R v Hoang

WADE v AUSTRALIAN RAILWAY HISTORICAL SOCIETY (SOUTH AUSTRALIAN DIVISION) (trading as STEAMRANGER) and ANOR
[2002] SASC 241
Full Court: Perry, Williams and Gray JJ

PERRY J. This is an appeal from an order of a Master as to the incidence of costs following the trial of proceedings arising out of a level crossing accident.
The plaintiff is the appellant. His claim against the Australian Railway Historical Society trading as “Steamranger” (“Steamranger”) and the Alexandrina Council (“the Council”) came on for hearing before a Master. The claim was for damages for serious injuries which the appellant suffered when he and the motor cycle which he was riding collided with a steam train operated by Steamranger at a level crossing within the district administered by the Council.
The Master found in favour of the appellant against both defendants, but reduced the appellant’s damages by reason of his contributory negligence, which he assessed at 70%.
The defendants had exchanged contribution notices against each other. The Master apportioned liability between them with respect to the amount recoverable by the appellant, as to two-thirds to the Council and as to one-third to Steamranger.
In the result, although he assessed damages at over $1.7 million, the judgment which was entered in favour of the appellant against both defendants was for $524,666.50.
All parties appealed the judgment on various grounds. The appeals came on for hearing before the Full Court, which delivered its judgment on 13 July 2000. The Full Court dismissed the appeals brought by the Council and the appellant. However, it allowed the cross-appeal by Steamranger, and set aside the judgment entered against that defendant.
In consequence of those orders, the Full Court set aside the orders for contribution as between the Council and Steamranger.
The matter was then listed again before the Master so that he might determine the incidence of the costs of action as between the appellant and the two defendants. After hearing argument, on 1 November 2001, the Master delivered written reasons as to the costs issues, and made an order that:
1.     the Council pay the appellant’s costs;
2.     the appellant pay Steamranger’s costs; and
3.     the application by the plaintiff for a “Bullock” or “Sanderson” order be refused.
By leave given by another Master on 5 December 2001, the appellant appeals to this Court against the order for costs. The appeal raises one ground only, namely that the first Master erred in exercising his discretion in refusing the application for a “Bullock” or “Sanderson” order.
The difference between the two orders is that in the case of a Bullock order a plaintiff who is liable to pay the costs of a successful defendant may recover those costs from an unsuccessful defendant.[1] In the case of a Sanderson order, the unsuccessful defendant pays the successful defendant’s costs directly to the successful defendant.[2]
[1] Bullock v London General Omnibus Co [1907] 1 KB 264.
[2] Sanderson v Blyth Theatre Co [1903] 2 KB 533. See also O’Keefe v Australian Trencher Co Pty Ltd (1991) 56 SASR 370.
In taking the course which he did, it appears that the Master accepted the argument put by the Council that the appellant had pursued a discrete cause of action against Steamranger, and that there was no conduct on the part of the Council which caused or contributed to the plaintiff instituting or maintaining his claim against Steamranger.
In his written reasons, after referring to the orders sought by the appellant, the Master commented:
“The question of whether or not either of such orders is to be made may often be examined by reference to what the unsuccessful defendant would have done if both defendants had not been joined by the plaintiff. In this case, the second defendant, by its defence, attempted to lay the blame, at least in part, at the feet of the first defendant. If credence is to be given to that aspect of the second defendant’s pleading (judged by what occurred up to but not including the date of judgment), the conclusion must be reached that, had the plaintiff not joined Steamranger, the second defendant would have joined Steamranger as a third party. As such, the second defendant would have been responsible for the third party’s costs because it would have failed to establish liability against Steamranger.”
Pausing there, if that reasoning had governed the final outcome of the costs order, either a “Bullock” or “Sanderson” order should logically have been made in favour of the plaintiff.
However, the Master went on to refer to other considerations. In doing so, he made reference to the argument put by the Council that the appellant had pursued a “discrete cause of action” against Steamranger, and that there was “no conduct” of the Council which “caused or contributed to the ... [appellant] ... maintaining his claim against” Steamranger. Having noted that argument, the Master then proceeded to reject it on the footing that the appellant’s action was against alleged joint tort feasors, against whom there was a combination of separate and joint allegations of negligence.
The Master went on to point out that there was “no material communication” between the appellant and the Council before the proceedings were commenced, from which he concluded that there was “no conduct on the part of ... [the Council] ... which could be said to have caused or contributed” to the appellant’s decision to join Steamranger. In my opinion, this observation, for reasons which I will come to, was in error, as was his further observation that it was “only when ... [the Council] ... filed its defence and brought contribution proceedings that it could be said that” the Council’s conduct contributed to the appellant continuing his claim against Steamranger.
