New South Wales Court of Appeal CITATION : NORTHERN RIVERINA COUNTY COUNCIL v PETTS & ANOR (NO 2) [2002] NSWCA 89 FILE NUMBER(S) : CA 40019/01 HEARING DATE(S) : 7 March 2002 JUDGMENT DATE : 7 March 2002 PARTIES : NORTHERN RIVERINA COUNTY COUNCIL ( Appellant) v Margaret PETTS & Maxwell PETTS (as Executors of the Estate of Stephen James PETTS) (First Respondent) & Masling Rotor Wing Pty Ltd (Second Respondent) (NO 2) JUDGMENT OF : Mason P at 1; Meagher JA at 15; Hodgson JA at 16 LOWER COURT JURISDICTION : Supreme Court - Common Law Division LOWER COURT CLD R40001/96 FILE NUMBER(S) : LOWER COURT James J JUDICIAL OFFICER : Appellant: G O'L Reynolds SC COUNSEL : First Respondent: D. Conti Second Respondent: C Hoeben SC Appellant: Phillips Fox SOLICITORS : First Respondent: Robb & Associates Second Respondent: Connery & Partners CATCHWORDS : Amendment of orders - costs (ND) DECISION : See par 12 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40019/01 MASON P MEAGHER JA HODGSON JA Thursday 7 March 2002 NORTHERN RIVERINA COUNTY COUNCIL v MARGARET PETTS AND GREGORY PETTS (AS EXECUTORS OF THE ESTATE OF STEPHEN JAMES PETTS) AND ANOR (No 2) JUDGMENT 1 MASON P: On 4 October 2001, this Court pronounced the following orders: 1. That the appeal be allowed; 2. That the verdict in favour of the First Respondent against the Appellant be set aside; 3. That the verdict in favour of the Second Respondent against the Appellant be set aside; 4. That a verdict be entered for the Appellant in respect of the First Respondent's action; 5. That a verdict be entered for the Appellant in respect of the Appellant's Cross-Claim against the Second Respondent; 6. That a verdict be entered for the Appellant in respect of the Second Respondent's Cross-Claim; 7. That the First Respondent and Second Respondent repay to the Appellant, with interest, the money paid pursuant to the Judgment of the Court below. Liberty to apply if there is disagreement about the rate of interest; 8. That the First Respondent and/or Second Respondent be ordered to pay the costs of these proceedings and of the proceedings below. (see Northern Riverina County Council v Petts and Anor [2001] NSWCA 341 at [11]). 2 The plaintiffs, who represent the estate of the late Stephen Petts, sued the council for negligence. That claim succeeded at first instance but this Court overturned the verdicts in favour of the Petts' interests and substituted a verdict for the council. 3 The defendant was the employee of Masling Rotor Wing Pty Limited and that company, or its insurers, had paid him and perhaps his estate, workers compensation. 4 In the Common Law Division there were two cross claims. The first was brought by the council against Masling. It was brought in contract and tort; and it alleged that Masling had breached its contract with the council, or alternatively that it was a tortfeasor liable to the deceased and therefore liable to contribute to the damages which the plaintiffs claimed. This first cross claim failed at first instance, essentially because James J was not satisfied that the employer's conduct caused cumulative fatigue, and therefore contributed to the accident. James J entered a verdict for Masling on the first cross claim. 5 The second cross claim was based on s 151Z of the Workers Compensation Act. Masling, by bringing that cross claim in these proceedings, was able to claim interest which it could not have done had it just waited for the proceedings to be determined by the common law court. That second cross claim was dependent on the plaintiffs obtaining a verdict against the council. They got such a verdict at first instance and accordingly James J entered a verdict for Masling against the council on the second cross claim for $144,552. James J ordered the council to pay the plaintiffs' costs and Masling's costs of the proceedings in the Common Law Division. 6 In the Court of Appeal, the council joined the plaintiffs as first respondent and Masling as second respondent. It sought to reinstate the verdict on the first cross claim by having the Court of Appeal find that Masling had breached its contract with the council and thereby contributed to the deceased's injuries; alternatively that there should be apportionment as between tortfeasors each of whom were liable. However, at the start of the hearing of the appeal the council abandoned its appeal against Masling. Furthermore, the ultimate failure of the plaintiffs' claim against the council by virtue of the orders in the appeal meant that there was nothing upon which to base a claim for indemnity or contribution by the council under the Law Reform (Miscellaneous Provisions) Act 1946. 7 It follows, that this Court should not have made order 5 in the appeal. We should have left standing the verdict in favour of Masling on the first cross claim. Everybody agrees with that. It is therefore common ground that order 5 must be set aside. 8 The real contest is about costs. First, the costs of the Court of Appeal which are dealt with in order 8. Masling submits that it should get its costs of the appeal from the appellant, or alternatively that there should be no order affecting it as to costs. It relies upon the late abandonment of the council's appeal against it in relation to the first cross claim. The problem with that is that when one looks at the written submissions and the oral submissions of Masling it is clear that that company made common cause with the plaintiffs in the appeal. The written submissions acknowledged an expectation that the appellant was not really pressing the appeal against Masling and really addressed the rights as between the plaintiffs and the council. There were also oral submissions along those lines and it is a matter in which Masling had a clear financial interest. I would not disturb the order for costs in relation to the appeal. 9 However the order for costs in relation to the Court below is another matter, and there are additional matters that have been brought to our attention which persuade me that we ought to vary order 8. 10 In the first place it is now clear that there were two days hearing after the main judgment was given by James J, and that they were exclusively referable to Masling's cross claim against the council. There were obviously some other costs in the proceedings that could be so characterised. Masling made common cause with the plaintiffs at trial, essentially in aid of that cross claim and its interest in that cross claim. There were also the costs referable to the council's cross claim against Masling. That cross claim failed before James J, in effect, on its own lack of merit. The fact that the Court of Appeal order provided an additional reason why it was unnecessary, does not really disturb the fact that the reasons of James J explain why that cross claim failed in its own right and costs should address that cross claim independently. 11 I would not, however, disturb the general thrust of order 8 in relation to the sharing between the plaintiffs and Masling of the burden of the council's costs of the proceedings at first instance. It seems to me that there is enough material to show that Masling had a very real interest in being party to those proceedings because of the claim for interest under its cross claim and that it did participate to a degree beyond its particular concern under the cross claims. 12 So the orders that I propose should be made are that orders 5 and 8 be set aside and in lieu of order 8 the following orders should be made: order that the costs exclusively referable to Masling's cross claim against the council be paid by Masling; order that the costs exclusively referable to the council's cross claim against Masling be paid by the council; and otherwise order that the plaintiffs and Masling pay the council's costs of the proceedings at first instance. 13 Subject to anything that counsel would wish to put, I would propose that there be no order as to the costs of the motion before us. 14 I stated three orders in lieu of the old order 8. I want to add another as, in effect the first, which is an order that Masling and the plaintiffs pay the council's costs of the appeal, and have a certificate under the Suitors Fund Act if otherwise qualified. 15 MEAGHER JA: I agree. 16 HODGSON JA: Yes I agree. MASON P: Does anyone want to say anything about the costs of the motion? REYNOLDS : Your Honour, we would submit they should be costs in the appeal. MASON P: No, they will be as indicated. ********** 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.