New South Wales Court of Appeal CITATION : Leighton Contractors Pty Ltd v Smith [No.2] [2000] NSWCA 160 FILE NUMBER(S) : CA 40498/98 HEARING DATE(S) : Decided on written submissions JUDGMENT DATE : 5 July 2000 Leighton Contractors Pty Ltd (Appellant) PARTIES : Rodney James Smith (1st Respondent) B&B Detail Joinery Manufacturers Pty Ltd (2nd Respondent) JUDGMENT OF : Mason P at 1; Meagher JA at 35; Fitzgerald JA at 1 LOWER COURT JURISDICTION : Supreme Court - Common Law Division LOWER COURT SC182/93 FILE NUMBER(S) : LOWER COURT Studdert J JUDICIAL OFFICER : B Toomey QC / M McAuley (Appellant) COUNSEL : C Calloway QC / R Taperell (1st Respondent) J Hislop QC / J Lonergan (2nd Respondent) John Sharpe HIH Workers' Compensation (NSW) Pty Limited Sydney (Appellant) SOLICITORS : Baker & Love Solicitors Charlestown (1st Respondent) Dunhill Madden Butler Sydney (2nd Respondent) CATCHWORDS : Costs - ND LEGISLATION CITED : Workers Compensation Act 1987 DECISION : Application by Smith to "revisit" the judgment on 19 April 2000 refused; Direct that, within 14 days from today, Smith and / or Leighton Contractors Pty Ltd may file and serve further applications in respect of costs, together with supporting material, including written submissions, limited to costs questions concerned with the matters discussed in the letter dated 15 May 2000 from the solicitors for AMP General Insurance Limited to the solicitors for HIH Workers' Compensation (NSW) Pty Ltd; Further direction that, if such an application is made, AMP General Insurance Limited and its solicitors file any material in reply within a further 14 days. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40498/98 SC 182/93 MASON P MEAGHER JA FITZGERALD JA WEDNESDAY 5 JULY 2000 LEIGHTON CONTRACTORS PTY LTD v SMITH [No.2] JUDGMENT COSTS 1 MASON P & FITZGERALD JA: The judgment of the Court in this matter was delivered on 19 April this year. The parties in this judgment, Rodney James Smith, Leighton Contractors Pty Limited and B&B Detail Joinery Manufacturers Pty Limited are referred to respectively as Smith, Leighton and B&B. 2 Smith, an employee of Leighton, was injured in the course of his employment. Both Leighton and B&B were found liable for his damage. Liability was apportioned 65 per cent against Leighton and 35 per cent against B&B. Because of Pt 5 Div. 5 of the Workers Compensation Act 1987, the total damages recoverable by Smith against Leighton were less than the total damages recoverable by him against B&B. 3 The nature of the proceedings in this Court was described by us in para. 2 of our reasons for judgment in the following terms: "Leighton appealed against both the trial judge's refusal of its claim for a declaration that it is entitled to an indemnity from B&B under the clause set out in paragraph 12 of Meagher JA's judgment and the amount of the damages which Smith was awarded against Leighton. Smith applied to strike out Leighton's appeal against his damages award, and Leighton instituted a precautionary application for leave to appeal. However, Leighton made it plain that it did not seek to proceed with its appeal or application for leave to appeal against Smith's damages if it is entitled to an indemnity from B&B. Smith applied for leave to appeal in respect of the damages which he was awarded against B&B, but only if Leighton successfully prosecuted its appeal against the damages which he had been awarded against Leighton. B&B opposed Leighton's claim for an indemnity and Smith's attempt to have the Court increase the damages which he was awarded against B&B, but did not seek any reduction in the damages which Smith was awarded against Leighton in the event that Leighton is held entitled to an indemnity against B&B. Since no more need be decided if Leighton is entitled to an indemnity from B&B, it is convenient to consider that question first." 4 All members of the Court were agreed that Leighton is entitled to be indemnified by B&B in respect of Leighton's liability to Smith. Accordingly, para. 11 of our judgment was as follows: "Conformably with the parties' submissions, Leighton's appeal against the damages awarded to Smith should be dismissed, as should its application for leave to appeal. Smith's application to strike out Leighton's appeal and his application for leave to appeal against the damages awarded him against B&B should also be dismissed." 5 The orders made by the Court corresponded with what we there stated. 6 Although Meagher JA agreed that Leighton is entitled to be indemnified by B&B in respect of Leighton's liability to Smith, his Honour commented upon other matters. Following the statements made by his Honour, Smith has now submitted that this Court's judgment "should be revisited", and, "to avoid .. obvious injustice to Smith," that "the Court's final orders should be revised". Although Smith's further submissions appear to be directed, primarily at least, to an increase in the amount of his judgment against B&B, an increase in the amount of his judgment against Leighton might also be necessary if his submissions were accepted, although he has at no time either cross-appealed or applied for leave to cross-appeal in respect of that judgment. 