PEARSON -v- CONNOR
[2022] WADC 65
•15 JULY 2022
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: PEARSON -v- CONNOR [2022] WADC 65
CORAM: COMMISSIONER COLLINS
HEARD: 13 JUNE 2022 AND WRITTEN SUBMISSIONS 8, 10 & 13 JUNE 2022
DELIVERED : 15 JULY 2022
FILE NO/S: CIV 310 of 2021
BETWEEN: RICHARD PEARSON
Plaintiff
AND
WAYNE CONNOR
Defendant
Catchwords:
Practice and procedure - Summary judgment application by the defendant - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 16 r 1, O 20 r 19, O 31 r 8
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Result:
Summary judgment awarded
Representation:
Counsel:
| Plaintiff | : | Mr D J Mezger |
| Defendant | : | Ms F A Stanton |
Solicitors:
| Plaintiff | : | Chapmans Barristers & Solicitors |
| Defendant | : | Minter Ellison |
Case(s) referred to in decision(s):
Bennett v The State of Western Australia [2012] WASCA 70
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148
Glendinning v Cuzens [2009] WASCA 21
Lewis v Garvey [2017] WADC 76
Mannall v Howard (No 2) [2019] ACTSC 113
Mervyn Jonathan Kitay in his capacity as liquidator of Computer Accounting and Tax Pty Ltd (In Liq) and Computer Accounting and Tax Pty Ltd (In Liq) [No 3] [2021] WASC 447
Mohammadi v Bethune [2018] WASCA 98
Nu-Fortune Gold Ltd v Roxbury Trading Pty Ltd [No 4] [2020] WASC 25
Ogbonna v Programmed Integrated Workforce Ltd [No 2] [2022] WASCA 79
Pearson and Prosegur Australia Pty Ltd (Compensation) [2021] AATA 312
Pearson and Prosegur Australia Pty Ltd [2019] AATA 823
Rodney Culleton v Inghams Enterprise Pty Ltd [2019] WADC 79
Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4
Sutherland v Federal Airports Corporation [1998] SASC 6903
Ugle v Director-General of the Department for Family and Children's Services [2020] WASC 262
COMMISSIONER COLLINS:
A. Introduction
The defendant has brought an application for summary judgment under O 16 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC). In the alternative, the defendant's chamber summons seeks an order under O 20 r 19(1) of the RSC requiring the plaintiff's writ of summons and endorsement of claim to be struck out in its entirety and the action be dismissed.
The defendant's application was brought by way of a chamber summons dated 11 February 2022. The application was supported by an affidavit from Alexandra Elizabeth Murphy dated 11 February 2022 (Murphy Affidavit) and an affidavit of Melissa Kym Joyce dated 10 June 2022, together with an outline of written submissions (dated 8 June 2022) and supplementary submissions (dated 13 June 2022).
The plaintiff filed an affidavit from Georgia Rose Benedetti dated 9 June 2022 and an outline of written submissions dated 10 June 2022. The plaintiff also filed a minute of proposed orders dated 9 June 2022. It sought the dismissal of the defendant's application, alternatively an order pursuant to O 31 r 8 of the RSC for the court to state a case on a question of law to be determined by the Supreme Court of Western Australia.
I heard the defendant's application on 13 June 2022. For the reasons that follow I will allow the defendant's application for summary judgment. My reasons for allowing the application are set out below.
B. Background to the defendant's application for summary judgment
The background to the defendant's application was not controversial and may be summarised as follows.
On 30 January 2018, the plaintiff and the defendant were involved in a motor vehicle accident in Kwinana, Western Australia: Murphy Affidavit, attachments AEM6 and AEM18.
At the time of the accident:
(a)the plaintiff and the defendant were employed by the same employer (Prosegur Australia Pty Ltd (PAPL)) as armoured vehicle operators (AVO): Murphy Affidavit, attachments AEM5, AEM6, AEM7, AEM8, AEM9, AEM10, and AEM16;
(b)the plaintiff and the defendant were rostered to work together: Murphy Affidavit, attachments AEM7, AEM10 and AEM16; and
(c)the defendant was operating the relevant vehicle while the plaintiff was outside of the vehicle. The vehicle was registered in South Australia under the Motor Vehicles Act 1959 (SA) and owned by PAPL: Murphy Affidavit, par 14 and attachments AEM4, AEM8, AEM11, AEM13, AEM14 and AEM15.
At the hearing, the circumstances of the motor vehicle accident were largely not in dispute (ts 30). The parties' counsel both referred to the circumstances of the accident as involving a 'bumper' that came off the relevant vehicle. The plaintiff got out of the vehicle to investigate and in the process, held the bumper when the vehicle moved, causing him to lose his balance and fall (ts 5, ts 20, ts 21).
On or about 2 February 2018, the plaintiff submitted a claim to his employer (PAPL) for workers' compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). The claim was in respect of an injury to the plaintiff's left arm as a result of the accident: Murphy Affidavit, par 17 and attachment AEM20.
On 12 February 2018, PAPL accepted liability to pay workers' compensation to the plaintiff under s 14 of the SRC Act: Murphy Affidavit, par 18 and attachments AEM8, AEM20, AEM21, AEM22, AEM23 and AEM24. Later, PAPL also accepted liability to pay the plaintiff workers' compensation under s 16 and s 19 of the SRC Act: Murphy Affidavit, par 19 and attachments AEM23 and AEM24.
Nearly three years later on 28 January 2021, the plaintiff commenced proceedings against the defendant in the District Court of South Australia (CIV 21-000645) for personal injuries arising out of the motor vehicle accident (South Australian Action): Murphy Affidavit, par 5 and attachments AEM1 and AEM2.
One day later on 29 January 2021, the plaintiff also commenced proceedings against the defendant in the District Court of Western Australia. In its indorsement of claim, the plaintiff claimed damages for personal injuries arising out of the motor vehicle accident on or about 30 January 2018 caused by the defendant's negligent driving (Western Australian Action).
On or about 15 July 2021, Auxiliary Master Roder of the District Court of South Australia granted the defendant leave in the South Australian Action to pursue summary judgment against the plaintiff: Murphy Affidavit, par 6 and attachment AEM3, par 17.
On 20 September 2021, Auxiliary Master Roder granted the defendant's summary judgment application in the South Australian Action, thereby dismissing the plaintiff's claim against the defendant (Master Roder's Decision): Murphy Affidavit, par 6 and attachment AEM3. Master Roder's Decision was annexed to the Murphy Affidavit as AEM3.
The time for filing an appeal in relation to Master Roder's Decision expired on 11 October 2021: Murphy Affidavit, par 7.
