New South Wales Supreme Court CITATION : Desmond Henry Randall v Aristocrat Leisure Limited (ACN 002 818 368) [2004] NSWSC 599 HEARING DATE(S) : 5/07/04 JUDGMENT DATE : 5 July 2004 JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Orders as to relocation expenses. Plaintiff to pay 10 percent of defendant's costs of the proceedings. CATCHWORDS : Costs - Principles - Construction - Relocation - Expenses LEGISLATION CITED : Supreme Court Act 1970 (NSW) Supreme Court Rules (NSW) Bond Corporation Holdings Limited, Re (1990) 1 ACSR 350 Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225 Donald Campbell & Co Ltd v Pollak [1927] AC 732 CASES CITED : Fexuto Pty Limited v Bosnjak Holdings Pty Limited (No 3) 30 ACSR 20, NSWSC, 26/11/98 Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Limited (1988) 81 ALR 397 Latoudis v Casey (1990) 170 CLR 534 Oshlack v Richmond River Council (1998) 193 CLR 72 Waters v P C Henderson (Australia) Pty Ltd, unreported, NSWCA, 6 July 1994, BC9404952 PARTIES : Desmond Henry Randall (Plaintiff) Aristocrat Leisure Limited (ACN 002 818 368) (Defendant) FILE NUMBER(S) : SC 50066/03 COUNSEL : Mr B Coles QC, Mr A Fernon (Plaintiff) Mr G Lindsay SC, Mr A McGrath (Defendant) SOLICITORS : Toomey Pegg Drevikovsky (Plaintiff) Phillips Fox (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST Einstein J Monday 5 July 2004 ex tempore Revised 26 July 2004 50066/03 Desmond Henry Randall v Aristocrat Leisure Limited JUDGMENT 1 On 8 June 2004 the Court published reasons for judgment in these proceedings. Pursuant to leave granted in paragraphs 598 and 604 of the judgment the parties have addressed further submissions in relation to particular relocation related expense claims and certain ancillary type matters. The parties have also addressed submissions relating to costs of the proceedings. I commence dealing with the relocation related expense claims and similar. Clauses 3A.8 and 3A.6 of the contract - relocation related expenses 2 Mr Randall maintains his claim for his entitlements under clause 3A.8 and 3A.6 of the contract. As set out in paragraphs 595, 596, 602 and 603 of the judgment these entitlements relate to reimbursement/payment of a number of items. In listing those items I will proceed by identifying the amounts which had been first claimed in the plaintiff's initial submissions of 17 June 2004 noting also: · that the materials provided to the Court today have taken into account the need, using exchange rates to transpose US dollar amounts into Australian dollar amounts · that there has been some very slight movement in some of these figures [as between those notified in the plaintiff's original written submissions and those now claimed in a calculation of quantum document handed to the Court by Mr Coles] 3 The subject entitlements relate to the reimbursement/payment of the following: · Shipping and storage expenses of Mr and Mrs Randall's belongings from Las Vegas to Sydney of $AU8,695.12. · Airfare expenses being the cost of a return trip to Las Vegas to arrange for the removal of Mr and Mrs Randall's belongings back to Sydney: AU$17,804.92. · Other out-of-pocket expenses put as $US318.77 [said to convert to AU$507.57] being certain out-of-pocket expenses incurred as identified in the calculation of quantum document and relating to the trip to Las Vegas. · One month's salary which had been put at $US85,402 but on the calculation of quantum document has been identified at AU$141,767.32. · Stamp duty and other expenses relating to the purchase of a home by Mr Randall in Australia. 4 Mr Randall also maintains his claim for reimbursement of property taxes which had originally been identified in Mr Coles' submissions of 17 June 2004 at $US11,085 but are now pressed in the sum of $AU18,444.22 paid in respect of the Nevada property. 5 As held in paragraphs 600 and 601 of the judgment, Mr Randall's entitlements under clause 3A.8 and 3A.6 of the contract continued to apply after termination of the contract given the intention of the parties that it continue to apply. The terms of those clauses are set out in paragraphs 593 and 594 of the judgment. In my view, subject to what follows, they provide for the payment of expenses referred to above. Shipping and Storage Costs 6 The evidence concerning the cost of the shipping and storage costs appeared in paragraphs 70, 71 and 80 of Mr Randall's statement of 10 October 2003 and the pages of the exhibit referred to therein. Those costs have been paid by Mr Randall and should have been paid by Aristocrat. Aristocrat refused to pay them and Mr Randall is entitled to be reimbursed. Ultimately, Aristocrat, as I understand it, now concedes this item. Trip to Las Vegas 7 The evidence concerning the cost of the trip to Las Vegas appears in paragraph 69 of Mr Randall's statement of 10 October 2003 and the pages of the exhibit referred to therein. Those costs were met by Mr Randall's Frequent Flyer points. The equivalent cost of the return airfares (and therefore the value of the Frequent Flyer points used) travel is set out in the affidavit of Ms Dominello sworn on 30 April 2004. Those costs related to a trip to Las Vegas to arrange for the relocation of Mr and Mrs Randall back to Sydney. Mr Randall is, in my view, entitled to be reimbursed for those expenses. 