Marsh v Ruggiero & Ors No. Scgrg-90-570 Judgment No. S28

[1999] SASC 28

MARSH v RUGGIERO & ORS

[1998] SASC 28

Williams J

1 On 21 December 1998 I heard argument upon the questions of costs which I had previously reserved when handing down my reasons for judgment following the trial of the action.
2 The plaintiff on 30 May 1989 was seriously injured in a vehicular accident and by next friend sued Mr Salvatore Ruggiero (the first defendant) who was the driver of a tractor with whom the plaintiff’s motor cycle collided.  The plaintiff’s claim against Mr Ruggiero was for damages for the serious injuries suffered by the plaintiff.  The relevant steps were as follows:
8 September 1989      Plaintiff notified Nominal Defendant of claim
29 September 1989   Nominal defendant denied liability
9 March 1990   Proceedings commenced by plaintiff against Salvatore Ruggiero
25 May 1992     Third party proceedings commenced against Fenton from whom Ruggiero purchased the tractor; it was alleged that the new lighting arrangements on the tractor did not strictly comply with the specification in the regulations.
25 May 1992     Second and third defendants joined as parties by the plaintiff who claimed that these additional defendants were vicariously liable for the wrong of the first defendant in the course of partnership business or for an act done with their authority.
11 June 1996     Nominal Defendant joined by the plaintiff as Fourth Defendant.
3 By consent at trial Fenton was dismissed from the action and the agreement between the parties avoids the necessity for me to be concerned with Fenton’s costs.
4 The plaintiff is a person under disability and the conduct of the proceedings on his behalf must be judged against that background.  The plaintiff was successful in his claims against the Nominal Defendant and his counsel argues that he should recover his costs in full.  I accept the force of that submission.
5 The second and third defendants were unsuccessful in their argument seeking to avoid vicarious responsibility for any liability attaching to the first defendant.  Evidence was called seeking to establish (albeit unsuccessfully) that Mr Salvatore Ruggiero was on a "frolic of his own", rather than performing partnership business or acting on the partners’ behalf with their authority.  The first, second and third defendants were represented by the same counsel (Mr D Smith) and incurred one set of costs.  I have decided - applying a broad brush - that justice would be achieved if I were to require Mr Smith’s clients to bear a sum by way of costs, equivalent to one half day refresher, representing  nominally the time devoted to the argument concerning "the relationship" between the first, second and third defendants.
6 In my judgment, as the first, second and third defendants have otherwise been successful (in the sense that liability attaches to the Nominal Defendant for the actions of the first defendant) they ought to receive their costs to reflect their success generally; however as the second and third defendants were unsuccessful upon a discrete issue as abovementioned they ought to be deprived of one half day’s counsel fee for themselves and they should be required to pay one half day’s counsel fee to senior and junior counsel for the plaintiff and senior and junior counsel for the defendant.  These fees will be calculated at refresher rates.  Arguably, an order (as I propose) requiring the first, second and third defendants to bear costs involving both senior and junior opposing counsel is a little harsh when one has regard to the nature of the issue upon which the second and third defendants were unsuccessful.  However, the nominal period of one half day which I allow as devoted to the issue is modest and represents the application of the "broad brush" to which I have referred in exercising my discretion.  The conduct of the defence of the first, second and third defendants is so intertwined that I have not attempted to segregate the first defendant’s position from that of his partners.
7 The Nominal Defendant (whilst recognising the inevitability that it must accept a costs burden) has argued that it should not be responsible for costs until the comparatively later date when it was joined as a party.  I disagree.  The Nominal Defendant denied liability and it is this conduct which is of particular significance in determining the commencing date for the costs which it must bear.  The plaintiff acted reasonably in initially pursuing a claim against the first defendant in the light of the Nominal Defendant’s denial of liability (see my comments below).  My attention has been directed to the provisions of Supreme Court Rule 101.01(1)(b) - requiring particulars upon 90 days notice to be provided to a defendant insurer before action.  In the circumstances nothing of consequence turns on the application of that rule.
8 The Nominal Defendant’s position as regards costs ought to be assessed with particular regard to its subsequent actions in vigorously defending the claim.  With the benefit of hindsight, it seems to me that generally speaking the work done in the action before the Nominal Defendant was joined was necessary in any event.  I make this comment in the knowledge as to how the parties eventually chose to conduct their cases.
9 Subject to the one half day adjustment in counsel fees to which I have referred, I consider that the Nominal Defendant as the unsuccessful defendant ought to bear the costs of the action.
10 The question arises as to how the order for costs as between the plaintiff and the Ruggieros (first, second and third defendants) should be expressed. The plaintiff has failed against these defendants, but it was reasonable that Mr Salvatore Ruggiero and his wife and son should be joined having regard to the factual difficulties associated with the application of s116 of the Motor Vehicles Act 1959. I consider that the defendants were all necessary parties to the resolution of facets of the dispute; it was certainly convenient that the issues be resolved between all parties in the fashion adopted within the framework of one action. I consider that the parties are to be commended for adopting the procedure which was followed and I have regard thereto in moulding an order which I consider to be just.
11 Counsel for the plaintiff argues that in terms of s116 of the Motor Vehicles Act, the legislative policy is to provide an injured plaintiff with an indemnity for costs. I am impressed with the argument therefore that a plaintiff (particularly a plaintiff under disability) should not be placed in the position of having to satisfy an order for costs against the successful defendants before looking to the unsuccessful Nominal Defendant for recoupment.
12 The case for the Nominal Defendant has been properly conducted (as has the case for other parties) and there is no element of criticism in my decision. However, the Nominal Defendant denied liability at an early stage and never resiled from that position. In my opinion (to anyone with even a bare knowledge of the facts) that step on 29 September 1989 (however it may have been expressed) must have carried with it the implication of an assertion that liability (if any) lay with the tractor driver. The subsequent conduct of the proceedings by the Nominal Defendant confirms that attitude. Therefore (with the particular advantage of looking at the matter in hindsight) it seems to me reasonable that the three successful defendants (Ruggieros) were joined by the plaintiff in the manner and at the time when that occurred; the associated costs were reasonably and properly incurred by the plaintiff as between himself and the unsuccessful Nominal Defendant. In these circumstances the principles discussed in Gould v Vaggelas (1984) 157 CLR 215 especially per Gibbs CJ at 229-230 will apply.
13 The principle is also discussed in Fennell v S & E Services (1988) 47 SASR 6 at 18-19 per Von Doussa J when he said:
"I am unable to detect any real difference of opinion between the four justices of the High Court in Gould v Vaggelas (1984) 157 CLR 215 who discussed the principle on which a Bullock order may be made against an unsuccessful defendant. Gibbs CJ considered that the mere fact that 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. He said(at 229-230):

