Rawlings v Royal Caribbean Cruises Ltd (No 2)

[2021] NSWDC 39

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Rawlings v Royal Caribbean Cruises Ltd (No 2) [2021] NSWDC 39

Hearing dates:

12 February 2021
Defendant’s Written Submissions – 09 February 2021
Plaintiff’s Written Submissions – 10 February 2021

Date of orders:

19 February 2021

Decision date:

19 February 2021

Jurisdiction:

Civil

Before:

Hatzistergos DCJ

Decision:

The Defendant to pay the Plaintiff’s costs

Catchwords:

COSTS – Whether costs should ordinarily follow the event – Where the Defendant argues it was successful on discrete issues and percentage costs order should be made- Where Plaintiff asserts the issues were interrelated- Where the Plaintiff asserts that the Defendant did not act reasonably with a view to resolution of proceedings

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW) rules 42.1

Cases Cited:

AmacaPty Ltd v Mathwin [2005] NSWCA 364

Bostik Australia Pty Ltd v Liddiard (No.2) Pty Ltd [2009] NSWCCA 304

Commonwealthof Australia v Gretton [2008] NSWCA 117

Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373

Halsey v Milton Keynes General NHS Trust; Steel v Joy [2004] 4 All ER 920.

Hughes v Western Australia Cricket Association (Inc) [1986] ATPR 40

Hockey v Fairfax Media Publications (No 2) [2015] FCA 750

Hooker v Gilling (No 2) [2007] NSWCA 214

James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296

Mauger v Wingecarribee Shire Council (No 2) [2015] NSWC 1191

Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (Supreme Court (NSW), 3 June 1998, unrep)

State of New South Wales v Stanley [2007] NSWCA 330

Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306

Sanders v Snell (No 2) (2000) 174 ALR 53

The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC

Texts Cited:

G E Dal Pont, Law Of Costs 4th edition

Category:

Costs

Parties:

Daniel Rawlings (Plaintiff)
Royal Caribbean Cruises Ltd (Defendant)

Representation:

Counsel:
Mr J. Cohen (Plaintiff)
Mr. E Cox (Defendant)

Solicitors:
Walker Law Group (Plaintiff)
HFW Australia (Defendant)

File Number(s):

2019/71056

Publication restriction:

Pursuant to s 9 of the Court Suppression and Non-Publication Orders Act 2010 (NSW), there is a non-publication order for the name and anything that may identify the Complainant which is to operate throughout the Commonwealth of Australia for a period of 20 years. The grounds for the order is that it is necessary to protect the safety of the person pursuant to s 8(1)(e) of the Court Suppression and Non-Publication Orders Act 2019 (NSW). The pseudonym “A” will be used.

Judgment

1. This matter was heard before me between 20-23 April 2020; May 2020 and between 1 and 5 June 2020. On 22 December 2020, I entered a judgment in favour of the Plaintiff in the sum of $97,394. I further ordered that subject to any application to my Associate to re-list the matter for any other further order as to costs, the Defendant was to pay the Plaintiffs costs. [1]

   1. Primary judgment at [524].

2. On 29 January 2021, the Defendant sought relisting to seek an alternative costs order to which there was no agreement. [2]

   2. MFI 8.

3. On 3 February 2021, the matter was re-listed before me. By consent, orders were made in accordance with the Short Minutes of Orders as follows:

1. The Defendant to serve upon the Plaintiff a draft Notice of Appeal, Notice of Motion (seeking a stay) and evidence in support together with its submissions on the issue of costs by 9 February 2021.

2. The Plaintiff to serve its response submissions and any evidence in reply on the issue of costs by 11 February 2021.

3. The matter is listed for hearing at 2pm on 12 February 2021.

4. On 12 February 2021, I ordered by consent that the Court Orders of 22 December 2020 be stayed pending further Order of the Court, the Court of Appeal or agreement of the parties.

5. The question of costs was thereafter argued based on the written and oral submissions submitted by the parties.

Defendant’s Submissions

6. The Defendant submitted that even though the Plaintiff was ultimately successful, the Court may order that it only have a percentage of its costs where it was unsuccessful on significant issues. In this regard, reliance was placed on the general statement of principle expanded by Toohey J in Hughes v Western Australia Cricket Association (Inc) [3] which was quoted with approval by the NSW Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2). [4]

   3. [1986] ATPR 40, 748 at 48, 136.

   4. [2005] NSWCA 296 at [32] – [34].

