Sydney Ferries v Morton [2010] NSWCA 238 | Case summary

15 SEPEMBER 2010 SYDNEY FERRIES v STEPHEN JAMES MORTON (No 2) Judgment 1 ALLSOP P: I agree with Campbell JA. 2 BASTEN JA: Although I was in dissent as to the outcome in this matter, I agree that the appropriate costs order was that the appellant pay the respondent's costs. 3 That order followed on a conventional approach to the "event", which was the outcome of the appeal. It followed that, absent some reason to order otherwise, the order made was in accordance with the Uniform Civil Procedure Rules 2005 (NSW), r 42.1. 4 The circumstances in which the Court may order otherwise in respect of specific issues on which the party which succeeded in relation to the final order failed were recently identified by the Court in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. 5 Where an appellant needs to succeed on a number of issues in order to obtain a favourable order, there should be no expectation that success on some issues will result in a reduction in the costs which it will have to pay because it was unsuccessful in the event. The discussion in Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373, relied upon by Sydney Ferries, involved an unsuccessful respondent, who sought to resist payment of all of the appellant's costs in circumstances where certain grounds were abandoned and where the appellant was unsuccessful on a major and severable issue, namely that of contributory negligence, which was quite distinct from the issue of damages (on which it succeeded). 6 The present application to vary the costs order made by the majority should be dismissed with costs. 7 CAMPBELL JA: This Court delivered its judgment and made orders in this matter on 6 July 2010: Sydney Ferries v Morton [2010] NSWCA 156. The order of the Court (per Allsop P and Campbell JA; Basten JA dissenting) was that the appeal be dismissed with costs. 8 By Notice of Motion filed 20 July 2010, the Appellant seeks to have the costs orders set aside and varied, pursuant to Uniform Civil Procedure Rule 36.16. The Respondent does not dispute that the application was made within the 14-day period permitted by UCPR 36.16(3A). 9 In Morton v Sydney Ferries Corporation [2009] NSWSC 341 Rothman J had set aside a decision of the Transport Appeals Board. That decision of the Board had upheld a decision of Sydney Ferries to terminate the employment of Mr Morton as a ferry Master. 10 Relevant principles for the award of costs were stated by Beazley, Tobias and McColl JJA in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]-[36]: "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) 34 Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called "discrete issues", for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. 35 In Madden v Connell [2001] NSWSC 1051, Hamilton J referred to there being a "rule" that where there are "discrete issues and the time taken on each issue at the hearing can be identified or realistically estimated", an order for costs may be made against the party which fails on such issues, or alternatively, that party may be deprived of its costs for that portion of the matter. In the Court's opinion it is preferable not to speak in terms of "rules". However, the underlying approach to the "rule" stated by his Honour may be an available approach to the exercise of the court's discretion as to costs in a particular case, depending upon all of the circumstances. 36 Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261: "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." 11 This statement of principles in James has been repeatedly approved: Roads and Traffic Authority v McGregor (No 2) [2005] NSWCA 453 at [17]; Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [63]-[65]; Rockdale City Council v Micro Developments Pty Ltd [2008] NSWCA 128 at [115]; Turkmani v Visvalingam (No 2) [2009] NSWCA 279 at [9]-[10]. 12 The statutory provisions referred to in para [31] and the first sentence of para [32] of this quotation from James, have now all been replaced. However, the replacement section and rules are not materially different to the ones referred to in James. If para [31] and the first sentence of para [32] of James are rewritten as follows, the passage quoted from James continues to state the law: 31 Costs orders in the Supreme Court are governed by the provisions of s.98 of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005 . Section 98 provides, relevantly that subject to rules of court and the Civil Procedure Act or any other Act, costs are in the discretion of the court: s.98(1)(a). UCPR 42.1 acts as a limited proscription of the Court's discretion conferred by s.98. UCPR 42.1 provides that, subject to Part 42, the Court shall order that costs follow the event " unless 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 UCPR 42.1 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. … 13 The Appellant submits that the appeal raised for decision six issues, namely: (1) whether the primary judge exceeded his powers on a judicial review application; (2) whether the reasons given by the Board were inadequate; (3) whether the Board failed to act in compliance with the first review proceedings; (4) whether the Board failed to make essential findings of fact; (5) whether the decision of the Board was manifestly unreasonable; and (6) whether the respondent was denied procedural fairness. 14 The fifth issue was raised by Mr Morton in his Notice of Contention. 15 The Appellant submits that it succeeded on the first five of these issues, and failed only on the sixth issue. It submits that the manner in which the Court disposed of the third issue, which concerned whether the Board was bound to follow what had been contended to be findings of fact made by Berman AJ when he set aside an earlier decision of the Board relating to Mr Morton's dismissal, will be directly relevant to the further conduct of the proceedings before the Transport Appeals Board. 16 The Appellant submits that a large part of the hearing time and written submissions were occupied by matters on which the Appellant succeeded, and that Mr Morton failed in respect of his Notice of Contention. It submits that the appropriate order for this Court to make is that Mr Morton should be entitled to 70% of his costs of the appeal, and that Mr Morton should pay the Appellant's costs of successfully defending the Notice of Contention. 17 I do not accept that any of these submissions provide a sufficient basis for varying the costs order that this Court has already made. 18 A factor of major importance is that the only reason why any party incurred costs concerning the appeal was that the Appellant initiated the appeal proceedings. The Appellant did not succeed in disturbing any aspect of the orders made in the court below. While the appeal involved the various issues that the Appellant has listed, I do not agree that any of them is "clearly dominant or separable". The present is not a case of the type discussed by Toohey J in Hughes v Western Australian Cricket Association (1986) ATPR 40-748, where "a litigant has succeeded only upon a portion of his claim", or where the Appellant is "a successful party who has failed on certain issues". I decline to open the Pandora's box of making a costs order in proceedings by reference to whether a finding in those proceedings might be useful to another tribunal in other and later proceedings. 19 I propose that the Appellant's Notice of Motion filed 20 July 2010 be dismissed with costs. **********

Sydney Ferries v Morton

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