Sydney Water v Asset Geotechnical Engineering & Ors

EX TEMPORE Judgment 1I gave judgment in this matter on 6 September 2013 (Sydney Water v Asset Geotechnical Engineering & Ors [2013] NSWSC 1274). I will not recite the facts. 2The present application concerns one aspect of the costs of those proceedings and is brought pursuant to liberty to apply which I reserved when pronouncing my orders on 6 September 2013. 3I gave judgment in favour of the fourth cross-defendant to the third cross-claim and I ordered the first defendant, who brought the third cross-claim, to pay the fourth cross-defendant's costs. That order was amended last week to include costs on an indemnity basis for a period of time. The amendment was made with the consent of the first defendant. 4The first defendant moves on a notice of motion filed on 20 September 2013. It seeks a Bullock order in its favour against the plaintiff, requiring the plaintiff to indemnify the first defendant in respect of the costs payable to the fourth cross-defendant to the third cross-claim. 5For the purpose of the balance of these reasons I will refer to the plaintiff as Sydney Water, the first defendant as Asset Geotechnical and the fourth cross-defendant to the third cross-claim as Flexible. 6The application for the variation of the order is brought on the basis of the affidavit of Asset Geotechnical's solicitor, Ms Veronica Chapman, affirmed 20 September 2013. Ms Chapman's evidence is unchallenged and uncontradicted in any way, and I accept it. I find that Asset Geotechnical included Flexible as a cross-defendant to its third cross-claim only because of its understanding of an issue that the plaintiff wished to ventilate. As I explained in my judgment, so far as the case of the plaintiff in negligence of each of the defendants was concerned, all parties agreed that the plaintiff's claim was an apportionable claim to which the provisions of Pt 4 of the Civil Liability Act 2002 (NSW) apply. I said, obiter dictum, it was not competent in those circumstances for a concurrent tortfeasor to seek contribution from the others under s 5 of the Law Reform Miscellaneous Provisions Act 1946 (NSW) for the reasons explained by McDougall J in Dymocks Book Arcade Pty Ltd v Capral Ltd [2010] NSWSC 195 at [9]. 7However, Asset Geotechnical argues that because the plaintiff asserted that a statutory claim brought against it and the other defendants under s 45 of the Sydney Water Act 1994 (NSW) was not an apportionable claim, Asset Geotechnical was justified in bringing and maintaining the cross-claim against Flexible. 8In the end, or if I may put it this way, at the very heel of the hunt, Sydney Water abandoned its claim under s 45 of that Act against all defendants. 9The trial before me took place over two full weeks commencing on 30 July 2012. The documentary evidence in the case occupied a court book of some nine volumes. In addition lay and expert evidence was taken over eight days of the trial. I interpolate, that the trial concluded in ten days was due to the extraordinary efficiency of the counsel involved. Having regard to the large quantity of material it might have been expected that such a case would have lasted much longer. I digress. 10The abandonment of the s 45 claim happened on the afternoon of the last day, it having been maintained throughout, and indeed it having been maintained by learned senior counsel for the plaintiff during his final address in chief. 11Mr Sheldon SC, who appears with Mr P Knowles, for Asset Geotechnical argues that there are two significant considerations in the present case justifying a departure from the general rule that costs follow the event and justifying the Court making a special order for costs in the nature of the Bullock order that he seeks. 12The first of those factors, quite apart from Miss Chapman's evidence as to why she joined Flexible, is that on 24 July 2012 she wrote to the plaintiff's solicitors and made it clear that the third cross-claim had been brought against the other defendants and Flexible because the plaintiff was maintaining that its claim was not apportionable. I interpolate that Miss Chapman in her letter talks about the plaintiff's claim in general terms, however as I have said it was never maintained by any party before me that the claim so far as it was brought in negligence was not apportionable. The only claims that were said to be not apportionable were the statutory claims under s 44 and s 45 of the Sydney Water Act. The s44 claim was maintainable against the second and third defendants only, and I put it to one side. 13In her letter Ms Chapman said: We are instructed to put your client on notice that in the event it is found that the claim is apportionable and as a result the Court makes orders for costs on the third cross-claim against our client, we will be seeking an order that, in the circumstances, those costs be payable by your client. In any event, we invite your client to formally concede that this is an apportionable claim, and to do so before commencement of the hearing of this matter next week. (My emphasis.) The plaintiff's solicitors did not respond to that letter. 