New South Wales Court of Appeal CITATION: Rolfe v. Katunga Lucerne Mill Pty.Ltd. & Anor. [2005] NSWCA 473 HEARING DATE(S): Matter dealt with in Chambers on written submissions JUDGMENT DATE: 22 December 2005 JUDGMENT OF: Hodgson JA at 1; Santow JA at 2; McClellan CJ at CL at 10 DECISION: See par.9 of judgment CATCHWORDS: PROCEDURE - COSTS - Whether costs order made in disposing of appeal should be altered. Mark Rolfe - appellant PARTIES: Katunga Lucerne Mill Pty. Ltd. - 1st respondent Robank Farm Supplies Pty. Ltd. - 2nd respondent FILE NUMBER(S): CA 40509/04 B. Gross QC with T. Boyd for appellant COUNSEL: S.G. Campbell SC with A.J. Bowen for respondents Leitch Hasson Dent, Sydney for appellant SOLICITORS: Henry Davis York, Sydney for respondents LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC1495/03 LOWER COURT JUDICIAL OFFICER: Hughes DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40509/04 DC 1495/03 HODGSON JA SANTOW JA McCLELLAN CJ at CL Thursday 22 December 2005 Mark ROLFE v KATUNGA LUCERNE MILL PTY LIMITED & 1 Ors Judgment 1 HODGSON JA: I agree with Santow JA. 2 SANTOW JA: On 28 July 2005 judgment was delivered in the successful appeal brought by Mr Rolfe, successful that is to say in only one of three bases of appeal. Essentially, the result was that the appellant succeeded in a claim based upon merchantable quality of contaminated chaff supplied by the respondents but failed on what had been a major plank of the appellant's appeal, namely tort liability. At [124] of the judgment I stated with the agreement of Hodgson JA and McClellan AJA: 124 As to costs, I would not award the appellant all his costs, given that the appellant should have focussed on the only tenable argument he had, namely merchantable quality, and not strayed otherwise into contract and tort liability. 3 The appellant seeks a variation of the costs order by way of review, there having been no argument on costs. The matter has proceeded by way of written submissions. 4 Essentially, the appellant's argument is set out at paragraphs 4 to 9 of its submissions: 4. The appeal in this matter was from a decision of Judge Hughes in the District Court. When the hearing commenced before Judge Hughes there were nine separate matters listed to be heard concurrently (Black Book Vol. 1 p1). The appellant in these proceedings is the plaintiff in the first matter listed before his Honour. The plaintiffs in the other cases are the owners of the horses which were trained by the appellant. The owners each brought separate proceedings in respect of the injuries to their horses. In all cases the defendants are the respondents to the appeal. 5. During the trial before Judge Hughes it was agreed that the first matter only would be tried and that the result as to breach of duty of care in the remaining cases would abide the result in the first matter (Black Book Vol. 2 p361R-U). 6. The owners of the horses were not party to any contract between the appellant and the respondents so that the tortious remedies also needed to be litigated at trial and argued on appeal. The owners did not buy the contaminated chaff and therefore could not have the benefit of the merchantability count in Section 19(2) of the Sale of Goods Act. The owners were limited to claims based upon tortious liability against each respondent. At trial a case was put and argued against the respondents in negligence for failure to recall in a timely manner. A case was also put and argued in negligence against the first respondent as the manufacturer of the contaminated chaff. These negligence allegations against both respondents were made on behalf of all plaintiffs, and not just the appellant personally. 7. As to the case against the respondents in negligence for failure to recall, the trial Judge found (Red Book 22J-K) that the recall of the bags of contaminated chaff was "carried out in a reasonable and prudent manner". That finding was contested in ground 4 of the Notice of Appeal and dealt with in the appellant's written submissions (Orange Book 43-67). His Honour also found that even if the respondents owed a duty of care to the appellant, the appellant's "own actions of feeding the suspect chaff was so unreasonable that any duty of care no longer applied" (Red Book 23V-W). That finding was contested in ground 15 of the Notice of Appeal and dealt with the appellant's Written Submissions (Orange Book 92-93). The respondents' submissions did not respond to the detailed submissions of the appellant except to say (Orange Book 109G-T) that it did not matter because the appellant had failed to make good the relevant causal connection he had to establish. The Court has now found the necessary causal connection (Judgment para 123). 8. As to the case against the manufacturer, the trial judge made no findings regarding breach of duty by the first respondent. His Honour did find that the manufacturer owed no duty of care because "it knew nothing of the plaintiff until 27 August 1999 and of course it had manufactured the chaff well before that" (Red Book 23Q-T). That finding was challenged on appeal (Orange Book 94). 9. It is submitted the Costs Order made by the Court should receive further consideration. Having regard to the agreement between the parties that the outcome of the owners' cases would depend upon the outcome of the appellant's case, it was necessary, in the appellant's case, to have a full hearing on any tortious liability by either respondent. In the circumstances it is submitted that the appellant should be awarded all his costs. 5 The short answer to this contention is that there was no compulsion upon the appellant to make the agreement that he chose to make that his first matter only would be tried and that the result as to breach of duty in the remaining cases would abide the result in the first matter. That argument of breach of duty was fundamentally weak and took more of the appeal time than it should have done. Whether or not the merchantable quality argument could have been mounted on behalf of the other eight horse owners would no doubt have depended upon their forensic decision to sue not the supplier and manufacturer only or at all but the trainer being the appellant who fed the contaminated chaff. Had they recovered damages against the appellant that damage in turn could have been claimable by the appellant against, in particular, the supplier, as flowing from the failure to supply chaff of merchantable quality to the appellant. 6 Be that as it may, I do not find there to be sufficient basis for varying the costs order that would otherwise be appropriate; and in particular from the agreement that the appellant chose to make with the respondents in relation to the other eight actions. 7 Whether the appellant and the owners sought to resile from the agreement to which I have earlier referred "when the outcome below was adverse", that consideration is not one which should affect a determination as to costs, even if that contention were made out. 8 Finally, I note that paragraph 10 of the appellant's written submissions proposes as an alternative possible course, though not its preferred course, that the Court of Appeal should now determine the grounds of appeal on the non-contractual issues. To the extent that the judgment already does so, further consideration is unnecessary and in any event, the matter has been determined on the basis of merchantable quality. That course is therefore not one which I would be disposed to adopt. 9 In all the circumstances, I would not vary the costs order that "The respondents/defendants to pay 80% of the appellant's costs of the appeal and of the trial in the court below." 10 McCLELLAN CJ at CL: I agree with Santow JA. ********** 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.