ACQ v Cook (No 2)
[2008] NSWCA 306
•17 November 2008
NEW SOUTH WALES COURT OF APPEAL
CITATION:
ACQ v Cook (No 2); Aircair Moree v Cook (No 2); Cook v Country Energy (No 2); Country Energy v Cook (No 2) [2008] NSWCA 306
FILE NUMBER(S):
40302/07; 40303/07; 40363/07; 40454/07
HEARING DATE(S):
On written submissions
JUDGMENT DATE:
17 November 2008
PARTIES:
40302/07
ACQ Pty Limited - Appellant
Gregory Michael Cook - First Respondent
Country Energy (formerly known as NorthPower) - Second Respondent
40303/07
Aircair Moree Pty Ltd - Appellant
Gregory Michael Cook - First Respondent
Country Energy (formerly known as NorthPower) - Second Respondent
40363/07
Gregory Michael Cook - Appellant
Country Energy (formerly known as NorthPower) - Respondent
40454/07
Country Energy (formerly known as NorthPower) - Appellant
Michael Gregory Cook - First Respondent
Aircair Moree Pty Limited - Second Respondent
JUDGMENT OF:
Beazley JA Giles JA Campbell JA
LOWER COURT JURISDICTION:
Not Applicable
LOWER COURT FILE NUMBER(S):
Not Applicable
LOWER COURT JUDICIAL OFFICER:
Not Applicable
COUNSEL:
B Walker SC; G Curtin; Y Cachia (ACQ Pty Ltd & Aircair Moree Pty Ltd)
P Menzies QC; G Giagios (Gregory Cook)
M Elkaim SC; P Khandhar (Country Energy)
SOLICITORS:
Riley Gray-Spencer Lawyers, Sydney (ACQ Pty Ltd & Aircair Moree Pty Ltd)
Whitelaw McDonald, Erina (Gregory Cook)
Turks Legal, Sydney (Country Energy)
CATCHWORDS:
COSTS – Bullock order – Sanderson order – discretion – principles governing grant of orders – whether reasonable and proper for plaintiff to have sued successful defendant – where joinder of successful defendant by plaintiff occurred at a time when it was already joined to the proceedings by way of cross-claim by the parties against whom costs order is sought – where those parties denied liability – where those parties were sued under statute while the successful defendant was sued in tort
LEGISLATION CITED:
Civil Procedure Act 2005
Damage By Aircraft Act 1999 (Cth)
Occupational Health and Safety Act 1983
Uniform Civil Procedure Rules
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
CATEGORY:
Consequential orders
CASES CITED:
ACQ Pty Ltd v Cook [2008] NSWCA 161
Almeida v Universal Dye Works Pty Ltd (No 2) [2001] NSWCA 156
Balesfire Pty Ltd v Adams [2006] NSWCA 112
Bullock v London General Omnibus Co [1907] 1 KB 264
Coombes v Roads and Traffic Authority (No 2) [2007] NSWCA 70
Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215
Inspector Mason v Country Energy [2003] NSWIRComm 206
Lackersteen v Jones (No.2) (1988) 93 FLR 442
Nominal Defendant v Swift [2007] NSWCA 56
Roads and Traffic Authority of New South Wales v Palmer (No 2) [2005] NSWCA 140
Sanderson v Blyth Theatre Co [1903] 2 KB 533
Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179; (2000) NSWCCR 417
Sved v Municipality of Woollahra (1998) NSW Con R 55-852
TEXTS CITED:
DECISION:
In Appeal 40302/07
(1) ACQ to pay the costs of NorthPower of the appeal.
(2) ACQ to pay the costs of Mr Cook of the appeal on an indemnity basis.
In Appeal 40303/07
(1) Aircair to pay the costs of NorthPower of the appeal.
(2) Aircair to pay the costs of Mr Cook of the appeal on an indemnity basis.
In Appeal 40363/07
(1) ACQ and Aircair to pay the costs of NorthPower of the appeal, otherwise no order as to costs.
In Appeal 40454/07
(1) Aircair and ACQ to pay the costs of NorthPower of the appeal, otherwise no order as to costs.
