Industrial Court of New South Wales CITATION: Veney v New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (No 2) [2009] NSWIRComm 33 ALLAN JOHN VENEY Applicant PARTIES: NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES AND UTILITIES UNION Respondent FILE NUMBER(S): IRC 1774 of 2007 CORAM: Schmidt J CATCHWORDS: Costs - costs of motion - whether there should be apportionment - whether costs should be costs in cause - whether costs should be payable forthwith - applicant to pay respondent's costs of the motion as agreed or assessed forthwith Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2008] NSWSC 7 Fiduciary v Morningstar [2002] NSWSC 432 CASES CITED: Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) 47 FCR 81 Surfing Hardware International Holdings v MacAusland (No 6) (2007) 169 IR 282 Veney v New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union [2008] NSWIRComm 228 HEARING DATES: 13 March 2009 EXTEMPORE JUDGMENT DATE: 13 March 2009 APPLICANT: Mr G Boyce of counsel LEGAL REPRESENTATIVES: RESPONDENT: Ms KT Nomchong of counsel SOLICITORS: White Barnes JUDGMENT: - 13 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Schmidt J 13 March 2009 Matter No IRC 1774 of 2007 ALLAN JOHN VENEY v NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION Application under s.106 of the Industrial Relations Act 1996 EXTEMPORE JUDGMENT (No 2) [2009] NSWIRComm 33 1 In December 2008, I gave judgment on a motion filed by the respondent seeking a declaration that the Court had no jurisdiction to hear or determine the claims advanced in these proceedings, or in the alternative, to set the proceedings aside as an abuse of process, or in the further alternative, orders striking out, or setting aside aspects of the claims advanced 2 The orders made were that the orders sought by Mr Veney in relation to redundancy pay in paragraphs A2(b) and D(a) of the summons, supported by the matters of fact and law appearing at paragraphs B9, 13 to 15 and 30(a) of the summons, be set aside. Otherwise, the orders sought in the motion were refused. 3 This judgment deals with the question of costs. The respondent argued that the appropriate order as to costs was: (a) The Applicant shall pay the Respondent's costs of and incidental to the Respondent's Notice of Motion filed 18 October 2007 on a party/party basis as agreed or assessed. (b) In the alternative to order (a) the Applicant shall pay 80% of the costs of and incidental to the Respondent's Notice of Motion filed 18 October 2007 on a party/party basis as agreed or assessed. (c) The costs shall be payable forthwith. 4 Mr Veney argued that the appropriate order was that costs be costs in the cause. 5 The usual rule is that costs follow the event. In this case, the usual order would be that Mr Veney pay the respondent's costs of the motion, it having succeeded in its application that a substantial part of his claim be set aside. Should there be a departure from that order? 6 There can be no question that what the respondent raised for consideration by its motion was the allegation that redundancy was the reason for the dismissal. At issue was whether Mr Veney could advance such claims in these proceedings, given the claims earlier advanced in his unfair dismissal proceedings. 7 The respondent was not entirely successful in its motion. Nevertheless, courts are generally reluctant to apportion costs on the basis of the success or failure of a party in relation to a number of different issues which they have litigated. Barratt J considered such circumstances in Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2008] NSWSC 7 at [24] - [30]: 24 In determining the question of costs, the court must proceed, in the first instance, in the way described in rule 42.1 of the Uniform Civil Procedure Rules to which brief reference has already been made. That rule is as follows: "Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs." 25 The position here is the same as that which prevailed under Part 52A rule 11 of the former Supreme Court Rules . The discretion to make "some other order" under that rule was the subject of the following observations of the Court of Appeal (Beazley JA, Tobias JA and McColl JA) in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296: "[31] Costs orders in the Supreme Court are governed by the provisions of s.76 of the Supreme Court Act 1997 and the Supreme Court Rules . Section 76 provides, relevantly that subject to the Act and the Rules, costs shall be in the discretion of the Court: s.76(1)(A). Part 52A r.11 acts as a limited proscription of the Court's discretion conferred by s.76. Part 52A r.11 provides that, subject to Part 52A, the Court shall order that costs follow the event 'except where it appears to the Court that some other order should be made as to the whole or any part of the costs' . [32] The effect of Pt 52A r.11 is that an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, as is specified by the rule itself, the Court is entitled to make a different order. That may occur where there are multiple issues involved. This was the subject of comment in Waters v. P C Henderson (Aust) Pty. Limited (unreported CA(NSW) Kirby P, Mahoney and Priestley JJA, 6 July 1994) where Mahoney JA said: 'Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.' [33] Similarly, Toohey J made the following observations in Hughes v Western Australian Cricket Association (1986) ATPR 40-748: '1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.' (references