"The ground on which a Bullock order may be made is, in my opinion, more accurately stated in a passage in Sanderson v Blyth Theatre Co [1903] 2 KB 533 at 539, which was cited with approval in Bullock v London General Omnibus Co [1907] 1 KB 264 at 272 and Hong v A & R Brown Ltd [1948] 1 KB 515 at 522, viz, 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 Corp (1948) 77 CLR 544, Williams J (at 572-573), 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 (see at 559-560, 566). In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission (1978) 39 LGRA 94 at 100, 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’."

Brennan J said (at 260):

"A judicial discretion can be exercised to make a Bullock order against an unsuccessful defendant in 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....."

14 Where an action is properly and reasonably brought against two defendants as being liable in the alternative and judgment is recovered against one only, the unsuccessful defendant by reason of the party’s conduct may be ordered to pay to the plaintiff the costs payable by the plaintiff to the successful defendant; in the alternative the unsuccessful defendant may be ordered to pay direct to the successful defendant his costs of action.  In exercising this discretion the Court is entitled to have regard to the conduct of the unsuccessful defendant before joinder of that defendant and also the manner in which the unsuccessful defendant conducted its defence see Fennell at 20).
15 The principles of practice to which I have referred are reflected in RSC 101.01(1) which provides that the Court may:
"(d)   where the costs of one defendant against a plaintiff ought to be paid by another defendant, order payment to be made by one defendant to the other directly, or the plaintiff to pay the costs of the successful defendant and allow him to include those costs as a disbursement in the costs payable to him by the unsuccessful defendant;"
This must be read in light of s40 of the Supreme Court Act 1935. I note the comment in Quick on Costs par4.1840:
"Sanderson or Bullock orders Rule 101.01(1)(d) (SA) expresses the jurisdiction to make a Sanderson order or a Bullock order assumed by the judges under the English legislation from which s40 of the Supreme Court Act 1935 (SA) derives. A Sanderson order directs the unsuccessful defendant to pay the successful defendant’s costs direct to her or him: Sanderson v Blyth Theatre Co [1903] 2 KB 533; see further [2.570]. A Bullock order directs the plaintiff to pay the successful defendant’s costs including them in the amount he or she is entitled to recover from the unsuccessful defendant: Bullock v London General Omnibus Co [1907] 1 KB 264;"
16 In my view the case is a proper one for making an order (Sanderson order) that the unsuccessful Nominal Defendant make a payment of costs direct to the successful defendants, rather than by adopting the circuitous route involving a payment by the plaintiff to the successful defendants and reimbursement from the unsuccessful defendant. In Sanderson v Blyth Theatre (1903) 2 KB 533 (see 542-543) the Court dealt with the position where a suit was instituted by the Attorney General ex officio; in such a case as the Attorney General could not be ordered to pay costs an order requiring direct payment as between defendants was considered appropriate. By parity of reasoning (although the matter is within my discretion) I consider that in the present case the plaintiff under disability (suing by Public Trustee as next friend) ought not to be involved with the costs of the successful defendants in the circumstances of the present action to which the provisions of s116 of the Motor Vehicles Act applies.
17 The formal orders will be as follows:

1. Subject to par2, order that the fourth defendant (Nominal Defendant) pay to the plaintiff and to the first, second and third defendants respectively their costs of action to be taxed (including costs incurred before the joinder of the fourth defendant as a party).

1. Order that the costs payable to the first, second and third defendants be reduced by requiring them (at refresher rates for counsel) to bear in respect of one half day of the trial an amount equal to their own counsel fees for that period and also counsel fees of senior and junior counsel for the plaintiff and the fourth defendant for that same period. 

1. There will be a certificate for counsel (including senior counsel) upon the argument as to costs leading to the present order.