White v Southon Builders Pty Ltd and Coastal Carpentry (Q) Pty Ltd
[2011] VCC 971
•1 July 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION LIST
SERIOUS INJURY DIVISION
Case No. CI-09-01332
| GREG WHITE | Plaintiff |
| v | |
| SOUTHON BUILDERS PTY LTD | Defendant |
| (ACN 095 816 452) (IN LIQUIDATION) -AND- |
Case No. CI-10-01204
| GREGORY WHITE | Plaintiff |
| v | |
| COASTAL CARPENTRY (Q) PTY LTD | Defendant |
| (ACN 086 734 287) |
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| JUDGE: | HIS HONOUR JUDGE PARRISH |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 3 February 2011 |
| DATE OF RULING: | 1 July 2011 |
| CASE MAY BE CITED AS: | White v Southon Builders Pty Ltd & Coastal Carpentry (Q) Pty Ltd (Ruling) |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 971 |
RULING
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Catchwords: ACCIDENT COMPENSATION – Section 134AB Accident Compensation Act 1985 – two origination motions issued for same injury at the same time in the same circumstances – grant by the Authority of leave to bring proceedings on one originating motion – issues of costs in relation to other originating motion.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Over | Robinson Gill |
| For Southon Builders Pty Ltd | Mr M F Fleming SC | Herbert Geer |
| For Coastal Carpentry (Q) Pty Ltd | Ms D A Sahely | Lander & Rogers |
| HIS HONOUR: |
Introduction
1 This ruling concerns the extent of any costs that Gregory White (“the plaintiff”) may be entitled to in circumstances where serious injury applications were brought successively by him pursuant to s.134AB(4) of the Accident Compensation Act 1985 (as amended) (“the Act”) and successive originating motion proceedings commenced following their respective rejections. Each application and originating motion relate to the same incident and injury but name different employers.
2 Ultimately, the Authority, pursuant to s.134AB(16)(a) of the Act, issued to the plaintiff in one of the proceedings a certificate in writing consenting to the bringing of common law proceedings for both pain and suffering damages and pecuniary loss damages in respect of the injury. The issue arises as to whether the plaintiff has any remedy to seek recovery of costs incurred in the making of the other application.
3 The plaintiff relies on an affidavit sworn on 16 December 2010 by Danielle Meyer, a solicitor employed by the plaintiff’s solicitors, and various exhibits to such affidavit (“Meyer’s affidavit”). Other than that material, no other evidence was relied on by any party and each party, pursuant to earlier order, made written submissions and spoke to such submissions.
Background
4 The plaintiff is a forty-eight-year-old man (born 3 August 1962) who suffered injuries to his left leg on 11 June 2004 when he fell from a roof at a building site at Gravelly Point Road, Raymond Hill, when he was performing general carpentry work and building work for the building company, Southon Builders Pty Ltd (“Southon”). The plaintiff lodged a claim against Southon pursuant to the provisions of the Act on or about 16 June 2004 and such claim was accepted and paid.
5 In that context, the following events have occurred:
(a) Those acting for the plaintiff lodged a serious injury application dated 12 November 2008 pursuant to s.134AB(4) of the Act in relation to Southon.[1] That application relevantly refers to, under the heading “Employment Details”, the name “Coastal Carpentry” and thereafter sets out gross earnings from Coastal Carpentry from 2001 to 2007 inclusive. [1] See Exhibit DM3 to Meyer’s affidavit
Although the Court has not sighted the proposed Statement of Claim accompanying such application, I was informed from the Bar table that such Statement of Claim pleaded that “Southon” was “at all relevant times” the employer of the plaintiff. Furthermore, again, although the Court did not sight the affidavit of the plaintiff sworn 22 October 2008, I was informed from the Bar table (without dispute) that the affidavit of the plaintiff sworn 22 October 2008 accompanying the application described the registration of “our own company Coastal Carpentry (Q) Pty Ltd” in March 1999 with the then wife of the plaintiff, Samantha as “… the sole director, secretary and shareholder, and I am the employee”.
