McCartney & Ors v Orica Investments Pty Ltd & Ors

Court of Appeal (NSW)|2011-12-13|Before: Giles JA, Macfarlan JA, Young JA, White J, Ball J

Judgment 1THE COURT : Judgment in this appeal was given on 8 November 2011: McCartney v Orica Investments Pty Ltd [2011] NSWCA 337. These reasons are concerned with consequential matters. 2The primary judge assessed damages for the loss by B & J of the Clos distributorship. A significant issue was whether the Clos distributorship would have been lost in any event, even if the appellants had not engaged in their wrongful conduct. The primary judge did not accept Mr Bontoux' evidence that Clos would have terminated the distributorship in any event, and made findings on a percentage basis of the likelihood of its termination. His Honour assessed damages at $1,219,829.70 plus interest. 3The appellants' challenge to his Honour's refusal to accept Mr Bontoux' evidence was upheld. That did not mean that his evidence should be accepted, and we held that there should be a new trial on the issue of whether the Clos distributorship would have been terminated in any event. 4We went further, against the possibility that the parties would be assisted in the future course of the proceedings, perhaps even assisted to come to an accommodation. On the assumption that Mr Bontoux' evidence was not accepted, we held that the primary judge's findings as to the likelihood that the Clos distributorship would have been terminated was erroneous and his assessment of damages on that basis could not stand. Contingent findings of likelihood on a percentage basis were made, and we contingently reassessed damages at $612,917 plus interest. 5The parties did not come to an accommodation. Written submissions on outstanding matters were received.

The new trial 10The appellants' submissions included that the new trial should be limited to whether through acceptance of Mr Bontoux' evidence the Clos distributorship would have been terminated in any event. They sought to preserve our contingent findings. 11No liberty so to submit was reserved. We believe it was made clear that the new trial on the issue of whether the Clos distributorship would have been lost in any event would extend generally to the likelihood of termination, see in particular at [98] pointing out that "the two questions of acceptance of [Mr Bontoux'] evidence, and some lesser likelihood of termination can not sensibly be separated". We remain of that view. 12The appellants' submission that in the new trial the findings contingently made on appeal will bind the trial judge is not correct. The trial judge will determine the likelihood that the Clos distributorship would have terminated on the evidence as freshly adduced, including (if he gives evidence) the evidence of Mr Bontoux. The finding will then be translated into the damages.

Repayment of the judgment sum 13The appellants had paid the judgment sum. The respondents accepted that it should be repaid, but only in so far as it exceeded our contingent assessment, and submitted that the amount of the contingent assessment should be paid into court or into an interest-bearing account pending final determination of the proceedings. 14The submission suffers the same difficulty as the appellants' submissions abovementioned. Our contingent reassessment falls away when there must be the new trial; it may be that the damages are nil or a much smaller amount. Payment into court would amount to a form of Mareva relief, for which no basis has been shown. 15An order for restitution of the amount paid, with interest at Court rates, should be made.

Costs 16The appellants submitted that the trial costs should be costs in the new trial. The respondents submitted that they should be in the disposal of the judge hearing the new trial, alternatively that they should be costs in the new trial. 17For what reason(s) might the judge dispose of the costs of the previous trial in a different manner from the costs of the new trial? The respondents suggested that much of the preparation for the first trial would be relied upon for the new trial. No doubt some will, but that will make it appropriate for those costs to follow the event of the new trial. The respondents also said that there had been without prejudice correspondence prior to the conclusion of the trial before the primary judge. Whatever may flow from that will equally flow in the costs order(s) following decision in the new trial. 18In our view, the trial costs thus far should be costs in the new trial. If there be grounds to do so, the judge's orders as to costs can take account of the earlier trial. The alternatives suggested by the respondents may not differ in practice. 19The appellants submitted that they should have the appeal costs. They said that they succeeded in the event (UCPR r 42.1), being a successful challenge to the primary judge's assessment, and that the issues of gross profit margin, allowance for overheads and failure to mitigate on which they were unsuccessful were not dominant or separable issues and did not otherwise call for an order other than that costs follow the event. If any reduction were to be made, they said, it should be modest - in the order of 10 per cent. The respondents submitted that the appellants should bear a proportion of the appeal costs, to reflect the fact that they were unsuccessful on some issues. They said that the reduction should be in the order of 30 per cent. 20In our view the issues of gross profit margin, allowance for overheads and mitigation of loss were sufficiently discrete, each apt to reduce (even eliminate) the damages, to warrant a reduction in the costs entitlement of the appellants. However, the bulk of the costs would have been incurred in attention to the larger issues on which the appellants succeeded, and the appellants had signal success in a hard-fought appeal. The reduction should be 15 per cent.

Orders 21We make the following orders. (1) Appeal allowed. (2) Set aside the orders made on 28 May and 2 June 2010. (3) Remit the proceedings to the Equity Division for a new trial as to whether the Clos distributorship would have been lost in any event and consequentially the damages for loss of the distributorship. (4) Order that the respondents repay to the appellants $1,819,350.59 and interest at pre-judgment Court rates from the date of payment by the appellants. (5) Trial costs to date be costs in the new trial. (6) Respondents pay 85 per cent of the appellants' appeal costs.

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: 13 December 2011

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