Seamez v McLaughlin [1999] NSWSC 25 (11 February 1999)

Last Updated: 18 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Seamez v McLaughlin [1999] NSWSC 25

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 13148/92

HEARING DATE{S): 9-13 November 1998; 16 November 1998;

19-20 November 1998; 4 February 1999

JUDGDMENT DATE: 11/02/1999

PARTIES:

(first plaintiff) Seamez (Australia) Pty Limited

(second plaintiff) Baden John Brown

(third plaintiff) Geraldine Freeman

v

(first defendant) Robert J McLaughlin

(second defendant) Richard F Buckley

JUDGMENT OF: Sperling J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

First, second & third plaintiffs: I G Harrison SC/P C See

First & second defendants: D J Fagan SC/W V McManus

SOLICITORS:

First, second & third plaintiffs: Philip Parbury & Assoc

First and second defendants: Colins Biggers & Paisley

CATCHWORDS:

Costs - whether to order costs of separate trial or reserve costs.

ACTS CITED:

DECISION:

Costs reserved

JUDGMENT:

1 I gave judgment in this matter on 29 January 1999. Prior to the matter coming into my hands an order had been made for the hearing of a separate issue. Although I am not sure that the usual expressions fit this case, I will speak in terms of a separate trial as to liability and a deferment of quantification of damages. I dealt only with liability.

2 On 4 February 1999, I heard argument as to the costs of the separate trial as to liability. On behalf of the plaintiff, application was made for an order for the costs of the separate trial and for a further order that such costs be assessed and payable forthwith. Without the latter order, payment would be deferred under the rules and could be set off against any order for costs that might subsequently be made in favour of the defendants.

3 In support of such orders, it was submitted that, although the plaintiffs had acceded to a separate trial as to liability, it was the defendants who had proposed that course. The plaintiffs, it was submitted, had succeeded on a discrete issue. There was no reasonable prospect, it was submitted, that the plaintiffs would fail to recover damages and, accordingly, no reasonable prospect that the defendants would recover any order for costs which might in fairness have to be set off against an order for costs in favour of the plaintiffs. It was at least likely, it was submitted, that the plaintiffs would recover an award of damages.

4 On behalf of the defendants, it was submitted that the costs of the separate trial as to liability should be reserved because the outcome of the case as a whole was unknown. As a secondary position, it was submitted that any order for costs in favour of the plaintiffs should be reduced because a significant part of the trial and preparation for trial was spent on an analysis of the plaintiffs' evidence which resulted in two of the plaintiffs' three witnesses not being accepted by the court, and because a substantial number of the specific findings sought by the plaintiffs as to breach of duty and the factual consequences were rejected.

5 On behalf of the defendants, in answer to the argument that any order for costs in favour of the plaintiffs should be reduced, it was submitted that the plaintiffs had substantially succeeded because, in substance, the court had held in their favour that as a result of breach of contractual duty on the part of the defendants they had lost the chance of a successful prosecution of the Federal Court proceedings, and had signed away intellectual property rights by executing the settlement deed.

6 Were this a final hearing, I would make an order for payment by the defendants of the plaintiffs' costs without reduction. I accept the submission that the plaintiffs have substantially succeeded in the separate trial as to liability. Many of the findings sought which I declined to make were of minor importance and occupied little trial time. It is true that a substantial part of the trial time and, I accept, preparation time was occupied in an attack on the credibility of the plaintiffs' three witnesses which resulted in the court not accepting two of them. However, the objective of the attack was to persuade the court to reject them all which did not occur. In the result, the one witness accepted by the court carried the day for the plaintiffs. So the attack failed in its objective. In these circumstances, I see no appropriate reason for reducing an order for costs on this basis.

7 As I have said, that is the approach I would take if I were to order the defendants to pay the plaintiffs' costs of the separate trial as to liability. However, I do not intend to do that. The costs of the separate trial as to liability should be reserved for determination by the judge who hears the next segment of the case. I say that because the issue as to liability in this case is no more discrete than it would have been if the whole of the case had been heard together at the one time. I do not think that there should be a different approach because the parties have, in their mutual interests, agreed to a separate trial as to liability. Secondly, I cannot say that the plaintiffs will necessarily succeed in the next segment of the proceedings. That should not be read as implying any view on my part, however provisional. There is simply not the material available for me to form a view about that one way or the other. In these circumstances, it could prove to be unfair to the defendants to require them to pay costs at this stage which might theoretically be offset by an order for costs in their favour at a later time. It is also possible that further developments in the proceedings might bear upon the proper approach to the costs of the separate trial as to liability. For example, if the plaintiffs failed to establish an entitlement to compensatory damages altogether, consideration would have to be given to whether the plaintiffs should be ordered to pay the defendants' costs of the whole of the proceedings.

8 For these reasons, I reserve the costs of the separate trial as to liability.

-oOo-

LAST UPDATED: 11/02/1999