Solicitors:
Monaco Solicitors (Plaintiff)
Kennedys Law Firm (First Defendant/First Cross-Defendant to the Third Cross-Claim/Fourth Cross-Defendant/Fifth Cross-Claimant); Second Cross-Defendant to Third Cross-Claim
Hall & Wilcox Lawyers (Second Defendant/First Cross-Claimant/Second Cross-Defendant/Third Cross-Claimant/First Cross-Defendant to the Fifth Cross-Claim) McCabes Lawyers (Third Defendant/First Cross-Defendant/Second Cross-Claimant/Fourth Cross-Claimant/Second Cross-Defendant to the Fifth Cross-Claim)
File Number(s): 2009/00335151
Publication restriction: None
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Judgment
HIS HONOUR: On 17 November 2014, reasons for judgment were issued in this matter (Ross Gazis v Gual Pty Limited [2014] NSWSC 1617). On 1 December 2014, the Court issued orders reflecting those reasons and on 10 December 2014, after hearing the parties' submissions on costs, the Court issued orders in relation to the costs of the proceedings, except for the costs of certain cross-claims. Further submissions were filed in relation to the costs of those cross-claims, which are to be determined in this judgment.
It is necessary briefly to recite the basis upon which all of the cross-claims were before the Court. The plaintiff had originally commenced proceedings against three defendants. The second defendant (the Club) and the third defendant (the Workers Compensation Nominal Insurer) cross-claimed against the first defendant, repeating the allegations of the plaintiff against the first defendant. The costs in each of those cross-claims have already been dealt with.
On the first day of the hearing of the matter, the plaintiff announced that his claim against the first defendant had been resolved in a manner which discontinued any claim by the plaintiff against the first defendant. As a consequence of the resolution of the claim against the first defendant, each of the Club and the Workers Compensation Nominal Insurer sought leave to commence a cross-claim against the first defendant's insurer (the cross-defendant). Leave was granted and the cross-claim commenced. That cross-claim was the third and fourth cross-claim respectively, the costs of which are in issue in this judgment.
The fifth cross-claim was originally commenced by the first defendant against the Workers Compensation Nominal Insurer, being a claim for contribution and/or indemnity, pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946, and in which the first defendant reiterated the claims made against the Workers Compensation Nominal Insurer by the plaintiff in the plaintiff's Statement of Claim.
However, as a consequence of the settlement, the fifth cross-claim was amended to substitute the cross-defendant for the first defendant. The fifth cross-claim also remains to be dealt with in these reasons.
At or about the same time as the plaintiff resolved proceedings against the first defendant, it also resolved proceedings against the cross-defendant, as a consequence of which the fifth cross-claim was incapable of succeeding, since the fifth cross-claim sought contribution and/or indemnity for any liability the cross-defendant incurred at the suit of the plaintiff.
For obvious reasons, the determination of the fourth cross-claim was dependent upon the resolution of the issues in the proceedings commenced by the Statement of Claim and the level of proportionate liability, if any, allocated to each of the plaintiff (in contributory negligence), the first defendant (being the employer), the Club (being the occupier) and the Workers Compensation Nominal Insurer (which was standing in the shoes of the sub-contractor to the Club providing security services).
To complicate matters even further, the cross-defendant argued in defence of the third and fourth cross-claim that it was not liable to indemnify the first defendant (employer) under the relevant insurance policy. As a consequence, the substantive reasons for judgment dealt, amongst other issues, with the interpretation of the insurance policy and determined that question against the interests of the cross-defendant.
It is necessary, having provided that somewhat simplistic and truncated description of the relationship between the parties in the litigation, to deal with the issue of costs in the fourth and fifth cross-claims.
Submissions of the Parties
The cross-defendant seeks orders that the Club pay the costs of the cross-defendant to the Second Amended Third Cross-Claim on the ordinary basis; that the Workers Compensation Nominal Insurer pay the costs of the cross-defendant on the fourth cross-claim on the ordinary basis; and that there be no order for costs on the fifth cross-claim. While the fifth cross was determined against its interests, the cross-defendant submits that there is no issue in terms of the costs of the Amended Fifth Cross-Claim. Taken separately from all other issues, that proposition is correct. However, the other interested parties submit that, given the nature of each of the cross-claims and their interrelationship, there should generally be no order as to costs in relation to any of the three cross-claims upon which the cross-defendant seeks orders for costs.
Under the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005, a cross-claim is a proceeding to which the aforesaid Act and Rules apply, as if the cross-claims were a separate proceeding (leaving aside the limitations on orders that may be made relating to a cross-claim seeking contribution). In theory, at least, the costs on each of the cross-claims must be dealt with as if each cross-claim was a proceeding in its own right.