In All Appeals
(1) Note that the appeals in matters 40302/07, 40303/07, 40363/07 and 40454/07 were in substance conducted as a single appeal, and direct that any assessment of costs be made accordingly.
(2) ACQ and Aircair to pay costs of the submissions relating to orders for costs.
(3) Orders for costs in the court below vacated, and in lieu thereof:
(a) ACQ and Aircair to pay Mr Cook’s costs on the ordinary basis to 17 November 2006, and on the indemnity basis from 17 November 2006.
(b) ACQ and Aircair to pay NorthPower’s costs.
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40302/07
CA 40303/07
CA 40363/07
CA 40454/07
DC 4202/04BEAZLEY JA
GILES JA
CAMPBELL JA17 NOVEMBER 2008
ACQ PTY LIMITED v GREGORY MICHAEL COOK (No.2)
AIRCAIR MOREE PTY LTD v GREGORY MICHAEL COOK (No.2)
GREGORY MICHAEL COOK v COUNTRY ENERGY (FORMERLY KNOWN AS NORTHPOWER) (No.2)
COUNTRY ENERGY (FORMERLY KNOWN AS NORTHPOWER) v GREGORY MICHAEL COOK (No.2)
Judgment
BEAZLEY JA: I agree with Campbell JA.
GILES JA: I agree with Campbell JA.
CAMPBELL JA: This decision relates to the one aspect of costs orders that remains in dispute after the court has disposed of the substance of the appeals in question. The judgment that disposes of the substance of the appeals is: ACQ Pty Ltd v Cook [2008] NSWCA 161.
That judgment related to the hearing of four separate appeals from a judgment in the District Court. In the litigation Mr Cook, a linesman employed by an electricity distribution authority called NorthPower, sued three defendants. Those defendants were Aircair, ACQ, and NorthPower. Mr Cook had been injured after a light aircraft that was owned by ACQ and operated by Aircair came into collision with a power line, causing it to drop. Mr Cook went to the scene, and was injured when he accidentally came in contact with the line.
In the litigation as it ultimately went to trial, Mr Cook sued ACQ and Aircair on a statutory cause of action arising under the Damage By Aircraft Act 1999 (Cth). He also sued Aircair on the basis that it, as the employer of the pilot of the aircraft at the time, was vicariously liable for the pilot’s negligence. His action against NorthPower alleged a breach of the duty of care that an employer owes to an employee.
Various cross-claims were litigated in the court below. Aircair and ACQ each sought indemnity or contribution as a tortfeasor liable for the same damage from NorthPower. NorthPower sought contribution, on that same basis, from Aircair and ACQ. ACQ and NorthPower also sought contribution to their liability on the statutory count, on the basis that NorthPower as a tortfeasor was liable for the same damage. An aspect of NorthPower’s defence concerned the extent, if any, to which Mr Cook’s damages against NorthPower should be reduced by reason of his contributory negligence.
That range of issues generated four separate appeals. In 40302/07 ACQ was the appellant. In 40303/07 Aircair was the appellant. In each of those appeals Mr Cook and NorthPower were respondents. Each of those appeals was dismissed.
40454/07 was an appeal in which NorthPower was the appellant, and Mr Cook and Aircair were the respondents. That appeal was allowed, the verdict and judgment that Mr Cook had obtained against NorthPower in the court below was set aside, and in lieu thereof a verdict and judgment in favour of NorthPower against Mr Cook was entered. A consequence of those orders was that an order that NorthPower had obtained against Aircair for contribution to its damages was also set aside.
Appeal 40363/07 was an appeal by Mr Cook, in which NorthPower was the respondent. It related to the trial judge’s assessment of Mr Cook’s contributory negligence, in the action he brought against NorthPower. As Mr Cook’s action against NorthPower ultimately failed, that appeal also failed.
It is agreed that in 40302/07 ACQ must pay the costs of NorthPower and of Mr Cook, both of the appeal and in the court below. It is also agreed on what basis those costs should be paid.