At the time of filing the defendant's affidavit evidence on 11 February 2022 in this application, the plaintiff had not appealed Master Roder's Decision.
At the oral hearing of the defendant's application, it was common ground that the plaintiff had not appealed Master Roder's Decision at that time (ts 3, ts 14, ts 28). The plaintiff's counsel did not submit otherwise.
C. Safety, Rehabilitation and Compensation Act 1988
As set out above, the plaintiff submitted a claim to his employer under the SRC Act on or about 2 February 2018. That claim was in respect of the motor vehicle accident and the injuries that the plaintiff submitted he sustained.
In his written submissions, the defendant submitted that the SRC Act placed certain restrictions on an injured worker seeking common law damages. The defendant submitted that by reason of the SRC Act, the plaintiff does not have an action at common law arising out of the motor vehicle accident against the defendant, being a fellow employee of PAPL. Relevantly, s 44 of the SRC Act prevents an action against the defendant unless the plaintiff has made an election under s 45 of the SRC Act. The defendant submitted that the plaintiff had not made an election under s 45 and retained his rights to compensation under s 24, s 25 and s 26 of the SRC Act.
It is convenient to set out the relevant provisions of the SRC Act, commencing with s 44 and s 45, which are in the following terms:
44Action for damages not to lie against Commonwealth etc. in certain cases
(1)Subject to section 45, an action or other proceeding for damages does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation or an employee in respect of:
(a)an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable (whether vicariously or otherwise) for damages; or
(b) the loss of, or damage to, property used by an employee resulting from such an injury;
whether that injury, loss or damage occurred before or after the commencement of this section.
(2)Subsection (1) does not apply in relation to an action or proceeding instituted before the commencement of this section.
(3)If:
(a)an employee has suffered an injury in the course of his or her employment; and
(b)that injury results in that employee's death;
subsection (1) does not prevent a dependant of that employee bringing an action against the Commonwealth, a Commonwealth a licensed corporation or another employee in respect of the death of the first-mentioned employee.
(4) Subsection (3) applies whether or not the deceased employee, before his or her death, had made an election under subsection 45(1).
45Actions for damages—election by employees
(1) Where:
(a) compensation is payable under section 24, 25 or 27 in respect of an injury to an employee; and
(b) the Commonwealth, a Commonwealth authority, a licensed corporation or another employee would, but for subsection 44(1), be liable for damages for any non-economic loss suffered by the employee as a result of the injury;
the employee may, at any time before an amount of compensation is paid to the employee under section 24, 25 or 27 in respect of that injury, elect in writing to institute an action or proceeding against the Commonwealth, the Commonwealth authority, the licensed corporation or other employee for damages for that non-economic loss.
(2)Where an employee makes an election:
(a)subsection 44(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the Commonwealth, the Commonwealth authority, the licensed corporation or the other employee for damages for the non-economic loss to which the election relates; and
(b)compensation is not payable after the date of the election under section 24, 25 or 27 in respect of the injury.
(3) An election is irrevocable.
(4) In any action or proceeding instituted as a result of an election made by an employee, the court shall not award the employee damages of an amount exceeding $110,000 for any non-economic loss suffered by the employee.
(5) The election by an employee under this section to institute an action or proceeding against the Commonwealth, a Commonwealth authority, a licensed corporation or another employee does not prevent the employee, before, or instead of, formally instituting such action or proceeding, doing any other thing that constitutes an action for non-economic loss.
Section 44 and s 45 of the SRC Act contain a number of terms that are defined in the SRC Act.
'Employee' is defined in s 5 of the SRC Act and is defined to mean, relevantly, a person who is employed by a licensed corporation if and only if:
(a)a person performs work for that corporation under a law or a contract; and
(b)pursuant to that law or pursuant to the law that is the proper law of that contract, as the case may be, the person would, if that corporation were not a licensed corporation, be entitled to compensation in respect of injury, loss or damage suffered by, or in respect of the death of, the person in connection with that work.
In the present matter, it was not in dispute that the plaintiff was an employee for the purposes of the SRC Act.
Section 44(1)(a) contains the phrase 'an injury sustained by an employee in the course of his or her employment.'
Under s 6 of the SRC Act, 'in the course of his or her employment' is defined to mean, amongst other things, relevantly, that:
(c)[w]hile the employee was temporarily absent from the employee's place of work undertaking an activity:
(i) associated with the employee's employment; or
The term 'licensed corporation' is defined in s 4 of the SRC Act to mean a 'corporation that is the holder of a licence that is in force under Part VIII' of the Act.
Part VIII of the SRC Act is titled 'Licences to enable Commonwealth authorities and certain corporations to accept liability for, and/or manage, claims'.
Section 98A(3) of the SRC Act falls within pt VIII. That section provides that if a licence is granted to an eligible corporation, the SRC Act applies in relation to the relevant employees of the corporation in a similar way to the way in which it applies to employees of the Commonwealth.
The defendant submitted that PAPL was at all material times, a licensed corporation for the purposes of the SRC Act: Murphy Affidavit, par 13 and attachment AEM12. At the hearing, the plaintiff did not submit otherwise. Attached to Ms Murphy's affidavit at AEM12 was a copy of the Commonwealth of Australia Gazette Government Notice (Notice No 4 of 2017) concerning the Safety, Rehabilitation and Compensation Act 1988 Part VIII; Prosegur Australia Pty Ltd; Notice of Extension and Variation of Licence; Notice No 4 of 2017 (Notice of Extension and Variation of Licence).
Ms Murphy deposed to the effect that PAPL's licence under the SRC Act had been periodically varied or extended over the years with the current licence due to expire on 30 June 2025.
Part 3 of the Notice of Extension and Variation of Licence is titled 'Scope of Licence'. Section 7 of that part is in the following terms:
Scope of licence - acceptance of liability
The Licensee is authorised to accept liability to pay compensation and other amounts under the SRC Act in respect of all injuries, loss or damage suffered by, or in respect of the death of, any of the employees of the Licensee where such injuries, loss, damage or death occur within the period of this licence.
During her oral submissions, the defendant's counsel submitted that, in effect, having regard to the facts of the matter and the operation of the SRC Act generally, s 44 should be read as follows (ts 7):
Subject to section 45, an action or other proceeding for damages does not lie against an employee [defendant] in respect of an injury sustained by an employee [plaintiff] in the course of his employment, being an injury in respect of which a licensed corporation [PAPL] would, but for this subsection, be liable (whether vicariously or otherwise) for damages.
In substance, an action does not lie against the defendant, there being no controversy that the defendant was a PAPL employee at the time of the motor vehicle accident (ts 7).