8 The evidence concerning the other out-of-pocket expenses originally said to total $US318.77 appears in paragraph 74 of Mr Randall's statement of 10 October 2003 and the pages of the exhibit referred to therein. Mr Randall was entitled to have the total costs of the relocation visit to Las Vegas met by Aristocrat. Those were part of those costs and should be paid. Ultimately, Aristocrat also conceded this item, as I understood it. One Month's Salary 9 Clause 3A.8 (read with clause 3A.6) of the contract clearly provided for a "relocation disturbance allowance of one month of his salary net of tax" on Mr Randall's return to Australia. Mr Randall's one month's salary at the relevant time was originally put as US$85,402 and the claim as presently pressed has already been identified as AU$141,767.32. As Mr Randall has contended, the part of clause 3A.6 referred to makes clear an intention that the relocation allowance is to be taxed and that in normal circumstances tax would be deducted and paid for by Aristocrat as his employer. Mr Randall would then be entitled to a group certificate for the year in which it is earned. However, Mr Randall is to receive the relocation benefit in the financial year 2004/2005 when he is no longer an employee of Aristocrat. In these circumstances, what if any tax Mr Randall will ultimately be liable to pay will be a matter for him and his accountant to determine and pay and subject to a final taxation assessment. In those circumstances, as it seems to me, Aristocrat is obliged to pay the full amount of the relocation benefit with the obligation upon Mr Randall to pay whatever tax may be payable upon such sum. Expenses related to purchase of a home 10 Clause 3A.8 (read with clause 3A.6) of the contract clearly provides that on Mr Randall's return to Australia Aristocrat will meet the costs and disbursements, including legal fees, agents' commission, insurance costs, advertising expenses, stamp duty and all government fees incurred in respect of Mr Randall purchasing a home in Australia. 11 As Mr Randall is yet to acquire such a home, a declaration is sought stating Aristocrat's obligations in this regard [excluding the word "reasonable", which I am inserting into the declaration which had been sought]. The declaration sought, with the addition of that word, would be as follows: "Aristocrat is required, pursuant to its contract of employment with Mr Randall, to pay, and keep Mr and Mrs Randall indemnified in respect of, all reasonable costs and disbursements incurred, including legal fees, agents' commissions, insurance costs, advertising expenses, stamp duty and all government fees by or on behalf of Mr and Mrs Randall in connection with the purchase for Mr Randall (and Mrs Randall) of a home in Australia." 12 Aristocrat has submitted as follows: "[This item] is a claim for relief by way of a declaration of a right to be paid costs and expenses for the purchase of a home in Australia in light of the fact that Mr Randall has not yet acquired such a home. The form of the declaration in paragraph 11 of the plaintiff's submissions does not however recognise that the benefit under clause 3A.6 is payable to Mr Randall, not Mrs Randall, or that the first sentence of clause 3A.6 refers to reimbursement for the reasonable costs of certain assistance. Accordingly the form of the declaration should be amended to reflect this and a requirement that Mr Randall's 'costs and disbursements' be reasonable, to read as follows: 'Aristocrat is required, pursuant to its contract of employment with Mr Randall, to reimburse Mr Randall in respect of all costs and disbursements, including legal fees, agents' commissions, insurance costs, advertising expenses, stamp duty and all government fees reasonably incurred by Mr Randall in respect of the purchase by Mr Randall of a home in Australia'." 13 In my view, Mr Randall's submissions are of substance. In short, the home acquired in Las Vegas was acquired in the name of Mr and Mrs Randall with the costs being met by Aristocrat pursuant to clause 3A.6 of the contract. Given the subject matter of the relevant clause being the family home, it seems clear that the clause was intended to relate to the family home of Mr Randall no matter in whose name it was acquired. No such limitation appears in the relevant part of clause 3A.6. I accept that it is only natural that Mr Randall may wish to acquire a family home in joint names with Mrs Randall. I further accept that there should be no restriction placed on the declaration sought to effectively prohibit this from occurring. 