omitted) [34] Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called 'discrete issues', for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to 'any disputed question of fact or law' before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. [35] In Madden v Connell [2001] NSWSC 1051, Hamilton J referred to there being a 'rule' that where there are 'discrete issues and the time taken on each issue at the hearing can be identified or realistically estimated', an order for costs may be made against the party which fails on such issues, or alternatively, that party may be deprived of its costs for that portion of the matter. In the Court's opinion it is preferable not to speak in terms of 'rules'. However, the underlying approach to the 'rule' stated by his Honour may be an available approach to the exercise of the court's discretion as to costs in a particular case, depending upon all of the circumstances. [36] Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261: 'Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.' This case is a classical example of that sentiment." 26 A recent statement of the relevant principles is found in the judgment of the Court of Appeal (Beazley JA, McColl JA and Basten JA) in Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373: "[7] As the appellants submit, the commencing position is that costs follow the event so that a successful party is entitled to costs. In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 (at [24]). A similar approach is adopted in the Court of Appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 (at [27]). [8] Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 (at [18]) per Hislop J (with whom Beazley JA and Tobias JJA agreed)." 27 In McFadzean v Construction Forestry Mining and Energy Union [2007] VSCA 289, the Court of Appeal of Victoria upheld orders that successful plaintiffs pay 40% of the costs of unsuccessful defendants. The court (Warren CJ, Nettle JA and Redlich JA) said at [153]: "The judge below acknowledged that in the normal course, a plaintiff who was only successful on one of a number of pleaded causes of action would be entitled to costs. In our view, the reasons his Honour gave for departing from this course were sound. The Rules of Court are wide enough to permit an apportionment of costs according to issues or causes of action. Importantly, the judge regarded the case brought by the successful appellants as a 'substantial failure ... whether assessed by references to causes of action or issues.' His Honour observed that the plaintiffs had been successful in eight of the 63 causes of action they had brought, and that, assessed as a proportion of the disputed questions of fact resolved in their favour, the success of the plaintiffs was substantially less than that. In these circumstances, there was clearly a reasonable basis for his Honour's conclusion that a 'substantial injustice' would result from an award of costs in favour of the successful plaintiffs." 28 The court also said at [156]: "The appellants also put their complaint in these terms: that the judge erred in failing to have regard to the fact that the 'plaintiffs' claims' were not severable. As we have noted, in exercising its discretion as to costs the court is entitled to take into account the failure of a party on certain 'issues'. But in this context, as the judge noted, 'issue' is not used in the technical pleading sense, but refers to any disputed question of fact of law. Accordingly, the question of the severability of 'claims', in the sense of causes of action, is not precisely to the point. In any event, his Honour was aware of the need to consider the extent to which the evidence led in respect of the successful Wilkinson v Downton claims also related to the other causes of action. Despite the complex nature of the case, his Honour found that 'it remains entirely possible to identify the disputed issues which I had to resolve, and the evidence adduced specifically with respect to each of them.' As his Honour found, the causes of action on which the successful plaintiffs failed dominated the trial." 29 Difficulties of delineation and apportionment were mentioned at [158]: "In fixing costs a superior court may treat 'heads of controversy as units of litigation' and give directions to the taxing master in relation to them, such units not being circumscribed by pleadings, causes of action or issues capable in themselves of leading to the granting of relief. But to avoid the complications of taxation resulting from making orders recognising the entitlements to costs of a party on each action on which they were successful, the orders may be notionally set off against each other or other adjustments made so as to produce an order for a proportion of one party's costs. This approach to costs orders where an action has had mixed success has been followed in a number of cases. In Hughes v Western Australian Cricket Association (Inc) , Toohey J had regard to the fact that the plaintiff had succeeded on some issues but failed on others, but concluded that: 'it would be unsatisfactory to attempt to apportion issues and leave the fixing of costs of those issues to the taxing officer. That would impose a very great burden on him and upon the parties' legal representatives.' In our view, the judge's approach to the apportionment of costs was particularly apposite in this case, having regard to the multiplicity of parties, actions, and issues, and the mixed success enjoyed by the plaintiffs." 