Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: The Nominal Defendant v Ross (No 2) [2014] NSWCA 370
• Hearing dates: On the papers
• Decision date: 31 October 2014
• Before: Beazley P at [1]; Meagher JA at [1]; Hoeben JA at [1]

Decision

Make the following orders in addition to those made in The Nominal Defendant v Ross [2014] NSWCA 212.

(3) The respondent is to pay 30 percent of the appellant's costs of the appeal.

(4) That the respondent have a certificate under s 6 of the Suitors' Fund Act 1951 if otherwise qualified.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: COSTS - costs of appeal - general rule that costs follow the event - departing from the general rule - where there has been a mixed outcome in the proceedings - global view of the outcome of proceedings appropriate.
• Legislation Cited: Civil Procedure Act 2005 - s98; Suitors Fund Act 1951 - s6(2); Uniform Civil Procedure Rules 2005 - r42.1
• Cases Cited: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007]NSWCA 373; James & Ors v Surf Road Nominees Pty Limited & Ors (No 2) [2005] NSWCA 296; Seller v Jones [2014] NSWCA 19; The Council of the NSW Bar Association v Nash [2013] NSWCA 466; The Nominal Defendant v Ross [2014] NSWCA 212
• Category: Costs
• Parties: The Nominal Defendant - Appellant; Ysaiah Ross - Respondent
• Representation: Counsel: Mr K Rewell SC/Mr W Fitzsimmons - Appellant; Mr R Sheldon SC/Ms E Welsh - Respondent; Solicitors: McCourts Solicitors - Appellant; Brydens Law Office LP - Respondent
• File Number(s): 2013/248126

Decision under appeal

• Citation: [2013] NSWDC 110
• Date of Decision: 2013-07-19 00:00:00
• Before: Levy SC DCJ
• File Number(s): 2011/157874

Judgment

1 THE COURT: The Court delivered judgment in this appeal on 3 July 2014: The Nominal Defendant v Ross [2014] NSWCA 212 (the principal judgment). The judgment of the primary judge in favour of the respondent in the amount of $328,540 was set aside and judgment was given in favour of the respondent for $266,939. The orders of the primary judge that the appellant pay the respondent's costs of the trial were left unaffected.

2 Three issues were raised by the appellant in the appeal:

(1) The finding of negligence against it.

(2) The extent of contributory negligence found against the respondent.

(3) Whether the respondent complied with his obligation of due inquiry and search.

The appeal in respect of issues (1) and (3) was dismissed but upheld in relation to (2). The finding of contributory negligence against the respondent was increased from 20 percent to 35 percent.

3 This judgment deals with the costs of the appeal.

Submissions

4 The appellant submitted that costs should follow the event in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (UCPR) (Seller v Jones [2014] NSWCA 19 at [56]).

5 In relation to discretionary considerations, the appellant relied upon the following:

(a) The costs of the hearing of the appeal were not increased by the failure of the appeal in respect of primary liability and due inquiry and search.

(b) There was no cross-appeal.

(c) The reduction in damages as a percentage of the primary judgment was significant.

(d) Where there are multiple issues, the Court should not generally attempt to differentiate between those issues unless a particular issue or group of issues is clearly dominant or separable (Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]).

(e) The issue of primary liability was not so dominant or separable as to require the Court to differentiate between those issues.

(f) The issue of due inquiry and search should not be treated as "dominant or separable" because it was intimately related to the question of primary liability so that if the respondent failed on that ground, then the claim itself failed.

(g) It would be just and reasonable for costs to follow the event and that there be no apportionment.

(h) The respondent, subject to the provisions of s6(2) of the Suitors Fund Act 1951 may by application to this Court seek an indemnity certificate in respect of the appeal.

6 The respondent submitted that the appellant should pay his costs of the appeal.

7 The respondent submitted that while there was some overlap between issues (1) and (2), issue (3) raised an entirely unrelated question.

8 The respondent submitted that in this case the liability issues were clearly separable from the due inquiry and search issue (James & Ors v Surf Road Nominees Pty Limited & Ors (No 2) [2005] NSWCA 296 at [34]). He submitted that the due inquiry and search issue occupied a significant part of the time taken to hear the appeal (Salmon at [7] and [11]).

9 In relation to discretionary matters, the respondent relied upon the following:

(a) The relative seriousness of matters on which success was achieved is a relevant factor (The Council of the NSW Bar Association v Nash [2013] NSWCA 466 at [107]).

(b) The appellant succeeded on only one of the three grounds it raised and the practical impact of its success on that ground was limited.

(c) The effect of the Court's decision was to reduce the damages to which the respondent was entitled by $61,601. When one had regard to the interest payable on the damages not already paid ($23,000) the net improvement in the position of the appellant was less than $38,000.

(d) The respondent was substantially successful when regard was had to the number of issues fought and the monetary impact of each of them.

10 As a fall-back position, the respondent submitted that if the Court were against his primary position, the appellant should pay two-thirds of the costs of the appeal based on the extent of its success.

Consideration

11 The starting position is s98 of the Civil Procedure Act 2005 (CPA) which provides that, subject to the rules of the court, costs are in the discretion of the Court including by whom, to whom and to what extent costs are to be paid. That having been said, regard needs to be had to rule 42.1 UCPR, i.e. if the Court makes any order as to costs, it should be in terms that costs follow the event unless the circumstances justify some other order.

12 Here there were three issues which were readily severable one from the other, although there was an overlap in the facts relating to primary liability and contributory negligence. The appellant was successful in setting aside the finding of contributory negligence but was otherwise unsuccessful. The issue upon which the appellant was successful did not occupy a significant part of the hearing time or of the written submissions. Nonetheless, the appeal was necessary to set aside the judgment below if that issue was made out in favour of the appellant.

13 There are other considerations. The appellant's challenge to the finding of primary liability had little prospect of success. The facts relating to it were not in dispute and a finding of negligence against the appellant was almost inevitable. The issue of due inquiry and search was quite separate, occupied most of the time in the appeal and was complex.

14 Taking those matters into account, the question is how the appellant's limited success should be properly reflected in the costs order on appeal. In the circumstances of this appeal, the Court is of the opinion that it is preferable to make a costs order which reflects an overall assessment of the respective successes of the parties on appeal, rather than orders directed to specific issues on which one or other of the parties was successful. This is one of those cases where a global view of the outcome of the proceedings should be taken.

15 Taking into account the respective success of the parties on the issues raised in the appeal and the time taken to argue those issues, but also having regard to the reduction in damages, the following orders should be made in addition to those already made.

"(3) The respondent is to pay 30 percent of the appellant's costs of the appeal.

(4) That the respondent have a certificate under s 6 of the Suitors' Fund Act 1951 if otherwise qualified."

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Amendments

04 November 2014 - re-imported The Nominal Defendant v Ross [2014] NSWCA 212 instead of The Nominal Defendant v Ross (No 2)
Amended paragraphs: entire judgment

Decision last updated: 04 November 2014