Furthermore, the affidavit also described his engagement by Southon as a “building supervisor” in or about February 2004, saying: “It was agreed that Coastal company would invoice Southon Builders for my services”. However, the plaintiff also deposes that the building supervisor job fell through but Southon then offered that the plaintiff be engaged to perform “… general carpentry and building work around the various sites”;
(b)
By letter dated 11 March 2009, the solicitors for the Authority rejected such application.[2] In particular, that letter stated, in part:
[2] See Exhibit DM4 to Meyer’s affidavit
“1
It is not satisfied your client is a ‘worker’ who is entitled to bring this application against Southon Builders Pty Ltd as the ‘employer’.
2
It is not satisfied that your client suffered injury arising out of or in the course of or due to the nature of, employment (which is denied) with Southon Builders Pty Ltd.
3
It says the section 134AB application should have been brought by your client against Coastal Carpentry (Q) Pty Ltd, being the ‘employer’ at the time of the alleged injury.
4
Alternatively, if your client is determined to be a ‘worker’ the degree of impairment of the worker is less than 30 per cent when assessed under section 104B of the Act and therefore the injury is not deemed to be a serious injury within the meaning of section 134AB of the Act.
5
Further, and in the alternative, if your client is determined to be a ‘worker’, it is not satisfied the worker has suffered a serious injury within the meaning of section 134AB of the Act. Therefore the Authority would not issue a certificate under section 134AB(16)(a).”
(my emphasis);
(c) Following the rejection of the application, the solicitors for the plaintiff issued an Originating Motion on 31 March 2009 naming Southon as the defendant;[3] (d) By letter dated 19 June 2009, the solicitors for the Authority, in relation to Southon, wrote to the solicitors for the plaintiff[4] and in particular, stated: [3] See Exhibit DM6 to Meyer’s affidavit
[4] See Exhibit DM7 to Meyer’s affidavit
“… Reference is made to previous discussions with our Catherine Mortellaro in respect of our client’s position that your client was not an employee of Southon Builders Pty Ltd at the time of injury, but rather was an employee of Coastal Carpentry (Q) Pty Ltd. Kindly confirm whether your client has lodged a further 134AB application against Coastal Carpentry (Q) Pty Ltd, and if not, whether it is his intention to do so.
… .”
(e)
By letter dated 25 June 2009, the solicitors for the plaintiff advised the solicitors for the Authority in relation to Southon,[5] wherein it is stated, in part:
[5] See Exhibit DM8 to Meyer’s affidavit
“… Our client has not lodged a further 134AB application against
Coastal Carpentry (Q) Pty Ltd and does not intend to do so.”
(f) The Originating Motion in relation to Southon received a trial fixture but the parties jointly asked the Court to vacate that hearing date and by letter dated 27 October 2009, the solicitors for the plaintiff served a further Serious Injury Application pursuant to s.134AB(4) of the Act dated 10 October 2009 in relation to Coastal Carpentry (Q) Pty Ltd (“Coastal”). Again, I was advised from the Bar table that this application was sent under cover of a letter dated 6 November 2009 to WorkSafe Australia from Ms Samantha Houghton-White in her ostensible capacity as a director of Coastal. Apparently, that letter advised that Coastal had been deregistered; that it never had any worker’s compensation insurance at the time of the plaintiff’s accident; that the plaintiff was Ms Houghton- White’s ex-husband; and that the plaintiff was the company’s “only employee”. Furthermore, the letter advised that the plaintiff’s legal advisor had obtained “a barrister’s advice” to the effect that “Coastal … should be the company served with the application for serious injury due to the fact that Greg was its ‘employee’”;
(g) Meyer deposes that she had a telephone conversation with a solicitor at Lander & Rogers on 4 February 2010 where it was suggested that Lander & Rogers would reject the serious injury application against Coastal to “have the issue of employment determined”; (h) By letter dated 24 February 2010, Messrs Lander & Rogers, solicitors on behalf of the Authority in relation to Coastal, rejected the serious injury application in relation to Coastal;[6] [6] See Exhibit DM12 of Meyer’s affidavit
(i) By letter dated 26 February 2010, the solicitors for the plaintiff advised Messrs Herbert Geer, the solicitors for Southon, that it was proposed to issue an originating motion against Coastal which then would be joined to the proceedings on foot against Southon;[7]
[7] See Exhibit DM13 of Meyer’s affidavit
(j)
After the rejection of the Coastal serious injury application, the solicitors for the plaintiff wrote letters to Messrs Herbert Geer and Messrs Lander & Rogers dated 1 March 2010,[8] wherein it is stated:
[8] See Exhibit DM15 of Meyer’s affidavit
“I note that a proceeding is currently on foot against Southon Builders Ply Ltd, for which there is an Administrative Mention on 2 March 2010. Further, Coastal Carpentry (Q) Pty Ltd has just rejected a Serious Injury Application, which will necessitate a further Originating Motion being issued.
