A, DC v Prince Alfred College Inc (No 2)
[2016] SASCFC 27
•24 March 2016
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
A, DC v PRINCE ALFRED COLLEGE INC (No 2)
[2016] SASCFC 27
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Peek)
24 March 2016
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - GENERALLY
Costs in appeal and trial of a claim for damages for personal injury.
Reasons for judgment previously delivered allowing the appellant’s appeal against the dismissal of an action in negligence. The Court held that the respondent was vicariously liable for damage suffered by the appellant as a consequence of abuse by a boarding house master and allowed the extension of time in which to bring the action.
The majority dismissed the appeal against the Judge’s findings that the respondent had not breached its primary duty to the appellant, and upheld the Judge’s finding that the respondent had not breached its duty of care.
The matter was remitted to the Judge for an assessment of damages.
The appellant sought an order for its costs of the trial and the appeal.
The respondent contends that the appellant should have no more than 50 per cent of it costs of the appeal because of its failure to establish primary liability.
Held per the Court:
1. The general rule is that costs ordinarily follow the event unless there are special circumstances justifying another order.
2. The interests of justice sometimes require a reduction in the costs that would otherwise have been awarded to a successful party when that party has failed on particular disputed questions of fact or law.
3. The appellant to have 90 per cent of the costs of the appeal, and 80 per cent of the costs of the trial.
Cretazzo v Lombardi (1975) 13 SASR 4; Ruddock v Vardalis (No 2) (2001) 115 FCR 229; Victoria v Master Builders Association of Victoria (Unreported, Victorian Court of Appeal, 15 December 1994); Mickleberg v Western Australia [2007] WASC 140, considered.
A, DC v PRINCE ALFRED COLLEGE INC (No 2)
[2016] SASCFC 27Full Court: Kourakis CJ, Gray and Peek JJ
THE COURT: On 10 November 2015, this Court allowed the appellant’s (A’s) appeal against the dismissal of the action in negligence brought against Prince Alfred College (PAC), a school in which he had boarded. A claimed that PAC had negligently failed to take steps to prevent a teacher, who was also a housemaster, from sexually abusing him. A’s claim was founded on both breaches of PAC’s primary duty of care to him and on its vicarious liability for the acts of its teacher.
On appeal the Court unanimously held that PAC was vicariously liable but, by majority, dismissed the appeal against the Judge’s findings that PAC had not breached its primary duty to A. The Court set aside the Judge’s decision refusing A an extension of time in which to bring the action and allowed the extension of time. The majority upheld the Judge’s finding that PAC had not breached its duty of care.
The action was remitted to the Judge for an assessment of damages.
A seeks an order for its costs of the trial and the appeal. PAC submits that the appellant should have no more than 50 per cent of its costs of appeal because of its failure to establish PAC’s primary liability. PAC contends that the question of costs of the trial should be remitted to the trial Judge or, alternatively, if determined by this Court should be reduced substantially to take into account A’s loss on the issue of PAC’s primary liability.
The principles governing the exercise of the costs discretion are well established. The Court exercises a judicial discretion with respect to costs in which the general rule is that costs ordinarily follow the event unless there are special circumstances justifying another order.[1] In more recent times, courts more readily modify the general rule recognising that the interests of justice sometimes require a reduction in the costs that would otherwise have been awarded to a successful party when that party has failed on particular disputed questions of fact or law.[2] In Ruddock v Vardalis (No 2),[3] Black CJ and French J summarised the principles as follows:[4]
Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:
· Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
· Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
· 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 other parties' 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 law.
[1] GT Corporation Pty Ltd v Amare Safety Pty Ltd [2008] VSC 296 at [31].
[2] Cretazzo v Lombardi (1975) 13 SASR 4 at 12.
[3] (2001) 115 FCR 229.
[4] (2001) 115 FCR 229 at [11]. See also Cretazzov v Lombardi (1975) 13 SASR 4 at 12 per Bray CJ; GT Corporation Pty Ltd v Amare Safety Pty Ltd [2008] VSC 297 at [31] per Robsen J.
The modification of the ordinary rule to reflect the way in which particular issues in the litigation are determined is a response to those ‘cases in which issues are raised which unduly extend the time and expense of litigation’.[5]
[5] Victoria v Master Builders Association of Victoria (Unreported, Victorian Court of Appeal, 15 December 1994) (Ormiston JA); see also Mickelberg v Western Australia [2007] WASC 140 at [30]-[35] (Newnes J) referring to “the need for greater economy and efficiency in the conduct of litigation”.