Against that background, the Master went on to say:
“The question of whether or not the conduct of the second defendant caused or contributed to the plaintiff’s decision to pursue the action against both defendants involves a finding of fact. If the above analysis as to the way in which the discretion is to be exercised is correct, I must be satisfied on whatever evidence is available to me that the conduct of the second defendant caused or contributed to a decision on the part of the plaintiff to continue the action against both defendants after the second defendant had filed its defence and issued contribution proceedings. There is no direct evidence which would enable such a finding to be made. Nor, by reference to the pleading, can it be inferred that the conduct of the second defendant by its defence and contribution proceedings caused or contributed to a decision on the part of the plaintiff (if such a decision were made) to continue the proceedings against both defendants. Without such a finding, the plaintiff cannot establish an entitlement to an order which either directly or indirectly relieves him of the obligation to pay the costs of the first defendant.”
In my opinion, the passages to which I have referred in the Master’s reasons take too narrow a view of the concept of the conduct of one defendant, in this case the Council, which might be thought to have a bearing on the decision of the plaintiff to sue the other defendant, in this case Steamranger.
The correct approach is identified in the following passage from the judgment of King CJ (with whom Jacobs and von Doussa JJ in substance agreed) in Fennell v Supervision and Engineering Services Holdings Pty Ltd and Anor:[3]
“The principle of justice upon which the Bullock order rests may, in my opinion, be stated thus. The unsuccessful defendant has caused the litigation by his wrongful act and by disputing liability for it. He therefore ought to pay all costs reasonably incurred by the plaintiff in connection with the litigation. If it was reasonable, as between the plaintiff and the unsuccessful defendant, for the plaintiff to sue the successful defendant, the unsuccessful defendant ought therefore in justice be liable to indemnify the plaintiff against the costs of so doing, including those which he is ordered to pay to the successful defendant. In many cases the basis for the plaintiff’s claim of reasonableness in joining the successful defendant will be the conduct of the unsuccessful defendant in placing the blame on the successful defendant. That conduct is, however secondary to the underlying principle of justice indicated above.”
[3] (1988) 47 SASR 6 at 7.
King CJ then goes on to refer to the decision of the High Court in Gould v Vaggelas.[4] From the judgments in Gould v Vaggelas he cited Wilson J (with whom Murphy J relevantly agreed) to the following effect:[5]
“Such an order may be made where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant.”
[4] (1984) 157 CLR 215.
[5] Ibid 247.
King CJ understood Gibbs CJ in the same case to have “formulated the principle” in the same terms, although Gibbs CJ had also observed:[6]
“That the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant.”
[6] Referring to Steppke v National Capital Development Commission (1978) 39 LGRA 94 per Blackburn CJ at 100.
King CJ went on to say:[7]
“Of course, if the word “conduct” is used in a sense wide enough to include the commission of the wrongful act and the contesting of liability, there may not be much difference between the two approaches.” (emphasis added)
[7] Ibid. 8.
In Fennell the plaintiff had unsuccessful sued his employer as well as another party (against whom he succeeded) with respect to a work injury. King CJ concluded:[8]
“I think that it was entirely reasonable for the appellant to sue his employer. ... The reasonableness of the proceedings against the employer was confirmed when Santos Ltd issued a third party notice alleging that the responsibility was that of the first defendant. That may be looked upon as ex post facto justification of the appellant’s action in instituting proceedings against the employer.”
[8] Ibid.
King CJ concluded that he could see no justification for refusing the Bullock order in those circumstances.
In the same case, Jacobs and von Doussa JJ reasoned in similar terms.
Jacobs J observed:[9]
“.... to my mind one thing is clear that after SES implicated Santos a prudent plaintiff really had no choice but to join Santos as a defendant and thereafter to prosecute the action to a conclusion against both defendants, and to do so was entirely reasonable. Upon that basis there was, in my opinion, a proper foundation for a Bullock order.”
von Doussa J observed:[10]
“In my opinion the principle to be discerned from Gould v Vaggelas (supra) is that a Bullock order may be made where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant; as between them those costs will be so incurred where the conduct of the unsuccessful defendant in relation to the plaintiff’s claim shows that the joinder of the successful defendant was reasonable and proper to ensure recovery.”
[9] Ibid at 15.
[10] Ibid at 19.
