Scenic Tours Pty Ltd v Moore (No 2)

[2018] NSWCA 300

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Scenic Tours Pty Ltd v Moore (No 2) [2018] NSWCA 300
Hearing dates:	On the papers
Decision date:	07 December 2018
Before:	Payne JA, Sackville AJA, Barrett AJA
Decision:	The following additional order is made:  14.   The Court answers the Agreed Common Questions in the manner set out in the document entitled “Agreed Common Questions and Answers”, being Annexure A to the Court’s reasons for judgment in Scenic Tours Pty Ltd v Moore (No 2)
Catchwords:	Representative proceedings – answers to common questions – costs orders
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Avopiling Pty Ltd v Bosevski [2018] NSWCA 146 Scenic Tours Pty Ltd v Moore [2018] NSWCA 238
Category:	Procedural and other rulings
Parties:	Scenic Tours Pty Ltd (Appellant) David Moore (Respondent)
Representation:	Solicitors: SWS Lawyers (Appellant) Somerville Legal (Respondent)
File Number(s):	2017/282822
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2017] NSWSC 733 Date of Decision: 31 August 2017 Before: Garling J File Number(s): 2014/223271

Judgment

1. THE COURT: The Court delivered judgment in this matter on 24 October 2018. [1] This judgment deals with outstanding matters. It assumes familiarity with the Principal Judgment, including abbreviations.

   1. Scenic Tours Pty Ltd v Moore [2018] NSWCA 238 (Principal Judgment).

2. The Court made orders in the Principal Judgment dismissing Mr Moore’s claim for damages pursuant to s 267(4) of the ACL for disappointment and distress. Mr Moore’s claim pursuant to s 267(3)(b) of the ACL for reduction in the value of the services remains to be determined by the primary Judge. [2]

   2.    Principal Judgment at [396], [399].

3. The Court reached the following conclusions in the representation proceeding brought on behalf of Group Members:[3]

   3. Principal Judgment at [397].

“(i)   the primary Judge’s findings that Scenic breached the Care Guarantee by reason of its pre-embarkation conduct in relation to Cruises 1, 4, 5, 6, 7, 8, 9 and 11 cannot stand;

(ii)   the primary Judge’s findings that Scenic breached the Care Guarantee by reason of its post-embarkation conduct in relation to Cruises 4, 5, 6 and 7 should not be disturbed;

(iii)   the findings that Scenic breached the Purpose and Result Guarantees in relation to Cruises 1, 2, 3, 4, 5, 6, 7, 8, 9 and 11 should not be disturbed;

(iv)   the Group Members are precluded by s 275 of the ACL and s 16 of the Civil Liability Act from establishing that Scenic is liable pursuant to s 267(4) of the ACL to pay damages for distress and disappointment by reason of Scenic’s breach of the Purpose and Result Guarantees;

(v)   the Group Members’ claims for compensation for reduced value pursuant to s 267(3)(b) of the ACL by reason of Scenic’s breach of the Care Guarantee in relation to Cruises 4, 5, 6 and 7 remain to be determined by the primary Judge;

(vi)   the Group Members’ claims for compensation for reduced value pursuant to s 267(3)(b) of the ACL by reason of Scenic’s breach of the Purpose and Result Guarantees in relation to Cruises 1, 2, 3, 4, 5, 6, 7, 8, 9 and 11 remain to be determined by the primary Judge; and

(vii)   the Group Members’ claims referred to in (vi) are subject to Scenic’s pleaded defence under s 61(3) of the ACL which also remains to be determined by the primary Judge.”

Orders

4. The Court explained the orders to be made in the Group Members’ case as follows: [4]

   4.    Principle Judgment at [400]-[401].

“400   Order 2 made by the primary Judge on 15 November 2017 provided that the common issues stated for determination be answered in the form of the Answers in the document described as “Answers to Common Issues Stated for Determination”. Because of the conclusions … reached many of the Answers cannot remain in place. More importantly, because of the difficulties with the form of this document, it would be neither appropriate nor helpful to attempt to reformulate the “Answers to the Common Issues” to give effect to these reasons for judgment. Instead the parties should be directed to agree on reformulated questions and answers that give effect to these reasons for judgment.

401   The following orders should therefore be made:

7.   Set aside Order 2 made by the primary Judge on 15 November 2017.

8.   The Group Members’ claims for damages for disappointment and distress pursuant to s 267(4) of the ACL be dismissed.

9.   Direct the parties to file within fourteen days agreed Common Questions and Answers thereto that give effect to these reasons for judgment, insofar as they address the claims of Group Members to compensation and damages by reason of Scenic’s breaches and alleged breaches of the Consumer Guarantees.

10.   In the absence of agreement, direct that

(a)   Scenic file within 14 days its proposed Common Questions and Answers thereto, together with written submissions in support not exceeding five pages in length; and

(b)   Mr Moore file within a further 14 days his proposed Common Questions and Answers thereto, together with written submissions in support not exceeding five pages in length.”

5. The parties have agreed on reformulated “Agreed Common Questions and Answers” (Agreed Questions). The document is Annexure A to this judgment.

6. The Agreed Questions accurately reflect the conclusions reached in the Principal Judgment. Although the Agreed Questions include some matters not in issue on the appeal, they are not now in dispute and it is convenient that they be included in a consolidated document. It is therefore appropriate that the Court order that the Common Questions be answered in the manner set out in Annexure A.