D. Legal principles applicable to summary judgment applications
Under O 16 r 1 of the RSC, the court may enter judgment for a defendant if, among other reasons, it is 'satisfied that the action is frivolous … [or] the defendant has a good defence on the merits'.
By O 16 r 2 of the RSC, an application under O 16 r 1 of the RSC should be supported by an affidavit verifying the facts upon which the application is based.
The legal principles governing the power to order summary judgment were not in dispute at the hearing of the defendant's application.
For convenience, I respectfully agree and adopt the recent summary of principles by his Honour Judge Allanson in Nu-Fortune Gold Ltd v Roxbury Trading Pty Ltd [No 4] [2020] WASC 25 [36] ‑ [39]:
36The principles to be applied in an application for summary judgment are well settled. As stated by Beech J in Henderson v Curtis:
The principles relevant to the grant of summary judgement are not in doubt. Summary judgment will be granted only when there is no real question to be tried. Conflicts of evidence on affidavit are not to be determined in the context of an application for summary judgment. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate course of the proceedings if it went to trial that summary judgment ought properly be granted: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46].
37In Agar v Hyde, the plurality (Gaudron, McHugh, Gummow and Hayne JJ) said:
The test to be applied has been expressed in various ways, but all the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way.
38In Webster v Lampard on an appeal arising out of the entry of summary judgment for a defendant, Mason CJ, Deane and Dawson JJ said:
Nowhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact.
39The court must proceed on the assumption that the evidence of the party resisting summary judgment, if not inherently incredible, would ultimately be accepted if the matter were to proceed to trial in the ordinary course.
(references omitted)
In Rodney Culleton v Inghams Enterprise Pty Ltd [2019] WADC 79, Gething DCJ summarised the relevant principles as follows, with which I agree and gratefully adopt:
17While the plaintiff may assume an evidentiary onus, the defendant retains the legal onus of demonstrating that the application for summary judgment ought to succeed.
18An application for summary judgment by a defendant is to be determined on the basis that the version of the facts put forward by the plaintiff, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action. However, the court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent. If after argument there remains real uncertainty as to the defendant's right to judgment without further investigation of the facts, summary judgment must be refused.
19A claim will be frivolous as required by RSC O 16 r 1 if it is so clearly untenable that it cannot possibly succeed. Once it appears there is a real question, whether of fact or law, on which the rights of the parties depend, the action should not be dismissed as frivolous.
20In looking at whether the defendant has a 'good defence on the merits' the question is whether, on the material before the court, it has been demonstrated that the plaintiff's action should not be permitted to proceed to trial because it is apparent that it must fail. This may require extensive argument.
(references omitted)
The principles of statutory construction are well known and were recently canvassed by the Western Australian Court of Appeal in Mohammadi v Bethune [2018] WASCA 98 [31] - [36]. There is no need to repeat those principles here. I respectfully adopt those principles.
E. Issues for determination
As matters developed during the hearing of the matter, it became apparent that there was no real controversy as to the material facts in the matter. Neither was there a controversy about the relevant law applicable to the defendant's application. The defendant submitted, in effect, that there was no factual or legal dispute between the parties that ought prevent the court from summarily dismissing the plaintiff's claim.
The main issue in dispute between the parties was whether the plaintiff had a maintainable action against the defendant, being a fellow employee of PAPL, arising out of the motor vehicle accident, or whether s 44 of the SRC Act prevented that action unless the plaintiff had made an election under s 45 of the SRC Act. A similar issue had been argued in Mannall v Howard (No 2) [2019] ACTSC 113 (Mannall), a decision of the Australian Capital Territory (ACT).
During the hearing, the plaintiff developed a second issue, which concerned whether PAPL exercised control over its two employees at the time of the motor vehicle accident.
F. Defendant's submissions - application for summary judgment
The defendant advanced three bases for finding that the plaintiff's claim should be summarily dismissed, relying on, in turn, O 16 r 1 of the RSC, O 20 r 19 of the RSC and res judicata. The defendant's written and oral submissions can be summarised as follows.
F.1PAPL liable for defendant's negligent actions (if any) - plaintiff's claim against defendant dismissed or summary judgment granted under O 16 r 1 of the RSC
The defendant submitted that it was well established that employers are vicariously liable for the actions of their employees conducted in the course of their employment. The plaintiff did not cavil with this statement of general principle.
Next, the defendant submitted that PAPL was vicariously liable for the defendant's alleged negligence (if any) in respect of the motor vehicle accident. In this respect, the defendant's case was that:
(a)the motor vehicle accident occurred in the course of the plaintiff's employment with PAPL (as per s 6 of the SRC Act). The plaintiff had not suggested otherwise, and in any event, there was no evidence otherwise;
(b)the defendant was employed by PAPL at the time of the motor vehicle accident and was driving the vehicle in the course of his employment: Murphy Affidavit, par 15 and attachment AEM11;
(c)the plaintiff had lodged a workers' compensation claim on the basis that he had suffered an injury during the course of his employment;
(d)PAPL had accepted liability for workers' compensation payments, reasoning that the plaintiff's injury occurred during his employment: Murphy Affidavit, attachment AEM 20;
(e)the plaintiff had been paid compensation under the SRC Act: Murphy Affidavit, attachments AEM20, AEM21, AEM22, and AEM23; and
(f) any suggestion otherwise was inconsistent with the plaintiff litigating his workers' compensation claim under the SRC Act: Murphy Affidavit attachments AEM8 (Pearson and Prosegur Australia Pty Ltd (Compensation) [2021] AATA 312) and Pearson and Prosegur Australia Pty Ltd [2019] AATA 823.
Further, it was not in dispute that:
(a)the vehicle the subject of the motor vehicle accident was registered in South Australia;
(b)the motor vehicle accident occurred in Western Australia;
(c)the date of the motor vehicle accident was 30 January 2018; and
(d)PAPL was the defendant's employer at the time of the motor vehicle accident.
The defendant submitted that if he drove negligently, as the plaintiff alleged in his indorsement of claim, that any such negligent act or omission was in the course of his employment with PAPL. In the circumstances, the effect of s 44 of the SRC Act was that the plaintiff could not bring any action or other proceedings for damages at common law against either the defendant or PAPL.
The defendant submitted that the plaintiff had not made an election under s 45 of the SRC Act: Murphy Affidavit, attachment AEM3, par 24. It followed that the plaintiff did not have a cause of action against the defendant by reason of s 44 of the SRC Act.
Put differently, the defendant submitted that consistent with O 16 r 1 of the RSC, the Western Australian Action was (a) frivolous or vexatious or (b) the defendant had a good defence on the merits or (c) the Western Australian Action should be disposed of summarily because the plaintiff was statutorily denied (due to the operation of the SRC Act) from bringing a claim against the defendant with the consequence being that the defendant had no liability to the plaintiff.
