Spotless Group Ltd v Premier Building and Consulting Pty Ltd & Anor [2008] VSCA 115

Court of Appeal (Vic)|2008-06-18|Before: REDLICH and DODDS STREETON JJA

COSTS - Lengthy trial - Costs apportioned according to measure of success of plaintiff who failed on most causes of action - Assessment of time taken on issues on which plaintiff successful - Multiple defendants jointly represented - Related corporate entities - Whether rule of thumb applies that successful defendants entitled to part of their costs.

1 The present application arises out of proceedings in the Supreme Court concerning the contamination of land at 225 Barkley Street (North Suburban land) and 227-231 Barkley Street (Premier land) in Brunswick with chemicals used in dry cleaning and laundry operations conducted on the sites between 1963 and 1983. I do not think it necessary to extensively recite the history of this matter, save for these pertinent facts. The first respondent, Premier, alleged its land had been polluted as a consequence of dry cleaning activities of a number of parties including Spotless Group Ltd (Spotless Group), Ensign Services (Aust) Pty Ltd (Ensign) and Spotless Services Ltd (Services). The applicant, Spotless Group, is the holding company of Ensign and Services (collectively the Spotless parties). Premier alleged that the dry cleaning activities amounted to common law nuisance, negligence, and breach of various statutory duties. The second respondent, North Suburban, brought proceedings against the Spotless parties alleging its land had been polluted because of the same activities although it relied only upon breach of statutory duties.

2 Following a lengthy trial that lasted 75 days Byrne J delivered his judgment on the 5 October 2007. His Honour found that Spotless Group was liable pursuant to s 62A(2) of the Environment Protection Act 1970 (Vic) (the 'Act') to compensate Premier and North Suburban for the costs associated in complying with the clean up notices issued by the Environment Protection Authority (EPA) under s 62A of the Act in relation to their respective lands. Premier and North Suburban failed in all other claims against Spotless Group, Ensign or Services.

3 Spotless Group filed a notice of appeal on 19 October 2007 in which it appealed against the finding that it caused or permitted pollution to occur on the Premier or North Suburban land and is liable to compensate them for costs incurred in complying with EPA 'clean up notices' under s 62A of the Act.

4 On the question of costs, Spotless Group argued that Premier should pay its costs notwithstanding that Premier succeeded against it because the basis upon which it succeeded was not pleaded and was not contended for until the very end of the trial and that Premier had failed upon the remaining issues. It was also submitted that Premier should pay the costs of Ensign and Services on the basis that costs should follow the event, they having been wholly successful. Spotless Group sought similar orders for costs against North Suburban.

5 Byrne J delivered a separate cost judgment on the 21 December 2007. His Honour held that Spotless Group should pay Premier and North the costs of their successful claims on a party and party basis. It was ordered that there be a one quarter discount of Premier's costs in relation to the court book which his Honour considered to be excessively large. His Honour was critical of certain aspects of the Spotless parties' defence of the claims against them, but did not consider that their conduct was such as to warrant a punitive order for costs.[1]

6 The trial judge found that it would be unfair that Spotless Group should bear the whole of Premier's costs of the trial as the trial also involved unsuccessful claims by Premier against parties other than the Spotless parties. The costs order in favour of Premier was thus limited to its claim made pursuant to s 62A. His Honour stated that the Taxing Master would not include in Premier's costs, those parts of the trial in which the Spotless parties had no interest.[2] The trial judge made no order that Premier should pay the costs of Spotless Group for the unsuccessful parts of their claims against it. He refused to make a costs order in favour of Ensign and Services although they were wholly successful as 'their interests were represented by the legal team which represented all of the Spotless parties' including Premier.[3] His Honour made like orders in favour of North Suburban for the same reasons as he had given in relation to Premier's costs.[4]

7 Pursuant to s 17A(1)(b) of the Supreme Court Act 1986 (Vic), Spotless Group seeks leave to appeal in respect of the costs judgment in the terms of a proposed amended notice of appeal dated 8 May 2008. Pursuant to rr 64.06 and 64.22(1), it seeks leave to amend its notice of appeal to add Ensign and Services as second and third appellants and to amend its grounds of appeal to add grounds which claim in substance that that the trial judge erred in not ordering an apportionment of costs by taking into account both Premier and North Suburban's success against Spotless Group and the extent to which Spotless Group was successful in the proceedings. It also wishes to add grounds which claim that the trial judge erred in not making an order for costs against Premier and North Suburban in favour of Ensign and Service for all of their costs of the proceedings. It also sought an order that the application for leave to appeal be stood over to be heard instanter and determined together with the appeal but no argument was advanced in support of this proposed order.