14 A declaration in the terms which had been sought by Mr Randall but adding the word "reasonable" will be made and should be provided for in the short minutes of order. Reimbursement of property taxes 15 As stated in paragraph 602 of the judgment the obligations of Aristocrat in respect of property taxes were recorded in Mr Gibbs' memorandum dated 2 December 2002 to Mr Randall and Mr Jeyaraj (PX5/1689). 16 As set out in paragraphs 669 to 673 of the judgment, responsibility for the detail of Mr Randall's relocation package was delegated to Mr Gibbs and Mr Jeyaraj by the board. Aristocrat did not during the trial challenge the proposition that Mr Randall's entitlement to be reimbursed for the property taxes paid was otherwise than in accordance with the detailed relocation package formulated by Mr Gibbs and Mr Jeyaraj and as set out in the 2 December 2002 memorandum. Aristocrat now contends that the claim should be rejected on the basis that the memorandum predated and did not form part of the contract. In my view, the relocation package having been delegated to Mr Gibbs, the memorandum was clearly prepared pursuant to that delegation. Accordingly, it does form part of Mr Randall's contractual relationship with Aristocrat and forms part of the entitlements that he is to receive from it. As referred to in paragraph 67 of Mr Randall's 30 April 2004 statement, Mr Gibbs agreed that the payment of property taxes form part of his agreement. This was not challenged or disputed during the trial. Mr Gibbs was not called to give evidence on this issue. The claim is allowed. Form of judgment viz a viz US dollars 17 The parties are at issue as to whether or not, insofar as the plaintiff may be entitled to a judgment referable to an amount calculated in United States dollars, the Court should enter a judgment in US dollars with interest at US rates. Clearly if US dollar amounts are to be converted into a judgment expressed in Australian dollars the Court would require to select an exchange rate calculated to do justice in the case. The exchange rate on 4 April 2003 is said to have been US$1.00 equals $AU1.66417. As at 25 June 2004 the current exchange rate has been stated to have been in the order of US$1.00 equals $AU1.45762. 18 Aristocrat contends that in the absence of any evidence about Mr Randall's expenditure plans in April 2003 there is no particular reason for applying the US dollar/Australian dollar exchange rate as at 4 April to any of the amounts in US dollars to which Mr Randall might be entitled. However, it is acknowledged that had Mr Randall been paid moneys due to him on 4 April 2003 it would have been open to him to receive or obtain Australian dollars at that time. 19 In my view, payment should not be made in US dollars if that does not properly represent the value of Mr Randall's loss. The amounts payable in US dollars related principally to the relocation expenses. Such sums, had they been paid, should have been paid on his termination. Given his return to Australia after termination, the amounts would have been converted to Australian dollars at that time. Accordingly, it seems to me that the judgment should be expressed in Australian dollars with the Australian dollar/US dollar conversion being calculated as at the date of termination. I accept as of substance the submission that Aristocrat should not be seen to be entitled to benefit from its own breach of contract in this regard. Costs 20 Detailed submissions, as I have said, have been addressed by the parties in relation to the proper exercise of the Court's discretion with respect to the making of costs orders. 21 Section 76 of the Supreme Court Act 1970 gives the Court full discretion to award costs. 22 Part 52A rule 11 of the Supreme Court Rules provides that, if the Court makes any order as to costs, the Court shall, subject to Part 52A, order that the costs follow the event, except where it appears to the Court that some other order should be made as to the whole or any part of the costs. 23 The well-known authorities support the proposition that the general principle of an award of costs is that costs are awarded to compensate the successful party for the expense of being put to the necessity of litigation: Oshlack v Richmond River Council (1998) 193 CLR 72 at 97-98 per McHugh J, at 120 - 123 per Kirby J, Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ. Accordingly, in the ordinary case, costs will follow the event: Oshlack v Richmond River Council (supra, at 97 per McHugh J, at 121 per Kirby J), Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 811-12 per Viscount Cave LC. 24 In Oshlack, McHugh J, with whose reasons for judgment Brennan CJ was in general agreement, after dealing with the statutory discretion conferring on the Court a broad discretion as to award costs, said at 101: "The Discretion Must be Exercised Judicially Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous consideration which, if taken into account, will cause the exercise of the discretion to miscarry. Consistent with the aim of justice, the law could not have developed otherwise . . . By far the most important factor which the Court has viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. . . . The combined force of the sentiments recognised above by Mason CJ, regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the 'usual order as to costs'. The Usual Order as to Costs The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought or defended by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation." 