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[2025] NSWCA 218
procedural. Each party was ordered to bear its own appeal costs. The costs of the proceedings before Elkaim AJ were made costs in the cause. No security-for-costs order was made. The Court set limits and...
The Court had already ordered a retrial on two limited matters. In this follow-up decision, it decided that neither party should pay the other's appeal costs because each had succeeded and failed on important issues. The costs of the original trial were left to the retrial judge, who would know the final result. The Court did not order security for costs because no motion or supporting evidence had been filed. It set out which parts of the earlier trial record would remain in use and what additional witness and expert evidence could be given, while leaving the retrial judge free to make relevant factual findings.
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2,118 words · generated 06/10/2026
This is a consequential judgment, not the substantive decision determining the parties' underlying contractual and other disputes. The Court of Appeal had published its substantive judgment on 28 August 2025. It allowed Netdeen's appeal in part, set aside the orders made below on 17 October 2024, and ordered a retrial confined to two matters identified in that earlier judgment ([1]). The parties were directed to try to agree on costs and other necessary orders. They did not agree, so the Court decided those questions on the papers.
4 cited instruments linked from this judgment.
The parties took different positions on appeal costs and the costs of the original trial. Netdeen sought its appeal costs and 50 per cent of its first-instance costs, with the balance reserved until after the retrial ([3]). Lindfield sought either costs in the cause for both the appeal and trial, or no order as to appeal costs ([7]). Netdeen also sought security for costs of the retrial in the amount of $624,862 and a stay pending compliance ([4]). Lindfield opposed that request, pointing out that no motion or supporting evidence had been filed ([8]).
The parties also disagreed about how much of the original trial should be repeated. Netdeen asked that the retrial proceed on the existing pleadings and trial record, with further cross-examination confined to the remitted matters ([5]). Lindfield proposed additional orders addressing the evidence, expert reports, factual findings, and allocation of costs ([10]–[12]). Both parties sought case-management orders, including a five-day listing, but the Court left those arrangements to the retrial judge ([28]–[29]).
The Court ordered each party to bear its own appeal costs, made the first-instance costs costs in the cause, and made no security order. It also authorised specified additional oral evidence on the cl 4.7 issue and additional expert evidence on damages, while preserving the existing cases and trial record as the basis for the retrial ([35]).
The Court began with the parties' common ground about the costs framework. Under CPA s 98, costs are discretionary. UCPR r 42.1 states the usual rule that costs follow the event, but the Court noted that a successful party may be deprived of costs if it failed on substantial issues ([14]). The judgment applies that framework to the overall appeal rather than treating the fact that Netdeen obtained a partial allowance as determinative.
The Court reviewed the seven key issues identified in the substantive judgment ([16]). Neither party's preferred construction of cl 4.7 was accepted ([17]). The primary judge's failure to make appropriate findings on that issue led to a retrial, and the Court said neither party should bear responsibility for that failure ([18]). Netdeen failed in its challenge concerning cl 4.6 ([19]). On unconscionability, it succeeded on many grounds, although some grounds were not determined, and Lindfield's relevant amended notice of contention was rejected ([20]). On the Wattle Court venture, Netdeen failed on its appeal grounds while Lindfield succeeded on parts of its notice of contention ([21]). Netdeen also failed in challenging the admission of Mr Potter's reports ([22]). It succeeded on the damages issue, which was remitted for retrial ([23]).
The Court recognised that some issues consumed more resources than others but said none was insignificant or peripheral. It characterised the parties' overall success and failure as roughly even ([24]). On that evaluation, each party bearing its own appeal costs was appropriate ([25]). The decision is therefore fact-sensitive: the Court did not announce that partial success invariably means no order as to costs. It assessed the result across the substantial issues in this appeal.
The first-instance costs were treated differently. The retrial would resolve two matters that could affect the practical outcome of the proceedings. The retrial judge would have the benefit of knowing that outcome and, in the Court's view, would be best placed to apply r 42.1 to both the first-instance proceedings and the retrial ([26]). The order that those earlier costs be “costs in the cause” leaves their treatment for later determination, rather than awarding them immediately to either party.