8 The preferred order which Spotless Group seeks in its proposed amended notice of appeal is a single costs order made in its favour for all of its costs save for those referable to Premier and North Suburban claim pursuant to s 62A on which they were successful. The question which thus arises is whether the trial judge should have apportioned costs for those parts of the trial on which each party had succeeded and arrived at a single order in favour of Spotless Group.

Principles relevant to leave to appeal from a costs judgment

9 It is convenient to deal first with the application for leave to appeal the costs judgment. An order made by a judge of the trial division as to costs which are in the discretion of the Trial Division are not subject to appeal to the Court of Appeal except by leave where the challenge to the costs order goes beyond the mere consequences of a successful appeal on the merits on other substantive grounds.[5]

10 It is well established that an appellate Court will not, in the absence of strong reasons, interfere with the exercise of discretion by the Court below with respect to the question of costs. As Callaway JA said in Hanlon v Brookes:

It is almost invariably the case that the judge at first instance is better placed to deal with the costs after a long trial and counsel seeking leave ordinarily has a difficult task. The test is not whether we should have exercised the discretion in the same way as his Honour did but whether there was or were a ground or grounds on which he could reasonably do so.[6]

11 This Court may disturb the costs orders made below where an error in principle is identified,[7] where the judge acted on a manifestly erroneous view of the facts,[8] or where the award is manifestly unreasonable.[9] But the applicant must satisfy a high threshold for such a grant of leave. The test to be applied is not whether the Court of Appeal would have made the same order but whether there is a ground upon which the order by his Honour could reasonably be made.[10] Some manifest error must be exposed to take the case out of the ordinary situation in which, wherever a discretion is to be exercised, minds may differ on the result.[11] Ormiston JA recognised this high threshold in Transport Accident Commissioner v O'Reilly[12] observing that:

It is extraordinarily difficult to show that a court of first instance or a tribunal with wide discretionary powers has erred in the exercise of its powers to award costs, if there be some basis for making an order other than the conventional order in favour of the successful party.

12 Spotless Group contends that his Honour erred by failing to take into account or alternatively failing to give adequate weight to the fact that it was successful against the first respondent on all pleaded claims raised by them.

13 A plaintiff who is only successful on one of a number of pleaded causes of action would ordinarily be entitled to costs. But no party suggests that Premier or North Suburban should have all their costs of the trial. In McFadzean v Construction Forestry Mining and Energy Union[13] the Court referred to a passage from the judgment of Eames J in Pricom Pty Ltd v Sgarioto[14] dealing with the position as to costs where a plaintiff has only been partially successful.

As a general rule costs should follow the event, and a successful party should obtain all of the costs of the action even although it failed to establish some of the alternative heads of its claim: Ritter v Godfrey (1920) 2 KB 47. However, in the exercise of its discretion the court may decline to order costs in favour of a successful party, or may order the successful party to pay the costs of the unsuccessful party, where the plaintiff failed to establish discrete heads of claim, or failed to establish issues which it pursued in its claim, although ultimately succeeding on the basis of another discrete head of claim: Hughes v Western Australian Cricket Association Inc [1986] FCA 382; (1986) ATPR 40-748, per Toohey J at 48, 136.

