Wade v Liverpool City Council & Anor

CATCHWORDS: PROCEDURE - Costs - Plaintiff obtained order that first and second defendants pay plaintiff's costs - Further costs orders made "as between the respective defendants" including orders reflecting apportionment of liability - Appeal by second defendant against apportionment allowed and new orders made reflecting reapportionment - Application by plaintiff to vary new orders to ensure defendants remained joint and severally liable for plaintiff's costs - Whether original orders in fact made defendants so liable - Whether, as a matter of discretion, Court should decline to vary orders - Supreme Court Rules 1970 Part 40 rule 9(3)

CASES CITED: Liverpool City Council v Millett; Liverpool City Council v Wade [2004] NSWCA 340

Nigel Bruce Wade PARTIES: Liverpool City Council Richard Gregory Millet

CL: Mr R Dalgleish 1 OPP: Mr D Villa COUNSEL: 2 OPP: N/A

Cl: G J Byles & Associates, Sydney SOLICITORS: 1 OPP: McCabe Terrill Lawyers, Sydney 2 OPP: N/A

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40129/03 DC 6655/02

MASON P SHELLER JA TOBIAS JA

Thursday 28 April 2005 NIGEL BRUCE WADE v LIVERPOOL CITY COUNCIL & ANOR [2] Judgment 1 MASON P: I agree with Tobias JA. 2 SHELLER JA: I agree with Tobias JA. 3 TOBIAS JA: This matter involved an appeal by Liverpool City Council (the Council) against orders made by Norrish DCJ on 7 February 2003 in favour of Nigel Bruce Wade (Mr Wade) in proceedings DC 6655/02 (CA 40129/03) and Richard Gregory Millett (Mr Millett) in proceedings DC 766/01 (CA 40130/03). For present purposes the Court is only concerned with DC 6655/02 (CA 40129/03) (the Wade proceedings). 4 Mr Wade sued Mr Millett for damages as a consequence of a collision between vehicles driven by each of them. He later joined the Council as a defendant alleging negligence against it. At the conclusion of the trial, Norrish DCJ entered a verdict and judgment for Mr Wade against both Mr Millett and the Council in the sum of $20,779. His Honour ordered Mr Millett to pay 10% of that sum and the Council to pay 90%. With respect to costs his Honour made the following orders: "The First and Second Defendants pay the Plaintiff's costs. As between the respective Defendants, the First Defendant pay the Plaintiff's costs prior to the joinder of the Second Defendant, the Second Defendant pay 90% of the Plaintiff's costs of the hearing, the First Defendant pay the balance.

His Honour also made various orders with respect to cross-claims between the defendants which are not presently relevant. 5 The Council applied to this Court for leave to appeal the primary judge's decision. Mason P and Hodgson JA granted that leave on 25 November 2003. In their judgments granting leave their Honours respectively said: "Mason P: What we are minded to do is to order that the claimant have leave to appeal in each matter but on a condition that in the event that the council displaces the order in Mr Wade's favour then the council will not seek to recover from Mr Wade the judgment and costs which the council should now pay to Mr Wade . The intent obviously is that the council can seek to recover that burden from Mr Millett. The intent is also that Wade will remain a party to the appeal so that there is no problem of issue estoppel but Wade will be a submitting party because, in reality, there is no risk to him should the appeal succeed. Hodgson JA: I think the council should also pay Wade's costs of the application for leave and the council [scil, costs] of a submitting appearance in the appeal, otherwise the costs of the application for leave would be costs in the appeal." (emphasis added) 6 The appeal came on for hearing on 15 September 2004 and judgment was delivered on 9 December 2004: Liverpool City Council v Millett; Liverpool City Council v Wade [2004] NSWCA 340. By majority, this Court allowed the Council's appeal in part and relevantly made the following orders: "b) Set aside the orders made by Norrish DCJ on 7 February 2003 and in lieu thereof order that: (i) there be judgment for the plaintiff against the first and the second defendant in the sum of $20,779 (ii) …