The security request was not determined on its merits. The Court's reason was procedural and specific: Netdeen had not filed a notice of motion or supporting evidence ([27]). The judgment does not set out a general test for security for costs or decide whether the amount sought was justified.
For the retrial, the Court relied on UCPR r 51.53 and CPA s 89 as sources of power to make orders affecting its scope ([30]). It regarded the cl 4.7 retrial as reopening an issue on which the primary judge had not made clear findings using the construction settled by the Court of Appeal. The Court accepted that the parties should remain bound by their existing pleadings, affidavit evidence, discovery orders, documentary tenders, and general forensic decisions ([30]). It permitted additional oral evidence from the named witnesses on the breach issue, with cross-examination rights ([31], [35]). On damages, it allowed each party's expert to give further evidence in chief and be available for further cross-examination ([34]–[35]).
The Court rejected a proposal to bind the retrial judge to the primary judge's factual findings, except where already overturned or necessarily arising from the earlier orders. It considered that would unduly constrain the retrial judge, who should be able to make relevant findings on the remitted matters ([32]). The orders remain subject to contrary or different orders by the retrial judge ([33]).
The judgment states and applies existing procedural rules; it does not purport to change the law. Before this decision, the substantive appeal had already established that there would be a limited retrial and identified its two matters. The consequential question was how to allocate costs and make that retrial workable.
For costs, the Court restated CPA s 98 and UCPR r 42.1: costs are discretionary, and the usual rule is that costs follow the event ([14]). It then applied that framework to a partial appeal outcome in which each party had succeeded and failed on important issues. The immediate result was that neither party received appeal costs ([25]). It left first-instance costs to be resolved in light of the retrial outcome ([26]). This is the application of the cited framework to these facts, not a new general formula for mixed-success appeals.
For retrials, the Court identified UCPR r 51.53 and CPA s 89 as the relevant powers ([30]). Its orders illustrate a balance between continuity and a fair opportunity to address the matters being retried: the existing cases and record remain the starting point, but specified additional evidence is permitted. The retrial judge is not bound by the primary judge's factual findings on the matters remitted and may make relevant findings ([30]–[33]).
The judgment does not describe the law before the cited provisions, compare different statutory versions, or discuss a change in doctrine. Accordingly, its contribution, as shown by the reasons provided, is the application of the cited procedural and costs rules to this particular partial appeal and retrial.
At [14], the Court says costs are discretionary under CPA s 98 and that the usual rule is that costs follow the event under UCPR r 42.1. In plain English, the result normally matters to who pays costs, but the court retains discretion to make a different order where the circumstances justify it.
At [24], the Court says both parties had “roughly even measures of success and failure”. This explains why the Court did not simply treat Netdeen's partial success as enough to award it the costs of the appeal. It assessed the overall result across the significant issues.
At [25], the Court orders each party to bear its own appeal costs. In practical terms, neither party receives an appeal-costs award against the other under this decision.
At [26], the Court says the retrial judge should be best placed to assess costs of the first-instance proceedings and retrial after knowing the outcome. “Costs in the cause” means those costs remain to be dealt with later in connection with the eventual result; the Court did not allocate them immediately.
At [27], the Court declines to determine security for costs because there was no notice of motion or supporting evidence. This is not a ruling that security could never be ordered. The judgment leaves the question for the retrial judge if Netdeen makes an application.
At [32], the Court says binding the retrial judge to the primary judge's factual findings would impose an “undue and undesirable constraint”. The retrial judge must be able to make relevant factual findings on the matters sent back for decision.
At [33], the Court makes the retrial arrangements subject to contrary or different orders by the retrial judge. In plain English, the Court sets the initial boundaries, but the judge managing the retrial retains authority to adjust them.
The reasoning on appeal costs is most directly relevant to a situation where an appeal has a mixed result across several substantial issues, rather than one party succeeding on the appeal as a whole in a straightforward way. Here, the Court reviewed seven issues, identified significant successes and failures for both sides, and considered none of the issues peripheral ([16]–[24]). It then ordered each party to bear its own appeal costs ([25]). The judgment does not establish that this order is automatic whenever an appeal succeeds in part.
