Coastal Hire Pty Ltd v Ewers
[2009] WASCA 36 (S)
•6 FEBRUARY 2009
COASTAL HIRE PTY LTD -v- EWERS [2009] WASCA 36 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2009] WASCA 36 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:50/2006 | 9 SEPTEMBER 2008 & ON THE PAPERS | |
| Coram: | WHEELER JA BUSS JA NEWNES JA | 5/02/09 | |
| 27/05/09 | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Sanderson order made | ||
| B | |||
| PDF Version |
| Parties: | COASTAL HIRE PTY LTD MICHAEL BOULTWOOD EWERS J-CORP PTY LTD CHRISTOPHER GAYNOR |
Catchwords: | Costs Application for Sanderson order Unsuccessful defendant had denied it was liable to plaintiff and alleged that successful defendant was liable Whether just that Sanderson order should be made Principles to be applied on application for Sanderson order |
Legislation: | Nil |
Case References: | Bankamerica Finance Ltd v Nock [1988] AC 1002 Berrigan Shire Council v Ballerini [2006] VSCA 65 Bullock v London General Omnibus Co [1907] 1 KB 264 Gould v Vaggelas (1985) 157 CLR 215 J-Corp Pty Ltd v Coastal Hire Pty Ltd [2009] WASCA 36 Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544 McCracken & McCracken v Pippett [2000] VSCA 20 Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140 Sanderson v Blyth Theatre Co [1903] 2 KB 533 State of Victoria v Horvath (No 2) [2003] VSCA 24 Stevedoring Industry Finance Committee v Gibson (2000) 20 NSWCCR 417; [2000] NSWCA 179 Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55-842 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : COASTAL HIRE PTY LTD -v- EWERS [2009] WASCA 36 (S) CORAM : WHEELER JA
- BUSS JA
NEWNES JA
DECISION : 27 MAY 2009 FILE NO/S : CACV 50 of 2006 BETWEEN : COASTAL HIRE PTY LTD
- Appellant
AND
MICHAEL BOULTWOOD EWERS
First Respondent
J-CORP PTY LTD
Second Respondent
CHRISTOPHER GAYNOR
Third Respondent
(Page 2)
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : EATON DCJ
Citation : EWERS -v- J-CORP PTY LTD & ORS [2006] WADC 52
File No : BUN CIV 18 of 2002
Catchwords:
Costs - Application for Sanderson order - Unsuccessful defendant had denied it was liable to plaintiff and alleged that successful defendant was liable - Whether just that Sanderson order should be made - Principles to be applied on application for Sanderson order
Legislation:
Nil
Result:
Sanderson order made
Category: B
Representation:
Counsel:
Appellant : No appearance
First Respondent : No appearance
Second Respondent : No appearance
Third Respondent : No appearance
Solicitors:
Appellant : DLA Phillips Fox
First Respondent : Chris Phillips
Second Respondent : Jarman McKenna
Third Respondent : No appearance
Case(s) referred to in judgment(s):
Bankamerica Finance Ltd v Nock [1988] AC 1002
Berrigan Shire Council v Ballerini [2006] VSCA 65
Bullock v London General Omnibus Co [1907] 1 KB 264
Gould v Vaggelas (1985) 157 CLR 215
J-Corp Pty Ltd v Coastal Hire Pty Ltd [2009] WASCA 36
Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544
McCracken & McCracken v Pippett [2000] VSCA 20
Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140
Sanderson v Blyth Theatre Co [1903] 2 KB 533
State of Victoria v Horvath (No 2) [2003] VSCA 24
Stevedoring Industry Finance Committee v Gibson (2000) 20 NSWCCR 417; [2000] NSWCA 179
Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55-842
(Page 4)
1 WHEELER JA: I agree with Newnes JA.
2 BUSS JA: I agree with Newnes JA.
3 NEWNES JA: This is an application by the appellant (Coastal Hire) for a Sanderson order against the second respondent (J-Corp) following a successful appeal by Coastal Hire against a judgment of the District Court in an action in which Coastal Hire and J-Corp were co-defendants. In the alternative, Coastal Hire seeks an order for indemnity costs of the action against the first respondent (Mr Ewers), the plaintiff in the District Court action.