F.2 Plaintiff's claim to be dismissed under O 20 r 19(1) of the RSC
The defendant submitted that the plaintiff's claim should be dismissed under O 20 r 19(1) of the RSC. Under that order, the court may, at any stage of the proceedings, order any pleading or the indorsement of any writ in the action be struck out on the grounds that, among other things the plaintiff's claim:
(a)discloses no reasonable cause of action;
(b)is scandalous, frivolous or vexatious; or
(c)is otherwise an abuse of the process of the court, and
may order the action to be stayed or dismissed or judgment to be entered accordingly. As may be seen below, this part of the defendant's case rested on all three grounds of O 20 r 19 of the RSC. These are addressed in turn below.
Dealing with the first of these, the principles that apply to an application to strike out a pleading or an indorsement because it does not reveal a reasonable cause of action, are well settled. They were not in dispute at the hearing of the matter. Stated shortly, the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action. As to the meaning of a 'reasonable cause of action', the court in English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [55] (Murphy JA & Vaughan JA) stated that the question was whether it would be open to the party (on its pleadings) to prove facts at the trial that would constitute a cause of action. 'Reasonable' means reasonable according to law. Mitchell JA agreed with this statement of principle at [163] but came to a different conclusion on the ultimate outcome of that case.
In the present case, the defendant submitted that by reason of s 44 and s 45 of the SRC Act, the defendant had no liability to the plaintiff (as explained above). In effect, the plaintiff's claim did not disclose a reasonable cause of action.
The defendant submitted that its second and third grounds relied on Master Roder's Decision in the South Australian Action.
As to the second ground, the defendant submitted that the plaintiff's writ should be struck out as it was 'frivolous' and 'vexatious'.
An action is 'frivolous' and 'vexatious' if it is so obviously untenable that it cannot possibly succeed: Ugle v Director-General of the Department for Family and Children's Services [2020] WASC 262 [24].
As to the third ground, the defendant submitted that the plaintiff's writ was an abuse of process because it was 'doomed to fail' and/or was 'plainly unsustainable': Mervyn Jonathan Kitay in his capacity as liquidator of Computer Accounting and Tax Pty Ltd (In Liq) and Computer Accounting and Tax Pty Ltd (In Liq) [No 3] [2021] WASC 447 [26]. The defendant submitted that abuse of process extended to proceedings where it was unjustifiably oppressive to re‑litigate an issue which had already been disposed of by earlier proceedings: Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4 [10].
The defendant submitted that Auxiliary Master Roder had already determined the plaintiff's claim in the South Australia Action, relevantly stating that there was 'no reasonable basis for prosecuting the claim': Murphy Affidavit, attachment AEM3, par 30. Auxiliary Master Roder also stated that the 'flaws that have been made out in the action will be the same wherever it is to be determined': Murphy Affidavit, attachment AEM3, par 19. In the circumstances, the defendant submitted that the Western Australian Action was contrary to the principles of modern case management and amounted to an abuse of process, and was frivolous and vexatious.
F.3 Res judicata
Next, the defendant submitted that the plaintiff's writ should be dismissed on the basis of the principle of res judicata. The defendant submitted that the plaintiff was seeking damages from the defendant in relation to the same accident, the same facts and the same set of circumstances as in the South Australian Action. Insofar as the plaintiff did not accept Master Roder's Decision, then the appropriate way forward was to appeal that decision. Absent an appeal, the plaintiff was estopped by the doctrine of res judicata from pursuing the Western Australian Action.
The principles of res judicata are well known. In Bennett v The State of Western Australia [2012] WASCA 70, Buss JA at [77] summarised the principle in the following terms (Martin CJ, with whom Mazza JA agreed, in a separate judgment, but did not dispute the principle):
By the doctrine of res judicata, a final judgment on the merits by a competent court or tribunal extinguishes any cause of action which is the subject of the decision. If the cause of action is made out, it merges in the judgment. The cause of action ceases to have an independent existence.
(references omitted)
The defendant submitted that the rule of res judicata depended not upon the correctness of the judgment but upon its existence: Lewis v Garvey [2017] WADC 76 [28].
In the present matter, the defendant submitted that Auxiliary Master Roder had dismissed the plaintiff's common law claim for damages for personal injuries on the basis of s 44 of the SRC Act: the South Australian Action, [25]. On the assumption that Master Roder's Decision was final, the plaintiff was bound by that decision in these proceedings.
F.4 To case state under O 31 r 8 of the RSC
As set out below, the plaintiff submitted that the Western Australian Action should be 'case stated' under O 31 r 8 of the RSC.
The defendant provided written submissions in response to the plaintiff's request, which were supplemented orally (ts 12). Put briefly, the defendant submitted that this matter was not a suitable matter to be case stated because of, amongst other things, (a) Auxiliary Master Roder had already determined the issue in dispute, (b) there was no ambiguity with Master Roder's Decision, (c) the parties had not agreed a preliminary question to be 'case stated,' and (d) it was unlikely that the formulation of a preliminary question would finally dispose of the action (including because of the existence of the res judicata point).
Further, the defendant submitted that in Mannall, Mossop J had decided a similar point, which was 'plainly correct'.
Mannall concerned a plaintiff employed by the ACT, who was injured when he was hit by a motor vehicle being driven by the first defendant (also an employee of the ACT) and insured by the second defendant on work premises owned by the ACT. Justice Mossop found, that, amongst other things:
100The consequence of this is that the circumstances of the present case are within the scope of s 44 of the SRC Act because the injury sustained by the plaintiff was an injury for which the Territory, being a 'Commonwealth authority' would but for s 44(1) have been liable for damages. This means that s 44(1) applies and has the effect that 'an action … for damages does not lie against' the first defendant in relation to the injury sustained by the plaintiff.
…
109Because the plaintiff and first defendant [the defendant driver] have established that the second defendant [the insurer] is liable to indemnify the first defendant, the agreement between the first defendant and the plaintiff, which, as I understand it, was contingent upon there being no obligation to indemnify, does not come into operation. Instead, the second defendant is liable to indemnify the first defendant but has established that, by reason of s 44 of the SRC Act, that the first defendant and hence the second defendant has no liability. In those circumstances, the appropriate disposition is that there be judgment for the defendants against the plaintiff.
(emphasis added)
In its supplementary written submissions, the defendant submitted that although Mannall was not binding on the District Court, it was 'ordinarily' a 'highly persuasive' decision. And later, the defendant submitted that Mannall was 'plainly correct, and directly on point'. The Mannall decision provided further support as to why the plaintiff's claim should be summarily dismissed.
