Thornton v Newcrest Mining Ltd
[2010] WADC 61
•30 APRIL 2010
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: THORNTON -v- NEWCREST MINING LTD [2010] WADC 61
CORAM: MAZZA DCJ
HEARD: 2 DECEMBER 2009 & 3 MARCH 2010
DELIVERED : 30 APRIL 2010
FILE NO/S: CIV 1475 of 2008
BETWEEN: MICHAEL EMERY THORNTON
Appellant
AND
NEWCREST MINING LTD
Respondent
Catchwords:
Appeal - Registrar's decision to grant respondent summary judgment - Action for damages for personal injury - Effect of s 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act 1947 (WA) on action - Appellant precluded from recovering damages by s 7(1)(b)
Legislation:
Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act 1947 (WA), s 7
Rules of the Supreme Court 1971 (WA), O 16
Result:
Appeal dismissed
Representation:
Counsel:
Appellant: Mr B Nugawela on 2 December 2009
Mr L Gandini on 3 March 2010
Respondent: Mr M Williams
Solicitors:
Appellant: Chapmans
Respondent: DLA Phillips Fox
Case(s) referred to in judgment(s):
Baxter v Obacelo Pty Ltd (2001) 205 CLR 635
Bayley v Wesfarmers Transport Ltd [2000] WASCA 399
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
MAZZA DCJ: This is an appeal by way of hearing de novo from a decision of Deputy Registrar Hewitt made on 22 August 2009 granting the first defendant summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court 1971 (WA). In these reasons I will refer to the plaintiff as the appellant and the first defendant as the respondent.
Background
By writ of summons dated 23 June 2008 the appellant, sought damages for left leg injuries he received in a workplace accident which occurred on 16 February 2004 at the Telfer Mine Site. The respondent was the owner and operator of that mine site. At the time, the appellant was employed, not by the respondent, but by Simon Engineering Pty Ltd ("Simon Engineering").
In very general terms, it is alleged that the respondent was negligent in two ways. First, the appellant's injuries were caused by the failure of the respondent to provide a reasonably safe work site. Second, it is alleged that after he was injured, the respondent's site nurse failed to treat the appellant's injuries properly. The appellant also alleges that the respondent breached certain statutory duties. This plea, save for the allegations against the site nurse, is in terms almost identical to the plea for negligence. It received no attention in the appeal.
There are further allegations that the appellant's injuries were misdiagnosed by the second defendant, a doctor, who was employed by the third and fourth defendants. The writ has not been served on the second, third and fourth defendants and this appeal does not concern these allegations.
The writ of summons is endorsed with a statement of claim. Materially, the claim for negligence against the respondent is pleaded as follows:
"7.On or about 16 February 2004 ('the material date'), the Plaintiff, in the course of his employment, was walking a crane to a new location when a supervisor from Simons approached him and asked him and other workers to use the crane to do a lift of a 30 tonne Trunion for him.
8.The crane referred to in paragraph 7 above was a 100 tonne crane.
9.As the Plaintiff was about to use the crane to lift the trunion, a sump nearby was being pumped dry of water.
10.The water being pumped from the sump ran down into the area in which the Plaintiff was working and whilst walking over to the equipment with a 25 tonne shackle, the Plaintiff slipped in mud caused by the running water and twisted his left knee ('the accident').
11.The accident was caused by the negligence of the First Defendant, its employees or agents and/or by the First Defendant's breach of statutory duty.
PARTICULARS OF NEGLIGENCE
The Defendant was negligent because it:
(a)failed to ensure that the minesite was safe, and in particular failed to ensure that the area where the Plaintiff was working was free from hazards
(b)failed to provide the Plaintiff with such information, instruction, and training as was necessary to enable him to safely perform his duties and, in particular, to ensure that the Plaintiff was made aware of the sump being pumped dry of water
(c)failed to provide the Plaintiff with adequate supervision in order to ensure his safety while he was performing his duties;
(d)as a result of the failures pleaded at sub‑paragraphs (a), (b) and (c) above, exposed the Plaintiff to hazard and risk of injury.
