Canterbury Municipal Council v Taylor (No 2)

[2002] NSWCA 96

CITATION:	Canterbury Municipal Council v Taylor & Ors (No 2) [2002] NSWCA 96
FILE NUMBER(S):	CA 40123/01
HEARING DATE(S):	13/02/02
JUDGMENT DATE:	19 April 2002
PARTIES :	Canterbury Municipal Council (Appellant/1st Cross-Respondent) William Roy Taylor (Respondent/Cross-Appellant) Christopher John Keogh (2nd Cross-Respondent) Karen Benedet (as Executrix of the Estate of Franco Benedet) (3rd Cross-Respondent)
JUDGMENT OF:	Spigelman CJ at 1; Ipp AJA at 2; Mathews AJA at 21

LOWER COURT JURISDICTION :	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	20387/98
LOWER COURT JUDICIAL OFFICER :	Barr J

COUNSEL:	G F Little SC/N E Chen (Appellant/1st Cross-Respondent) G B Hall QC/S Norton SC (Respondent/Cross-Appellant) K Dodd SC/H Silvester (2nd Cross-Respondent) R C Tonner (3rd Cross-Respondent)
SOLICITORS:	Moray & Agnew (Appellant/1st Cross-Respondent) Makinson & d'Apice (Respondent/Cross-Appellant) Phillips Fox (2nd Cross-Respondent) Bartier Perry (3rd Cross-Respondent)
CATCHWORDS:	Costs orders - application for Sanderson or Bullock order - claim for indemnity costs - principles. ND
CASES CITED:	Canterbury Municipal Council v Taylor & Ors [2002] NSWCA 24 Almeida v Universal Dye Works Pty Limited (No 2) [2001] NSWCA 156 Sved v Council of the Municipality of Woollahra (1998) NSW Convr 55-842 Lackersteen v Jones (No 2) (1988) 93 FLR 442 Stevedoring Industry Finance Committee v Ronald J Gibson (2000) NSWCA 179
DECISION:	Orders made in terms of paragraphs 1 to 7.3 of the draft minutes of order of 25 March 2002, a copy of which is attached hereto.

CA 40123/01
SC 20387/98

SPIGELMAN CJ
IPP AJA
MATHEWS AJA

Friday 19 April 2002

CANTERBURY MUNICIPAL COUNCIL v WILLIAM ROY TAYLOR & ORS

(NO. 2)

Judgment

1 SPIGELMAN CJ: I agree with Ipp AJA.

2 IPP AJA: These reasons are supplementary to and should be read together with the judgment delivered by this Court in Canterbury MunicipalCouncil v Taylor & Ors [2002] NSWCA 24. By that judgment the appeal of the Canterbury Municipal Council was dismissed and the cross-appeal of Mr Taylor was upheld in various respects. The effect of the successful cross-appeal, in substance, was that the apportionment of damages determined by Barr J was set aside and responsibility for the appellant’s damages was apportioned on the basis of 50% in respect of the Council, 25% in respect of Mr Benedet and 25% in respect of Mr Taylor himself. The parties were directed to make written submissions in regard to further orders that were to be made. This has now been done and a dispute has arisen in relation to the costs orders that should be made.

3 In essence, Mr Taylor seeks Sanderson (or Bullock) orders against the Council and Mrs Benedet. In addition, Mr Taylor seeks costs on an indemnity basis; this argument being based on an offer of compromise served by his solicitors on 21 December 2001.

4 Barr J dealt with the making of a Sanderson order as follows:

“17. The plaintiff applies for a special order requiring the first defendant to indemnify him in relation to the costs of the other defendants which he will be required to pay. It is submitted that it was reasonable for him to join all the defendants. Reference was made to earlier proceedings brought by the widow of Mr Benedet. It was submitted that the relationship between the first defendant and the second and third defendant was poorly documented and was not accurately known to the plaintiff and that the first defendant maintained and continued a cross-action against those defendants, which justified the plaintiff in continuing his action against them.
18. None of these matters to my mind justifies a requirement that the first defendant indemnify the plaintiff. It was he who commenced actions against the remaining defendants. This is not a case in which the plaintiff could say that one of several parties must have been liable but could not say which. The nature of the claims against each defendant was distinct. I do not think that the maintenance of any cross-claim by the first defendant justified the plaintiff in continuing his action against any such defendant.
19. The plaintiff always intended to and did pursue to the end his claims against the other defendants. Neither, in my opinion, did the first defendant’s cross-claims materially affect the hearing time.”

5 Barr J had held that Mr Benedet was not negligent and this finding has been reversed. It follows that this Court is now at large in relation to exercising its discretion in respect of costs. Nevertheless, due respect must be given to the trial judge’s view in regard to whether a Sanderson order should be made. This stems from the intimate knowledge that the judge acquired of the case while seeing and hearing the witnesses.

6 In Almeida v Universal Dye Works Pty Limited (No 2) [2001] NSWCA 156 this Court quoted with implicit approval the following statement by Giles J in Sved v Council of the Municipality of Woollahra (1998) NSW Convr 55-842 at 55,605:

“It is not sufficient for the making of a Bullock order that it was reasonable for the plaintiff to bring the proceedings against both defendants, although sometimes the condition for making a Bullock order is stated in that way … One statement of principle is that the order may be made where the costs have been reasonably and properly incurred by the plaintiff as between it and the unsuccessful defendant …; it has also been said that the conduct of the unsuccessful defendant must have been such as to make it fair to impose some liability on it for the costs of the successful defendant, or that the conduct of the unsuccessful defendant must show the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought … The difference in formulations is probably more apparent than real, as reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant. Such conduct was found in Lackersteen v Jones (No 2) (1988) 93 FLR 442 in the unsuccessful defendant denying the authority of its agent whereby the plaintiff joined the agent who became the successful defendant, and more widely has been found in the unsuccessful defendant telling the plaintiff in one way or another that it should look to the successful defendant for its remedy …”

See also Stevedoring Industry Finance Committee v Ronald J Gibson (2000) NSWCA 179.