In Victoria and Master Builders Association of Victoria[6] Ormiston JA explained that in an era of high cost litigation it had become necessary to more often allocate costs according to success on particular issue because ‘regrettably there are many cases in which issues are raised which unduly extend the time and expense of litigation’. Those observations were echoed in Mickelberg v Western Australia[7] by Newens J who referred also to ‘the burdens imposed on the public resources of the Court’ by parties pursuing claims on which they are ultimately not successful.
[6] (Unreported, Victorian Court of Appeal, 15 December 1994).
[7] [2007] WASC 140 at 30-35.
Just as parties must make a cost benefit and risk analysis decision on whether to bring an action at all, so too must decisions be made about which claims to include within an action. Parties should not be encouraged to add to a claim which has sufficient prospects, in itself, to justify the bringing of an action other claims, of doubtful merit, on the assumption that the costs of pursuing the latter claims will be recovered because of success on the good claim.
In adversarial litigation the parties and their legal advisors carry the primary responsibility for ensuring the cost-effectiveness of litigation because they have a particular knowledge and understanding of the controversy, and the available evidence, which the court cannot know because of legal professional privilege.
It is therefore the responsibility of the legal profession to actively consider the affect of adding doubtful claims, or mounting defences to good claims without any foundation for doing so, on the efficient resolution of the proceedings. In accordance with that duty legal practitioners must give advice on the relative merits of the possible claims and defences and on the cost and time implications of pursuing those claims so that the litigant is in a position to give informed instructions on how to conduct the proceedings.
The authorities to which we have referred make it clear that the rule does not only apply to a ‘precise issue in the technical pleading sense’ but extends to any substantial disputed question of fact or law. There is of course a limit to the dissection of an action which is practicably possible.
On the other hand, the court should not be overly parsimonious in the award of costs to a plaintiff who has won a judgment against a wrongdoer who has denied liability on all of the grounds of the plaintiff’s claim.
There can be no precision in the balancing of the tension between the ordinary rule and its qualification. Much will depend on the extent to which the costs of the litigation of the separate issues can easily be separated out and on the reasonableness of the forensic decision of the successful party to pursue, not only the claims on which he or she succeeded, but also those claims on which he or she failed.
Costs of the appeal
A appealed on 22 grounds. We accept the distillation of the issues raised by those grounds appearing in PAC’s written submissions as follows:
18.Notwithstanding his 22 grounds of appeal, properly analysed the appellant’s complaints distilled into four groups and 9 issues:
18.1. The case in primary negligence predicated on:
18.1.1.failing to make adequate enquiries when employing Bain generally or placing him in the Boarding House;
18.1.2. failing to adequately supervise Bain in the Boarding House;
18.1.3.failing to provide appropriate follow up care after the discovery of the abuse.
18.2 The case for breach of a non-delegable duty;
18.3 The case in vicarious liability;
18.4. The application for an extension of time, which comprised the following four sub issues:
18.4.1.the extension on the basis of legal disability and accrual of the cause of action in 1996 (bringing him within the 30 years ‘long stop’ provision in s 45 of the Limitation of Actions Act);
18.4.2.The extension on the basis of the ascertainment of a material fact within the 12 months prior to the institution of the proceedings ( s 48(3)(b)(i) of the Limitation of Actions Act);
18.4.3.The extension on the basis of the respondent’s conduct (s 48(3)(b)(ii) of the Limitations of Actions Act);
18.4.4. The favourable exercise of the discretion to extend time.
A failed on the issues described in [18.1] and [18.2]. A succeeded on the issue in [18.3]. A also succeeded on the application for an extension of time but only on the basis of the ground identified in [18.4.2]. On appeal A also won an extension of time in which to bring the action (issue 18.4.4) but because of the limited nature of the facts in dispute on the question of vicarious liability and not on some of the wider grounds on which he had argued.
More time was expended on the hearing of the appeal on the matters on which A failed than on the matters on which he succeeded, even though there was a largely common sub-stratum of evidence.
Moreover even though many but not all of the grounds on which the appellant failed were arguable they were not strong. Nonetheless A was successful in obtaining a disposition in his favour. A’s ultimate success and the close relationship between at least some of the issues on which A was unsuccessful and the issues on which he succeeded militate against a substantial reduction in his costs.
Balancing these considerations we would order that A have 90 per cent of his costs of the appeal.
Having received and considered submissions on the costs of the trial, we think it is desirable to deal with the costs of the trial without further delay or expense. We would not remit the matter to the Judge. A’s case at trial concerning pre-employment enquiries occupied a substantial amount of time. It was without merit for several reasons canvassed in the judgment of the trial Judge and the judgment of the majority on appeal.
On the extension of time substantial time was spent on the question of legal disability which was most unlikely to succeed. Moreover there was really no reason to pursue that ground given the strength of the case for an extension on the discovery of new facts. We would order that A have 80 per cent of the costs of trial.
29
5
0