…
12.By reason of the negligence and/or breach of statutory duty on the part of the First Defendant, its employees or agents, the Plaintiff sustained injury.
PARTICULARS OF INJURY
(a)a radial tear of the posterior horn of the medial meniscus of the left knee.
(b)a subcortical fracture and marrow oedema of the medial femoral condyle of the left leg.
('the injuries')
13.Following the accident the Plaintiff attended the First Defendant's site nurse who instead of diagnosing and treating the injuries properly, simply strapped the left knee, gave the Plaintiff Voltaren cream and Panadol, and told him to return to work.
14.As a result of the matters pleaded in paragraph 13 above, the First Defendant was further negligent.
PARTICULARS OF FURTHER NEGLIGENCE
(a)The First Defendant's servant/agent failed to treat the Plaintiff properly and thereby exposed him to the risk of aggravation of his injuries.
(b)The First Defendant's servant/agent dealt with the Plaintiff's injuries with an intention to minimise financial harm to the First Defendant rather than with an indifferent and expert approach with the Plaintiff's health in mind.
15.As a result of the injuries, the Plaintiff was eventually flown off the minesite by the First Defendant."
The respondent filed its defence on 4 July 2008 denying any negligence and alleging that if there was negligence, the appellant was contributorily negligent.
On 31 March 2009 the appellant filed a document setting out his particulars of damage. In that document, he revealed, quite properly, that he had already received $250,000 by way of "settlement monies received".
On 19 May 2009 the respondent filed a summons seeking leave to apply for summary judgment and summary judgment. Although the application was filed out of time, leave was not opposed before Deputy Registrar Hewitt. The grant of leave was not opposed before me.
The essence of the application and the respondent's submissions before me is that the appellant has already been compensated for the injury that he suffered on 16 February 2004 and recovery of further damages is impossible having regard to s 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act 1947 (WA) ("the Act").
The affidavits
The application for summary judgment was supported by an affidavit sworn by the respondent's solicitor, Mark Lewis Williams, on 8 May 2009.
This affidavit reveals that a writ was issued in this court for damages against Simon Engineering arising from the accident on 16 February 2004. The endorsement of claim to that writ was in very wide terms as follows:
"The plaintiff claims against the defendant damages in respect of all personal injuries suffered by him arising out of or in the course of his employment with the defendant on or around 16 February 2004 and in respect of all subsequent aggravations and/or recurrences of whatsoever nature, which injuries, aggravations and/or recurrences were caused by the negligence and/or breach of statutory duty and/or breach of contract of the defendant.
AND THE PLAINTIFF claims damages and interest thereon pursuant to s 32 of the Supreme Court Act 1935 upon such terms and conditions as this honourable court shall think fit."
On 31 May 2007 a consent to judgment signed on 11 May 2007 was filed in the court. That consent to judgment was signed by the solicitors for the parties and is in the following terms:
"We the parties to this action consent to judgment being entered for the plaintiff against the defendant for the sum of $250,000, exclusive of weekly payments made to date pursuant to the Workers' Compensation and Injury and Management Act 1981, plus legal costs in the sum of $11,804 inclusive of disbursements."
The registrar of this court ordered that judgment be entered on 31 May 2007 in the terms of the consent to judgment.
Prior to the writ being issued, pursuant to the terms of the Workers' Compensation and Injury and Management Act 2001 (WA) the degree of disability suffered by the appellant had to be determined. That degree of disability was determined by a degree of disability agreement dated 28 May 2007. The agreement was set out in a form known as a Form 24. In that document the description of the appellant's injury was "left knee injury and psychological sequelae". The date of the injury in the Form 24 was 16 February 2004 and the parties to the agreement were the appellant and his employer.
Mr Williams stated, and it is not disputed, that the judgment sum was paid to the appellant on 6 June 2007.
The appellant swore two affidavits. His first affidavit was sworn on 28 May 2009. This document is very brief. The material paragraphs in the affidavit are as follows:
"3.At the time I settled my claim with the insurers for Simon Engineering, I had not commenced any court proceedings against Simon Engineering. I agreed an amount with the insurers for Simon Engineering on the basis that it was part of my losses only.