In 40303/07 it is agreed that Aircair should pay the costs of NorthPower and of Mr Cook of the appeal and in the court below. It is also agreed on what basis those costs should be paid.
The dispute relates only to the orders that should be made in 40363/07 and 40454/07. There is a consensus that NorthPower should receive its costs of those appeals, and its costs in the court below, from someone, but there is a dispute about from whom those costs should be received. The dispute concerns whether ACQ and Aircair (or Aircair alone) should ultimately bear all of those costs, pursuant to either a Bullock Order, or a Sanderson Order. Resolution of that dispute requires examination of the circumstances in which NorthPower came to be joined to the litigation.
Facts Relating to Joinder of NorthPower
The accident in which Mr Cook was injured occurred on 28 December 2000. NorthPower was aware of his injury on the day it happened. As the evidence in the case shows, it conducted its own investigation into the circumstances of the accident, and it participated in a WorkCover investigation. Its workers compensation insurer was notified promptly.
On 28 May 2002 the solicitor for NorthPower requested payment from Aircair, pursuant to section 151Z Workers Compensation Act 1987, of workers compensation payments that had been made to Mr Cook. On 27 June 2002 the solicitors for Aircair responded, saying:
“… we fail to see … why our client has any liability in relation to the injuries allegedly suffered by Mr Cook.
Could you please send all future correspondence to this firm regarding the claim.
If your client is intent on serving a statement of claim we have instructions to accept service.”
On 19 December 2003 Mr Cook commenced proceedings against Aircair in the District Court. At that stage, Aircair was the only defendant sued.
On 9 February 2004 the solicitors for Aircair wrote to Mr Cook’s solicitors, enclosing a Notice of Appearance, foreshadowing a request for particulars, and saying:
“… could you please explain how our client could be liable at all and further why NorthPower is not a defendant to the proceedings if your client is prepared to continue with them at all.”
On 21 April 2004 several events happened. Aircair filed a Defence in which it denied liability. Also, Aircair’s solicitors wrote to Mr Cook’s solicitors, saying:
“… we ask that you please explain how our client could be liable for the plaintiff’s injuries in circumstances where, we are instructed, your client:-
(a)entered the cotton field without first ensuring that the power line was not still live; and
(b)failed to see and avoid the live power line before making contact with it.
We maintain our view that our client has no liability in relation to the injuries suffered by the plaintiff, and suggest that your client consider joining NorthPower to the proceedings.”
At the time that NorthPower was ultimately joined to the proceedings, on 21 March 2006, the limitation period had expired. NorthPower was able to be joined only because Judicial Registrar McDonald, on 17 March 2006, gave Mr Cook leave to proceed against NorthPower and to amend his Statement of Claim. For the purpose of the application for that leave Mr Cook’s solicitor swore an affidavit that set out the circumstances of the delay in joining NorthPower. A theme of that affidavit is that it was only after some considerable delay that Mr Cook had evidence that he suffered more than 15% whole person impairment. The first evidence that Mr Cook had more than 15% whole person impairment came into his solicitor’s hands on 21 April 2004, when a report from a Dr Macarthur was received.
On 25 May 2004 Mr Cook’s solicitors conferred with junior and senior counsel. The advice given in that conference was confirmed by letter of 26 May 2004. The advice was to the effect that there was a cause of action on the statutory count. As well, Senior Counsel said:
“I would be concerned about joining the employer, the employer might well raise significant arguments concerning contributory negligence and the amount that can be recovered against the employer is limited in any event to economic loss. In short, the game may not be worth the candle.”
On 10 June 2004 Senior Counsel wrote to Mr Cook’s solicitors again, saying:
“I write further to my conversation with Mr Stewart of 7 June and confirm that on further consideration I am of the opinion that Mr Cook’s employers should be joined. It seems to me that there is a risk, if they are not joined, of a finding being made that they are partly responsible for the plaintiff’s injuries, and if that is so and if the Civil Liability Act 2002 applies, then the plaintiff’s recovery would be reduced by whatever percentage was found to be attributable to the negligence of the employer.
