Saad v Chubb Security Pty Ltd

Submissions 12The parties provided written submissions on costs. The submissions included:

• Plaintiff's written submissions dated 9 July 2013;
• First defendant's written submissions dated 9 July 2013; and
• Second defendant's written submissions dated 29 May 2013; and 13Supplementary oral submissions were made on 8 May 2013.

Summary of the Proceedings 14The plaintiff, at the material time, was an employee of the second defendant, CBA. The first defendant, Chubb, was a contractor to the first defendant. It provided security services to CBA's premises at Pitt Street Sydney, the plaintiff's workplace. 15Between July 2002 and October 2006, Chubb captured and recorded a large number of CCTV images of the plaintiff whilst on the premises. 16The plaintiff commenced proceedings in the District Court on 18 August 2010 against the two defendants in respect of certain of the above images which were published in or around 2007 on a social networking site, Facebook. The plaintiff's case is that the images focussed on her torso and were accompanied by humiliating commentary. 17The plaintiff brought the proceedings by way of Statement of Claim which pleaded causes of action in negligence and in defamation against both defendants. 18Subsequently, the plaintiff sought to rely upon a proposed Amended Statement of Claim.

Costs Submissions 19The plaintiff and the defendants have made submissions in support of their respective applications for costs orders in relation to the abovementioned applications.

Plaintiff's Submissions 20The plaintiff in her submissions opposed the making of separate or discrete orders in relation to the various applications. It was submitted on her behalf that relevant costs principles indicate that costs orders should be made in terms that costs follow the event unless it appeared to the court that some other order should be made: Uniform Civil Procedure Rules 2005 ("UCPR"), r 42.1 21It was the plaintiff's contention that, at the interlocutory stage, the court is not in a position to make a costs order that does justice between the parties. The rationale for making an order that costs be costs in the cause has been stated to be that often a court is not in a position to adjudicate on the ultimate outcome of the proceedings. Reference was made in the plaintiff's submissions in this respect to the decision in Crown in the Right of State of New South Wales v Gevaux [2011] NSWSC 758 per Ward J at [13], a case involving an application for interlocutory injunctive relief. 22A further submission was made that an appropriate costs order is to be made in accordance with the outcome of proceedings as a whole without attempting to differentiate between particular issues. Reference in this respect was made to principles as stated in Waterways Authority of NSW v Coal and Allied Operations Pty Ltd [2006] NSWSC 183 per Barrett J at [12]. The focus of attention in that case was upon the question as to whether or not, where there is a mixed outcome in proceedings, the discretion on costs should be exercised on an apportionment basis having regard to discrete or particular issues or groups of issues and the success or failure in relation to the same. 23It was further submitted on behalf of the plaintiff that relevant to the exercise of the court's discretion to award costs in the Notices of Motion in question in this case was the nature of the case itself: at [5]. The plaintiff, it was noted, was in the course of her employment and at her workplace when the CCTV images of her were taken. A large number of these images were uploaded by someone, whose identity is yet to be confirmed, onto Facebook into an account bearing the plaintiff's name and with commentary that was degrading of her. 24Facebook, it was noted, was founded in 2004 and at the time of the plaintiff filing her Statement of Claim no superior court in Australia had addressed the law in relation to the circumstances in which the plaintiff found herself: at [6]-[7]. The law in relation to legal causes of action for wrongful conduct on social media such as Facebook, it was contended, remained in the early stages of its development: at [8]. 25The plaintiff's submissions again emphasised that the strike-out motions brought by the defendants were interlocutory in nature. Case law authority referred to in the submissions would indicate, it was argued, that justice often required the party who should bear the interlocutory costs be determined by the result of the principal litigation of which the interlocutory application forms part. It was submitted that that approach should be taken in this case. 26If a different approach was taken, then it was submitted that the plaintiff should have her costs to the extent of her success. 27It was also submitted for the plaintiff that both defendants had sought complete dismissal of the plaintiff's claim and failed: at [13]. 28Further, it was submitted that the issues on which the defendants succeeded were "insignificant" in the context of the motions, the purposes of which were to strike out the Statement of Claim: at [15].

