Boral Australian Gypsum Ltd v Victorian WorkCover Authority
[2015] VSCA 187
•21 July 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0076
| BORAL AUSTRALIAN GYPSUM LIMITED (ACN 004 231 976) | First Appellant |
| - and - | |
| BORAL PLASTER FIXING PTY LIMITED (ACN 004 111 479) | Second Appellant |
| v | |
| VICTORIAN WORKCOVER AUTHORITY | First Respondent |
| - and - | |
| PAUL RAYMOND HOUSDEN | Second Respondent |
---
| JUDGES: | TATE, SANTAMARIA and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | Written submissions |
| DATE OF JUDGMENT: | 21 July 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 187 |
| JUDGMENT APPEALED FROM: | [2014] VCC 850 (Judge Misso) |
---
COSTS – Special costs order – Bullock order – Appeal from dismissal of third party proceeding commenced when unsuccessful plaintiff appealed in principal proceeding – GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55; Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd (2010) 31 VR 46; Boz OnePty Ltd v McLellan (No 2) [2015] VSCA 145, considered.
---
| APPEARANCES: |
| No appearances. The Court considered the written submissions of the parties. |
TATE JA
SANTAMARIA JA
McLEISH JA:
On 25 June 2015, this Court published its reasons dismissing the appeals in matters S APCI 2014 0071, in which Paul Raymond Housden (‘Housden’) was the appellant and Boral Australian Gypsum Ltd and Boral Plaster Fixing Pty Ltd (‘the Boral companies’) were the respondents (‘the principal appeal’), and S APCI 2014 0076, in which the Boral companies were the appellants and the Victorian Workcover Authority (‘VWA’) and Housden were the respondents (‘the second appeal’).[1]
[1]Housden v Boral Australian Gypsum Ltd; Boral Australian Gypsum Ltd v Victorian Workcover Authority [2015] VSCA 162 (‘Reasons’).
On 25 June 2015, orders were pronounced dismissing both appeals. When those orders were pronounced, the Boral companies said that they wished to make a submission that a special costs order should be made which would have the result that Housden pay their costs of the second appeal and indemnify them for the costs they had been ordered to pay to VWA in the second appeal. In effect, the Boral companies asked the Court to make a ‘Bullock’ order.[2] An application for a similar order was made at trial and it was rejected.
[2]Bullock v London General Omnibus Co [1907] 1 KB 264; Victoria v Horvath [No 2] [2003] VSCA 24 [7].
The orders made by the Court on 25 June 2015 were as follows:
S APCI 2014 0071
(1) The appeal is dismissed.
(2)The appellant pay to the first respondent and the second respondent their costs of the appeal, including any reserved costs.
S APCI 2014 0076
(1) The appeal is dismissed.
(2)The appellants pay to the first respondent its costs of the appeal, including any reserved costs.
(3)The appellants file and serve brief written submissions of no more than 3 pages on the question whether a special order for costs should be made against the second respondent on or before 1 July 2015.
(4)The second respondent file and serve brief written submissions of no more than 3 pages in response to the appellants’ submissions on the question whether a special order for costs should be made against the second respondent on or before 6 July 2015.
In our opinion, the order sought by the Boral companies should be made. In the reasons that follow, familiarity with the Court’s Reasons is assumed.
The second appeal arose out of third party proceedings instituted by the Boral companies in which they sought contribution and/or indemnity from VWA in respect of any damages and legal costs recovered from them by Housden. The Boral companies alleged that Housden’s plastering services were supplied to them pursuant to an agreement made between them and Stebec Pty Ltd (‘Stebec’), which employed Housden, and that Stebec had agreed to indemnify the Boral companies in respect of any liability which they may have to Housden. Further, the Boral companies claimed contribution and/or indemnity pursuant to the provisions of the Wrongs Act 1958 in respect of the injury allegedly sustained by Housden, on the basis that, if Housden had sustained injury as he alleged, such injury had been caused and/or contributed to by the negligence and/or breach of statutory duty of Stebec. As Stebec had been deregistered, the Boral companies alleged that they were entitled to an indemnity from VWA, as Stebec’s insurer, pursuant to s 601AG of the Corporations Act 2001 (Cth).
In its turn, VWA instituted proceedings pursuant to s 138 of the Accident Compensation Act 1985 against the Boral companies seeking indemnity with respect to the compensation paid to or in respect of Housden under that Act as an employee of Stebec. Housden was not a party to those proceedings and no appeal was brought in respect of them.
The Boral companies contend that it was necessary for them to commence the second appeal in order to protect their third party proceedings against VWA in the event that Housden was successful in the principal appeal. Given that Housden had appealed the judgment against him below, it was a natural consequence that they would have to file an appeal against the dismissal of their third party proceedings against the VWA. The Boral companies accepted that most of the issues that would have had to have been decided in their third party proceedings against the VWA had not been decided because the judge had dismissed Housden’s claim against them. However, they contended that their action had been reasonable and that the second appeal had not taken up much of the Court’s time.