14 In certain cases it is apposite for a trial judge to apportion costs having regard to the multiplicity of parties, actions, issues and the mixed success enjoyed by the plaintiffs.[15] Under r 63.04, the judge may award costs in relation to particular questions or parts of the proceeding. The rules of court are wide enough to permit an apportionment of costs according to issues or causes of action,[16] which enable a court to look at the realities of the case and attempt to do substantial justice.[17]

15 Thus a pragmatic approach may be taken in cases where no party is wholly successful and there are clearly practical difficulties in awarding costs on an issue by issue basis. In exercising its discretion as to costs the court is entitled to take into account the failure of a party on certain 'issues'.[18] 'Issue' is not used in the technical pleading sense, but refers to any disputed question of fact of law. In Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd this Court observed:

In cases where neither party is wholly successful there are clearly practical difficulties in awarding costs on an issue by issue basis which would involve making separate costs orders. His Honour took a pragmatic approach, which has much to commend it, of apportioning the costs between the parties. [19]

16 A trial judge may find that despite the complex nature of the case it remains entirely possible to identify the disputed issues which were resolved, and the evidence adduced specifically with respect to them so as to conclude that particular issues dominated the trial. In McFadzean the Court said:

In fixing costs a superior court may treat 'heads of controversy as units of litigation' and give directions to the taxing master in relation to them, such units not being circumscribed by pleadings, causes of action or issues capable in themselves of leading to the granting of relief. But to avoid the complications of taxation resulting from making orders recognising the entitlements to costs of a party on each action on which they were successful, the orders may be notionally set off against each other or other adjustments made so as to produce an order for a proportion of one party's costs. This approach to costs orders where an action has had mixed success has been followed in a number of cases. In Hughes v Western Australian Cricket Association (Inc), Toohey J had regard to the fact that the plaintiff had succeeded on some issues but failed on others, but concluded that: 'it would be unsatisfactory to attempt to apportion issues and leave the fixing of costs of those issues to the taxing officer. That would impose a very great burden on him and upon the parties' legal representatives.' In our view, the judge's approach to the apportionment of costs was particularly apposite in this case, having regard to the multiplicity of parties, actions, and issues, and the mixed success enjoyed by the plaintiffs.[20]

Whether the proposed proportionate costs order should have been made

17 In his reasons the trial judge adverted to the fact that Premier had failed on every issue pleaded against Spotless Group and was only successful on an issue which North Suburban had raised and which Premier 'opportunistically picked up at the very end of the trial'.[21] Premier's reliance on the s 62A claim had been described by his Honour in these terms:

The factual basis was fully explored. I heard full argument for and against the North Suburban contention in submissions presented on its behalf and on behalf of the Spotless Parties who followed. In the circumstances of the joint trial such as this, I see no injustice to the Spotless Parties in permitting counsel for Premier to press this contention; I see a serious prospect of injustice for Premier if I should refuse.[22]

18 The trial judge attached considerable weight to the fact that a very substantial part of the trial was concerned with determining the nature, extent and source of pollution of the Premier land and on those issues Premier had succeeded. It was his Honour's perception that this issue occupied about 50% (36 days) of the trial while 'very little time was occupied with the issues upon which the Spotless parties were successful'.[23]

19 In its initial outline of submissions Spotless Group focussed primarily on its degree of success in the trial. It submitted that the estimates of the portions of the trial taken up by the issues upon which it was successful were both readily identifiable and significant. It asserted that the trial judge had failed to take these matters into account. It took issue with the trial judge's estimate that about 50% of the trial concerned issues as to the pollution and its source and pointed to Premier's estimate that 'the contamination case' only occupied 40% of the hearing time at trial. An evidence table was annexed supporting these submissions. Premier's outline of submission sought to support the trial judge's assessment and disputed Premier's analysis of the time taken on various issues.

20 Where there is a dispute as to the time spent on various issues in a very lengthy and complex trial, this Court must of necessity, look to the parties' analysis of the time spent on those issues. But it is trite to say that the party that asserts that the trial judge has fallen into error in his or her assessment of the time spent on such issues carries the burden of demonstrating manifest and substantial error.