My understanding of this matter is that both Serious Injury Applications are being resisted primarily on the basis that the claimed employer is not in fact the employer. This would appear to be in truth a dispute between your respective clients. I do not understand either party to be suggesting that neither is the employer.
My reading of the medical evidence is that there can be no true
issue as to whether Mr White has in fact suffered a serious injury.
Proceedings against Coastal will shortly be issued and we will
then be seeking to consolidate the two proceedings.If there is anything that can be done between your respective clients to resolve this preliminary issue, I respectively suggest it be done expeditiously so as to minimise costs for all concerned.
Please contact me if you wish to discuss the matter or if we can
assist in facilitating a resolution to this impasse.”
(k)
On or about 23 March 2010, the solicitors for the plaintiff issued a further Originating Motion naming Coastal as the defendant;[9]
(l)
On 4 June 2010, the solicitors for the plaintiff wrote to Messrs Herbert Geer and Messrs Lander & Rogers,[10] wherein it is stated:
[9] See Exhibit DM19 of Meyer’s affidavit
[10] See Exhibit DM20 of Meyer’s affidavit
“I refer to my letter of 1 March 2010.
Please advise whether any further developments have been made in ascertaining who is the common law employer for the purposes of this Originating Motion.
I again request that if anything that can be done between your respective clients to resolve this issue, that it be done expeditiously so as to minimise costs for all concerned.
Please contact me if you wish to discuss the matter further or if any further information can be provided to assist in facilitating the resolution of this issue.”
(m)
By letter dated 17 June 2010, the solicitors for the plaintiff again wrote to Messrs Herbert Geer and Messrs Lander & Rogers,[11] wherein it is stated in part:
[11] See Exhibit DM21 of Meyer’s affidavit
“I note that this matter has been listed for hearing commencing 3
November 2010.As indicated to you in our letter dated 1 March 2010, the issue bringing this matter to hearing appears to me to be the dispute between your respective clients as to who the proper employer is.
If the parties would like to conduct a conference pursuant to the Serious Injury Protocols, we would be happy to attend at same provided we are there to talk about serious injury issues proper and/or the quantum of damages rather than only the issue of who the employer is. Of course, if our input is sought in relation to questions of employment, Mr White might be able to contribute towards that although we have already provided information in that regard previously.
If you would like to discuss the possibility of such a conference, I
invite you to contact me.”
(n) By way of letter dated 5 July 2010, the solicitors for the plaintiff wrote to Messrs Herbert Geer and Messrs Lander and Rogers,[12] wherein it is stated: [12] See Exhibit DM22 of Meyer’s affidavit
“… Mr White currently resides interstate and I am in the process of organising medico/legal examinations in Melbourne in preparation for his Serious Injury Hearing in November 2010. I query, in light of previous correspondence, whether the issue of serious injury is being contested or whether the Serious Injury Application has been rejected due to the dispute about who the employer is in this case.