I am also of the view that whilst the probabilities are that a case brought against the employer would fail, it cannot be said, at least at this stage, that the prospects were so poor as to make a case not maintainable. I confirm that you will ask Mr Giagios to draft the process.”
On 2 July 2004 the solicitors for Mr Cook wrote to the solicitors for NorthPower seeking a concession that Mr Cook had more than 15% whole person impairment. On 15 November 2004, after Mr Cook had attended a medical appointment with an orthopaedic surgeon at the request of the insurers for NorthPower, the solicitors for NorthPower conceded that his degree of permanent impairment was at least 15%.
In the meantime, on 13 October 2004 Mr Cook had filed an Amended Statement of Claim, joining ACQ to the proceedings, and pleading the statutory count.
On 16 November 2004 the solicitors for Mr Cook sent to the solicitors for NorthPower a Notice of Claim.
On 23 November 2004 the solicitors for Mr Cook provided various particulars to the solicitors for NorthPower under section 282 Workplace Injury Management and Workers Compensation Act 1998.
On 20 January 2005 Aircair and ACQ filed a Notice of Cross-claim against NorthPower, alleging it had breached its duty of care to Mr Cook, and seeking contribution as a tortfeasor liable for the same damage. On the same day, Aircair and ACQ filed a Defence to the Amended Statement of Claim denying liability.
During the rest of 2005 particulars were provided, and a Pre-Filing Statement and Pre-Filing Defence were exchanged between the solicitors for Mr Cook and NorthPower. There was an attempt at mediation in the Workers Compensation Commission that came to nothing.
As mentioned earlier, it was only on 21 March 2006 that NorthPower was joined to the proceedings.
In the Defence that Aircair and ACQ filed to the Further Amended Statement of Claim by which NorthPower was joined, Aircair and ACQ continued to deny liability.
Principles Concerning Bullock and Sanderson Orders
The discretionary power that section 98 Civil Procedure Act 2005 gives to the court to determine costs, including by whom, to whom and to what extent costs are to be paid, is conferred “subject to rules of court and to this or any other Act.”
One rule of court that restricts that discretion is Uniform Civil Procedure Rule 42.1:
“Subject to this Part, if the court makes any order as to costs, the court is to order that the 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.”
If a Bullock Order, (named after Bullock v London General Omnibus Co [1907] 1 KB 264) were to be made in the present case, the costs of each appeal, and the costs in the court below, would follow the event, but any costs that Mr Cook was ordered to pay to NorthPower would be part of the costs that he was entitled to recover from ACQ and Aircair. If a Sanderson Order (named after Sanderson v Blyth Theatre Co [1903] 2 KB 533) were to be made in the present case, there would be no order for Mr Cook to pay any costs to NorthPower, but Aircair and ACQ (or one of them) would be ordered to pay NorthPower’s costs.
Gould v Vaggelas [1985] HCA 85; (1985) 157 CLR 215 concerned an action brought by the purchasers of a business against the vendor, alleging they had been induced to purchase the business by misrepresentations. In the alternative, they sued accountants who had advised them before purchase concerning the financial standing of the business. They succeeded against the vendors, but failed against the accountants. The trial judge made a Bullock Order relating to the costs the purchasers were ordered to pay the accountants. The Queensland Full Court set aside that order. The High Court in turn restored it. Gibbs CJ, at 229-230 said:
“… the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock Order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff’s error or overcaution.
The ground on which a Bullock Order may be made is … that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed “are ordered to be paid by the unsuccessful defendant, on the ground that … those costs have been reasonably and properly incurred by the plaintiff as between him and the [unsuccessful] defendant.” In Johnsons Tyne Foundry Pty Ltd v Maffra Corporation Williams J (1948) 77 CLR at 572-573 stated the principle in a similar way and Starke and Dixon JJ, in giving their reasons for making a Bullock order, both relied on the circumstance that the attitude adopted by the successful defendant had induced the plaintiff to join the other defendant (1948) 77 CLR at 559-560, 566. In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission (1978) 39 LGRA 94 at 100; 21 ACTA 23 at 30-31 when he said that:
“There is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant.””