(iii) … (iv) … (v) the first defendant pay the plaintiff's costs of the Local Court proceedings and of the District Court proceedings prior to the joinder of the second defendant (vi) the first defendant pay 45% of the plaintiff's costs of the District Court subsequent to the joinder of the second defendant (vii) the second defendant pay 55% of the plaintiff's costs of the District Court proceedings subsequent to the joinder of the second defendant." 7 At the conclusion of the hearing of the appeal when judgment was reserved, the parties were requested to provide draft orders depending upon whether the Council was successful on its primary appeal against its liability to Mr Wade or was only successful with respect to its appeal against the apportionment to it by the primary judge of 90% responsibility for Mr Wade's damages. Agreed forms of draft orders were provided to the Court by Mr Millett and the Council on or about 22 September 2004. 8 By majority, the Council's appeal on the issue of liability was dismissed but it was successful on the issue of apportionment. The Court reapportioned responsibility for Mr Wade's damages at 45% to Mr Millett and 55% to the Council. This was reflected in the formal orders of the Court which followed the agreed form of orders to which I have referred: see [2004] NSWCA 340 at [153]. 9 Mr Wade now moves the Court pursuant to Part 40 rule 9(3) of the Supreme Court Rules 1970 to vary subparagraphs (v), (vi) and (vii) of (b) of the orders made on 9 December 2004 upon the basis that when those orders were made Mr Wade was absent. This was because the effect of the terms upon which the Council was granted leave to appeal resulted in Mr Wade being a submitting party to the appeal. Accordingly, he filed a submitting appearance and took no part in the hearing of the appeal. It was clear from the terms upon which leave was granted that Mr Wade could not be affected by any orders the Court might make in favour of the Council on the appeal. 10 The variation now sought to the orders referred to is that, firstly, there be inserted in (b) before subparagraph (iv) an order in the following terms: "The first and second defendants pay the plaintiff's costs of the Local Court proceedings and of the District Court proceedings as agreed or assessed"

and that subparagraphs (v), (vi) and (vii) be prefaced by the words " As between the respective defendants ". 11 The purpose of the variation is to ensure that Mr Millett and the Council remain jointly and severally liable for Mr Wade's costs of the proceedings at first instance particularly as it has at all material times been known that Mr Millett was uninsured and may have difficulty in personally meeting any judgment or costs order made against him in favour of Mr Wade. Only the Council has contested the motion. Mr Millett submitted to such orders as the Court might make. 12 As the orders of this Court now stand, the Council is only obliged to pay 55% of Mr Wade's costs of the District Court proceedings and then only subsequent to its joinder to those proceedings. On the other hand, Mr Millett has been ordered to pay Mr Wade's costs of the Local Court proceedings and of the District Court proceedings prior to the joinder of the Council and 45% of his costs of the District Court proceedings subsequent to joinder. Mr Wade fears that he will be unable to recover those costs from Mr Millett as he is uninsured. He asserts that the orders made by this Court with respect to costs in accordance with the agreed draft orders provided by Mr Millett and the Council subsequent to the hearing of the appeal, do not accord with the condition with respect to the payment of Mr Wade's costs upon which the Council was granted leave to appeal. 13 Prior to the hearing of the appeal a dispute had arisen between the Council and Mr Wade with respect to the condition upon which leave had been granted which required the Council not to "seek to recover from Mr Wade the judgment and costs which the Council should now pay to Mr Wade."