7 It was submitted on Mr Taylor’s behalf that Barr J made two errors in concluding that a Sanderson order should not be made. These were:

(a) He erred in holding “that this was not a case in which Mr Taylor could say that one of several parties must have been liable but he could not say which”.

(b) He erred in holding that the claims against each defendant were distinct.

8 It was submitted on Mr Taylor’s behalf that he was unaware of the precise relationship between the New South Wales Touch Association and Mr Keogh, and between them and the Council. Therefore, he did not know which defendant was liable.

9 In support of this submission, reference was made to the fact that the Council disputed the allegation that Mr Keogh had “booked” the Velodrome on the day of the accident and argued that Mr Keogh had required play to proceed on the Velodrome field without the Council’s knowledge, even when he knew that the touch footballers were not entitled to be there.

10 While there is some substance in these points, I think that they are answered by the finding of Barr J that Mr Taylor “always intended to and did pursue to the end his claims against the other defendants”. In other words, Barr J found that, irrespective of the degree of uncertainty in Mr Taylor’s mind, he had determined, independently, to sue all the defendants, and it was not the arguments on the part of the Council that caused him to maintain his claim against the New South Wales Touch Association and Mr Keogh. I am not persuaded that his Honour was wrong in making these findings.

11 It was submitted on Mr Taylor’s behalf that the conduct of the Council and Mrs Benedet in denying their liability and pursuing cross-claims against Mr Keogh and the New South Wales Touch Association, created uncertainty in Mr Taylor’s mind. For that reason, it was said, it was not safe for him to do anything other than proceed against Mr Keogh and the New South Wales Touch Association. Again, I am not persuaded that this submission is correct. Nothing has been shown to refute the finding by Barr J that Mr Taylor always intended, independently, to pursue his claims against all the defendants “to the end”.

12 In regard to the finding that the claims against each defendant were distinct, it was submitted on Mr Taylor’s behalf that the variation in the particularisation of negligence of each claim would not preclude the making of a Sanderson order. It was said that the nature of the duty owed to Mr Taylor by all the defendants was the same, and it arose out of the same factual situation.

13 While each claim against each defendant was for breach of a duty of care, each, in a sense, was distinct. The distinction lay in the differences in the scope of the duty of care that each was said to have owed Mr Taylor and the differences in the way that each breached the duty of care owed by it or him. Again, I am not persuaded that Barr J was wrong in considering that the differences between the nature of the claims had a bearing on the exercise of his discretion as to whether a Sanderson order should be made.

14 I am not satisfied that the conduct of the unsuccessful defendants was such as to make it fair to impose some liability on any of them for the costs of the successful defendants. Nor am I persuaded that the joinder of Mr Keogh and the New South Wales Touch Association was reasonable and proper to ensure recovery of the damages sought.

15 In the circumstances I would not grant Sanderson or Bullock orders of the kind sought by Mr Taylor.

16 As regards to the claim for indemnity costs, on 21 December 2001 the solicitors for Mr Taylor served on the solicitors for the Council and Mrs Benedet an offer of compromise in the following terms:

“1. That the verdict and judgment for William Roy Taylor against Canterbury Municipal Council in the Court below be varied by substituting judgment in favour of William Roy Taylor for $275,000.00.
2. In lieu of Order 4 in the Court below, Canterbury Municipal Council be ordered to pay William Roy Taylor’s costs of and incidental to the trial, and of and incidental to the Appeal, as agreed or assessed.
3. In lieu of Order 6 in the Court below, Canterbury Municipal Council be ordered to pay the costs of Christopher John Keogh, New South Wales Touch Association and Karen Benedet of an [sic] incidental to the trial and the Appeal, as agreed or assessed.”

17 The offer of compromise was made on the basis that the Council alone would be liable for Mr Taylor’s damages. No provision was made in the offer for any liability on the part of Mrs Benedet in her capacity as the Executrix of the Estate of the late Franco Benedet. Nevertheless, Mr Taylor seeks orders that both the Council and Mrs Benedet pay his costs of the appeal on an indemnity basis as from the date of the making of the offer. In the circumstances, I do not understand the basis of the claim against Mrs Benedet and I would not accede thereto.

18 Mr Taylor claims an order that the Council pay his costs of the appeal on an indemnity basis as from 21 December 2001. The effect of the judgment of this Court is that the respondent is entitled to entry of judgment against the Council and Mrs Benedet in the sum of $390,532.50 together with interest. The Council is to be responsible for two-thirds of the judgment and Mrs Benedet for one-third. On the assumption that the Council will be able to recover that one-third from Mrs Benedet (should it pay the full amount of $390,532.50 to Mr Taylor), it would have to pay a net sum of approximately $260,354. This sum is less than the $275,000, the subject of the offer of compromise.

19 The offer of compromise did not mirror the effect of the judgment of this Court and in all the circumstances I am not persuaded that the fact that an offer in those terms was made should lead to an order that the Council pay the costs of the appeal on an indemnity basis.

20 The parties are in agreement that orders should be made in terms of paragraphs 1 to 7.3 of the draft minutes of 25 March 2002, a copy of which is attached hereto. I would make such orders but would make no further order.

21 MATHEWS AJA: I agree with Ipp AJA.

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