Chubb's Submissions 29Chubb sought a more favourable costs order than would be provided by an order that costs be costs in the cause, it being contended that such an order would not fairly reflect the extent of Chubb's success on the motions. 30As to Chubb's Notice of Motion filed 14 April 2011, it was submitted it had been successful in striking out the plaintiff's cause of action in defamation. Whilst its application to dismiss the claim in negligence failed, its submissions as to the inadequacy of the pleading were accepted, the plaintiff requiring leave to re-plead the claim in negligence. The failure to exercise such leave would mean that the claim was liable to be struck out. 31It was further noted that the plaintiff's Notice of Motion filed 9 May 2011 seeking an extension of time for the cause of action in defamation and for leave to amend to specify imputations was dismissed. 32Chubb, accordingly, was said to have enjoyed complete success on that application which was solely directed to the pleaded defamation action. 33It was further observed on behalf of Chubb that the plaintiff was unsuccessful in her Notice of Motion to amend filed 14 July 2011 insofar as she sought to add the additional causes of action for harassment, invasion of privacy, or intentional infliction of harm. She was only granted leave to include a cause of action based on breach of confidence.

CBA's Submissions 34The second defendant, CBA, seeks an order that the plaintiff pay its costs of the motions heard on 6 and 18 October 2012 and two-thirds of the costs incurred by it in the proceedings up to 4 October 2012. 35Insofar as it obtained orders dismissing the plaintiff's cause of actions in negligence and defamation, it was said that CBA was wholly successful on its motion and was therefore entitled, in the ordinary course, to the payment of its costs by the plaintiff. 36As in the submissions for Chubb, it was noted on behalf of the CBA that leave had been granted to the plaintiff to amend her Statement of Claim to include an alleged breach of confidence action but that notwithstanding her success in that regard, she was unsuccessful in obtaining leave to plead causes of action based on breach of privacy, harassment and the intentional infliction of harm. 37It was said that the CBA is now faced with what, in effect, was a totally new Statement of Claim against it. It was further submitted that the major portion of legal work undertaken on behalf of the CBA to the date of the judgment related to the plaintiff's actions in negligence and defamation, not to breach of confidence. It submitted that most, if not all, of the costs incurred by it to the date of the judgment would have been wasted. It was also noted that the plaintiff was yet to amend her Statement of Claim to plead a cause of action for breach of confidence. 38Accordingly, the CBA submitted that not only should the plaintiff pay its costs of the motions, but she should also be made subject to a costs order to pay two-thirds of all other legal costs incurred by the CBA up to 4 October 2012.

Consideration 39I propose to deal with the question of costs by reference to the individual Notices of Motion which were determined by the judgment. Three of the applications involved Chubb.

Chubb's Notice of Motion Filed 14 April 2011 40As noted above, on this application Chubb was successful in part (in respect of the strike-out of the cause of action in defamation). It was not successful on its application to strike-out the plaintiff's claim in negligence. As noted above, the plaintiff was required to re-plead her cause of action in negligence by reason of defects in the pleading. 41Chubb's submission was, as noted above, that it should not be required to pay the plaintiff's costs of the application to strike-out the cause of action in negligence or to bear its own costs of the application. 42Chubb submitted that an order that costs be costs in the cause would not fairly reflect the extent of its success on the Motion. 43I note the following matters in relation to the Notice of Motion filed 14 April 2011: (i) Chubb's Notice of Motion (insofar as it sought an order striking out the defamation action) and the plaintiff's Notice of Motion filed 9 May 2011 both concerned issues related to the defamation action. Chubb was successful in relation to both Notices of Motion. (ii) Chubb's Notice of Motion filed 14 April 2011 also sought an order, unsuccessfully, to strike out the plaintiff's cause of action in negligence. (iii) A considerable portion of time at hearing of Chubb's Notice of Motion was taken up in relation to the issues concerning the matters referred to in (i) and (ii) above. 44I consider an order should be made in respect of Chubb's Notice of Motion dated 14 April 2011 which reflects the extent of its success on the application filed 14 April 2011. Accordingly, insofar as Chubb was successful in obtaining an order striking out the defamation cause of action, but not successful in striking out the negligence cause of action, I order that the plaintiff pay 50% of Chubb's costs of its Notice of Motion filed on 14 April 2011. 45At [220] of the judgment I noted that the plaintiff's pleading of the cause of action in negligence against Chubb was defective. Leave was granted to the plaintiff to re-plead her cause of action in negligence against Chubb in proper form. 46In respect of the plaintiff amending her Statement of Claim in negligence, by reason of its defective pleading, the plaintiff is to pay Chubb's costs. However, I note that the issue of the defective form of the Statement of Claim pleading the plaintiff's cause of action in negligence was not a matter that involved lengthy consideration in the context of the strike-out application or for the purpose of determining the strike-out application. The need for the plaintiff to re-plead, in other words, was a separate matter, requiring pleading and particulars concerning the negligence alleged.