Wilson J (with whom Murphy J agreed on this point), at 247, stated the test for when the making of a Bullock Order was permissible as being:
“… where the costs in question have been reasonably and properly incurred by the plaintiff and between him and the unsuccessful defendant.”
Brennan J, at 260, stated the test as being that the order can be made:
“… in an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiff’s claim against showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought.”
In Gould v Vaggelas the Bullock Order was restored notwithstanding that the causes of action against the accountants and the vendors (as Gibb CJ said at 231):
“… were unrelated. Failure against one does not mean success against the other.”
In Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179; (2000) NSWCCR 417 at [128] Mason P (with whom Stein and Heydon JJ agreed) quoted and applied the following summary of the law, taken from the judgment of Asche CJ in Lackersteen v Jones (No.2) (1988) 93 FLR 442 at 449:
“1.It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.
2.The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.
3.While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.
4.Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful.”
The case was a complex personal injury case where numerous defendants had been sued concerning injury caused by exposure to asbestos. Mason P, at [134] approved the reasoning of the trial judge as follows:
“The conduct of SIFC relating to the joinder of AEWL sufficient to justify a Bullock order was the denial of a duty by SIFC and the submission that "in the special circumstances of this case" AEWL owed a duty of care to the plaintiff. In circumstances where the plaintiff was facing a denial of duty or breach by all defendants this denial made it reasonable to find that as between the plaintiff and SIFC, where the plaintiff's injuries arose from transactions in which both SIFC and AEWL were intimately involved (employees of each had faced direct and repeated complaints by the men working with asbestos), it is just that SIFC bear the cost of the successful defendant, AEWL. If SIFC had not denied duty the joinder of AEWL would not have been necessary.”
In Almeida v Universal Dye Works Pty Ltd (No 2) [2001] NSWCA 156 Priestley JA made a Bullock Order, saying at [8]:
“… any conduct by the defendant or state of affairs in which the defendant is an integral part which makes it fair and reasonable for other parties to be joined as defendants will be relevant to deciding on fair costs orders”.
That case arose from an injury on a building site, all three defendants were under common control, and the plaintiff was unable to ascertain who was the occupier or head contractor in charge of work on the site.
In Roads and Traffic Authority of New South Wales v Palmer (No 2) [2005] NSWCA 140 Giles JA (with whom Spigelman CJ and Handley JA agreed) cited at [30] the following from his judgment in Sved v Municipality of Woollahra (1998) NSW Con R 55-852 at 55, 605:
“… reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant. Such conduct was found in Lackersteen v Jones (No 2) in the unsuccessful defendant denying the authority of its agent whereby the plaintiff joined the agent who became the successful defendant, and more widely has been found in the unsuccessful defendant telling that the plaintiff in one way or another that it should look to the successful defendant for its remedy (Altamura v Victorian Railways Commissioners; Gould v Vaggelas; Fennell v Supervision & Engineering Services Holdings Pty Ltd).”
That was a case where a plaintiff who was severely injured when her car went off the road sued the RTA, the local Council, and Pioneer. The RTA had funded the work, on quite detailed terms, but did not actually carry it out. The Court of Appeal held it did not owe a duty of care to the plaintiff. Pioneer was a road making contractor, who carried out the work in question under contract with the Council.
In RTA v Palmer (No 2) Giles JA said (at [34]-[35]):
“The plaintiff relied on the wide view of conduct in Almeida v Universal Die Works Pty Ltd (No 2). She said that it was an RTA road, the work was funded by the RTA, the Council and Pioneer were aware of the arrangements by which control over the road works were to be judged, but the Council and Pioneer denied liability to the plaintiff and made no admissions as to control. The Council and Pioneer each cross-claimed for contribution, and at least on appeal the Council submitted that the RTA was liable to the exclusion of the Council. In these circumstances, it was said, there was conduct of the Council and Pioneer which made it not only proper but essential for the plaintiff to join the RTA as defendant and maintain her claim against it.