Background
4 Mr Ewers was engaged by J-Corp to carry out some brick cleaning work on a house which J-Corp was in the course of constructing. Mr Ewers was injured while carrying out the work when he fell some 4 metres to the ground after a mesh panel on the perimeter of the scaffolding on which he was standing gave way.
5 Mr Ewers brought the District Court action against J-Corp claiming damages for negligence, breach of contract and breach of statutory duty, against Coastal Hire (the owner of the scaffolding) claiming damages for negligence and breach of statutory duty, and against the third respondent (Mr Gaynor) (the scaffolder who had erected the scaffolding) claiming damages for negligence and breach of statutory duty. Coastal Hire, J-Corp and Mr Gaynor brought contribution proceedings against each other.
6 Mr Ewers was successful at trial against Coastal Hire, J-Corp and Mr Gaynor, and judgment was entered for Mr Ewers in the agreed sum of $250,000. In the contribution proceedings, the trial judge apportioned liability equally between J-Corp, Coastal Hire and Mr Gaynor.
7 On appeal to this court, the orders of the trial judge in respect of Coastal Hire were set aside, the action by Mr Ewers against Coastal Hire was dismissed, and the contribution proceedings by J-Corp and Mr Gaynor respectively against Coastal Hire were dismissed: J-Corp Pty Ltd v Coastal Hire Pty Ltd [2009] WASCA 36.
8 The parties were given liberty to apply for any special costs orders they may seek arising out of the appeal. The current application is brought pursuant to that liberty. It was to be determined on the basis of the written submissions of the parties.
(Page 5)
Coastal Hire's submissions
9 It was submitted on behalf of Coastal Hire that in the circumstances it is appropriate that a Sanderson order be made, requiring J-Corp to pay Coastal Hire's costs of the action and the appeal. In the action, J-Corp not only denied any liability to Mr Ewers but (among other things) alleged that Mr Ewers' injuries were caused by the negligence of Coastal Hire. Consistent with that position, J-Corp issued contribution proceedings against Coastal Hire, alleging that the negligence of Coastal Hire had caused or contributed to Mr Ewers' injuries.
10 In circumstances where J-Corp had failed to accept responsibility for the accident and attempted to blame Coastal Hire, it was reasonable for Mr Ewers to join Coastal Hire as a defendant, or, alternatively, to continue to prosecute the claim against Coastal Hire.
11 Mr Ewers was not a party to the contractual arrangements between Coastal Hire and J-Corp in respect of the erection or maintenance of the scaffolding. He did not know the precise relationship that existed between them or the extent of any duty of care they each owed to him as a result of that relationship, nor would he have been able to tell in advance which of them was liable for his injuries.
12 It was argued that Coastal Hire will suffer hardship if it is required to recover its costs from Mr Ewers, as opposed to J-Corp. Mr Ewers still suffers from the injuries he sustained in the accident and has been unable to return to work. He is now 66 years of age. He is therefore unlikely currently to have any source of income. It is just in the circumstances that J-Corp bears the liability for Coastal Hire's costs.
J-Corp's submissions
13 J-Corp opposed the grant of a Sanderson order. It submitted that nothing that J-Corp had done had caused or encouraged Mr Ewers to commence, or continue to prosecute, the claim against Coastal Hire and there was nothing in J-Corp's conduct in the litigation which would make it fair to impose liability on it for the costs of Coastal Hire.
14 Mr Ewers commenced the action against Coastal Hire of his own volition and in it he made a number of discrete allegations against Coastal Hire concerning the suitability and safety of the scaffolding which were unrelated to J-Corp.