Plaintiff's Notice of Motion Filed 9 May 2011 47This application by the plaintiff sought an order granting leave to amend the Statement of Claim to specify the imputations on which she relied and to provide particulars. As the plaintiff's claim against Chubb in defamation failed, this application also failed. 48I consider the appropriate order is that the plaintiff pay Chubb's costs of the application, noting however, that there was very little time or consideration separately required by this application.

Plaintiff's Notice of Motion Filed 14 July 2011: New Causes of Action 49As discussed above, the plaintiff sought leave to amend her Statement of Claim to add four proposed new causes of action. Leave was granted to amend the Statement of Claim to include one of those new causes of action, namely, a cause of action for breach of confidence (against both Chubb and the CBA). 50The plaintiff was, accordingly, only partially successful. In the circumstances, I consider that a proper exercise of discretion to be an order that Chubb pay one-quarter of the plaintiff's costs of that Notice of Motion filed by the plaintiff on 14 July 2011.

CBA's Notice of Motion Filed 13 April 2011 51The CBA filed a Notice of Motion on 13 April 2011 seeking an order that the plaintiff's Statement of Claim be dismissed or, alternatively, an order that the plaintiff provide further particulars of the claims in negligence and defamation. 52On 9 May 2011, the plaintiff filed a Notice of Motion seeking to extend the limitation period for the defamation action by her against the CBA. 53On 29 September 2011, the plaintiff served an Amended Notice of Motion which sought leave to add particulars of the alleged defamation and to add causes of action for breach of confidence, invasion of privacy, intentional infliction of harm and harassment. 54The CBA was successful in two respects: (i) The plaintiff's proceedings in defamation were statute-barred and an extension of time was unavailable. On that basis, the claim was struck out. (ii) The plaintiff's action for personal injury damages was not maintainable by reason of the provisions of s 44 of the Safety Rehabilitation Compensation Act 1988 (Cth). That cause of action was also struck out. 55As noted above, leave was granted on the plaintiff's Notice of Motion filed 14 July 2011 to amend the Statement of Claim to include a cause of action for breach of confidence against both the first and second defendants but, as noted above, the application failed insofar as it sought leave to include the other causes of action, namely those for harassment, invasion of privacy, or intentional infliction of harm. 56In summary:

• The CBA was the successful applicant in striking out the plaintiff's claims for defamation and her claim for personal injury.
• The plaintiff was a partly successful applicant in obtaining leave to amend her Statement of Claim to add a new cause of action based on breach of confidence. 57The CBA has submitted that it was essentially faced with a new Statement of Claim and that the "major portion" of legal work undertaken on its behalf was related to the plaintiff's causes of action in negligence and defamation. As noted above, the CBA applies for costs as follows: (i) Its costs of the Notice of Motion; and (ii) Two-thirds of all other legal costs incurred by it in the proceedings up to 4 October 2012 (the date of judgment). 58The outcome of the application made by the CBA filed 13 April 2011 was a successful one by it against the plaintiff. The plaintiff achieved a successful outcome against CBA in obtaining leave to amend the Statement of Claim to include an entirely different basis for her claim, namely a cause of action for breach of confidence. 59The CBA, in my opinion, is entitled to an order for costs against the plaintiff in respect of its Notice of Motion, it being the wholly successful party to the application. 60As to the costs of the proceedings, whilst the CBA, vis-à-vis the plaintiff, was successful in its above application, I consider that at least some of the legal work, investigation work and other work on behalf of it in relation to the causes of action in negligence and defamation may have utility to the CBA in defending the plaintiff's cause of action for breach of confidence. That fact of itself raises questions as to how costs may be properly assessed and apportioned, particularly at this point in time before the ultimate outcome of the proceedings can be known. 61Whilst there is much to be said in favour of the discretion on costs being exercised in favour of CBA, for the reasons set out above, I consider ultimately that the discretion should be exercised upon the basis that the CBA's costs as to the proceedings up to 4 October 2012 should be costs in the cause and I so order.

Orders 62I propose, as set out below, to make particular orders as to costs against the plaintiff and one costs order against Chubb. 63Uniform Civil Procedure Rule 42.7 provides that, unless the Court otherwise orders, costs of any application or other step in proceedings are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. Further, Part 42.7(2) provides: "Unless the Court orders otherwise, costs referred to in sub-rule (1) do not become payable until the conclusion of the proceedings." 64As between the plaintiff and Chubb, the plaintiff having been granted leave to amend the Statement of Claim to include a further cause of action in breach of confidence and additionally to plead cause of action in breach of confidence against the CBA, the rights of the parties are yet to be finally determined on the Amended Statement of Claim. 65The applications by Chubb and CBA, in the particular circumstances of these proceedings, as well as the plaintiff's application to amend her Statement of Claim as referred to above are, in my opinion, interlocutory in nature. 66It has been observed that, in practice, two different tests have been formulated in the attempt to distinguish between orders that are final orders and those which are interlocutory. The first test (which represents the position in New South Wales) looks at the nature of the application and its strict legal effect. Specifically, it looks at whether the order finally disposes of the rights of the parties: Ritchies Supreme Court Procedure, NSW at 2 101.8. 67In Hall v Nominal Defendant [1966] 117 CLR 423 at 440, it was observed: "... so an order made in the course of an action or suit which does not conclude the rights of the parties inter se, although it may, of course, conclude the fate of the particular application in which it is made, is interlocutory only. On this basis an order staying proceedings against one of several defendants on the ground that they are scandalous, vexatious and an abuse of the process of the Court has been treated as interlocutory ... The same view was taken of an order striking out a plaintiff's statement of claim on the ground that it disclosed no reasonable cause of action: Jones v Insole (1891) 64 LT 703 and of an order dismissing an action as frivolous and vexatious ..." 68The circumstances in these proceedings in which the orders have been made on the abovementioned applications by each of the parties the provisions of r 42.7(2), in my opinion, apply. Accordingly, the costs orders set out below made against the plaintiff and the costs order specified below against the first defendant in respect of the plaintiff's Notice of Motion filed on 14 July 2011, do not become payable until the conclusion of the proceedings. 69I make the following orders: (1)The plaintiff to pay the second defendant's costs of the Notice of Motion filed 13 April 2011. (2)The plaintiff pay 50% of the first defendant's costs of the Notice of Motion filed 14 April 2011. (3)The plaintiff is to pay the first defendant's costs incurred in respect of the plaintiff re-pleading the cause of action in negligence against the first defendant. (4)The plaintiff pay the first defendant's costs of the Notice of Motion filed 9 May 2011. (5)The first defendant pay one-quarter of the plaintiff's costs of the Notice of Motion filed on 14 July 2011. (6)In respect of the second defendant's costs of the proceedings up to 4 October 2012, costs be costs in the cause. (7)I grant liberty to apply in respect of any ancillary matters arising in respect of the above orders.

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