Celic v Henley Arch Pty Ltd (ACN 15 007 316 930); Celic v Victorian WorkCover Authority (Ruling as to Costs)
[2021] VCC 910
•9 July 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| GENERAL LIST |
Case No. CI-18-05695
| RATKO CELIC | Plaintiff |
| v | |
| HENLEY ARCH PTY LTD (ACN 15 007 316 930) | Defendant |
-AND-
Case No. CI-19-04714
| RATKO CELIC | Plaintiff |
| v | |
| VICTORIAN WORKCOVER AUTHORITY | Defendant |
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JUDGE: | HIS HONOUR JUDGE LAURITSEN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 April 2021 | |
DATE OF JUDGMENT: | 9 July 2021 | |
CASE MAY BE CITED AS: | Celic v Henley Arch Pty Ltd (ACN 15 007 316 930); Celic v Victorian WorkCover Authority (Ruling as to Costs) | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 910 | |
RULING AS TO COSTS
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Subject:COSTS ORDER
Catchwords: Cost of summons for the determination of a preliminary question and serious injury application in dispute – Bullock and Sanderson Orders – whether it is appropriate to order a non-party to pay costs
Legislation Cited: Workplace Injury Rehabilitation and Compensation Act 2013; Wrongs Act 1958
Cases Cited: Celic v Henley Arch Pty Ltd (ACN 15 007 316 930); Celic v Victorian WorkCover Authority (Ruling) [2021] VCC 396; Bullock v London General Omnibus Co [1907] 1 KB 264; Sanderson v Blyth Theatre Co [1903] 2 KB 533; Victorian WorkCover Authority v Kogan Bros Consolidated Pty Ltd (2011) 31 VR 386; Lackersteen v Jones (No 2) (1988) 93 FLR 442; Popovic v ACN 098 054 678 Pty Ltd & Anor (Costs Ruling) [2012] VSC 612; Knight v FP Special Assets Ltd (1992) 107 ALR 585
Ruling: Sanderson Order made against Henley Arch for the cost of the summons. No cost order made in respect of the serious injury application.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Smith with Mr C Hangay | Zaparas Lawyers |
| For the Defendant Henley Arch Pty Ltd | Mr D McWilliams | Meridian Lawyers |
| For the Defendant Victorian WorkCover Authority | Ms J Clarke | IDP Lawyers Pty Ltd |
HIS HONOUR:
1When I published my Reasons,[1] the parties raised the issue of costs. After receiving their submissions, I reserved the issue. Consequently, I have not yet made any substantive order or declaration. When I publish these further Reasons, I invite again the parties to prepare a form of orders or declarations.
[1]Celic v Henley Arch Pty Ltd (ACN 15 007 316 930); Celic v Victorian WorkCover Authority [2021] VCC 396
2The effect of my Reasons is the Mr Celic’s claim against Henley Arch may proceed but his claim against the Victorian WorkCover Authority (“VWA”) cannot.
3Mr Celic seeks the modern form of the “Bullock”[2] order; namely, the “Sanderson”[3] order, where the unsuccessful defendant is ordered to pay Mr Celic’s costs and those of the successful defendant.
[2]Bullock v London General Omnibus Co [1907] 1 KB 264
[3]Sanderson v Blyth Theatre Co [1903] 2 KB 533
4Here, the VWA may be viewed as the successful defendant in the serious injury application and Henley Arch as the unsuccessful defendant in the other proceeding.
5Mr Celic sought the following orders:
(a) Henley Arch pay Mr Celic’s costs of the summons;
(b) Henley Arch pay the VWA’s costs of the serious injury application;
(c) Henley Arch to pay Mr Celic’s costs of the serious injury application.
6The VWA did not oppose an order that Henley Arch pay Mr Celic’s costs of the summons or the VWA’s costs of the serious injury application. However, it sought, as an alternative:
(a) that Henley Arch pays its costs of and associated with the preliminary question on the standard basis;
(b) that Mr Celic pay the VWA’s costs of the serious injury application not common with the costs of the preliminary question;
(c) other than that, the serious injury application be dismissed.
