Nudrill Pty Ltd v La Rosa - [2010] WASCA 158

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: NUDRILL PTY LTD -v- LA ROSA [2010] WASCA 158

CORAM: McLURE P
BUSS JA
MURPHY JA

HEARD: 9 APRIL 2010

DELIVERED : 4 AUGUST 2010

FILE NO/S: CACV 69 of 2009

BETWEEN: NUDRILL PTY LTD
Appellant
AND
GIUSEPPE LA ROSA
ROSINA LA ROSA
Respondents

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :YEATS DCJ
Citation  :NUDRILL PTY LTD -v- LA ROSA & ANOR [2009] WADC 84
File No  :CIV 1523 of 2008

Catchwords:

Practice and procedure - Amendment to allow claim against individual only in alternative to claim against partnership of which individual is allegedly partner

Partnership - Joint contractual obligations of partners

Practice and procedure - Alternate pleas in contract and tort - Possessory title to property founding claim in negligence - Claim in tort open on material facts pleaded - Reliance on legal consequences which arise from material facts pleaded

Practice and procedure - Court's power to vary its own orders

Practice and procedure - No case submission - Verdict by direction - Party applying should have been put to election

Legislation:

Partnership Act 1895 (WA), s 17, s 18, s 19, s 26
Rules of the Supreme Court 1971 (WA), O 21 r 5

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant: Mr J A Thomson
Respondents : Dr P R MacMillan

Solicitors:

Appellant: SRB Legal
Respondents : Friedman Lurie Singh & D'Angelo

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

Alexander v Rayson [1936] 1 KB 169
Allan v Hocking [2006] TASSC 2; (2006) 15 Tas R 234
BHP Steel (RP) Pty Ltd v ABB Engineering Construction Pty Ltd [2001] WASCA 294
Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609
Cahill v Construction, Forestry, Mining & Energy Union (No 2) [2008] FCA 1292; (2008) 170 FCR 357
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1
Crouch v Joseph (Unreported, WASC, Library No 9004.1, 22 August 1991)
Esanda Finance Corp Ltd v Peat Marwick Hungerfords [1997] HCA 8; (1997) 188 CLR 241
Fankhauser v Mark Dykes Pty Ltd [1960] VR 376
Gerrard v Slamar [2004] WASCA 253
Green v Wilden Pty Ltd [2004] WASC 105
Hobbs v Petersham Transport Co Pty Ltd [1971] HCA 26; (1971) 124 CLR 220
James v Australia & New Zealand Banking Group Ltd (1986) 64 ALR 347
J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA) (No 2) (1992) 38 FCR 458
Jones v Dunkel (1959) 101 CLR 298
Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 1 AC 785
Lever Bros Ltd v Bell [1931] 1 KB 557
Morgan v Banning (1999) 20 WAR 474
Nudrill Pty Ltd v La Rosa [2009] WADC 84
Pateman v Higgin [1957] HCA 62; (1957) 97 CLR 521
Ralph M Lee (WA) Pty Ltd v Fort (1991) 4 WAR 176
Re Vandervell's Trusts (No 2); White v Vandervell Trustees Ltd [1974] Ch 269
Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54
Roman Catholic Archbishop of Perth v Bishop (Unreported, WASCA, Library No 950470, 7 September 1995)
Wilden Pty Ltd v Greenco Pty Ltd (Unreported, WASC, Library No 950322, 22 June 1995)
Young v Rank [1950] 2 KB 510

McLURE P: I agree with Murphy JA.
BUSS JA: I agree with Murphy JA.
MURPHY JA:

Introduction

The appellant was the plaintiff in proceedings in the District Court in which it sued for damages sustained to a drilling rig when the rig was being transported from Gnangara to Kalgoorlie. The respondents were the defendants to the action. It was common ground at trial that the first‑named respondent was the driver of the truck which transported the rig at the time the damage occurred. It is convenient to refer to the parties to the appeal by reference to their positions at trial.
The learned trial judge found that the defendants had no case to answer, and dismissed the plaintiff's action. Her Honour's reasons appear in Nudrill Pty Ltd v La Rosa [2009] WADC 84. Indemnity costs were also awarded against the plaintiff. The plaintiff appeals both decisions. The notice of appeal was served approximately one week late, and the plaintiff also seeks an extension of time.
The judge's decision in relation to the dismissal of the plaintiff's action centred upon her view of the nature and scope of the plaintiff's claim, as contained in the pleadings. In substance, her Honour found that by the close of its case, the plaintiff had not established any evidence in support of its contractual claim that the defendants had agreed to transport the rig (reasons [29]) and that, in the absence of such evidence, its pleaded claim in negligence must also fail (reasons [30] ‑ [31]).
It will be necessary to consider the plaintiff's pleading in some detail, but, first, reference should be made to the course of the trial.

The course of the trial

The trial commenced on 25 May 2009. The plaintiff had served pre‑trial submissions on 15 May 2009, but there was no formal opening by the plaintiff's counsel at the start of the trial. On the first day, both the plaintiff's counsel and the defendants' counsel indicated that each side had a witness who was leaving Western Australia later that day, and that it was important for their evidence to be given that day. Accordingly, those two witnesses were called. On the second day, the plaintiff completed its evidence and closed its case.

