Australian Education Union (SA) v Grieve

[2000] SASC 430

AUST EDUC UNION (SA) (FORMERLY SAIT) v GRIEVE
[2000] SASC 430

1................ WILLIAMS J  On 17 November 2000 I ordered that the plaintiff’s damages be assessed at $50 000 at the date of judgment for reasons which I then published (Judgment No. [2000] SASC 381). I am now required to deal with the costs of the action (other than the Full Court appeal).

1. On 5 August 2000 in the course of final addresses I received submissions from counsel as to questions of costs generally.  On 24 November 2000 I received supplementary submissions when my attention was drawn to the defendant’s offer to consent to judgment which was filed in accordance with the Rules of Court on 11 June 1997; the amount then offered namely $30 000  was not accepted.  The defendant contends that the amount was “adequate” in terms of Supreme Court Rules (“SCR”) 40.05 and seeks costs arising after 14 days from the date of offer.

2. Having regard to the manner in which I expressed the award for damages, it is convenient to restate in broad terms the effect of my decision in order to assess the adequacy of the offer on the date when it was made.  The defendant breached his obligations as an architect in 1985; his default would have attracted an award of $20 000 if the breach and its consequences had immediately come to light and if the damages had been then assessed.  In fact, the breach was not discovered until January 1994 and the action was commenced on 10 January 1995.  If I had assessed damage as at the date of commencement of the action (assuming it to be 10 years after breach) I would have awarded $40 000.  Thereafter I would have allowed interest at 10 per cent per annum on the original sum of $20 000 leading to the award of $50 000 in round terms some fifteen years after the original breach.  As at the date of the filed offer (about twelve years after the breach), the amount which I would have awarded (namely about $44 000) can be seen to be greater than the offer.  (I have used the same “rounded” figures as used by counsel - more exact calculations are unnecessary).  Although the amount offered could be classed as “realistic”, the fact remains that it is below the amount of my assessment (however one looks at the effect of my calculations).  I reject the defendant’s submissions that the amount offered was “adequate” in terms of the Supreme Court Rules.

3. The case proceeded to trial before me initially for 13 days (leading to my judgment of 4 June 1998) and there were further hearings regarding re-opening of evidence and then two days of final argument on 14 and 15 August 2000 to bring to account the Full Court’s decision. 

4. The defendant disputed liability and there was also a substantial issue as to assessment of damages.  The plaintiff claimed that the defendant had accepted supervisory responsibility as an architect in terms of his instructions to see that the plaintiff’s building was entirely cleared of asbestos.  I found against the plaintiff on this important issue, but found that the defendant’s obligation was only to achieve a reasonable result consistent with cost constraints.  There was an argument as to the implications associated with the building contract (which the defendant drew).  The Full Court differed from me in construing the contract in a way which led to the conclusion that the defendant failed to make vital inspections in the closing stages of work.  It also differed from my conclusion as to the steps involving in “brokering the deal” of which the defendant gave evidence concerning building owner and asbestos contractor.  There were other subsidiary issues before me which I will not separately identify; a determination of the status of the plaintiff’s field officer was one such issue.

5. When the matter was remitted to me for assessment of damages (and to deal with a question arising under the Limitation of Actions Act 1936 (SA)) there was an issue (already ventilated at trial) as to the extent of the remedial work for which the defendant was liable. The substantial question has always been as to the ambit of the defendant’s professional responsibility and as to what was reasonably required to make good if the defendant had defaulted in his inspections. By one route or another, the plaintiff claimed that the work needed to be “redone” in the costly manner undertaken in 1994. Whilst denying liability at all, the defendant claimed that the extent of the appropriate remedial work was quite small - a general clean up and respraying. I held that the work done in 1984 - 1985 should not be treated in effect as valueless and that it was not reasonable to require the defendant to bear the cost of the very extensive re-working of the job to a different standard and using a different method than that selected by the plaintiff in 1984. Eventually I accepted the force of the defendant’s submissions although my assessment was a little higher than the figures which the defendant placed before me. I rejected the primary thrust of the plaintiff’s approach to damages.