4.The lawyers at Simon Engineering wanted to use Court documents to give effect to the settlement.
5.My losses as a result of my work accident in February 2004 at the Telfer goldmine, were, and continue to be well in excess of the monies paid to be [sic] by the insurers for Simon Engineering."
Paragraph 3 is ambiguous. The sentence "I agreed an amount with the insurers for Simon Engineering on the basis that it was part of my losses only" could mean that at the time he was negotiating with the insurers for Simon Engineering the appellant made an explicit agreement with the insurers that any amount he recovered was only part of his losses. The sentence could also mean that his subjective and unexpressed intention was to recover from Simon Engineering part of his losses.
When this matter first came before me on 2 December 2009, his then counsel, Mr Nugawela, accepted that the appellant's affidavit was ambiguous. At that hearing I wanted to ensure that the appellant's position was clearly put before me. As a result, in fairness to both parties, I gave leave to each of them to file further affidavits and adjourned the hearing.
The appellant swore his second affidavit on 10 December 2009. In this affidavit he set out his recollection of the settlement agreement. The relevant parts of that affidavit are as follows:
"2.I refer to paragraph 3 of [the first affidavit]. My recollection of the chronology leading up to the settlement of my claim with Simon Engineering is as follows:
(i)leading up to May 2007, the workers' compensation's insurers' solicitors for Simon Engineering contacted my solicitors regarding the possibility of settlement discussions;
(ii)those settlement discussions took place on 11 May 2007 at the offices of the insurers' solicitors, Messrs SRB Legal;
(iii)prior to that settlement meeting, I had not elected to pursue a common law negligence claim against Simon Engineering as at that time, to the best of my understanding, I had to be certified over 16% impaired and elect within six months of my accident to pursue such a negligence claim;
3.Whilst I cannot be sure, I think despite 2 (iii) the above, I had applied to, or was intending to apply to Workcover to try and overcome the 30% degree of disability threshold.
4.During the settlement discussions in May 2007 it became evident that Simon Engineering's insurers were not prepared to offer me figures covering my full losses.
5.Again without being completely sure, I do recall my weekly workers' compensation payments were running out and I was going to be in financial difficulty. For that reason I decided to settle my claim for a sum of money less than my complete losses, and pursue other defendants for the balance of my loss.
6.It is for these reasons that I agreed to settle my claim with Simon Engineering.
7.At the time of the settlement, I had not issued proceedings against Simon Engineering. Following the settlement, all settlement documents were prepared by SRB legal on behalf of Simon Engineering's workers' compensation insurer. Annexed hereto and marked with the letter 'A' is a copy of a District Court Writ.
8.I understand from my solicitors that, even though their name appears on the Writ, it was prepared by SRB Legal. Simon Engineering's insurer also paid the filing fee for the Writ.
9.The Workcover form 24 agreement for 30%, being annexure 'MLW4' was only agreed to by Simon Engineering after the settlement, to enable my settlement to go through." (original emphasis)
Unfortunately, there are parts of the affidavit which are still ambiguous. In par 5 and par 6 it is unclear whether he was alleging an explicit agreement to settle for part of his losses, or he was merely stating what was his subjective intention.
Ms Trudgian was the solicitor who had the conduct of the action initiated by the appellant against Simon Engineering. Her recollection of the negotiations and their aftermath is set out between par 9 to par 15 of her affidavit sworn 29 January 2010 as follows:
"9On 11 May 2007, I attended an informal settlement conference with Len Gandini from Chapmans and Stephen Fong from Allianz. During that conference, Len Gandini made submissions to me on the plaintiffs likely award of damages against Simon Engineering should the plaintiff be determined to have a permanent degree of disability of 'not less than 30%' and commence court proceedings against Simon Engineering in respect of the negligence claim. Len Gandini also made a number of offers on the plaintiffs behalf to settle the negligence claim, starting with an offer to accept $300,000.00 in addition to all payments that had been made to date further to the Workers' Compensation & Injury Management Act 1981 (WA), plus costs (that is, $522,121.93 inclusive of workers' compensation to date, plus costs). I also made a number of counter-offers to settle the negligence claim and the workers' compensation claim during the conference. The plaintiff was not present in the room at any time during these discussions and negotiations.