Please respond to this letter within seven days to advise whether you are indeed disputing that Mr White has sustained a ‘serious injury’. Otherwise, I put you on notice that Mr White will be claiming the costs of travelling to Melbourne for medico/legal appointments.”
(o)
By letter dated 6 July 2010, the solicitor from Herbert Geer wrote to the solicitor for the plaintiff,[13] wherein it is stated, in part:
[13] See Exhibit DM23 to Meyer’s affidavit
“… We expect to be in a position to respond to your query In respect of further developments regarding WorkSafe’s position as to who the relevant employer is shortly.
We request that you hold off arranging medico-legal examinations for the next 21 days arid we shall contact you again before the expiration of that time.
… .”
(p)
By letters dated 13 August 2010, the solicitors for the plaintiff wrote to Messrs Herbert Geer and Messrs Lander & Rogers,[14] wherein it is stated, in part:
[14] See Exhibit DM26 of Meyer’s affidavit
“I refer to my letter of 5 July 2010.
As you are aware, Mr White currently lives interstate. Many of his treating doctors are from Queensland. Please advise me who you expect to require for cross-examination and also whether you would consent to these doctors providing evidence via video link to avoid the costs of these witnesses travelling to Melbourne.
… .”
(q)
By letter dated 22 September 2010, Messrs Lander & Rogers wrote to the solicitors for the plaintiff,[15] enclosing a notice of intention to cross- examine various witnesses. Further, by letter dated 11 October 2010, Messrs Lander & Rogers advised the solicitors for the plaintiff of a further doctor required for cross-examination.[16]
(r)
The solicitors for the plaintiff refer to a file note dated 14 October 2010[17] in relation to a telephone conversation with a solicitor from Herbert Geer, wherein it was advised that no serious injury certificate was being granted that day but that a serious injury certificate would be granted in the near future;
(s)
The solicitors for the plaintiff make reference to file notes on 18 October 2010 and 21 October 2010 detailing discussions held with a solicitor from Messrs Lander & Rogers in relation to costs in the event that Southon issued a serious injury certificate;
(t)
By letter dated 22 October 2010, Messrs Herbert Geer, the solicitors for Southon, enclosed a “Certificate pursuant to s.134AB(16)(a)” granting leave to the plaintiff to bring proceedings for the recovery of pain and suffering damages and pecuniary loss damages.[18] Also enclosed with such letter were “Minutes of Consent Orders” signed by Herbert Geer in the following terms:
[15] See Exhibit DM27 of Meyer’s affidavit
[16] See Exhibit DM30 of Meyer’s affidavit
[17] See Exhibit DM32 of Meyer’s affidavit
[18] See Exhibit DM36 of Meyer’s affidavit
“THE PARTIES AGREE TO THE FOLLOWING ORDERS:
1 The Defendant pay the Plaintiff’s costs on Scale D, including reserved costs, to be taxed in default of agreement.
2 The proceedings otherwise be dismissed.”
(u) By letter dated 27 October 2010, Messrs Lander & Rogers wrote to the solicitors for the plaintiff,[19] wherein it is stated, in part: [19] See Exhibit DM38 of Meyer’s affidavit
“…Your client’s claim seeking a serious injury determination in respect of injury sustained on or about 11 June 2004 is currently listed for hearing on 3 November 2010.
We have been advised by Worksafe Victoria and Herbert Geer lawyers, that serious injury in respect of the subject injury as been granted as for both heads of damages in respect of the entity, Southon Builders.
As a result of the grant of serious injury in respect of the subject injury, there is now no further issue for determination in relation to the application lodged against Coastal Carpentry (Q) Pty Ltd.
Please immediately confirm agreement to withdraw the Originating Motion lodged against Coastal Carpentry (Q) Pty Ltd. We agree to bear own costs in respect of that Originating Motion.
… .”
(v) By letter dated 28 October 2010, the solicitors for the plaintiff wrote to Messrs Lander & Rogers,[20] wherein it is stated:
[20] See Exhibit DM40 of Meyer’s affidavit
“I refer to your fax of 28 October 2010 enclosing Consent Orders.