It may have been reasonable for the plaintiff in her own interests to join the RTA as a defendant, but I do not think that there was conduct which made it just that the Council, and still less Pioneer, pay the costs payable by the plaintiff to the RTA. Neither the Council nor Pioneer created any circumstances of uncertainty as to who was the proper defendant. They were not obliged to concede liability or make admissions in order to remove the RTA from contention, there being a respectable argument that the RTA was liable, and there is no reason to think that short of effective capitulation by the Council and Pioneer the plaintiff would not have maintained her claim against the RTA. In my opinion, conduct has not been shown such as to make it fair to impose on the Council and Pioneer liability for the costs of the RTA.”
In Nominal Defendant v Swift [2007] NSWCA 56 a plaintiff injured in a road accident sued in the alternative, the Nominal Defendant (on the basis that the accident had been brought about by the manner of driving, of an unidentified vehicle) and the council (on the basis that the defective manner of construction of the road had materially contributed to the accident). The trial judge had found both the Nominal Defendant and the council liable. On appeal the judgment against the Nominal Defendant was upheld, but the judgment against the council was set aside. However Santow JA (with whom McColl JA agreed) made a Bullock Order against the Nominal Defendant. He said, at [99]:
“… the respondent was justified, even prompted, in bringing proceedings against the Council, by reason of the Nominal Defendant denying liability as it did disputing, inter alia, that it was an “unidentified vehicle”. That action made inevitable the joining of the Council by the respondent.”
Decision
Mr Menzies QC, counsel for Mr Cook, seeks the Bullock Order or Sanderson Order on the basis that it was reasonable for him to seek to join NorthPower on the basis, first, that it was reasonable and proper for Mr Cook to join NorthPower. The reasonableness of that course was said to arise from the fact that, prima facie, a cause of action in negligence existed against it, and as well, NorthPower pleaded guilty to charges brought against it under the Occupational Health and Safety Act 1983 following Mr Cook’s injury (Inspector Mason v Country Energy [2003] NSWIRComm 206).
I do not find the second factor persuasive. The charge to which NorthPower pleaded guilty was one under section 15(1) Occupational Health and Safety Act, which provides:
“Every employer shall ensure the health, safety and welfare at work of all the employer’s employees.”
An employer can breach that section without being negligent.
However, I accept that it was reasonable and proper for Mr Cook to join NorthPower. Even though his Senior Counsel advised that the probabilities were that the case would fail (and there was no evidence of that advice ever changing) the joinder of NorthPower occurred at a time when each of ACQ and Aircair had themselves joined NorthPower to the proceedings by way of cross-claim, and each had asserted in its cross-claim that NorthPower had caused Mr Cook’s injuries by its negligence. The bringing of those cross-claims are a potent admission of the reasonableness of Mr Cook suing NorthPower. When the cross-claims against NorthPower were already on foot, before NorthPower was joined, the action of Mr Cook in joining NorthPower was not the instigating cause of NorthPower incurring costs in defending the proceedings at first instance.
Mr Menzies also submits that there was a substantial connection between the causes of action sued on. I agree. Mr Curtin, counsel for ACQ and Aircair correctly points out that ACQ and Aircair were sued under a statute, while NorthPower was sued in tort, that the questions of duty and breach of an employer’s duty were different to questions of whether the statutory obligation arose, and that the negligence claims alleged against NorthPower and Aircair raised distinct questions as to existence, content and breach of duty. Notwithstanding those matters, Mr Cook was still suing all defendants in connection with the same damage, suffered in the same incident, that he alleged arose from breaches of obligations that the various defendants owed to him. A similar circumstance did not prevent the making of a Bullock Order in Gould v Vaggelas. It is not enough to prevent the making of a Bullock Order in the present case.
The question of whether there is something in the conduct of an unsuccessful defendant that makes a Bullock Order or Sanderson Order proper in the circumstances of the case needs to be considered separately in relation to Aircair and ACQ. It was only Aircair that, in the correspondence in February and April 2004, was contemptuous of Mr Cook’s prospects against Aircair, and positively suggested to Mr Cook’s solicitors that he should join NorthPower. (Though Mr Menzies also relied on the letter of 28 May 2002, that letter was written by the solicitor acting for NorthPower and was addressed to “Aircair Aviation”. There is no reason to believe it came to the attention of Mr Cook’s lawyers or influenced their conduct). However, even after Mr Cook’s Senior Counsel, on 10 June 2004, had changed his mind about whether NorthPower should be joined, Mr Cook did not join NorthPower until more than 18 months later.