The Boral companies relied on the recent decision of this Court in Boz OnePty Ltd v McLellan (No 2)[3] in support of their application. In that case, the Court observed that, generally speaking, the principles that apply to costs as between a plaintiff and a defendant also apply as between a defendant and a third party, but that, depending on the circumstances of the case, including the conduct of the plaintiff and the degree of connection between the principal proceedings and the third party proceeding, a plaintiff may be ordered to pay a third party’s costs either directly (by means of a Sanderson order[4]) or indirectly (by means of a Bullock order).[5]
[3][2015] VSCA 145 (‘Boz One’).
[4]Sanderson v Blyth Theatre Co [1903] 2 KB 533.
[5]Boz One [2015] VSCA 145 [42].
In Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd,[6] the Court said that, where a third party claim is dismissed because the plaintiff’s claim against the defendant fails, the defendant will ordinarily be liable for the third party’s costs of the third party proceeding. However, circumstances may warrant a departure from that rule, including by the making of an order that the plaintiff bear the third party’s costs either directly or indirectly. In deciding whether such a departure is warranted, it will ordinarily be necessary to consider at least:
[6](2010) 31 VR 46 (‘Kheirs’).
(a) the reasonableness of the defendant’s decision to join the third party;
(b) whether that joinder was reasonably foreseeable by the plaintiff, such that the plaintiff might be viewed as having some responsibility for the costs of the third party proceeding; and
(c) the responsibility of the respective parties for the time taken up in the hearing of the third party proceeding.[7]
[7]Kheirs (2010) 31 VR 46, 54–5 [28].
To these considerations, there may be added:
(d) whether the third party claim raised ‘private issues’ such that the third party was not necessarily joined because of the plaintiff’s claim;
(e) whether the plaintiff’s claim was the catalyst for the third party claim or had made it ‘inevitable’;
(f) the relationship between the original claim and the third party claim.[8]
[8]GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55, 69–70 [73]–[75] (‘GEC’); Boz One [2015] VSCA 145 [36], [42] (n 35).
In GEC, Finn J described the last of these factors as ‘perhaps the most significant … consideration’.[9] He further cautioned that causation alone was not sufficient to justify an order requiring a plaintiff to pay a third party’s costs, nor is a plaintiff to be made liable for any third party claim a defendant sees fit to make.[10] Accepting that to be so, where the plaintiff’s claim reasonably prompted the bringing of third party proceedings, most commonly a court will order that the successful defendant is entitled to recover from the plaintiff both the defendant’s own costs and those of the successful third party which the defendant has been ordered to pay.[11]
[9]GEC (2003) 201 ALR 55, 70 [75].
[10]Ibid 70 [73], [74].
[11]See G E Dal Pont, Law of Costs (LexisNexis Butterworths, 3rd ed, 2013) [11.36]. This understanding is apparent, for example, in Burke v Gillett [1996] 1 VR 196, 201 and Mifsud v ICT Pty Ltd (1997) 7 Tas R 148, 152–3 (a case involving claims similar to the present).
The written submissions made on behalf of Housden emphasized that the present case is one in which the claim by the Boral companies against the VWA rested on matters that were not resolved by the result in the principal appeal. Because of the way in which the proceedings were conducted below, practically none of the issues which need to be determined in the third party proceedings for the Boral companies to be successful have been determined. For example, it was not determined whether Stebec was liable under any indemnity agreement to the Boral companies. It was not determined whether Stebec or the Boral companies were his employer or if Stebec owed him a duty of care. Accordingly, it has not been determined that the Boral companies had established that Stebec was liable to them under an indemnity agreement such as to trigger the operation of s 601AG of the Corporations Act 2001 (Cth). Further, it was not shown that any insurance contract with the VWA covered the liability alleged by the Boral companies under the indemnity agreement alleged with Stebec.
In our opinion, the fact that the claims in the third party proceeding did not need to be resolved is not of decisive importance. It will often be the case, when a plaintiff’s claim against a defendant fails, that it is not necessary to determine the merits of a claim which the defendant brought against a third party in the event that the plaintiff’s claim had succeeded. More importantly, the claims that have not been resolved concern the Boral companies’ liability for the injury alleged by Housden in the principal proceeding and necessarily raise legal and factual issues potentially bearing on that liability.
As the Boral companies submitted, Housden’s conduct in commencing the principal appeal precipitated the commencement of the second appeal. It was reasonable for the second appeal to be brought, in order to preserve the position of the Boral companies in the event that the principal appeal had succeeded. The written submissions of both the Boral companies and VWA in respect of the second appeal were brief and their oral submissions were, quite properly, directed to the issues upon which the principal appeal was decided. In the circumstances, Housden should pay the costs of the Boral companies in both appeals and the costs ordered to be paid by them in respect of the second appeal.
We will therefore order in the second appeal that the second respondent pay to the appellants their costs of that appeal and the costs ordered to be paid by them in that appeal to the first respondent. The appellants’ costs of the appeal include the costs of the present application.
---
5
0