On the third day, before the defendants opened their case, the plaintiff's counsel applied to amend the statement of claim pursuant to O 21 r 5 of the Rules of the Supreme Court1971 (WA). There was some difficulty dealing with the application because the proposed amendment was not in the prescribed form and the usual red underlinings were not shown. The proposed amendment sought to delete references to the alleged business name of the defendants which had appeared in the title to the action, and to add express allegations that the first‑named defendant, in the alternative to the defendants, was liable on the contract and in negligence. These were referred to as the 'identity amendments'. These amendments were initially opposed by the defendants, but later in the day the defendants withdrew their opposition to them. The judge allowed the 'identity amendments'.
On the fourth day of the trial, on the application of the defendants, the judge (purportedly) rescinded her order giving leave to amend in relation to the 'identity amendments', except insofar as they applied to the title of the defendants to the action. The judge also heard an application by the defendants that they had no case to answer. The judge recorded, in her reasons [10], [30] and [31], the submission of the defendants in that regard:
In the meantime, the defendants submitted they had no case to answer - first in relation to what I will call the interim amended statement of claim and then, subsequently in relation to the finally amended statement of claim. The submission is based on an alleged hiatus in the evidence in the plaintiff's case - that the plaintiff failed to lead any evidence of who entered into the relevant contract to transport the drill‑rig for the plaintiff. Without that evidence the defendants contend the claim for damages in contract and in tort must fail.
...
As to the claim in negligence, the defendants point to the plaintiff's statement of claim. In par 8 the plaintiff pleaded that based on the matters pleaded in par 4, 6 and 7, the defendants owed the plaintiff a duty of care in tort to exercise reasonable skill and care in transporting the drill-rig. Without evidence of who the plaintiff contracted with the defendants contend that as a matter of law, the plaintiff cannot establish any duty of care owed by the defendants. The defendants contend the claim for damages in tort must also fail.
The defendants further contend that for the defendants to be sued as joint tortfeasors there must be a concurrence in the act or acts causing damage (Civil Procedure WA 34.8.6). There was no evidence of that in this case without proof of the partnership of the two defendants. The plaintiff alleged in par 7 of its statement of claim that at the time of the accident the drill‑rig was 'in the possession of the defendants'. Without evidence of the partnership, that contention cannot succeed. The defendants contend there is no prime face [sic] case as to the duty of care owed by the two defendants in partnership trading under the name of J‑Can Transport Services and the claim in negligence must also fail.
The judge accepted the defendants' submissions (reasons [38]) and found, on the fifth day, that there was no case to answer.