10I made contemporaneous handwritten notes of the discussions and negotiations that took place during the informal conference. A copy of those notes is attached to this affidavit and marked 'AAT6'.
11After a series of offers and counter-offers, the plaintiff and Simon Engineering agreed during the informal conference to settle the negligence claim and the workers' compensation claim on the following terms:
11.1For the purposes of settlement only, Allianz agreed on behalf of Simon Engineering that the plaintiffs permanent degree of disability was 'not less than 30%'.
11.2By consent, judgment would be entered for the plaintiff against Simon Engineering for $250,000.00 in addition to all payments that had been made to date further to the Workers' Compensation & Injury Management Act 1981 (WA) (settlement sum).
11.3Simon Engineering would pay the plaintiffs party‑party costs of $11,804.00 inclusive of disbursements.
11.4The settlement would be effected by way of a consent to judgment filed and sealed in the District Court (in an action that would be commenced by way of a writ of summons to be issued after the informal conference).
11.5The plaintiff would pay from the settlement sum any further statutory expenses that had not already been paid by Allianz as at the date of the informal conference.
11.6Simon Engineering would not indemnify the plaintiff against any amount payable to any private health fund or any State or Commonwealth government departments, and any amount owing to any private health fund or any government department would be deducted from the settlement sum and reimbursed directly to the relevant any private health fund or government department.
11.7Simon Engineering would make a 10% advance payment to Medicare Australia further to s33B of the Health & Other Services (Compensation) Act 1995 (Cth).
11.8The plaintiff would discontinue WorkCover Application Number SD205/07A
I made a contemporaneous, shorthand note of these terms in the notes I made during the conference.
12On or around 17 May 2007, I sent a letter to Chapmans on SRB letterhead which enclosed a number of documents that were described in the letter, which I and one or more of SRB's other employees had prepared. A copy of the letter is attached to this affidavit and marked 'AAT7'.
13On 25 May 2007, SRB received a letter from Chapmans dated 22 May 2007. A copy of that letter is attached to this affidavit and marked 'AAT8'.
14At no time prior to the settlement agreement being reached, and in particular, at no time during the informal conference, did the plaintiff or Len Gandini or Chapmans or anyone else ever tell me or otherwise mention that:
14.1the plaintiff had also made, was going to make, or was considering making, a claim for damages in negligence against anyone else in relation to the injuries he sustained in the accident (second negligence claim)
14.2the plaintiff intended to make a second negligence claim after settling the workers' compensation and negligence claims against Simon Engineering
14.3the plaintiff believed the settlement sum was well short of what he was likely to be awarded if he had successfully sued Simon Engineering in the District Court of Western Australia for damages in negligence in respect of the injuries he received in the accident
14.4the plaintiff was not accepting the settlement sum in full and final satisfaction of all causes of action he had in respect of the injuries he had suffered in the accident.
15If Len Gandini had made any statement or comment to this effect and the statement or comment was made during the informal conference, I would have made a contemporaneous note of it during the conference. I made no such note, because no such statement or comment was ever made to me during the conference (or otherwise). Further, if the plaintiff, Len Gandini or Chapmans had made any statement or comment to this effect at any time, I would have had to advise both Simon Engineering and Allianz whether the plaintiffs intentions and possible causes of action against any other tortfeasor could result in that tortfeasor making a claim, either under the Law Reform (Contributory Negligence & Tortfeasors' Contribution) Act 1947 (WA), contract or otherwise, that would result in Simon Engineering having a further liability in connection with the injuries the plaintiff sustained in the accident. I never provided either Simon Engineering or Allianz with any such advice because I had no reason to as no such statement or comment was ever made to me." (original emphasis)
At the resumed hearing of this appeal on 3 March 2010, the appellant was represented by Mr Gandini. He informed me that the appellant did not dispute Ms Trudgian's account of events. It is evident from her account that at no time did the appellant explicitly state or agree that the amount he settled for represented only part of his losses and that he was not accepting the settlement sum in full and final satisfaction of all causes of action he had in respect of the injuries he had suffered in the accident. Further, nothing was said by the appellant or on his behalf to indicate that he intended to make further claims with respect to his injuries.
