HICKS v MERCY FAMILY CENTRE [2002] NSWSC 661

New South Wales Supreme Court

CITATION : HICKS v MERCY FAMILY CENTRE [2002] NSWSC 661 FILE NUMBER(S) : SC 20111 of 1997 HEARING DATE(S) : 14 May 2002 JUDGMENT DATE : 26 July 2002

Plaintiff: Simon Erick HICKS PARTIES : First Defendant: Mercy Family Centre Limited Second Defendant: Cindy Ip JUDGMENT OF : Hulme J at 1

Plaintiff: DR Conti COUNSEL : First Defendant: GM Gregg Second Defendant: I Harrison SC Plaintiff: McClellands SOLICITORS : First Defendant: Corrs Chambers Westgarth Second Defendant: Spark Helmore CATCHWORDS : Judgment as to costs DECISION : See paragraph 28

- 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

HULME J

Friday 26 July 2002

20111 of 1997

HICKS v MERCY FAMILY CENTRE LIMITED AND ANOR JUDGMENT 1 HULME J: In Reasons delivered in these proceedings on 9 January last, I held that the Plaintiff was entitled to succeed against the Second Defendant but that the First Defendant was entitled to succeed in its defence to the Plaintiff's claim. One of the matters I said was:- "Although the matter has not been argued, the Plaintiff's claims against the two Defendants were separate and in no sense arising from any doubt as to the events which led to Simon's injury. In these circumstances, I see no basis for concluding that the Second Defendant should be the ultimate bearer of the First Defendant's costs." 2 However, at the time of delivering those Reasons, I was asked to defer making any final decision on the question of costs. That topic was then stood over until 14 May when there was some discussion. Subsequently, on or about 27 May, written submissions on behalf of the Plaintiff were made followed on 4 June by submissions filed for the Second Defendant. These Reasons are directed to the topic of costs. 3 It is not necessary here to repeat at length, matters canvassed in my principal Reasons. Perhaps sacrificing accuracy for brevity, the Plaintiff when aged 1, had fallen off a sofa when under the care of the Second Defendant. I held the latter liable for a casual act of negligence. Although the circumstances of the Plaintiff's fall were put in issue in the Second Defendant's pleadings, there seems to have never been any real doubt as to those circumstances (except possibly for some matters of detail). The Second Defendant had described them to at least the Plaintiff's mother and Mrs White soon after the event. 4 The Plaintiff's mother had been put in touch with the Second Defendant by the First Defendant as part of the latter's business operations. The First Defendant exercised some supervisory role by interviewing the Second Defendant when she first proposed to become a children's day carer, by visiting the Second Defendant's home and considering its facilities and safety prior to accepting her as someone to whom parents looking for carers could be referred and finally, by carrying out every 2 weeks or so unannounced visits by way of spot checks on the Second Defendant. 5 The claim against the First Defendant was largely based on these facts and representations as to its ability in its activities and as to what it would do. Both Defendants were joined by the Plaintiff from the outset of proceedings, on 14 February 1997. 6 While the Second Defendant's defence at all times denied or did not admit the significant of the various allegations in the Statement of Claim, there was nothing otherwise in the Defence of the Second Defendant which could fairly be regarded as an inspiration for the continuation of the proceedings by the Plaintiff against the First Defendant. 7 There were cross claims between the Defendants. That of the Second Defendant, not filed until 6 August 2001, fell into 4 parts. In the first, the Second Defendant repeated the allegations in the Statement of Claim, asserted that any damage suffered by the Plaintiff occurred "as a result of the negligence of the (First) Defendant by itself" and claimed contribution or indemnity. In the second part of her Cross-Claim, the Second Defendant alleged an agreement between her and the First Defendant, and that, in the circumstances, the First Defendant knew or ought to have known that the Second Defendant would rely on the First Defendant's published safety requirements and advice it provided (and on it) exercising all due care as to best practices to ensure the safe caring of children placed in the care of the Second Defendant by the First Defendant. This part of the Cross-Claim went on to allege negligence by the First Defendant in failing to advise, inter alia that it was necessary to have cots available. 