It was contended by the Council that this condition did not require it to pay Mr Wade's costs of the proceedings in the District Court at all. This dispute was resolved by Mason P and Hodgson JA who, after receiving written submissions from the parties, delivered a supplementary judgment on 30 March 2004 in which their Honours made it clear "that 'the judgment and costs' referred to by Mason P in the order granting leave to appeal included the costs orders in Mr Wade's favour by the District Court." 14 In the meantime Mr Wade's solicitors had, on 3 December 2003, submitted an assessment of their costs to the Council's solicitors. After the clarification (if such was needed) by this Court of the condition upon which leave to appeal was granted to the Council on 25 November 2003, the latter's solicitors changed tack. Firstly, they requested a breakdown of Mr Wade's costs and expenses with particular reference to those incurred prior to the joinder of the Council as a defendant in Mr Wade's proceedings. Secondly, they contended that the costs payable by the Council pursuant to the "clarified" condition upon which leave was granted should not include those costs incurred by Mr Wade prior to the date of the Council's joinder to the District Court proceedings. However, Mr Wade's solicitors maintained that it was clear from this Court's "clarification" of 30 March 2004 that the condition upon which leave was granted required the Council to pay the costs ordered by Norrish DCJ in his original order of 7 February 2003 which was that "The First and Second Defendants pay the Plaintiff's costs."

It was argued that this order of the primary judge did not purport to distinguish between those costs incurred before and those incurred after the date upon which the Council was joined as a defendant to Mr Wade's proceedings although such a distinction was expressly made by his Honour in his orders as to how those costs were to be borne as between the defendants. 15 In its submissions on Mr Wade's Notice of Motion to this Court to vary the orders made by it with respect to costs on 9 December 2004, the Council contended that the leave condition was only to apply if monies were paid by the Council to Mr Wade pursuant to the orders made by the primary judge in which event the Council could not seek an order for their restitution in the event that its appeal on liability was successful. Furthermore, it was submitted that there was no inconsistency between the leave condition and the costs orders made by this Court on 9 December 2004. 16 Submissions were then made by the Council as to the proper interpretation of the orders made by the primary judge with particular reference to his Honour's order that the "First and Second Defendants pay the Plaintiff's costs". Although it was contended that, on the authorities, where multiple unsuccessful parties are liable for a successful plaintiff's costs, that liability is joint and several, it was also submitted that in accordance with general principles, the Council could be liable only for those costs incurred after its joinder to Mr Wade's proceedings. The submissions thus accepted that the Council had a joint and several liability with Mr Millett in respect of Mr Wade's post-joinder costs but that, as a matter of principle, it could not be liable for Mr Wade's pre-joinder costs. It was on this basis that it was submitted that there was no material difference between the relevant costs orders made by this Court on 9 December 2004 and those made by the primary judge on 7 February 2003. 17 In my opinion, the Council's submissions have no merit and should be rejected for the following reasons:

(a) The primary costs order made by Norrish DCJ was clear and plain on its face: it was that Mr Millett and the Council were to be jointly and severally liable for the whole of Mr Wade's costs of the proceedings at first instance including those incurred in the Local Court.

(b) Whatever might be the appropriate principle to apply in relation to a defendant's liability for costs incurred prior to its joinder in the proceedings, no such distinction was made by the primary judge in his primary costs order in favour of Mr Wade although he expressly recognised that distinction in his order as to how those costs were to be borne as between Mr Millett and the Council.

(c) Whether the primary judge was right or wrong in the making of an order that had the effect of imposing a joint and several liability on the Council to pay Mr Wade's pre-joinder costs, no complaint was ever made with respect to that order by the Council until after 30 March 2004 and then only in correspondence. In particular, its amended Notice of Appeal filed 26 August 2004 did not include a ground of appeal challenging the primary judge's costs orders.

(d) It is equally plain, if it was not plain before, that on 30 March 2004 this Court made it clear that the condition upon which leave was granted to the Council required it to pay, irrespective of the outcome of the appeal, Mr Wade's costs as ordered by the primary judge on 7 February 2003.

(e) There can be no doubt that the costs orders made by this Court on 9 December 2004 are inconsistent with those made by the primary judge on 7 February 2003 which were required to be maintained as a condition of the grant of leave. Regrettably, this Court overlooked this when it accepted, all too readily, the draft orders agreed only between Mr Millett and the Council.