G.Plaintiff's submissions in opposition to the defendant's application for summary judgment
The plaintiff's written and oral submissions can be summarised as follows.
First, in its written submissions, the plaintiff put its case in the following way:
2. The Plaintiff's primary position however is that this Court is not bound by Mannall and/or that decision is in any event incorrect.
….
5. The Plaintiff's action is self-evidently against Mr Connor as the driver of the vehicle and is not an action against his (that is the Plaintiff's) employer, which of course is also Prosegur Australia Pty Ltd.
6. The Plaintiff submits the provisions of s.44 of the Safety, Rehabilitation and Compensation Act (Commonwealth) ("the SRC Act") apply to, and in fact were only designed to apply to, common law claims against a workers employer when such a worker was injured in the course of their employment.
7. Whilst Mr Pearson was clearly in the course of his employment, he is not alleging any negligence on behalf of Prosegur as his employer. He is simply alleging that Mr Connor negligently drove the vehicle involved in his accident.
8. In this matter, the fact that Mr Connor was the Plaintiff's co-worker, and both were in the course of their employment at the time of the accident, therefore becomes irrelevant.
The plaintiff submitted that if the court formed the view that it was bound by Mannall, then it ought to 'case state' the matter to the Supreme Court of Western Australia under O 31 r 8 of the RSC. That was on the basis that the Supreme Court of Western Australia would not be bound by Mannall.
In his oral submissions, the plaintiff's counsel submitted that if this court determined that it was not bound by Mannall, then the plaintiff would not press for the matter to be 'case stated' to the Supreme Court of Western Australia (ts 17, ts 18). Ultimately, that is what occurred. In effect, I found that although the decision in Mannall is persuasive, it was not binding on this court (ts 18). Thereafter, the plaintiff's counsel did not press for the matter to be 'case stated' to the Supreme Court of Western Australia.
The plaintiff also submitted that Sutherland v Federal Airports Corporation [1998] SASC 6903 (Sutherland) provided the 'correct interpretation of s 44 of the SRC Act as opposed to the decision of Mannall'. In his oral submissions, the plaintiff's counsel submitted that Sutherland supported the plaintiff's position because in that case, the employer was found not liable (ts 21).
In Sutherland, the plaintiff sued the occupier of the grounds where the plaintiff sustained his injury. The plaintiff did not sue his employer. The court in that case, found that the plaintiff could sue the occupier of the grounds. Given this, Sutherland is a case which falls outside the terms of s 44(1) of the SRC Act. Sutherland does not in fact support the plaintiff's position, as the defendant in this matter falls within s 44 of the Act.
As to the plaintiff's substantive argument, it may be seen that the plaintiff's case was that the SRC Act, particularly s 44, principally concerned employers: pars 6, 7 and 8 above. In effect, the plaintiff submitted that because the defendant was not the employer, but rather a co-worker, s 44 and s 45 did not apply. I also observe that the plaintiff made a similar submission to Auxiliary Master Roder in the South Australian Action which Auxiliary Master Roder rejected (ts 8, ts 9): see AEM3, [27] - [28].
By contrast, the defendant's counsel submitted that the defendant fell 'fairly and squarely within the chapeau of s 44(1)' as the chapeau applied to employees as well (ts 8).
Secondly, the plaintiff's counsel submitted that the matter involved a factual issue concerning the employer's (PAPL) control over the defendant. The defendant's counsel put his client's position in the following way (ts 19, ts 20):
In these proceedings, the accident had occurred away from the employer's premise, and it occurred in a shopping centre car park in Kwinana as pleaded in the writ and endorsement of claim. The circumstances that led to the accident on or about 30 January 2018, and the extent of the direction and control exercised by the defendant employer has not been established.
It is not possible for the court to establish today that the defendant was acting in the course or scope of his employment under the direction and control of the employer to attract the operation of the doctrine of vicarious liability. The doctrine of vicarious liability has the requirement of control. It means some direct and immediate operational control involving the capacity for effective intervention. That was not present here.
The accident occurred on 30 January 2018 and was reported on 2 February 2018 when submitting a claim for workers' compensation. And I think I just want to establish the facts of what occurred on that day from what we can understand from the reports that have been filed.
The vehicle was driving. It pulled over because they could hear noise from a bumper on the ground. The bumper had previously been damaged by a kangaroo and had sticky tape or some sort of - sorry, commissioner, I looked away. The bumper was being held up - it pulled over into the car park of the Kwinana Shopping Centre. Previously the bumper had been held up by tape because it had been hit by a kangaroo.
Now, I'm not sure what policies they have down there, but I'm sure their policies wouldn't - and we don't know this because we don't have evidence in the court today of any policies or procedures, or what their normal processes are in relation to fixing a mechanical situation such as a bumper falling off the back. But in this case there was tape used to hold it up. Then the defendant happened to reverse, knocking - hitting a bollard and knocking it off once again.
So in this case what I'm referring to is there has to be direct control of the employer for them to be vicariously liable. And when we have circumstances where we have no reporting or under-reporting, they cannot have direct control in relation to the events that occurred.
And I simply state this. They then proceeded after the bumper fell off, which the matter has been pleaded in the endorsement of claim, but then they went to another - I don't believe it was a contractor. I don't even know - as I was saying, we have no evidence in relation to what their processes are.
And a little later (ts 20), the plaintiff's counsel said the following:
So where I'm going with this is, there seems to be a complete lack of control by the employer in relation to the actions of employees because (1) they don't have direct control and are unable to immediately effect any event during the operations of that particular business. They're not aware of what actually occurred.
As matters developed, the plaintiff's counsel submitted that the defendant had not established that the employer (PAPL) was liable for the actions of its employees (ts 21 - ts 26). The plaintiff's counsel put that submission orally as follows (ts 24):
The basis for that is that the defendant - even though they [the plaintiff and defendant] were acting in their course and scope of their employment, they weren't under the direction and control of the employer [PAPL] at that time.
The plaintiff's oral submission was not supported by reference to any evidence before the court.
As may be apparent, this part of the plaintiff's case again focussed on the role of employers under the SRC Act, and not employees. The plaintiff did not grapple with the chapeau to s 44(1) of the SRC Act, which in its terms, applies to employees as well. In effect, an action for damages under s 44(1) of the SRC Act in relation to the plaintiff's injury does not lie against the defendant, being an employee of PAPL.
And separately, the defendant's counsel contended that insofar as there was a factual dispute about the motor vehicle accident, upon which no evidence had been led, the defendant's position was that 'if the bumper fell off and it needed to be put back on, that was an activity associated with the employee's employment' (ts 29) - falling within s 6 of the SRC Act. However, the defendant's position was that it was not aware of any dispute about the facts underpinning the accident (including the bumper): this was in circumstances, where the plaintiff had made, and there had been acceptance of, claims of compensation under the SRC Act (ts 30).
