JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : HAMPTON -v- BHP BILLITON MINERALS PTY LTD [No 2] [2012] WASC 285 (S) CORAM : EDELMAN J HEARD : ON THE PAPERS DELIVERED : 11 SEPTEMBER 2012 FILE NO/S : CIV 2292 of 2011 BETWEEN : NEVILLE CHARLES HAMPTON First Plaintiff
NANCY EDITH LUMSDEN
Second Plaintiff
AND
BHP BILLITON MINERALS PTY LTD
First Defendant
MITSUI-ITOCHU IRON PTY LTD
Second Defendant
ITOCHU MINERALS & ENERGY OF AUSTRALIA PTY LTD
Third Defendant
Catchwords:
Practice and procedure - Costs - Application for costs departing from usual costs orders - Costs of claim and counterclaim to be assessed separately - Whether there was any disentitling conduct by the defendants - Whether discretion should be exercised to reduce proportion of recoverable costs
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Legislation:
Nil
Result:
Costs orders made
Category: B
Representation:
Counsel:
First Plaintiff : No appearance
Second Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Solicitors:
First Plaintiff : Gibson & Gibson
Second Plaintiff : Gibson & Gibson
First Defendant : Ashurst Australia
Second Defendant : Ashurst Australia
Third Defendant : Ashurst Australia
Case(s) referred to in judgment(s):Hampton v BHP Billiton Minerals Pty Ltd [2012] WASC 133Milne v Attorney-General for the State of Tasmania [1956] HCA 48; (1956) 95 CLR 460Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72Roe v The Director General, Department of Environment and Conservation for the State of Western Australia [2011] WASCA 57 (S)
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1 EDELMAN J: Following delivery of my reasons in this proceeding the defendants proposed orders as follows:
(1) The first and second plaintiffs' action be dismissed. (2) The first and second plaintiffs pay the first, second and third defendants' costs of the action, to be taxed if not agreed.
(3) The first, second and third defendants' counterclaim be dismissed.
(4) The first, second and third defendants pay the first and second plaintiffs' costs of the counterclaim, to be taxed if not agreed.
2 The plaintiffs opposed orders (2) and (4). They filed affidavit evidence and submissions in support of an order that there be no order as to costs. The defendants filed responsive submissions. When all submissions and affidavits were received the parties agreed that the matter should be dealt with on the papers. 3 The usual costs order is that the successful party pay the costs of the unsuccessful party. Departure from this usual position occurs only with 'good reason' or in 'special circumstances': Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 86 [35] (Gaudron & Gummow JJ), 96 - 98 [66] - [70] (McHugh J), 120 - 121 [134] (Kirby J); Milne v Attorney-General for the State of Tasmania[1956] HCA 48; (1956) 95 CLR 460, 477 (the Court). As Martin CJ and Murphy JA explained in Roe v The Director General, Department of Environment and Conservation for the State of Western Australia [2011] WASCA 57 (S)[13]:
The use of the expression 'special circumstances' to describe those occasions upon which it will be appropriate for a court to depart from the usual order as to costs emphasises the rare and exceptional character of those occasions.
4 In this case the usual order would be that the plaintiffs pay the defendants' costs of the action and that the defendants pay the plaintiffs' costs of the counterclaim. 5 The plaintiffs' submission that an order should be made for 'no order for costs' relied upon (i) an assertion that the defendants' conduct in relation to the defence should disentitle them to a portion of the costs of the claim; and (ii) the plaintiff's entitlement to the costs of the counterclaim. The plaintiffs submitted that these two matters made the
(Page 4) position in relation to costs so finely balanced that an order should be made that there be no order as to costs.
6 The first point that should be made is that, as was common ground, the plaintiffs are entitled to the costs of the counterclaim. But even if the plaintiffs were also correct that the defendants' conduct of the defence should disentitle the defendants to a portion of the costs of the claim then the appropriate orders in this case would be that the defendants pay the plaintiffs' costs of the counterclaim and that the plaintiffs pay the defendants a reduced proportion of the defendants' costs of the claim. However, for the reasons below, I do not consider that there is any basis upon which I can reduce the proportion of costs which the defendants can recover for the claim. 7 The plaintiffs submitted that there were two respects in which the defendants' conduct of the claim was disentitling conduct which justified an apportionment of the costs of the claim. First, it was said that the defendants were unreasonable in their resistance to providing discovery. Secondly, it was said that the defendants filed unnecessary witness statements.
8 These two matters were supported by an affidavit from a senior solicitor acting for the plaintiffs, Mr Pelligra. The plaintiffs' complaint, as summarised from the affidavit and submissions, was as follows.
(i) The plaintiffs had sought discovery of documents relating to 'the defendants' practices, policies and procedures' and 'relating to the termination of employment and any contract of sale of other employees who are taking part in the Home Ownership Scheme': Plaintiffs' Contentions and Submissions in Relation to Costs [3.3]. (ii) The defendants had resisted discovery on the basis of relevance: Plaintiffs' Contentions and Submissions in Relation to Costs [3.3], affidavit of Mr Pelligra sworn 22 August 2012 [4] - [5].
(iii) The defendants filed and served witness statements from Mr Harding and Mr Baker on 20 April 2012. Issues of discovery arose from the witness statements of Mr Harding and Mr Baker: affidavit of Mr Pelligra sworn 22 August 2012 [7].
(iv) The plaintiffs were put to the cost of objecting to the witness statements of Mr Harding and Mr Baker, mainly due to failure to make discovery: Plaintiffs' Contentions and Submissions in
(Page 5) Relation to Costs [3] - [4], affidavit of Mr Pelligra sworn 22 August 2012 [14].