30 The general approaches recognised in the case law allow attention to be paid to "multiple issues" or "matters" or "heads of controversy" or "portions" of a plaintiff's claim. Time spent on identifiable aspects may be taken into account. The delineation is not necessarily to be derived from pleadings or statements of causes of action. And it should not be made in such a way as to cast impossible or difficult burdens upon the person whose task it will be to assess costs. The real guiding principle, it seems to me, is that stated by Gummow, French and Hill JJ in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261: "Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation." 8 The respondent argued that in this case, there would be no apportionment in respect of the issues on which it failed, namely sick leave, notice and legal costs, because there were clear and arguable bases upon which those claims were advanced. Apportionment would only be ordered if the view were formed that raising those issues was 'so unreasonable that it is fair and just to make the order' (see Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) 47 FCR 81 at [84]). 9 It was argued for Mr Veney that while the respondent had succeeded on only one of the issues which it had raised, the argument advanced in relation to each of them was the same, namely that: each of these Applicant's claims were either raised or pleaded or argued or decided or could have been agitated or were not agitated or did or did not have evidence led about them - in the Applicant's unfair dismissal proceedings 10 It followed, it was argued that while the respondent's success in relation to the redundancy claim issue could be retrospectively separated from a legal point of view from the issues on which the respondent did not succeed, the evidence and arguments advanced in relation to the entirety of the respondent's case was identical or almost identical. The cases advanced in relation to all matters on which the respondent relied were intertwined. It was also relevant that the strike out application had failed and that the respondent had made no offer to the applicant in relation to the redundancy part of the case. Consideration 11 The view I have come to is that there should be no departure from the usual costs order in this case, notwithstanding the issues on which the respondent failed. The arguments advanced for Mr Veney themselves lead to that conclusion. The matters argued on the motion were intertwined, as both parties submitted. The aspects on which the respondent failed were plainly the minor aspects of what was argued. That the respondent made no offer of settlement of its claim was not in issue. That, however, cannot resolve this question. It was always open to Mr Veney to withdraw the redundancy part of his claim. Had he done so, the motion or the major part of it, would have been unnecessary. I am satisfied that this is not a case where there can sensibly be an apportionment of costs, as a matter of justice between the parties. 12 As to the claim that these costs should be payable forthwith, it was argued for the respondent that its motion concerned a separately identifiable matter, properly now viewed as complete (see Fiduciary v Morningstar [2002] NSWSC 432 at [11]). Mr Veney's conduct in advancing the redundancy claim could be viewed as unreasonable (see Fiduciary at [12]). It was also relevant that there was much to come in the proceedings, which would take a long time to dispose of (see Fiduciary at [13]). 13 In opposing this aspect of what the respondent sought, reliance was placed for Mr Veney on the Full Court's approach in Surfing Hardware International Holdings v MacAusland (No 6) (2007) 169 IR 282 at [49] - [51]. There it was said: 50 The circumstances in which a cost order may be made prior to the final order for costs include where: (a) a question in the proceedings has been separately determined, no issue in the trial of the balance of the proceedings overlaps with the question in the separate determination and no issue in the trial of the balance of the proceedings can cast doubt on the correctness of an order for costs (see Baramon Sales Pty Ltd v Goodman Fielder Mills Limited [2001] FCA 1819 at [6]–[7]; (b) a question in the proceedings has been separately determined and the question was discrete from any other relief sought in the proceedings (see Charlie Brown Pty Limited and anor v Green and ors (Unreported, Supreme Court of New South Wales, McClelland CJ, 3 July 1995) at 1); (c) an aspect of the proceedings which has been determined is sufficiently self-contained and detached or detachable from the remainder of the proceedings yet to be heard (see Peter Robert Horrobin v Australia and New Zealand Banking Group Limited (Unreported, Court of Appeal of New South Wales, Priestley JA, 6 June 1997) at 9; Fiduciary Ltd and another v Morningstar Research Pty Ltd and others (2002) 55 NSWLR 1 at [10]; (d) the proceedings were instituted some time previously and there is a considerable time before the proceedings will be disposed of finally (see Horrobin at 9; Fiduciary at [13]; Allstate Life Insurance Co v Australia & New Zealand Banking Group Limited (No 13) (Unreported, Federal Court of Australia, Lockhart, Lindgren and Tamberlin JJ, 17 August 1995) at [5]; UnitedGlobalCom at [24]); 51 A guiding factor is whether the "demands of justice" (or the "interests of justice") support the making of costs order prior to the final order for costs (see Fiduciary at [7]–[8], [18]; Thunderdome