7Essentially, Henley Arch sought these orders:
(a) that Mr Celic pay the VWA’s costs of the serious injury application;
(b) the serious injury application be dismissed;
(c) the costs of Mr Celic and Henley Arch in the summons be costs in the Wrongs Act proceeding.
8Whether a court makes a Bullock or Sanderson order depends on whether it is reasonable and just to do so.
9In Victorian WorkCover Authority v Kogan Bros Consolidated Pty Ltd,[4] the Court set out factors to be considered when making an order against unsuccessful defendants:
(a) whether it was reasonable for the plaintiff to join the successful defendant;
(b) whether the conduct of the unsuccessful defendant was such as to make it fair to impose some liability on them for the costs of the successful defendant; and
(c) whether the claims against the successful defendant and the unsuccessful defendants are interdependent or essentially alternative claims.
[4] (2011) 31 VR 386 at paragraph [12]
10In Lackersteen v Jones (No 2),[5] Asche CJ added a fourth principle:
“Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced om litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have pay more than one set of costs merely because he is unsuccessful.”
[5] (1988) 93 FLR 442 at 449
Discussion
11The order of the institution of these proceedings should be recalled. They were issued or filed as follows:
(a) on 19 December 2018, the Writ against Henley Arch;
(b) on 7 October 2019, the Originating Motion for the serious injury application;
(c) on 20 April 2020, an Amended Writ against Henley Arch;
(d) on 15 May 2020, the Statement of Claim for the Amended Writ;
(e) on 2 July 2020, the Defence of Henley Arch to the Statement of Claim.
12Usually, if costs followed the event, then Henley Arch would be ordered to pay Mr Celic’s costs of the proceeding before me. However, he would be ordered to pay the costs of the VWA of the proceeding before me. The question of whether he is ordered to pay the costs of the serious injury application arises if it is dismissed or refused.
13It was Mr Celic’s choice to issue both proceedings. Ultimately, he was uncertain about his status as a “worker” under the Act. In his Originating Motion with the VWA, he seeks a serious injury certificate for injuries “suffered throughout the course of his employment with Henley Arch Pty Ltd in or about January 2016 to 29 March 2016”. This proceeding was filed on 7 October 2019.
14On 19 December 2018, Mr Celic issued a Writ against Henley Arch. Its endorsement asserted, relevantly:
(a) he was employed by Henley Arch as a tiler; and
(b) he suffered injury arising out of and in the course of his employment.
15Almost eighteen months later, an Amended Writ was filed. The allegation of employment was removed and replaced by “engaged to perform work”.
16A month later, his Statement of Claim was filed. It appears to assert he was an independent contractor for, in paragraph 3, he pleads:
“The Plaintiff at all material times carried on the business of performing tiling and handyman work.”
17But at paragraph 14, he pleads:
“At all material times in the performance of his work for the Defendant, the Plaintiff was under the supervision and control of Defendant, their servants and/or agents.”
18Henley Arch did not admit the allegations in paragraph 3 and denied those in paragraph 14, adding, by way of particulars to the latter – “The plaintiff was, at all relevant times, engaged as an independent tiling contractor”. Although Mr Celic did not expressly assert he was an employee of Henley Arch, the latter expressly pleaded he was not.
19After the issue of both proceedings, the three parties joined the two proceedings together for the purpose of seeking a binding determination, which would effectively end one of the two proceedings.
20In theory, Mr Celic could have chosen to pursue one proceeding to finality. However, a final determination of his employment status under the Act would not estop the other party, who was not a party to that proceeding. There may have been other obstacles to that course.
21This is not a case where the VWA was joined as a party to the other action. Nor is it the case where Henley Arch was joined to the serious injury application. Henley Arch could not be sued in the one proceeding because of the Act. Accordingly, both proceedings were independently commenced and came together, with the consent of all parties, in the proceeding before me. In the unusual environment created by legislation, I would find there was an interdependence of the claims against the defendants through the element in common – the employment status of Mr Celic.