Principles to be applied to the defendant's summary judgment application
Order 16 r 1 of the Rules of the Supreme Court provides that a defendant may apply for summary judgment and the court may order summary judgment if it is satisfied that the action is frivolous or vexatious or that the defendant has a good defence on the merits.
In this case the onus was on the respondent to show that there is no serious question to be tried on any cause of action raised by the appellant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.
Summary judgment should not be granted where there are material disputes on the facts. As to this, the relevant facts of this case are not disputed and are clear.
The submissions
The respondent's submission is that the appellant cannot, by virtue of s 7(1)(b) of the Act be awarded damages in any action against it and so the action is frivolous and vexatious.
Section 7 of the Act, insofar as it is relevant to this appeal, is in the following terms:
"(1)Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort -
(a)judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage;
(b)if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered … against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given: and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the Court is of opinion that there was reasonable ground for bringing the action.
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought."
Professor Fleming in "The Law of Torts" (9th Edition) succinctly describes the philosophy of this section and others like it in the following way at p 292:
"[S]tatute now provides that even if sued separately (whether as joint tortfeasors or otherwise), the sums recoverable under the judgments given those actions shall not in the aggregate exceed the amount awarded in the first, and the plaintiff shall not be entitled to costs in any of those actions other than the first, unless the court is of the opinion that there was a reasonable ground for bringing the action. This reform has the object of deterring verdict-shopping, for the sake both in reducing litigation and of avoiding the complication of inconsistent verdicts on claims for contribution between tortfeasors. A second action, while not prohibited, will only benefit a plaintiff when the defendant in the first action is judgment proof." (footnotes omitted)
The respondent's submission is that while the appellant is not barred from suing the respondent or obtaining a judgment against it, he cannot obtain damages in a sum which exceeds the amount he recovered from the action against his employer. In light of this, the respondent submits that the action taken against it by the appellant is pointless and thus frivolous and vexatious.
Mr Nugawela made two submissions on behalf of the appellant that s 7(1)(b) of the Act does not apply to this case. First, Mr Nugawela sought to rely upon the decision of the Full Court in Bayley v Wesfarmers Transport Ltd [2000] WASCA 399. In that case, it was held that s 7(1)(b) of the Act does not apply to a situation where there are two tortfeasors each of whom is responsible for separate torts resulting in separate injuries to the plaintiff. These are simply not the facts of this case. Bayley v Wesfarmers Transport is not of any assistance to the appellant.
Mr Nugawela's second submission was that, in the present action, two torts were allegedly committed by the respondent, the second of which was not part of the first action. The second tort he was speaking of is the claim in pars 13 and 14 in the statement of claim in which it is alleged that the respondent's site nurse failed to treat the appellant properly and prematurely sent him back to work. This submission, in theory, has merit - something the respondent's counsel recognised.
However, the appellant's claim with respect to the nurse is patently defective. In par 14(a) of the statement of claim the appellant pleads that as a result of the nurse's inadequate treatment the appellant was "exposed … to a risk of aggravation of his injuries". However, there is no claim that the risk eventuated and caused any aggravation of his injuries or any other harm to him. The claim in par 14(b) is not an allegation of negligence. Rather, it is a statement of motive on the part of the respondent.
I inquired of Mr Nugawela on 2 December 2009 whether the appellant intended to amend this part of his statement of claim. No amendment was sought, then or later. I assume from this that the appellant cannot prove that the respondent's nurse caused any aggravation of his injuries. In these circumstances I cannot accept Mr Nugawela's second submission.
