Caffey v Leatt-Hayter
[2013] WASC 348 (S)
•18 OCTOBER 2013
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA |
| CITATION | : CAFFEY -v- LEATT-HAYTER |
[No 3] [2013] WASC 348 (S)
| CORAM | : BEECH J | ||
| HEARD |
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| DELIVERED |
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| FILE NO/S |
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| BETWEEN |
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ROSE ANGELA CAFFEY
JAMES DALE CAFFEYSecond Plaintiffs
AND
GEOFFREY RICHARD LEATT-HAYTER JOSCELYN ROYSTON LEATT-HAYTER First Defendants
SEASIDE CORPORATION PTY LTD
Second Defendant
Catchwords:
Costs - First plaintiff successful against some defendants and unsuccessful against another defendant - Whether successful defendant should have all or only a portion of her costs - Whether Bullock or Sanderson order should be made against unsuccessful defendants in relation to successful defendant's costs
[2013] WASC 348 (S)
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1
Result:
Plaintiffs pay the second named first defendant's costs of the action
Category: B
Representation:
Counsel:
| First Plaintiff | : | On the papers |
| Second Plaintiffs | : | On the papers |
| First-named First Defendant | : | On the papers |
| Second-named First Defendant : | On the papers | |
| Second Defendant | : | On the papers |
Solicitors:
| First Plaintiff | : | Henry Sklarz |
| Second Plaintiffs | : | Henry Sklarz |
| First-named First Defendant | : | Cullen Babington Macleod |
| Second-named First Defendant : | Cornerstone Legal | |
| Second Defendant | : | Cullen Babington Macleod |
Case(s) referred to in judgment(s):
Amaca Pty Ltd v Hannell [2007] WASCA 158 (S)
Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 (S)
Bullock v London General Omnibus Co [1907] 1KB 264
Caffey v Leatt-Hayter [No 3] [2013] WASC 348
Coastal Hire Pty Ltd v Ewers [2009] WASCA 36 (S)
Sanderson v Blyth Theatre Co [1903] 2 KB 533
[2013] WASC 348 (S)
BEECH J
BEECH J:
Introduction
On 20 September 2013, I delivered my reasons for judgment after the trial of this action.[1] I ordered that:
[1] Caffey v Leatt-Hayter [No 3] [2013] WASC 348.1. There be judgment for the first plaintiff against the first named first and the second defendants in the sum of $246,652.05
2. The plaintiffs' claims otherwise be dismissed.
3. The first named first and second defendants pay the first plaintiff's costs of the action, including reserved costs, to be taxed if not agreed.
4. The plaintiffs file and serve submissions in relation to the question of the second named first defendant's costs by 2 pm on 27 September 2013.
5. The defendants file and serve submissions in relation to that topic by 4 pm on 4 October 2013.
6. The question of the second named first defendant's costs be determined on the papers.
3 The parties filed submissions in accordance with those orders. These
reasons relate to who should pay Mrs Leatt-Hayter's costs, and whether
she should have the whole of her costs.
The positions of the parties
The plaintiffs submit that:
(a) there should only be one set of costs; (b) Mrs Leatt-Hayter should not receive all her costs, given her failure on the issues of contributory negligence and causation; and (c) there should be a Sanderson or Bullock order, by which Mr Leatt-Hayter is made liable for Mrs Leatt-Hayter's costs, taking into account various matters, particularly Mr Leatt-Hayter's evidence at trial. 5 Mrs Leatt-Hayter seeks an order that the plaintiffs pay her costs of
the action. She opposes any apportionment of the costs, and opposes the
making of a Sanderson or Bullock order.
[2013] WASC 348 (S)
BEECH J
Mr Leatt-Hayter and Seaside also oppose the making of a Sanderson or Bullock order.
The proper exercise of discretion in relation to Mrs Leatt-Hayter's costs
For the reasons that follow, I accept Mrs Leatt-Hayter's submissions.
Mrs Leatt-Hayter was successful in the action. The starting point is that a successful party to an action is entitled to recover its costs.[2]
[2] Rules of the Supreme Court 1971 (WA) O 66 r 1.
