Bondi Beach Foods Pty Ltd v Chadwick (No 2)

[2023] NSWCA 308

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Bondi Beach Foods Pty Ltd v Chadwick (No 2) [2023] NSWCA 308

Hearing dates:

On the papers

Decision date:

15 December 2023

Before:

Gleeson JA; Leeming JA; Payne JA

Decision:

1. Subject to order 3 below, no order as to the costs of the proceedings in this Court, including the application for costs of the proceedings in this Court, with the intention that the parties bear their own costs.

2. Dismiss the notices of motion filed by Bucket List and Crossguard on 23 and 24 November 2023.

3. Bucket List and Crossguard to pay Mr Chadwick’s costs of the notices of motion filed on 23 and 24 November 2023.

Catchwords:

COSTS – costs of appeal – where both parties enjoyed measure of success – costs of trial – costs order made at first instance was a ground of appeal – no substantive submissions made on that ground, despite the absence of submissions being pointed out in writing and during the hearing of the appeal – defendants belatedly seek to vary order dismissing that ground of appeal – no basis shown to vary costs order

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 42.34

Cases Cited:

Bondi Beach Foods Pty Ltd v Chadwick [2023] NSWCA 265

Chadwick v Bondi Beach Food Pty Ltd (No 2) [2023] NSWSC 246

James & Ors v Surf Road Nominees Pty Limited & Ors [No 2] [2005] NSWCA 296

State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283

Category:

Costs

Parties:

Bondi Beach Foods Pty Ltd (Appellant; First Respondent to First Cross-Appeal; Second Respondent to Second Cross-Appeal)
Clinton Chadwick (First Respondent to Appeal and Second Cross-Appeal; Cross-Appellant in First Cross-Appeal)
Crossguard Group Pty Ltd (Second Respondent to Appeal and First Cross-Appeal; Cross-Appellant in Second Cross-Appeal)

Representation:

Counsel:
P M Morris SC (Bondi Beach Foods Pty Ltd)
D Lloyd SC and M Kalyk (Clinton Chadwick)
N Polin SC (Crossguard Group Pty Ltd)

Solicitors:
Meridian Lawyers (Bondi Beach Foods Pty Ltd)
Salerno Law (Clinton Chadwick)
Hall & Wilcox (Crossguard Group Pty Ltd)

File Number(s):

2023/115883

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2023] NSWSC 197

Date of Decision:

9 March 2023

Before:

Elkaim AJ

File Number(s):

2019/00307732

JUDGMENT

1. THE COURT: These reasons address two issues: costs of an appeal in which both parties enjoyed a measure of success, and costs at first instance, a point which has already been determined.

Background

2. This Court by its judgment delivered on 9 November 2023 allowed in part appeals brought by the two defendants (Bucket List and Crossguard) following a 13 day trial, and dismissed the cross-appeal brought by the plaintiff Mr Chadwick: Bondi Beach Foods Pty Ltd v Chadwick [2023] NSWCA 265. Mr Chadwick had visited licensed premises operated by Bucket List on a Friday evening in December, where he was struck and seriously injured by a patron, Mr Martin. The trial judge found that Mr Chadwick was entitled to succeed in two separate ways. One was that the patron Mr Martin and his group would, but for the breaches of duty by each of Bucket List and Crossguard, have been removed from the premises well in advance of Mr Chadwick’s arrival. The second was that both defendants breached their duty to provide sufficient licensed security guards, and if that had not occurred, then those guards more likely than not would have intervened to de-escalate and separate Messrs Martin and Chadwick when they were confronting each other, with the result that Mr Chadwick would not have been injured. On 9 March 2023 the primary judge entered a judgment in favour of Mr Chadwick against each of Bucket List and Crossguard of $200,706.40, incorporating an assessment of contributory negligence of 20%.

3. On appeal, this Court found that Mr Chadwick was entitled to succeed on only the second, and not the first, way in which his case was advanced. This Court also assessed contributory negligence at 50%, and set aside one component of the damages awarded (future economic loss of $25,000). The result was a judgment in Mr Chadwick’s favour against each of Bucket List and Crossguard of $112,941.50. This Court otherwise dismissed Bucket List’s appeal and Crossguard’s cross-appeal, as well as dismissing Mr Chadwick’s cross-appeal seeking a larger award of damages.