In this case, at the time when he commenced the proceedings, the appellant was faced with a situation in which, apart from himself, there were at least two other parties who had arguably been to blame in causing or contributing to the injuries which he had suffered. There is no question but that prudent counsel would have advised that proceedings be brought against both.
The reasonableness of the decision to sue both was confirmed, to use the expression used by King CJ in Fennell (supra), when both defendants issued contribution notices to each other. It was further confirmed when, at trial, both defendants were found liable. It is nothing to the point that on the appeal one was exonerated. What must be addressed is whether it was reasonable for the plaintiff to bring the proceedings in the first place.
In my opinion, this was a proper case in which to make a Bullock order, that is, an order that the appellant be entitled to recover from the Council the costs which it was obliged to pay to Steamranger.
As to whether or not this Court should interfere to correct the error, I accept the statement of principle which finds expression in the judgment of the Full Court in Southern Resources Ltd and Ors v Residues Treatment and Trading Co Ltd and Ors,[11] where Jacobs ACJ, Prior and Mullighan JJ acknowledged:
“... the wide discretion of the trial judge on questions of costs with which an appellate court ought not generally to interfere. The appellants have to show that the discretion was so unreasonable and unjust as to require the appellate court to substitute its own discretion ...”[12]
[11] (1991) 56 SASR 455 at 480.
[12] Citing Norwest Refrigeration Services Pty Ltd v Baine, Dawes (WA) Pty Ltd (1984) 157 CLR 149 per Brennan J at 176.
In this case, the order made by the Master was tainted with an error of reasoning. The appellant’s entitlement to a Bullock order is plainly made out, and in the circumstances I think it proper for this Court to interfere.
Leave to Appeal
Section 50 of the Supreme Court Act 1935, which deals with appeals against decisions of judges and Masters, provides, inter alia:
“50(1) Subject to the rules of court an appeal shall lie to the Full Court against every judgment ... order or direction of a judge ...
Provided that-
(1).......
(2)No appeal shall lie without the leave of the judge, from any order-
(a)...........
(b)as to costs only which by law are left to the discretion of the judge.
(3).............
(2)Subject to the rules of court, an appeal shall lie to a judge against a judgment, order, direction or decision of a Master.”
In this case, a Master other than the Master who made the costs order which is now placed under challenge, purported to give leave to appeal to the Full Court against that order.
On a proper construction of s 50, it is questionable as to whether or not leave is needed to appeal from a Master, although pursuant to s 50(2) the appeal of right (whether or not it extends to a costs order) should ordinarily be to a single judge and not to the Full Court.
In an unpublished ruling in Rothmore Farms Pty Ltd v Belgravia Pty Ltd and Ors,[13] Lander J held that appeals from a costs order made by a Master were governed by s 50(2), and leave to appeal in that case was not required.
[13] Supreme Court action No 1032 of 1999.
I would prefer not to express an opinion on the point as it was not fully argued in this case.
Insofar as an appeal under s 50(2) might be thought to lie to a single judge, the judge may always reserve the case for the consideration of the Full Court (s 49(1)).
The respondents took no point as to the competency of the appeal, and in those circumstances, I would treat the appeal as properly before the Court.
I would allow the appeal and quash the order under appeal. I would substitute an order on the following terms:
(a) That the defendant Alexandrina Council pay the plaintiff’s costs of action to be taxed.
(b) That the plaintiff pay the first defendant, Australian Railway Historical Society’s (South Australian Division) (trading as Steamranger) costs to be taxed.
(c) That the plaintiff be entitled to recover against the defendant Alexandrina Council the costs payable by it to the first defendant.
WILLIAMS J. I agree.
GRAY J.                I agree with the reasons of Perry J. The appeal should be allowed. I agree with the proposed orders.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1.    Bullock v London General Omnibus Co [1907] 1 KB 264.
2.    Sanderson v Blyth Theatre Co [1903] 2 KB 533. See also O’Keefe v Australian Trencher Co Pty Ltd (1991) 56 SASR 370.
3. (1988) 47 SASR 6 at 7.
4. (1984) 157 CLR 215.
5. Ibid 247.
6.    Referring to Steppke v National Capital Development Commission (1978) 39 LGRA 94 per Blackburn CJ at 100.
7. Ibid. 8.
8. Ibid.
9. Ibid at 15.
10. Ibid at 19.
11. (1991) 56 SASR 455 at 480.
12.    Citing Norwest Refrigeration Services Pty Ltd v Baine, Dawes (WA) Pty Ltd (1984) 157 CLR 149 per Brennan J at 176.
13.    Supreme Court action No 1032 of 1999.

[2002] SASC 241

30 July 2002