The pleadings and preliminary observations on the pleadings

Prior to the rescinded amendments at trial, the plaintiff's pleaded case was as follows. First, the plaintiff pleaded that it was a bailee of the rig from a related company, and that it had an immediate right to possession of the rig (statement of claim pars 1 and 2A). It pleaded that it entered into a contract with the defendants, who carried on business as partners under the name 'J‑Can Transport', for the defendants to carry the rig for reward (statement of claim pars 3 and 4). The plaintiff then pleaded the alleged terms of the transportation contract, including terms to the effect that the defendants would use reasonable care in transporting the rig (statement of claim par 5).
Following the plea of contract, the plaintiff pleaded the establishment of a duty of care for the purposes of a claim in tort. It pleaded:
5.6.    Further and in the alternative, it was reasonably foreseeable to the Defendants that if they failed to exercise due skill and care in transporting the Drill rig, the Plaintiff would suffer loss and damage.
6.7.    The Plaintiff was in a position of vulnerability in that while the Plaintiff retained an immediate right to possession of the Drill rig at all times, it had no physical control over the Drill rig, Truck or Low Loader during the time it was in the possession of the Defendants.
7.8.    On the basis of the matters pleaded in paragraphs 4, 6 and 7 ~~3, 5 and 6~~ herein the Defendants owed the Plaintiff a duty in tort to exercise reasonable skill and care in transporting the Drill rig so as to avoid causing loss and damage to the Plaintiff.
Following these pleas, the plaintiff pleaded that the rig was transported on a vehicle driven by the first‑named defendant when, in the course of transportation, an incident occurred in which the rig was damaged (statement of claim pars 11 ‑ 12). The plaintiff pleaded that the incident was caused by breaches of contract by the defendants (statement of claim par 13). The plaintiff then pleaded a breach of the pleaded duty of care (statement of claim par 14):
~~13.~~14. Further and in the alternative, the incident was caused by the Defendant's negligence in that the Defendant breached the duty of care pleaded in paragraph 8 7.
The particulars of negligence against the defendants (which replicated the particulars of breach of contract) were as follows:
(a)failed to exercise and/or maintain proper control over the Truck and Low Loader so as to prevent the Incident;
(b)failed to stop, slow or manoeuvre the Truck at such time and in such a manner so as to avoid the Incident;
(c)drove the Truck without due care and attention;
(d)drove the Truck at a speed that was excessive in the circumstances;
(e)applied the brakes on the Truck too suddenly whilst entering the roundabout causing the Low Loader to roll over;
(f)failed to safely negotiate the roundabout so as to maintain the stability of the Low Loader and prevent the same rolling over;
(g)manoeuvred the Truck in such a manner as to cause the wheels of the Low Loader to lift from the road surface;
(h)failed to properly position or secure, or position and secure, the drill rig on the Truck so as to prevent the Low Loader rolling over;
(i)failed to engage the stabilizers of the Low Loader so as to prevent the Incident;
(j)failed to deliver the Drill rig to the destination undamaged;
(k)failed to take reasonable care and skill to avoid loss to the Plaintiff.
The defendants, in their defence, pleaded that a specified corporate entity carried on business under the name J‑Can Transport Services. The defendants pleaded that:
(a)the contract for transportation was with the corporate entity (defence par 6);
(b)the contract contained certain terms which, in effect, excluded any liability by the carrier (defence par 7);
(c)whether the transportation contract was with the defendants or with the corporate entity, the plaintiff was estopped from denying that the contract contained the terms referred in subpar (b) above (defence par 8A ‑ 8H);
(d)the incident occurred when the first‑named defendant was driving the truck, but that it occurred without any negligence or default on the part of the defendants (defence pars 5, 9 and 10); and
(e)further or alternatively, if the first‑named defendant's conduct contributed to the incident, neither the defendants nor the corporate entity was liable because of the exclusion clauses in the contract (defence par 11).
It is to be noted that the plaintiff sued in contract and negligence. There was no express reference to a claim in bailment, but if the pleaded facts give rise to that relationship, it is unnecessary to expressly refer to the word 'bailment' in the pleading: Roman Catholic Archbishop of Perth v Bishop (Unreported, WASCA, Library No 950470, 7 September 1995). On the principles of bailment, a private carrier for reward is, subject to the terms of the contract, liable for damage to the goods of which it is the bailee unless it can establish that the damage occurred without want of reasonable care on its part: Hobbs v Petersham Transport Co Pty Ltd [1971] HCA 26; (1971) 124 CLR 220, 229, 233 ‑ 234, 237 ‑ 243. See also Gerrard v Slamar [2004] WASCA 253 [18] ‑ [19]. Unlike claims in contract and negligence, where the plaintiff always carries the legal onus, in a claim in bailment, the bailee bears the legal onus of proving that the goods were damaged or lost without any failure on its part to take reasonable care: Fankhauser v Mark Dykes Pty Ltd [1960] VR 376, 377. A plaintiff may plead claims in bailment, contract and negligence, and a failure to succeed in the bailment claim does not necessarily preclude success by a plaintiff in proving breaches of specific terms of the contract for carriage, or in proving a breach of duty of care: Hobbs v Petersham Transport (229); Roman Catholic Archbishop v Bishop (8).
In this case, the plaintiff pleaded, in effect, a contract of carriage with the defendants, the fact of carriage, and the damage to the goods. Although not expressly pleaded as a claim in bailment, and although no mention of such a claim was made in the plaintiff's pre‑trial submissions, such a claim was available to be argued on the pleadings. Any claim in bailment (had it been argued), and the breach of contract claim pleaded by the plaintiff, would relate to the carriage for reward pleaded by the plaintiff, namely, the alleged contract between the plaintiff and the alleged partnership carried on by the defendants. The plaintiff pleaded that the contract was entered into by the first‑named defendant as agent for the alleged partnership between himself and the second‑named defendant.
A partnership is not a legal entity distinct from its members. Each partner has unlimited personal liability for the debts of the firm. By s 26 of the Partnership Act 1895 (WA) the acts of a partner which are necessary for or usually done in carrying on business of the kind carried on by the partnership of which he or she is a member shall bind his or her partners to the same extent as if he or she were an agent duly appointed for that purpose, unless the partner had no authority and the person with whom the partner deals knows of that matter or does not know or believe that person to be a partner.
The debts and contractual obligations of the partnership are joint, and not several, or joint and several, although after a partner's death that partner's estate is also severally liable to the extent that such obligations remain unfulfilled, subject to prior payment out of the estate of that partner's separate debts: s 16 of the Partnership Act; I'Anson Banks RC, Lindley and Banks on Partnership (18th ed) (2002) [1302] ‑ [1306]; Fletcher KL & Higgins PFP, The Law of Partnership in Australia and New Zealand (10th ed), 182 ‑ 185. Williams GL, Joint Obligations (1949), 35 ‑ 36. On the other hand, the liability of partners for torts and other wrongs is joint and several: s 17 ‑ s 19 of the Partnership Act; Fletcher & Higgins, The Law of Partnership (182 ‑ 183, 185 ‑ 186).
In the case of a joint promise, each promisor is liable in full on the single promise: Williams, Joint Obligations (33).
In relation to questions of the entity with which a party contracts, in Wilden Pty Ltd v Greenco Pty Ltd (Unreported, WASC, Library No 950322, 22 June 1995) Parker J (with whom Kennedy & Franklyn JJ agreed) said:
In my view this issue ultimately comes down to a question of fact. If, as a matter of fact, the [party seeking the services] intended to deal with, and made offers to, whichever entity was conducting the … business … which entity in turn accepted those offers, that is the end of the matter; a contract will have been formed between the [party seeking the services] and the [party supplying the services]. If such is the case it is immaterial whether the [party seeking the services] was aware of the specific entity to whom the offers were directed and the contracts formed (9).

The grounds of appeal

The principal grounds of appeal are to the effect that the judge erred in law in dismissing the action on the ground that the defendants had no case to answer in that:
(a)the judge erred in determining that the first‑named defendant did not have a case to answer in respect of the plaintiff's claim in negligence pleaded in the statement of claim (first ground);
(b)further, or alternatively, the judge erred in her discretion in rescinding the orders to amend the pleading, and the judge should have determined that the first‑named defendant did have a case to answer having regard to such amendments (second ground); and
(c)the judge erred in exercising her discretion in proceeding to determine the no case submission without first requiring the defendants to elect whether to lead evidence (third ground).
Alternatively, the plaintiff alleged that the judge erred in the exercise of her discretion in awarding indemnity costs (fourth ground).

