Gradco Pty Ltd v Buckingham
[2012] TASSC 69
•23 October 2012
[2012] TASSC 69
COURT: SUPREME COURT OF TASMANIA
CITATION: Gradco Pty Ltd v Buckingham [2012] TASSC 69
PARTIES: GRADCO PTY LTD
v
BUCKINGHAM, Ronald Frederick
QBE INSURANCE (AUSTRALIA) LTD (Third Party)
MOTOR ACCIDENTS INSURANCE BOARD (Third Party)
FILE NO: 46/2011
DELIVERED ON: 23 October 2012
DELIVERED AT: Hobart
HEARING DATE: 16 October 2012
JUDGMENT OF: Blow J
CATCHWORDS:
Procedure – Costs – General rule – Costs follow the event – Third parties – Successful defendant – Application by successful third party for plaintiff to pay its costs – Whether third party proceedings unnecessary.
Johnson v Ribbins [1977] 1 WLR 1458; Burke v Gillett [1996] 1 VR 196; Mifsud v ICT Pty Ltd (1997) 7 Tas R 148; Edwards v Stocks (No 2) (2009) 17 Tas R 454, referred to.
Aust Dig Procedure [559]
REPRESENTATION:
Counsel:
Plaintiff: P L Jackson
Defendant: T Cox
Third Party QBE: P L Jackson
Third Party MAIB: B R McTaggart
Solicitors:
Plaintiff: Wallace Wilkinson & Webster
Defendant: Temple-Smith Partners
Third Party QBE: Wallace Wilkinson & Webster
Third Party MAIB: McLean McKenzie & Topfer
Judgment Number: [2012] TASSC 69
Number of paragraphs: 16
Serial No 69/2012
File No 46/2011
GRADCO PTY LTD v RONALD FREDERICK BUCKINGHAM;
QBE INSURANCE (AUSTRALIA) LTD, MOTOR ACCIDENTS
INSURANCE BOARD (THIRD PARTIES)
REASONS FOR JUDGMENT BLOW J
23 October 2012
I have been asked to make orders as to costs in relation to an unsuccessful action and related third party proceedings.
During 2008 the defendant, Ronald Buckingham, was driving from his home near Exeter to his place of work near Rosebery when he negligently ran off the road. He was carrying a passenger whom he worked with. The passenger was injured, and claimed workers compensation from their employer, Gradco Pty Ltd, the plaintiff in this action. Gradco made some payments of compensation. A dispute arose as whether the passenger had rights under the Motor Accidents (Liabilities and Compensation) Act 1973 ("the MALC Act"), or under the Workers Rehabilitation and Compensation Act 1988 ("the WRC Act"). In 2009 the passenger sued Mr Buckingham for damages, with a view to such damages being paid by the Motor Accidents Insurance Board ("the MAIB"). In 2010 Gradco sued Mr Buckingham seeking reimbursement of the money that it had paid out by way of workers compensation, relying on a provision in the WRC Act. That is the action whose costs I am now concerned with. In relation to that action Mr Buckingham took third party proceedings against Gradco's workers compensation insurer, and against the MAIB, with a view to obtaining an indemnity, if need be, from one of them. Earlier this year I conducted a trial of the issues as to liability in both the passenger's action and Gradco's action. Subsequently I gave judgment in both actions: Cook v Buckingham [2012] TASSC 53. I dismissed Gradco's action and the related third party proceedings. In the passenger's action, I gave judgment for that plaintiff for damages to be assessed, and for an indemnity against the MAIB.
In relation to Gradco's action, I have been asked to make orders for costs as follows:
· Mr Buckingham has sought an order that Gradco pay his costs on a party and party basis.
· Relying on the MALC Act, s14, he has also sought an order that the MAIB pay his costs on an indemnity basis, to the extent that they are not paid by Gradco.
· The MAIB has sought an order that Gradco pay its costs.
· In the alternative, the MAIB has sought an order that Mr Buckingham pay its costs, with a view to Gradco being ordered to indemnify Mr Buckingham as to the payment of those costs.
· In the event that Mr Buckingham is ordered to pay the MAIB's costs, he seeks an order that Gradco indemnify him in respect of those costs.
Should Gradco pay the MAIB's costs?
The power to make orders for the payment of costs is conferred by the Supreme Court Civil Procedure Act 1932, s12(1). That Act confers a discretion which is not fettered by any legislative provision. There is a general rule that costs follow the event, ie that the unsuccessful party will be ordered to pay the successful party's costs. See, for example, Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72. Because the power to order costs is discretionary, the general rule may be departed from in appropriate cases.
When a plaintiff has failed against a defendant, the defendant has joined a third party seeking an indemnity, and no indemnity is ordered because the plaintiff has failed, generally the third party is regarded as having succeeded against the defendant, and the defendant is regarded as having succeeded against the plaintiff. On that basis, the usual orders in that situation are that the plaintiff pay the successful defendant's costs, that the defendant pay the successful third party's costs, and that the unsuccessful plaintiff indemnify the defendant in respect of the third party's costs: Johnson v Ribbins [1977] 1 WLR 1458; Burke v Gillett [1996] 1 VR 196; Mifsud v ICT Pty Ltd (1997) 7 Tas R 148; Edwards v Stocks (No 2) (2009) 17 Tas R 454 at par[10].