21 In an extensive 'outline of submission in reply' Spotless Group asserted that the trial judge 'mistook the true position as to the time at trial occupied by and the significance of the issues on which the Spotless parties were successful'. It also contended that the trial judge had erred in his assessment of the time taken on the issues on which Premier was successful. It advanced detailed argument as to the time taken on various issues which it said was 'apparent' from the figures in the previously annexed evidence table. As Dodds-Streeton JA observed during argument, the 'descriptors' used in the table and the generality of parts of its submission made it extremely difficult to comprehend the basis for Spotless Group's contentions and assess their accuracy. On the return of the application Premier foreshadowed that it intended to challenge the accuracy of the figures and conclusions drawn from the evidence table.

22 In light of the disagreement between the parties, we intimated that if either party wished to rely upon its analysis of how much time was taken up at trial by the various issues, they would need to file affidavit material in support of their argument. All parties were provided with an opportunity to do so. The hearing of the application was adjourned.

Time spent on issues on which Premier and North Suburban were successful

23 Prior to the resumed hearing Spotless Group filed a further affidavit in which it amplified its contentions that there should have been a proportionate costs order. It produced an amended evidence table to the effect that only 23% of the trial was taken up with the issues of the source and cause of the pollution to Premier's land and that 57% of the trial was devoted to issues which Spotless Group won which were unrelated to the s 62A claim. Most of the figures appearing in the amended evidence table differed from the figures which had been referred to in Spotless Group's outline of submission in reply. Premier filed an answering affidavit in which it identified the parts of Spotless Group's evidence table with which it disagreed. Premier's table was to the effect that 43% of the trial was taken up with issues on which Premier was successful and 13% was devoted to issues on which Spotless Group won.[24] The calculations of both parties assumed that portions of the trial were devoted to issues that were not germane to the success of either party. Premier calculated that figure to be 44% and Spotless Group 20%. Thus Premier contended that the trial judge had been fair in his assessment that approximately 50% of the trial had been spent on issues concerning pollution and its source.

24 Spotless Group submitted that his Honour fell into error in placing undue weight upon the ultimate outcome without regard to the relative measure of success it had on the separate issues and causes of action the trial.[25] In answer Premier submitted that the apportionment of costs sought by Spotless Group would have the likely consequence that Premier would be required to pay the costs of Spotless Group.[26] It submitted that only in 'exceptional cases' should the successful party be ordered to pay the costs of the proceeding.[27] It argued that this was not such a case as the trial judge was of the view little time was spent on the issues on which Spotless Group was successful.

25 Spotless Group relied upon the fact that each claim pleaded by Premier against it was dependent upon the Court lifting the corporate veil so as to make it liable for the conduct of other Spotless parties including the now deregistered subsidiaries. The trial judge had rejected the contentions that other Spotless parties were the agent for or were involved in a common enterprise with Spotless Group. He thus rejected the attempt to lift the corporate veil. Spotless Group relied on the fact that Premier had failed in all its pleaded claims against it and submitted that there had been no basis in law or fact for the claim that the acts or omissions of the operating Spotless companies should be visited on the Spotless Group. The time spent on this issue has been accepted and treated by all parties as an issue on which Spotless Group was successful.

26 North Suburban had not pursued any common law claim against Spotless Group. It made a claim under s 62A.[28] Accordingly, it argued that it should not have to pay costs of issues it won, whatever the position of Premier might be. It asserted direct liability on the part of Spotless Group as well as attempting to 'lift the corporate veil'.[29]

27 Both Premier and North Suburban defended their decision to seek to pierce the corporate veil on the grounds that they could not run the risk that they sued only Spotless Group to discover at trial that the cause of the pollution was one of the other Spotless parties. Premier submitted that a great deal of time was spent at trial seeking to establish the cause of the pollution because the Spotless parties did not draw a distinction between their respective roles. It was contended that the Spotless parties had done nothing to clarify which Spotless parties were responsible for what activity on their land hence the need for protracted time at trial to discover who was responsible.

28 Subject to two matters that I shall hereafter refer to, it was not however suggested in oral argument by Spotless Group on the further hearing of the applications that the corrections made to the evidence table in the affidavit filed by Premier should not be acted upon as reflecting the time taken upon issues on which Premier was successful. Spotless Group returned its focus in oral argument to the primary matter raised in its initial outline of submission that Premier had not been compensated for its relative success in the trial.

