Rogan-Gardiner v Woolworths Ltd [No 2]
[2010] WASC 290 (S)
•22 OCTOBER 2010
ROGAN-GARDINER -v- WOOLWORTHS LTD [No 2] [2010] WASC 290 (S)
Pending Appeal
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2010] WASC 290 (S) | |
| Case No: | CIV:2149/2004 | 1-4, 8-11 JUNE, 1 NOVEMBER 2010 | |
| Coram: | HALL J | 22/10/10 | |
| 4/11/10 | |||
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Costs orders made Set off of costs against judgment sum Stay of execution pending taxation of costs | ||
| B | |||
| PDF Version |
| Parties: | MICHELLE ROGAN-GARDINER WOOLWORTHS LTD (ABN 88 000 014 675) |
Catchwords: | Costs Whether costs should be apportioned where plaintiff not wholly successful Order 66 r 1(3) Turns on own facts Order 24A r 3(a) Offer of compromise Whether offer not sufficiently clear Whether costs awarded to defendant should be set off against the judgment sum |
Legislation: | Supreme Court Act 1935 (WA), s 32, s 37 Supreme Court Rules 1971 (WA), O 24A r 3, O 24A r 10, O 66 r 1 |
Case References: | Danidale Pty Ltd v Abigroup Contractors Pty Ltd [2007] VSC 552 Gray v Sirtex Medical Ltd [2009] WASC 126 Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 Pringle v Gloag (1879) 10 Ch D 676 Re Elgindata Ltd (No 2) (1992) 1 WLR 1207 Rogan Gardiner v Woolworths Ltd [No 2] [2010] WASC 290 Thiess v TCN Channel Nine Pty Ltd (No 5) (1994) 1 Qd R 156 X&Y (by her Tutor X) v Pal [1991] NSWCA 302 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 4 NOVEMBER 2010 FILE NO/S : CIV 2149 of 2004 BETWEEN : MICHELLE ROGAN-GARDINER
- Plaintiff
AND
WOOLWORTHS LTD (ABN 88 000 014 675)
Defendant
Catchwords:
Costs - Whether costs should be apportioned where plaintiff not wholly successful - Order 66 r 1(3) - Turns on own facts
Order 24A r 3(a) - Offer of compromise - Whether offer not sufficiently clear - Whether costs awarded to defendant should be set off against the judgment sum
Legislation:
Supreme Court Act 1935 (WA), s 32, s 37
Supreme Court Rules 1971 (WA), O 24A r 3, O 24A r 10, O 66 r 1
(Page 2)
Result:
Costs orders made
Set off of costs against judgment sum
Stay of execution pending taxation of costs
Category: B
Representation:
Counsel:
Plaintiff : Dr P R MacMillan
Defendant : Ms G A Archer SC
Solicitors:
Plaintiff : Jackson McDonald
Defendant : Clayton Utz
Case(s) referred to in judgment(s):
Danidale Pty Ltd v Abigroup Contractors Pty Ltd [2007] VSC 552
Gray v Sirtex Medical Ltd [2009] WASC 126
Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81
Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516
Pringle v Gloag (1879) 10 Ch D 676
Re Elgindata Ltd (No 2) (1992) 1 WLR 1207
Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290
Thiess v TCN Channel Nine Pty Ltd (No 5) (1994) 1 Qd R 156
X&Y (by her Tutor X) v Pal [1991] NSWCA 302
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1 HALL J: On 22 October 2010 I delivered judgment in this matter: Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290. The plaintiff was successful in respect of her claim that the contract of employment was breached when her employment was terminated without adequate notice. However, she was unsuccessful in respect of other claims relating to alleged breaches of implied terms to act in good faith and to make a severance payment in the event of redundancy.
2 The parties have submitted conflicting minutes of proposed orders. The primary source of dispute is in respect of costs. The defendant seeks its costs in respect of those matters on which the plaintiff was unsuccessful. Further, the defendant proposes that in respect of the reasonable notice claim it should only pay the plaintiff's costs to 16 March 2007 and thereafter the plaintiff should pay the defendant's costs. The reason for the latter submission is that an offer to compromise was made by the defendant on 16 March 2007 pursuant to O 24A of the Rules of the Supreme Court 1971 (WA). That offer was for an amount greater than will be awarded pursuant to the judgment.
3 The plaintiff opposes the orders sought by the defendant. In particular, it is submitted that the plaintiff has been substantially successful and should be able to recover her costs. As regards the compromise, the plaintiff submits that the terms of the offer were uncertain and, therefore, it cannot form the basis of an award of costs to the defendant following the making and rejection of that offer.
