Somerville Retail Services Pty Ltd v Victorian WorkCover Authority (No 2)

[2011] VSCA 188

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2010 0040

SOMERVILLE RETAIL SERVICES PTY LTD
	Appellant
v
VICTORIAN WORKCOVER AUTHORITY	Respondent

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JUDGES:	NEAVE, MANDIE, HARPER JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	2 June 2011
DATE OF JUDGMENT:	29 June 2011
MEDIUM NEUTRAL CITATION:	[2011] VSCA 188
JUDGMENT APPEALED FROM:	Victorian WorkCover Authority v Somerville Retail Services Pty Ltd [2010] VCC 0181 (Judge Ginnane)

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COSTS – Application by successful respondent for indemnity or solicitor and client costs – Whether appeal hopeless – No prior notice to appellant of respondent’s intention to seek a special costs order – Appellant ordered to pay costs of appeal to be taxed as between solicitor and client.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr N Green QC with Mr D McWilliams	Mallesons Stephen Jaques
For the Respondent	Ms G L Schoff SC with Ms R L Enbom	Corrs Chambers Westgarth

NEAVE JA:
MANDIE JA:
HARPER JA:

1. As a result of the dismissal of this appeal,[1] it is accepted that the unsuccessful appellant must pay the respondent’s costs at least on a party-party basis but the respondent has sought an order that its costs be taxed on an indemnity basis, alternatively as between solicitor and client. 

   [1][2011] VSCA 166.

1. The respondent submits that the appeal had no prospect of success and that, properly advised, the appellant should have known that it had no prospect of success.[2]  Indeed, the respondent submits that the appellant must have recognised that the appeal was hopeless.  The main point relied upon by the respondent to advance these submissions is that the appellant did not and was unable to advance a suggested classification (‘WIC’) under the Premiums Order that more closely corresponded to the predominant activity at the appellant’s workplace than the classification advanced by the respondent.  In those circumstances, given that it was common ground that some classification had to be assigned, it was inevitable that the classification proposed by the respondent and applied by the trial judge would be found, on appeal, to be correct.

   [2]Citing Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 401 (Woodward J) and Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41, [13]-[15].

1. In answer, the appellant relied upon what was said by Kirby P in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd.[3]The learned President said that it was extremely unusual for indemnity costs to be ordered in the New South Wales Court of Appeal and that the risk of an adverse costs order was not something that would ordinarily be contemplated by parties to an appeal.  He said that if a party was to make an application for a special costs order they would be best advised to put their opponents on notice that the appeal was obviously hopeless and doomed to fail.  That would then activate the lawyers for the opposing party to properly advise their client on the assertion made by the respondent and the likely costs consequences.  The appellant pointed out that at no stage prior to dismissal of the appeal had the respondent given any such warning in the present matter.  The appellant further submitted that the appeal was not hopeless and in support of that contention briefly repeated its appeal submissions. 

   [3](1995) 36 NSWLR 242, 247-250.

1. What the appellant’s submissions on costs fail to grapple with is how the appeal could possibly have succeeded in the absence of an alternative WIC being advanced by the appellant as one which more closely corresponded to the predominant activity at the appellant’s workplace than the WIC proposed by the respondent and accepted by the trial judge.  But unless such a viable alternative WIC could be identified, it should have been obvious to the appellant that the appeal could not succeed.  In our opinion, the appeal was hopeless and the appellant should have known that it was hopeless.

1. A respondent in this kind of situation ought be encouraged to warn an appellant but the failure to do so in the present case does not, in our view, lead to the conclusion that a special costs order should not be made.  In our opinion, a special costs order should be made but, in recognition of the absence of prior warning from the respondent, the order should be for a taxation of costs on a solicitor and client basis rather than on an indemnity basis.

1. Accordingly, the order is that the appellant pay the respondent’s costs of and incidental to the appeal to be taxed as between solicitor and client.

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