On 3 March 2010 Mr Gandini appeared on behalf of the appellant. He submitted that s 7(1)(b) of the Act did not apply to this case having regard to the High Court of Australia's decision in Baxter v Obacelo Pty Ltd (2001) 205 CLR 635. In that case it was held that the New South Wales equivalent of s 7(1)(b) of the Act applied only to cases where there was more than one proceeding and did not preclude recovery against more than one defendant sued as joint tortfeasors in the one proceeding. Baxter v Obacelo is distinguishable from the present case. Unlike this case, the appellant in Baxter v Obacelo sued joint tortfeasors in the one action not in a number of actions. Moreover, Mr Baxter entered into a deed of settlement with one tortfeasor expressly reserving his right to proceed in relation to the other tortfeasor. I cannot accept Mr Gandini's submission that Baxter v Obacelo assists this appellant's case.
In the present case, the undisputed evidence is that the appellant reached a settlement agreement with Simon Engineering at the settlement conference on 11 May 2007. That agreement was evidenced by the degree of disability agreement, the endorsement on the writ and the consent judgment. Those documents indicate very clearly and unambiguously that the appellant sued his employer for damages arising out of the left leg injuries he sustained at work on 16 February 2004. In respect of that claim he agreed to receive the sum of $250,000 in satisfaction of it. He was paid this sum.
Unlike Baxter v Obacelo, at no time did the appellant expressly reserve his rights against any other tortfeasor. At best, the evidence discloses that the appellant had a subjective intention to sue the respondent at a later point in time. The appellant's statements of his subjective belief or intention are inadmissible as an aid to construction of the contract reached at the settlement meeting on 11 May 2007: Bayley v Wesfarmers Transport [19].
In my opinion on the undisputed facts in this case, s 7(1)(b) of the Act applies. The appellant's claim against the respondent is with respect to the same damage the subject of the settled proceedings against Simon Engineering. By virtue of s 7(1)(b) of the Act the appellant cannot in the proceedings against the respondent recover damages which exceed the amount of the damages he received in the action against his employer. To proceed against the respondent in light of this, would, even if he was successful in proving negligence against the respondent, be of no value to him. Such proceedings would, in my view, be frivolous and vexatious.
In my opinion the position is so clear that summary judgment should be given in favour of the respondent.
For these reasons I dismiss the appellant's appeal. I will hear from the parties further as to the precise form of the orders that I should make and as to the question of costs.
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: THORNTON -v- NEWCREST MINING LTD [No 2] [2010] WADC 61 (S)
CORAM: MAZZA DCJ
HEARD: 2 DECEMBER 2009 & 3 MARCH 2010 AND
ON THE PAPERS
DELIVERED : 30 APRIL 2010
SUPPLEMENTARY
DECISION :25 FEBRUARY 2011
FILE NO/S: CIV 1475 of 2008
BETWEEN: MICHAEL EMERY THORNTON
Appellant
AND
NEWCREST MINING LTD
Respondent
Catchwords:
Costs - Application by respondent to be paid indemnity costs
Legislation:
Nil
Result:
Costs orders made
Representation:
Counsel:
Appellant: No appearance
Respondent: No appearance
Solicitors:
Appellant: Chapmans
Respondent: DLA Phillips Fox
Case(s) referred to in judgment(s):
Nau v Kemp & Associates Pty Ltd [2010] NSWCA 164
Quancorp Pty Ltd v MacDonald [1999] WASCA 101
Thornton v Newcrest Mining Ltd [2010] WADC 61
Unified Pty Ltd v The Cancer Council of Western Australia Inc [No 2] [2011] WASC 39
MAZZA DCJ: On 30 April 2010, I made orders dismissing the appellant's appeal from a decision given by Deputy Registrar Hewitt: Thornton v Newcrest Mining Ltd [2010] WADC 61. The appellant has since filed a notice of appeal against this decision. When I delivered judgment I gave the parties liberty to file written submissions on the question of costs. It was agreed that I would determine any order for costs on those submissions.