The disposition of the appeal

The first ground

The first ground raises for consideration, primarily, the nature and scope of the plaintiff's statement of claim prior to the amendments at trial.
A statement of claim alleging negligence ought to plead the essential facts upon which the existence of a duty of care is based. The pleading of the facts grounding the duty is particularly important where the claim is for pure economic loss, where foreseeability of harm is a necessary, but not sufficient, condition for the existence of a duty of care: Esanda Finance Corp Ltd v Peat Marwick Hungerfords [1997] HCA 8; (1997) 188 CLR 241, 252, 253 ‑ 254 258, 260, 291, 310 ‑ 311. In cases involving damage to property in which the plaintiff has a relevant interest, foreseeability of harm is generally sufficient to ground the duty: Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609, 617. A plaintiff may bring a claim in negligence for damage to property if it has legal ownership of or possessory title to the property: Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 1 AC 785.
It is accepted by the defendants in this appeal that the plaintiff pleaded against both defendants a duty of care (respondents' submissions par 5). The defendants, nevertheless, contend, in effect, that insofar as a duty of care was pleaded against the first‑named defendant, it relied on three matters, all of which were dependent upon the plaintiff having entered into the contract with the defendants for the transportation of the rig. That was the proposition upon which, in effect, the judge acted in considering the state of the evidence and finding that the defendants had no case to answer. In my opinion, that proposition cannot be supported.

The plea of duty appears from pars 6, 7 and 8 of the statement of claim. In considering the pleading for present purposes, in my view, it is appropriate to avoid an overly technical or rigid examination in discerning the existence and nature of a cause of action: cf Morgan v Banning (1999) 20 WAR 474, 476 ‑ 477, 487.
The plea in par 6 was prefaced as being both further, and 'in the alternative' to the pleas of contract which preceded it. It introduced a new topic, namely, a common law duty of care. It pleaded foreseeability of harm if the defendants failed to exercise reasonable care in transporting the rig. The plea of foreseeability itself was, in my view, sufficient to ground the duty of care pleaded in par 8 of the statement of claim in circumstances where the plaintiff had pleaded property damage and an immediate possessory right to the property. Counsel for the defendants in effect conceded as much during the course of argument in the appeal.
Whilst the plea of breach of duty in par 14 referred to the 'Defendant' in the singular, it was clearly intended to mean both defendants, who were the subject of the duty pleaded in par 8 of the statement of claim. The particulars of negligence enumerated in (a) to (i) (see [14] above), were, at least, directed to the conduct of the first‑named defendant. Those allegations could sustain a finding of liability in negligence against him if, as had been pleaded, he owed the plaintiff a duty of care.
In par 7, the plaintiff pleaded that it was in a position of vulnerability whilst it was not in physical control of the rig and whilst the rig was in the possession of the defendants. The plea of possession was not confined, in terms, to possession under the pleaded contract. Nor, by their terms, were the subsequent pleas in pars 9, 10 and 11 (which referred, in effect, to the rig coming under the physical control of the first‑named defendant) confined by reference to the contract pleaded in par 4. The pleas in pars 9, 10 and 11 were admitted save for one qualification, which is irrelevant for present purposes.
Moreover, whilst the plea of duty referred to in par 8 of the statement of claim was expressed in the conjunctive insofar as it picked up the pleas in pars 4, 6 and 7 of the statement of claim, par 8 could not properly be read as signifying that unless each of pars 4, 6 and 7 were established, there was, on the plaintiff's case, no duty of care owed by either of the defendants. If at law any of those pleas were capable of establishing a duty of care, the failure to prove the others would not detract from the existence of the duty.
Accordingly, in my view, the plaintiff had pleaded facts in support of the existence of a duty of care owed by the first‑named defendant and that duty was not dependent upon the anterior plea that the contract of transportation was one between the plaintiff and the defendants. The plaintiff is ordinarily entitled to rely on any legal consequences which arise from the material facts pleaded: Crouch v Joseph (Unreported, WASC, Library No 9004.1, 22 August 1991) 19; Lever Bros Ltd v Bell [1931] 1 KB 557, 582 ‑ 583; Re Vandervell's Trusts (No 2); White v Vandervell Trustees Ltd [1974] Ch 269, 321, 324.
It follows, in my opinion, that the judge, in acceding to the defendants' application that they had no case to answer, acted upon a misunderstanding of the plaintiff's pleading and the legal effect of the matters pleaded.
For these reasons, I would uphold the first ground of appeal

The second ground

The court has jurisdiction over its own orders and has a larger discretion as to orders made on interlocutory applications than as to those which are final judgments. A court is empowered to discharge or vary orders made on a prior interlocutory application where:
(a)an order by consent is made under a mistake by only one of the parties;
(b)where an order is made ex parte;
(c)where changed circumstances make it just and proper to do so; and
(d)where the interests of justice require it.
See Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [23] ‑ [24].
In this case, having made the interlocutory order to allow the 'identity amendments', in my view the judge had no proper grounds to rescind the order the following day. None of the criteria mentioned above had any application.
Moreover, the pleaded contract involved a claim that the first‑named defendant was a joint promisee with the second‑named defendant under the contract and that each personally undertook the same obligation to the plaintiff. Accordingly, the plaintiff had already pleaded, in effect, that the first‑named defendant was personally liable in contract. The proposed amendment did not alter the substance of the pleaded claim against the first‑named defendant. It did not involve the pleading of any new facts. It merely characterised the contract, in the alternative, as one between the plaintiff and first‑named defendant only. It involved no prejudice to either the first‑named defendant or the second‑named defendant which could not be cured by costs. In failing to have proper regard to the true nature of the plaintiff's pleaded claim in contract, the scope of the amendment, and the absence of prejudice, the judge erred in refusing the amendment, even assuming she had properly rescinded her previous order in that regard.
For these reasons, I would also uphold the second ground of appeal.

