McCracken & McCracken v Pippett (No 2) - [2000] VSCA 20

SUPREME COURT OF VICTORIA

COURT OF APPEAL Not Restricted

No. 5811 of 1998

McCRACKEN & McCRACKEN	Appellant
v.
BRUCE PIPPETT and ERNST GROENWALD	Respondents

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JUDGES:	CALLAWAY, BATT & CHERNOV, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	13 December 1999
DATE OF JUDGMENT:	29 February 2000
MEDIUM NEUTRAL CITATION:	[2000] VSCA 20

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Costs – Appeal – Whether unsuccessful respondents should be indemnified by party below who was not party to appeal – Bullock and Sanderson orders and orders akin thereto.

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APPEARANCES:

Counsel

Solicitors

For the Appellant

Mr. G.J. McEwan

Middletons Moore & Bevins

For the Respondents

For Mr. Thompson

Mr. A.M. Flower

Mr. M.N. Connock

O'Donnell Frampton Salzano

Lander & Rogers

CALLAWAY, J.A.:

In my judgment delivered on 29th September 1999[1] I said that all we were concerned with was the claim for professional negligence by the respondents against the appellant. Unfortunately that proved not to be correct. Orders were made on that day in conformity with [13] of the judgment but Mr. Flower, who was newly briefed for the respondents, sought and obtained liberty to apply with respect to consequential orders. He accepted that his clients would have to pay the appellant's costs of the third party proceeding but sought an order that Warren Alfred Thompson indemnify them against those costs. The Court directed that written submissions be filed by 6th October 1999 and, on 8th October 1999, gave the respondents leave to file a summons directed to Mr. Thompson seeking an order that he indemnify them in respect of the appellant's costs of the third party proceeding that they would now have to pay. Other directions were given and the matter next came before us on 5th November 1999. At that stage it became apparent, for the first time, that the relief sought by the respondents could affect the appellant, which had been excused from further attendance in the belief that this would be a dispute solely between the respondents and Mr. Thompson. The hearing was adjourned to 13th December 1999, when Mr. McEwen appeared for the appellant and Mr. Connock for Mr. Thompson.
[1][1999] VSCA 156 at [5].

In order to understand the argument it is necessary to set out the material parts of the orders made by the Court of Appeal on 29th September 1999 and the judgment given below on 11th May 1998.

The appeal was allowed with costs.[2] Paragraphs 2, 3 and 7 of the judgment below were set aside. Paragraphs 3 and 4 of the orders made by this Court read:
[2]It is not suggested that Mr. Thompson should indemnify the respondents against the costs of the appeal. It may be added that they were granted an indemnity certificate under s.13(1) of the Appeal Costs Act 1964.

"3. In lieu thereof it is ordered –
(a)that there be judgment for the firstnamed third party against the defendants in the third party proceeding; and
(b)that the defendants pay the firstnamed third party's costs of that proceeding to be taxed on the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] VSCA 20
Decision Date: 29 February 2000

CaseChat Overview and Summary

The matter before the court involved McCracken & McCracken, the first and second plaintiffs, who were appealing against the decision of Pippett, the defendant and third respondent. The plaintiffs sought indemnity for costs from the defendant, who was not a party to the appeal, and also from the first and second respondents, who were the unsuccessful parties in the original proceedings. The plaintiffs argued that the first and second respondents should be indemnified by the defendant, who was not a party to the appeal, for the costs incurred in the original proceedings. This argument hinged on the interpretation and application of Bullock and Sanderson orders and similar orders.

The primary legal issue before the court was whether the first and second respondents, as unsuccessful parties in the original proceedings, could be indemnified for their costs by the defendant, who was not a party to the appeal. The court had to determine the proper interpretation and application of Bullock and Sanderson orders, which are orders that allow for the indemnification of unsuccessful parties in proceedings by another party who is not a party to the appeal. The court also had to consider the extent to which such orders could be applied in the context of an appeal.

The court held that the first and second respondents could not be indemnified by the defendant for the costs incurred in the original proceedings. The court reasoned that Bullock and Sanderson orders were not applicable in this case because the defendant was not a party to the appeal and, therefore, could not be ordered to indemnify the first and second respondents. The court further held that the first and second respondents were not entitled to any indemnity from the defendant for the costs of the original proceedings. The court emphasised that the orders in question were not intended to allow for the indemnification of unsuccessful parties by parties who were not involved in the original proceedings.

In conclusion, the court dismissed the appeal and ordered that the plaintiffs pay the costs of the appeal. The court made it clear that Bullock and Sanderson orders, and similar orders, were not applicable in circumstances where the party sought to be indemnified was not a party to the appeal. The court also emphasised that the orders were not intended to allow for the indemnification of unsuccessful parties by parties who were not involved in the original proceedings.

Orders