Del Casale & Ors. v Artedomus (Aust) Pty. Limited (No.2)

[2007] NSWCA 305

New South Wales

Court of Appeal

CITATION:	Del Casale & Ors. v. Artedomus (Aust) Pty. Limited (No.2) [2007] NSWCA 305
HEARING DATE(S):	Matter dealt with on written submissions in Chambers
JUDGMENT DATE:	31 October 2007
JUDGMENT OF:	Hodgson JA at 1; McColl JA at 1; Campbell JA at 1
DECISION:	1. Grant leave to the appellants to appeal the orders made by the trial judge on 12 April 2006 ("the Orders"). 2. Appeal allowed. 3. Set aside the orders and in substitution thereof make the following orders: i) Declare that by arranging and effecting the importation of Pietra di Modica (by whatever name) through the third defendant, the first defendant contravened clause 7 of the agreement he had with the plaintiff not to compete with the plaintiff for a period of three years from 4 December 2002 in New South Wales; ii) Declare that the plaintiff is entitled to an enquiry as to damages as against the first defendant in relation to the contravention referred to in order (i) above; iii) Order that upon the plaintiff notifying the Court, within fourteen days from the date of these orders, of its intention to prosecute the enquiry as to damages referred to in order (ii) herein, an enquiry be held before an Associate Justice to determine the damages, if any, that the plaintiff is entitled to in respect of the contravention referred to in order (i); ; iv) Order that the costs of the enquiry referred to in order (iii) abide the results of that enquiry; v) Order that the proceedings are otherwise dismissed; vi) Order the plaintiff pay one-half of the defendants’ costs of the proceedings (for the benefit of the second and third defendants) and that the first defendant pay two-thirds of the plaintiff’s costs of the proceedings; vii) Order that the respondent pay one-half of the appellants’ costs of the appeal and application for leave to appeal (for the benefit of the second and third appellants) and a further one-quarter of the appellants’ costs of the appeal and application for leave to appeal (for the benefit of the first appellant).
CATCHWORDS:	PRACTICE - Costs - Appeal - Where different orders appropriate in respect of parties with the same legal representation
PARTIES:	Antonio Del Casale - 1st appellant Alessandro Savini - 2nd appellant Stone Arc Pty. Limited - 3rd appellant Artedomus (Aust) Pty. Limited - respondent
FILE NUMBER(S):	CA 40269/06
COUNSEL:	Mr. M. Ashhurst with Mr. S. Docker for appellants Mr. A. Moses with Ms. J. Webster for respondent
SOLICITORS:	Kemp Strang, Sydney for appellants Clayton Utz, Sydney for respondent
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	ED1119/03
LOWER COURT JUDICIAL OFFICER:	Burchett AJ

CA 40269/06
ED 1119/03

HODGSON JA
McCOLL JA
CAMPBELL JA

Wednesday 31 October 2007

DEL CASALE & ORS. V. ARTEDOMUS (AUST) PTY. LIMITED (NO.2)

Judgment

1 THE COURT: The Court gave reasons for judgment in this matter on 18 July 2007 ([2007] NSWCA 172), and pursuant to provision then made the parties have made submissions as to the orders to be made, including costs.

2 These submissions raise three issues:

1. The form of order concerning the enquiry as to damages.
2. Costs at first instance.
3. Costs of appeal.

3 As regards the first matter, Artedomus seeks an enquiry as against all claimants. There is no basis in the Court’s judgment for an award of damages against Mr. Savini or Stone Arc, so the enquiry should be limited to Mr. Del Casale, as proposed by the claimants.

4 As regards the second matter, Artedomus seeks an order against all claimants for payment of two-thirds of its costs. The claimants contend that Artedomus should pay two-thirds of the costs of Mr. Savini and Stone Arc and that Mr. Del Casale should pay one-sixth of Artedomus’s costs.