The third ground

The purpose of the third ground is not entirely clear.
The third ground was originally formulated when ground 2 was put as an alternative to ground 1. At the hearing of the appeal, ground 2 was amended to make it further or in the alternative to ground 1.
The plaintiff, by the third ground, perhaps anticipates that even if it succeeds on the first and second grounds, and establishes that the action against the first‑named defendant ought not to have been dismissed, the judge's dismissal of the action against the second‑named defendant might still not be interfered with. There is no notice of contention by the defendants to that effect. The defendants' counsel at trial did not ask her Honour to treat the position of the first‑named and second‑named defendants differentially. He did not make a no case submission in respect of the second‑named defendant only, and in the alternative to his no case submission on behalf of both defendants.
I will address the third ground even though, in the absence of a notice of contention, the issue does not seem to me strictly to arise.
There was no dispute that in this State, a no case submission is regarded as equivalent to the common law submission seeking a verdict by direction, rather than the common law non‑suit procedure. (The two common law procedures and their history are discussed by Windeyer J in Jones v Dunkel (1959) 101 CLR 298, 322 ‑ 332, and are conveniently summarised in Ligertwood A, Australian Evidence (3^rd ed, 1998), 400 – 404. See also Allan v Hocking [2006] TASSC 2; (2006) 15 Tas R 234 [11] ‑ [22].)
It is also common ground that the general practice in civil cases tried by a judge without a jury in Western Australia is for the judge to require the defendant who wishes to make a submission of no case to elect whether to call evidence, and to decline to rule on the submission until that election is made, although the judge does have a discretion in that regard. In BHP Steel (RP) Pty Ltd v ABB Engineering Construction Pty Ltd [2001] WASCA 294, Kennedy J (Wallwork J & Pidgeon AUJ agreeing) said [7]:
The general practice in civil cases tried by a Judge without a jury in Western Australia is for the Judge to require a defendant who wishes to make a submission of no case to elect whether to call evidence, and to decline to rule on the submission until that election is made. The primary reason for this practice is to avoid a new trial if an appeal against a decision of no case to answer is successful. The trial Judge does, however, have a discretion and he or she may, in special circumstances, decide not to require the defendant to make an election - see Ralph M Lee (WA) Pty Ltd v Fort (1991) 4 WAR 176 at 180. This practice accords with that in the United Kingdom, as to which see Alexander v Rayson [1936] 1 KB 169 at 178 and Young v Rank [1950] 2 KB 510 at 511 - 515.
In J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA) (No 2) (1992) 38 FCR 458, French J (as his Honour then was) referred to the discretion as being:
[I]nformed by the long experience of the courts which indicates strongly that the better course in most cases is to hear all the evidence before making any decision on its effect (461).
Examples of where, in the exercise of discretion, a defendant may not be put to an election include cases where the matter can be decided on a question of law without the need to examine the evidence, where there is a jurisdictional issue, and where fraud has been alleged against the defendant: Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1, 7. None of those factors applied here. Moreover, in civil cases involving more than one defendant, the arguments against allowing one defendant to make a no case submission are 'powerful and they have been endorsed by courts on a number of occasions': James v Australia & New Zealand Banking Group Ltd (1986) 64 ALR 347, 401. See also J‑Corp v Australian Builders (463 ‑ 465).
In dealing with the question of whether the defendants in this case should have been put to an election, her Honour referred to Compaq v Merry in these terms (reasons [12]):
In this case I agreed to hear the submission of no‑case without putting the defendants to their election because in this case the defendants rely on a matter of law, that is a hiatus in the evidence. In Compaq Computer Australia v Merry (1998) 157 ALR 1 at 7, Finkelstein J noted that the practice of putting the defendants to their election is not inflexible. Examples were given of cases depending on an issue of law "where departure from the rule will usually best serve the interests of justice". Justice Finkelstein relied on the decision in Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54 where Perry J said that in cases where reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action no election should be required. This is such a case. I agreed to hear the no‑case submission without putting the defendants to their election. Having heard the no‑case submission I now rule on the no‑case submission. I consider that it is in the interests of justice that the defendants not be put to their election in this case. That is because it is purely a matter of law and the interests of justice would be best served by dealing with it directly.
It seems, with respect, that her Honour has given emphasis to the observations of Perry J in Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54 inconsistently with the approach adopted by Finkelstein J. In Compaq v Merry, Finkelstein J said:
In Residues Treatment (at 68) Perry J categorised the circumstances in which a 'no case' submission could be made as:
1.Where no reference at all as to the evidence is required.
2.Where a reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action.
3.Where it is argued that on a consideration of the evidence adduced by the plaintiff taken at its highest from the plaintiff's point of view, the evidence could not support the causes of action pleaded.
4.The situation where it is contended that although there is some evidence to support the plaintiff's claim it is so weak and unreliable that it should be dismissed without calling upon the defendants.
His Honour said that cases in categories 1 and 2 should not involve an election, but that the general practice should be applied to cases in categories 3 and 4.
In my view, the cases to which I have earlier referred do support the view that when the 'no case' submission is based on some proposition of law that does not require attention to the evidence it will often be the case that the moving party is not put to his election. On the other hand, the authorities show that category 2 cases do fall within the general rule (see, eg, Protean at 239) although departure from it may be more readily allowed by the court in the exercise of its discretion (7 ‑ 8). (emphasis added)
I would respectfully adopt the above observations by Finkelstein J in relation to the 'category 2 cases'.
In my view, the judge failed to recognise the scope of the general rule as it applied to the case before her. There were no special circumstances taking the case outside of the general rule and both defendants should have been put to an election. Had the judge applied the general rule, her misconception of the plaintiff's pleaded case would not, presumably, have led to the consequences which have now occurred, as, presumably, the defendants would have elected to go into evidence. Furthermore, specifically with respect to the second‑named defendant, the interests of justice would not have been served in this case in acceding to the no case submission by the second‑named defendant and allowing the trial to proceed against the first‑named defendant only. Had the action proceeded against him alone, the first‑named defendant would no doubt have contended that he was not liable because of the terms of the contract which governed the carriage as alleged in his defence. It would not have been in the interests of justice, in that circumstance, to disable the plaintiff from pursuing its own pleaded case in contract, involving both defendants.
Accordingly, in my view, the judge's exercise of discretion miscarried in allowing the defendants to make a no case submission without putting them to an election.

