Valcorp Australia Pty Ltd v Angas Securities Limited [2012] FCAFC 52 | Case summary

The cross-appeal is dismissed.
There be judgment for the first respondent against the appellant for damages in the sum of $649,198.06.
There be judgment for the second respondent against the appellant for damages in the sum of $305,673.54.
There be judgment for the third respondent against the appellant for damages in the sum of $171,063.44.
The first respondent is to refund the sum of $324,559.03 to the appellant within 21 days.
The second respondent is to refund the sum of $152,836.77 to the appellant within 21 days.
The third respondent is to refund the sum of $85,531.71 to the appellant within 21 days.
Pursuant to section 51A(1)(a) of the Federal Court of Australia Act 1976 (Cth) the respondents are to pay interest on the sums referred to in orders 5 to 7 above at the prescribed rate for pre-judgment interest from 4 April 2011 to the date of the payment of the sums referred to in orders 5 to 7 above.
The appellant pay the respondents' costs of the proceedings No SAD 172 of 2009 taxed on a party and party basis.
The respondents pay the appellant's costs of the cross-appeal as agreed or taxed on a party and party basis.
The respondents pay 60% of the appellant's costs of the appeal as agreed or taxed on a party and party basis. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

the court: 1 On 9 March 2012, this Court allowed the appellant's appeal in part. The Court invited the parties to bring in a minute of orders reflecting the reasons for decision of the Court and to make submissions in respect of the costs of the appeal. 2 The parties were able to agree a minute of orders. The minute of orders reflects that the damages awarded to the respondents at first instance were reduced by a total of $562,927.51. 3 The parties, also, agreed that the respondents should pay the appellant's costs of the cross-appeal. We will make an order dismissing the cross-appeal and an order that the respondents pay the appellant's costs of the cross-appeal. 4 As to the question of costs of the appeal, the respondents contended that there should be no order for costs of the appeal. In support of this contention, the respondents submitted that there were two major issues in the appeal, namely, the challenge to the assessment of contributory negligence and the challenge to the award of loss of opportunity damages. The respondents went on to contend that the issues were of equal significance on the appeal and that the appellant was successful on only one of the two issues. Accordingly, said the respondents, the appropriate order was that there should be no order for costs. The respondents referred to the case of MacFarlane v Federal Commissioner of Taxation (1986) 67 ALR 624 (MacFarlane). In that case, the Full Court made no order for costs where there were two issues in the appeal and each party had been successful in respect of one issue. 5 The question of costs of an appeal falls to be dealt with in the discretion of the Court. As a general principle, a party who has been substantially successful in the appeal will be awarded its costs of the appeal. However, it has, also, been recognised that in some cases the appropriate exercise of the discretion would be to discriminate between the various issues that were argued on the appeal and to apportion costs by reference to the success of the respective parties in relation to specific issues. There will be circumstances, therefore, when the award of costs will reflect the fact that a respondent has been successful in resisting one or more grounds of the appeal. The case of MacFarlane, is an example of the Full Court exercising the discretion by reference to the success of the parties in respect of the issues on the appeal. However, it does not follow that where each party was successful on one of the two issues in an appeal, the discretion can only properly be exercised by making no order as to costs. The proper exercise of the discretion calls for a wider inquiry. Ultimately, the object is to achieve a result which best reflects the justice of the case taking into account all the relevant considerations. 6 In this appeal, the appellant has succeeded in reducing the damages awarded against it by a total of $562,927.51. The costs order should, therefore, reflect this fact and the fact that it was necessary for the appellant to come to Court to achieve this result. 7 The appellant did not achieve the full extent of the success which it sought by challenging the award of loss of opportunity damages. Its failure to achieve that objective, however, does not detract from its success in reducing the damages. Accordingly, in our view, it is appropriate that the appellant should be compensated by way of an order for costs in respect of this appeal. However, it must, also, be recognised that the issue upon which the appellant failed, namely, the challenge to the award of loss of opportunity damages, comprised a significant part of the appeal. In our view, it is, also, appropriate that the order for costs reflects that fact. Accordingly, in our view, the appropriate order for costs in this case is that the respondents pay 60% of the appellant's costs of the appeal. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jacobson, Siopis and Nicholas.

Valcorp Australia Pty Ltd v Angas Securities Limited

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