Costs Follow Separate Legal Issue in Dust Diseases Tribunal Case

In a case before the Dust Diseases Tribunal, the court ordered that the unsuccessful party on a separate legal issue pay the costs attributable to that issue, following the principle that costs should follow the event.

Dust Diseases Tribunal New South Wales Medium Neutral Citation: [NAME] v [NAME] (No. 2) [2018] NSWDDT 11 Hearing dates: 14 December 2018 Date of orders: 20 December 2018 Decision date: 20 December 2018 Before: Russell SC DCJ Decision: (1) Order the [NAME] defendant to pay the plaintiff's costs on an ordinary basis up to 16 November 2018. (2) Order the plaintiff to pay the [NAME] defendant's costs on an ordinary basis from 17 November 2018, including the costs of the further costs argument. Catchwords: COSTS – identification of the event – only issue determined by the Tribunal was a separate legal issue identified by the parties – case appropriate for an order that the unsuccessful party (the plaintiff) on that separate issue pay the costs of the [NAME] (the [NAME] defendant) attributable to that issue. Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005 Cases Cited: [NAME] v [NAME] (Coolah) Pty Ltd [2012] NSWSC 1383 Jelbarts Pty Ltd v McDonald [1919] VLR 478 Williams v Stanley Jones & Co Ltd [1926] 2 KB 37 Category: Costs Parties: [NAME] (Plaintiff) [NAME] ([NAME] Defendant Representation: Counsel: [redacted] [NAME] ([NAME] Defendant)

Solicitors: [redacted] [NAME] ([NAME] Defendant) File Number(s): DDT 391/17

Judgment 1. In this matter I gave judgment for the plaintiff against the [NAME] defendant on 30 November 2018 in an amount to be agreed between the parties, calculated by deducting the amount of NZD 136,705.79 from agreed damages of $415,000. I directed the parties to bring in a form of order to reflect this finding.

2. On 14 December 2018 the parties again appeared before me and announced the agreed figure. I then gave judgment for the plaintiff against the [NAME] defendant for $289,583. That left to be determined the question of costs.

3. While the plaintiff succeeded in obtaining a judgment against the [NAME] defendant, the [NAME] defendant submitted that the defendant should pay the plaintiff's costs on the ordinary basis up to 16 November 2018, and the plaintiff should pay the [NAME] defendant's costs on the ordinary basis from 17 November 2018.

4. The basis for this submission emerges from correspondence between the parties by which an agreement as to damages was reached. On 30 August 2018 the solicitors for the plaintiff wrote to the solicitors for the [NAME] defendant offering to resolve the claim for $485,000 inclusive of costs. The plaintiff proposed, in the alternative, that the parties agree upon the following heads of damages and amounts: general damages - $350,000; loss of expectation of life - $8,120; gratuitous care - $64,277.20; interest on care - $2,156.50.

5. The total of these figures was $424,553.70.

6. The solicitors for the [NAME] defendant responded by a letter dated 8 November 2018. The solicitor referred to "the alternate offer to agree on the heads of damage" set out in a letter dated 30 August 2018. The solicitor said: "We have now been instructed that our client is prepared to agree to damages, inclusive of the amount received from the [NAME], in the sum of $415,000 in respect of the same heads of damage referred to in your letter. Would you please advise whether our client's offer to agree damages, subject to any deduction for the New Zealand payment, is acceptable to the plaintiff."

1. Some further correspondence flowed in order to clarify what exactly was being offered and what could be agreed. This resulted in a letter from the solicitor for the plaintiff dated 16 November 2018 to the solicitor for the [NAME] defendant. It said: "We are instructed that the plaintiff accepts the damages proposed in your above letter, such that:

1. The [NAME] defendant is to pay the sum of $415,000, less any deduction of the amount of NZD 136,705.79 received from the New Zealand Accident Compensation Corporation that is required by determination of the Tribunal; and 2. The [NAME] defendant to pay the plaintiff's costs."

1. The trial of the sole issue in the case, being a legal issue, proceeded on 22 November 2018. The plaintiff tendered an Agreed Statement of Facts which included the following: "16. The plaintiff is entitled to a verdict and judgment against the [NAME] defendant.