In due course, the respondent filed detailed submissions. The essence of those submissions is that the respondent is entitled to indemnity costs of the action and the appeal. Essentially, it is submitted that the appellant's action and appeal had no chance of success and were 'hopeless' cases. The respondent submits that the appellant's conduct in bringing and maintaining the action and the appeal was so unreasonable that the court should exercise a discretion to order indemnity costs against the appellant.
The only submission made on behalf of the appellant as to costs was that 'it may well be premature to determine any question of costs (in the light) of Nau v Kemp & Associates Pty Ltd [2010] NSWCA 164'.
Nau v Kemp & Associates was decided after I had delivered judgment. It is a case not on indemnity costs, rather, it deals with the interpretation of s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) which is the statutory equivalent of s 7(1)(b) of the Law Reform (Contributory Negligence Tort Feasors) Act 1947 (WA). I gather that the purpose of citing this authority to me was to suggest that my decision in this case was wrong. Ultimately, that is a matter for the Court of Appeal to decide. It would be inappropriate for me to, in effect, to revisit my decision in light of Nau v Kemp & Associates. Contrary to the appellant's submissions, I have concluded that the correct course is to make costs orders now.
The relevant chronology
On 23 June 2008 the appellant issued the writ in this action.
On 4 February 2009, the respondent's solicitors wrote to the appellant's solicitors putting them on notice of their view that the appellant was not entitled to recover further damages having regard to s 7(1)(b) of the Law Reform (Contributory Negligence and Tort Feasors Contribution) Act 1947.
On 19 May 2009, the respondent filed a summons seeking leave to apply for summary judgment and summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court 1971 (WA) (the RSC). On 28 August 2009, Deputy Registrar Hewitt upheld the respondent's application for summary judgment. On 3 September 2009 the appellant filed a notice of appeal against Deputy Registrar Hewitt's decision. That appeal was initially heard by me on 2 December 2009. As a result of some concerns that I had about the evidence submitted by the appellant, I adjourned the proceedings to 3 March 2010 for further submissions and to allow further evidence to be adduced by affidavit. On 3 March 2010 I heard oral submissions and reserved my decision.
The law
The general rule is that the successful party to an action recovers their costs from the unsuccessful party: O 66 r 1 of the RSC. The usual costs order is for costs on a party/party basis. An order for indemnity costs will only be made in exceptional circumstances. The circumstances in which a court will make such an order are not closed and cannot be exhaustively stated. They include where there has been a improper or unreasonable conduct on the part of a party or that party's legal advisors and in those circumstances mark the court's disapproval of the conduct: Unified Pty Ltd v The Cancer Council of Western Australia Inc [No 2] [2011] WASC 39 (Allanson J).
A court should be careful when invited to conclude that an indemnity costs order should be made because the losing party's cause was 'hopeless'. As Wheeler J observed in Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7]:
On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in may areas of law, and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full.
I now turn to the application of the relevant principles to the present case. The full factual basis leading to the appellant's settlement of his claim against Simon Engineering was not apparent to me until the affidavit of Ms Trudgian sworn 29 January 2010 was before the court. The content of that affidavit along with Mr Gandini's concession on 3 March 2010 that the appellant did not dispute Ms Trudgian's account of events were important factors which enabled me to conclude that the appellant's action would have been no value to him even if he proved negligence against the respondent. Up to the hearing on 3 March 2010, while the appellant's case against the respondent might have been characterised as weak, I did not regard it as being hopeless. I would not order the payment of indemnity costs up to this point.
I have given serious consideration to whether I should order indemnity costs for the appearance on 3 March 2010. At that point the appellant's case, in my mind, revealed to be without merit. However, I do not think that the solicitor/client costs for that appearance would substantially exceed the party/party costs. Certainly no evidence to that effect has been put before me. In these circumstances I would not order indemnity costs for that appearance.
Conclusion and orders
In my opinion an award of indemnity costs should not be made either in respect of the action or on the appeal. I make the following costs orders:
1.The appellant should pay the respondent's costs of the action and the appeal on a party/party basis to be taxed if not agreed.
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