I confirm that you do not need to brief for the hearing and that we are not seeking any costs against your client. However, we are intending to seek costs against a non-party, that being Southon Builders Pty Ltd.
Please find enclosed amended Minutes of Proposed Consent Orders. If you sign and return these to me I will be able to hand these up to the Court on 3 November 2010 and no appearance by you will be necessary.
… .”
The Minutes of Proposed Consent Orders in the Coastal Originating
Motion were in the following terms:
“1 That the proceeding be dismissed. 2
That there be no order as to costs between the Plaintiff and the Defendant of this action.”
(w) By letter dated 8 November 2010, Messrs Herbert Geer wrote to the solicitors for the plaintiff,[21] wherein it is asserted that the solicitors for the plaintiff have no entitlement to “seek the costs of your client’s Coastal Carpentry (Q) Pty Ltd application against Southon Builders Pty Ltd”; (x) By letter dated 8 November 2010, the solicitors for the plaintiff wrote to Messrs Herbert Geer,[22] wherein it is asserted that an order would be sought on the Coastal Originating Motion that the Court orders Southon to pay the plaintiff’s costs on Scale D, including any reserved costs, to be taxed in default of agreement. The basis of such order was to cover those costs incurred prosecuting the application against Coastal which were not common in the prosecution of the application against Southon.
[21] See Exhibit DM47 of Meyer’s affidavit
[22] See Exhibit DM48 of Meyer’s affidavit
6 Given that background, counsel for the plaintiff submitted as follows:
•
That the parties seemingly at least agree to the extent that on the motion against Southon, there be an order that the costs of the plaintiff be paid by Southon on a party-party basis and on the motion against Coastal, that there be no order as to costs. However, on the motion against Coastal, the plaintiff seeks a further order that Southon pay the plaintiff’s legal costs on a party-party basis.
•
Leaving aside provisions of the Act, the County Court has a discretion pursuant to s.78A of the County Court Act and Rule 63A.03(1) of the County Court Civil Procedure Rules 2008 to make the added order.
•
Section 134AB(27)(a) of the Act has “limited application” and does not apply to this application.
First, as a matter of statutory construction, the section only limits the discretion in relation to costs where the Court has made a “decision” in a s.134AB(16)(b) application of a kind which is “against” a party to the application. Until such a decision has been made, the general discretion remains unfettered by the sub-section. Reference is made to Mifsud v Chemplex Australia Ltd,[23] wherein the Court of Appeal considered the effect of s.135B(6) of the Act which prescribed a regime as to the payment of costs where a “judgment or order for damages is made”, and held that the section did not deprive the Court of a discretion as to costs at any stage of a proceeding before judgment for costs.[24]
In the subject circumstances, the Coastal Originating Motion has not been the subject of a “decision” and there is no “party against whom a decision is made”. Because the Authority has granted the plaintiff a Serious Injury Certificate for both pain and suffering and pecuniary loss in the Southon Originating Motion, the Coastal Originating Motion is now redundant. In this sense, the Serious Injury Certificate so granted is peculiar to the injury rather than the employer and there can only be one finding of serious injury.[25] The Court will not and should not determine an issue which is not contentious and no longer of importance and, accordingly, even if the motion against Coastal is dismissed, there would not be a “decision of a kind that there is a party against whom a decision is made”.