7. The Defendant also relied on two further authorities which it asserted supported its argument being the decisions of White J in Hockey v Fairfax Media Publications (No 2) [5] and Davies J in Manager v Wingecarribee Shire Council (No 2). [6]

   5. [2015] FCA 750 at [84] – [91].

   6. [2015] NSWC 1191 at [37].

8. In the present case, the Defendant submitted that three issues occupied significant court time and associated costs:

1. Substantial portions of the evidence and cross examination related to the initial detention of the Plaintiff from 15 November, the shipboard investigation and the maintenance of the Plaintiff’s detention until he could be disembarked at Noumea.

2. The Plaintiff was unsuccessful on various damages claims including the asserted diagnosis of PTSD, a claim for economic loss, past/future medical expenses and exemplary damages.

3. The Plaintiff unsuccessfully opposed the suppression order on 20 April and 22 May 2020.

9. The Defendant argued that it was successful on these issues and incurred substantial costs and the costs Order should compensate it for the costs incurred and reflect the Plaintiff’s partial success. To that extent the Defendant went further than to argue that the Plaintiff should not just have its own costs. It contended that in the circumstances, the Plaintiff should receive only 50% if its costs.

10. In support of its argument, the Defendant sought to rely on a letter from the Plaintiff’s solicitors stated 11 February 2021 which was described as a tax invoice in respect of the Plaintiff’s costs amounting to $355,709.94. [7] This was said to demonstrate the significant costs involved in the matter albeit that it was confined to the Plaintiff’s costs.

    7. Exhibit 1(costs application).

Plaintiff’s Submissions

11. The Plaintiff acknowledged that Rule 42.1 of the Uniform Civil Procedure Rules (‘UCPR’) provided that costs should follow the event whilst accepting that the rule enabled the Court to otherwise order. The Plaintiff accepted by reference to what was said by Hodgson JA in Commonwealth of Australia v Gretton [8] that there was a general discretion to make a percentage costs order having regard to what the Court considered to be the responsibility of each party to the incurring of costs. The Plaintiff relied upon the principles for making costs orders reflecting time taken in dealing with particular issues which the successful party in the proceedings did not succeed as outlined in Bostik Australia Pty Ltd v Liddiard (No.2) Pty Ltd. [9]

    8. [2008] NSWCA 117 at [121].

    9. [2009] NSWCA 304 at [38].

12. The Plaintiff nonetheless argued that a percentage costs order not be made. With respect to its lack of success as to the initial part of the Plaintiff’s confinement, it drew attention to the fact that there was one continuous period of confinement albeit that the Court found it was initially lawful but subsequently not.

13. Likewise, the Plaintiff asserted that its claim for psychiatric injury had its source in the period of detention and not through any other conduct. It accepted however that the Court could if not satisfied that the Plaintiff sustained personal injury exclude costs associated with procuring evidence of Dr Allnutt and the joint evidence of Dr Allnut and Dr Chalk. The Plaintiff contended however the issue with PTSD and the Plaintiffs allegation of personal injury did not significantly increase the overall running of the trial.

14. As to what is described as a “suppression order” (this was in fact a “non-publication order”), the Plaintiff asserted that whilst the Defendant initially sought to establish grounds on which an order would be made, it initially failed to do so but ultimately the Plaintiff took a neutral position. The Plaintiff further argued that when considering responsibility of the costs, the Plaintiff’s synopsis of damages was not relevant but what was relevant was that it had submitted an offer of compromise of $101,000 [10] which was reasonable in light of the judgment and was a relevant consideration as to the costs discretion. Reference in this regard was made to the decision in Amaca Pty Ltd v Mathwin. [11]

    10. Exhibit A (on costs).

    11. [2005] NSWCA 364.

Consideration

15. In Hughes v Western Australia Cricket Association (Inc) [12] Toohey J stated:

“1. Ordinarily costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order - Ritter v Godfrey [1920] 2 KB 47.

2. Where a litigant has succeeded only on a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed - Forster v Farquhar [1893] 1 QB 564.

3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law -.Cretazzo v Lombardi (1975) 13 SASR 4 at 12.”

The Defendant accepted Toohey J’s statement is one of the general principle.

12. [1986] ATPR 40, 4788 at 48, 136.

16. Both parties made reference to the principles summarised in Bostik Australia Pty Ltd v Liddiard (No.2) Pty Ltd. [13] Those principles were derived from the decision in Elite Protective Personnel Pty Ltd v Salmon (No 2). [14] What emerges from those decisions is that costs would ordinarily be awarded to the successful party unless the particular issue is dominant or separable and further, if the matters upon which the party was unsuccessful took up a significant part of the trial by way of evidence or argument. Whether an order contrary to the general rule that costs should follow the event should be made depends upon the circumstances of the case viewed against the Court’s wide discretionary powers which powers should be liberally construed.

