May v Thomas

[2014] WASCA 176 (S)

MAY -v- THOMAS [2014] WASCA 176 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2014] WASCA 176 (S)
Court:	THE COURT OF APPEAL (WA)	Published:	17/11/2014
Case No:	CACV:78/2012	Heard:	ON THE PAPERS
Coram:	MARTIN CJ BUSS JA CHANEY J	Delivered:	17/11/14
No of pages:	6	Judgment Part:	1 of 1
Result:	Costs of the first trial to be costs in the cause of the second trial. Respondent to pay 80% of appellant's taxed or agreed costs of the appeal. Respondent granted indemnity certificate pursuant to Suitors' Fund Act 1964 (WA).
Category:	B
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Parties:	MARK CHRISTOPHER MAY ANTHONY TREVOR THOMAS
Catchwords:	Costs Partial success on appeal Whether departure from general rule that successful party should recover its cost justified Turns on own facts
Legislation:	Rules of the Supreme Court 1971 (WA), O 66 r 1 Suitors' Fund Act 1964 (WA)
Case References:	Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) Getex Pty Ltd v Reed Business Information Pty Ltd [No 2] [2013] NSWSC 1271 May v Thomas [2014] WASCA 176 Nudrill Pty Ltd v La Rosa [2010] WASCA 158 (S) Oshlack v Richmond River Council (1998) 193 CLR 72 Suncorp Metway Insurance Ltd v Kilner [2013] QCA 69 Walker v Symonds [2014] QCA 184

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MAY -v- THOMAS [2014] WASCA 176 (S) CORAM : MARTIN CJ

BUSS JA
CHANEY J

HEARD : ON THE PAPERS DELIVERED : 17 NOVEMBER 2014 PUBLISHED : 17 NOVEMBER 2014 FILE NO/S : CACV 78 of 2012 BETWEEN : MARK CHRISTOPHER MAY

Appellant

AND

ANTHONY TREVOR THOMAS
Respondent

ON APPEAL FROM:

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Coram : FENBURY DCJ

Citation : MAY -v- THOMAS [No 2] [2012] WADC 96

File No : CIV 2394 of 2004

Catchwords:

Costs - Partial success on appeal - Whether departure from general rule that successful party should recover its cost justified - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 66 r 1

Suitors' Fund Act 1964 (WA)

Result:

Costs of the first trial to be costs in the cause of the second trial.

Respondent to pay 80% of appellant's taxed or agreed costs of the appeal.
Respondent granted indemnity certificate pursuant to Suitors' Fund Act 1964 (WA).

Category: B

Representation:

Counsel:

Appellant : Mr T H Offer
Respondent : Mr T F Percy QC & Mr S D Hubbard

Solicitors:

Appellant : Vertannes Georgiou
Respondent : DLA Piper Australia

Case(s) referred to in judgment(s):

Amaca Pty Ltd v Hannell [2007] WASCA 158 (S)
Getex Pty Ltd v Reed Business Information Pty Ltd [No 2] [2013] NSWSC 1271
May v Thomas [2014] WASCA 176
Nudrill Pty Ltd v La Rosa [2010] WASCA 158 (S)
Oshlack v Richmond River Council (1998) 193 CLR 72
Suncorp Metway Insurance Ltd v Kilner [2013] QCA 69
Walker v Symonds [2014] QCA 184

REASONS OF THE COURT:

Summary

1 For reasons previously published,1 the court allowed this appeal, dismissed a notice of contention served by the respondent, set aside the decision of the trial judge and remitted the matter to the District Court differently constituted for rehearing. At the time those orders were made, directions were made for the exchange of written submissions relating to the costs of the appeal and of the first trial, on the basis that those issues would be resolved by the court on the papers and without a further hearing. The parties have exchanged written submissions on those issues which have been considered by the court. These are our reasons for concluding that the appropriate orders with respect to costs are that the costs of the first trial should be costs in the cause of the second trial, the respondent should be ordered to pay 80% of the appellant's taxed or agreed costs of the appeal, and the respondent should be granted an indemnity certificate pursuant to the provisions of the Suitors' Fund Act 1964 (WA).

The costs of the trial

2 The decision of the trial judge was set aside because the reasons given for that decision were inadequate. Until the retrial has been conducted and a decision delivered, it is not possible to know which of the appellant or the respondent will ultimately be successful. However, at this stage of the proceedings it can be safely concluded that the costs which each party incurred in relation to the first trial were thrown away by no fault of either party. In these circumstances there is no reason to depart from the general rule which applies when a retrial is ordered, to the effect that the costs of the first trial are ordered to be costs in the cause of the retrial.2

The costs of the appeal

3 There were seven grounds of appeal. Five were concerned with the inadequacy of the reasons given by the trial judge. Two grounds of appeal were directed at the substantive issues in the case, one of which,3 if upheld, would have resulted in a verdict in favour of the appellant. The respondent served a notice of contention containing two grounds, both of which were directed to the substantive issues in the case and one of which,4 if upheld, would have led to a verdict in favour of the respondent.

