‘Sanderson’ or ‘Bullock Order’

Palmer & Anor v Finnigan & Ors [2010] QSC 86

Further to my earlier posting regarding this decision; the matter returned in respect of costs and more particularly in respect of costs as between the defendants and third parties, and whether a ‘Sanderson’ or ‘Bullock Order’ was appropriate.

The plaintiff was ordered to pay the defendants costs on a standard basis on the Supreme Court scale despite the notional award of damages being within the District Court. The rationale of her Honour A. Lyons is found at paragraphs 20-23.

As to costs of the third parties

[31] In my view the defendants should pay the costs of the second third party given the correspondence set out above. The issue is whether this should be on an indemnity basis after the offer was made on 27 October 2009. The principles enunciated in Calderbank v Calderbank6 do not necessarily entitle the party making the offer to indemnity costs but rather “the correct principle is that a Calderbank offer may entitle a party to a different costs order, other than that costs follow the event.”7 In some circumstances this will mean that it is not necessarily a favourable costs order as the principle is “…whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure…”8 In the circumstances of this case I consider given the clear intimations made to the defendants by the second third party that it was unreasonable for the defendant to maintain their claim against the second third party.

[32] I consider that the defendants should pay the costs of an incidental to the proceeding of the second third party up to 27 October 2009 on the standard basis to be assessed.

[33] In relation to the submissions of the third third party the third party seeks an order that the defendant pay its costs on the standard basis. I also consider that this is the appropriate order.

6 [1975] 3 All ER 333.

7 Paper by the Hon Justice MJ Beazley AO “Calderbank Offers” March 2008.

8 Per Beazley J at [18] quoting Giles JA in SMEC Testing Services Pty Ltd v Campelltown City

Council [2000]NSWCA 323 at [37].

[34] The defendants also argued that the costs of the third parties should be the subject of a “Bullock Order” or “Sanderson Order”. In his text Law of Costs Dal Pont discusses the orders as follows:9

“Actions with a multiplicity of defendants can give rise to special problems. Costs of a defended action can increase significantly where there are multiple defendants or additional parties. Also, the fruits of victory by a plaintiff against one defendant can be diminished if he or she loses against other defendants and is ordered to pay their costs. To meet the latter problem the courts have exercised their costs discretion, where it is just to do so, to oust the general rule that a plaintiff who succeeds against one defendant but fails against the other must pay the costs of a successful defendant. The court may order the unsuccessful defendant to reimburse the plaintiff for the costs of the successful defendant (a ‘Bullock order’), or order the unsuccessful defendant to pay direct to the successful defendant the plaintiff’s costs of proceedings against the latter (a ‘Sanderson order’).”

9 Dal Pont, G E, Law of Costs Second Edition LexisNexis Butterworths, Chatswood, 2009 at 316.

Her Honour reviewed the test of reasonableness in joining third parties and found it had not been met and neither the grounds for Bullock order – paragraphs 35-39. Her Honour did however order the defendants to pay the second third party’s costs on an indemnity basis.

Brisbane Barrister –David Cormack

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