25 In the notes to the Supreme Court Rules Part 52A11.2, the following appears (cited with approval by the Court of Appeal in Waters v P C Henderson (Australia) Pty Ltd, unreported, NSWCA, 6 July 1994, BC9404952): "Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues, yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupy the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is particularly dominant or separable, it would ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful, and those on which it failed." The defendant's submissions 26 The short proposition put forward by the defendant is as follows: · There are four events referred to in the Judgment pursuant to which costs should follow, which are: (a) Mr Randall has succeeded in his claim for the payment of a bonus pursuant to clause 3.4 of the contract; (b) Mr Randall has succeeded in his claim for the payment of amounts for relocation assistance for his move back to Australia pursuant to clause 3A.8 of the contract; (c) Other than as set out in sub-paragraphs (a) and (b) above, Mr Randall has failed in the claims he has made against Aristocrat; and (d) Aristocrat has failed in its cross-claims against Mr and Mrs Randall. · Following each of those events, the appropriate costs orders, so the defendant submits, to be made are: - The defendant pay the costs of the plaintiff in relation to the claims made arising from the allegations in paragraphs 11–12, 13(c) and (d), 14, 18–23A and 25–35 of the Further Amended Summons; - The defendant/cross-claimant pay the costs of the plaintiff/first cross-defendant and the costs of the second cross-defendant in respect of the claims made in the Second Further Amended Cross-Claim; and - Except as provided in orders (a) and (b) above, the plaintiff pay the defendant's costs of the proceedings. The plaintiff's submissions 27 The plaintiff on the other hand generally contends as follows: · in this case, Mr Randall has been successful in obtaining a judgment for approximately $1 million. However, it is conceded that, in relation to the substantial amount claimed (approximately $12 million), Mr Randall was unsuccessful. In those circumstances, it is appropriate to consider the extent to which Mr Randall and Aristocrat were successful in their respective claims and defences; · there are three relevant matters to be considered in connection with costs. These are: · the costs incurred in respect of the plaintiff's performance bonus; · the costs incurred by Aristocrat in defending the claim for the termination payments; and · the costs incurred by the plaintiff in defending Aristocrat's claim. The costs incurred in respect of the plaintiff's performance bonus · the plaintiff was wholly successful in his claim for the performance bonus for 2002. This issue is clearly one which can be distinguished from the other issues that were the subject of the trial; · the bonus issue took up a substantial amount of evidence at the trial. Mr Randall and Mr Bush were cross-examined at length on this issue. None of the other witnesses called on behalf of Mr Randall in relation to the bonus issue (Mr Wilson, Mr Henry, Mr Barnett and Mr Robertson) were ultimately cross-examined. The plaintiff estimates that approximately 20% of the trial was spent dealing with the bonus issue. [It is appropriate to note that the defendant takes violent objection to that assessment suggesting that only a reasonably small part of the trial was spent dealing with the bonus issue]; · discovery in relation to the bonus issue was extensive and was a contentious issue between the parties. The documents referred to in paragraph 627 of the judgment were not discovered willingly by Aristocrat, and involved substantial correspondence between the parties' solicitors. As recorded in paragraph 628 of the judgment, ultimately none of these documents, or the calculation of the amount of the bonus by Mr Randall, was challenged during the trial; · the plaintiff should receive all of his costs, including one-fifth of the trial costs, incurred in connection with the bonus issue. The costs incurred by Aristocrat in defending the claim for the termination payments · Aristocrat amended its defence to Mr Randall's summons on three occasions in the course of these proceedings; · Aristocrat's first defence was filed on 29 July 2003. Prior to this date, Aristocrat had provided no substantive reason to Mr Randall for terminating his services. That defence raised a substantial number of matters to allegedly justify Mr Randall's summary termination. That defence alleged that Mr Randall had committed an act of dishonesty, fraud, wilful disobedience, misbehaviour, and a breach of duty, and that Mr