8 The third part of the Cross-Claim alleged that there was an implied term of the agreement that the First Defendant would exercise all due care, skill and diligence in providing appropriate directions as to best practices to ensure the safe care of children and breached that term by failing to advise, inter alia, that it was necessary to have cots available. In the fourth part of the Cross Claim the Second Defendant asserted that the failure of the First Defendant to provide the Second Defendant with an adequate number of cots amounted to a breach of Part 3 of the Children (Care and Protection) Act. 9 The absence of the cots was added as a particular of negligence in the Plaintiff's Further Amended Statement of Claim filed at the time of the hearing in September 2001, though not in an Amended Statement of Claim filed in October 2000. Prior to the Further Amended Statement of Claim, those nearest to this complaint were of failing to take all reasonable and effective measures to ensure that the Plaintiff did not fall to the floor and failing to ensure that the Plaintiff was not in a position of danger. The Plaintiff did not seek to rely on the other fresh matters pleaded in the Second Defendant's Cross-Claim. 10 When regard is had to the other matters pleaded by the Plaintiff against the First Defendant, it is again impossible to conclude that the matters raised by the Second Defendant made any significant contribution to the Plaintiff's suing of the First Defendant or to the maintenance or breadth of its claim. 11 The situation seems to me to be one where the Plaintiff either did not direct enough attention to the matter or, not content with its prospects of success against, or perhaps recovery of damages from, the Second Defendant elected to sue the First Defendant also. ? DELETE 12 I take the basic principle governing the entitlement of a Plaintiff to have a successful defendant's costs paid, directly or indirectly, by an unsuccessful defendant to be that "those costs have been reasonably and properly incurred by the Plaintiff as between him and the (unsuccessful) defendant". As an expression of the test, those words were used in Gould v Vaggilas (1983-1985) 157 CLR 215 by Gibbs CJ at 230, and by Wilson J (with whom Murphy J concurred) at 247. It is not merely a question of whether by some other standard, e.g. a Plaintiff looking after his own interests or as between the Plaintiff and the successful Defendant, the Plaintiff's decision was reasonable - Hang v A & R Brown Ltd (1948) 1 KB 515 at 522 cited by Williams J in Johnsons Tyre Fariday Pty Ltd v Mappa Corporation (1948) 77 CLR 544 at 572. 13 Commonly matters which go to satisfy the higher or more stringent test will lie in conduct of the unsuccessful defendant or in uncertainty in the mind of the Plaintiff, not dissipated by the unsuccessful defendant, as to the circumstances of the event which precipitated the proceedings. In Gould v Vaggilas Gibbs CJ endorsed the remarks of Blackburn CJ in TA INSERT p230.4-.5 14 In the same case Brennan J (at 260) said that an order of the nature under consideration can be made "only if the conduct of the unsuccessful defendant in relation to the plaintiff's claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought." See also Larkensteen v Jones (No2) (1988) 93 FLR 442 at 449. Actions of a unsuccessful Defendant which can be taken into account include Cross-Claims and other conduct after the commencement of proceedings see – Altassier and Victorian Railways Commissioner (1974) VR33 at 35; Fennell v S & E Services Holdings (1988) 475 ASR6 at 20. 15 In this case the circumstances of the Plaintiff's fall were known to the Plaintiff's mother and tutor. The Second Defendant had informed her of what had occurred. The facilities which the Second Defendant had to care for the Plaintiff, including the absence of a cot, was also known to Mrs Sendt. Although I do not suggest liability in the Second Defendant was clear, I do not see in that or any conduct of the Second Defendant anything which, as between the Plaintiff and the Second Defendant made it reasonable for the Plaintiff to sue or maintain its action against the First Defendant. 16 And even if there was something which argued in that direction it was, in the context of the Plaintiff's proceedings against the First Defendant, such a minor matter in that I would not be disposed to exercise my discretion in the Plaintiff's favour. It strikes me that by far the largest factor in the Plaintiff suing the First Defendant was its own "error or overcaution" - to borrow the words of Gibbs CJ in Gould v Vaggilas at 229. 17 Although there is some degree of connection between the Plaintiffs claims against the two defendants, e.g. the Second Defendant did not have a cot available, the First Defendant did not sufficiently supervise so as to ensure the Second Defendant had a cot available, the claims against the Second Defendant are fundamentally distinct. Even if in this case it were possible to say that "the joinder of the successful defendant was reasonable and proper to ensure recovery" - and I am not sure that is an appropriate description – I think it more appropriate to describe the situation as one where the Plaintiff, unsure whether the circumstances would be held to constitute negligence on the part of the Second Defendant, sought someone else at whom it could point a finger and then pointed as many fingers as it could think of. The changes to the claims made against the First Defendant wax eloquently in that direction. 