(Page 6)
15 It was argued that the causes of action against J-Corp and Coastal Hire respectively were separate and distinct, and based on different duties. Mr Ewers' essential case against Coastal Hire was that the scaffolding which it supplied and erected was, at the time it was supplied and erected, clearly unsafe for use. Those were matters solely between Mr Ewers and Coastal Hire. The essential case against J-Corp was that it failed to ensure the erected scaffolding was maintained in a safe and proper condition, and failed to warn contractors and potential users of the scaffolding not to move, alter or interfere with it.
16 It was further submitted that the claim by Mr Ewers against Coastal Hire was not reasonable. Alternatively, it was not reasonable for Mr Ewers to allege the scaffolding as originally erected was unsafe, which was Mr Ewers' primary claim against Coastal Hire. Mr Ewers failed in that claim.
17 It was submitted that in the circumstances it was reasonable for J-Corp to deny liability on the basis of its appointment of Coastal Hire as a competent contractor.
18 Accordingly, there is no justification for the making of a Sanderson order against J-Corp.
Mr Ewers' submissions
19 Mr Ewers adopted the submissions of Coastal Hire in support of the Sanderson order. He submitted that the real issue in the action was whether Coastal Hire or J-Corp was responsible for the injuries he suffered in the accident and it would be unfair that he should have to pay Coastal Hire's costs. He argued that J-Corp had encouraged him to proceed against Coastal Hire by pleading in its defence that if the scaffolding was unsafe that was due to the negligence of Coastal Hire, for which J-Corp was not liable. The current submission on the part of J-Corp - that it was reasonable for J-Corp to deny liability on the basis of its appointment of Coastal Hire as a competent contractor - underlined why it was reasonable for Mr Ewers to proceed against Coastal Hire.
20 In circumstances where J-Corp blamed Coastal Hire for the accident, and where ultimately J-Corp was found to be liable, it was just that J-Corp should have to meet Coastal Hire's costs of the action.
21 Mr Ewers opposed the alternative claim by Coastal Hire for indemnity costs against him, saying that such an order would require delinquency on his part, of which there was none.
(Page 7)
The relevant principles
22 The court has a very wide discretion in relation to costs. It is a discretion to be exercised judicially. In the exercise of the discretion, the fundamental question must always be what is just in the particular circumstances of the case.
23 It has long been accepted that where a plaintiff succeeds against one defendant but fails against another defendant in an action against them for substantially the same relief, the court may order that the costs of the successful defendant be paid, directly or indirectly, by the unsuccessful defendant. Where the court makes a Sanderson order, the unsuccessful defendant is ordered to pay the successful defendant's costs of the action direct to the successful defendant: Sanderson v Blyth Theatre Co [1903] 2 KB 533. Where the court makes a Bullock order, the unsuccessful defendant is ordered to pay to the plaintiff the costs for which the plaintiff is liable to the successful defendant: Bullock v London General Omnibus Co [1907] 1 KB 264; Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544, 572.
24 Generally there is no practical difference between the two forms of order, except where the unsuccessful defendant is insolvent, or there is at least a real risk that he is impecunious. Then the insolvency (or the impecuniosity) of the unsuccessful defendant is a factor to be taken into account as part of the overall circumstances for the purpose of determining which form of costs order should be made as a matter of fairness: Bankamerica Finance Ltd v Nock [1988] AC 1002, 1011; State ofVictoria v Horvath(No 2) [2003] VSCA 24 [15].
25 In the present case, the effect of a Sanderson order would be that J-Corp would be ordered to pay Coastal Hire's costs of the action and the appeal direct to Coastal Hire. The effect of a Bullock order would be that J-Corp would be ordered to pay to Mr Ewers the costs of the action and the appeal for which Mr Ewers is liable to Coastal Hire. It was not suggested that a Bullock order might be appropriate.
26 It is necessary then to turn to the circumstances in which it is appropriate to order that the successful defendant's costs of the action should be borne by the unsuccessful defendant.