29 There were two matters that Spotless Group expressly relied upon in oral argument in support of its submission that the trial judge had mistaken the amount of time taken on issues on which Spotless Group was successful. First, as noted by the deponent of the Premier affidavit, Spotless Group included 'transactional issues' in its calculation of the issues on which it was successful.[30] The trial judge had allowed 15% for these issues but did not treat them as issues resolved in favour of Spotless Group. Premier submitted that the trial judge had underestimated the time spent on these issues which it described as 'audit, transaction, planning and building surveyor issues and the cases put against and defended by other parties' and which it said the trial judge had found 'did not involve Spotless parties and in which they played a minor role at trial'.[31] The trial judge in his reasons referred to the fact that he had indicated early in the trial that he would excuse counsel during period of the trial when issues which were of no interest to their client were being dealt with. It was acknowledged by Spotless Group that Spotless parties had been content to allow other parties to 'make the running' on these issues. It was not disputed that they made no closing submission at trial on these issues. I do not accept, as Spotless Group argued, that because they may have had an interest in the outcome of these issues, the trial judge was required to allocate the costs of these issues to Spotless Group. I see no error in the approach adopted by the trial judge.

30 Secondly, Spotless Group disputed Premier's assessment, that the time taken on the question of 'remediation' of their polluted land should be taken into account as a matter on which Premier was successful. Premier maintains that 10.45% of the trial was spent on this issue while Spotless Group contends that it was 14.1%. His Honour excluded remediation from the matters to be taken into account on the question of costs. Spotless Group submitted that the trial judge was in error in not treating it as a matter on which it was successful.

31 The actual amount of time that should be attributed to this issue was one of a number of areas of dispute which it is impossible for this Court to resolve. Spotless Group submits that the remediation issue fell away when the land was sold but that Premier continued to rely upon it as a measure of damages, an issue on which Premier failed. Premier contended that the evidence on this issue was relevant to the cause of the pollution and consequently directly relevant to its claim under s 62A of the Act. A number of passages of the transcript were set out in its most recent affidavit which appear to support that contention. Premier also submitted that the task of further disentangling the evidence in respect of remediation of contamination by the chemical, Solex, was of such complexity that it was not feasible to perform it in any meaningful way.

32 The oral submissions of Spotless Group did not advance any additional argument as to how this issue could be resolved in its favour. I have not been persuaded that this issue should be characterised as one decided in Spotless Group's favour so as to lead to the conclusion that there was error in the costs order made.

33 In oral argument Spotless Group advanced an additional argument not previously raised in its outlines of submissions. It was said that only a very small time was spent establishing the basis upon which Spotless Group was directly as distinct from derivatively liable for the relevant pollution.[32] In response to an enquiry Spotless Group submitted that no more than two days was taken up in establishing that Spotless Group had brought a contaminant, white spirit, onto its land at a material time. That argument does not appear to have been advanced before the trial judge. It is plain enough that at trial the questions of the source and cause of the contaminant that had spread to Premier's land and the task of remediation were all intertwined. Premier and North Suburban were required to disentangle the activities of the Spotless parties over a substantial period of time to isolate responsibility. The task was made more complex by the hypothesis advanced by the Spotless parties that it may have been a neighbouring landowner or one of the deregistered Spotless parties that was responsible.

34 Returning to the primary oral argument that Spotless Group should have its costs of those claims on which it was successful, the trial judge, in my opinion was entitled to give minimal weight, in the exercise of his discretion, to the fact that Premier and North Suburban failed on a number of claims. Importantly, his Honour regarded the case brought by Premier and North Suburban as substantially successful when assessed by reference to issues and that Spotless Group's success related to such a small proportion of the trial.

35 Spotless Group has not raised a sufficient doubt as to the accuracy of North Suburban's claim that the issues on which it did not succeed occupied only a very small portion of the trial time.[33] In its submission North Suburban contends that 61.6% of the trial time was spent on issues on which it succeeded.[34] The accuracy of these figures may be open to debate but Spotless Group has not demonstrated that they do not provide a sufficient guide as to trial time taken to justify the costs order made in favour of North Suburban.

