A Goninan & Co Ltd v Direct Engineering Services Pty Ltd
[2008] WASCA 112 (S)
•15 MAY 2008
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA |
| TITLE OF COURT : | THE COURT OF APPEAL (WA) | |
CITATION | : | A GONINAN & CO LTD -v- DIRECT ENGINEERING SERVICES PTY LTD [No 2] [2008] WASCA 112 (S) |
| CORAM | : MARTIN CJ McLURE JA BUSS JA | ||
| HEARD |
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| DELIVERED |
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| SUPPLEMENTARY | |||
| DECISION |
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| FILE NO/S |
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| BETWEEN |
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AND
DIRECT ENGINEERING SERVICES PTY LTD
(ACN 008 700 178)
Respondent
ON APPEAL FROM:
| Jurisdiction | : | SUPREME COURT OF WESTERN AUSTRALIA |
| Coram | : MURRAY J | ||
| Citation |
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| File No |
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| Catchwords: |
Costs - Turns on own facts
Legislation:
Nil
Result:
The respondent to pay the appellant 50% of its costs of the action (but not the counterclaim), including any reserved costs, to be taxed
Category: B
Representation:
Counsel:
| Appellant | : | Mr G R Hancy & Mr P K Walton |
| Respondent | : | Mr M J McCusker QC & Mr L F A Nixon |
Solicitors:
| Appellant | : | Jackson McDonald |
| Respondent | : | Clayton Utz |
[2008] WASCA 112 (S)
Case(s) referred to in judgment(s):
A Goninan & Co Ltd v Direct Engineering Services Pty Ltd [No 2] [2008]
WASCA 112
Direct Engineering Services Pty Ltd v A Goninan & Co Ltd [2006] WASC 105
| JUDGMENT OF THE COURT | [2008] WASCA 112 (S) |
JUDGMENT OF THE COURT: On 15 May 2008, the court delivered judgment in this appeal. On that date it made orders, relevantly, that:
(a) the appeal be allowed; (b) the orders made by the learned trial judge, Murray J, in CIV 1098 of 2001, on 9 June 2006 and 20 July 2006, be set aside and in lieu thereof, relevantly, the respondent's claim and the appellant's counterclaim be dismissed; and (c) the respondent pay the appellant's costs of the appeal, including any reserved costs, to be taxed. 2 On 15 May 2008, the court made programming orders for the filing
of written submissions concerning the orders as to costs which should be made in relation to the proceedings at first instance. Counsel who appeared on that date agreed the court should make the relevant orders on the papers.
3 Subsequently, the appellant filed written submissions and an
affidavit of Robert Lelio Marando sworn 22 May 2008, the respondent filed written submissions and an affidavit of Yonnene Helena Pearce sworn 29 May 2008 and the appellant filed submissions in reply. Later, the respondent, with the agreement of the appellant and the leave of the court, uplifted Ms Pearce's affidavit and filed another affidavit of Ms Pearce sworn 11 June 2008. We have read and considered the written submissions, Mr Marando's affidavit, Ms Pearce's second affidavit and correspondence from the parties' solicitors, and it is unnecessary, in these reasons, to reproduce them.
4 The background facts and circumstances are set out in the reasons of
the learned trial judge (Direct Engineering Services Pty Ltd v A Goninan & Co Ltd [2006] WASC 105) and in this court's reasons on the appeal (A Goninan & Co Ltd v Direct Engineering Services Pty Ltd [No 2] [2008] WASCA 112). It is unnecessary to recount them yet again in these reasons.
5 In the proceedings at first instance, AXA Colonia Versicherung,
using the respondent's name and purported rights, by subrogated action alleged that the fire was caused by the appellant and claimed from the appellant a contractual indemnity, alternatively, damages for breach of contract and negligence. Quantum was not in issue.