27 In Gould v Vaggelas (1985) 157 CLR 215, the purchasers of a business commenced proceedings against the vendor alleging they had been induced to purchase the business by misrepresentations. In the alternative, they sued accountants who had advised them before the
(Page 8)
- purchase in relation to the financial standing of the business. The purchasers succeeded against the vendors but failed against the accountants. The trial judge made a Bullock order relating to the costs that the purchasers were ordered to pay to the accountants. That was set aside on appeal to the Full Court, but restored by the High Court. In considering the circumstances in which it is appropriate to make a Bullock order, Gibbs CJ said:
… the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.
The ground on which a Bullock order may be made is … that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed 'are ordered to be paid by the unsuccessful defendant, on the ground that ... those costs have been reasonably and properly incurred by the plaintiff as between him and the [unsuccessful] defendant'. In Johnsons Tyne Foundry Pty Ltd v Maffra Corporation, Williams J stated the principle in a similar way and Starke and Dixon JJ, in giving their reasons for making a Bullock order, both relied on the circumstance that the attitude adopted by the successful defendant had induced the plaintiff to join the other defendant. In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant' (229 - 230). (footnotes omitted)
[I]n an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiffs' claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought (260).
(Page 9)
29 In McCracken & McCracken v Pippett [2000] VSCA 20, Callaway JA considered that the two-step approach suggested by Gibbs CJ in Gould may be convenient in some cases but it would not always be convenient and it could lead to error. Callaway JA went on:
It is easy to think of circumstances in which the reasonableness of bringing suit might be directly related to conduct on the part of the unsuccessful defendant. In truth there is a single question, namely whether it is fair, as between the plaintiff and the unsuccessful defendant, that the latter should pay the successful defendant's costs. Prima facie, the unsuccessful defendant should not have to do so. There must … be something about his or her conduct that makes it appropriate to shift the incidence of the successful defendant's costs. The plaintiff, after all, has been unsuccessful too [11].
30 See, too, State ofVictoria v Horvath (No 2) [10].
31 In Stevedoring Industry Finance Committee v Gibson (2000) 20 NSWCCR 417; [2000] NSWCA 179, Mason P (with whom Stein and Heydon JJA agreed) applied the following principles:
1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.
2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.
3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.
4. 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 on 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 to pay more than one set of costs merely because he is unsuccessful [128].
32 In Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140 [30], Giles JA (with whom Spigelman CJ and Handley JA agreed) referred with approval to the statement in Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55-842, 55,605, that 'reasonableness as between the plaintiff and the unsuccessful
(Page 10)
- 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'.
33 In Berrigan Shire Council v Ballerini [2006] VSCA 65, Nettle JA put the position as follows:
In short [a Sanderson or Bullock order] will not ordinarily be made unless:
(a) the plaintiff's claims against the two defendants are interdependent or essentially alternative claims; and
(b) it is reasonable for the plaintiff to have joined the successful defendant and the conduct of the unsuccessful defendant has been such as to make the order just [41].
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.
The disposition of the application
35 By his amended statement of claim, filed pursuant to leave granted on 30 July 2003, Mr Ewers pleaded causes of action against J-Corp in contract, negligence and breach of statutory duty. J-Corp was alleged to owe a duty of care to Mr Ewers as a subcontractor on a building site which was occupied by J-Corp as the principal building contractor. Identical (and extensive) particulars were given of the breaches of contract and the duty of care. They included allegations that J-Corp had
(Page 11)
- failed to ensure that the scaffolding was safe and that it had failed to maintain the scaffolding in a safe condition. Mr Ewers also alleged that J-Corp was in breach of the Occupational Safety and Health Regulations 1996 (WA) (the OSH regulations) by failing to ensure, in a number of specified respects, that the scaffolding met the requirements of the regulations.
36 Mr Ewer's claim against Coastal Hire (and Mr Gaynor) was based upon their supply and erection of the scaffolding, which was alleged to give rise to duties of care to construct scaffolding that was safe and to ensure that the erected scaffolding was maintained in a safe condition, and an obligation to comply with the requirements of the relevant provisions of the OSH regulations. The breaches of the duty of care and the OSH regulations alleged by Mr Ewers were in all material respects identical to those alleged against J-Corp.