Secondly, even the event there has been a “decision” within the meaning of s.134AB(27)(a), the inhibition against costs only occurs between the parties to the application and cannot apply to determine the costs as between a party and a third party to the application. The use of the word “party” in s.134AB(27)(a) means the effect of the section on costs should be restricted as between parties, just as s.134AB(28), which refers to worker, employer, authority and insurer has been interpreted as governing only costs as between the worker on one hand and the employer, authority or self-insurer on the other.[26]
[23] [1999] VSCA 175
[24] Reference was also made to Whitehead v Kreglinger (Australia) Pty Ltd [1998] 4 VR 216; O’Neill v Williamson (No 2) [2008] VSC 430 and Baulch v Lyndoch Warrnambool Inc (No 2) [2010] VSCA 53
[25] See Papercorp Pty Ltd v Nicolaou [2006] VSCA 143
[26] See Spotless Services Australia Ltd v Herbath [2009] VSCA 285, at paragraph 49; Fassbender v HW & MTA Bohlmann [2010] VSCA 2004 at paragraphs 69-70; and Papadopoulos v MC Labour Hire Services Pty Ltd (No 3) [2009] VSC 183
•
The discretion vested in the Court is not modified or limited by the WorkCover Legal Costs Order 2001. It does not prevent the making of such an order because point C of the 2001 Order regulates how costs are calculated in “proceedings … instituted by the worker pursuant to s.134AB(16)(b) of the Act and where costs are awarded to the worker; but it says nothing about who can be made liable for those costs and the footnote to point C of the WorkCover Legal Costs Order 2001 cannot exclude the general discretion as to costs as it is not considered to be part of the subordinate instrument. Reference is made to s.36(3) of the Interpretation and Legislation Act 1984 (Vic)”.
•
The Court should exercise its discretion in making an award of costs against Southon in the Coastal motion in circumstances whereby the solicitors for the plaintiff issued the motion against Southon. Although clearly a large proportion of the costs can be obtained in the costs order against Southon in the Southon motion, there are clearly costs which have been incurred by the solicitors for the plaintiff which are peculiar to the prosecution of the Coastal application. In the event that there is no remedy to recover such costs, the plaintiff will have to bear such costs through no fault of the plaintiff or his solicitors.
7 Counsel for Southon submitted:
•
Section 134AB(27)(a) of the Act has application with the effect that the Coastal Origination Motion is a type of proceeding referred to in sub- section (27)(a) and by virtue of the proposed order dismissing the proceeding, such amounts to a “decision” of the Court to be made “against” the plaintiff.
•
Section 134AB(28) of the Act, which is a provision comparably limiting costs orders, has been construed not to apply to interlocutory costs.[27]
•
In relation to the submission of the plaintiff that the proposed dismissal in the Coastal proceeding is not a “decision” – such construction is wrong, as the “decision” contemplated in s.134AB(27)(a) of the Act connotes “the formal judicial act in a proceeding which finally determines or disposes of the proceeding, or some issue or dispute in the proceeding. Such a formal judicial act, whether embodied as an order or judgment of the Court, is a ‘decision’ of the Court, for the purposes of s.134AB(27)(a), notwithstanding that the decision is made by the consent of the parties to the proceeding … .”
[27] See O’Neill v Williamson (No 2) (op cit) followed in Papadopoulos v MC Labour Hire Service Pty Ltd (No 3) (op cit) at paragraph 13 and in Spotless Services Australia Ltd v Herbath (op cit) at paragraph 38
The case referred to by the plaintiff of Mifsud v Chemplex Australia Ltd[28] and similar cases set out in the plaintiff’s submissions only deal with interlocutory decisions, not final decisions.