4. The primary judge ordered Bucket List and Crossguard to pay Mr Chadwick’s costs. Shortly thereafter, Crossguard applied for a variation of that costs order, and at a hearing on 17 March 2023 contended that the parties should bear their own costs in light of the size of the judgment obtained, which was less than the jurisdictional limit of the District Court and less than the $500,000 in r 42.34 of the Uniform Civil Procedure Rules 2005 (NSW). That application was rejected: Chadwick v Bondi Beach Food Pty Ltd (No 2) [2023] NSWSC 246. His Honour gave the following reasons at [18]-[25]:

The plaintiff, in written submissions, has concentrated on the medical case that was presented to the court, in particular surrounding the existence of organic brain damage and a major psychiatric injury.

I found against an organic brain injury and generally calculated non-economic loss based on a continuing, but diminishing, post-traumatic stress disorder, together with a minor orthopaedic injury and some scarring.

The fact that I made the above findings does not mean that the plaintiff’s case, on injury, was not put forward with appropriate foundation. The plaintiff, in particular through Dr Klug and Dr Rowe, provided evidence upon which brain damage and psychiatric injury could have been found. My findings were more based on my assessment of the plaintiff, as disclosed during the hearing, than any error made by either of the above two doctors. It is trite that an expert opinion will rise or fall on the validity of the assumptions upon which it is based.

Had I found in the plaintiff’s favour on the medical issues, there would have been a significant effect on my findings of non-economic loss and future economic loss. The former would have contemplated suffering for the remainder of the plaintiff’s life, the latter would have continued through to the end of the plaintiff’s working life.

Past economic loss and out of pocket expenses may also have increased, but probably to a lesser degree.

Without speculating as to what the different figures might have been, the result would have been to substantially increase the damages. This is illustrated by the effects of the Civil Liability Act 2002 which has an inversely progressive discounted scale for non-economic loss. For example, my assessment of 25% of a most extreme case produced a figure of $46,000. Had I found 30%, the figure would have been $162,000, and at 35% the figure would have been $246,500.

Another important element, I think, is that my findings on the plaintiff’s injury and continuing disability arose from the defendants’ largely successful attack on his credit. While there may be a fine line between an allegation of gross exaggeration and fraud, the attack in this case was very close to an allegation of fraud. As this had never been pleaded the plaintiff’s legal advisers had never been put on notice of the approach to be taken by the defendants and never considered this issue in the decision about the appropriate jurisdiction in which to commence the proceedings.

In my view, the commencement and continuation of the proceedings in the Supreme Court was warranted to the extent that I reject the application to amend my previously made costs orders.

5. One of Crossguard’s grounds of cross-appeal, ground 9, addressed the order made by the primary judge that the defendants pay the plaintiff’s costs. This was addressed at [281]-[283] of this Court’s reasons for judgment as follows:

Paragraphs 154-159 of Crossguard’s written submissions addressed this ground. Those submissions did not assert any error on the part of the primary judge in the exercise of his discretion. Mr Chadwick’s submissions in response said:

Crossguard does not identify any error at all, much less one within the principles stated under House v The King (1936) 55 CLR 499. The submissions only cite authorities. The primary judge gave reasons for why costs were awarded (Red 107-110) and no issue has been taken with those reasons. That discretion has not miscarried.

Crossguard filed written submissions in reply, but did not respond on that ground. Nor did Crossguard advance any oral submissions on this ground.

In those circumstances, there is no reason to depart from the unchallenged exercise of discretion by the primary judge. This was a complex hearing, with many issues in play, with three parties represented by senior counsel. The matters which led to the primary judge departing from the default position are not substantially altered by the conclusion that only one of Mr Chadwick’s bases of liability has been upheld. Nor are they altered by the increase in his contributory negligence from 20% to 50%.

6. In light of one aspect of the application now before the Court, it should be added that Bucket List made no submissions in relation to the exercise of the costs discretion at all, either in writing or orally.

7. Turning to the costs of the proceedings in the Court of Appeal, the reasons for judgment stated at [286]:

The result is limited success for all parties. It is possible that the appropriate order for costs in this Court be that each party pay his or its own costs, reflecting that outcome. However, there may be matters of which this Court is not aware, and it may also be that one or more parties wishes to be heard further as to costs. The orders I propose will permit that to occur.

8. Order 6 provided:

6. The parties to have leave to file and serve agreed orders within 14 days of today, or in the absence of agreement, short submissions not exceeding 3 pages as to the orders for costs of the proceedings in this Court, with each party having leave to file and serve short submissions not exceeding 2 pages in reply within 7 days thereafter.

9. Fourteen days thereafter, Bucket List supplied a submission which flagged an intention to make further submissions concerning the costs of the trial. Crossguard made a similar submission. That resulted in the following communication from the Court later the same day:

I refer to the submissions supplied by Mr Morris SC on 23 November 2023. In paragraphs 11 and 12, Bondi Beach Foods Pty Ltd makes a submission and states that if the Court accepts it, then it seeks leave to make (further) submissions with respect to the costs of the trial. Those further submissions have not been provided.