Fourth ground

The fourth ground was put as an alternative in the event that the appellant failed on grounds 1 ‑ 3.
In light of the above, it is unnecessary to deal with this ground.

Leave to extend time

The plaintiff's delay was not great - one week. It has been explained by affidavit. These matters, in conjunction with the merits of the appeal and the absence of prejudice to the defendants, indicate that an extension of time should be granted.

Consequential orders

For the above reasons, the appeal should succeed. The question, nevertheless, remains whether the dispositive orders should involve sending the matter back to the trial judge to complete the hearing of the case, or to order a new trial altogether. In the latter case, there would be no advantage in having the new trial heard by the same judge.
The plaintiff seeks an order that the matter be remitted to the District Court of Western Australia for a retrial, before a differently constituted court. The defendants contend that it should go back to the trial judge.
In Alexander v Rayson [1936] 1 KB 169, 179 the court noted, in an appeal in a context similar to this one, that the parties had agreed to the matter going back to the trial judge to complete the evidence and hearing.
On the other hand, the purpose of the requirement for an election is to avoid a new trial if an appeal against a decision of no case to answer is successful; generally, at least, and absent agreement between the parties to the contrary, the consequence of a successful appeal in these circumstances is a new trial: BHP Steel v ABB Engineering Construction [7]; James v ANZ Banking Group (400) (Toohey J); Compaq v Merry (7) (Finkelstein J); and Cahill v Construction, Forestry, Mining & Energy Union (No 2) [2008] FCA 1292; (2008) 170 FCR 357 [29]; Young v Rank [1950] 2 KB 510, 514 (referred to by Anderson J in Ralph M Lee (WA) Pty Ltd v Fort (1991) 4 WAR 176, 180); Green v Wilden Pty Ltd [2004] WASC 105 [27] (Hasluck J).
Albeit made in a somewhat different context, the observations of Kitto J in Pateman v Higgin [1957] HCA 62; (1957) 97 CLR 521 also seem to me to be pertinent. Kitto J said:
[I]t remains, I think, a sound general proposition from which to start in the consideration of each particular case according to its own circumstances that if there is to be a new trial it ought to be of the case as a whole unless the Court thinks that 'they shall do more injustice by setting the matter at large again' (527).
There is no real satisfactory answer to the question posed in [54] above. The events in question occurred some nine years ago, and eight years before the trial. The additional passage of time that has occurred, and will further occur, prior to a new trial or resumed hearing, may adversely affect the recollection of witnesses. Neither course avoids that problem.
The following matters may be considered relevant to the exercise of the court's discretion in favour of sending the matter back to the trial judge:
(a)the trial proceeded with both the plaintiff and the defendants having called a number of witnesses. The plaintiff called five witnesses and the defendants called one witness, who came from inter‑state. A new trial would involve all the witnesses being called again;
(b)as her Honour was seized of the matter, she might be expected to have some advantage over a new judge who had to pick the matter up afresh; and
(c)there is no suggestion that the judge, prior to acceding to the defendants' no case submission, had rejected oral evidence relevant to the plaintiff's case. To that extent the case may, in substance, resume where it left off. (The judge did refuse the plaintiff's counsel leave to tender a business name search after the close of the plaintiff's case, and in the course of argument in relation to the defendants' no case application. However, her Honour appears to have seen that as an aspect of an attempt to adduce evidence on the no case application. Her Honour was presumably guided, at that time, by the misunderstanding of the plaintiff's case which informed her decision to rescind the identity amendments).
The factors which could be taken into account in ordering a new trial are:
(a)ordinarily a trial should be commenced and completed in the one hearing. Whilst some trials do run over their allocated time and a subsequent hearing is necessary, that is to be regarded as an undesirable, albeit occasionally unavoidable, deviation from the proper course;
(b)the plaintiff, which has called all its witnesses, will be the party most inconvenienced if a new trial is ordered - yet notwithstanding that, it is the party seeking a new trial; and
(c)any advantage in having the primary judge resume the hearing of the matter is likely to be, at best, slight, as her Honour has had no occasion to give any further active consideration to the matter for a year.
Having regard to the considerations to which I have referred, on balance, I am not persuaded that more injustice will be done if a new trial is ordered than if the matter is remitted back to the trial judge to complete the hearing. The general proposition should operate, and there should be a new trial.