17. The heads of damage claimed by the plaintiff are assessed in the sum of $415,000.

18. The plaintiff's heads of damage consist of: a. general damages; b. damages for loss of expectation of life; c. damages for gratuitous care; and d. interest on damages for gratuitous care."

Submissions for the parties 1. The solicitor for the [NAME] defendant submitted that the sole issue at the trial was the deductibility of the payment made by the New Zealand Accident Compensation Corporation. The defendant was [NAME] on that sole issue at trial and all of the court time was engaged in litigating this issue. The submission pointed to the well-known authorities concerning the discretion to award costs to a party which has been [NAME] on a separate issue. 2. [NAME] submitted that the agreement reached between the parties was "an agreement as to the heads of damage and an agreement that the issue as to deductibility of the ACC payment be left to the determination of the Tribunal."

3. While that is so, that was the end result of the negotiations. The parties had been, and remained in, dispute concerning the deductibility of the ACC payment. That was the only stumbling block to a final settlement, once they agreed that the plaintiff's damages on "full value" amounted to $415,000 in total. 4. [NAME] submitted that the [NAME] defendant had run this as a "test case" and that the result in favour of the [NAME] defendant would be to its benefit in future litigation. I reject that submission for two reasons. Firstly, there is nothing in the correspondence to suggest that the [NAME] defendant put this up as a test case. While the point had never before been decided, it was not a case of the kind where the [NAME] defendant indicated that, for better or worse, it wanted a legal issue decided by a court. Secondly, it cannot be said that my finding that the payment was deductible would necessarily benefit the [NAME] defendant in any future litigation. My decision will not be binding on any other judge. As a reading of my decision will indicate, the issue had to be decided by an examination of the particular facts in the case, in the light of the intention of parliament in relation to the New Zealand legislation.

5. In any event, if the agreement between the parties was as characterised by [NAME] in submissions, then it would seem that both parties agreed to leave the deductibility of the ACC payment to the determination of the Tribunal. Of course they did, but this was only because they could not agree on this matter, and very sensibly both parties left it as the sole issue to be determined in the case.

Consideration of the costs issue 1. Section 98(1) of the Civil Procedure Act 2005 provides as follows: "Subject to rules of court and to this or any other Act; (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid; and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."

1. Rule 42.1 of the Uniform Civil Procedure Rules 2005 provides: "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 the whole or any part of the costs."

1. To apply this rule it is necessary for a court to identify "the event" that costs will follow. In the ordinary course of litigation, the event is the judgment in favour of one party or the other. However, there is a line of authority that the "event" may refer to the result of individual issues: Williams v Stanley Jones & Co Ltd [1926] 2 KB 37; Jelbarts Pty Ltd v McDonald [1919] VLR 478.

2. In [NAME] v [NAME] (Coolah) Pty Ltd [2012] NSWSC 1383 at [29] Justice Schmidt found that the event may be identified by giving consideration to the practical outcome of the proceedings, by reference to who the [NAME] in the proceedings was, having in mind the matters over which the parties joined issue and who succeeded on them.

3. The deductibility of the payment by the [NAME] was purely a legal issue. After agreement had been reached on damages (subject to deductibility) it remained the sole issue for determination. The hearing on 22 November 2018 dealt with that issue and no other, as did the judgment delivered on 30 November 2018.

4. The [NAME] defendant acknowledges that it should pay the plaintiff's costs on the ordinary basis up to 16 November 2018 but says that the plaintiff should pay its costs on the ordinary basis from 17 November 2018.

5. It does seem to me that the only issue in play after 16 November 2018 was the legal issue of deductibility. All money spent by both parties on lawyers after that date related to that issue. The issue of deductibility was a separate legal issue. The outcome of the hearing on 22 November 2018 on that separate issue was that the [NAME] defendant succeeded on the only matter put before the Tribunal.

6. To reflect those matters, I find that the appropriate order is that sought by the [NAME] defendant.

Orders 1. My further orders are: 1. Order the [NAME] defendant to pay the plaintiff's costs on an ordinary basis up to 16 November 2018. 2. Order the plaintiff to pay the defendant's costs on an ordinary basis from 17 November 2018, including the costs of the further costs argument.

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