The appellant:
(a) denied liability;
| JUDGMENT OF THE COURT | [2008] WASCA 112 (S) |
(b) alleged contributory negligence in relation to the claim in tort; (c) contended that, in any event, the respondent's claim was not maintainable in that:
(i) the action was brought in the name of the respondent by an insurer in exercise of a purported right of subrogation; and (ii) the insurer did not have a right of subrogation that it could exercise against the appellant; (d) sought to set off against the respondent's claim, the respondent's liability under the counterclaim to pay damages; (e) by its counterclaim, contended that if it was liable to the respondent:
(i) the liability was caused by a breach of cl 11(d)(v) of the head contract by the respondent in that the respondent failed to obtain insurance for the benefit of the appellant; and (ii) the liability was caused by the respondent's breaches of cl 17 of the head contract and implied terms of the sub-contract in that the respondent failed, amongst other things, to inform the appellant that the duct was lined with flammable material. 7 The trial occupied four days. At the commencement of the trial, the
respondent conceded that if the appellant was an insured under the AXA insurance policy, then AXA had no right of subrogation and the proceedings against the appellant could not be maintained.
The learned trial judge decided, relevantly:
(a)
the respondent's claim to an indemnity from the appellant failed in that the provision relied on by the respondent was not part of the contract between them;
(b)
the respondent had made out its claims against the appellant for breach of contract and negligence;
(c)
the negligent performance of the work by the appellant in breach of its contract and in breach of its duty in tort were causally related to the damage suffered by the respondent;
(d) the respondent was not guilty of contributory negligence; (e)
the head contract did not oblige the respondent to effect insurance for the benefit of its subcontractors (including the appellant) and,
| JUDGMENT OF THE COURT | [2008] WASCA 112 (S) |
in consequence, the appellant was not an insured under the policy
of insurance;
(f) it was not open to the appellant to seek to take the benefit of cl 11(d)(v) of the head contract under s 11(2) of the Property Law Act 1969 (WA); (g) AXA was entitled to pursue the claim in the name of the respondent by right of subrogation and no circuity of action resulted; and (h) the appellant's counterclaim which alleged that, if the AXA insurance policy did not provide liability cover for the benefit of the appellant, then the respondent had breached cl 11(d)(v) of the head contract, failed. 9 The appellant, in its appeal to this court, challenged the learned trial
judge's construction of the head contract and the AXA insurance policy and his findings that the respondent was not obliged under the head contract to effect insurance for its subcontractors (including the appellant) and the appellant was not an insured under the AXA insurance policy. The appellant also challenged his Honour's finding in relation to s 11(2) of the Property Law Act and his finding that if the insurance policy did not provide liability cover for the benefit of the appellant, then the respondent had breached cl 11(d)(v) of the head contract, but it was unnecessary for this court to determine those issues.
10 In our opinion, it is not reasonable for the appellant to have the
whole of its costs of the proceedings at first instance in circumstances where it was unsuccessful on a number of issues which were contested at the trial but not challenged in the appeal. It is true that this court found that the respondent's action against the appellant was not maintainable, but the appellant chose not to fight the trial solely on that basis, and put in contest other issues on which it failed. The issues on which the appellant lost and which it did not challenge in the appeal were not trivial or insubstantial. They involved significant issues of fact and law.
11 We consider that justice would be done as between the parties if the
respondent was ordered to pay the appellant 50% of its costs of the action (but not the counterclaim), including any reserved costs, to be taxed. We would direct the taxing officer to allow for senior and junior counsel at the trial.
The appellant also sought special orders in relation to the taxing of the costs. In particular, it sought these orders:
| JUDGMENT OF THE COURT | [2008] WASCA 112 (S) |
The scale limits imposed by item 13 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 1999, item 13 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2002 and item 16 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 be removed.
In determining the amount allowed to the appellant for getting up, the Taxing Officer make a reasonable allowance for research undertaken by the appellant to the extent that the taxing officer considers such research was reasonably necessary for the appellant to conduct the action.
We would make the first order but not the second. The first order sought is appropriate in that the proceedings at first instance involved legal and factual issues concerning negligence, contractual construction and insurance which were difficult and complex, and it is at least arguable that the amount properly allowable for getting the case up for trial would exceed the limit imposed by the scale. The second order sought is unnecessary, especially where the court has decided to make the first order, because research properly undertaken would be part of getting the case up for trial and therefore within any amount properly allowed by the taxing officer.
In summary, we would make orders as follows:
(a) The respondent is to pay the appellant 50% of its costs of the action (but not the counterclaim), including any reserved costs, to be taxed. (b) The taxing officer is directed to make allowance for senior and junior counsel at the trial. (c) The scale limits imposed by item 13 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 1999, item 13 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2002 and item 16 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 be removed.
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