9 The court has broad powers in relation to costs, including to award a
party only a proportion of its costs. For a number of reasons, courts will be slow to dissect the issues in a case to identity who succeeded on which issues, as a basis for a costs order.[3] This will not generally be appropriate unless there are discrete, severable issues on which the generally successful party failed, and which added to the costs of the proceedings in a significant and readily discernible way.[4]
10 The plaintiffs submit that substantial costs, including the costs
associated with the preparation of witness statements and a number of objections, were involved in Mrs Leatt-Hayter's allegations that the manner in which the plaintiffs had conducted the Westbooks business had caused their loss, and in her allegations of contributory negligence. Mrs Leatt-Hayter having been unsuccessful in respect of those allegations, the plaintiffs submit that Mrs Leatt-Hayter should receive only 75% of her costs.
11 The allegations of contributory negligence related to two broad
topics: first, alleged failures to make proper inquiries before expressing their satisfaction under the due diligence clause; and, secondly, a failure to take reasonable care in the manner in which the plaintiffs ran the Westbooks business after its acquisition.[5]
12 In my view, the allegations of contributory negligence in relation to
the plaintiffs' decision to express their satisfaction under the due diligence clause were not discrete and severable from the other issues in the action. In particular, those allegations were wrapped up with the question of whether the non-disclosure of the budget cuts was, in all the circumstances, misleading, and with the question of reliance on the part of the plaintiffs in proceeding with the transaction. Much of the same
[2013] WASC 348 (S)
BEECH J
[4] Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) [7].
evidence bore on these topics.[6] It is true that the plaintiffs succeeded in relation to those other questions. However, it is noteworthy that, rightly in my view, the plaintiffs did not claim their costs in relation to those issues as against Mrs Leatt-Hayter.
[6] See sections 4.3.5, 5.3 and 8.4 of the primary reasons.
13 I am not satisfied that the mismanagement allegations as to causation
or contributory negligence added to the costs of the proceedings in a significant and readily discernible way. As I observed in the primary reasons,[7] it appeared that this claim of contributory negligence was not pressed. It was not mentioned in closing. The same is true of the mismanagement allegation as a causation issue. The questions in cross-examination of Mr Caffey on that topic were very limited. The defendants did not call any evidence in support of the allegation.
[7] [504].14 I note, however, that Mrs Leatt-Hayter filed and served two
statements of Dianne Touchell before the trial. Those statements were the subject of numerous objections. The statements primarily related to the mismanagement allegation. Mrs Leatt-Hayter did not call Ms Touchell. I would exclude the costs associated with those witness statements, and with objections to them, from the order for costs in favour of Mrs Leatt-Hayter.
15 That brings me to the question of whether a Sanderson or Bullock
order should be made. Bullock and Sanderson orders may be made in a case where a plaintiff succeeds against one defendant, but fails against another defendant. The effect of such an order is that the costs of the successful defendant are paid, directly or indirectly, by the unsuccessful defendant. A Sanderson order is an order that the unsuccessful defendant pay the successful defendant's costs of the action.[8] A Bullock order is an order that the unsuccessful defendant pay to the plaintiff the costs for which the plaintiff is liable to the successful defendant.[9] A practical difference between the two forms of order arises only, generally at least, where there is a real risk that the unsuccessful defendant is impecunious.
[8] Sanderson v Blyth Theatre Co [1903] 2 KB 533.[9] Bullock v London General Omnibus Co [1907] 1KB 264.16 The court's discretion as to costs is broad. It must be exercised
judicially. In the end, the critical question is always what is just in the circumstances of the case. Having emphasised those points, in Coastal
[2013] WASC 348 (S)
BEECH J
Hire Pty Ltd v Ewers[10] Newnes JA (Wheeler and Buss JJA agreeing) said as follows:
[10] [2009] WASCA 36 (S) [34]As I have observed, the court's discretion as to costs exists to enable the court to do justice between the parties in the particular circumstances of the case. In my view, therefore, where a Bullock or Sanderson order is sought ultimately the question must always be whether it is just that, as between the plaintiff and the unsuccessful defendant, the unsuccessful defendant should bear the burden of the successful defendant's costs. The exercise of the relevant discretion is not amenable to hard and fast rules, but, in my opinion, normally a Bullock or Sanderson order will be made only where:
1. the plaintiff's claims against two or more defendants are substantially connected or interdependent;
2. the plaintiff acted reasonably in suing the successful defendant; and
3. there is something in the conduct of the unsuccessful defendant which makes to just to move the burden of the successful defendant's costs from the plaintiff to the unsuccessful defendant.