36 Spotless Group have not in my view discharged the heavy onus of establishing that there are no reasonable grounds that could support the costs order made by the trial judge. I am unpersuaded, despite the earnest argument advanced for Spotless Group that the trial judge took a manifestly erroneous view of the facts, that his assessment of the time taken at trial on issues was manifestly in error or that some other error affected his costs judgment which would warrant the granting of leave in relation to the costs order made in favour of Premier.

Whether other entities related to Spotless Group should have their costs - the proposed amendment of the Notice of Appeal to add Ensign Services (Aust) Pty Ltd and Spotless Services Ltd

37 Spotless Group contends that, as Ensign and Services were successful litigants, and therefore they ought to have costs awarded in their favour. It relies upon the general principle that costs are awarded to compensate the successful party for the expense of being put to the necessity of litigation.[35] Accordingly, in the ordinary case, costs will follow the event.

38 Spotless Group argues that the trial judge denied Ensign and Services the benefit of this principle and fell into error by assuming that the entitlement of Ensign or Services to costs as successful defendants would be limited to any discrete additional costs they incurred in the proceeding over and above those costs common with the unsuccessful defendant, Premier.[36]

The rule of thumb where there are multiple defendants who have had mixed success and are jointly represented

39 Spotless Group call in aid the 'rule of thumb' examined by Einstein J in Currabubula Holdings Pty Ltd v State Bank of NSW[37] that where two or more defendants in the same proceeding have the same legal representation, each successful defendant is entitled to its proportion of the costs incurred on behalf of all, plus the costs, if any, incurred exclusively on any individual defendant's behalf.[38] It did not appear to be in issue that the Spotless parties had run a joint defence and had filed, served and relied upon the same documents and evidence. Counsel for Spotless Group acknowledged that it had not relied upon the 'rule of thumb' in making submissions on costs before the trial judge and had only raised the rule in its reply before this court.

40 The rule is intended to achieve substantial justice in the awarding of costs as between a partially successful plaintiff and variously successful and unsuccessful defendants.[39] The rule operates upon the premise that defendants are proportionately responsible for and liable for the joint costs involved in mounting the defence. In Currabubula Einstein J observed:

Thus, a successful defendant cannot claim from the plaintiff more than a proportionate share of the joint costs of the action in addition to any costs separately referable to that defendant. Conversely, the partially successful plaintiff is prevented from looking to each of the unsuccessful defendants for more than an equal proportionate share of the costs not solely referable to the plaintiff's case against one or other of the defendants individually, in addition to the costs which are so referable. In this way, the rule of thumb prevents both the unjust enrichment of the partially successful plaintiff or successful defendant and the casting of an unfair burden on the unsuccessful defendants. Where the premise is falsified or the rule does not achieve its intended effect, it finds no application.[40]

41 If the rule applies, it would not result in Premier, Ensign or Services obtaining the orders they seek. Each would only be entitled to one third of their joint costs of those actions on which they were successful, together with any costs which exclusively relate to any one of them.[41] No evidence was placed before the trial judge of any additional or exclusive costs relating to Ensign or Services. That is to say it was not suggested that they had incurred costs over and above the costs common with Spotless Group. In its outline it submitted that there had been exclusive costs incurred by Ensign and Services but they were not identified nor was there any specification of the issues to which they might relate. In oral argument no reference was made to any exclusive costs of these companies. Rather, reliance was placed on the principle that the successful party is to be recompensed the liability it has reasonably incurred in defending the action.[42]

42 A court is not obliged to apply the rule, described as 'rough and ready' in every circumstance of joint representation of defendants and will not do so where its application would involve an injustice. The rule calls for each successful or partially successful defendant to obtain only their proportion of the joint costs of defending the action in the 'ordinary and straightforward' case. [43]

43 In Korner v H Korner & Co Ltd,[44] discussed in Currabubula[45] the defences of the different defendants, who had the same legal representation, were of a 'stone walling character.' The plaintiff succeeded on the substantial issue in the action and only failed on lesser issues. Wynn-Parry J upheld the decision of the Taxing Master who had refused to apply the rule of thumb. The Court of Appeal upheld the decision of Wynn-Parry J holding that the application of the rule will depend upon the nature of the case and the defences raised. Singleton LJ with whom Jenkins LJ agreed did not consider that a judge would be compelled to apply the rule of thumb in a class of case where to follow it would result in an injustice. He was of the opinion that as the trial judge had made separate provision for the costs of the issues on which the plaintiff was successful and unsuccessful, the terms of the order for costs excluded the application of the rule of thumb.