    13. [2009] NSWCA 304 at [38].

    14. [2007] NSWCA 373.

17. Bostik and Elite also need to also be considered in the context of what was said in Hooker v Gilling (No 2) [15] by McColl JA:

    15. [2007] NSWCA 214.

21 The circumstances in which the Court may depart from the general rule in UCPR 42.1 were considered by Ipp AJA (with whom Foster AJA agreed) in Arian v Nguyen [2001] NSWCA 5; (2001) 33 MVR 37 as follows:

“36 In Oshlack v Richmond River Council McHugh J (at 97) reiterated the long-standing rule that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. His Honour went on to say:

‘The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd ([1951] 1 All ER 873 at 874), Devlin J formulated the relevant principle as follows:

‘No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.’ ’

His Honour noted that ‘misconduct’ in this context includes conduct relating to the litigation and conduct that unnecessarily protracts the proceedings. McHugh J was in dissent in Oshlack but as Foster AJA pointed out in Mannix v Loumbos [2000] NSWCA 32 there was no disagreement in the High Court as to these observations of general principle which are well established.

37 The making of an order that a successful party pay his or her opponent’s costs requires strong justification (Ottway v Jones [1955] 1 WLR 706 at 708, 714, Scherer v Counting Instruments Limited [1986] 1 WLR 615 at 618) and exceptional circumstances must exist before a party will not only be deprived entirely of costs but also required to pay part of the opponent’s costs (Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201; Robinson v Australian Association of Social Workers Limited [2000] SASC 239).

Where a party raises issues or makes allegations improperly or unreasonably, this may constitute misconduct such that the court may not only deprive it of its costs but order it to pay the whole or a part of the unsuccessful party’s costs: Trade Practices Commission v Nicholas Enterprises Pty Ltd at 208 per Fisher J, Re Elgindata Limited (No 2) [1993] 1 All ER 232 at 237 per Nourse LJ; Ashby v Marshall, (unreported, SC (SA), 28 November 1991); Popovic v Murray (unreported SC(Tas), 15 March 1991).

38 It is rare for a successful party who is guilty of misconduct in the litigation to be ordered to pay the unsuccessful opponent’s costs where the misconduct does not lengthen the proceedings unnecessarily, cause unnecessary issues to be canvassed or otherwise cause the costs of the litigation to be increased. Indeed, the court’s entitlement to depart from the usual order that costs follow the event has sometimes been said, in effect, to be subject to the qualification that the misconduct in question occasioned unnecessary litigation and expense (see Huxley v West London Extension Railway Company (1899) 14 App Cas 26 at 32-33 per Lord Halsbury LC; Ritter v Godfrey [1920] 2 KB 47 per Atkin LJ at 60). In other cases, however, this qualification has not been mentioned: see for example Donald Campbell & Co v Pollak [1927] AC 732 at 811-812; Thorne v Doug Wade Consultants Pty Ltd [1985] VR 433 at 500; Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271-272; Re Elgindata Limited (No 2) (supra). On balance, it seems to me that while delay and increased expense brought about by improper conduct in the course of the litigation are highly relevant factors in the discretion to depart from the usual order as to costs, they are not essential to the exercise of that discretion. It would, in any event, be very unusual for misconduct of that kind not to cause unnecessary delay and expense.” (emphasis added).

22 It is useful to extract the full passage from McHugh J ‘s reasons in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 which Ipp AJA summarised (at [36]). McHugh J said (at [69]):

“ ‘Misconduct’ in this context means misconduct relating to litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party has already offered in settlement of the dispute.” (emphasis added)

23 Further, in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 (at 874) (to which McHugh J referred in Oshlack) Devlin J said that in applying the ordinary rule that a successful plaintiff ought not to be deprived of costs, or made to pay the costs of the other side, unless that party has been guilty of some sort of misconduct:

“… [I]t is necessary to decide whether the plaintiff really has been successful, and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a ‘successful’ plaintiff. In certain cases he may be, eg, where part of the object of the action is to establish a legal right, wholly irrespective of whether any substantial remedy is obtained. To that extent a plaintiff who recovers nominal damages may properly be regarded as a successful plaintiff, but it is necessary to examine the facts of each particular case. ” (emphasis added)

