FEDERAL COURT OF AUSTRALIA Walker v Citigroup Global Markets Australia Pty Limited (formerly known as Salomon Smith Barney Australia Securities Pty Limited) [2006] FCAFC 135 Walker v Citigroup Global Markets Australia Pty Limited (formerly known as Salomon Smith Barney Australia Securities Pty Limited) [2006] FCAFC 101 related DAVID WALKER v CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY LIMITED) VID 77 OF 2006 CITIGROUP GLOBAL MARKETS AUSTRALIA HOLDINGS PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA PTY LIMITED) v DAVID WALKER VID 233 OF 2006 GYLES, EDMONDS AND GREENWOOD JJ 31 AUGUST 2006 SYDNEY VIA VIDEO LINK TO MELBOURNE (HEARD IN MELBOURNE) IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 77 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: DAVID WALKER Appellant AND: CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY LIMITED) Respondent JUDGES: GYLES, EDMONDS AND GREENWOOD JJ DATE OF ORDER: 31 AUGUST 2006 WHERE MADE: SYDNEY VIA VIDEO LINK TO MELBOURNE (HEARD IN MELBOURNE) THE COURT ORDERS THAT: 1. The appeal be allowed. 2. Paragraph 1 of the orders made by Kenny J on 19 December 2005 (VID 531 of 1998) be varied by substituting $3 783 704.21 for $41 566.00, $2 346 553.00 for $22 917.00 and $1 437 151.21 for $18 649.00. 3. The respondent is to pay the appellant's costs of the appeal on a party and party basis up to and including 13 April 2006 and on an indemnity basis thereafter. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 233 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CITIGROUP GLOBAL MARKETS AUSTRALIA HOLDINGS PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA PTY LIMITED) Appellant/Cross-Respondent AND: DAVID WALKER Respondent/Cross-Appellant JUDGES: GYLES, EDMONDS AND GREENWOOD JJ DATE OF ORDER: 31 AUGUST 2006 WHERE MADE: SYDNEY VIA VIDEO LINK TO MELBOURNE (HEARD IN MELBOURNE) THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The cross-appeal be allowed. 3. Paragraph 2 of the orders made by Kenny J on 19 December 2005 (VID 531 of 1998) be varied by substituting $178 793.15 for $1 307 919.35, $100 000 for $721 113.35 and $78 793.15 for $586 806.00. 4. The appellant/cross-respondent is to pay the respondent/cross-appellant's costs of the appeal and cross-appeal on a party and party basis up to and including 13 April 2006 and on an indemnity basis thereafter. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 77 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: DAVID WALKER Appellant AND: CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY LIMITED) Respondent IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 233 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CITIGROUP GLOBAL MARKETS AUSTRALIA HOLDINGS PTY LIMITED (FORMERLY KNOWN AS SALOMON SMITH BARNEY AUSTRALIA PTY LIMITED) Appellant/Cross-Respondent AND: DAVID WALKER Respondent/Cross-Appellant JUDGES: GYLES, EDMONDS AND GREENWOOD JJ DATE OF ORDER: 31 AUGUST 2006 WHERE MADE: SYDNEY VIA VIDEO LINK TO MELBOURNE (HEARD IN MELBOURNE) REASONS FOR JUDGMENT 1 On 23 June 2006, reasons for judgment were delivered and each appeal was stood over to enable counsel for Walker to bring in short minutes of order to give effect to the reasons (Walker v Citigroup Global Markets Australia Pty Limited (formerly known as Salomon Smith Barney Australia Securities Pty Limited) [2006] FCAFC 101). The parties were unable to agree on draft orders. Written submissions have been received from each party as to the appropriate orders. We shall deal summarily with the matters in dispute without reciting the arguments of the parties. 2 The appropriate disposition of VID 233 of 2006 is that the appeal by Citigroup Global Markets Australia Holdings Pty Limited be dismissed and the cross-appeal by David Walker be allowed. The effect of the reasons is that there should be judgment for Walker on the claim for consequential relief in the sum of $100 000 plus interest and costs. There should be no order as to the balance of the claim against Citigroup Global Markets Australia Holdings Pty Limited as that will be subsumed by the order in VID 77 of 2006. Interest at 10.5 per cent per annum should run on the sum of $100 000 from 1 March 1999. We are of the view that the damage would have substantially occurred over the first two years after accrual of the cause of action, and 1 March 1999 is a reasonable mid point. 3 We see no proper basis upon which Citigroup Global Markets Pty Limited should now be permitted to challenge the amount of lost earnings in relation to appeal VID 77 of 2006. There was no issue raised on the appeal and the reasons for judgment proceeded on an agreed basis. Even if a mathematical error was involved, it is said on behalf of Walker that the agreed figure was a compromise as it reflected less for bonus payments than had been claimed. No basis has been established for reopening of the issue. We agree that interest should only be awarded progressively as the loss was incurred. We are not satisfied that the schedule put forward by Citigroup Global Markets Pty Limited is satisfactory. In our view, taking a mid point and calculating interest thereafter is an appropriate methodology in this case. For those purposes, 1 March 1998 is a reasonable starting point and 30 June 2003 a reasonable end point. The mid point is 29 October 2000 – say, 1 November 2000. 4 It is accepted that Walker is entitled to costs on an indemnity basis from 14 April 2006. We do not think that it is necessary to spell that order out in any detail. The effect of it is well understood. It is submitted for the Citigroup companies that Walker should only be awarded 60 per cent of his costs, presumably because of the omission of any damages on account of economic loss on the Trade Practices cause of action. However, this was due to the 'set off' against the other damages. Walker succeeded on the substance of both appeals and the costs orders will reflect that outcome. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Gyles, Edmonds and Greenwood. Associate: Dated: 31 August 2006 Counsel for Walker: Mr C Gunst QC and Mr Brian Lawrence Solicitor for Walker: Holding Redlich Counsel for Citigroup Global Markets Australia Pty Limited (formerly known as Salomon Smith Barney Australia Securities Pty Limited) and Citigroup Global Markets Australia Holdings Pty Limited (formerly known as Salomon Smith Barney Australia Pty Limited): Mr P Jopling QC and Mr M McDonald Solicitor for Citigroup Global Markets Australia Pty Limited (formerly known as Salomon Smith Barney Australia Securities Pty Limited) and Citigroup Global Markets Australia Holdings Pty Limited (formerly known as Salomon Smith Barney Australia Pty Limited): Freehills Date of Last Submission: 16 August 2006 Date of Orders: 31 August 2006