22Ultimately, the question is whether it is just to make a Sanderson order against Henley Arch.[6]
[6] Popovic v ACN 098 054 678 Pty Ltd & Anor (Costs Ruling) [2012] VSC 612 at paragraph [13]
23After Henley Arch filed its Defence, on 1 September 2020, Mr Celic’s solicitors wrote to its solicitors. In part, the letter read:
“It is our understanding from your pleadings that your client does not assert that the Plaintiff was a worker (pursuant to Workcover legislation) but rather that the Plaintiff was an independent tiling contractor.
Accordingly, on the basis of your pleadings, we will seek our client’s instructions to discontinue his serious injury application/Originating Motion against the Victorian Workcover Authority.
Should your client’s position be different to that outlined at paragraph 2 above, we would be grateful if you could advise us of this as soon as possible.”
24The solicitor for Henley Arch replied on the same day by email. His reply read, in part:
“It has not been alleged, in our proceeding, that your client was an employee. My client is not in a position, at this stage, to determine whether your client was a deemed worker. That is something that has been alleged previously by your client and I will need access to your client’s records and the like before I am able to advise my client on this issue. To make it clear, the fact that my client has not asserted, in its defence, that your client was a deemed worker should not be taken as an admission that your client was not a deemed worker.”
25Despite the endorsement to the Amended Writ, the Statement of Claim and the emphatic denial of employment in the Defence, Henley Arch left open the possibility of applying for an amendment to its Defence to assert employment. It depended on what information Henley Arch obtained. Such a course left Mr Celic in a state of uncertainty. In effect, Henley Arch was forcing the issue. If Henley Arch wanted to plead employment, it should have done so in its Defence, whether in the time stipulated in the Rules or such longer period granted by the Court or with Mr Celic’s agreement. It seems out of an abundance of caution, Mr Celic’s solicitor sought reassurance, which he did not receive. In effect, the reply foreshadowed the possibility of an amendment of the Defence to raise employment. It is little wonder Mr Celic took the next step.
26On 10 November 2020, Mr Celic issued two summonses, one directed to Henley Arch and the other to the VWA. Each sought the same orders:
(a) that, pursuant to Rule 47.04, the WorkCover proceeding (CI-19-04714) and the Public Liability proceeding (Cl-18-05695) be listed concurrently for determination of a preliminary question.
(b) that that preliminary question be as follows:
(i) At the relevant time, was the plaintiff a worker (pursuant to s3 of the Workplace Injury Rehabilitation and Compensation Act 2013) or a deemed worker (pursuant to Part 9 of Schedule 1 of the WIRC Act).
27When these summonses came before me, the parties agreed to the respective proceedings being listed concurrently for the determination of the preliminary question.
28Henley Arch drew my attention to Knight v FP Special Assets Ltd.[7] At 595, Mason CJ and Deane J said:
“Obviously, the prima facie general principle is that an order for costs is only made against a party to the litigation.”
[7] (1992) 107 ALR 585
29And at 603, Dawson J said:
“The cases therefore establish a long-asserted jurisdiction to award costs in appropriate cases against a person who is not a party to the proceedings where that person is the effective litigant standing behind an actual party or where there has been a contempt or abuse of the process of the court.”
30Plainly, neither example applies here. Although Henley Arch is not a party to the serious injury application, it was a party to the trial of the same preliminary question in its proceeding. A different answer to that question would have substantially or entirely disposed of the proceeding. In my opinion, it is appropriate to consider Henley Arch a party to the proceeding constituted by the preliminary question.
31It is also proper to exercise my discretion to make a Sanderson order against Henley Arch, because the reply of 1 September 2020 placed Mr Celic in an invidious position and, as I have said, forced his hand. But my orders will be confined to the costs of the summons insofar as Henley Arch is concerned.
32On the other hand, the principle discussed in Knight’s case would make it inappropriate for me to order Henley Arch to pay the VWA’s costs of the serious injury application or any other costs associated with the Wrongs Act proceeding.
33I will make the following Orders:
(a) that Henley Arch pay Mr Celic’s costs of the summons;
(b) that Henley Arch pay the VWA’s costs of the summons.
34These costs should be taxed by the Costs Court in default of agreement. I do not propose to certify for counsels’ fees. This is a matter for the Costs Court.
35If Mr Celic and the VWA want the Court to make some other order relating to the serious injury application, then they can approach the Court in the usual way.
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