R T & Y E FALLS INVESTMENTS PTY LTD v STATE OF NEW SOUTH WALES (No 2) [2007] NSWCA 86

New South Wales Court of Appeal

CITATION: R T & Y E FALLS INVESTMENTS PTY LTD v STATE OF NEW SOUTH WALES (No 2) [2007] NSWCA 86

HEARING DATE(S): On papers

JUDGMENT DATE: 16 April 2007

JUDGMENT OF: Beazley JA at 1; Hodgson JA at 2; Ipp JA at 3

DECISION: (a) The State pay the costs of the second trial and the second appeal.; (b) No order be made as to the costs of the proceedings up to the conclusion of the first trial.; (c) The State pay interest of $185,687.14 to 31 March 2007 and interest thereafter at the rate of $47.95 per day.

PARTIES: R T & Y E FALLS INVESTMENTS PTY LTD (Appellant) STATE OF NEW SOUTH WALES (Respondent)

FILE NUMBER(S): CA 40369/05

COUNSEL: B Walker SC/ P T Taylor SC (Appellant) P W Taylor SC/G Laughton SC (Respondent)

SOLICITORS: Taylor & Whitty (Appellant) I V Knight, Crown Solicitor (Respondent)

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): 4422/93

LOWER COURT JUDICIAL OFFICER: Palmer J

LOWER COURT DATE OF DECISION: 14/04/2005

LOWER COURT MEDIUM NEUTRAL CITATION: R T & Y E FALLS INVESTMENTS PTY LTD v STATE OF NEW SOUTH WALES [No 2] [2005] NSWSC 335

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40369/05

BEAZLEY JA HODGSON JA IPP JA

16 April 2007 R T & Y E FALLS INVESTMENTS PTY. LTD v STATE OF NEW SOUTH WALES (No. 2) Judgment 1 BEAZLEY JA: I agree with Ipp JA. 2 HODGSON JA: I agree with Ipp JA. 3 IPP JA: These reasons concern the orders that should be made for interest and costs following this Court's judgment in [2007] NSWCA 18 delivered on 23 February 2007. By that judgment, the appeal of Falls Investments against the State of New South Wales was upheld, the orders made by Palmer J were set aside, and judgment for Falls Investments in the sum of $175,000.00 was ordered. No order was then made in respect of interest and costs as these issues had not been argued. 4 As regards interest, the parties have since agreed that the total interest to 31 March 2007 on the judgment sum is $185,687.14 and increases thereafter by $47.95 per day until payment is made. 5 In [188] of my judgment (with which Beazley and Hodgson JJA agreed), I expressed the provisional view that the State should pay the costs of both trials and the costs of the appeal. Orders were made inviting the State to file written submissions if it wished to contend otherwise and for Falls Investments to file written submissions in reply. The State did file written submissions and Falls Investments replied. 6 Falls Investments' successful appeal was the fourth round of litigation between it and the State of New South Wales (the respondent). Full details of the litigation are given in the reasons delivered in [2007] NSWCA 18. In the first trial, Palmer J gave judgment for Falls Investments in the sum of $607,981.00. In so doing, his Honour dismissed Falls Investments' claims based on contract, estoppel and negligence but upheld its claim under the Fair Trading Act 1987 (NSW). On 25 March 2003, this Court upheld the State's appeal (see State of New South Wales v R T & Y E Falls Investments Pty Ltd (2003) 57 NSWLR 1) on the basis that there had been no contravention of the Fair Trading Act. Falls Investments' appeal in relation to the contract and estoppel causes of action, and also in regard to damages, was dismissed. In the first appeal, this Court upheld Falls Investments' argument in regard to its negligence cause of action on the ground that his Honour had not dealt adequately with the negligence case. The Court remitted Falls Investments' claim in negligence and all questions of costs of the first trial to Palmer J. At the remitted trial, Palmer J dismissed Falls Investments' claim. The judgment in [2007] NSWCA 18 was in respect of the second appeal. 7 As is explained in [85] of [2007] NSWCA 18, the first way in which Falls Investments put its argument in the second appeal was that the State had caused Falls Investments to transfer its agisted cattle to Malton and that the State should have foreseen that that transfer might cause Falls Investments to suffer loss. The second, alternative, way in which Falls Investments put its case was that the State, by its representations, induced Falls Investments to leave infected cattle (the "reactors") with the Malton herd and thereby cause Falls Investments to suffer loss. This case was referred to as "the reactor case". In the second appeal, this Court rejected Falls Investments' case based on the transfer of the agisted cattle but upheld the reactor case. 8 In dealing with the costs issues, the State made three primary submissions, namely, that Falls Investments: