Bartlett v Weatherill (No 2)

[2017] NSWSC 181

Supreme Court

New South Wales

Medium Neutral Citation:	Bartlett v Weatherill (No 2) [2017] NSWSC 181
Hearing dates:	On the papers
Decision date:	06 March 2017
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	See [11]
Catchwords:	COSTS – party seeking monetary sum who fails to obtain judgment is unsuccessful party, even if breach established – no reason shown to depart from the general principle that costs ought follow the event
Legislation Cited:	Suitors’ Fund Act 1951 (NSW), s 6 Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)), s 18 Uniform Civil Procedure Rules 2005 (NSW), r 42.1 Civil Procedure Act 2005 (NSW), s 98
Cases Cited:	Bartlett v Weatherill [2017] NSWSC 31 Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd (1985) 1 NSWLR 491
Category:	Costs
Parties:	Clinton Garth Bartlett (Plaintiff) Colin Weatherill (Defendant)
Representation:	Counsel: RC Gration (Plaintiff) JA Darvall (Defendant)   Solicitors: WMD Law (Plaintiff) Freedman & Gopalan Solicitors (Defendant)
File Number(s):	2016/00228657

Judgment

Introduction

1. On 6 February 2017 I published reasons allowing the appeal brought by the plaintiff in this Court (Mr Bartlett) against the defendant in this Court (Dr Weatherill): Bartlett v Weatherill [2017] NSWSC 31 and reserved the question of costs. The parties were directed to file submissions if they sought an order other than that the costs ought follow the event (which would have resulted in Dr Weatherill being ordered to pay the costs of the proceedings in this Court and in the Local Court; and the costs orders in the Local Court being set aside).

The parties’ submissions

2. It is accepted by Dr Weatherill that he should pay the costs of the proceedings in this Court. He seeks a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of these costs. He contended that the costs order in the Local Court should not be disturbed or, in the alternative, that it should be disturbed “to such extent as the Court sees fit”. It was submitted on behalf of Dr Weatherill that since the Local Court found, contrary to Mr Bartlett’s defence, that Mr Bartlett had contravened s 18 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)), it was appropriate that Mr Bartlett pay Dr Weatherill’s costs of the Local Court proceedings, since it was necessary for him to litigate in order to obtain that finding.

3. Mr Bartlett submitted that the appropriate orders were the ones foreshadowed as being in accordance with the general rule that costs ought follow the event: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1. He submitted that, since the result of the Local Court proceedings, following his appeal to this Court, was that he obtained a judgment against Dr Weatherill, there was no reason to depart from the general rule.

Consideration

4. There is a broad discretion as to costs: s 98 of the Civil Procedure Act 2005 (NSW). However the general rule is that costs follow the event: UCPR, r 42.1. In order to work out the operation of the general rule, it is necessary to identify who is the successful party and who is the unsuccessful party. For example, a defendant who has been found to be liable in negligence for damages of $50,000 will be the unsuccessful party. However if the defendant has made an offer, without prejudice except as to costs, or an offer of compromise, of $100,000, the making of that offer, if not accepted by the plaintiff, converts the defendant into the successful party, at least from the date of the offer.

5. If a plaintiff seeks a money judgment, and establishes a wrong (such as breach of s 18 of the Australian Consumer Law) but fails to prove loss, the plaintiff may, though successful on one point (breach), be unsuccessful on another (damage). If the net result of such proceedings is that the defendant obtains judgment against the plaintiff, the plaintiff is generally regarded as the unsuccessful party. The question may become more complicated where a plaintiff seeks a declaration of breach as well as damages. In such a case, “success” on the declaration of breach would need to be weighed against “failure” in terms of any monetary remedy, to determine the appropriate costs order.

6. In the proceedings in the Local Court, Dr Weatherill sought only one remedy: judgment for a monetary sum. He succeeded in the Local Court by obtaining a judgment for $25,000. He obtained an order for costs in his favour, which included an order for indemnity costs on the basis of an Offer of Compromise he had made to resolve the proceedings for a judgment of $20,000 in his favour. However, the result of the proceedings in this Court is that the Local Court judgment in favour of Dr Weatherill was set aside and a judgment in favour of Mr Bartlett was substituted. Accordingly, Mr Bartlett was, ultimately, the successful party in the Local Court (following the appeal to this Court).

7. Although Dr Weatherill might have felt aggrieved by Mr Bartlett’s conduct, which was found to be a breach of the Australian Consumer Law, he was not entitled to the remedy he sought (judgment for a money sum) unless he could show that he had suffered loss. For reasons given in the principal judgment, the evidence showed that he was actually better off as a result of Mr Bartlett’s conduct.

8. In these circumstances, I consider the appropriate orders to be to set aside the costs orders in the Local Court and order that Dr Weatherill pay Mr Bartlett’s costs of the Local Court proceedings.

9. There remains the issue of whether a certificate ought be given under the Suitors’ Fund Act. Whether a certificate ought be granted in the present case is a matter of discretion: s 6(5). This Court has power under s 6(1)(a) to grant a certificate under the Suitors’ Fund Act. Although the purpose of such a certificate is not expressed, its purpose can be gleaned from a reading of the Suitors’ Fund Act as a whole. In Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd (1985) 1 NSWLR 491, Kirby P outlined the applicable principles that guide the interpretation of s 6. His Honour identified the purpose of the statute as:

“. . .the relief of a party who incurs or becomes liable for costs not through his own decision or conduct but because of some error of law of the court appealed from.”

10. The Magistrate was, as I have found, in error in ordering judgment in favour of Dr Weatherill in the sum of $25,000 when there was no evidence of loss, and, indeed, the evidence established that Dr Weatherill was better off. However, the error was the result of the submissions made on behalf of Dr Weatherill. Judicial officers are entitled to be assisted by counsel in the identification of the correct legal principles and the correct application of the law. This is particularly so in the Local Court where Magistrates do not have ready access to transcript and are often required to hear civil cases in several discrete days over a course of months, as occurred in the present case. Dr Weatherill is bound by the conduct of his counsel. In these circumstances I am not persuaded that it is appropriate to grant a certificate under the Suitors’ Fund Act.

Orders

11. For the foregoing reasons, I make the following orders:

1. In Local Court Proceedings 2014/00338451:

1. Set aside the following orders:

1. The defendant (Mr Bartlett) plaintiff to pay the plaintiff’s (Dr Weatherill’s) the costs as agreed or assessed on the ordinary basis up to 12 November 2015; and

2. The defendant (Mr Bartlett) to pay the plaintiff’s (Dr Weatherill’s) costs as agreed or assessed on an indemnity basis from 13 November 2015.

2. In lieu thereof, order the plaintiff (Dr Weatherill) to pay the defendant’s (Mr Bartlett’s) costs of the proceedings in the Local Court.

2. In the proceedings in this Court, order the defendant (Dr Weatherill) to pay the plaintiff’s (Mr Bartlett’s) costs of the proceedings.

3. Refuse the defendant’s (Dr Weatherill’s) application for a certificate under the Suitors’ Fund Act 1951 (NSW).

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Decision last updated: 06 March 2017