Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd (No 2) [2015] NSWCA 68 Hearing dates: On the papers. Last written submission 17 March 2015 Decision date: 25 March 2015 Before: Macfarlan JA, Gleeson JA, Sackville AJA Decision: 1. In addition to Order 2 made on 5 February 2015 (setting aside Order 3 made by McDougall J on 12 May 2014), set aside Orders 2 and 4 made by McDougall J on 12 May 2014. 2. In lieu of Orders 2, 3 and 4 made by McDougall J on 12 May 2014, make the following orders: (2)Verdict for the cross-claimant (Robertson) on its cross-claim in the sum of $1,009.477.15, inclusive of interest to 1 May 2014. (3)Direct entry of judgment for Robertson against the cross-defendant (Composters) in the sum of $974,660.15, such judgment to take effect from 1 May 2014. 3. No order for the costs of the appeal, with the intent that each party bears its own costs. 4. Note the agreement of the parties that the amount owing by Composters to Robertson, as at 17 March 2015, is the sum of $641,716.73. Legislation Cited: Civil Procedure Act 2005 (NSW), s 90(2)(a) Cases Cited: Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 Category: Costs Parties: Mushroom Composters Pty Ltd (Appellant) IS & DE Robertson Pty Ltd (Respondent) Representation: Counsel: B Walker SC / S Duggan (Appellant) BF Katekar / D Krochmalik (Respondent) Solicitors: HWL Ebsworth Lawyers (Appellant) Henry Davis York (Respondent) File Number(s): 2014/158572 Decision under appeal Court or tribunal: Supreme Court Citation: Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164 (4 March 2014) Mushroom Composters v Robertson (No 2) [2014] NSWSC 552 (12 May 2014) Date of Decision: 12 May 2014 Before: McDougall J File Number(s): 2011/20925 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: The Court delivered judgment in this appeal on 5 February 2015: Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 (Principal Judgment). This judgment needs to be read with the Principal Judgment. The same abbreviations are used. 2. The Court allowed Composters' appeal in part. The Court set aside Order 3 made by McDougall J on 12 May 2014, which directed entry of judgment, pursuant to the Civil Procedure Act 2005 (NSW), s 90(2)(a), for Robertson against Composters in the sum of $1,556,206. 3. The parties were directed to bring in agreed short minutes of order. In the absence of agreement, the parties were directed to file and serve their own proposed short minutes of order, together with brief written submissions. 4. Each party duly filed short minutes of order and written submissions. As there seemed to be significant differences in calculations between the submissions and lack of clarity as to whether the sum of $400,000 held by the Principal Registrar by way of bank guarantee had been paid out to Robertson, the parties were asked to clarify their respective positions. 5. As the result of that request, the parties provided a joint note, as follows: "1. The parties set out agreed calculations as to damages below. (a) Verdict for the Respondent for the first component of damages assessed by McDougall J at paragraph 3 of the his reasons handed down on 12 May 2014. $808,328.00 (b) Pre-judgment interest from 1 February 2011 to 1 May 2014. The interest calculation was provided to McDougall J at first instance and accepted by him in arriving at the final verdict as at 1 May 2014. $201,149.15 (c) Less the verdict for the Appellant assessed by McDougall J at paragraph 33(1) of the Judgment. This includes pre-judgment interest on the verdict for Appellant from 20 January 2011 to 1 May 2014 in the sum of $7,002. The interest calculation was provided to McDougall J at first instance. ($34,817) (d) Subtotal in favour of the Respondent as at 1 May 2014. $974,660.15 (e) Plus post judgment interest from 2 May 2014 to 8 January 2015. $57,197.86 (f) Less $400,000 bank guarantee held by the Principal Registrar and paid to the Respondent on 8 January 2015 ($400,000.00) (g) Subtotal as at 8 January 2015 $631,858.01 (h) Plus post judgment interest from 9 January to 17 March 2015. $9,858.72 (i) Total as at 17 March 2015 $641,716.73 2. The Appellant and Respondent agree, that in light of the reasons of the Court of Appeal, that the appropriate orders that McDougall J ought to have made are: (a) Verdict for the Respondent on its cross-claim in the sum of $1,009,477.15 inclusive of interest to 1 May 2014; and (b) Direct entry of judgment against the Appellant in the sum of $974,660.15 and that judgment to take effect from 1 May 2014. 3. The Appellant and the Respondent agree that the amount owing by the Appellant to the Respondent as at 17 March 2015 is the sum of $641,716.73. 4. The Appellant and the Respondent agree that the cost orders of McDougall J at first instance should not be disturbed. 5. Hence the only matter in dispute is the appropriate costs of the appeal." (References omitted.) 1. The Principal Judgment recorded (at [90]) the preliminary view of the Court that, subject to written submissions, no order should be made as to the costs of the appeal. 2. Composters submits that Robertson should pay 50 per cent of Composters' costs of the appeal because: * the appeal was successful in defeating Robertson's claim in respect of years 3 and 4 of the alleged contract (that claim amounting to $514,091, plus interest); and * most of the appeal grounds related to the contractual effect of the arrangements between the parties and, while Composters concentrated on the lack of agreement as to price in years 3 and 4, other issues were still relevant to the appeal. 1. Robertson's submissions point out that Composters abandoned five of its 11 grounds of appeal at the outset of the hearing. The abandoned grounds involved challenges to more than half of the damages awarded to Robertson. As Robertson also pointed out, a number of other issues addressed in Composters' written submissions were not pursued at the hearing. 2. In substance, Composters' argument on the appeal relied on a single ground, namely the absence of a final and concluded agreement between the parties as to price. By refining the issues in this way, Composters' senior counsel reduced the time required for the hearing. Refinement of the issues by concentrating only on the really significant matters is something to be encouraged. 3. The difficulty for Composters, so far as its claim for costs is concerned, is that the refinement took place at a very late stage in the proceedings. A good deal of work undertaken by Robertson's legal representatives would not have been necessary had the refinement taken place in a timely fashion. Moreover, Composters did not merely abandon a number of arguments. It conceded that the bulk of the damages award made by the primary Judge in Robertson's favour should stand. That concession was only made at or perhaps very shortly before the hearing of the appeal. 4. For these reasons, it is appropriate that no order should be made as to the costs of the appeal, with the intent that each party bears its own costs. 5. The following orders should be made: 1. In addition to Order 2 made on 5 February 2015 (setting aside Order 3 made by McDougall J on 12 May 2014), set aside Orders 2 and 4 made by McDougall J on 12 May 2014. 2. In lieu of Orders 2, 3 and 4 made by McDougall J on 12 May 2014, make the following orders: (2) Verdict for the cross-claimant (Robertson) on its cross-claim in the sum of $1,009.477.15, inclusive of interest to 1 May 2014. (3) Direct entry of judgment for Robertson against the cross-defendant (Composters) in the sum of $974,660.15, such judgment to take effect from 1 May 2014. 3. No order for the costs of the appeal, with the intent that each party bears its own costs. 4. Note the agreement of the parties that the amount owing by Composters to Robertson, as at 17 March 2015, is the sum of $641,716.73. ********** 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. Decision last updated: 25 March 2015