The reasoning about trial costs concerns proceedings where a retrial remains necessary and the outcome of the remitted issues may affect the practical result of the litigation. Here, the Court considered the retrial outcome relevant to applying the costs rule to the first-instance proceedings and left that question to the retrial judge ([26]).
The security-for-costs discussion concerns an application made in the absence of the procedural material identified by the Court: a notice of motion and supporting evidence ([27]). The reasons do not determine the substantive merits of a security application supported by evidence.
The retrial-scope reasoning concerns a retrial limited to particular matters after an appeal, where there is a trial record that can largely be carried forward but some additional evidence is needed. The Court preserved the parties' prior cases and forensic steps while permitting specified additional evidence and further cross-examination ([30]–[35]). It also rejected an order that would bind the retrial judge to prior factual findings on remitted matters ([32]). These features define the setting addressed by the judgment; the reasons should not be read as prescribing the exact same evidentiary arrangement for every retrial.
The judgment supplied here does not identify any later court decisions considering or applying this decision. It therefore provides no basis to describe subsequent judicial treatment or to say that later courts have followed, distinguished, or departed from it.
The only case identified in the reasons is the same proceeding's substantive appeal decision, Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd [2025] NSWCA 196. The present reasons refer to that decision for the earlier orders, the issues determined on appeal, and the construction governing the cl 4.7 breach issue ([1], [16]–[24], [30], [35]). That is the relationship between the two decisions shown by this text. Any account of subsequent treatment would require later judgments not included in the supplied material.
The judgment leaves the ultimate allocation of first-instance and retrial costs open. It expressly assigns that assessment to the retrial judge, who will know how the remitted issues are resolved ([26]). The present reasons therefore do not determine which party will ultimately bear those costs.
The security-for-costs question is also unresolved. The Court did not assess the amount of $624,862 or determine whether security should be ordered. It left the question for the retrial judge if Netdeen wished to make an application ([27]).
Several case-management matters are left to the judge who manages the retrial. The Court declined to set a five-day hearing or direct filing of opening submissions, saying these matters should be handled through retrial case management ([28]–[29]). It also left the question of whether the experts should prepare a joint report to the retrial judge ([34]).
Finally, the operative order is subject to any contrary or different order by the retrial judge ([33], [35]). The judgment establishes the initial evidentiary framework but leaves room for the retrial judge to respond to issues arising in the conduct of the proceedings. The reasons do not state how that discretion will be exercised in any later application.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd (No 2) [2025] NSWCA 218
Hearing dates: On the papers
Date of orders: 29 September 2025
Decision date: 29 September 2025
Before: Stern JA; Ball JA; Griffiths AJA
Decision: (1) Each party bear its own costs of the appeal.
(2) Costs of the proceedings before Elkaim AJ be costs in the cause.
(3) Pursuant to UCPR r 51.53 and/or s 89 of the CPA, and subject to any contrary or different orders by the retrial judge, on the retrial leave is granted:
(a) to the defendant below to reopen its case, so as to lead further oral evidence in chief from any of Messrs Greg Gardner, Darren Wallis, Trent Gardner and Christopher Thornton on the issue whether the defendant breached cl 4.7, on the construction determined by the Court of Appeal in its judgment on 28 August 2025 at [2025] NSWCA 196 (the breach issue), and (if necessary) leave is granted to the plaintiff to have any of those witnesses recalled for further cross-examination on the breach issue;
(b) to the parties to lead additional evidence in chief from their respective experts (in the case of the plaintiff, Mr Michael Potter and in the case of the defendant, Mr Andrew Ross) in respect of order 3(b) dated 28 August 2025, and (if necessary) leave is granted to each of the parties to have the other party’s expert recalled for further cross-examination.
(4) Pursuant to UCPR r 51.53 and/or s 89 of the CPA, and subject to any contrary or different orders by the retrial judge, the retrial proceedings are otherwise to be conducted on the basis of the respective parties’ cases, including pleadings, affidavit evidence, documentary tender, rulings on evidence, oral evidence and cross-examinations as recorded in the transcript, and any concessions or admissions made by a party at or before the hearing.