4 Section 37(1) of the Supreme Court Act 1935 (WA) provides that the costs of and incidental to all proceedings in the court shall be in the discretion of the court, subject to the provisions of the Act and the rules of the court. Order 66 r 1(1) of the Rules provides that subject to the express provisions of any statute and of the rules, 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 any action or matter recover their costs. The discretion is wide, only being limited by such fetters as are contained in the Act or rules (or any other Act) and by the fact that the discretion must be exercised judicially: Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516 [39] (Steytler P).
5 Costs orders are intended to be compensatory in nature. The purpose of a costs order is to compensate a party for costs that they have incurred in respect of a matter where they have proven to be successful. The rationale behind the general rule that a successful party is entitled to their
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- costs is that this is generally a just outcome where a party turns out to have been unjustifiably brought to court or to have been unjustifiably caused to have recourse to the court: Gray v Sirtex Medical Ltd [2009] WASC 126 [62] (Le Miere J).
6 It would, however, be simplistic to assume that the party who achieves a judgment in their favour is necessarily entirely successful, or even substantially so, for the purpose of costs. The power exists to apportion costs to make orders relating to different parts of the proceedings where that is appropriate. Order 66 r 1(3) provides that where a successful party has introduced an issue upon which he or she has failed and that issue has increased the costs of the proceedings, the court may order that party to pay costs in respect of that issue. Order 66 r 2(a) provides that where there are multiple causes of action, costs may be allowed to the plaintiff on those on which he or she succeeds and to the defendant on those on which he or she succeeds, in the same manner as if separate actions had been brought.
7 It has been suggested that these rules create no more than a starting position and do not impinge upon the court's wide discretion to make orders that reflect the justice of the case: Dal Pont GE, Law of Costs (2003) 243. Nonetheless, they permit the distributing of costs according to the outcome of particular issues in the action: Dal Pont, 243; Thiess v TCN Channel Nine Pty Ltd (No 5) (1994) 1 Qd R 156, 208 (in regard to the former Queensland rule which was similar).
8 There can, however, be difficulties in assessing liability of the costs on the basis of who won or lost a particular issue. Even where the issues are capable of identification, the costs relating to each may not be readily separated. Evidence may have been led which was relevant both to a successful and an unsuccessful issue. Nor would an order that determines liability for costs to be borne by a party based on the number of issues they lost necessarily reflect the costs expended on those issues. This is because some issues may be more or less important than others, or because an issue is subsidiary to or overlaps with another. It has been suggested that it is only if it is possible to isolate an issue that was unnecessarily pursued would it be proper to deprive a successful party of all costs in respect of that issue; otherwise a more general assessment is usually made: Dal Pont, 241; Re Elgindata Ltd (No 2) (1992) 1 WLR 1207, 1218 (Beldam LJ).
9 Circumstances may exist that justify a successful party who has failed on certain issues not only being deprived of the costs in those issues
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- but also being ordered to pay the other party's costs in relation to them: X&Y (by her Tutor X) v Pal [1991] NSWCA 302 [15] (Clarke JA) quoted in Dal Pont at page 239. However, courts are more likely to order a successful litigant to pay costs on issues upon which they have failed where those issues have been improperly or unreasonably raised: Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81, 84 (Keely J). This discretion is reflected in the terms of O 66 r 1(2) of the Rules. A successful party who neither improperly nor unreasonably raises issues nor makes allegations on which he or she has failed is not generally ordered to pay any part of the unsuccessful party's costs: Re Elgindata (No 2) (1214) (Nourse LJ).
10 In the present case there were three primary issues; whether there was a breach of the implied term to give reasonable notice of termination, whether there was a breach of the implied term to act in good faith and whether there was a breach of an implied term to make a severance payment in the event of redundancy. Some evidence was arguably relevant to only one of these issues. However, other evidence was relevant to more than one issue. In particular there was evidence that was relevant to an issue in respect of which the plaintiff was successful and also to an issue in respect of which she was not successful. For example, evidence relating to the restructure and job offers made to the plaintiff between April and September 2002 were relevant to the unsuccessful issue of the alleged breach of the good faith term. However, that evidence was also relevant to the breach of the reasonable notice term because in its defence, the defendant sought to argue that reasonable notice of termination had been given at the time the restructure was announced in April 2002 and that the plaintiff's employment had in fact terminated when the position that she formerly occupied was abolished later that year. Accordingly, as is evident from my reasons for judgment, it was necessary to consider that possibility and the evidence relating to it in dealing with the breach of reasonable notice provision. In these circumstances, orders that would simply award costs in respect of each issue to the successful party would be problematic. It would not be in the interest of either party to make orders that would be unclear in regards to their application to the costs incurred.