Thirdly, as to the res judicata point, the plaintiff's counsel submitted that the South Australian Action did not involve a final decision (ts 28).
H. Disposition
On the material before me, I am satisfied that the defendant has a good defence on the merits of the action brought against it by the plaintiff. I largely agree with the defendant's submissions. It is not necessary to repeat that reasoning here. I will allow the defendant's application for summary judgment. I summarise my brief reasons below.
First, having regard to s 44 and s 45 of the SRC Act, I am satisfied that the plaintiff cannot bring an action or other proceedings for damages at common law against either the defendant or PAPL. That position flows from the ordinary and natural meaning of the text in those sections. There is no ambiguity. That position is also consistent with Master Roder's Decision and the decision in Mannall.
I am also satisfied that if the defendant drove negligently, as the plaintiff alleged in his indorsement of claim, that any such negligent act or omission was in the course of the defendant's employment with PAPL. This flows from the proper construction of the SRC Act, the materials provided to the court as part of the defendant's application and the absence of any evidence from the plaintiff supporting the relevant contentions advanced orally at the hearing of the matter.
I am also satisfied that should the defendant have required leave, that I would have granted the defendant leave under O 16 r l to make the summary judgment application out of time. In this regard, the defendant's counsel made oral submissions in relation to the delay in commencing the present application, which was largely driven by awaiting the outcome of the South Australian Action, and the possible appeal of that action (ts 15, ts 16). The plaintiff did not oppose the defendant's application on this basis.
Having regard to the above matters, I am satisfied that the defendant has a good defence on the merits. I am also satisfied that the Western Australian Action is frivolous in the sense that if the action went to trial, it would raise no arguable case and would be one in which the defendant had a good defence on the merits. For similar reasons, the Western Australian Action should be disposed of summarily, because the plaintiff is statutorily denied (due to the operation of the SRC Act) from bringing a claim against the defendant with the consequence that the defendant has no liability to the plaintiff. The defendant has discharged the onus of proof that is on it and is entitled to judgment under O 16 r 1 of the RSC.
Secondly, and for similar reasons, I am satisfied that the plaintiff's claim should be dismissed under O 20 r 19(1) of the RSC, because it does not disclose a reasonable cause of action; it is frivolous and/or vexatious; and because it is otherwise an abuse of the process of the court. The operation of s 44 and s 45 of the SRC Act precludes the plaintiff's claim. Moreover, Master Roder's Decision and Mannall count against maintaining the claim.
Finally, given the views I have formed as to the defendant's application under O 16 r 1 and O 20 r 19 above, it is not strictly necessary for me to determine the defendant's res judicata defence. The fact that the plaintiff has sought damages from the defendant in the Western Australian Action in relation to the same accident, the same facts, and the same set of circumstances as in the South Australian Action, which Auxiliary Master Roder dismissed, provides a strong argument for res judicata to apply. However, there is a question as to whether the Master Roder's Decision involves a final order (given that it involved a summary judgment action).
In its written submissions, the defendant submitted that the South Australian Action did involve a final order on the basis of Florida Investments Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148, 149. However, the defendant also referred to the decision of Glendinning v Cuzens [2009] WASCA 21 where Newnes AJA at [23] ‑ [24], with whom Pullin JA agreed, observed that:
While the decision in Florida Investments has been applied in this State in a number of subsequent cases, it is likely that in an appropriate case it will be necessary for the decision to be reconsidered.
In the present case, although the defendant filed short written submissions on the issue, and the matter was raised briefly during the hearing, I have not had the benefit of full argument. Since hearing the defendant's application, the Western Australian Court of Appeal has recently handed down a decision which appears to be relevant to the questions raised by the ground: see Ogbonna v Programmed Integrated Workforce Ltd [No 2] [2022] WASCA 79 [114], [116] ‑ [117]. I have not heard from the parties on this issue.
Given my findings, I do not think it is necessary for my decision to determine the question in the present circumstances.
Conclusion
I grant the defendant's application for summary judgment.
I will hear from the parties as to costs.
I note that the defendant submitted at the hearing that it would seek an order for indemnity costs.
The parties should file any written submissions (or evidence) on the question of costs within 14 days of the date of this decision, with the determination of the question to be dealt with on the papers, unless a party expressly asks for an oral hearing.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
SZ
Associate to Commissioner Collins
15 JULY 2022
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: PEARSON -v- CONNOR [2022] WADC 65 (S)
CORAM: COMMISSIONER COLLINS
HEARD: ON THE PAPERS
DELIVERED : 10 OCTOBER 2022
FILE NO/S: CIV 310 of 2021
BETWEEN: RICHARD PEARSON
Plaintiff
AND
WAYNE CONNOR
Defendant
Catchwords:
Costs - Indemnity costs - Turns on own facts
Legislation:
District Court of Western Australia Act 1969 (WA), s 64
District Court Rules 2005 (WA), r 6
Rules of the Supreme Court 1971 (WA), O 20 r 19, O 31 r 8, O 66 r 1
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Supreme Court Act 1935 (WA), s 37(1)
Result:
Indemnity costs awarded
Representation:
Counsel:
| Plaintiff | : | Mr D J Mezger |
| Defendant | : | Ms F A Stanton |
Solicitors:
| Plaintiff | : | Chapmans Barristers & Solicitors |
| Defendant | : | Minter Ellison |
Case(s) referred to in decision(s):
Ling v O'Reilly [2021] WADC 78 (S)
Mannall v Howard (No 2) [2019] ATSC 113
Pearson v Connor [2022] WADC 65
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151
Sutherland v Federal Airports Corporation [1998] SASC 6903
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
COMMISSIONER COLLINS:
A. Introduction
On 15 July 2022, I delivered my reasons for decision in Pearson v Connor [2022] WADC 65 (Reasons for Decision), awarding the defendant summary judgment. I also ordered the parties to file any written submissions or evidence on the question of costs within 14 days of the date of the decision, with the question of costs to be determined on the papers, unless a party expressly asked for an oral hearing.
On 26 July 2022 the defendant filed an outline of written submissions, together with a list of authorities. The defendant also filed an affidavit by Alexandra Elizabeth Murphy, affirmed on 26 July 2022 (Murphy Affidavit), in support of an application for costs to be paid on an indemnity basis. The plaintiff did not file any submissions or evidence.
For the reasons that follow, I will allow the defendant's application for an award of indemnity costs. My reasons for allowing the application are set out below.