Catchwords: COSTS — where appellant enjoyed partial success on appeal — where retrial ordered — whether to apply usual rule as to costs for costs of appeal — whether costs of trial should be costs in cause — whether to order security for costs for the retrial
CIVIL PROCEDURE — Court of Appeal — where retrial ordered — whether orders should be made affecting ambit of retrial
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 89, 98
Uniform Civil Procedure Rules 2005, rr 51.53, 42.1
Cases Cited: Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd [2025] NSWCA 196
Category: Costs
Parties: Netdeen Pty Ltd trading as GJ Gardner Homes (Appellant)
Lindfield NSW Pty Ltd (Respondent)
Representation: Counsel:
S Couper KC and JV Gooley (Appellant)
TD Castle SC and D Levi (Respondent)
Solicitors:
Thomson Geer (Appellant)
Addisons (Respondent)
File Number(s): 2024/00392632
Publication restriction: Nil
THE COURT**:** On 28 August 2025, the Court published its substantive judgment in the appeal (see Netdeen Pty Ltd t/as GJ Gardner Homes v Lindfield NSW Pty Ltd [2025] NSWCA 196 (AJ)). The appeal was allowed in part. The orders below dated 17 October 2024 were set aside and a retrial was ordered limited to only two matters specified in order 3. The parties were also ordered to seek to agree costs and any other necessary orders within 21 days. If agreement could not be reached (as has been proven to be the case) each party was directed to file and serve an outline of written submissions. The parties were informed that final orders would be made on the papers and without a further hearing.
These reasons for judgment concern costs and other necessary orders. For convenience, we will use the same abbreviations as in AJ and familiarity with those earlier reasons for judgment will be assumed.
Netdeen contended that Lindfield should pay its costs of and incidental to the appeal, as well as 50% of Netdeen’s costs of and incidental to the proceedings below. It contended that the remainder of the costs of and incidental to the proceedings below should be reserved pending the determination by the retrial judge of the two matters specified in order 3.
Netdeen also sought an order that Lindfield pay security for costs in respect of the retrial in the sum of $624,862 by means agreed between the parties. Moreover, it contended that the retrial should be stayed subject to Lindfield complying with the orders sought by Netdeen.
As to the conduct of the retrial, Netdeen contended that the Court should order now that the retrial be conducted on the basis of the respective parties’ cases, including pleadings, affidavit evidence, documentary tender, rulings on evidence, oral evidence in cross-examinations as recorded in the transcript of the previous trial, and any concessions or admissions made by a party at or before the hearing. Netdeen asked the Court to grant leave to the parties for the purposes of the retrial to cross-examine witnesses, including the expert witnesses, strictly on the remitted matters as identified in AJ[233].
Netdeen also urged the Court to make orders now regarding the filing and serving of written outlines of opening submissions for the purposes of the retrial and to list the retrial for a period of 5 days on a date convenient to the retrial judge.
Lindfield sought an order that the parties’ costs of both the appeal and of the trial be costs in the cause. Alternatively, it submitted that there should be no order as to costs of the appeal.
Lindfield opposed the making of any order as to security for costs in respect of the retrial on the basis that Netdeen had not filed any motion or supporting evidence.
As to the retrial itself, Lindfield sought an order that the matter be remitted to the Chief Judge in Equity to allocate a new judge to conduct the retrial in accordance with order 3 dated 28 August 2025 and to set the retrial down for a hearing with an estimated time of 5 days.
Lindfield also sought orders pursuant to r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and/or s 89 of the Civil Procedure Act 2005 (NSW) (CPA) so as to limit the retrial in the following manner:
(a) Netdeen have leave to reopen its case in respect of order 3(a) dated 28 August 2025 so as to lead further oral evidence in chief from Messrs Greg Gardner, Darren Wallis, Trent Gardner and Christopher Thornton on the issue whether Netdeen breached cl 4.7 of the MFA dated 1 July 2014 based on the construction determined by this Court in AJ, and Lindfield have leave to have any of those witnesses recalled for further cross-examination for the purposes of order 3(a) dated 28 August 2025. (b) Lindfield have leave to reopen its case in respect of order 3(b) dated 28 August 2025, so as to allow Mr Michael Potter to be recalled for examination or cross-examination and/or to have Mr Andrew Ross recalled for further cross-examination for the purposes of the same order.
