Wollongong Coal Ltd v Gujarat NRE Properties Pty Ltd

Judgment

1. On 13 March 2020 judgment was entered in favour of the Plaintiff against the Second and Third Defendants, with reasons published ("the March Reasons"): see Wollongong Coal Ltd v Gujarat NRE Properties Pty Ltd [2020] NSWSC 254. I shall use the same abbreviations here as are used in the March Reasons and regard should be had to the March Reasons, particularly [1]-[14], [30]-[44], [91]-[98], [117], [124] and [178]-[182].
2. The Jagatramkas seek a variation of the usual order on costs, which is that the unsuccessful party pays the costs of the successful party, namely that the Jagatramkas only be required to pay 80 per cent of WCL's costs. It was agreed that the matter should be determined on the papers. I directed a regime for written submissions, and I have received the Jagatramkas' submissions dated 20 March 2020 ("DSCosts"), the WCL submissions in response dated 27 March 2020 ("PSCosts") and the Jagatramkas' submissions in reply ("Reply on Costs").
3. The basis advanced in DSCosts for the order sought is that WCL did not succeed on all of the claims it advanced in its Further Amended Statement of Claim: 1. WCL at the commencement of the hearing abandoned its claim that the entry by Mr Jagatramka into the ESA involved a breach of his fiduciary and statutory duties. The Jagatramkas' submissions prepared in advance of the hearing dealt with that issue in five pages and the Jagatramkas had to obtain an expert report dealing with the level of remuneration in the ESA. 2. WCL in the course of the hearing abandoned its claim that the proceeds of sale of shares in Properties had been inappropriately distributed to companies connected with the Jagatramkas. 3. WCL failed in what was described by the parties (and in the March Reasons) as the "Third Component" - i.e. a claim that the arrangement made by Mr Jagatramka for the sale of the shares in Properties involved breaches of fiduciary and statutory duties by the Jagatramkas.
4. The usual rule, which finds expression in r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), is that costs should follow the event unless the Court otherwise orders. In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304, the Court (Beazley, Ipp and Basten JJA) summarised the law as follows at [38]: "The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows: Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272. These principles were applied in City of Canada Bay Council v Bonaccorso Pty Ltd (No 3) [2008] NSWCA 57 at [22] and most recently in Turkmani v Visvalingham (No 2) [2009] NSWCA 279."