44 Where the costs order by its terms or as a consequence of the reasoning of the trial judge rests on an assessment of how the substantial issues in the trial were resolved, rather than on the success or failure of causes of action which have been jointly defended, the rule will generally have no scope for operation. Thus in McFadzean[46] the Court in rejecting a submission, not dissimilar to that advanced by Spotless Group, held that the rule of thumb had no application where the trial judge had made an apportioned costs order against multiple parties on the basis of the resolution of the issues at trial and the time taken at trial in dealing with them.

45 It is not unusual for the purposes of a costs order to group together parties who are related corporate entities and who have had the same legal representation.[47] The costs order made by Byrne J was 'issue' based and rested upon a view as to how much time was occupied at trial on the substantial issues and on the fact that the Spotless parties had common legal representation. His Honour had found that very little time was spent in the trial on issues on which Spotless parties were successful.[48] To award costs in favour of the other Spotless parties, Ensign and Services, would defeat the purpose of the order made by the trial judge in favour of Premier and North suburban and would lead to a substantial injustice. As North Suburban contended, had the trial judge made costs orders in favour of Ensign and Services, he would have had to make a Bullock[49] or Sanderson order[50] against Spotless Group to achieve the outcome which he intended.

46 The submission that his Honour erred by refusing to make separate orders for costs in favour of the other Spotless parties cannot be sustained.[51]

47 I have had the benefit of reading in draft the reasons prepared by Redlich JA. I agree with his Honour's proposed disposition for the reasons he states.

[1] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [29].

[5] ETNA v ARIF [1999] VSCA 99; [1999] 2 VR 353, 378 (Batt JA); Harvey Poynton Ltd v Ali [No 2] [2005] VSCA 314 (Unreported, Ormiston, Buchanan and Eames JJA, 21 December 2005) [17] (Ormiston JA).

[7] McCauley v McCauley [1910] HCA 16; (1910) 10 CLR 434, 455 (Isaacs J).

[8] See, for example, Whiteman v Johnson [1995] VicRp 81; [1995] 2 VR 637, 639-40 (Phillips JA); ETNA v ARIF [1999] VSCA 99; [1999] 2 VR 353.

[9] ETNA v ARIF [1999] VSCA 99; [1999] 2 VR 353, 378 (Batt JA); Garrard (t/as Arthur Anderson & Co) v Email Furniture Pty Ltd (1993) 32 NSWLR 662, 668 (Kirby ACJ).

[10] ETNA v ARIF [1999] VSCA 99; [1999] 2 VR 353, 378 (Batt JA).

[11] Wentworth v Rogers [No 3] (1986) 6 NSWLR 642, 644 (Kirby P).

[13] [2007] VSCA 289 (Unreported, Warren CJ, Nettle and Redlich JJA, 13 December 2007), [152] (Warren CJ, Nettle and Redlich JJA).

[14] (Unreported, Supreme Court of Victoria, Eames J, 10 April 1995).

[16] Woolf v Burman (1940) 13 ALJR 431; Byrns v Davie [1991] VicRp 93; [1991] 2 VR 568, 569 (Gobbo J).

[17] Permanent Building Society v Wheeler [No 2] (1992) 10 WAR 569; Semco Developments Pty Ltd v Graham [2005] VSCA 268 (Unreported, Chernov, Eames and Ashley JJA, 22 November 2005) [24].