14The second basis upon which Mr Sheldon relies is the circumstances in which the claim was "abandoned". I refer to it having been "abandoned" at [6] of my principal judgment. As Mr Sheldon points out, that may not have been an entirely accurate description of what occurred. At page 762.21 of the transcript of 10 August 2012 learned Senior Counsel for the plaintiff said this: Could I just perhaps say something after hearing the submissions, I concede on the evidence I can't make out, I can't win the claims under section 45 of the Sydney Water Act. 15Abandonment might in a general sense cover those comments, but I think there is force, with respect, in Mr Sheldon's argument that this was a concession of defeat on the merits by learned Senior Counsel and I propose to treat it that way for the purpose of this judgment. 16Mr J Sheller of counsel, who appears today for Sydney Water, says in respect of the second ground in particular that this is a case where it can be seen that there is a discrete apportionable issue. The discrete apportionable issue is whether the s45 claim could be made good and, if so, whether, therefore, Asset Geotechnical could pass on some of that liability to Flexible if the plaintiff was correct in maintaining that, unlike the negligence claim, the claim under s 45 was not an apportionable claim to which Pt 4 of the Civil Liability Act applied. 17In making their submissions, counsel for Asset Geotechnical relied upon the judgment of Finn J in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; 128 FCR 1 at [1588]. Mr Sheller takes issue with Asset Geotechnical's approach to that case. Learned counsel argued that something special, perhaps exceptional, is required in the circumstances to enliven a discretion to deprive a successful plaintiff of some of its costs, or to mulct it with the costs payable by an unsuccessful defendant to another successful party. 18He points out that the letter of 24 July 2012 in truth is not a Calderbank offer and, if he is wrong about that, he submits that in any event the condition identified by Ms Chapman as capable of triggering a special application for costs was not fulfilled in this case. There was no judgment on the merits that the s 45 claim is an apportionable claim, rather the claim was abandoned. 19He also points out, with some force I might say with respect, that the third cross-claim is not confined or restricted to seeking contribution in respect of the s 45 claim only, rather it is couched in familiarly, broad terms. Its pleading effectively picks up the whole of Sydney Water's claim against Asset Geotechnical. Indeed, to the extent to which it makes a claim against Flexible, it makes no express mention of s 45 at all. Mr Sheller's point is reinforced I think by the consideration that in fact Sydney Water were denied leave by Hidden J to join Flexible as an additional defendant to the proceedings. Although a draft amended statement of claim had been circulated by Sydney Water amongst the defendants pleading a claim against Flexible, inter alia, under s 45, because Sydney Water was unsuccessful before Hidden J, the document was never consummated by filing and service. 20As a matter of plain reading of the cross-claim, no mention is made of s 45, whether by express language, as I have already pointed out, or by way of incorporation, or picking up of the allegations made in the statement of claim. It is true that there is an incorporation of the pleadings at paragraphs 54 to 61, which pick up a claim against the second and third defendants, inter alia, under s 45 and, again by picking up paragraph 69 making the same claim against the fourth defendant under s 45. Paragraph 3 of the cross-claim picks up paragraph 47, which is the claim against Asset Geotechnical under s 45, but there is no incorporation of such a claim made against Flexible because none is advanced by Sydney Water because of the orders of Hidden J. 21The actual claim against Flexible is formulated in the following terms in paragraph 7 of the third cross-claim: For the purpose of this cross-claim only, if (which is denied so far as the allegations relate to the acts or conduct of the cross-claimant and is not otherwise admitted) the allegations made by the plaintiff against the cross-claimant in the statement of claim are correct, the fourth cross-defendant is a tortfeasor who is liable to the plaintiff in respect of the same damage as the damage in respect of which the cross-claimant was alleged to be liable to the plaintiff. 