Costs

7. The Principal Judgment dealt with the costs of the proceedings as follows: [5]

   5.    Principal Judgment at [402],[403].

“402   The primary Judge made an order in the Primary Judgment that Scenic pay Mr Moore’s costs of “the claim” on a party and party basis. My present view as to costs is as follows:

(i)   the costs of the proceedings in the Common Law Division should be determined by the primary Judge in the light of the outcome of the proceedings; and

(ii)   having regard to the fact that Scenic’s appeal has succeeded, but only in part, Mr Moore should be ordered to pay 50 per cent of Scenic’s costs of the application for leave to appeal and of the appeal.

403   On this basis, the following orders as to costs should be made:

11.   Set aside Order 2 made by the primary Judge on 31 August 2017.

12.   Order that the costs of the proceedings in the Common Law Division be determined by the primary Judge.

13.   Order that Mr Moore pay 50 per cent of Scenic’s costs of the application for leave to appeal and of the appeal.”

The parties were given the opportunity to file further written submissions if they wished to argue for different costs orders.

8. Mr Moore filed written submissions seeking a variation to the costs order. He submitted that the parties should bear their own costs of the appeal for the following reasons:

“(a)   The issues on appeal reflect the reality that the proceeding was a hybrid of proceedings concerning Mr Moore's personal claim and his representative claim on behalf of passengers on 10 cruises;

(b)   The appellant's success against Mr Moore in respect to the latter's personal claim did not involve any features peculiar to Mr Moore's position but, rather, reflected success on damages issues generally applicable to the representative claim. This means that the costs outcome should abide the result of the appeal concerning the representative claim;

(c)   The great preponderance of expense in this appeal concerned (common) issues on the representative claim and, in that regard, many grounds of appeal were either not determined at all; or, to the extent that they were determined, the parties enjoyed mixed success.” (Emphasis in original)

9. The principles relevant to the costs of proceedings in which there has been a “mixed outcome” were recently restated in Avopiling Pty Ltd v Bosevski:[6]

“Section 98 of the Civil Procedure Act2005 (NSW) confers on the Court a wide discretion with respect to costs. Under rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the general rule is that the Court is to order that costs follow the event. The “event” may be characterised in more than one way. Generally the “event” refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22.”

6. [2018] NSWCA 146 at [172] (Payne JA, McColl and White JJA agreeing).

10. Mr Moore’s written submissions in substance concede that Scenic enjoyed a significant degree of success in relation both to Mr Moore’s individual claim and the claims made on behalf of the Group Members. Mr Moore contends, however, that the issues on which Scenic succeeded were essentially questions of law while Scenic failed on factual issues. Accordingly, so Mr Moore argues, more time was spent on the issues on which Scenic failed than on the issues in respect of which it succeeded.

11. These submissions do not fairly reflect either the way in which the appeal was conducted or the outcome. A major part of Mr Moore’s case at trial (both his personal claim and the claims brought on behalf of Group Members) rested on allegations as to Scenic’s knowledge of river conditions and the adequacy of its response prior to embarkation of each cruise. Many of these allegations were introduced by way of late amendments to the pleadings. [7] Scenic succeeded in setting aside the bulk of the primary Judge’s findings on these allegations. Because of Scenic’s success on these issues some of the factual questions explored at trial turned out to be either irrelevant to the appeal or unnecessary to decide. This was so notwithstanding that the parties devoted considerable attention in their submissions to the factual questions.

    7. Principal Judgment at [65].

12. A good deal of time at the trial was also devoted to considering the consequences of the parties’ failure to identify clearly the common issues of law and fact arising in the proceedings. This failure must largely be attributed to the manner in which Mr Moore presented the claims. It was primarily his responsibility to ensure that the representative proceedings were constituted and pursued in accordance with the requirements of the Civil Procedure Act 2005 (NSW). [8] The failure to do so created difficulties not only at the trial but on the appeal. Among other things, the parties were at odds as to precisely what had been decided and whether Scenic had been denied procedural fairness by the primary Judge making certain findings in the Group Members’ case. The arguments on these matters were largely the consequence of the failure to structure the litigation around common questions of law and fact.

    8.    See Principal Judgment at [69]-[77].

13. It is true that not all Scenic’s challenges to the findings and conclusions of the primary Judge succeeded. In particular Scenic’s attack on the primary Judge’s characterisation of the “services” Scenic provided to customers was rejected. Had that attack succeeded it would have been fatal to Mr Moore’s case and that of the Group Members. Mr Moore’s success on this challenge must be taken into account in determining the appropriate costs order.

14. It would be quite inappropriate to attempt to assess costs in this case on an issue by issue basis. Many of the issues overlapped or were inter-related, while others were generated by the failure to identify satisfactorily common issues of law or fact. It is therefore necessary to adopt a “relatively broad brush approach”. Having regard to the parties’ respective successes and failures on the appeal and Mr Moore’s particular responsibility for increasing the complexity and cost of the appeal, the orders made in the Principal Judgment should stand.

Orders

15. The following additional order should be made:

14.   The Court answers the Agreed Common Questions in the manner set out in the document entitled “Agreed Common Questions and Answers”, being Annexure A to the Court’s reasons for judgment in Scenic Tours Pty Ltd v Moore (No 2)

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Annexure A

Endnotes

Decision last updated: 07 December 2018