Metzke & Anor v Sali & Anor

2 The costs of the appeal and the cross-appeal now fall to be determined. Both sides were agreed that we could determine the question of these costs on written submissions filed by them. In summary, Metze and Allen contend that they should get their costs of the appeal and the cross-appeal. The Sali parties contend that there should be no order as to costs of the appeal and the cross-appeal.

3 The appeal and the cross-appeal raised nine questions:

1. Was the trial judge wrong in concluding that Metzke & Allen failed to exercise reasonable care and skill in October 1999 by not considering and advising the Sali brothers in relation to the financial result for Universal Logistics for the year ended 30 June 1999?[2]

2. Was the trial judge wrong in concluding that this failure had no relevant consequence, as the sum of $199,990 would have been advanced in any event?[3]

3. Was the trial judge wrong to conclude that Metzke & Allen were negligent in failing to take the steps referred to by the trial judge by the end of July 2000?[4]

4. Was the trial judge wrong to conclude that the failure of Metzke & Allen to do so would have prevented the loss found to have been suffered by S Sali & Sons?[5]

5. Was it open on the pleadings for the trial judge to reach this conclusion?[6]

6. Was the trial judge wrong in not finding negligence in relation to the period during which S Sali and Sons' debt increased between September 1999 and July 2000?[7]

7. Was the trial judge wrong in concluding there was no contributory negligence?[8]

8. Was the trial judge wrong to conclude that Mr Blizzard was a concurrent wrongdoer?[9]

9. If Mr Blizzard was a concurrent wrongdoer, was the apportionment of 70 per cent to him wrong?[10]

4 Questions 3, 4, 5 and 7 related to the appeal. Metke & Allen failed in respect of questions 3, 4 and 5, but were successful in respect of question 7 (the issue of contributory negligence). The substantial bulk of the appeal was taken up with questions 3, 4 and 5. In our view, this is a case where it is appropriate to apportion costs across issues. Whilst the appeal on the issue of contributory negligence had merit, the same cannot be said about the appeal so far as it concerned the negligence of Metzke & Allen.

5 One approach that might be taken is to order Metzke & Allen to pay the costs of questions 3, 4 and 5 and the Sali parties to pay the costs of question 7. Recognising that Metzke & Allen had to appeal in any event to succeed on the issue of contributory negligence, we are of the view that the appropriate order, so far as the appeal is concerned, is that there be no order as to costs.

6 The cross-appeal involved questions 1, 2, 6, 8 and 9. The Sali parties contend that the cross-appeal was 'well justified...on the basis that the apportionment made by the trial judge in reliance upon breach of the Hedley Byrne duty was unjustified, and should not have been permitted, as the Hedley Byrne duty had never been pleaded'. Whilst we formed the view that the amended defence did not plead the facts necessary to establish a Hedley Byrne duty, and that senior counsel for Metzke & Allen should have sought leave to further amend the defence,[11] we reject the submission that the conduct of the cross-appeal was well justified. The cross-appeal contained 16 grounds. The Sali parties enjoyed no success in respect of any of them. We see no reason why the costs of the cross-appeal should not follow the event.

7 It follows that the appeal will be allowed in part with no order as to costs and the cross-appeal will be dismissed with costs.

8 In their written submissions, the Sali parties applied for an indemnity certificate in the following terms:

If the Court makes an order for costs against the respondents, the respondents seek an indemnity certificate in respect of costs under s 4(1)(b) of the Appeal Costs Act 1998.

9 We take this to be an application in respect of any orders for costs made against the Sali parties in the appeal, because the Sali parties have no entitlement to an indemnity certificate in respect of the costs of the cross-appeal. The application for a certificate, being predicated on an order for costs in the appeal being made against the Sali parties, must be refused in circumstances where no such order has been made.

[1] [2010] VSCA 267.

[2] Metzke & Allen's notice of contention.

[3] The Sali parties' appeal grounds 1 to 5.

[4] Metzke & Allen's appeal grounds 1 and 2.

[5] Metzke & Allen's appeal grounds 3 and 4.

[7] The Sali parties' cross-appeal, specifically grounds 14 and 16.

[9] The Sali parties' cross-appeal ground 11.

[10] The Sali parties' cross-appeal ground 12.

[11] [2010] VSCA 267, [78].