24 While it might be accepted that there was no disagreement in the High Court as to McHugh J’s observations of general principle, I would also point out that, as I said in Fordyce v Fordham & Anor [2006] NSWCA 274 (at [74], Beazley and Santow JJA agreeing), the majority in Oshlack rejected the proposition that there was any absolute rule with respect to the exercise of the s 98 power such as that “in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party”: see Gaudron and Gummow JJ (at [40]), Kirby J (at [134]). I also drew attention (Fordyce v Fordham & Anor at [80]) to observations made by Hodgson JA (with whom Einstein J agreed) in Furber v Stacey & Anor [2005] NSWCA 242 that the “prima facie principle …that costs follow the event” expressed in District Court Rules 1973 Pt 39A r 9 and Pt 21 r 8 was:

“…subject to the ability of the Court, referred to in those Rules, to make such orders as it appears to the Court to be made, as the justice of the case may require .” [16] (emphasis added)

16. Ipp JA agreeing.

18. Although Hooker v Gilling (No 2) was not referred to in Bostic and Elite, Sabah Yazgi v Permanent Custodians Limited (No 2) [17] was. [18] That was a case where the Court ultimately held:

25 In this case, although there were multiple issues, none of the claims made were inappropriately brought; there was no evidence, and it was not apparent from the reasons of the associate judge that Sabah Yazgi had in any way unnecessarily protracted the trial; and the matter that occupied most of the time taken in giving evidence related to the question of the forgery, which, as is indicated above, was the fulcrum around which the entitlements of both Sabah Yazgi and Permanent Custodians revolved.

17. [2007] NSWCA 306.

18. at Bostic at [38] and Elite at [7].

19. In the present case, the Defendant did not advance their argument for costs on the basis of the Plaintiff having engaged in any misconduct that led to a lengthening of the hearing. Rather, it was based on what it contended were the issues that the Plaintiff failed to succeed.

20. G E Dal Pont in his book “Law of Costs” 4^th ed summarised the legal principles as he saw them stating:

In approaching apportionment of costs, a court must strike a balance between not discouraging litigants from canvassing all material issues, and not rewarding them for unreasonable conduct in pursuing issues. Consistent with this balancing act, there is no fixed rule, only discretion; the court in each case seeks to achieve the outcome most consonant with the justice of each case. In particular, courts have warned of the difficulty of revisiting each issue and tallying ‘wins and losses’, a concern being that a just and equitable decision on the question of costs is not ‘reached simply as a matter of arithmetic’. Judges have remarked, to this end, that ‘[t]he judgment as to apportionment is … an evaluative one’, and the exercise of discretion is one ‘based largely on impression’. There is the further concern that to embark on detailed inquiries as to success or failure on issues may add uncertainty and complexity to the outcome of litigation, derogating from the prospect of settlement and obliging the court to hear lengthy and frequent arguments as to costs. [19]

19. G E Dal Pont 4th ed, 213-214 [8.7].

21. Somewhat analogous statements were made in Sanders v Snell (No 2) [20] where Kirby J stated that:

“It is not usual for the court to specify that costs will only be pay able in respect of particular issues. Accordingly it is not usual or appropriate for a taxing officer to proceed in such a nice way unless there are good and exceptional reasons in the particular case to do so. A court will not ordinarily specify that cost will only be payable in respect of particular issues as the marginal expense of calculation the costs of arguing particular issues, themes, ideas, facts cases or argument will ordinarily be outweighed by the inutility of doing so.”

This is especially so where there is considerable overlap between the issues that have been the subject of conflicting outcomes. Plainly the mere fact that a Court does not accept all a successful parties arguments does not make it appropriate to deal with costs on an issue by issue basis. [21]

20. (2000) 174 ALR 53 at 57, [15].

21. The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8]

22. Whilst the Defendant relied on the decision in Maugher v Wingecarribee Shire Council (No.2), [22] this case was distinguishable in that “the matter in which the Plaintiff succeeded took a very small period of time to argue and to articulate”. [23] Davies J at [31] referred to the decision in Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd, Hodgson [24] CJ in Eq (at 13) stating:

Apart from that consideration, in general terms I accept that if an issue is raised reasonably and is not disproportionate to the whole case, then normally the successful party should get his or her costs. However, particularly in relation to severable issues, the lesser the strength of the point raised and the greater the proportion it bears to the whole case, the more likely it is that the successful party may be deprived of costs; and if the Court comes to the view that it was unreasonable to raise the issue, then the successful party may have to pay the costs of that issue.

22. [2015] NSWSC 1191.

23. [2015] NSWSC 1191 at [33].