B. Defendant's submissions - application for indemnity costs
The defendant submitted that he was entitled to an award of indemnity costs on two bases. Each submission is summarised below.
The plaintiff's case was a hopeless case
The defendant submitted that the plaintiff's case was a 'hopeless case' and ought never have been commenced: it was always 'doomed to fail'. The defendant provided five reasons in support of his submission. The defendant's written submissions can be summarised as follows.
First, the defendant submitted that the following matters were not controversial:
(a)the plaintiff and defendant had the same employer;
(b)their employer was a licensed corporation;
(c)the plaintiff was involved in a motor vehicle accident on 30 January 2018;
(d)the licensed corporation owned the relevant vehicle;
(e)the defendant was driving the motor vehicle at the time of the accident; and
(f)the plaintiff suffered injuries as a result of the accident.
Secondly, the only issue in dispute concerned the application of s 44(1) and s 45 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). The defendant put his position consistent with the ordinary and natural meaning of those sections, which was not controversial.
Thirdly, on 29 January 2021, the plaintiff had commenced proceedings against the defendant in the District Court of South Australia (CIV 21‑000645) for personal injuries arising out of the motor vehicle accident (South Australian Action). On 20 September 2021, Auxiliary Master Roder of the District Court of South Australia dismissed the plaintiff's claim against the defendant: Pearson v Connor [11], [14]. In the circumstances, the defendant submitted that the plaintiff's argument had already been rejected by Auxiliary Master Roder in the South Australian Action.
Fourthly, the defendant's position was consistent with Mannall v Howard (No 2) [2019] ATSC 113 (Mannall), in which a similar issue had been argued and determined adversely to the plaintiff's argument in the present action.
The defendant's solicitors had written to the plaintiff's solicitors by letter dated 19 March 2021 and informed the plaintiff's solicitors of the decision in Mannall: Murphy Affidavit, AEM1. That was prior to the plaintiff serving his writ on the defendant in this action.
Fifthly, the plaintiff's action had been found to be frivolous, in the sense that it raised no arguable case, and disclosed no reasonable cause of action, was frivolous and/or vexatious and an abuse of the process of the court for the purposes of O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) (RSC): Pearson v Connor [86] ‑ [87].
The plaintiff's conduct warrants an order for indemnity costs
The defendant submitted that it was improper and unreasonable for the plaintiff to commence the exact same action in Western Australia, particularly given the decision in the South Australian Action. It was submitted that the plaintiff's conduct warranted an order for indemnity costs. In support of that submission, the defendant referred to 10 matters. The defendant's written submissions can be summarised as follows.
First, in March 2021, the defendant's solicitors had written to the plaintiff's solicitors and informed them that the claim was 'doomed to fail'. The defendant's solicitors warned that should the plaintiff pursue the action in Western Australia the defendant would tender the letter in support of an application for costs on an indemnity basis.
Secondly, if the plaintiff found any error with Auxiliary Master Roder's decision of 20 September 2021, the appropriate course was to appeal that decision. In effect, the plaintiff should not have maintained the Western Australian action.
Thirdly, the plaintiff served the writ of summons in the present action on 20 January 2022, in circumstances where the plaintiff had already argued and lost on the same facts in the South Australia Action.
Fourthly, the plaintiff did not explain how the present action would succeed in Western Australia, despite not succeeding in South Australia.
Fifthly, by serving its writ in the present action, the plaintiff forced the defendant to unnecessarily incur costs defending the matter, which include the costs of briefing counsel.
Sixthly, the defendant's solicitors wrote to the plaintiff's solicitors by letter dated 10 February 2022 and provided further detail why the plaintiff's claim was 'doomed to fail': Affidavit of Melissa Kym Joyce sworn on 10 June 2022 (Joyce Affidavit), MKJ2. The defendant's solicitors' letter again informed the plaintiff's solicitors that if the present action were dismissed, the defendant would tender a copy of its letter in support of an application for indemnity costs.
Seventhly, the plaintiff did not comply with orders 3 and 4 of the court's orders dated 8 March 2022, or order 3 of the court's orders dated 8 April 2022, which concerned the filing of written submissions and lists of authorities.
Eighthly, the only authority the plaintiff referred to in support of his position - namely, Sutherland v Federal Airports Corporation [1998] SASC 6903, was found not to support the plaintiff's position.
Ninthly, the plaintiff sought orders for a 'case stated' approach under O 31 r 8 of the RSC, which unnecessarily increased the costs of the litigation by requiring the defendant to prepare supplementary written submissions. At the hearing on 13 June 2022, the plaintiff's counsel made a concession that if the court were not bound by the decision of Mannall, the plaintiff would not press for the matter to be 'case stated'. Ultimately, that is what occurred: Pearson v Connor [69] ‑ [70].
Tenthly, on 15 July 2022, this court ordered summary judgment against the plaintiff. Auxiliary Master Roder had earlier ordered summary judgment in the South Australia Action. This court's decision was the second time that summary judgment had been ordered in relation to claims arising from the same accident.
C. Plaintiff's submissions
The plaintiff did not file any written submissions or evidence in relation to the issue of costs.
D. Relevant legal principles - costs
The costs of any action in the District Court may be paid or apportioned between the parties in such manner the court directs and in default of such a direction shall abide the event: District Court of Western Australia Act 1969 (WA) (DCA), s 64(1).
Subject to the DCA, a District Court judge has the same power in relation to the payment of costs by any party as a judge of the Supreme Court: DCA s 64(3).
Subject to any inconsistency between the District Court Rules 2005 (WA) (DCR) and the RSC, the RSC apply to and in respect of any case in the District Court: DCR pt 1 r 6.
The Supreme Court has a wide discretion to award costs in respect of all proceedings in the court: Supreme Court Act 1935 (WA), s 37(1). The costs of, and incidental to, all proceedings shall be in the discretion of the court, but without limiting the general discretion, the court will generally order that the successful party to an action or matter recover their costs: O 66 r 1(1) of the RSC. This is often referred to as the 'usual order as to costs' and/or 'the rule that costs follow the event': Ling v O'Reilly [2021] WADC 78 (S) [22] (Whitby DCJ).
The principles in relation to the grant of costs on an indemnity basis are well established. In Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) (Swansdale Pty Ltd v Whitcrest Pty Ltd) [10], the court comprising Pullin JA and Kenneth Martin J summarised the principles relating to the making of indemnity costs orders as follows:
1.A superior court, in its inherent jurisdiction, may make an indemnity costs order (see also Supreme Court Act 1935 s 37, and Legal Profession Act 2008 s 280).
2.An indemnity costs order departs from the usual costs disposition order, whereby costs are awarded on a party/party basis: EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59.
