District Court New South Wales Medium Neutral Citation: Cockburn v The Trust Company Ltd (No 3) [2014] NSWDC 134 Decision date: 24 July 2014 Before: Cogswell SC DCJ Decision: (1) Plaintiff pay first defendant's costs of the proceedings on the ordinary basis up to 18 March 2013. (2) Plaintiff pay first defendant's costs on an indemnity basis from 19 March 2013. (3) Second defendant pay the plaintiff's costs of the proceedings, including costs which the plaintiff is obliged to pay by reason of orders (1) and (2). Catchwords: Procedure - costs - offer of compromise made - Calderbank letter - Bullock order - conduct of unsuccessful second defendant - second defendant had information about occupation of premises. Cases Cited: ACQ v Cook (No 2); Aircair Moree v Cook (No 2); Cook v Country Energy (No 2); Country Energy v Cook (No 2) [2008] NSWCA 306. Calderbank v Calderbank [1975] 3 All ER 333. Steppke v National Development Commission (1978) 39 LGRA 94. Category: Costs Parties: Raymond Cockburn (plaintiff) The Trust Company Limited (first defendant) Jeminex Brands and Operations Pty Ltd (formerly Beaver Brands Pty Ltd) (second defendant) Representation: Counsel: L Friedwald (plaintiff) Solicitor: HWL Ebsworth (first and second defendants) File Number(s): DC 2012/00176113 Judgment 1For reasons which I gave on 2 June 2014, I entered a verdict and judgment in favour of Mr Raymond Cockburn against Jeminex Brands & Operations Pty Ltd. In addition, I entered a verdict and judgment against Mr Cockburn in favour of The Trust Company Ltd. The Trust Company Ltd was the first defendant in the proceedings and Jeminex Brands & Operations Pty Ltd was the second defendant. I will refer to them as the first and second defendants. 2On 18 March 2013, the first defendant provided the plaintiff with an offer of compromise. In summary, the offer was that judgment would be entered for the first defendant and each party pay their own costs. In addition, reliance was placed on the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333. The letter accompanying the offer of compromise pointed out that the first defendant had supplied copies of the lease between it and the second defendant and the letter reminded the plaintiff that it did not admit that it was the occupier of the premises. 3The first defendant now asks me that I order the plaintiff to pay its costs up to the time of the offer of compromise on an ordinary basis and, after that, on an indemnity basis. 4This was not a straight-forward matter. So far as the occupation of the premises was concerned, the plaintiff took the precaution of suing two defendants. One of those defendants was entirely successful. I see no reason why I ought not to order the plaintiff to pay the first defendant's costs, on an ordinary basis, up to the date of the offer of compromise, namely 18 March 2013. 5The waters become muddied after 18 March 2013. I do not mean that in a critical sense. The plaintiff's solicitors wrote to the second defendant's solicitors asking whether they were "prepared to concede that the duty of care has been wholly delegated to you by the First Defendant." The second defendant filed its defence later that month, on 26 July 2013. It admitted that the "first and/or second defendant was the occupier" of the premises where the accident occurred. That was, of course, an admission made by the second defendant. But there is no evidence that the second defendant was authorised to make that admission on behalf of the first defendant. The second defendant did not plead to the allegation by the plaintiff that "the first defendant occupied the premises pursuant to a lease agreement entered into with the registered proprietor of the premises." The second defendant pointed out that it does not so plead "[a]s it raises no allegation against it." However, the second defendant pleaded in the alternative that "if any liability to the plaintiff is to be attributed to the defendants that such liability would lie entirely with the first defendant." 6First, I should say that I see no reason to order otherwise than that the plaintiff should pay the first defendant's costs on and from 19 March 2013 on an indemnity basis. Ms L Friedwald of counsel, who appears today for the plaintiff on this application, has argued that I should make a Sanderson order, directing the second defendant to pay HIS HONOUR: I will just suspend my judgment. Ms Friedwald, I think it's a Bullock order that you would need rather than a Sanderson. A Sanderson order by the looks of it - and I am looking at ACQ - there would be no order for a plaintiff to pay any costs, and I am going to order you to pay the costs of the first defendant, but the other defendant pays them direct. In this case, I'm ordering your client to pay them and the Bullock order would be that, if you are successful, that the costs which you will get against the second defendant should include the costs you are ordered to pay against the first defendant. That is my understanding from para 31 of ACQ. FRIEDWALD: If that is the proposed course, your Honour, I would not have any problem with that. As I said before, it's a mere technicality, in terms of the changing of the money, so I am content for that course. HIS HONOUR: All right. Thank you. 7It is clear from an authority provided to me by Ms L Patrick, who appears for the second and first defendants - namely, ACQ v Cook (No 2); Aircair Moree v Cook (No 2); Cook v Country Energy (No 2); Country Energy v Cook (No 2) [2008] NSWCA 306 - that I must focus on any conduct of the second defendant before making a Bullock order. The question I must ask myself, according to a passage extracted at [32] in his judgment in ACQ by Campbell JA (with whom Beazley and Giles JJA agreed) from the judgment of Blackburn CJ in Steppke v National Development Commission (1978) 39 LGRA 94, is whether "the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant." Relying on authority referred to in [36], Campbell JA also said that the "court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion." 8I propose to order the second defendant to pay that part of the plaintiff's costs which are attributable to the plaintiff having to pay the first defendant's costs. My reasons are that the second defendant made it clear from its allegation in [16] of its defence to the amended statement of claim - that having been filed on 26 July 2013 - that liability should "lie entirely with the first defendant" in the proceedings. 9The first defendant and the second defendant were closely related commercially, in that the second defendant was a sub-tenant of the first defendant, which, in turn, was sub-tenant to a person who was not a party to the proceedings. I am not critical of the conduct of the second defendant, but it made its position clear that the plaintiff had to make its case against the first defendant. At the end of the day, through counsel, both defendants submitted that there was "no evidence before the Court that the first defendant occupied any part of the land demised under the lease". I take that reference from [5] of counsel for the defendant's written submissions dated 23 May 2014, which became marked for identification 6. On the other hand, in [8], it was submitted that there is "no doubt that the second defendant occupied the warehouse at the time of the accident." 10It is true, as Ms Patrick argued, that the plaintiff might have sought particulars or administered interrogatories to obtain more information about the first defendant, but it is also true that the second defendant had more information about the first defendant and the respective positions of the defendants so far as occupation of the relevant premises was concerned. To my mind, it is fair in those circumstances that the second defendant should pay that part of the plaintiff's costs which are attributable to the costs which he has been ordered to pay to the first defendant. 11Accordingly, the costs orders I make are these - (1)that the plaintiff pay the first defendant's costs of the proceedings on the ordinary basis up to 18 March 2013; (2)that the plaintiff pay the first defendant's costs on an indemnity basis from 19 March 2013; (3)that the second defendant pay the plaintiff's costs of the proceedings, including costs which the plaintiff is obliged to pay by reason of orders (1) and (2). ********** 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: 20 August 2014