MacDIARMID INDUSTRIAL SERVICES PTY LTD v LEMON; LEMON v FRISINA SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL GLEESON CJ, MAHONEY P and MEAGHER JA 9 May 1996 [1996] NSWCA 378 Gleeson CJ. I ask Mahoney P to give the first judgment. Mahoney P. The facts of this matter are set forth in the judgment of the Court given on 2 April 1996. Restated, as far as necessary for present purposes, they are as follows. The plaintiff suffered two accidents, a motor vehicle accident and an industrial accident. The motor vehicle accident was suffered on 2 June 1988 and resulted in the lesser of the injuries. On 20 December 1985 the plaintiff was injured at work and his injuries were much more substantial. Both proceedings were heard together and in July 1995 a jury gave judgment for the plaintiff in the motor vehicle claim for $50,000 and in the industrial accident claim for $925,032. With appropriate adjustments the verdicts were, respectively, $56,912 and $935,472. The defendant in the industrial accident case, the company, appealed against the judgment in that case. The plaintiff in the motor vehicle case appealed against the judgment in the motor vehicle case. It is said, in the sense that is understood in this appeal, that that was a defensive appeal. It was brought, it is said, upon the basis that if the appeal against the industrial accident judgment were upheld and a new trial ordered, a question of apportionment of the plaintiff's ultimate and total state of disability between the two causes of action would or might be necessary. It was therefore said that the appeal brought by the plaintiff in the motor vehicle matter was defensive to enable, on a retrial, that matter to be reconsidered together with the industrial accident matter. The Court, in the event, dismissed both appeals and dismissed them with costs. It dismissed the industrial accident appeal for the substantial reasons which are set forth in the judgment of the Court on 2 April 1996. It followed, from the course of proceedings and the appeals that followed, that the appeal against the motor vehicle judgment should also be dismissed. The Court made orders, as I have said, that the appeals be dismissed, with costs. Two applications have been made in relation to the orders for costs. No objection has been taken to the applications being made at this stage and notwithstanding the orders that were made by the Court on 2 April 1996. What is now sought is, in effect, variations of the orders in each of the cases. The present applications have been made upon the basis that the Court can and, depending upon the circumstances, should consider the application itself. The first application is an application by the defendant in the motor vehicle litigation, Mr Frisina, who was, of course, the successful respondent in the motor vehicle appeal. He asks that an order be made for indemnity costs to the extent set forth in par 2 of the notice of motion of 18 April 1996. It is submitted that an appropriate offer for compromise was made in that appeal and for that reason an order for indemnity costs should be made, as asked. Theoffer of compromise is set forth in the affidavit of 18 April 1996 by Stephen 2 UNREPORTED JUDGMENTS John Modder, the solicitor involved in the matter. The offer involves a compromise offer of $56,912 in full satisfaction of the judgment given in favour of the plaintiff against the respondent and a stipulation that no order be made as to appeal costs. The question is whether, in the exercise of its discretion, the Court should make the order for indemnity costs there sought. It is not necessary to deal at length with the considerations involved; they have been referred to in the discussion which has taken place upon the hearing of these notices of motion. In my opinion, one of the important matters relevant in this regard is whether it was reasonable and to what extent, for the plaintiff to bring the second appeal, it being brought, as I have indicated, for the purposes of safeguarding him against a possible difficulty should the company's appeal in the industrial accident case be upheld and a retrial ordered. That is a matter which the Court can and, in my opinion, should take into account in determining whether, in its discretion, the order for indemnity costs here sought should be made. Having regard to what has been said as to the reason for bringing that appeal and the circumstances of the case as outlined in the court's judgment of 2 April 1996, I would propose that in the exercise of its discretion the court not order indemnity costs as sought. I think that there was a degree of reasonableness in the plaintiff bringing the appeal and it was appropriate, in a sense, that it do so. I think that that factor, coupled with the general context of the case, is such as to warrant the Court, in the exercise of its discretion, not making the order sought. That motion, therefore, should fail. I come then to consider the second notice of motion. That notice of motion has been filed by the company, the unsuccessful appellant in the industrial accident appeal. The notice of motion seeks four orders: 1. Costs order entered by the Court on 2 April 1996 be vacated. 2. The appellants to pay the respondent's costs of proceedings No 40472 of 1992 in the Court of Appeal on a party/party basis up to and including 8 July 1994 (being the date of the respondent's Offer of Compromise) and thereafter on an indemnity basis. 3. That the appellant in appeal No 40524 of 1992 pay the respondent's costs of that appeal. 4. That the appellants in appeal No 40472 of 1992 indemnify the appellant in appeal No 40524 of 1992 in respect of the Costs Order in paragraph 3 above. When the proceedings commenced this morning the Court was informed that orders 1, 2 and 3 were to be made by consent and I would propose that the Court, by consent, make those orders. The only order that is therefore in question is order 4. That order seeks that the appellant in appeal No 40472/92, that is the company, indemnify the appellant in appeal No 40524/92, that is the plaintiff, in respect of the costs order in par 3, that is, the costs which the plaintiff has had to pay to the successful respondent Mr Frisina in the motor vehicle proceedings. There is sought to be made, as the Chief Justice referred to it in the course of argument, something having some analogy to a Bullock order. The question is whether the Court should now order that the company should bear the costs which the plaintiff has to pay to Mr Frisina in respect of the motor vehicle appeal. No question has arisen as to the power of the Court to do so. The Court has not had before it in detail the circumstances in which the two matters were heard together but it appears likely that, in all the circumstances, the Court would have WREDIARMID INDUSTRIAL SERVICES PTY LTD v LEMON; LEMON v FRISINA (Gleeso& CJ) the power to make order 4 which is sought in this notice of motion. I propose that the Court deal with the matter on that basis. The question therefore is whether, as a matter of discretion, the Court should make that order. This order is, I think, different in a relevant sense from at least one form of the Bullock orders which are made. In this case the bringing of the appeal in the motor vehicle appeal was for the benefit of the plaintiff. It was not, in the sensethat I would regard as relevant for present purposes, in any way for the benefit of the company. It was a safeguard, essentially, for the plaintiff in both proceedings. I do not think that, in the circumstances, it is appropriate that the company be burdened with the costs of that appeal. The matter is capable of being argued on both sides and the Court has had the benefit of interesting argument from the representatives who are before the Court today. In the course of the matter my mind has wavered but in the end I do not think that it is appropriate that the company be ordered to pay the costs of the appeal which the plaintiff brought for safeguarding his position in the manner to which I have referred. In my opinion, therefore, order 4 should not be made. The result of this is that the applicant on the motion in the motor vehicle case has failed and on the matters in respect of which issue was being joined in argument on the industrial accident motion, the applicant has failed. Prima facie, both motions should be dismissed with costs. However, the parties should have the opportunity, briefly, to address costs if they desire to urge anything in that regard. I would propose the orders as I have indicated. Gleeson CJ. Does anyone want to say anything about the costs of the motions? (Counsel indicated in the negative). I agree with the orders proposed by Mahoney P and his Honour's reasons for those orders. Meagher JA. So do I. Gleeson CJ. The orders of the Court will be as proposed. Orders accordingly.