(v) Documents related to those witness statements were provided to the plaintiffs six days before the hearing. On the first day of trial the defendants provided further discovery: affidavit of Mr Pelligra sworn 22 August 2012 [13]. (vi) The plaintiffs were put to the cost of preparing cross-examination. This expense was said to be wasted when the defendants did not call those witnesses: Plaintiffs' Contentions and Submissions in Relation to Costs [3.5] - [3.6].
(vii) Since the order for costs of the discovery application was that costs be in the cause, if the plaintiffs were ordered to pay the costs of the claim then the plaintiffs will be required to pay the costs of a discovery application that was resisted on the incorrect basis that the documents were not relevant: Plaintiffs' Contentions and Submissions in Relation to Costs [3.7].
9 There are four reasons why I do not accept that costs of the claim should be apportioned due to the conduct of the defendants in relation to discovery. 10 First, the plaintiffs' complaint about the costs of the discovery application is essentially a complaint about the order I made that costs of that application be in the cause. In a letter annexed to Mr Pelligra's affidavit, Mr Pelligra says that my decision on the discovery application 'may well have been different' if I had had the benefit of submissions concerning the relevance of the documents in relation to which discovery was sought in light of the witness statements of Mr Harding and Mr Baker.
11 I received written submissions in relation to the discovery application on 11 April 2012 (plaintiffs) and 13 April 2012 (defendants). My decision was delivered on 24 April 2012. The witness statements were provided to the plaintiffs on 20 April 2012. No submission was made, nor was any sought to be made prior to my reasons for decision, in relation to the effect of the witness statements on discovery.
12 Nor was any issue raised after my reasons for decision were provided to the parties, and before any costs orders were made. The plaintiffs did not seek an order that the costs of my decision on discovery be reserved. Instead, in a letter on 24 April 2012, the plaintiffs proposed to the
(Page 6) defendants that costs be in the cause. At the directions hearing on 2 May 2012, when I enquired whether there was any agreed position between the parties concerning the costs of the discovery application, counsel replied that the agreed position was that costs be in the cause: ts 54 (2 May 2012).
13 Secondly, the documents which the defendants provided to the plaintiffs on 16 May 2012 were described by the defendants as arising from Mr Harding's evidence 'to the effect that employees considered to have engaged in misconduct are terminated immediately with pay in lieu of notice'. Those documents were various termination letters of the employment of specific individuals. It is arguable (but I did not receive any submissions on this point at the discovery application) that these were not the documents sought by the plaintiffs in their discovery application. The documents sought by the plaintiffs in relation to termination were '[a]ny direction given internally by BHPBIO or policies adopted in regard to the termination of employees with pay in lieu of notice instead of working out their period of notice': Hampton v BHP Billiton Minerals Pty Ltd [2012] WASC 133 [22] (emphasis added). 14 As I explained in my decision on the discovery application, I understood this category to be concerned 'alleged general policies adopted by the defendants in relation to termination of employees with pay in lieu of notice' (emphasis added): Hampton v BHP Billiton Minerals Pty Ltd [2012] WASC 133 [33]. At trial, and consistently with this approach, counsel for the plaintiffs also described the documents that had been sought in the discovery application as 'specifically related to procedures, policies relating to termination of employment': ts 168. But, counsel for the plaintiffs submitted that the evidence of Mr Harding 'can't be a BHPBIO policy; it has to be Mr Harding's own personal approach to the termination of employment': ts 170.
15 Thirdly, as I explained in my discovery judgment ([33]) there was no pleading or submission that BHPBIO acted in a manner contrary to any of its internal policies in its dealings with the plaintiffs. No amendment was made to raise this as an issue, although other amendments were made.
16 Fourthly, although an apportionment of costs arising from an action is possible, there are difficulties in making an apportionment where to do so would involve reopening issues and a decision in an interlocutory dispute. This is especially so where, as here, the characterisation of the interlocutory dispute and the assessment of the conduct in relation to the interlocutory issue is not clear-cut.
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17 As a footnote to this issue I should mention that although, as counsel for the plaintiff had observed, the discovered employment termination letters turned out to be irrelevant, nothing in these reasons should be taken as any endorsement of the propriety of the discovery of employment termination letters by the defendants as late as the first morning of trial. But I do not express any opinion on this issue in the absence of evidence and argument concerning the relevance of these letters on the pleadings or the identification of the particular issues to which Mr Harding's witness statement was said to be directed.
18 As to those aspects of the plaintiffs' complaint which related to the failure of the defendants to call witnesses, this is not a matter which could permit the apportionment of costs. The defendants were entitled to elect not to call any witnesses. I would be prepared to draw the inference, without direct evidence, that the plaintiffs' counsel had prepared substantial cross-examination in anticipation of the defendants calling the witnesses for whom they had filed witness statements. But I was not directed to, and I am not aware of, any authority which suggests that costs can be apportioned merely due to a failure to call witnesses. To the opposite effect is authority which permits, in some instances, the party who fails to call a witness to recover the expenses of that witness: see the discussion in G dal Pont The Law of Costs (2nd ed, 2009) 573 [17.32].
19 A further reason why the failure to call witnesses is not a matter which would generally cause costs to be apportioned is because this course can save both court time and expense to the parties. The highest that this submission could be put is that it might be that in exceptional circumstances a successful party might be deprived of a proportion of costs due to a failure to call witnesses. But it is not necessary to express any opinion on this matter because such circumstances do not exist in this case. It was not inappropriate for the defendants to elect not to call witnesses.
20 The appropriate orders are as follows:
1. The first and second plaintiffs' action be dismissed. 2. The first and second plaintiffs pay the first, second and third defendants' costs of the action, to be taxed if not agreed.
3. The first, second and third defendants' counterclaim be dismissed.
4. The first, second and third defendants pay the first and second plaintiffs' costs of the counterclaim, to be taxed if not agreed.