Randall had wilfully, persistently and materially breached the provisions of the contract by: · causing Aristocrat to enter into the employment contract with Mr Randall; · causing or permitting ASX announcements on 7, 10 and 11 February 2003 to be made; · making an apology to the board on 17 February 2003; · making public statements on 18 February 2003; · causing or permitting the 2002 annual report to be published; · breaching the ASX Listing Rules; · breaching his statutory obligations to the company; · failing to advise the board of the content of emails of 10 and 11 December 2002; · causing or permitting Aristocrat to ship 3000 gaming machines valued at $US60.22 million to Colombia; · incurring unauthorised personal expenditure to the value of approximately $36,500; · proffering a secured promissory note allegedly signed by Mr Randall forging Mrs Randall's signature. · in addition to these defences, Aristocrat relied on statutory defences arising under sections 200B and 208 of the Act to deny Mr Randall's entitlement to the termination payment provisions of the contract; · in its amended defence filed on 2 December 2003, Aristocrat withdrew the allegations in respect of unauthorised personal expenditure, but otherwise maintained the other defences to Mr Randall's claim. An order for costs was made in Mr Randall's favour in respect of this amendment; · in its further amended defence filed on or around 28 April 2004, Aristocrat added further grounds of defence in paragraphs 68A-68H. No grounds of defence were deleted; · in the second further amended defence (being the final defence filed by Aristocrat during the course of the trial), Aristocrat added certain defences in relation to Mr Randall's claim for reimbursement of property taxes. However, it also withdrew its defence in relation to the South American contract shipment and in relation to Mr Randall causing Aristocrat to enter into his contract of employment; · as set out in paragraphs 46 and 48 of the judgment, notwithstanding the broad scope of the allegations continued to be made in the defences, Aristocrat confined its allegations against Mr Randall "very considerably indeed". The manner in which Aristocrat had confined its case at final submissions is set out in paragraph 46 of the judgment. In essence, Aristocrat relied only upon the three matters set out in paragraph 63 of the second further amended defence and Mr Randall's failure to disclose such matters to the board; · as is noted in paragraph 465 of the judgment, "at the end of this very strongly contested litigation, the defendant has in very large measure failed to prove much of the case which was opened". Appendix A to the judgment is a schedule that sets out each of the relevant paragraphs from the defence and whether or not such matters were either made out or even pursued at final address; · further, Aristocrat failed in establishing any dishonesty, fraud, or wilful disobedience on the part of Mr Randall. Such allegations are very serious allegations indeed and required a very strong response; · for the purposes of the conduct of the trial, Mr Randall naturally incurred substantial costs in responding to each of the various defences raised, as set out above. In particular, one of those matters, being the allegation concerning the South American contract, involved a similar allegation being raised in Aristocrat's cross-claim. That cross-claim sought to recover from Mr Randall the value of the machines shipped (approximately $US60 million). Like the defence on this issue, the cross-claim was not dropped until the trial had commenced. A substantial amount of costs was incurred in relation to the discovery of relevant documents pertaining to the shipment of these machines. Much of those documents made up part of the 17 volumes which formed the agreed bundle; · in the context of Aristocrat's defence in relation to the South American contract, the comments of Justice Young in Fexuto Pty Limited v Bosnjak Holdings Pty Limited and Ors (No 3) 30 ACSR 20 at 25, NSWSC, (26 November 1998) should be noted: "There are situations where a person's reasonable conduct in litigation is relevant, such as a situation where a person prepares a whole lot of material, thinking that a particular matter is going to be raised, and at the trial, the other side does not raise it, and reasonable in that sense, does affect the result." · further, a substantial factual issue that took up a considerable amount of time during the course of the trial related to the ASX announcements on 7, 10 and 11 February 2003. As noted in paragraph 465 of the judgment, none of those announcements were proven to have been false; · the allegations in relation to the signing of the promissory note were only withdrawn by Aristocrat after Mrs Randall had given evidence and was cross-examined; · whilst not raising factual issues during the course of the trial, the defences under the Act did involve a substantial amount of time and costs for the purpose of preparing submissions in