However Gradco contends that it should not have to bear the MAIB's costs because the third party proceedings against the MAIB were unnecessary.
Gradco's claim against Mr Buckingham was not for damages, but for a sum of money that it claimed to be payable pursuant to a statutory provision, namely s134(1) of the WRC Act. In the third party proceedings, Mr Buckingham contended that the MAIB was obliged to indemnify him in respect of that claim pursuant to s14(1) of the MALC Act. That subsection reads as follows:
"(1) By virtue of this Act, but subject to and in accordance with the provisions thereof, the Board is bound to indemnify an owner or user of a motor vehicle, or his legal personal representatives, in respect of any liability (not being a contractual liability) incurred by him in respect of the personal injury to a person resulting directly from a motor accident involving that motor vehicle in this State on or after the appointed day."
At the relevant time, Mr Buckingham was the user of a motor vehicle. If, as was claimed by Gradco, he had a liability to reimburse that company in respect of its workers compensation payments in respect of his passenger, then that was a non-contractual liability incurred by him in respect of the personal injury to that passenger resulting directly from a motor accident, involving the motor vehicle used by him, in Tasmania. It follows that, unless there was an applicable statutory exception, the MAIB was obliged by s14(1) to indemnify Mr Buckingham in respect of his liability, if any, to Gradco. In this respect the MAIB was in a similar position to an insurer with an obligation to indemnify an insured person in respect of a particular liability, if that liability existed. There is no suggestion that the MAIB ever contended otherwise. It defended the third party proceedings solely on the basis of s14(3) of the MALC Act, which provides that s14(1) does not apply to any liability of the owner or user of a motor vehicle in respect of which a policy of insurance is required to be maintained under the WRC Act, s97(1).
Questions arose in the action commenced by the passenger as to whether he and Mr Buckingham were travelling in the course of their employment at the time of the accident. I concluded that they were not. I concluded that the passenger's injuries did not arise out of and in the course of his employment and that, because of the wording of the relevant legislative provisions, the MAIB was not exempted from liability by s14(3). On that basis I held, in third party proceedings relating to the passenger's action, that the MAIB was liable to indemnify Mr Buckingham in respect of his liability to pay damages to the passenger.
It was against this background that counsel for Gradco argued that there was no need for Mr Buckingham to institute third party proceedings in relation to Gradco's action, seeking an indemnity from the MAIB. He argued that the question whether the MAIB was liable to indemnify Mr Buckingham in relation to Gradco's claim depended on whether s14(3) exempted the MAIB from liability; that the same issue was going to fall for determination in the proceedings instituted by the passenger; and that the MAIB had never indicated that it would continue to deny liability if it were held in those proceedings that the two men were travelling otherwise than in the course of their employment, and that the s14(3) exemption did not apply.
Counsel for the MAIB argued that Gradco could very easily have awaited the outcome of the passenger's action before commencing its action. He argued that, once Gradco sued him, Mr Buckingham could not reasonably be expected to refrain from instituting third party proceedings. He pointed out that the passenger's action could have settled, leaving Mr Buckingham in a position where he faced potential personal liability with no indemnity proceedings on foot.
The third party proceedings in respect of Gradco's claim were instituted by means of a third party notice that was filed on 21 March 2011. At that stage no orders had been made for the two actions to be tried together, nor for issues as to liability to be tried before the assessment of the passenger's damages or any other issues. The passenger's action was a personal injuries action that might have taken a long time to come to trial, particularly if the passenger's injuries had not stabilised. As at 21 March 2011, there was no reason, as far as I know, for Mr Buckingham to anticipate that questions of liability would be determined in the two actions at the same time. As far as I know, he was not in a position to rule out the possibility of Gradco proceeding to trial long before the passenger. I am therefore not persuaded that it was unnecessary or inappropriate for him to institute the third party proceedings. He instituted such proceedings against both the MAIB and Gradco's workers compensation insurer, no doubt with a view to it being determined which of them, if either, was liable to indemnify him. That seems to me to have been a prudent and appropriate course for him to take.
As far as I can tell, the additional costs generated as a result of these third party proceedings having been instituted formed quite a small proportion of the total costs of the litigation relating to the accident.
In the circumstances, I think it appropriate that Gradco should bear the costs of the third party proceedings against the MAIB, as an unsuccessful plaintiff ordinarily would. I think it would be more convenient to order Gradco to pay the MAIB's costs directly, rather than ordering Mr Buckingham to pay them and Gradco to indemnify Mr Buckingham. That is to say, I think it preferable to make an order akin to a Sanderson order rather than one akin to a Bullock order: Sanderson v Blyth Theatre Co [1903] 2 KB 533; Bullock v London General Omnibus Co [1907] 1 KB 264. There is no reason not to take that course.
Conclusion
Gradco did not oppose the making of an order that it pay Mr Buckingham's costs in relation to the action. The MAIB did not oppose an order requiring it to pay Mr Buckingham's costs of the proceedings on an indemnity basis, less any amount recovered by him from Gradco in respect of his costs.
For the reasons stated above, I make the following orders:
1That the plaintiff pay the defendant's costs of and incidental to the action and the third party proceedings, on a party and party basis.
2That the plaintiff pay the costs of the second-named third party on a party and party basis.
3That the second-named third party pay the defendant's costs of and incidental to the action and the third party proceedings, on an indemnity basis, except for such costs as the defendant recovers from the plaintiff.
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