Supreme Court New South Wales Medium Neutral Citation: Tanwar Enterprises Pty Limited v Bradshaw [No 2] [2013] NSWSC 1458 Hearing dates: 19 September 2013 Decision date: 02 October 2013 Before: Bellew J Decision: (i) Each party is to pay its own costs of the appeal in this Court. (ii) The costs of the proceedings in the Local Court are to abide the outcome of those proceedings. Catchwords: COSTS - costs following successful appeal brought by the Plaintiff from a decision in the Local Court - where conduct of the plaintiff's case in the court below was relevant to the discretion in respect of costs - where plaintiff's success on one ground of appeal was based upon submissions not put to the court below - where conduct of defendant in the proceedings in the court below in abandoning aspects of its defence on the day of the hearing contributed to the manner in which the proceedings unfolded before the Magistrate - whether costs should follow the event - whether the court should exercise its discretion to make some other order in light of the conduct of the proceedings by the parties in the court below - whether the court should order that the successful party on appeal pay the costs of the unsuccessful parties to the appeal - whether the court should depart from the general rule in some other way Legislation Cited: Uniform Civil Procedure Rules NSW 2005 Cases Cited: Conder v Silkbard Pty Ltd [1999] NSWCA 459 Donald Campbell & Co Limited v Pollak [1927] AC 732 Knight v Clifton [1971] 2 All ER 378 Miller v Miller (1979) 141 CLR 269 Tanwar Enterprises Pty Limited v Bradshaw [2013] NSWSC1276 Trade Practices Commission v Nicholas Enterprises Pty Limited (1979) 28 ALR 201; (1979) 42 FLR 213 Wickstead v Brown (1992) 30 NSWLR 1 Category: Costs Parties: Tanwar Enterprises Pty Limited - Plaintiff Cheryl Maree Bradshaw - First Defendant Firma Insurance Services Pty Limited - Second Defendant Representation: Mr C Jackson - Plaintiff Mr C Ackland - First Defendant Mr S Maybury - Second Defendant Remington and Co - Plaintiff Mason Black - First Defendant William Roberts Lawyers - Second Defendant File Number(s): 2013/64031 Publication restriction: Nil Decision under appeal Jurisdiction: 9109 Date of Decision: 2013-02-14 00:00:00 Before: Magistrate Bradd JUDGMENT INTRODUCTION 1In this matter I gave judgment on 13 September 2013 (see Tanwar Enterprises Pty Limited v Bradshaw [2013] NSWSC 1276) in which I concluded that due to errors on the part of the Magistrate, it was appropriate to order that the proceedings be remitted to the Local Court to be further dealt with according to law. On that occasion, for the reasons more fully expressed in the judgment, I adjourned the matter so as to allow the parties to bring in Short Minutes of Order giving effect to the conclusions that I had reached. 2On 19 September 2013 I made orders in accordance with the Short Minutes which had been signed on behalf of each party. On that occasion I also heard submissions as to the appropriate order as to costs. This judgment deals with my determination of that issue. SUBMISSIONS OF THE PARTIES AS TO COSTS 3All parties agreed that costs of the Local Court proceedings should abide the result of those proceedings once concluded. 4Further, to the extent that it might become relevant, it was agreed between the plaintiff ("Tanwar") and the second defendant ("Firma") that there should be no costs order in respect of ground 2 because of the circumstances in which that ground arose (see my earlier judgment at [89]-[91]). 5The real issue between the parties concerned the appropriate order as to the remaining costs of the appeal. 6Counsel for Tanwar submitted that costs should follow the event. He pointed out that Tanwar had been successful on each of the three grounds which had been the subject of argument. This, he submitted, was in circumstances where the first defendant ("Bradshaw") and Firma had each made a decision to attempt to retain the judgment which had been obtained in the Local Court, thereby putting Tanwar to the expense of arguing the appeal. 7In terms of its position as against Bradshaw, counsel for Tanwar relied upon the fact that I had concluded that the relevant pleadings had placed vicarious liability in issue. 8In terms of its position as against Firma, counsel for Tanwar relied upon the fact that I had found that on the whole of the material which was before the Magistrate, vicarious liability had been placed in issue and that the Magistrate had erred in his determination of that question. Counsel for Tanwar also relied upon the fact that it was not until the day of the hearing that Firma indicated that it would revise its pleadings and narrow the issues. 9Bradshaw's solicitor submitted that the errors made by the Magistrate at first instance had come about as a consequence firstly, of confusion arising out of the conduct of the proceedings by counsel for Tanwar and secondly, as a consequence of Tanwar's pleadings. He submitted that in these circumstances, the appropriate order was that each party bear its own costs of the appeal. 10Counsel for Firma submitted that this was an appropriate case in which to depart from the normal rule that costs should follow the event. He further submitted that notwithstanding that Tanwar was successful in the proceedings, I should make an order that Tanwar pay Firma's costs. 11In support of this position, Counsel for Firma submitted that the discretion as to costs was to be exercised judicially, according to the circumstances of each case. He further submitted that in the exercise of that discretion, the conduct of a party in the court below was a relevant consideration. In this regard, he pointed out that in the present case, at least in respect of ground 4, many of the submissions made to me by counsel for Tanwar, and which were material to my conclusion that such ground was made out, had never been put to the Magistrate at first instance. 12Counsel for Firma submitted that however the matter might be approached, this was not a case in which costs should follow the event. He submitted that even if I was not prepared to make an order that Tanwar pay Firma's costs, it would be appropriate to depart from the general rule in "some other way" having regard to the circumstances of the present case. In support of these submissions counsel for Firma referred me to the decisions in Miller v Miller (1979) 141 CLR 269, Wickstead v Brown (1992) 30 NSWLR 1 and Conder v Silkbard Pty Ltd [1999] NSWCA 459. CONSIDERATION 13Rule 42.1 of the Uniform Civil Procedure Rules is in the following terms: 42.1 General rule that costs follow the event 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. 