[28] (op cit)
• Even if s.134AB(27)(a) did not apply and the issue was considered as though Southon and Coastal were co-defendants in the same proceeding, it is not enough to justify an order against an unsuccessful defendant that it pay the costs of a plaintiff against a successful co- defendant only on the basis that it was “reasonable” for the plaintiff to proceed against the defendant who wins. An order would not be made unless, also, the conduct of the losing defendant in the litigation makes it just that he pay the costs of the co-defendant (see Gould v Vaggelas[29]). Reference was also made to State of Victoria v Horvath (No 2)[30] wherein the Court of Appeal stated, at paragraphs 9-10: [29] (1984) 157 CLR 215, at 230
[30] [2003] VSCA 24
“In general terms, a plaintiff who seeks to have the losing defendant pay the costs of the successful defendant pursuant to a Bullock or a Sanderson order must establish that, in the circumstances of the case, it would be reasonable and just for such an order to be made - see for example, Sanderson, Reid and Gould v Vaggelas. …
If that requirement is satisfied, a plaintiff who seeks a Bullock or a Sanderson order must also ordinarily show that it was reasonable for him to have joined the successful defendant and that the conduct of the unsuccessful defendant was such as to make it just to require him to indemnify the successful defendant. In Gould v Vaggelas, for example, Gibbs J said:
‘It is sometimes said that the court may make an order of that kind - a Bullock order - where it was reasonable in all the circumstances for the plaintiff to bring the action against two or more defendants. …. There are some statements in the authorities which appear to support that view, including the judgment of Latham CJ in Johnsons Tyne Foundry Pty Ltd v Maffra Corp. In my respectful opinion, however, the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.
The ground on which a Bullock order may be made is, in my opinion, more accurately stated in a passage in Sanderson v Blyth Theatre Co which was cited with approval in Bullock v London General Omnibus Co and Hong v A & R Brown, viz., that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed 'are ordered to be paid by the unsuccessful defendant, on the ground that ... those costs have been reasonably and properly incurred by the plaintiff as between him and the [unsuccessful] defendant'. In Johnsons Tyne Foundry Pty Ltd v Maffra Corp, Williams J stated the principle in a similar way and Starke and Dixon JJ, in giving their reasons for making a Bullock order, both relied on the circumstance that the attitude adopted by the successful defendant had induced the plaintiff to join the other defendant. In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant’. (Footnotes omitted).’
The test was expressed in slightly differently terms by Brennan J and by Wilson J although their formulation of it does not detract from the utility of the above two step analysis favoured by Gibbs CJ in the appropriate case. Such an approach was adopted by Callaway JA in McCracken & McCracken v Pippett (No 2) on the basis, as his Honour said, that it was ‘convenient’ for the purposes of the case before the Court to do so. His Honour warned, however, that:
‘... it would not always be convenient and it could lead to error. It is easy to think of circumstances in which the reasonableness of bringing suit might be directly related to conduct on the part of the unsuccessful defendant. In truth there is a single question, namely whether it is fair, as between the plaintiff and the unsuccessful defendant, that the latter should pay the successful defendant's costs. Prima facie, the unsuccessful defendant should not have to do so. There must, as Gibbs CJ and Blackburn CJ recognized, be something about his or her conduct that makes it appropriate to shift the incidence of the successful defendant's costs. The plaintiff, after all, has been unsuccessful too.’”
•
Nothing in the conduct of Southon would amount to a basis which induced the solicitors for the plaintiff to claim and then issue against Coastal.
•
Similar considerations apply if the plaintiff were to seek an additional order on the Southon Originating Motion. Although Southon is the unsuccessful party in the Southon Originating Motion, any costs to be awarded pursuant to s.134AB(27)(a) of the Act can only be costs of and incidental to the proceeding, not the costs of a “completely separate other proceeding”, or be a proceeding brought ancillary to the successful proceeding brought against Southon.
8 The solicitor for Coastal submitted:
• Coastal is entitled to a decision in its favour in so dismissing the application by the plaintiff against it. Pursuant to s.134AB(27)(a) of the Act, Coastal is entitled to be awarded costs in its favour against the plaintiff. Section 50(1)(a) of the Act also stipulates that costs must be awarded against the party to whom a judgment or decision is made and that the Court must not otherwise make an award of costs. (See s.50(1)(c)). • In the circumstances of this matter, an agreement was reached between the solicitors for the plaintiff and the solicitors for Coastal whereby the proceeding would be dismissed with no order as to costs. If any further order is sought to be made in the Coastal proceeding, then it would be in breach of an agreement reached between the solicitors for the plaintiff and the solicitors for Coastal. Ruling 9 At the outset, I do find that the solicitors acting for the plaintiff acted reasonably to protect the interests of their client by issuing successive applications against Southon and Coastal to avoid any prospect of their client “falling through the cracks”. Furthermore, I have formed the view that the conduct of Southon influenced the solicitors for the plaintiff to make an application against Coastal. In this respect, I do refer, amongst other things, to the letter dated 11 March 2009 from the solicitors for the Authority wherein the Southon application is rejected.[31] In particular, the rejection notice indicates that the application should have been brought against Coastal and indeed, there was no change of that position until the granting of the Serious Injury Certificates by the solicitors for Southon in October 2010. It would appear, consistent with the views of the solicitor for the plaintiff, that the issue essentially was, from the Authority’s point of view, who was the appropriate employer?
