Aerolink Air Services Pty Ltd v Bankstown Airport Limited (No. 2)

[2019] NSWSC 1853

Supreme Court

New South Wales

Medium Neutral Citation:	Aerolink Air Services Pty Ltd v Bankstown Airport Limited (No. 2) [2019] NSWSC 1853
Hearing dates:	On the papers: plaintiff’s submissions 25 October 2019; defendant’s submissions 17 October 2019
Date of orders:	20 December 2019
Decision date:	20 December 2019
Jurisdiction:	Common Law
Before:	White J
Decision:	Order that the defendant pay one-third of the plaintiff’s costs of the proceedings to date referable to issues of liability.
Catchwords:	COSTS — party/party — general rule that costs follow the event — where multiple issues at trial — where plaintiff not successful on all issues — no issue of principle
Cases Cited:	Bowen Investments v Tabcorp Holdings Ltd (No. 2) [2008] FCAFC 107 Priestley v Priestley (No. 2) [2016] NSWSC 1259 Wyzenbeek v Australasian Marine Imports Pty Ltd (No. 3) [2019] FCA 439
Category:	Costs
Parties:	Aerolink Air Services Pty Ltd (Plaintiff) Bankstown Airport Limited (Defendant)
Representation:	Counsel: C P O’Neill (Plaintiff) P Bennett, solicitor (Defendant)   Solicitors: TPS & Co (Plaintiff) Holman Webb (Defendant)
File Number(s):	2016/22582

Judgment

1. WHITE J: On 27 September 2019 I gave judgment for the plaintiff for damages to be assessed on a limited basis (Aerolink Air Services Pty Ltd v Bankstown Airport Ltd [2019] NSWSC 1283). I observed:

“175   Aerolink has succeeded on one of its claims but has failed on its principal claim. However, Aerolink succeeded on a substantial issue at trial as to the cause of the fire which, prima facie, was a separable and perhaps dominant issue in respect of which substantial costs would have been incurred. I will make directions for the parties to provide written submissions on costs.”

2. BAL submitted that there were essentially two issues for trial, namely, whether Aerolink could recover damages for losses it sustained as a result of the fire and, secondly, its “post-fire bailment claim” that involved a small portion of the hearing time at best. BAL submitted that it was the party who substantially succeeded at the trial. It sought an order that Aerolink pay 90 per cent of its costs, or, alternatively, that both parties pay their own costs in relation to the cause of the fire and that Aerolink pay BAL’s costs in relation to one of the issues in the proceedings, namely, whether BAL owed Aerolink the duty as alleged by Aerolink.

3. Aerolink submitted that it succeeded at trial. It submitted that, prima facie, it was entitled to all of its costs of the proceedings, both because it succeeded on part of its claim and because it succeeded on a major issue at trial as to the cause of the fire. It failed on its claim for damages arising from the fire because of my findings as to the effect of the parties’ contractual agreements that I found excluded the duty alleged. The evidence concerning those agreements was largely uncontroversial. Aerolink submitted that it should receive all of its costs or otherwise should receive all except a small proportion of its costs.

4. It is not known whether the damages to which Aerolink is entitled pursuant to my orders will be small or large. Neither party submitted that I should not determine the costs of the proceedings on the issues of liability because a costs order might be affected by an offer of compromise.

5. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides:

“42.1   General rule that costs follow the event (cf SCR Part 52A, rule 11)

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.”

6. For the reasons I gave in Priestley v Priestley (No. 2) [2016] NSWSC 1259 at [41]-[49] there is some doubt as to whether “the event” for the purpose of the rule refers to the overall result of the litigation or the outcome of particular issues, and if the former whether the outcome is to be judged from the plaintiff’s perspective only, or from both parties’ perspectives. (See also Wyzenbeek v Australasian Marine Imports Pty Ltd (No. 3) [2019] FCA 439 at [39]).

7. It is unnecessary to explore this question, which in any event was not the subject of submissions. As Finkelstein and Gordon JJ said in Bowen Investments v Tabcorp Holdings Ltd (No. 2) [2008] FCAFC 107 at [5], if an issue by issue approach produces a result that is fairer than giving the successful party all of his or her costs, notwithstanding his or her failure on particular issues, then the issue or issue approach should be adopted.

8. The cause of the fire was a separable issue. It was the dominant issue at the hearing in terms of time taken, and in the evidence prepared before hearing. On this issue Aerolink succeeded. But for the issue as to the cause of the fire, the costs incurred by both parties would have been much less than what they must be. On the other hand, there would have been no issues as to the cause of the fire had Aerolink’s claim been confined to that on which it succeeded.

9. Aerolink’s principal claim was for damages for its losses caused by the fire. On that issue it failed.

10. Aerolink succeeded on its alternative claim and thus has had some success.

11. Weighing these considerations, I consider that Aerolink should be entitled to a proportion of its costs of the proceedings to date, except for any costs that might have been incurred in respect of the assessment of damages. That is, the costs order is to apply only in respect of costs incurred referable to issues of liability. A costs order in respect of costs incurred in relation to the assessment of damages must await the outcome of that assessment.

12. The assessment of that proportion is necessarily impressionistic. I conclude that BAL should pay one-third of Aerolink’s costs of the proceedings to date referable to issues of liability, and excluding costs that may have been incurred in respect of the assessment of damages.

13. Accordingly, I make the following order:

1. Order that the defendant pay one-third of the plaintiff’s costs of the proceedings to date referable to issues of liability.

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Decision last updated: 20 December 2019