response. Ultimately, Aristocrat barely submitted such defences in its final address. Mr Randall's submissions on the Act defences were wholly accepted by the Court; · the substantial factual dispute that took the most amount of time during the trial related to Mr Randall's public statements on 18 February 2003 and the three ASX announcements. Aristocrat was unsuccessful in relation to its claims concerning the ASX announcements, and was successful in relation to only two of the three allegations made concerning the public statements. The time taken in relation to the matters on which Aristocrat was both successful and unsuccessful was approximately equal. [I interpolate to note that Aristocrat does not accept this time break-up]; · given that fact and given the substantial costs that Mr Randall otherwise incurred in relation to each of the other defences that were either not pursued or were unsuccessful, no order for costs should be made in favour of Aristocrat in respect of its successful defence of Mr Randall's claim for termination payments. The costs incurred by the plaintiff in defending Aristocrat's cross-claim · the original cross-claim filed by Aristocrat on 29 July 2003 made claims: · against both Mr and Mrs Randall for the repayment of US$1,665,000 plus interest of US$50,821.23 in respect of the loan allegedly advanced to both Mr and Mrs Randall to acquire the Nevada property; · against Mr Randall in respect of costs allegedly incurred by Aristocrat in respect of the ASIC inquiry; · against Mr Randall in respect of losses arising out of Aristocrat's inability to sell the 3,000 gaming machines shipped to Colombia; and · against Mr Randall to reimburse Aristocrat for expenses incurred by Aristocrat for his personal benefit in the amount of US$82,609.27 and A$36,504.31. · in its amended cross-claim filed on 2 December 2003, Aristocrat withdrew its claim in respect of the expenses incurred by Aristocrat for Mr Randall's personal benefit. A costs order has been made in Mr Randall's favour as a result of that amendment; · in its further amended cross-claim filed during the course of the trial, Aristocrat withdrew all of its claims against Mr Randall but maintained its claim against Mr and Mrs Randall for repayment of the principal loan and interest allegedly accrued. Aristocrat maintained its claim for the principal sum, notwithstanding the fact that the property had been delivered up and sold in December 2003 for an amount in excess of the amount advanced. The claim was also maintained notwithstanding the clear terms of Mr Randall's relocation agreement that Aristocrat would accept the property in full satisfaction of the debt (see paragraphs 676, 677 and 680 of the Judgment). Aristocrat was invited by Mr Randall's solicitors to amend its claim by withdrawing the claim for the principal. It refused to do so; · the claim in respect of the ASIC inquiry was only withdrawn in response to a subpoena issued to Aristocrat's solicitors seeking production of the file in relation to the ASIC inquiry.; · as referred to above, given the matters alleged in the cross-claim concerning the South American shipment, substantial costs in respect of discovery were incurred in order to defend this potentially very large claim that was made; · Mr Randall was wholly successful in defending each of the matters in the cross-claim. Mr Randall is entitled to his costs, including the costs incurred in respect of the final amendment; · such costs should be paid on an indemnity basis. The allegations made in respect of the ASIC inquiry and the South American contract were serious and substantial allegations, for potentially a very substantial amount of money (the South American contract was worth US$60 million). The claims were maintained right up until the trial, but were very quickly dropped. Aristocrat did not seek to lead any evidence in relation to the South American contract. The claim in relation to the ASIC inquiry was quickly dropped when a subpoena was issued. This is clear evidence that Aristocrat had no serious intention to pursue these claims, but nevertheless caused Mr Randall to incur substantial costs to respond to them; · the claim made by Aristocrat in respect of the Nevada loan had no genuine prospects of success given: · the clear terms of the housing loan approved by the compensation committee on 20 May 2002 were that it was interest free and would be satisfied (even assuming Aristocrat's case at its highest, with interest being payable) on receipt of the proceeds of sale of the Nevada property (see paragraph 680 of the Judgment); and · the evidence of Mr Bush (referred to in paragraphs 692, 693 and 694 of the Judgment) that it was his understanding that the terms of the promissory note were subject to the terms of Mr Randall's employment agreement that the loan would be interest free. · in these circumstances, it is appropriate that an order for indemnity costs be made: see Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Limited (1988) 81 ALR 397; Re Bond