[31] See Exhibit DM4 to Meyer’s affidavit
10 Curiously, both the representatives of Southon and Coastal assert strongly the force of s.134AB(27)(a) of the Act which states:
“ Subject to the rules of the court—
(a) in proceedings relating to an application for leave of the court under subsection (16), costs are to be awarded against a party against whom a decision is made … .”
11 Both Southon and Coastal submit that a decision has been made against the plaintiff and accordingly, he is not entitled to any costs. Notwithstanding that submission, Coastal asserts that it entered into an agreement with the solicitors for the plaintiff that there would be no order as to costs and the solicitors for Southon are prepared to pay party-party costs incurred by the plaintiff in the prosecution of the Southon claim.
As made clear in the recent High Court decision of Maurice Blackburn Cashman v Brown,[32] s.134AB provides for five different ways in which the existence of a serious injury can be established. Obviously one method is pursuant to s.134AB(16)(a) in circumstances where the Authority is “satisfied that the injury is a serious injury”. Another way is for a determination by a court pursuant to s.134AB(19)(a) being “satisfied on the balance of probabilities that the injury is a serious injury”.
[32] [2011] HCA 22 (delivered on 22 June 2011)
12 Clearly, in the circumstances of this matter, the solicitors for Southon utilised s.134AB(16)(a) of the Act.
13 In my view, sub-section (27)(a) of s.134AB of the Act contemplates a situation that there has been a determination by a court under s.134AB(16)(b) of the Act.
14 In my view, it is artificial and against the spirit of the legislation to interpret the sub-section to mean that as soon as an originating motion is dismissed in any circumstance, it automatically calls into play the sub-section. As noted earlier, if such was the case, how can there be an order granting costs to the plaintiff in the Southon motion in circumstances where the motion was dismissed?
15 Consistent with what I perceive to be the agreement between the solicitors for the plaintiff and the solicitors for Coastal, I make the following orders:
(1) The proceeding is dismissed. (2) There be no order as to costs. 16 As I construe the correspondence between those parties, it was made clear by the solicitor for the plaintiff that she kept open her right to claim costs incurred in the Southon application. The confusion may have arisen as to whether or not she was seeking costs against Southon as part of the costs order in the Coastal proceeding or indeed, as part of the orders sought against Southon in the Southon proceeding.
17 Of course, everything I have stated in relation to sub-section (27) is apposite to the Southon proceeding. In some ways, moreso, given that the proceeding is being dismissed and costs are being awarded to the solicitors for the plaintiff in respect of that proceeding.
18 Although appreciating that no costs order was made against the plaintiff in the Coastal proceeding, which is the usual basis for a Sanderson or Bullock order, I am of the opinion that in the circumstances of the matter, where undoubtedly costs have been incurred by the solicitors for the plaintiff prosecuting the Coastal application, I have come to the view that such costs should be borne by Southon in its costs order.
19 Accordingly, I order as follows:
(1) That the proceedings be dismissed. (2)
That the defendant (Southon Builders) pay the plaintiff’s costs on Scale D, including reserved costs to be taxed in default of agreement, and such costs to include the party-party costs incurred by the solicitors for the plaintiff in the prosecution of the application against Coastal in proceeding number CI-10-01204, such costs be non common to any costs awarded in this proceeding number CI-09-01332.
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