Lindfield also sought an order pursuant to UCPR r 51.53 that Mr Potter and Mr Ross meet in conclave and prepare a joint report at least 14 days before the hearing of the retrial.
Further, Lindfield sought an order pursuant to UCPR r 51.53 and/or s 89 of the CPA that the retrial judge shall, unless and to the extent overruled or clarified by the Court of Appeal:
(a) Rely on all matters as they stood at the close of the respective parties’ cases at the first trial, including pleadings, affidavit evidence, documentary tender, rulings on evidence, oral evidence in cross-examination as recorded in the transcript and any concessions or admissions made by a party at or before the hearing. (b) Rely on findings of fact made by Elkaim AJ at the first trial. (c) Be entitled to a grant of leave to vary any of Lindfield’s proposed orders regarding the conduct of the retrial (apart from the first of those proposed orders) if it appeared to the retrial judge to be just and convenient to do so, on motion by a party before or during the hearing of the retrial. (d) Determine all questions of costs of the prior trial, appeal and retrial at the conclusion of the retrial.
We consider that this is an appropriate case in which the usual rule should not be applied to the costs of the appeal because, although Netdeen was successful in obtaining an order that the appeal be allowed in part, it failed on several key issues, as we will now outline.
At AJ[4], the Court identified the following seven key issues to be determined on the appeal:
The proper construction of cl 4.7 of the MFA, which places limits on the right of renewal.
The findings the primary judge made, or failed to make, concerning whether the requirements of cl 4.7 of the MFA were satisfied by Netdeen, and whether findings on that issue can be made on appeal.
Whether the primary judge erred in finding that Netdeen breached cl 4.6 of the MFA by offering renewal terms on something other than the then current master franchising agreement.
Whether Netdeen acted unconscionably in breach of s 21 of the ACL, whether for the reasons relied upon by the primary judge or as contended in the amended notice of contention.
Whether the primary judge erred in failing to find that Lindfield repudiated the MFA by reason of its involvement in establishing a rival business to the one carried on by GJ Gardner Homes through a company known as Wattle Court Homes Pty Ltd (Wattle Court) and thereby lost the right to renew the MFA.
Whether the primary judge erred in admitting Mr Potter’s reports into evidence.
Whether the primary judge erred in his Honour’s assessment of damages and, if so, whether his Honour’s assessment can be sustained having regard to the matters relied upon in the amended notice of contention.
In broad terms, these issues were ultimately determined in a way which resulted in both parties experiencing roughly equal amounts of success and failure. Thus, as to the first issue, neither party supported the primary judge’s construction of cl 4.7 of the MFA, but the Court ultimately did not accept either of the parties’ preferred constructions.
As to the second issue, neither party should bear responsibility for the primary judge’s failure to make appropriate findings below based upon the proper construction of cl 4.7, which occasions the need for a retrial on that issue.
As to the third issue, Netdeen failed in its challenge to the primary judge’s finding that it had breached cl 4.6 of the MFA by offering renewal terms on something other than the then current master franchising agreement.
As to the fourth issue, Netdeen succeeded in many of the grounds of appeal relating to the primary judge’s finding that it had engaged in unconscionable conduct in breach of s 21 of the ACL, but the Court found it unnecessary to determine grounds 11-22 of the notice of appeal. The Court also rejected those parts of Lindfield’s amended notice of contention relating to unconscionability.
As to the retrial, we do not accept Lindfield’s submission that there should be an order remitting the matter to the Chief Judge in Equity so that a new judge can be appointed to conduct the retrial. Order 3 itself directs that there be a retrial limited to determining the two relevant matters. It is a matter for the parties to approach the Chief Judge in Equity to progress the matter.
Similarly, it is not appropriate for this Court at this time to set the retrial down for a hearing with an estimated time of 5 days as sought by both parties. The case management of the retrial should be left to the retrial judge (or the judge giving directions for the retrial), including giving directions for the provision of written outlines of submissions.
