New South Wales Court of Appeal CITATION: Equititrust Ltd & Anor v Franks (No 2) [2009] NSWCA 238 HEARING DATE(S): 23 March 2009 JUDGMENT DATE: 13 August 2009 JUDGMENT OF: Ipp JA; Macfarlan JA; Handley AJA (1) Appeal allowed in part. (2) The judgment in the Equity Division is varied by substituting judgment for $274,797.58 in lieu of $427,869 with effect from 4 April 2008. DECISION: (3) Order that $274,797.58 together with interest on that sum at the judgment rate from 4 April 2008 until the payment into Court, and thereafter at the rate paid on funds in Court, be paid out of Court to the solicitors for the respondent, and that the balance, together with accrued interest, be paid out to the solicitors for the appellants. (4) Application for leave to appeal against the cost orders of 4 April 2008 dismissed. (5) No order as to the costs of the appeal including the costs of the application for a stay heard on 18 August 2008. (6) Appeal otherwise dismissed. CATCHWORDS: PROCEDURE - costs and consequential orders - no issue of principle CATEGORY: Consequential orders Equititrust Ltd (formerly Equitiloan Ltd) (First Appellant) PARTIES: Equitiloan Pty Ltd (formerly Equitiloan Securities Pty Ltd) (Second Appellant) Phillip Maurice Franks (Respondent) FILE NUMBER(S): CA 40193/08 COUNSEL: D J Jackson QC/M G McHugh (Appellants) M S Willmott SC/M W Sneddon (Respondent) Marsdens Law Group (Appellants) SOLICITORS: Tucker & Cowen (Appellants) DTA Lawyers (Respondent) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 4333/00 LOWER COURT JUDICIAL OFFICER: Brereton J LOWER COURT DATE OF DECISION: 1 February 2008 and 4 April 2008 LOWER COURT MEDIUM NEUTRAL CITATION: Franks v Equitiloan Securities Pty Ltd [2008] NSWSC 33; Franks v Equitloan Scurities Pty Ltd (No 2) [2008] NSWSC 456 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40193/08 SC 4333/00 IPP JA MACFARLAN JA HANDLEY AJA THURSDAY 13 AUGUST 2009 EQUITITRUST LTD & ANOR v FRANKS (NO 2) Judgment 1 THE COURT: Judgment on this appeal was delivered on 24 July 2009. The parties were directed to bring in short minutes of order reflecting the conclusions of the Court and were given the opportunity to make written submissions as to costs. Short minutes of order and written submissions have now been lodged. Costs of the Appeal 2 The principal issues on the appeal related to promissory estoppel and set-off. A third issue as to a grant of leave to appeal concerning costs orders did not occupy any significant time during the oral hearing and was dealt with briefly in the written submissions and judgment. It can accordingly be left out of account in considering the appropriate orders as to costs of the appeal. 3 The appellants were successful on the estoppel issue, but only partly so because the Court held that, despite the appellants' challenge to the primary judge's estoppel findings, there was an operative estoppel for part of the relevant period. 4 The respondent was successful on the set-off issue. 5 In our view, it is appropriate that there be no order as to the costs of the appeal, to the intent that each party bear its own costs. The estoppel and set-off questions were quite separate issues. For the purpose of considering the costs position, the appellants should be regarded as the successful party on the estoppel issue as they succeeded in obtaining a significant variation to the judgment given at first instance, so far as it was relevant to that issue. To obtain that variation it was necessary for them to bring the appeal. The respondent submitted that the fact that the estoppel point which succeeded was pleaded only in a general fashion detracts from the appellants' position. This submission should not be accepted because, as we held in our earlier judgment, the point was sufficiently pleaded. Costs of the Stay Application of 18 August 2008 6 After a hearing on 18 August 2008, Bell JA ordered that upon payment into Court of the sum of $427,869 pending the determination of the appeal, the orders made by Brereton J at first instance on 4 April 2008 be stayed. The order as entered said that costs were "to await the outcome of the appeal". 7 The appellants contend that they should now have an order in their favour for payment by the respondent of their costs of the application for stay because those costs should "follow the event" of the appeal which the appellants submit was that they were successful. However, as we have indicated above, the appellants and the respondent should be regarded as having each succeeded on one of the two principal issues litigated on appeal. In these circumstances, no order as to costs of the stay application should be made. Orders to be made 8 The following orders reflect the reasons above and matters agreed between the parties: (1) Appeal allowed in part. (2) The judgment in the Equity Division is varied by substituting judgment for $274,797.58 in lieu of $427,869 with effect from 4 April 2008. (3) Order that $274,797.58 together with interest on that sum at the judgment rate from 4 April 2008 until the payment into Court, and thereafter at the rate paid on funds in Court, be paid out of Court to the solicitors for the respondent, and that the balance, together with accrued interest, be paid out to the solicitors for the appellants. (4) Application for leave to appeal against the cost orders of 4 April 2008 dismissed. (5) No order as to the costs of the appeal including the costs of the application for a stay heard on 18 August 2008. (6) Appeal otherwise dismissed. ********** 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.