ARKRIVER PTY LTD and ANOR v COLLY FARMS COTTON LTD [1996] NSWCA 22

ARKRIVER PTY LTD and ANOR v COLLY FARMS COTTON LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MEAGHER and SHELLER JJA and WADDELL AJA 27 March 1996, 7 June 1996 [1996] NSWCA 22

DEED OF RELEASE — INDEMNITY COSTS — SUCCESSFUL CLAIM OR DEFENCE SUCCESS IN LITIGATION INCLUDES...

FACTS:

Whether in an indemnity costs agreement the phrase "a successful claim or defence in the proceedings" included a settlement favourable to the parties in that they retained part of the whole monies claimed.

HELD:

By Meagher JA; Sheller JA, Waddell AJA agreeing -

(1) It is not an unnatural use of language for a defendant to describe a favourable settlement inter partes of litigation as "success" in that litigation.

(2) Success in litigation includes settlement by court order whereby orders of the court below are set aside pursuant to the Deed of Release allowing a defendant to retain a portion of the proceedings.

ORDERS:

1. Appeal allowed.

2. Judgment and order of Cole J set aside.

3. In lieu thereof, judgment for the appellants against the respondent for an amount equal to the costs of the appellants in these proceedings as agreed or assessed.

4. Order that the respondent pay to the appellants interest on the said amount from 10 July 1992 to 1 October 1993.

5. These orders to take effect as from 1 October 1993.

6. The respondent to pay the appellants' costs both of the proceedings before Cole J and of the appeal, but to have a certificate under the Suitors' Fund Act, 1951 in respect of the latter.

Meagher JA

This is an appeal from a judgment of Cole J, in what at first blush looks a simple matter. Initially my inclination was to agree with everything his Honour said, but on further reflection I feel unable to do so.

The Bank of New South Wales Nominees Pty Ltd as plaintiff sued Colly Farms Cotton Ltd, the respondent to the present proceedings, to recover $804,413.88. Colly Farms Cotton Pty Ltd defended the case by way of a cross-claim against the Bank of New South Wales Nominees Pty Ltd, and also by the same cross-claim sued Arkriver Pty Ltd, the Governor of the Bank of Scotland, and a number of other cross-defendants including Anglo-American Agricultural PLC. Colly Farms Cotton Pty Ltd claimed that, if the Bank of New South Wales Nominees Pty Ltd was successful against it, it was entitled to be indemnified by both Arkriver Pty Ltd and Anglo-American Agricultural PLC. To complete the circle, Arkriver Pty Ltd and Anglo-American Agricultural PLC themselves claimed against both the Bank of New South Wales Nominees Pty Ltd and Colly Farms Cotton Ltd.