For the reasons that follow, I am not persuaded that a Bullock or Sanderson order is appropriate in this case.
18 The claim against Mrs Leatt-Hayter was not in the alternative to, but
rather was further to, the claims against Seaside and Mr Leatt-Hayter. The claim against Seaside was based on what was said in the Information Memorandum, and what was said by Mr Leatt-Hayter. The claim against Mr Leatt-Hayter was based on what he said at the meeting in August 2009, as well as what he knew. The claim against Mrs Leatt-Hayter was not based on representations that she made, but was based upon her alleged knowledge.
19 This was not a case where one defendant said, in effect, to the
plaintiff that the plaintiff should look to another defendant, rather than to it, for its losses. The situations in which a Bullock or Sanderson order is appropriate are not limited to such cases, but those cases provide one paradigm of the situations when it is appropriate.
20 There is no evidence or submission that the initial decision to join
Mrs Leatt-Hayter was in any way the result of conduct on the part of Mr Leatt-Hayter. Originally, Mrs Leatt-Hayter was joined on the basis that she and Mr Leatt-Hayter were both primarily liable as the sellers of the business, and, thus, the persons on whose behalf representations had
[2013] WASC 348 (S)
BEECH J
been made. Subsequently, the writ and statement of claim were amended. The claims against Mrs Leatt-Hayter were advanced on the basis that she had relevant knowledge so as to make her liable.
21 On Mr and Mrs Caffey's evidence, with an immaterial exception,
Mrs Leatt-Hayter was not present when Mr Leatt-Hayter made the relevant representations at the meeting in August 2009.
22 In their submissions, the plaintiffs point to evidence of
Mr Leatt-Hayter that they say supported their claim against Mrs Leatt-Hayter, and so made the prosecution of the claim against her reasonable. The first disclosed evidence of Mr Leatt-Hayter which offered any assistance to the plaintiffs' claim against Mrs Leatt-Hayter came in the form of Mr Leatt-Hayter's witness statement of 6 August 2013. That statement was provided less than a week before the commencement of the trial. Moreover, although, if accepted, it provided some assistance to the plaintiffs' case, it was not sufficient (even if accepted) to make the plaintiffs' case.
There is no evidence or submission that, apart from Mr Leatt-Hayter's witness statement of 6 August 2013, the plaintiffs would have abandoned the claim against Mrs Leatt-Hayter.
24 There was no cross-examination by counsel for Mr Leatt-Hayter of
Mrs Leatt-Hayter, or of any witness, that sought to implicate
Mrs Leatt-Hayter.25 The plaintiffs also point to the fact that Mr Leatt-Hayter's evidence in
these respects, and generally, was rejected by the court, submitting that that makes it just that he, rather than the plaintiffs, pay Mrs Leatt-Hayter's costs of the action. I do not accept that submission. I am not persuaded that the fact that a party's evidence is not accepted by the court where it conflicts with that of another witness is an appropriate or sufficient ground to justify a Sanderson or Bullock order.
26 I am not persuaded that there is anything sufficient in
Mr Leatt-Hayter's conduct that makes it just to move the burden of
Mrs Leatt-Hayter's costs from the plaintiffs to Mr Leatt-Hayter.27 It is not entirely clear to me what the plaintiffs seek to exclude in
asserting that there should be 'only one set of costs'. The plaintiffs assert that Mr Caffey's claim for damages did not materially add to the costs of the action. To my mind, in the context of the question of costs orders to be made in favour of a successful defendant, that is not of central
[2013] WASC 348 (S)
BEECH J
significance. Mrs Leatt-Hayter was successful in defending the claims made by the first plaintiff and in defending the claims made by the second plaintiffs (at trial pursued only by Mr Caffey). For the reasons given, in my view, Mrs Leatt-Hayter should have her costs of the action as a whole. There is no ground for excluding her costs in defending Mr Caffey's claims, whatever the scale of those costs, from the costs awarded in her favour.
Conclusion
For these reasons, I order that:
The plaintiffs pay the second named first defendant's costs of the action, excluding the costs of and incidental to the witness statements of Dianne Touchell and objections thereto, to be taxed if not agreed.
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