these matters it is appropriate to deal with an unfortunate disagreement between the parties as to whether the issue relating to damages upon which the appeal and cross-appeal was upheld, that is, the proper construction of s 15(3) of the Civil Liability Act 2002 (the Act) was raised at the trial. 11 In the judgment of M W Campbell AJA at [161] it was said that the point had not been raised before Judge Bishop. The Judge, although dealing in his judgment with a construction point as to s 15(2)(b) of the Act, did not refer to s 15(3) and the point made on appeal. There was no ground of appeal directed to a suggested failure by his Honour to consider the issue or give reasons in respect thereto. 12 However, the RTA's submissions assert that the point was taken and attach written submissions placed before Judge Bishop by Mrs McGregor and, more importantly, the RTA which appear, although not beyond argument or with clarity, to raise the issue. Certainly, a reading of the case cited in the RTA's submissions Geoghan v D'Aubert [2003] NSWCA 260 would have made the point clear. The submissions do not appear to annex a copy of the unreported judgment. 13 Mr Mark Williams of Senior Counsel, who appeared for Mrs McGregor at the trial, has put in a submission in reply to this Court that the point was not taken before Judge Bishop. Mr Pollin of Counsel and Mr McInerney of Counsel, who appeared for the other parties on the trial, were led before this Court. The RTA's submissions, supported by those of the Council, rely upon the written submission put at the trial. 14 It is not necessary to examine the conflicting arguments on this question for two reasons. 15 First, it is clear that the point, albeit arguably raised in the written submissions, did not engage the attention of either the experienced Judge or the senior counsel appearing for Mrs McGregor. 16 And second, in their final submissions on this issue all parties appeared to accept that, in the events that happened thereafter, the question of whether the issue was raised at trial was of little, if any, significance. It might have been otherwise had the costs order at the trial been in issue. 17 The contention by the RTA and the Council that they should have their costs of the appeal should be rejected. The relevant principles are conveniently stated by this Court in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31] - [33] as follows:

"31 Costs orders in the Supreme Court are governed by the provisions of s.76 of the Supreme Court Act 1997 and the Supreme Court Rules . Section 76 provides, relevantly that subject to the Act and the Rules, costs shall be in the discretion of the Court: s.76(1)(A). Part 52A r.11 acts as a limited proscription of the Court's discretion conferred by s.76. Part 52A r.11 provides that, subject to Part 52A, the Court shall order that costs follow the event " except where it appears to the Court that some other order should be made as to the whole or any part of the costs ".

32 The effect of Pt 52A r.11 is that an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, as is specified by the rule itself, the Court is entitled to make a different order. That may occur where there are multiple issues involved. This was the subject of comment in Waters v. P C Henderson (Aust) Pty. Limited (unreported CA (NSW) Kirby P, Mahoney and Priestley JJA, 6 July 1994) where Mahoney JA said: '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 and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is clearly dominant or separable, it will 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.'

33 Similarly, Toohey J made the following observations in Hughes v Western Australian Cricket Association (1986) ATPR 40-748: '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 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.' (references omitted)" 18 In this case there are two distinct and separate issues, one as to liability and one as to a particular point of statutory construction going to one aspect of the damages awarded. The issue as to liability could itself be sub-divided into discrete questions; however, for present purposes it is enough to note that the liability issue, both in terms of the amount at issue and the time spent on submissions both written and oral, was very much the predominant one. Whilst the RTA and the Council succeeded on the more minor issue, they lost on the predominant one. 19 In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, Gummow, French and Hill JJ said at 272: "Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation." 20 Subject to what follows the Court considers that the appropriate apportionment of the costs of the appeal and cross-appeal in this matter is that the RTA and the Council should pay 85 percent of Mrs McGregor's costs. The liability to pay those costs should be apportioned as to 40 percent to the RTA and 60 percent to the Council. That is the apportionment ordered by the trial Judge both as to damages and costs. 21 Mrs McGregor put that the orders should be otherwise and that there should be provision for indemnity costs having regard to the history of settlement attempts by her and the rejection of such attempts by the RTA and the Council. 22 Mrs McGregor before the trial made offers of settlement one of which, in the sum of $150,000 plus costs, was a formal Offer of Compromise and founded the cost order made by Judge Bishop. 23 It is common ground that that offer has no formal effect on appeal but remains relevant to the exercise of a general discretion. 24 On 30 May 2005 Mrs McGregor served both the RTA and the Council with an Offer of Compromise in the Court of Appeal proceedings in the sum of $200,000 plus costs, pursuant to Pt 22 of the Supreme Court Rules. 25 This Court's reduction of Mrs McGregor's damages to $178,941 meant that this offer had no formal effect. However, Mrs McGregor relied upon the fact that this sum exceeded the earlier $150,000 by $28,941 and, when interest was taken into account, fell short of the later $200,000 by only $1,691, as significant matters in the exercise of the Court's discretion. 26 The determination of the RTA and the Council to contest the matter at all stages was, it was put, demonstrated by an earlier Calderbank letter by the RTA offering settlement on the basis of a verdict and judgment for the RTA, which would pay its own costs and the absence of any other responses from either to offers of settlement including additional informal offers prior to the hearing of the Appeal. 27 It should be accepted that the RTA and the Council at all stages intended to contest the issue of liability. However, the offer of compromise before appeal by Mrs McGregor did not abandon the claim for future domestic assistance or an amount equivalent to the sum awarded under that head. 28 Having regard, in particular, to the decision in Geoghan, the prospects of succeeding upon the s 15(3) point were negligible. Indeed, in the written submissions before this Court the comment was made by Senior Counsel for Mrs McGregor that "…. If Bishop DCJ had understood the submission the way RTA now wants it to be put, then surely his Honour would have made no allowance for future care." The point of construction was of importance as to the effect of s 15(s) of the Act. 29 We are not persuaded that it was unreasonable or delinquent of the RTA and the Council to reject a compromise that did not abandon the full value of the future domestic assistance award. (Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160 at [20]. It is beside the point, for present purposes, that the RTA and the Council were intent upon pressing on with the appeal on the liability issues. 30 The Court considers that the order for costs discussed above and the usual order of party and party costs should be made. (Baresic at [20]). 31 Certain of the costs of Mrs McGregor have not been ordered to be paid by any other party. She should have a certificate under the Suitors' Fund Act 1951 if otherwise entitled. 32 Orders

1. That the Roads and Traffic Authority and the Woollahra Municipal Council pay 85 percent of Mrs McGregor's costs of the appeal and cross-appeal.

2. That such costs be met as to 40 percent by the Roads and Traffic Authority and as to 60 percent by the Woollahra Municipal Council.

3. Mrs McGregor is to have a certificate under the Suitors' Fund Act 1951 if otherwise entitled.

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