UCPR r 36.16 entitles a party to apply for further orders or to vary existing orders. If Bondi Beach Foods wishes to apply for further orders, then it should do so formally. Any submissions which Bondi Beach Foods wishes to make, upon which its application depends, should be included in that application.

The Court anticipates that all issues as to costs, at first instance and on appeal, will be resolved in a single judgment. The Court does not propose to rule on any party’s submission in advance, especially when it is undeveloped and the attitude of the other parties is unknown.

If Bondi Beach Foods wishes to apply under r 36.16, it should file a notice of motion today or tomorrow. The time period in r 36.16(3A) expires tomorrow. If Bondi Beach Foods makes such application, then it may be anticipated that the Court will alter the existing directions so as to permit Bondi Beach Foods to have, say, a further week to supply such submissions and evidence on which it seeks to rely, with an appropriate time for the other parties to be heard in response.

10. In accordance with that email, Bucket List filed a notice of motion on 23 November 2023, and Crossguard filed its own notice of motion on 24 November 2023. Both were in identical terms. Each was inelegantly drafted. Each sought two orders. The first was “That the order of the Court made 9 November 2023 having the effect of affirming order 2 of the Judgment of Elkaim AJ made 9 March 2023 be varied”. No such order of this Court was identified, for the good reason that there was none. Bucket List’s appeal and Crossguard’s cross-appeal were allowed in part, but not so as to alter order 2 made on 9 March 2023 which provided that “The defendants are to pay the plaintiff’s costs of the proceedings”. The fact that order 2 made on 9 March 2023 was not varied or set aside reflected the failure of ground 9 of Crossguard’s cross-appeal.

11. The second order sought is:

That the order with respect of costs of the proceedings in the Court below be varied so as to reflect and accommodate [Mr Chadwick’s] lack of success on dominant or severable issues in the proceedings. …

12. Bucket List and Crossguard supplied submissions directed to establishing that Mr Chadwick had obtained a much smaller judgment than he had sought, and that he had failed on various issues, said to be either dominant or separable (using the language of some of the decisions in this area, including James & Ors v Surf Road Nominees Pty Limited & Ors [No 2] [2005] NSWCA 296 at [32]). Mr Chadwick’s submissions rightly pointed out that neither submission addressed the threshold question, which is why either side ought to be permitted to raise arguments substantially in support of ground 9 of Crossguard’s cross-appeal when they had an opportunity to do so in the two days set down for the hearing, and they had declined to do so.

13. In reply, Bucket List “conceded” that “the possibility of this application should have been foreshadowed during the appeal and leave sought to ventilate the issue following the delivery of the judgment of this Court”. The submission continues:

It is unrealistic to claim, as Chadwick does, that the costs consequences of possible outcomes could have been fully addressed at the hearing of the appeal. The substance of the appeal and Chadwick’s cross-appeal (only discontinued during the second day) occupied most of the two days allocated to the parties.

14. Bucket List then submitted that the application should be heard, because, so it was said, (a) Mr Chadwick failed on the issues which occupied most of the trial time, (b) this Court was not at a disadvantage compared to the primary judge, (c) whether Mr Chadwick had achieved substantial success given this Court’s findings had not been the subject of prior consideration and determination, and (d) “the lack of proportion between the amount recovered and the costs incurred underlines the certainty that an award of unrestricted party/party costs in favour of Chadwick would not reflect [Bucket List’s] substantial success in the proceedings”.

15. The submissions of each of Mr Chadwick and Bucket List pointed to reasons in favour of and attacking the exercise of discretion as to costs of the primary judge. Each relied on solicitor’s affidavits concerning the issues, or the quantification of those issues. None of these submissions need be summarised.

16. No party sought an oral hearing.

Re-exercising the discretion as to costs at first instance

17. We do not accept that there was no opportunity to be heard as to the costs at first instance in the two days set down for the appeal. First, all parties had an opportunity to be heard in writing on ground 9 of Crossguard’s cross-appeal. Secondly, Mr Chadwick’s written submissions made the point, which was accurate as well as uncontradicted, that Crossguard’s submissions failed to identify error. There was an opportunity in written submissions in reply to respond to that. That opportunity was not taken. Perhaps more importantly, there was ample opportunity in oral addresses to be heard on this issue. The point was scarcely one that was hidden or subtle. It was perfectly clear that the parties’ costs would have dwarfed the relatively small judgment obtained by Mr Chadwick. Nor was there any shortage of time. Oral addresses of Bucket List and Crossguard completed in the afternoon of the first day. And yet nothing was said in relation to the issue, save for the following factually accurate submission made by counsel for Mr Chadwick (Tcpt, 21 September 2023, p 95):

Before going on, I will say something about loss. I don’t intend to deal with Mr Polin’s appeal ground in respect of the primary judge’s cost order. He said nothing about that orally. We observe that there is not an [inkling] of his engagement of The House v The King principles on attack on that judgment.