22Paragraph 8 is a general claim for indemnity or contribution against all cross-defendants to the third cross-claim. 23Looking at the language of paragraph 7, it is somewhat difficult to see the cross-claim brought against Flexible as other than a cross-claim brought under s 5 of the Law Reform (Miscellaneous Provisions) Act given that the averment in paragraph 7 employs the language of that provision. As Mr Sheldon conceded in his written submissions, on the basis of the decision of the Court of Appeal in Hampic Pty Ltd v Adams [1999] NSWCA 455 at [61], it would be difficult to characterise a statutory claim under s 45 as a tort and, therefore, s 5, by parity of reasoning, would have no application. On the other hand, the actual claim for relief sought in the third cross-claim is in the most general terms and is not limited by reference to s 5. 24Mr Sheldon argues that, on the face of it, the general language of indemnity/contribution would be sufficient to found a claim under general law, or equitable, principles relating to contribution for co-ordinate liabilities. Indeed, there is some authority in the Court of Appeal for the proposition that such a claim may be advanced without a party filing a cross-claim: HIH Casualty & General Insurance Ltd v Pluim Constructions Pty Ltd [2000] NSWCA 281 at [81] - [82]; at least between existing parties. 25In my judgment, the letter of 24 July 2012 is in the circumstances as I have outlined them insufficient to enliven a special discretion as to costs. First, the event upon which it is propounded was unfulfilled. Secondly, it did not invite the plaintiff to do anything in response to it, but rather was written in terrorem. It might be said, as Mr Sheldon argues, that it was implicit that Sydney Water was being invited to make a concession. I can see the force of that argument, but there is nothing in the terms in which the letter was written which invited Sydney Water to do anything, or offered any concession if it did. Moreover, although on balance I think the third cross-claim may be taken to embrace a claim against Asset Geotechnical under s 45, it was certainly couched in the most general language. 26I accept Ms Chapman's evidence, as I have said. However, the cross-claim did more than simply ventilate a claim for general contribution against Flexible; it joined each of the other defendants as parties, and, it might be said, it has the appearance of being filed for more abundant caution in case - contrary to the expectation of the parties - all of the claims including the negligence claims were found to be not apportionable claims under Part 4. I accept that that may not have been Ms Chapman's subjective intention, but, looked at objectively from the point of view of the responding parties, that seems to me to the correct conclusion for the Court to reach. 27It is notorious that a Bullock order may be made if the conduct of even a successful party to litigation warrants it. Moreover, in more recent years there has been a recognition that in circumstances where a successful plaintiff is unsuccessful on a discrete issue, provided the costs referable to that issue can be identified with precision and apportioned, a special order for costs can be made which favours the unsuccessful defendant. 28It is important to record that the only order sought by Asset Geotechnical is indemnity for the costs incurred in maintaining it's cross-claim against Flexible. That is, it seeks an indemnity in respect of the costs that it has been ordered to pay to Flexible. The factor that most influenced Ms Chapman was the failure of Sydney Water to concede that the claim was an apportionable one to which Pt 4 of the Civil Liability Act applied, as I have remarked more than once in these overly long reasons. Subjectively, from her affidavit I accept that the s 45 claim was a central part of her thinking, but I must say, with respect, viewed from the standpoint of the reasonable party in the position of Sydney Water, that central consideration is not obvious from reading either the correspondence or the cross-claim. 29Had s 45 been put front and centre in the inter-partes correspondence concerned with whether the claim was apportionable or not, that might have been one thing, but, in circumstances where the matter was put more generally, I am not persuaded that there was anything about the conduct of Sydney Water in maintaining its claim under s 45, and then conceding it at the end, which brings this case into that category of case where it is appropriate to order a successful plaintiff to pay any of the costs payable by an unsuccessful defendant. 30For those reasons, I dismiss Asset's notice of motion of 20 September 2013. I order Asset Geotechnical to pay Sydney Water's costs of the motion as part of the costs payable under order 7 pronounced on 6 September 2013.