24. Unreported, 3 June 1988.

23. Hockey v Fairfax Media Publications Pty Ltd (No2) is also distinguishable as there White J found the Plaintiff had failed against one Defendant and to the extent he succeeded there was a failure on the matters which were described as “the real core of his claim.” [25]

    25. at [117]-[118].

24. I accept the Plaintiff’s submissions that the action which he brought was in relation to a continuous period of confinement, part of which was found lawful and part of which was not. The Defendant needed to establish the lawfulness of the entire confinement and it succeeded in doing so only in part. The Defendant accepted in argument that it would have been necessary for the Plaintiff to set the factual basis by which what part of the confinement was unlawful. Although the Plaintiff did not particularise with precision the timing of when that lawful confinement became unlawful, the lawfulness as a whole in the light of the unfolding events was raised by both parties in both evidence and submissions. [26] The matter was plainly raised in cross examination of Captain Sullivan. [27] Moreover, the circumstances of the initial confinement informed the ultimate basis on which the Plaintiff succeeded. [28] To that extent, I do not accept that the Plaintiff’s earlier confinement was separable as the Defendant contended. The situation is somewhat analogous with that considered in State of New South Wales v Stanley. [29]

    26. See for example Defendant’s primary written submissions at [67]–[72], 535.1-8 and T 517.34-521.50 and Plaintiff’s oral submissions at T 583.32-586.33.

    27. T 356.1-.49.

    28. Primary judgment at [413].

    29. [2007] NSWCA 330.

25. The background to the making of the non-publication order is recounted in my judgment on the same matter. [30] A motion had been filed on 17 April 2020 by the Defendant for orders in respect of a number of persons. The matter was advanced on the first day of the trial and on later occasions including the fourth day. On 22 May 2020, the Defendant advised that it would not proceed with its motion and Mr Watson SC advanced the motion on behalf of the interested persons which included A and her mother. That motion was supported by affidavit evidence and resulted in a non-publication order being made. The Plaintiff did not oppose the final making of the order and to the extent that it had any position in relation to the earlier orders that related to a motion which the Defendant ultimately abandoned. Accordingly the Defendant’s assertion that the Plaintiff unsuccessfully opposed the making of the order ultimately made is rejected.

    30. Unreported 25 May 2020.

26. With respect to the question of the Plaintiff’s lack of success in respect to what was described in the primary judgment as the civil liability claim, the Plaintiff’s claim for economic loss for past, future, medical expenses and exemplary damages occupied a very small part of the proceedings. It is true that the Plaintiff claimed that he suffered PTSD following his imprisonment being an issue that he was unsuccessful on. Having reviewed the matter however my overall impression of this evidence is that it was relatively confined. The Plaintiff’s evidence in chief on this matter extended to some 10 pages on the transcript. The cross examination was also relatively confined and also canvassed the history recorded in various notes including as to what occurred on the 15^th of November 2016. The evidence of Dr Chalk and Dr Allnut was according to the transcript 1 hour and 7 minutes. I should add that the Plaintiff also succeeded in its aggravated damages claim a matter in respect of which the Defendant made no substantive submissions and in respect of which the medical evidence provided some support as to the Plaintiff’s reaction as to the way he was treated. [31]

    31. See primary judgment at [481].

27. Bearing in mind the extent that this issue was raised in the context of the whole case including the documentary and other evidence, I am not satisfied that the time occupied was significant. Although I did not regard this aspect of the case as particularly strong no unreasonableness in pursuing these matters was suggested. Ultimately in default of agreement the quantum of costs will be a matter for assessment.

28. Whilst the Plaintiff in argument raised the failure of the Defendant to make any proposal for resolution in the face of its offer of compromise, the evidence does not enable me to find that there was an unreasonable failure to mediate on its behalf. [32] Nor do I regard the decision in Amaca Pty Ltd v Mathwin [33] as of any assistance to the resolution of the issues on this application.

    32. Halsey v Milton Keynes General NHS Trust; Steel v Joy [2004] 4 All ER 920.

    33. [2009] NSWCA 304

29. Ultimately the Plaintiff vindicated an important legal right. Inevitably there has been some prolonging of the trial by reason of the Plaintiff’s advancement where he failed to succeed. However, I am not satisfied as a whole that segmenting the costs in the way the Defendant seeks is practical or appropriate.

30. For these reasons, I order the Defendant to pay the Plaintiff’s costs.

**********

Endnotes

Amendments

28 July 2021 - Typographical errors

Decision last updated: 28 July 2021