14Notwithstanding the terms of rule 42.1, if I am satisfied that some other order should be made I have a discretion to depart from the general rule that costs follow the event. In appropriate circumstances, it is open to me to make an order that costs be awarded against a successful party, or to refrain from ordering costs in favour of a successful party (see generally Donald Campbell & Co Limited v Pollak [1927] AC 732). 15The discretion must be exercised according to the circumstances of the case in question and it is impossible to define the entirety of the circumstances which might justify a departure from the general rule. However, an order that a successful party pay the costs of an unsuccessful party (which was the order that I was urged to make by counsel for Firma in the present case) is rare and requires the existence of exceptional circumstances (see Trade Practices Commission v Nicholas Enterprises Pty Limited (1979) 28 ALR 201 at 208 per Fisher J citing Knight v Clifton [1971] 2 All ER 378 at 386 per Russell LJ and at 390 per Sachs LJ). 16The circumstances in which the errors of the Magistrate arose in the present case are fully considered in my earlier judgment. In my view, there are three matters of particular significance in determining the appropriate order to be made as to costs. 17Firstly, whilst I concluded at [73] that vicarious liability was ultimately put in issue as between Tanwar and Bradshaw, that situation was reached after counsel for Tanwar stated one position, then stated another, and put a final position which was at odds with his original position, and which was couched in terms which were apt to confuse. As I pointed out in my judgment (at [73]) Tanwar's position as to the issues, particularly the issue of vicarious liability, could and should have been stated with far greater simplicity and far great precision. 18Secondly, and partly as a consequence of the matters referred to in [17] above, the issue which was the subject of ground 4 of the appeal was argued before the Local Court without counsel for Tanwar putting to the Magistrate those submissions which were put to me on the hearing of the appeal. For the reasons set out in [105]-[106] of my judgment, I ultimately concluded that it was in the interests of justice to allow those submissions to be made on appeal. However, the fact remains that they were not made in the court below. Had they been made, and had the Magistrate had the assistance of counsel, it is at least possible that the Magistrate would not have erred as he did. 19Thirdly, as I pointed out in my judgment (at [25]), Firma filed a lengthy defence to Tanwar's cross-claim which placed a number of matters in issue. Many of those issues were abandoned after the hearing before the Magistrate had commenced, in circumstances where no previous indication appears to have been given that this course would be taken. No reason was ever proffered, either to the Magistrate or to me, which explained why the issues could not have been narrowed before that time. Had that course been taken, the real dispute which existed between Firma and Tanwar would have been clearly defined in advance of the hearing as it should have been. The adoption of that course would, at the very least, have limited the scope for error on the part of the Magistrate. 20There is no doubt that the conduct of parties to litigation can be a relevant consideration in relation to the question of costs. In Donald Campbell and Co. Ltd (supra) Viscount Cave LC observed (at 755): .... it must be kept in view that the right to costs does not, in most cases, merely depend upon the merits of the cause as finally decided, but may, to a very great extent, depend upon the mode in which it has been conducted throughout by the parties". 21In Wickstead v Brown (supra) Handley and Cripps JJA (at 19), in a passage which has some application to the circumstances of the present case, observed (when declining to apply the general rule that costs follow the event): "Moreover the appellant's partial success in this Court has been based on arguments which were not raised below. Had these arguments been raised below it may not have been necessary to bring appeals to this Court. This is a factor which should be reflected in the orders for costs: see Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 702)". 22A similar situation arose in Conder v Silkbard Pty Ltd (supra) where Beazley JA (as her Honour then was) said at [37] (Meagher JA agreeing): "That leaves the question of costs. This is not a case where costs should follow the event. The respondent sought to uphold the judgment on the basis that adequate reasons had been given. I have found against it on that point. Additionally and more importantly, however, it conducted the case on appeal on an entirely different basis to the manner in which it conducted its case at trial. Senior counsel for the respondent conceded in both his written and oral submissions to this Court, that the order sought under s 209C was strictly unnecessary for the respondent's purposes. There is no doubt about that. The basis upon which the stay was sought was also misconceived. Although the respondent's submissions as to the proper construction of s 192 in this Court have been accepted, I do not consider that it should have its costs of the appeal because of the manner in which it conducted the case below. By the same token, counsel for the appellants, both in the court below and in this Court placed a construction on s 192 and s 209C which was totally erroneous. I do not consider, therefore, that it should be the beneficiary of a costs order." 23In my view, those aspects of the conduct of the case on behalf of Tanwar to which I have referred at [17] and [18] above are such that Tanwar should not be the beneficiary of a costs order in its favour. 24It does not follow however, that I accept Mr Maybury's submission that Firma should have the benefit of a costs order made against Tanwar. Firstly, as I have pointed out, the making of such an order requires the existence of exceptional circumstances. I do not consider that the matters relied upon by Mr Maybury fall into that category. Secondly, the conduct of the matter on behalf of Firma in the manner I have described was at least a contributing factor to the somewhat confusing manner in which the proceedings unfolded before the Magistrate. 25In all of these circumstances, this is a case in which each party should bear its own costs. Having come to that view, it is not necessary for me to make a specific order in respect of the costs as they relate to ground 3. ORDERS 26For the forgoing reasons I make the following orders: (i)Each party is to pay its own costs of the appeal in this court. (ii)The costs of the proceedings in the Local Court are to abide the outcome of those proceedings. ********** 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. Decision last updated: 03 October 2013