18. That was the basis on which ground 9 of Crossguard’s cross-appeal was dismissed.

19. The submissions advanced by Bucket List and Crossguard do not even address the fact that this ground has been raised and determined.

20. In substance, the motion seeks to alter the result of ground 9 of Crossguard’s cross-appeal. There are occasions when the power under UCPR r 36.16 is available to do just that, for example where the Court has proceeded on an erroneous basis, or has overlooked a submission. The authorities are collected in State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283, as Mr Chadwick’s submissions noted. That is far removed from the present case.

21. The power in r 36.16 is not intended to give litigants who chose not to advance submissions on a point raised on appeal a further opportunity to do so after judgment has been delivered and orders made. In State of New South Wales v Hollingsworth (No 2) at [17], this Court constituted by Mitchelmore, Stern JJA and Basten AJA said:

As is well-established, the power conferred by UCPR, r 36.16 is to be exercised “sparingly and with caution” having regard to the importance of the finality of litigation, and “does not give a licence to disgruntled litigants to re-agitate, in the hope of obtaining a more favourable outcome, issues that have been determined against them”: Majak v Rose (No 5) [2017] NSWCA 238 (“Majak”) at [12]-[13] (Leeming and Simpson JJA, Emmett AJA).

22. It is true that the outcome of a judgment in favour of Mr Chadwick in the amount of $112,941.50 is materially less than the result reached at trial, where the judgment was $200,706.40. But that different outcome does not bear upon the reasons by which the primary judge confirmed the order that the defendants pay Mr Chadwick’s costs. Even now it is not asserted that any aspect of those reasons, which have been reproduced above, is incorrect.

23. Finally, we would note that this Court’s decision establishes that Bucket List and Crossguard are liable to Mr Chadwick for a substantial judgment based on physical injury he sustained at the premises in which those parties conducted their business. Both at trial and on appeal, each of Bucket List and Crossguard denied that he was entitled to a dollar. While the damages awarded are much more modest than those claimed, they are substantial, and it was open to the trial judge to reach the conclusion that he did.

Costs of the proceedings in this Court

24. Bucket List seeks an order that Mr Chadwick pay 80% of its costs on appeal, on the basis that “the limited success on the part of Chadwick would be met more appropriately” by such an exercise of discretion. Crossguard adopts Bucket List’s submissions.

25. Mr Chadwick sought an order that Bucket List and Crossguard pay 60% of his costs of the appeal including the cross-appeals, on the basis that numerous issues were sought to be agitated on appeal, unsuccessfully, by Bucket List and Crossguard, and the points on which they succeeded in altering the judgment (namely, contributory negligence and future economic loss) occupied relatively little of the parties’ oral and written submissions.

26. The main attack in this Court was on liability. Bucket List and Crossguard could only succeed in setting aside the judgments against them if they altered the findings of breach and causation in respect of both ways in which Mr Chadwick’s case was advanced. In that endeavour they failed, and those issues occupied the largest portion of the submissions and the reasons of this Court.

24. On the other hand, Mr Chadwick was unsuccessful in respect of contributory negligence, and one aspect of damages, and entirely unsuccessful on his cross-appeal. The appropriate order as to costs in this Court to reflect the mixed success is that there be no order as to costs.

25. There should also be no order as to the costs of the applications for the exercise of the discretion as to the parties’ costs in this Court. However, no proper basis has been put forward to exercise the power under r 36.16 to vary the outcome of ground 9 of Crossguard’s appeal. Mr Chadwick should never have been vexed with the notices of motion. Each motion should be dismissed with costs.

26. The Court’s orders therefore are:

1. Subject to order 3 below, no order as to the costs of the proceedings in this Court, including the application for costs of the proceedings in this Court, with the intention that the parties bear their own costs.

2. Dismiss the notices of motion filed by Bucket List and Crossguard on 23 and 24 November 2023.

3. Bucket List and Crossguard to pay Mr Chadwick’s costs of the notices of motion filed on 23 and 24 November 2023.

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Decision last updated: 15 December 2023