[18] Byrns v Davie [1991] VicRp 93; [1991] 2 VR 568, 571 (Gobbo J); Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748, 48 136 (Toohey J); Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1987) 17 FCR 211, 222 (Bowen CJ, Morling and Gummow JJ); Pricom Ltd v Sgarioto (Unreported, Supreme Court of Victoria, 24 April 1995) 8-10 (Eames J).

[19] [2007] VSCA 309 (Unreported, Chernov, Redlich and Kellam JJA, 19 December 2007) [89] (Chernov, Redlich and Kellam JJA).

[20] [2007] VSCA 289 (Unreported, Warren CJ, Nettle and Redlich JJA, 13 December 2007) [156] (Warren CJ, Nettle and Redlich JJA).

[21] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 377 (Unreported, Byrne J, 5 October 2007) [446].

[22] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [446].

[23] [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [27].

[24] First Respondent's Submission, 11 June 2008, [5].

[25] Applicants Supplementary Submissions, 6 June 2008, [10] citing Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd [No 3] [2003] 1 Qd R 26, 60-1 (McPherson JA).

[26] First Respondent's Outline of Submissions, 26 May 2008, [19].

[27] Verna Trading v New India Assurance [1991] VicRp 12; [1991] 1 VR 129, 155 (Kaye J). See also Ritter v Godfrey [1920] 2 KB 47; Thorne v Doug Wade Consultants Pty Ltd [1985] VicRp 48; [1985] VR 433; Loizou v Derrimut Enterprise Pty Ltd [No 2] [2004] VSC 548 (Unreported, Whelan J, 9 June 2004).

[28] Second respondent's supplementary submission, 11 June 2008, [3].

[30] Spotless Group outline of submission in reply refers to a figure of 17.1% for these issues.

[31] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [27].

[34] It claims success as to 19.9% of the trial time on the source of the pollution 41.2% (excluding the corporate veil issues) on opening and closing submissions.

[35] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 97-8 (McHugh J), 120-3 (Kirby J); Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 543 (Mason CJ).

[36] Applicant's Outline of Arguments in Reply, 29 May 2008, [5.3].

[37] [2000] NSWSC 232 (Unreported, Einstein J, 31 March 2000).

[38] Currabubula v State Bank of New South Wales [2000] NSWSC 232 (Unreported, Einstein J, 31 March 2000) [89]-[106] (Einstein J); Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 97 (McHugh J), 121 (Kirby J); Donald Campbell & Co Ltd v Pollack [1927] AC 732, 811-12 (Viscount Cave LC); G E Dal Pont, Law of Costs (2003) [11.6].

[39] Currabubula [2000] NSWSC 232 (Unreported, Einstein J, 31 March 2000) [89]-[106] (Einstein J).

[40] [2000] NSWSC 232 (Unreported, Einstein J, 31 March 2000) [95] (Einstein J).

[41] In re Colquhoun [1854] EngR 247; (1854) 5 De G M & G 35; 43 ER 781; Beaumont v Senior and Bull [1903] 1 KB 28.

[42] Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567, 569 (Atkin LJ).

[43] Korner v H Korner & Co Ltd [1950] 1 Ch 10, 14 (Wynn-Parry J).

[44] [1951] 1 Ch 10, 14-5 (Wynn-Parry J).

[45] [2000] NSWSC 232 (Unreported, Einstein J, 31 March 2000).

[46] [2007] VSCA 289 (Unreported, Warren CJ, Nettle and Redlich JJA, 13 December 2007) [149]-[153] (Warren CJ, Nettle and Redlich JJA).

[47] See, for example, Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309 (Unreported, Chernov, Redlich and Kellam JJA, 19 December 2007) [90] (Chernov, Redlich and Kellam JJA).

[48] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [27].

[49] Bullock v London General Omnibus Co [1907] 1 KB 264.

[50] Sanderson v Blyth Theatre Co [1903] 2 KB 533.

[51] Premier Building and Consulting Pty Ltd (Receivers Appointed) (ACN 066 568 367) v Spotless Group Ltd (ACN 004 376 514) [2007] VSC 516 (Unreported, Byrne J, 21 December 2007) [29].

At a glance

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Before

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Judgment (105 paragraphs)

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Legislation Cited (4)

Cases Cited (8)