3.The court's discretion as to the making of an indemnity costs order is a discretion that must be exercised judicially. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397, 400 Woodward J said:
Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases, where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way'.
(emphasis added)
4.To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:
It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.
5.Furthermore, in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Unreported, FCA, 3 May 1991) (referred to by Ipp J in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191) French J observed:
The categories in which the discretion may be exercised are not closed.
6.Competing principles need to be balanced in assessing the making of a potential award of indemnity costs. In Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7], Wheeler J observed:
On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law, and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full.
7.An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate‑Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, 233 (Sheppard J), referred to by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
8.A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling: see Flotilla [20] ‑ [24].
9.An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance: Flotilla [11]. In Unioil (No. 2) (193), Ipp J observed:
However, counsel for the plaintiffs was unable to identify any costs so incurred that would not be covered by an order for party and party costs. An order for indemnity costs on this ground is therefore not warranted.
10.Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:
A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.
The above principles have been applied in numerous cases, including recently by Quinlan CJ in Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151 at [15]. I respectfully adopt the above principles.
H. Disposition
As noted above, the defendant put its case for indemnity costs on the basis that the plaintiff's case was a hopeless case, doomed to fail and the plaintiff's conduct warranted such an order. On the materials before me, I am satisfied that there ought to be an order for indemnity costs. I largely agree with the defendant's submissions. It is not necessary for me to repeat them here. I summarise my brief reasons below.
First, Auxiliary Master Roder dismissed the South Australian Action in September 2021. In effect, the plaintiff was aware in September 2021 that his claim against the defendant for personal injuries arising out of the motor vehicle accident was not maintainable. If the plaintiff doubted the decision of Auxiliary Master Roder, the proper course was to appeal that decision, which the plaintiff did not do.
Secondly, Auxiliary Master Roder's decision involved the ordinary application of s 44 and s 45 of the SRC Act.
Thirdly, Auxiliary Master Roder's decision was consistent with the decision in Mannall, in which a similar issue had been argued, and determined, adversely to the plaintiff's interests.
Fourthly, the Sutherland authority did not support the plaintiff's position.
I am satisfied that there is much force in the submission that the plaintiff persisted with a 'hopeless case' and that reasonably advised, the plaintiff ought not have persisted with the present Western Australian action.
Next, the significant difficulties with the plaintiff's position were brought to the attention of the plaintiff by the defendant's letter of 19 March 2021. That was prior to the plaintiff serving its writ on the defendant nearly 10 months later in January 2022. It was also prior to Auxiliary Master Roder's decision in the South Australian Action in September 2021. The defendant's solicitors' correspondence set out the difficulties with the plaintiff's claim and relevantly referred to the decision of Mannall (although the correspondence erroneously referred to the case as Manning v Howard [2019] ACTSC 113 instead of Mannall v Howard). Given the ACTSC citation, there could not be any misunderstanding as to the reference.
The defendant's solicitors again wrote to the plaintiff's solicitors by letter dated 10 February 2022. In that letter, the defendant's solicitors largely repeated the matters contained in its earlier correspondence. In addition, the correspondence further developed why the plaintiff's claim against the defendant would fail. The correspondence also indicated that given the decision of Auxiliary Master Roder, whereby summary judgment had been given against the plaintiff, the plaintiff was estopped from pursuing the present action against the defendant by reason of res judicata.
Given the passage of time, the plaintiff was, in my view, given a fair opportunity to consider his position, withdraw and discontinue this action without the defendant incurring any further costs at that time. Instead, by letter dated 28 February 2022, the plaintiff's solicitors responded to the defendant's solicitors' correspondence, and in effect, rejected their contentions: Joyce Affidavit, MKJ3. The plaintiff's solicitors' correspondence was in the following terms:
Our Ref: 18/0089
Your Ref: PMYJ 1330546
Minter Ellison
GPO Box 2550
PERTH WA 6831 BY EMAIL: [email protected]
28 February 2022
Dear Madam
RE: RICHARD JAMES PEARSON v WAYNE CONNOR
DISTRICT COURT ACTION NO. CIV 310 of 2021
We refer to previous correspondence and communications and do apologise for the brief delay in responding to your correspondence from a few weeks ago.
Not surprisingly Mr Pearson intends to oppose your client's Chamber Summons and says it has no merit and is doomed to fail.
In these circumstances please advise if your client is prepared to agree to consent orders to either:
•have your client's Chamber Summons dismissed with costs; or alternatively
•agree to consent orders to program the matter through to a Special Appointment.
In the circumstances we look forward to receiving your response to these matters by later today or sometime tomorrow morning.
Yours faithfully
Chapmans
Barristers & Solicitors (emphasis added)
As is apparent, the plaintiff's solicitors' correspondence did not respond to the defendant's solicitors' construction of the SRC Act or explain the plaintiff's position. The plaintiff did not explain why the Western Australian action would succeed in circumstances where the South Australian Action had failed. Instead, the plaintiff, in effect, left the defendant with no alternative other than to proceed with a summary judgment application and thus incur costs.
Having regard to the context of this matter, including the plaintiff's failure to set out his position, the decision of Auxiliary Master Roder and the decision in Mannall, the plaintiff's conduct is difficult to understand. In any event, the plaintiff put the defendant to unnecessary expense (which may reasonably be inferred from the defendant's affidavit evidence and submissions). In my view, in the context of this matter, the plaintiff's conduct (or that of his legal advisers: see Swansdale Pty Ltd v Whitcrest Pty Ltd [10(7)]) was unreasonable.
In the circumstances, it seems to me that this is a case where justice requires the grant of an order for indemnity costs. The plaintiff's conduct in bringing the same action in South Australia and Western Australia put the defendant to significant expense. The defendant twice put the plaintiff on notice that this particular action was without merit. The first time the defendant's notice was supported by the decision in Mannall and the second time, the defendant's notice was supported by the decision of Auxiliary Master Roder. The defendant's notices were, in my view, fair and reasonable. The plaintiff's failure to discontinue the matter was, in all the circumstances of this case, unreasonable. The plaintiff's conduct is sufficient to justify a departure from the usual order in relation to costs and the making of an award of indemnity costs.
Conclusion and orders
For the reasons set out above, the plaintiff should pay the defendant's costs of the action on an indemnity basis.
I propose orders in the following terms, save that the parties can apply to the court if there is a dispute in relation to the final form of the orders:
1.the plaintiff's claim be dismissed and judgment is entered for the defendant; and
2.the plaintiff should pay all the costs incurred by the defendant except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions, the defendant is completely indemnified by the plaintiff for its costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LP
Associate to Commissioner Collins
10 OCTOBER 2022
28
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