Corporation Holdings Limited (1990) 1 ACSR 350; Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225. Dealing with the issue 28 There is considerable substance, as it seems to me, in a number of the plaintiff's above described submissions. Most particularly: · the plethora of defences raised initially and by further amendments by Aristocrat to the summons raised numerous factual as well as legal issues alleged as justification of the summary termination; · when all of these issues are matched against the manner in which Aristocrat ultimately confined its case in final submissions it is true to say [as the Court found] that at the end of the very strongly contested litigation Aristocrat, in very large measure, had failed to prove much of the case which was opened; · many of the defences proved unsuccessful. 29 However, clearly Aristocrat did successfully defend the claim pursued for a very large sum propounded upon the basis that the summary dismissal had not been justified. 30 It is true that the substantial factual dispute that occupied most of the time during the trial related to Mr Randall's public statements on 18 February 2003 and to the three ASX announcements. Aristocrat was unsuccessful in relation to its claims concerning the ASX announcements, but was successful in relation to two of the three allegations made concerning the public statements. On the other hand, standing behind the particular issue concerning these public statements was a very large volume of evidence effectively called by both parties. 31 It has to be of course noted that the cross-claim was unsuccessful and that Mrs Randall had also been joined to the cross-claim as a cross-defendant. 32 To my mind, the amount of time taken up during the hearing with issues concerning the allegations made against Mrs Randall may be regarded as very small indeed. 33 The current proceedings throw up circumstances in which the proper adjudication of the respective entitlements to costs does seem to me to occasion some real difficulty. Ultimately, it is appropriate to recognise that in terms of the summons [leaving to the side the ancillary claims], the principal bifurcation was as between the claim to approximately $12 million grounded upon the suggested invalid summary dismissal and the claim to approximately $1 million for the bonus. And in relation to the much larger claim Aristocrat was ultimately successful albeit, as I have said, that its wide-ranging defences were ultimately so very confined in final address. 34 Also, of course, Mr Randall succeeded on the bonus issue, succeeded on the smaller ancillary items dealt with in the summons and successfully defended the cross-claim insofar as he was a cross-defendant to the cross-claim. 35 It seems to me that it would be very difficult for a costs assessor to work out what portions of the final hearing should be seen to be attributable to the many and disparate issues litigated. The more convenient course to the parties seems to me for the Court to now make an appropriate costs order taking into account all of the claims made on the summons and made in the cross-claims, and in that exercise, setting off now the plaintiff's rights to a sum on issues where it succeeded on the summons and cross-claim and now, the defendant's rights to a sum where it succeeded on issues raised in the summons. I understood counsel to accede to the proposition that the Court has the discretion to take this approach [cf the transcript taken]. At the same time and in relation to that exercise, having raised the matter with counsel during the course of address taken today, it is somewhat difficult to make separate provision for the position concerning Mrs Randall's costs of the cross-claim insofar as it was pursued against her. It seems to me that the appropriate course in that regard is to take into account, as it were, the position which would otherwise have obtained had there been some separate consideration with respect to Mrs Randall's position but to ultimately make no order as to her costs of the cross-claim. To the extent that she may have been entitled to some form of costs order on the cross-claim, the credit in that regard will, in the approach the Court has taken, be booked, as it were, to Mr Randall's side of the ledger. 36 Approaching the proceedings in that manner, in my view, the proper exercise of the Court's discretion is to order that Mr Randall pay 10 percent of the costs of Aristocrat in relation to the whole of the proceedings, [including, that is to say, the summons and the cross-claim], and to make no other orders as to costs. The short minutes of order should reflect that. 37 Insofar as the claim to the one month's salary is concerned, the amount should be awarded in terms of US dollars. I certify that paragraphs 1 - 37 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 5 July 2004 ex tempore and revised 26 July 2004 ___________________ Susan Piggott Associate 26 July 2004 Last Modified: 08/03/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.