Racetiming and Scoring Pty Ltd and another v Dorian Industries Pty Ltd and another (1992) 36 FCR 297 at 312; UnitedGlobalCom at [16], 14 In Fiduciary it was observed by Barrett J: 10 It becomes necessary now to consider the factors which have caused courts to depart from the normal rule in Part 52A rule 9(1) that costs are payable at the conclusion of the proceedings. A convenient and useful starting point is the following passage in the judgment of Priestley JA in Horrobin v Australia & New Zealand Banking Group Ltd (unreported, NSWCA, 6 June 1997): "None of the cases is on all fours with the present one; indeed, a reading of them emphasises the need for cases to be considered by reference to their own particular facts. Nevertheless, those relied on by counsel for H and S show there is a tendency for costs orders to be made payable forthwith and without waiting for the conclusion of further proceedings when the proceedings in respect of which the costs orders have been made are regarded as sufficiently self-contained and detached or detachable from proceedings yet to be heard, whether between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime." 11 This identifies the first recognisable category of case, namely, where the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect. Examples of this may be found in Charlie Brown Pty Ltd v Green (unreported, NSWSC, McClelland CJ in Eq, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830. 12 A second factor which may incline the court to order that costs be payable forthwith is some unreasonable conduct on the part of the party against whom costs have been ordered. That was a factor taken into account by Simpson J in Gattellari v Meagher [1999] NSWSC 1279, although, in the end, her Honour did not think that the particular conduct warranted such an order. 13 A third factor is, as it was put by Giles J in Doran Constructions Pty Ltd v University of Newcastle (unreported, NSWSC, 16 December 1994), that "there is much to come in the proceedings" and "one can see a fairly long time before the proceedings are disposed of". In Horrobin (above), the decision of Priestley JA to order that costs be payable forthwith was influenced to some extent by the fact that the controversy between the parties would run for at least a further year. In Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, FCA, 18 August 1995), Lindgren J said that it may be appropriate for greater use to be made of the analogous provision in the Federal Court Rules, "particularly in cases such as this one where the final determination of the proceedings is so far away". 15 For Mr Veney, it was submitted that: 'The Applicant submits that the Respondent's claim for an order that costs be payable forthwith is an unwarranted application. It will have a direct effect upon the Applicant's financial capacity to pursue his substantive proceedings to their conclusion and/or obtain further legal representation. 16 There was, however, no evidence led upon which that submission could rest. Any costs order has a financial consequence for the party against which it is made, more so in this case of an individual litigant. Hardship, as a basis for refusing to make any costs order otherwise justly made in particular circumstances, must be established on some evidentiary basis, it if is to be available to be considered by the Court. Such evidence is absent in this case. 17 In all of the circumstances, I am satisfied that in this case, the just order is an order that the costs be payable forthwith. The issue which has been determined is a discrete one, from what remains to be determined in the balance of these proceedings. Account also needs to be taken of what I concluded at [35] and [37] of the earlier judgment (Veney v New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union [2008] NSWIRComm 228): 35 The case does not assist Mr Veney, given that the question of the reasons for the dismissal is raised in both the ss 84 and 106 proceedings. The Commissioner had to determine what the reason for the dismissal was, in the s 84 proceedings, in order to determine whether the dismissal was 'harsh, unreasonable or unjust'. The parties joined issue as to what the reason for the dismissal was. In the s 84 proceedings, Mr Veney could and ought to have advanced the claim which he now seeks to agitate in the s 106 proceedings, namely that the true reason for the dismissal was redundancy. Having elected not to do so, he is plainly estopped from raising that claim now in these proceedings. The issue of the reason for the dismissal has been decided once and for all by the Commissioner. 37 Here, it cannot be overlooked that the reason for the dismissal was in issue in the s 84 proceedings. That matter may not be re-litigated in these proceedings. Mr Veney was obliged to bring his whole case in the s 84 proceedings as to the reasons for the dismissal. 18 These proceedings will also undoubtedly still take a considerable time to complete. It is in all of those circumstances just that the costs be payable forthwith. 19 I finally note that before concluding the hearing, I directed the parties to confer as to the terms of the directions to be made for further preparation of the matter for hearing. These terms are to be filed on Monday, 16 March 2009. Orders 20 For the reasons given I order that Mr Veney pay the respondent's costs of the motion, as agreed or assessed. Such costs are to be paid forthwith. ------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.