(f) The condition upon which leave was granted was intended to ensure that Mr Wade was not prejudiced in the event that the Council's appeal was successful in whole or in part. It was readily appreciated that Mr Millett was uninsured but it was this Court's plain intent on the leave application that Mr Wade should recover the whole of his costs at first instance from the Council leaving it to obtain reimbursement from Mr Millett of any costs paid by it to Mr Wade which related to any costs incurred by him prior to the Council's joinder. As I have observed, this is clearly reflected in the costs order made by the primary judge as between Mr Millett and the Council. 18 Notwithstanding what I regard as a completely unjustified "interpretation" by the Council of the primary judge's costs order in favour of Mr Wade which followed a completely unjustified "interpretation" by the Council of this Court's condition upon which leave was granted, the Council nevertheless submitted that as a matter of discretion this Court should decline to vary its orders of 9 December 2004. The factual basis of this submission was that by letter dated 24 September 2004 the Council's solicitors had forwarded to Mr Wade's solicitors a copy of its client's submissions dated 21 September 2004 and the draft orders with respect to the appeal. Those submissions, as their heading indicated, related to the appropriate orders to be made in the event that the Council's appeal was allowed in whole or in part. 19 Paragraphs 4 and 7 of those submissions were in the following terms: "4. No monies have been paid to Mr Wade in respect of the costs of the proceedings below as the costs are still being assessed, and accordingly the orders made by the Court of Appeal do not need to make any provision for reimbursement of such monies. In relation to costs, the orders simply need to reflect the orders that should have been made in the Court below . … 7. In respect of Mr Wade's costs the orders have been drafted so that Mr Wade will not be liable for his costs, and the liability for those costs has been allocated to one or other of Mr Millet and/or the Council depending upon the outcome ." (emphasis added) 20 It was then submitted that Mr Wade's solicitor was clearly on notice of the order proposed with respect to the payment of his costs of the proceedings below and the reasons for them. As he did not respond to the draft orders, his client could not now be heard to complain. 21 Mr Wade's solicitor has responded by way of affidavit to the effect that because his client was a submitting party, he only briefly perused the submissions attached to the letter of 24 September 2004. He deposed that he had "no reason whatsoever to believe that [the Council] would propose orders which would contravene the protection given to my client by this Honourable Court previously."