6. As recorded in my judgment of 17 November 2000 I held hearings on 20 December 1999, 4 April 2000 and 5 July 2000 to deal with an application by the plaintiff to re-open the evidence.  I have noted in my reasons of 17 November 2000 that the plaintiff was not prepared to give an undertaking to recall witnesses.  I took steps at that time to ensure that the plaintiff had an opportunity to reflect upon this decision which directly flowed through into my ruling as a factor for my decision (as appears on the face of my reasons).  In all the circumstances the defendant might fairly have an entitlement to costs of that application if I were minded to dissect the action into its component parts.

7. The plaintiff was successful in the action and I am conscious of the remarks of Jacobs J in Cretazzo v Lombardi [1975] 13 SASR 4 at 16:

   “But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law.  The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.  There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.”

8. There were a number of important issues in the case where the defendant was successful.  He succeeded to the extent of showing that the terms of his engagement did not require him to get rid of all asbestos; he was successful in his contention that reworking of the job at a cost (in 1994) in the vicinity of $200 000 was not reasonable as a basis for assessing damage.  I dismissed the plaintiff’s claim for delay costs associated with the 1994 project.  The defendant was also ultimately successful in resisting the application to re-open evidence.  However, the defendant unsuccessfully resisted an extension of time under the Limitations of Actions Act.  The defendant was found to be liable upon a limited basis and modest damages were awarded.  It is arguable that a costs order should recognise those aspects of the case where the defendant’s substantial success can be identified and measured against the plaintiff’s modest success as reflected in the final judgment.

9. However, s 40 of the Supreme Court Act 1935 (SA) (“SCA”) must be brought to account. It provides:

   “(1). Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.

   (2)If-

   (a)... an action for the recovery of damages or any other monetary sum is brought in the Court;

   (b)    the action might have been brought in the District Court; and

   (c)... the plaintiff recovers less than an amount fixed by the rules for the purposes of this paragraph,

   no order for costs will be made in favour of the plaintiff unless the court is of the opinion that it is just, in the circumstances of the case, that the plaintiff should recover the whole or part of the costs of action.”

I note the discretion left to me by the section.

1. In terms of SCR 101.02A the relevant amount fixed for the purposes of s 40(2) is $75 000.

2. All things having been considered, I am not disposed to exercise the discretion in favour of the plaintiff.  I have brought to account all that has been put to me by counsel in reaching this decision.  I have had regard to the amount recovered - which is considerably less than $75 000.  I have had regard to what was involved (particularly in terms of legal principle and its application and claimed difficulties in terms of the evidence).  I have had regard to the desire of the plaintiff to obtain the views of a Judge of this Court and the reasonableness of such a course.  The case had its challenges but it was one which the District Court would be well-equipped to handle.  Having regard to the extent of the defendant’s success, a just result will be achieved by making no order generally as to costs but subject to an exception as hereinafter mentioned.

3. On 4 June 1999 counsel came before me and argued as to the future course of the proceedings.  Eventually I vacated the bench on that day and the Chief Justice heard some submissions as a result of which the Full Court reconvened.  I propose to allow the plaintiff its costs in respect of the hearing before me on that day.  In allowing the plaintiff its costs for that day (which raised a discrete issue), I assume that these costs will cover the whole day and that there will be no application for any further costs orders for any part of that day.

4. In reaching my decision I note that s 40 refers to “the whole or part of the costs of action”. I have considered the matter from many angles to ensure that s 40 is not allowed to operate in a draconian fashion contrary to the will of Parliament. I have looked at the matter not only by weighing up (inter alia) the issues upon which the parties have respectively achieved success, but I have considered also the time which was occupied in dealing with the various points and their importance to and place in the case. I am aware that the plaintiff needed to establish a foundation of fact (as it did) to secure an extension of time for bringing the proceedings; I am aware that the defendant resisted the extension being granted. The fact is that the defendant has successfully resisted what might be regarded as the major claim (the existence of which may be seen as some justification for the decision to proceed in this Court). I have tested my analysis against the remarks of Jacobs J as quoted above.

5. My formal order is that the defendant pay to the plaintiff its costs of the hearing on 4 June 1999 (one full day) but that otherwise there be no order as to costs.