7 In his reasons for judgment, Meagher JA expressed the opinion that an amount of $180,000 for non-economic loss, which had been included in the assessment of the damage caused by Leighton, had been omitted from the assessment of the damage caused by B&B. 8 Obviously, if that is correct, the judgment in Smith's favour against B&B was too low, irrespective of whether that judgment was for the whole or only 35 per cent of Smith's damage. 9 Nonetheless, Smith sought an increase in the amount which he was awarded against B&B only if Leighton succeeded in reducing the amount of Smith's judgment against it. 10 Because it succeeded in obtaining a declaration that it is entitled to an indemnity from B&B, Leighton did not seek a reduction in the amount of Smith's judgment against it, and, accordingly, Smith did not seek to have his judgment against B&B increased. 11 Smith is not entitled to have the Court reconsider its decision not to increase his judgment against B&B because a more favourable result might have been achieved if he had previously adopted a different approach. 12 Although more heavily disguised, the other basis on which Smith seeks to have the Court re-open its judgment has the same objective. 13 Because at the hearing of the proceedings it was unknown whether the Court would uphold Leighton's claim to an indemnity for B&B, argument was advanced in relation to other matters which would or might have to be decided if the Court found that Leighton was not entitled to an indemnity. 14 In the course of the argument addressed by Smith's counsel, it was submitted that the decision of Allan J in Leonard v Smith (1992) 27 NSWLR 5. is incorrect. In his reasons for judgment Meagher JA endorsed that view. In our judgment, we said that the correctness of Leonard v Smith (1992) 27 NSWLR 5. was not challenged, and that leave was not sought to reconsider earlier decisions of this Court in which it was followed and applied. While the latter statement was entirely correct, it would have been more accurate to say that the correctness of Leonard v Smith (1992) 27 NSWLR 5. was not challenged except to the extent that its correctness arose for consideration in connection with Smith's application for leave to appeal against his judgment against B&B. 15 As we have already stated, because Leighton did not attempt to have Smith's judgment against it reduced, he did not seek to have his judgment against B&B increased. It was accordingly unnecessary for the Court to consider the correctness of Leonard v Smith (1992) 27 NSWLR 5. 16 Once again, Smith is not entitled to have the Court reconsider its decision, or to have it consider the correctness of Leonard v Smith, (1992) 27 NSWLR 5. because he now wishes to adopt a different approach from that previously adopted in the hope that it might produce a more favourable result against B&B. 17 Axiomatically, Smith is not entitled to have the Court reconsider its decision because he now wishes to adopt a different approach which might produce an increased judgment against Leighton, when he has neither cross-appealed not applied for leave to cross-appeal in respect of his judgment against Leighton. 18 Smith's application for the Court to "revisit" its judgment should be refused. 19 The remaining issues relate to costs. The orders previously made by the Court left it open to the parties to make further submissions in writing in relation to costs, save that B&B was ordered to pay Leighton's costs of its appeal against B&B. 20 Subject to one matter discussed below, none of the submissions received persuade us that costs should not follow the event in each of the proceedings. That is to say, subject to the matter referred to, we would be of opinion that: (i) Leighton should be ordered to pay the costs of its appeal and application for leave to appeal against the damages awarded to Smith; (ii) Smith should be ordered to pay the costs of his motion to strike out Leighton's appeal against the damages he was awarded, and his application for leave to appeal against the damages he was ordered to pay B&B. 21 It is implicit in what has been said that, subject to the matter discussed below, we do not consider that B&B should be made to bear the costs of other aspects of the proceedings, either directly or indirectly, because of its erroneous denial that Leighton is entitled to the indemnity which it claimed. 22 While the ultimately unsuccessful appellate proceedings initiated by Leighton against Smith and Smith against Leighton and B&B would not have been brought but for Leighton's appeal against the refusal of its claim to an indemnity from B&B, those additional proceedings by Leighton against Smith and Smith against Leighton and B&B were not a necessary legal consequence of B&B's refusal of that indemnity, it has not been decided that all or any of them would have succeeded, if pursued, and all have been dismissed because, since the Court held Leighton entitled to the indemnity which it claimed from B&B, the other proceedings were not pressed. 23 Further, again subject to the matter remaining for discussion, there is no justification for ordering that any of costs should be ordered to be assessed on an indemnity basis. 