He thus did not realise that the Council intended to move outside the scope of the condition imposed by this Court in its grant of leave, particularly in light of the " clarifying " judgment of 30 March 2004. He further deposed that had he been aware of the full nature and extent of the Council's submissions on costs, he would have approached the Court and sought leave to file submissions in response objecting to the proposed draft orders. The Council did not seek leave to cross-examine him. 22 Nevertheless, the Council in a written submission signed by Mr D Villa of counsel and dated 18 March 2005 responded to this affidavit by asserting that the solicitor's evidence that he had "briefly" perused the submissions was "barely credible". It was contended that even the most cursory reading of those submissions would have put Mr Wade's solicitor on notice as to what the Council was seeking by way of costs order. Nor was it credible, the submissions boldly continue, that Mr Wade's solicitor believed that the condition of the grant of leave preserved an entitlement to costs from the Council for the period prior to the Council's joinder. The Council's position was that there was no such entitlement and that Mr Wade's solicitor knew this. 23 In my opinion, the discretionary argument now advanced by the Council is equally without merit. Although not appreciated by the Court at the time, the last sentence of [4] of the submissions (a copy of which was provided to Mr Wade's solicitor) should never have been made or permitted to have been made. This was, firstly, because no ground of appeal had been notified by the Council to suggest that, in the event that its appeal on liability failed, nonetheless the primary judge's costs order now complained about should not have been made. Secondly, in my opinion the legal representatives of the Council must have appreciated that, in light of this Court's "clarifying" judgment of 30 March 2004, the submissions made in the last sentence of [4] as well as that in [7] were untenable. 24 In [1] of the submissions reference was made to the condition upon which leave was granted, namely, that Mr Wade would not be required to reimburse the Council any monies that the Council had paid over to Mr Wade pursuant to the orders made by the primary judge on 7 February 2003. The first part of [4] of the submissions then suggested that no question of reimbursement arose because no monies in respect of costs had been paid. What the submission failed to draw to this Court's attention was that the Council was seeking an order in respect of Mr Wade's costs that differed from that made by the primary judge and which was required, as a condition of the grant of leave, to be complied with irrespective of the result of the Council's appeal. In my opinion this bordered on the misleading. 25 So that there can be no misunderstanding, I would have no hesitation in accepting as wholly credible the sworn evidence of Mr Wade's solicitor referred to in [21] above. The Council's written submissions of 21 September 2004 required more than a cursory reading for their full impact to be appreciated. Regrettably, like Mr Wade's solicitor, I only gave them such a reading when preparing my judgment of 9 December 2004 and, like him, failed to recognise their true import. No proper basis existed for what I regard as an unsubstantiated slur by Mr Villa of counsel for the Council on the solicitor's veracity. 26 I would therefore reject the submission that, as a matter of discretion, this Court should decline to make the variations sought. On the contrary, in my opinion the orders sought in the Notice of Motion should be granted. 27 Mr Wade seeks his costs of the Notice of Motion on an indemnity basis. The Council opposed this. It had the temerity to submit that it was entitled to have its costs of the Motion paid by Mr Wade on the basis that had Mr Wade's solicitor read and appreciated the significance of the submissions and the form of draft orders provided by the solicitors, the present application would have been unnecessary. Furthermore, it submitted that it is irrelevant that the Council had now conceded that it has a joint and several liability to pay Mr Wade's post joinder costs. 28 The very contention that had Mr Wade's solicitors read and appreciated the significance of the written submissions and form of draft orders proposed, then the present application would have been unnecessary contains, in my opinion, a clear concession that those submissions and orders were inconsistent with the terms of the condition upon which the Council was granted leave to appeal. Again, it is a submission without merit. 29 In my opinion, the manner in which the Council has advanced this matter of costs has been inappropriate in the extreme. It continued to, in effect, question the meaning and intent of the condition imposed by this Court on the grant of leave, arguing that upon the proper construction of the primary judge's costs order in favour of Mr Wade there was no difference between that and the orders for costs made by this Court on 9 December 2004. It maintained this position notwithstanding the "clarifying" judgment of this Court of 30 March 2004 that that condition required the Council to "now pay to Mr Wade" the costs the subject of the primary judge's order of 7 February 2003. Furthermore, it advanced an "interpretation" of that costs order which was untenable and in circumstances where, notwithstanding that it was not the subject of a ground of appeal, it was maintained that that order should not have been made as it was inconsistent with authority. 30 In these circumstances, the Council's conduct with respect to its opposition to Mr Wade's Notice of Motion is such as to attract an order that it pay Mr Wade's costs of the motion on an indemnity basis. 31 I would therefore propose the following orders:

(1) That Order (b) made by this Court on 9 February 2004 in matter CA 40129/03 be varied by deleting subparagraphs (v), (vi) and (vii) thereof and substituting the following: (v) The first and second defendants pay the plaintiff's costs of the Local Court proceedings and of the District Court proceedings; (vi) That as between the first and second defendants, · the first defendant to pay the plaintiff's costs of the Local Court proceedings and of the District Court proceedings prior to the joinder of the second defendant; · the first defendant pay 45% of the plaintiff's costs of the District Court proceedings subsequent to the joinder of the second defendant; · the second defendant pay 55% of the plaintiff's costs of the District Court proceedings subsequent to the joinder of the second defendant.

(2) The first opponent pay the claimant's costs of the Notice of Motion filed 23 February 2005 on an indemnity basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.