Londos v Amaca Pty Limited (No. 2)

[2017] NSWDDT 10

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:	Londos v Amaca Pty Limited (No. 2) [2017] NSWDDT 10
Hearing dates:	On the papers
Date of orders:	10 October 2017
Decision date:	10 October 2017
Before:	Judge D. Russell
Decision:	1.   Vacate Order 2 made on 22 August 2017. 2.   Order the plaintiff to pay the defendant’s costs referable to the plaintiff’s claim for the loss of the future receipt of the Commonwealth age pension. 3.   Order the defendant to pay the plaintiff’s costs of the balance of the issues. 4.   Order that each party pay his or its own costs of the applications for costs orders.
Catchwords:	COSTS – Departure from ordinary rule that costs follow the event – Where successful party fails on discrete issue – Whether issue on which successful plaintiff failed was clearly severable or clearly dominant – Whether entitled to costs of the action.
Legislation Cited:	Dust Disease Tribunal Regulation 2013 Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005
Cases Cited:	Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Sabah Yazgi v Permanent Custodians Limited (No. 2) [2007] NSWCA 306 Bostik Australia Pty Limited v Liddiard (No. 2) [2009] NSWCA 304 Turkmani v Visvalingam (No. 2) [2009] NSWCA 279 Monie v Commonwealth of Australia (No. 2) [2008] NSWCA 15
Category:	Costs
Parties:	Fred Dib (plaintiff) Amaca Pty Limited (formerly James Hardie & Coy Pty Ltd) (defendant)
Representation:	Counsel: P Semmler QC (plaintiff) S Tzouganatos (plaintiff) D Priestley SC (defendant) J Sheller (defendant)   Solicitors: Turner Freeman Lawyers (plaintiff) Mills Oakley (defendant)
File Number(s):	DDT 236/2016

Judgment ON COSTS

INTRODUCTION

1. The trial in this matter took place over seven days in late July and early August 2017. Judgment in favour the plaintiff for $504,956 was delivered on 22 August 2017. An order was made for the defendant to pay the plaintiff’s costs.

2. Liberty was granted to the parties if a different costs order was sought. The costs issue was to be dealt with on the papers. No party requested the opportunity to make oral submissions.

THE DEFENDANT’S SUBMISSIONS

3. The defendant submitted that circumstances dictated a departure from the usual rule that costs follow the event. The defendant submitted that the plaintiff had lost a clearly dominant or severable issue.

4. A large part of the hearing was taken up with the plaintiff’s claim for future economic loss. The plaintiff submitted that because his life had been cut short by his disease of mesothelioma, he had lost the receipt of the Commonwealth age pension for his “lost years”. The legal issue in the case was whether or not such a loss was compensable.

5. In the judgment delivered on 22 August 2017 I found that such a loss was not compensable as a matter of law. In case that finding was overturned on appeal, I went on to consider the economic value of the loss of the pension claim. For the reasons set out between paragraphs 184 to 208 of my judgment, I assessed the value of that loss as nil.

6. Thus on the major issue in the case, being the loss of the age pension claim, the plaintiff lost as a matter of law and lost on the facts. The defendant submits that the appropriate order would therefore be to deny the plaintiff the costs of that separate issue, and order the plaintiff to pay the defendant’s costs on that issue.

SUBMISSIONS OF THE PLAINTIFF

7. The plaintiff opposes such an order. It submits that the defendant wanted to run the plaintiff’s case on the pension issue as a test case. However, correspondence put into evidence on the costs issue suggests that, if anything, it was the plaintiff who proposed dealing with this matter as a test case. However, that suggestion was made at an earlier stage when there were thoughts of removing the matter from the Claims Resolution Process. In the end result, my finding is that neither party wanted to run this as a test case. It was simply run as a damages claim, and within that damages claim was a relatively novel claim for loss of the age pension as a head of future economic loss.

8. The plaintiff submitted that if the Tribunal were to make the costs order suggested by the defendant, that would create a situation of “substantial injustice to Mr Londos who would be deprived of a significant proportion of his damages (in unrecoverable costs or costs payable to Amaca) resulting from litigation in which he was ultimately successful”.

9. The plaintiff also attempted to put into evidence material concerning without prejudice offers made between the parties. I proposed to completely ignore the offers which were made prior to the hearing. They were “without prejudice” offers. Neither party took the opportunity to avail themselves of the mechanism for serving an Offer of Compromise under Part 6 of the Dust Diseases Tribunal Regulation 2013. Each party could have protected himself or itself on costs by the service of such an offer. Neither did so.

POWER AS TO COSTS

10. Section 98(1) of the Civil Procedure Act 2005 provides:

“Subject to rules of court and to this or any other Act:

(a)   costs are in the discretion of the court, and

(b)   the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c)   the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.”

11. Rule 42.1 of the Uniform Civil Procedure Rules 2005 provides as follows:

“General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.”

12. The event is in this case the ultimate outcome of the proceedings. This is the judgment for the plaintiff against the defendant for $504,756. The order made on 22 August 2017 for the defendant to pay the plaintiff’s costs was an order that costs follow the event. That order will be reconsidered pursuant to the leave granted.

13. I was referred to a large number of authorities for the proposition that where the successful party fails on a particular issue, the court can order that party to pay the costs of the lost issue. I will not recite all of those authorities, only those which I have found the most useful.

14. The starting point is the decision of the Federal Court of Australia in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748. Justice Toohey said of the power to otherwise order:

“The discretion must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be the effect.

1.   Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.