11 It is important to note at this stage that because of the rejected offer of compromise the only costs which it is suggested by the defendant should be apportioned are those incurred prior to 16 March 2007. Those costs would clearly be pre-trial costs. It is also important to note that the character of the issues changed at trial, or at least one of them did.
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12 Initially the pleadings in respect of the alleged breach of the good faith term referred only to that term having been breached by termination of the employment or the manner of that termination. At trial an amendment was permitted which extended the ambit of that claim to cover the conduct of the defendant between 15 April 2002 and 11 September 2003. In opposing that amendment the defendant submitted that it had prepared its case on the basis that the alleged breach of the good faith term was limited to the act of termination and the manner of it. Thus, at the relevant time, that is prior to 16 March 2007, the breach of good faith claim was more confined and more closely aligned to the issue on which the plaintiff was ultimately successful. Indeed, on the basis of how the pleadings stood at that time, it would be difficult to say that either the breach of good faith claim or the severance payment claim so clearly increased the costs as to justify the court exercising the discretion referred to in O 66 r 1(3). Nor am I of the view that the issues upon which the plaintiff was unsuccessful were improperly or unreasonably raised. In these circumstances the appropriate order will be that the defendant pay the plaintiff's costs prior to 16 March 2007.
13 In regard to the offer of compromise, that offer relevantly provided that the defendant would pay to the plaintiff a sum which was larger than the judgment sum has proved to be and then had a paragraph which read:
The action be dismissed and the defendant pay the plaintiff's costs to be taxed if not agreed.
14 The plaintiff submits that the terms of this paragraph were contrary to O 24A r 3(9) in that if the compromise had been accepted, the plaintiff would have been entitled to apply for judgment in her favour in accordance with the terms of the offer. It is submitted that it is inconsistent with the offer stating that the action would be dismissed for the plaintiff to be entitled to judgment in her favour. For this reason the plaintiff suggests that the offer was not reasonably certain and therefore should not have costs consequences. I queried with counsel for the plaintiff whether any question regarding the certainty of the offer had been raised at the time it was made. He stated that no such question had been raised.
15 In my view there can be no realistic doubt as to the certainty of the offer. In context, reference to the action being dismissed could only reasonably have been understood as meaning that an acceptance of the offer would bring the proceedings to an end. The offer was entirely clear as to the amount that was to be paid, the interest to be payable, the
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- obligations of the parties as to costs, that the offer was intended to resolve the entire proceedings and the length of time for which the offer was to remain open. In these circumstances, I cannot accept the submissions of the plaintiff. Accordingly, O 24A r 10(5) applies and the defendant is entitled to an order against the plaintiff for its costs following rejection of the offer.
16 There is a final issue. The defendant seeks that there not only be a set off of costs against costs but that the costs to which it is entitled should also be set off against any monies due to the plaintiff pursuant to the judgment. The parties are in agreement that judgment should be entered for the plaintiff in the sum of $59,623 plus interest. Bearing in mind what I have said earlier in respect of costs, it is likely that there will be a net amount after setting off costs that is due to the defendant. Order 66 r 7 is broad enough to permit damages to be set off against costs. That circumstances may exist where justice requires that such a set off occur has been recognised since at least 1879: Pringle v Gloag (1879) 10 Ch D 676, 679.
17 In Danidale Pty Ltd v Abigroup Contractors Pty Ltd [2007] VSC 552 Habersberger J considered a similar submission and concluded that the appropriate course was to order a stay of execution of judgment pending the taxation of costs. His Honour considered that it would not be just to expose the defendant in that case to the risk, however remote, that having paid the judgment sum to the plaintiff it could find itself unable to recover the costs awarded to it. His Honour also took into account that the stay would not prejudice the plaintiff because interest would continue to accrue during the period that the taxation of costs was taking place.
18 In the present case I am satisfied that justice requires that there be orders which will facilitate the setting off of costs due to the defendant against both costs due to the plaintiff and the judgment sum due to the plaintiff.
19 Accordingly, the orders of the court will be:
1. Judgment be entered for the plaintiff in the sum of $59,623 plus interest calculated at 6% pursuant to s 32 of the Supreme Court Act from 12 September 2003 to the date of payment.
2. The defendant pay the plaintiff's costs of the action on a party and party basis until 16 March 2007, to be taxed if not agreed.
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- 3. The plaintiff pay the defendant's costs of the action on a party and party basis to be taxed if not agreed from 17 March 2007.
4. Execution of the judgment be stayed pending finalisation of the quantum of the above orders for costs, either by agreement or taxation, and the ascertainment of the amount owed by the plaintiff to the defendant for costs (after deducting the costs owed by the defendant to the plaintiff) or until further order.
5. That any net amount of costs payable by the plaintiff to the defendant be set off against the judgment sum.
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