24 We are not prepared to hear further submissions except on the one matter discussed below. 25 After the Court had delivered judgment, but before they lodged additional written submissions in relation to both costs and Smith's attempt to "revisit" the judgment, the solicitors for B&B's insurer, AMP General Insurance Limited, wrote a letter dated 15 May 2000 to the solicitor for Leighton's insurer, HIH Workers' Compensation (NSW) Pty Ltd, which contains a number of unexpected statements. 26 According to AMP's solicitor's letter, "B&B has been in liquidation since 1993 and has now been deregistered." That was not revealed to this Court, and it seems was not revealed to the trial judge if Leighton's assertion that it was not at any time advised that B&B was in liquidation or had been deregistered is correct. 27 Prior to the proceedings in this Court, AMP had paid Smith the amount of his judgment against B&B, but AMP's solicitors' letter asserts that B&B's liability to indemnify Leightons is "not a liability which is covered under the terms of AMP's Policy." However, the letter acknowledges that AMP's solicitors "were instructed to continue to represent the interests of B&B on the appeal." Counsel appeared in this Court on the instructions of AMP's solicitors, and argued that Leighton is not entitled to the indemnity to which the Court held it is entitled from B&B. 28 If AMP's solicitors' assertions that (i) "B&B has been in liquidation since 1993 and has now been deregistered" and (ii) B&B's liability to indemnify Leightons "is not a liability which is covered the terms of AMP's Policy", are correct, the entire proceedings in this Court and Leighton's cross-claim at trial for a declaration that it is entitled to be indemnified by B&B might have been totally futile. 29 Further, questions might arise concerning the possible effect of the Corporations Law on the orders against B&B (including orders for costs) which could and should have been made by the trial judge or could be made by this Court. 30 In their letter to Leighton's insurer's solicitor, the solicitors for AMP further stated that they "write as a matter to inform you …that: (i) AMP will not be indemnifying B&B in respect of its additional liability; and (ii) we will be ceasing to act in the matter." 31 In a subsequent submission, Leighton has raised the possibility that AMP's solicitors, or perhaps AMP, should be required to pay costs, perhaps on an indemnity basis. Leighton has applied for "this matter to be re-listed before the Court of Appeal for further directions not only as to costs but as to the further conduct of the matter, including the proposed action of the solicitor for B&B to cease to act on B&B's behalf". Other paragraphs in Leighton's submission refer to its "wish to know when the solicitor for B&B first became aware that his client was in liquidation, and when he first became aware that his client had been deregistered", and assert that the "stated intention of the solicitor for B&B to cease to act for B&B at this time raises a significant issue as to the professional conduct in acting for B&B throughout these proceedings without advising both the Court and the parties that his client insurer, AMP…, refused to indemnify B&B in respect of the contractual indemnity to Leighton's." The further submission is made that AMP's solicitor "at this time ought not be permitted to cease to act for B&B, ought be required to file an affidavit disclosing all relevant facts in relation to his acting for B&B, AMP's refusal to indemnify B&B in respect of the contractual indemnity, when he first became aware B&B was in liquidation, and when he first became aware B&B had [been] de-registered." Despite a reference to "Leighton's wish to consider the filing of an affidavit as to what in fact has occurred....", that has not been done. 32 Nor has any further material in relation to these issues been filed by B&B, AMP or its solicitors. 33 We do not propose to re-list the proceedings for further oral argument but propose directions to the following effect: (a) Within 14 days from today, Leighton and / or Smith may file and serve further applications in respect of costs, together with supporting material including written submissions. Any such application must relate only to costs questions concerned with the matters discussed in the letter from AMP's solicitors. The Court does not propose to revisit the orders made on 19 April 2000 except perhaps its order that B&B pay the costs of Leighton's appeal against the dismissal of its claim for an indemnity from B&B. If Leighton proposes to pursue a claim against AMP or its solicitors other than for costs, it must do so in appropriate separate proceedings. (b) If either Leighton or Smith makes an application as provided for in this paragraph, AMP and its solicitors must file all material relied upon in reply within a further 14 days. 34 The only order which we propose at this time is that Smith's application to "revisit" the judgment delivered by the Court on 19 April 2000 be refused. 35 MEAGHER JA: Having no real option to do otherwise, I agree with my brethren. 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