2.   Where a litigant has succeeded only on a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which she has failed.

3.   A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.”

15. In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, it was submitted that the court’s power to order a successful party to pay the costs in respect of an issue raised by that party, on which the party failed, ought to be exercised only where the court, on a consideration of all the circumstances, has concluded that the raising of that issue by the applicant was so unreasonable that it is fair and just to make the order. The Court of Appeal held that no such principle exists in the sense of a fixed proposition of law. It held that in a proper case the party that is successful overall may be ordered to pay the costs of a discrete issue – at p.615D.

16. In Sabah Yazgi v Permanent Custodians Limited (No. 2) [2007] NSWCA 306, the Court of Appeal said at [24]:

“In the case where there are multiple issues litigated, the court may, in the exercise of its discretion, order that a successful party have part only of its costs. However, it does not necessarily follow that that is the appropriate order. The commencing position is that costs follow the event so that a successful party is entitled to costs. It may be appropriate to order that a successful party be deprived of costs or a portion of the costs if the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument. This proposition is well established and does not require any discussion of the case law, which is conveniently contained in the annotations to Rule 42.1 in Ritchie’s Uniform Civil Procedure (NSW): paras 42.1.5; 42.1.10; 42.1.15.”

17. In Bostik Australia Pty Limited v Liddiard (No. 2) [2009] NSWCA 304 the Court of Appeal said at [38]:

“The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows:

•   Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

• In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.

• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].

• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).

• A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.

These principles were applied in City of Canada Bay Council v Bonaccorso Pty Ltd (No 3) [2008] NSWCA 57 at [22] and most recently in Turkmani v Visvalingham (No 2) [2009] NSWCA 279.”

APPLICATION OF THOSE PRINCIPLES

18. In the present case the issue of the loss of the age pension was clearly a separable issue. It was an additional head of damages which was only belatedly added to the pleadings and particulars after a similar claim succeeded in the District Court of South Australia.

19. The issue of the loss of the age pension was in my view a dominant issue. It took up a large part of the submissions. My judgment in this matter reflects the care and attention given to the issue by both senior counsel. I was referred to a large number of authorities, both Australian and English. Further, the evidence of the two accountants was directed only to the issue of quantification of the loss of age pension claim. The defendant has submitted that much of the evidence of Professors Pavlakis and Boyer was directed towards life expectancy, which in turn affected the calculation of the loss of pension claim. I reject that submission. Most of their evidence was directed towards the course of the disease of mesothelioma and the current strategies for dealing with patients’ pain.

20. I will not embark upon an analysis of how much of the court hearing was taken up with the separate issue of the loss of the pension claim. As pointed out by the plaintiff in his submissions, not much of the preparation would have been taken up with that claim, at least before it was added in late May 2017. However, much preparation on the pension issue must have been done after the claim was raised. Further, a significant part of the evidence and the submissions was taken up entirely on the loss of pension claim. I find that it was not only a separable issue but a dominant issue in the proceedings. The unsuccessful issue took up a significant part of the trial both by way of evidence and particularly by way of argument.

21. The separable issue was both a disputed question of law and a disputed question of fact. I found against the plaintiff on both.

22. In the case of Bostik cited above, the ultimate outcome on costs was that the defendant was successful on a limitation issue. The Court of Appeal said at [39] that consideration of that issue involved considerable time both in written and oral argument. It was a severable issue and the defendant should not be required to pay the successful plaintiff’s costs relating to the time spent in dealing with it.

23. It is trite to say that each case must be decided on its own facts. Other authorities cited to me have resulted in a conclusion opposite to that reached in Bostik. For example, in Turkmani v Visvalingam (No. 2) [2009] NSWCA 279, the Court of Appeal held that the issues of liability and apportionment for contributory negligence were clearly not severable. All arguments relied upon against liability had some bearing on the court’s overall assessment of the relative degrees of fault of the two parties. Costs for a separate issue were thus denied.

24. In Monie v Commonwealth of Australia (No. 2) [2008] NSWCA 15, the Court of Appeal dealt with a plaintiff who had succeeded in proving economic loss, but for a lesser amount than the quantum claimed at trial. The court said that it did not regard the economic loss claim as a separable issue or a dominant one. All that happened was that the plaintiff succeeded for that head of damage but for a lesser amount than claimed. No doubt this depended on the evidence accepted by the court.

25. In contrast, the claim for economic loss in the present case has entirely failed, both as a matter of law and on the facts.

26. I find that this is a case where the general rule that costs follow the event should yield to a recognition that while the plaintiff won the case, he lost a clearly dominant and severable issue. In those circumstances it would be unjust to order the defendant to pay all of the plaintiff’s costs. The plaintiff lost a large part of the case and the defendant, in effect won on that same aspect of the case.

ORDERS

27. I propose to vacate the costs order which I made on 22 August 2017 and in lieu thereof order the plaintiff to pay the defendant’s costs referable to the plaintiff’s claim for loss of the future receipt of the Commonwealth age pension, and to order the defendant to pay the plaintiff’s costs on all other issues.

28. I will leave it to the parties, or in default of agreement an assessor, to work out what those costs should be. I do not propose to make my own apportionment of these costs, as I only know what happened at the trial. I do not know how much work there was involved in preparation of the various issues. There is the further complication that this case was heard concurrently with a similar economic loss claim brought in Dib v Amaca Pty Limited.

29. My orders are:

1. Vacate Order 2 made on 22 August 2017.

2. Order the plaintiff to pay the defendant’s costs referable to the plaintiff’s claim for the loss of the future receipt of the Commonwealth age pension.

3. Order the defendant to pay the plaintiff’s costs of the balance of the issues.

4. Order that each party pay his or its own costs of the applications for costs orders.

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Decision last updated: 10 October 2017