Costs are in the discretion of the Court and the Court has full power to determine by whom, to whom and to what extent costs are to be paid: s 98 Civil Procedure Act. Ordinarily, costs will follow the event and the discretion reposed in the Court by the terms of s 98 of the Civil Procedure Act must be exercised judicially: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72. While the unsuccessful party can ordinarily expect to bear the liability for costs, costs are not a punishment, but are part of the process of compensation. Generally, costs are awarded in order to compensate the successful party for the costs associated with enforcing or successfully defending that party's rights.
As earlier stated, the ordinary rule that costs follow the event is subject to the power of the Court to depart from that rule, which power must be exercised judicially. In Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171, Hodgson JA (Allsop P and Macfarlan JA agreeing) determined that the matter ought be decided on the basis of whether the defendant acted reasonably in raising an issue ultimately decided against it. The Court determined to apportion the costs as between the successful and unsuccessful party based on a general consideration of the manner in which the matter proceeded and the degree to which the time of the hearing was taken up with the successful and unsuccessful issues.
In Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145, the Court of Appeal referred to the obvious proposition that a defendant who is forced to incur costs in resisting a claim ought have those costs compensated, even though some arguments (reasonably raised) were unsuccessful. It cannot be said, in relation to the issue of the coverage of the insurance policy and the requirement of the cross-defendant to indemnify the first defendant that those issues raised by the cross-defendant were unreasonable, even though ultimately determined against the cross-defendant's interests.
Nevertheless, neither the Club nor the Workers Compensation Nominal Insurer was instigating a claim, otherwise than on the basis of defending its rights. In other words, the cross-claims were taken against the cross-defendant because of the necessity for each of the Club and the Workers Compensation Nominal Insurer to defend its rights and, in that regard, a similar underlying purpose to that expressed in Griffith v Australian Broadcasting Corporation (No 2) may by applicable, namely, some consideration be given to the situation that each of the Club and the Workers Compensation Nominal Insurer were acting only to defend its rights and to ensure all relevant parties were before the Court.
The general approach to costs is one in which judicial officers form a general impression and not one in which they undertake a detailed or minute examination of the quantification of successful and unsuccessful issues.
Consideration
Fundamentally, the issue of liability was determined on the basis of which of the three possible defendants was liable to the plaintiff (if any) and the extent to which they were liable. The cross-defendant, who stands in the shoes of the first defendant in the proceedings, reached an accommodation with the plaintiff at the eleventh hour of the proceedings and the cross-claims were commenced to ensure that any liability on any one of the remaining defendants was properly apportioned. In the absence of such cross-claims, either defendant may have foregone contribution to the damages otherwise awarded.
In those circumstances, the cross-claims were necessary in order to accord to the defendants an appropriate and equitable distribution of the damages that may ultimately have been awarded and which, ultimately, were awarded. In that context, the only separate issue raised was the insurance policy issue, which was determined against the interests of the cross-defendant.
Nevertheless, the cross-defendant was successful in its defence of the cross-claim and the plaintiff, reasonably, appropriately and correctly, determined that the cross-defendant had no liability for the damage suffered by the plaintiff.
I take a general approach, based on an overall impression of the proceedings before me and their context, rather than a minute analysis of the issues. I start from the proposition that costs ought follow the event and qualify that only on the basis of the lateness of the plaintiff's discontinuance against the first defendant (and the cross-defendant) and the necessity of the other defendants to institute cross-claims in order to ensure a proper apportionment of any liability determined by the Court.
I also take into account the unsuccessful issue raised by the cross-defendant, but not in a significant way. Rather, I take it into account in the context of the role played by the cross-defendant in the proceedings as a whole.
The third, fourth and fifth cross claims were heard at the same time as the general proceeding. Other than the filing of the pleadings themselves and the "insurance cover issue", there is little to distinguish the costs that would have been incurred on the fourth cross-claim as distinct from the fifth cross-claim or either from the third cross-claim. Further, the cross-defendant sought apportionment under the fifth cross-claim, which was also heard at the same time and on which they were unsuccessful.
In all of the circumstances, the Court makes the following orders:
(1) South Sydney Junior Rugby League Club Ltd and the Workers Compensation Nominal Insurer pay half of the costs of the cross-defendant to the Second Amended Third Cross-Claim and the Amended Fourth Cross-Claim on the ordinary basis;
(2) South Sydney Junior Rugby League Club Ltd and the Workers Compensation Nominal Insurer pay the same proportion of the aforesaid costs as they are liable to pay of the damages awarded to the plaintiff;
(3) No order as to costs on the Amended Fifth Cross Claim;
(4) Enforcement of the aforesaid order for costs be stayed on the same basis and for so long as enforcement of the judgment in relation to the damages awarded to the plaintiff and the other costs orders are stayed.
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Decision last updated: 18 May 2015
Parties
Applicant/Plaintiff:
Ross Gazis
Respondent/Defendant:
Gual Pty Limited - Formerly known as Sermacs Australia Pty Ltd