Conclusion

The appeal should be allowed.
There should be orders in terms of pars 1 ‑ 4 of attachment 4 of the plaintiff's (appellant's) case 'orders wanted'.
The parties should be heard on costs.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: NUDRILL PTY LTD -v- LA ROSA [2010] WASCA 158 (S)

CORAM: McLURE P
BUSS JA
MURPHY JA

HEARD: 9 APRIL 2010 & ON THE PAPERS

DELIVERED : 4 AUGUST 2010

SUPPLEMENTARY
DECISION :11 NOVEMBER 2010

FILE NO/S: CACV 69 of 2009

BETWEEN: NUDRILL PTY LTD
Appellant
AND
GIUSEPPE LA ROSA

ROSINA LA ROSA
Respondents

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :YEATS DCJ
Citation  :NUDRILL PTY LTD -v- LA ROSA & ANOR [2009] WADC 84
File No  :CIV 1523 of 2008

Catchwords:

Costs - New trial ordered - Who should pay costs of first trial - Circumstances justifying departure from general rule - Respondents caused miscarriage of first trial - Turns on own facts

Legislation:

Nil

Result:

Parties to bear own costs of third and fourth days of the hearing before the trial judge
Otherwise, respondents to pay appellant's costs of the hearing before the trial judge and all other costs thrown away as a result of the order for a retrial, and of the appeal

Category: B

Representation:

Counsel:

Appellant: Mr J A Thomson
Respondents : Dr P R MacMillan

Solicitors:

Appellant: SRB Legal
Respondents : Friedman Lurie Singh & D'Angelo

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

Baulch v Lyndoch Warrnambool Inc (No 2) [2010] VSCA 53
Brittain v The Commonwealth of Australia (No 2) [2004] NSWCA 427
Malpas v Malpas (1885) 11 VLR 670
Monaco v Arnedo Pty Ltd (1994) 13 WAR 552
Nudrill Pty Ltd v La Rosa [2010] WASCA 158
Rees v Bailey Aluminium Products Pty Ltd [2008] VSCA 244; (2008) 21 VR 478
Steele v Mirror Newspapers Ltd [1975] 2 NSWLR 48
Stewart v McKinley (1885) 11 VLR 802

McLURE P: I agree with Murphy JA.
BUSS JA: I agree with Murphy JA.
MURPHY JA:

Introduction

On 4 August 2010 the court allowed the appeal in this matter, set aside the judgment and consequential orders of the District Court and ordered that the matter be remitted to the District Court for a retrial before a differently constituted court. Following publication of the court's reasons, parties were given time to file and serve submissions regarding the appropriate orders as to the costs of both the appeal and the first trial. These reasons deal with those submissions.
The appellant submits that the respondents should be ordered to pay the appellant's costs of both the appeal and of the first trial.
The respondents make no submission regarding the costs of the appeal, but say that the costs of the first trial should be costs in the cause of the retrial.
It is unnecessary once again to describe the course of the first trial, which is set out at [7] ‑ [10] of the court's reasons: Nudrill Pty Ltd v La Rosa [2010] WASCA 158. It is sufficient to note that the trial ran over five days (albeit not all full days), the appellant (plaintiff) closed its case at the end of the second day and the third to fifth days involved the course of events which has ultimately led this court to order a retrial.
There is no suggestion by either party that the costs should be paid out of the fund provided by the Suitors' Fund Act 1964 (WA).

Appellant's submissions

The appellant relies on Brittain v The Commonwealth of Australia (No 2) [2004] NSWCA 427 and submits, in effect, that the court should depart from the general rule that the costs of the first trial should be costs in the cause of the retrial because the respondents' counsel 'particularly led the trial judge into error' by making the following submissions at trial, which were demonstrated to be wrong on appeal:
(a)that the proposed 'identity amendments' to the statement of claim should be disallowed;

(b)that the respondents were not required to make an election before advancing a submission of no case to answer;
(c)that there was no case to answer; and
(d)that any claim in tort against the first‑named respondent was dependant on establishing the existence of a contract with the first‑named respondent.

Respondents' submissions

The respondents submit that the general rule should be applied in the circumstances for, in effect, the following two reasons:
(a)a considerable amount of time at trial was spent dealing with the appellant's proposed 'identity amendments' whereas, on appeal, the amendments were found to be unnecessary; and
(b)had the appellant's counsel argued its case, including its opposition to the no case submission, in accordance with the reasoning espoused by this court in its disposition of the present appeal, the trial would not have taken the course that it did, and the appellant's failure to run its case in that way therefore materially contributed to the result at trial.
As to the second reason, the respondents cite Rees v Bailey Aluminium Products Pty Ltd [2008] VSCA 244; (2008) 21 VR 478 in support of their contention that the appellant materially contributed to the result at trial.