37 J-Corp denied that it was in breach of contract, negligent or in breach of statutory duty. It also alleged (relevantly) that it had taken reasonable care in the selection of Coastal Hire as a competent contractor to supply and erect the scaffolding, and that if the scaffolding was unsafe, incomplete or contrary to the regulations that was due to the negligence of Coastal Hire, for which J-Corp was not liable.
38 Coastal Hire denied that it was liable to Mr Ewers and alleged (relevantly) that any duty to erect the scaffolding properly was owed by Mr Gaynor. Coastal Hire said that if, after it was erected, the scaffolding was unsafe, incomplete or contrary to the regulations, that was due to alterations made to it by an unknown third party. It claimed that after erection any duty to ensure that the scaffolding was maintained in a safe condition lay on J-Corp as the occupier and principal contractor on site. If at the time of the accident the scaffolding was unsafe, incomplete or contrary to the regulations, that was due to the negligence or breach of statutory duty of J-Corp.
39 In his reply to Coastal Hire's defence, Mr Ewers alleged that if the scaffolding was altered after erection, the panel in question was in any event unsafe in several respects at the time it was supplied. Those specific allegations were not made against J-Corp.
40 The contribution proceedings between Coastal Hire and J-Corp reflected their respective positions in the main action. J-Corp contended (among other things) that the accident was caused by Coastal Hire, by supplying scaffolding that was unsafe or failing to erect in accordance
(Page 12)
- with the OSH regulations or failing to maintain it in a safe condition. Coastal Hire, on the other hand, contended that J-Corp was responsible for the accident because it had failed to maintain the scaffolding in a safe condition.
41 It is significant that Mr Ewers was not privy to the arrangements between J-Corp and Coastal Hire in relation to the scaffolding. The contract between J-Corp and Coastal Hire was not, so far as it was relevant to the action, reduced to writing and there is nothing to suggest that Mr Ewers was familiar with the terms upon which J-Corp and Coastal Hire dealt with each other. Nor was Mr Ewers in a position to know how the mesh panel which fell came to be in an unsafe condition. Indeed, at trial that was a substantial issue between the defendants.
42 Mr Ewers was faced then, on the one hand, with a contention by J-Corp that the accident had occurred because Coastal Hire had supplied unsafe scaffolding or had failed to erect or maintain it in a safe condition and, on the other, a contention by Coastal Hire that the accident had nothing to do with the nature or erection of the scaffolding but that it had occurred because the scaffolding had not been maintained in a safe condition, the responsibility for which lay with J-Corp, not with Coastal Hire. It was Coastal Hire's contention that ultimately prevailed.
43 It is the case that J-Corp did not cause Mr Ewers to commence the action against Coastal Hire. It is to be inferred that Mr Ewers did so because it was unclear on the information available to him which of them was responsible for the defect in the scaffolding. In the circumstances, I consider it was reasonable for Mr Ewers to commence the action against both J-Corp and Coastal Hire. Once the action was commenced, it was reasonable for Mr Ewers to maintain the claim against Coastal Hire, in light of J-Corp's position throughout that it was Coastal Hire, not J-Corp, which had caused the accident. It was that conduct of J-Corp which ensured that Coastal Hire remained a defendant in the case in circumstances where J-Corp's contention as to the cause of the action was without substance. While Mr Ewers made some separate allegations against Coastal Hire regarding the nature of the scaffolding itself, in respect of which he was unsuccessful, I do not think that when the case is taken as a whole that materially alters the position.
(Page 13)
44 In the circumstances, I am satisfied that it is appropriate to make the Sanderson order sought by Coastal Hire. I would therefore order that J-Corp pay to Coastal Hire, Coastal Hire's costs of the action and the appeal to be taxed. It is unnecessary to consider the alternative remedy of indemnity costs against Mr Ewers. Coastal Hire did not seek an order for indemnity costs against J-Corp.
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