4 The two grounds of appeal and the notice of contention relating to the substantive issues in the case were each dismissed. As we have noted, each of the grounds of appeal relating to the inadequacy of the reasons given by the trial judge was upheld. In summary, the appellant was successful on all grounds of appeal relating to the inadequacy of the reasons given by the trial judge, and was successful in having the decision of the trial judge set aside, but each of the appellant and respondent were unsuccessful in relation to the arguments which they advanced with respect to the substantive issues in the case.

5 Although the court has a wide discretion with respect to costs, that discretion will generally be exercised by ordering the unsuccessful party to pay the successful party's costs - see Rules of the Supreme Court 1971 (WA), O 66 r 1. Where the generally successful party has failed on a particular issue or issues, the costs orders properly made will ordinarily only be adjusted to reflect that failure if the issues upon which that party failed are discrete and severable, and the introduction of those issues added to the costs of the proceedings in a significant and readily discernible way.5 If it is appropriate to adjust the costs order to take account of the generally successful party's failure on a specific issue or issues, the adjustment will usually be made by reducing the costs which the successful party is entitled to recover by a percentage which reflects the contribution which those issues made to the overall costs of the proceedings, and the fact that the generally unsuccessful party was successful on those issues. The percentage to be deducted will be assessed as a matter of general impression rather than by reference to any detailed assessment of the breakdown of costs actually incurred.6

6 In this case, as we have noted, it is not yet possible to say which party will be ultimately successful. However, the appellant was the generally successful party on the appeal, although he failed in relation to the discrete and severable issues raised by those grounds of appeal which were dismissed, and which were concerned with the substantive issues in the case. The introduction of those issues would have added to the costs of the proceedings in a significant and readily discernible way. However, the assessment of the extent to which those issues added to the costs of the proceedings must take account of the fact that they overlapped to a significant extent with the issues raised in the respondent's notice of contention which was also dismissed.

7 The application of the general principles to which we have referred to the circumstances of this case leads to the conclusion that the costs of the appeal which the appellant, as the generally successful party on the appeal, should recover from the respondent should be adjusted to take account of the appellant's failure in relation to those grounds of appeal which were directed to the substantive issues in the case. However, the extent of the adjustment should reflect the respondent's failure on the notice of contention which it served, as the issues raised by that notice overlapped to some extent with the issues raised by the grounds of appeal which were dismissed.

8 Undertaking that adjustment as a matter of impression rather than mathematical science, the appellant should recover 80% of its costs of the appeal from the respondent. That percentage reflects the general notion that each party should bear their own costs of the issues upon which they were unsuccessful, as they overlapped and were of similar complexity. The appellant's costs should therefore be reduced by a percentage which reflects the likely portion of his costs referrable to the issues upon which he failed, which we estimate at 20%.

9 The respondent submits that there are three reasons why the general principles relating to costs should not be applied in this case.

10 First, it is said that neither party was ultimately successful on the appeal, because neither party persuaded the court that there should be a verdict in its favour. However, the appellant was successful in obtaining an order setting aside the decision of the trial judge, with the result that a retrial has been ordered. Accordingly, there can be no doubt that the appellant was the generally successful party on the appeal. The appellant's failure to obtain a verdict in his favour is properly reflected by the process of adjustment to which we have referred, which also takes into account the respondent's failure on the issues raised by the notice of contention.

11 Second, it is submitted that because it is not yet possible to say which party will be ultimately successful, no order for the costs of the appeal should be made in favour of one or other party at this stage of the proceedings. However, in every case in which a retrial is ordered, it will not be known which party will be ultimately successful at the time when orders are made with respect to the costs of the appeal. Because the appeal is a discrete and severable component of the litigation, there is no reason why the general rule to the effect that costs follow the event should not be applied to that component.7 As the appellant was the successful party on the appeal, there is no reason why the costs of the appeal should not follow the relevant event which is the outcome of the appeal.

12 Third, the respondent submits that the appeal was allowed through no fault of either party but due to the inadequacy of the reasons given by the trial judge. While that proposition is correct, it ignores the fact that the respondent unsuccessfully attempted to uphold the judgment at first instance. The respondent's opposition to the appeal caused the appellant to incur costs prosecuting the appeal:

Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did.8 (footnotes omitted)

13 For these reasons, none of the matters to which the respondent refers justify departure from the general rules relating to costs. Applying those rules there will be an order that the respondent pay 80% of the appellant's taxed or agreed costs of the appeal.

The Suitor's Fund

14 The respondent applies for an indemnity certificate pursuant to the provisions of the Suitors' Fund Act 1964 (WA). There is no reason why this certificate should not be granted. The appeal succeeded on a question of law,9 and there is no reason why, in the circumstances of this case, the respondent should not be indemnified from the fund.

______________________________________

1May v Thomas [2014] WASCA 176.
2Nudrill Pty Ltd v La Rosa [2010] WASCA 158 (S) [11].
3 Ground 6.
4 Ground 2.
5Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) [7].
6Amaca Pty Ltd v Hannell [2007] WASCA 158 (S) [6].
7Nudrill Pty Ltd v La Rosa [2010] WASCA 158 (S).
8Oshlack v Richmond River Council (1998) 193 CLR 72 [97].
9Suncorp Metway Insurance Ltd v Kilner [2013] QCA 69; Walker v Symonds [2014] QCA 184; Getex Pty Ltd v Reed Business Information Pty Ltd [No 2] [2013] NSWSC 1271.