Relevant principles

There is no dispute that the general rule when a retrial is ordered is that the costs of the first trial should be costs in the cause of the retrial, unless it would be unjust to do so. See eg, Brittain v The Commonwealth of Australia (No 2) [4], [23], [30]; Monaco v Arnedo Pty Ltd (1994) 13 WAR 552, 523; Stewart v McKinley (1885) 11 VLR 802, 808 ‑ 810; Malpas v Malpas (1885) 11 VLR 670, 710 ‑ 711.
In Brittain v The Commonwealth of Australia (No 2), McColl JA (with whom Handley and Tobias JJA agreed) explained the rationale underpinning the general rule as follows [30]:
The logic of the general rule is manifest. While the Court has a plenary discretion concerning costs … the ordinary principle is that costs follow the event … Where a new trial is ordered the parties' rights have not been finally determined. The identity of the successful party has not been established. The general rule is clearly intended to ensure that the ultimate costs order reflects the ordinary principle when the parties' rights are finally determined. Departures from the general rule are intended to deal with situations where its application would lead to injustice.
In that case, the plaintiff sought a direction from the trial judge which counsel for the defendant initially accepted, but subsequently opposed. The trial judge acceded to the defendant's submission and refused to give the direction. On appeal, the court held that the plaintiff was entitled to the direction and ordered a retrial. Regarding the costs of the trial, the plaintiff contended that the defendant was responsible for 'persuading' the trial judge not to give the direction by adopting an approach which was, inter alia, 'wrong in law' and 'led the court into error' [12]. It sought an award of indemnity costs in relation to the first trial.
The defendant submitted, in effect, not unlike the respondents in this case, that had counsel for the plaintiff made clear and cogent submissions concerning its position, the error may well have been averted. The defendant argued that both parties were responsible for the trial judge's error and that, consequently, the general rule should be applied. The court rejected the defendant's submission as 'speculation' and accepted that it was the defendant's submissions at trial which led the court into error. The court held that it would be unjust to deprive the plaintiff of its costs in circumstances where the defendant caused the miscarriage of the trial, and awarded the plaintiff the costs of the trial on an indemnity basis [33].
For the court to depart from the general rule, it is not necessary for there to have been any impropriety or malicious intent in the way one party ran its case. An award of the costs of a mistrial is not made by way of punishment and is, rather, an application of the principle that costs thrown away should be borne by the party responsible: Baulch v Lyndoch Warrnambool Inc (No 2) [2010] VSCA 53 [8]; Steele v Mirror Newspapers Ltd [1975] 2 NSWLR 48, 56.

Application of principles to this case

This is a case where the trial judge was, to a substantial extent, led into error by the submissions of the respondents which were accepted by her Honour, but rejected on appeal, resulting in this court ordering a retrial. In my view, the ordinary application of the general rule would do an injustice to the appellant insofar as, if the appellant is unsuccessful at the retrial, it will be responsible for both the costs of that trial and the first trial, notwithstanding that the respondents were responsible for the miscarriage of the latter: Baulch v Lyndoch Warrnamboo Inc (No 2) [10].
I do not consider that the appellant's position at trial materially contributed to the error which has led to a retrial. Nor is this a case where the appellant's trial counsel 'permitted' the impugned submissions to affect the trial judge as they did: cf Rees v Bailey Aluminium Products. The appellant’s trial counsel contested the respondents' submissions and in broad terms advanced its case according to reasoning which was, in effect, not dissimilar to the reasoning adopted by this court. Counsel's efforts to draw the trial judge's focus away from the pleadings to the evidence, when making submissions in opposition to the no case application, was, it appears, in consequence of the (incorrect) view her Honour had taken of the appellant's pleaded case, despite counsel's efforts to persuade her otherwise in the context of the amendment application. To say that the trial would have taken a different course had the appellant's counsel presented its case in a different way is mere speculation: Brittain v The Commonwealth of Australia (No 2) [32].
There are, however, other features of this case which would make it unjust for the appellant to receive all the costs of the miscarried trial. Although this court determined that the appellant's amendment application ought to have succeeded, the application was very late, it did not initially comply with the rules and significant time was spent at trial dealing with it. I do not accept the respondents' submission that this court found that the amendments were 'unnecessary'; the finding was, relevantly, that the proposed amendments did not alter the substance of the pleaded claim (reasons [37]). However, the appellant should, in my view, bear the costs of that application, as the appellant’s counsel in effect conceded at trial. On the other hand, the appellant should have the costs of the hearing of the no case application, which application clearly ought to have been refused. Taking a broad view, the costs of those two applications, which occupied the third and fourth days of the trial, may be seen to cancel each other out.
In relation to the costs of the appeal, there is no suggestion that the general rule, that costs should follow the event, would not be appropriate in the circumstances.

Conclusion

Taking the above considerations into account, and bearing in mind the court's broad discretion as to costs (s 37(1) Supreme Court Act 1935 (WA)), orders to the following effect should be made:
1.Each party bear its own costs of the third and fourth days of the hearing before Yeats DCJ.
2.Save as provided in par 1 above, the respondents pay the appellant's costs of the hearing before Yeats DCJ and all other costs thrown away as a result of the order for a retrial, to be taxed if not agreed.
3.The respondents pay the appellant's costs of the appeal, to be taxed if not agreed.