18 When regard is had to all of the circumstances, I am not persuaded that this is a case where the costs of the First Defendant should be borne by the Second Defendant rather than the Plaintiff. 19 On 14 May I was also informed of an arrangement made at about the time the Protective Commissioner was appointed as the Plaintiff's tutor whereby costs would not be sought by the First or Second Defendants against him. Hence the order for costs which my Reasons of 9 January envisaged in favour of the First Defendant against the Plaintiff should be modified. The costs orders made below reflect that. 20 On 14 May it was also pointed out to me that in my principal reasons I had not dealt specifically with what I have described as the second to fourth claims made in the Second Cross Claim. Based on my conclusions as to the respective liability of the Defendants to the Plaintiff I had said in those Reasons merely:- "48. Thirdly, it follows from the conclusions at which I have arrived that neither the First or Second Defendants (sic) succeeds on its Cross-Claim." 21 That statement remains correct so far as what I have described as the first claim made in the Second Cross-Claim, the claim for contribution. However, Mr Harrison SC, the appearing for the Second Defendant, asked that I decide the remaining issues. Mr Gregg, appearing for the First Defendant submitted that there was utility in my doing so if I was not functus officio. At the hearing on 14 May no one suggested that my orders had been taken out and my search of the Court file indicates the same. In those circumstances I propose to deal with the other issues in the Second Defendant's Cross-Claim. Because I have found in the First Defendant's favour on the Plaintiff's claim, there is no occasion to reconsider the First Defendant's Cross-Claim. 22 The reasons I gave for concluding, when dealing with the Plaintiff's claim, that the Second Defendant's failure to have a cot did not constitute or demonstrate a lack of reasonable care apply with equal force to the First Defendant. I do not regard the failure of the First Defendant to give advice to the effect that cots were necessary as negligent or a breach of any term such as is alleged in the Second Cross-Claim. 23 In the fourth part of the Cross Claim the Second Defendant asserted that the failure of the First Defendant to provide the Second Defendant with an adequate number of cots amounted to a breach of Part 3 of the Children(Care and Protection) Act. A simple answer to that claim is that there is nothing in Part 3 that imposes any such requirement. There is, as I pointed out in my principal Reasons, in the Family Day Care Services Regulation 1989 made under the Act a Code of Conduct which included the following:- "3 (1) A registered caregiver must provide an adequate number of beds and cots for the children in his or her care, having regard to their number, ages and the hours of the day during which they are in the caregiver's home." (2) A registered caregiver must ensure that: (a) each bed or cot for children in his or her care is equipped with a clean and comfortable mattress and bed clothing that is appropriate to the climate; and …. 24 Regulation 14 obliged the First Defendant to give the Second Defendant a copy of the Code before placing any child with her and this occurred. Regulation 14 also obliged the First Defendant to provide guidance and information to assist in the Second Defendant' compliance with the Code but there was no obligation under the Regulation on the First Defendant to provide cots. 25 And such obligations as there were related to the provision of beds or cots. As I said in my principal Reasons, "even if a mattress on the floor is not a "bed" within that provision, the provision does not detail when a cot rather than a bed, one of the sources of danger to Simon in this case, is to be used. Furthermore, the terms of the provision seem to me to indicate that it is not directed at safety but rather to the needs of young children for sleep and cleanliness." 26 In short, I do not see in the statutory provisions, the obligation pleaded or any breach of it. 27 Accordingly I adhere to the decision made previously that there should be a verdict and judgment for the Cross Defendants on the Cross-Claims. 28 In conformity what I said earlier in these Reasons, the orders for costs I make are:- 1. Order the Second Defendant to pay the Plaintiff's costs of the claim against her. 2. Order that the Plaintiff by his former tutor Susan Elizabeth Sendt pay the First Defendant's costs up to the time of the appointment of the Protective Commissioner as the Plaintiff's tutor. 3. Order the Cross Claimants to pay the Cross Defendants' costs of the Cross Claimants' respective Cross Claims.