It is appropriate, however, that this Court make some orders affecting the ambit of the retrial with a view to ensuring that the retrial is limited to the two matters specified in order 3. The Court’s powers in relation to a retrial are set out in UCPR r 51.53 and s 89 of the CPA. The retrial regarding the matter described in order 3(a) is best viewed as a reopening of that matter in circumstances where the primary judge failed to make clear findings on the issue of whether there was a breach of cl 4.7 of the MFA, properly construed. Accordingly, we accept Lindfield’s submission that both parties should be bound by their existing pleadings, affidavit evidence, discovery orders, documentary tenders and general forensic decisions made at the first trial.
Leave should be granted for Netdeen to adduce further evidence from Messrs Greg Gardner, Darren Wallis, Trent Gardner and Christopher Thornton on the issue whether Netdeen breached cl 4.7, properly construed. That evidence should be led orally and not by way of further affidavits. Lindfield should have leave to cross-examine those witnesses.
We do not accept Lindfield’s submission that the parties should also be bound by factual findings made by the primary judge except to the extent that they have been overturned by this Court or necessarily arise within the scope of order 3. This would impose an undue and undesirable constraint on the retrial judge, who should be at liberty to make any findings of fact which are relevant to the matters remitted for retrial.
The orders we will make concerning the scope and conduct of the retrial will also be subject to any contrary or different order made by the retrial judge.
As to the retrial relating to order 3(b) (i.e. quantification of damages) we consider it appropriate that leave be given to both parties to adduce further evidence in chief from their respective experts (that is, Mr Potter and Mr Ross) and that those experts should be made available for further cross-examination. It should be left to the retrial judge (or judge giving directions for the retrial) to determine whether or not the expert witnesses should be required to provide a joint report.
For all these reasons, we make the following orders:
Each party bear its own costs of the appeal.
Costs of the proceedings before Elkaim AJ be costs in the cause.
Pursuant to UCPR r 51.53 and/or s 89 of the CPA, and subject to any contrary or different orders by the retrial judge, on the retrial leave is granted:
(a) to the defendant below to reopen its case, so as to lead further oral evidence in chief from any of Messrs Greg Gardner, Darren Wallis, Trent Gardner and Christopher Thornton on the issue whether the defendant breached cl 4.7, on the construction determined by the Court of Appeal in its judgment on 28 August 2025 at [2025] NSWCA 196 (the breach issue), and (if necessary) leave is granted to the plaintiff to have any of those witnesses recalled for further cross-examination on the breach issue; (b) to the parties to lead additional evidence in chief from their respective experts (in the case of the plaintiff, Mr Michael Potter and in the case of the defendant, Mr Andrew Ross) in respect of order 3(b) dated 28 August 2025, and (if necessary) leave is granted to each of the parties to have the other party’s expert recalled for further cross-examination.
**********
Netdeen Pty Ltd t/as GJ Gardner Homes
Lindfield NSW Pty Ltd
Each party was ordered to bear its own appeal costs. The costs of the proceedings before Elkaim AJ were made costs in the cause. No security-for-costs order was made. The Court set limits and evidence permissions for the retrial, while making those arrangements subject to any contrary or different order by the retrial judge.
As to the fifth issue, which related to the Wattle Court venture and whether Lindfield repudiated the MFA, Netdeen failed to establish grounds 23-27 of its notice of appeal and the Court upheld grounds 1(e), (f) and (g) of Lindfield’s amended notice of contention in relation to those matters.
The sixth issue related to the admissibility of Mr Potter’s reports. Netdeen failed to establish ground 29 which challenged the primary judge’s ruling on that matter.
Netdeen was successful in relation to the seventh issue, being the primary judge’s assessment and quantification of damages, which has resulted in that matter being remitted for retrial.
Some of the key issues took up more time and resources than others, as was reflected in the parties’ written and oral submissions, but adopting a broad-brush approach, none of the key issues could be described as insignificant or peripheral. Speaking generally, we reiterate that both parties enjoyed roughly even measures of success and failure.
In all these circumstances, we consider that it is appropriate to order each party to bear its own costs of the appeal.