Background
David Ward was injured while travelling as a passenger in a specialised mining vehicle at Appin Colliery. The vehicle’s driver was employed by WorkPac Mining Pty Limited, but the Court had held in the principal judgment that Illawarra Coal Holdings Pty Limited was the employer pro hac vice and therefore the party vicariously liable for the driver’s conduct. Ward succeeded against Illawarra Coal but not against WorkPac, which was not otherwise negligent.
The original orders awarded Ward $3,588,174.17 against Illawarra Coal, required Illawarra Coal to pay Ward’s costs, and required Ward to pay WorkPac’s costs. Ward then sought a Sanderson order requiring Illawarra Coal to pay WorkPac’s costs, including costs associated with the first cross-claim. The defendants subsequently resolved the cross-claim costs issues by consent, and the Court also needed to adjust the judgment orders to account for workers’ compensation payments.
The Court’s Holding
The Court dismissed Ward’s motion for a Sanderson order. Although it was reasonable for Ward to sue WorkPac given the initial uncertainty about responsibility for the driver and Illawarra Coal’s denial of liability, reasonableness alone was insufficient. Ward also had to identify conduct by Illawarra Coal that made it fair to require that company to bear the successful defendant’s costs.
Illawarra Coal’s denial of liability and explanation of its position did not constitute the necessary additional conduct. Its defence raised genuine factual and legal issues, was not wholly without merit, and it had not positively encouraged Ward to join WorkPac. The Court also found that paying WorkPac’s costs would not deprive Ward of the fruits of his substantial judgment. Ward was ordered to pay Illawarra Coal’s costs of the unsuccessful motion.
The Court replaced its earlier orders, entering judgment for Ward against Illawarra Coal for $3,588,174.17 less $708,816.29 in applicable compensation repayments, with a partial stay of execution for $575,871.58. Judgment remained for WorkPac against Ward; Illawarra Coal must pay Ward’s costs, while Ward must pay WorkPac’s costs. All cross-claims were dismissed, with cross-claim costs orders made substantially by consent.
Key Takeaways
- A plaintiff seeking a Sanderson order must show both that suing the successful defendant was reasonable and that some conduct by the unsuccessful defendant makes shifting those costs fair.
- A defendant’s denial of liability, without positive encouragement to join another party or comparable additional conduct, ordinarily will not justify a Sanderson order.
- Courts balance protecting a successful plaintiff’s recovery against avoiding the imposition of multiple sets of costs on an unsuccessful defendant merely because it lost.
Why It Matters
The decision underscores that reasonable joinder in a multi-defendant case does not itself protect a plaintiff from the successful defendant’s costs. Even where uncertainty over employment arrangements and vicarious liability makes joining both defendants prudent, a special costs order requires something more in the losing defendant’s litigation conduct.
Parties considering Bullock or Sanderson relief should therefore focus on evidence that the unsuccessful defendant induced or encouraged the joinder, or otherwise conducted itself in a way that makes the ordinary costs result unfair.