Mr Curtin submits that a substantial reason why Mr Cook joined NorthPower was because he was assured of being able to overcome the damages threshold concerning degree of permanent impairment against NorthPower. From the sequence of events, I would infer that having available evidence, as at 21 April 2004, that the damages threshold was exceeded, was not enough to induce Mr Cook to take the step of joining NorthPower. Rather, the concession, on 15 November 2004; that the degree of permanent impairment exceeded 15%, was also needed before the balance was tipped.
But even obtaining that concession was not sufficient to tip the balance. It was still more than a year before NorthPower was joined, and an important event during that period of more than a year, was that Aircair and ACQ both joined NorthPower, by their own cross-claims.
In my view, the combined effect of the denials of liability by Aircair and ACQ, and their joinder of NorthPower by cross-claim before Mr Cook himself joined NorthPower are sufficient to justify the making of a Bullock Order or a Sanderson Order in the present case against each of ACQ and Aircair. That view is consistent with the conclusion reached in this Court in Balesfire Pty Ltd v Adams [2006] NSWCA 112 at [103]-[113]. Aircair’s positive suggestion that NorthPower be joined provides some extra justification for making such an order against Aircair.
No argument was advanced by any party about whether, if either a Bullock Order or a Sanderson Order was to be made, one of those types of order was more appropriate than the other. A Bullock Order could work unjustly, if Mr Cook were to recover from ACQ and Aircair the amount of the costs he was ordered to pay to NorthPower, but failed to pass that amount on to NorthPower. As well, the operation of a Sanderson Order is administratively cleaner than the operation of a Bullock Order, in that the payment is made directly by the person who the Court intends should bear the liability, to the person who the Court intends should receive the indemnity. As Beazley JA (with whom Ipp JA agreed) said in Coombes v Roads and Traffic Authority (No 2) [2007] NSWCA 70 at [42], “That order is more direct and will eliminate administrative and procedural steps that are unnecessary”. In these circumstances, I would propose making a Sanderson Order rather than a Bullock Order.
In the reasons for judgment concerning the substance of the appeal at [215]-[218] I expressed a preliminary view that the costs of the four separate appeals might appropriately be dealt with on a basis that aggregates the costs of the four separate appeals. However, the submissions of Mr Cook, and correspondence between the solicitors for NorthPower and other parties in which a measure of agreement has been reached, proceeds on the basis that separate orders will be made in relation to the four appeals. I will not disturb that consensus.
Orders
The orders I propose are:
In Appeal 40302/07
(1) ACQ to pay the costs of NorthPower of the appeal.
(2)ACQ to pay the costs of Mr Cook of the appeal on an indemnity basis.
In Appeal 40303/07
(1) Aircair to pay the costs of NorthPower of the appeal.
(2)Aircair to pay the costs of Mr Cook of the appeal on an indemnity basis.
In Appeal 40363/07
(1)ACQ and Aircair to pay the costs of NorthPower of the appeal, otherwise no order as to costs.
In Appeal 40454/07
(1)Aircair and ACQ to pay the costs of NorthPower of the appeal, otherwise no order as to costs.
In All Appeals
(1)Note that the appeals in matters 40302/07, 40303/07, 40363/07 and 40454/07 were in substance conducted as a single appeal, and direct that any assessment of costs be made accordingly.
(2)ACQ and Aircair to pay costs of the submissions relating to orders for costs.
(3) Orders for costs in the court below vacated, and in lieu thereof:
(a)ACQ and Aircair to pay Mr Cook’s costs on the ordinary basis to 17 November 2006, and on the indemnity basis from 17 November 2006.
(b) ACQ and Aircair to pay NorthPower’s costs.
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LAST UPDATED:
17 November 2008
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