5 There is force in the claimant’s submissions that, at best, only limited interlocutory relief could have been justified against Mr. Savini and Stone Arc, and that in terms of final relief the proceedings against them totally failed; that it should be inferred that each defendant was liable to pay one-third of the defendant’s costs; and that Mr. Savini and Stone Arc should accordingly be indemnified to the extent of two-thirds of the defendant’s costs. There is also some force in the claimant’s submission that at most Mr. Del Casale should pay one-third of Artedomus’s costs, and that this should be reduced to one-sixth because of Artdeomus’s limited success even against Mr. Del Casale.

6 However, there is also force in Artedomus’s submission that Stone Arc was found by the primary judge to be a mere cloak for Mr. Del Casale’s activities, that much time was taken at first instance by issues raised and lost by all claimants, and that the joining of Stone Arc and Mr. Savini did not add proportionately to the costs of the proceedings.

7 If the three claimants had been at arms-length and separately represented, appropriate orders would have been for Artedomus to pay most of the costs of Stone Arc and Mr. Savini, and for Mr. Del Casale to pay two-thirds of Artedomus’s costs (the reduction being in respect of increases in costs due to joining Stone Arc and Mr. Savini, and due to severable issues lost by Artedomus) with no Bullock or Sanderson order in relation to costs payable by Artedomus to other defendants.

8 In circumstances where the three claimants were not at arms-length, and not separately represented, in our opinion the appropriate order would be for Artedomus to pay one-half of the claimants’ costs of the proceedings at first instance (for the benefit of Stone Arc and Mr. Savini) and for Mr. Del Casale to pay two-thirds of Artedomus’s own costs. In reaching this conclusion, we have regard to the reality that there are two individuals involved, namely Mr. Savini and Mr. Del Casale, and that Stone Arc has no substantial separate substance; and we have notionally split costs equally between Mr. Savini and Mr. Del Casale, including Stone Arc with Mr. Savini because no relief is given against Stone Arc.

9 As regards the costs of the appeal, Artedomus submitted that the claimants enjoyed partial success on the appeal because of the grounds J, K and L. In fact, the decision of the Court meant that the claimants did not need to rely at all on grounds J, K and L for their success.

10 Again, had the three claimants been at arms-length and separately represented, appropriate orders would have been for Artedomus to pay all of the costs of the appeal of Stone Arc and Mr. Savini, and for Artedomus to pay one-half of Mr. Del Casale’s costs. In our opinion, in circumstances where the three claimants were not at arms-length and not separately represented, the appropriate order is that Artedomus pay one-half of the appellants’ costs of the appeal (for the benefit of Stone Arc and Mr. Savini) plus a further one-quarter of the appellants’ costs of the appeal (for the benefit of Mr. Del Casale).

11 Accordingly, the Court makes the following orders:

1. Grant leave to the appellants to appeal the orders made by the trial judge on 12 April 2006 ("the Orders").
2. Appeal allowed.
3. Set aside the orders and in substitution thereof make the following orders:
i) Declare that by arranging and effecting the importation of Pietra di Modica (by whatever name) through the third defendant, the first defendant contravened clause 7 of the agreement he had with the plaintiff not to compete with the plaintiff for a period of three years from 4 December 2002 in New South Wales;
ii) Declare that the plaintiff is entitled to an enquiry as to damages as against the first defendant in relation to the contravention referred to in order (i) above;
iii) Order that upon the plaintiff notifying the Court, within fourteen days from the date of these orders, of its intention to prosecute the enquiry as to damages referred to in order (ii) herein, an enquiry be held before an Associate Justice to determine the damages, if any, that the plaintiff is entitled to in respect of the contravention referred to in order (i);
iv) Order that the costs of the enquiry referred to in order (iii) abide the results of that enquiry;
v) Order that the proceedings are otherwise dismissed;
vi) Order the plaintiff pay one-half of the defendants’ costs of the proceedings (for the benefit of the second and third defendants) and that the first defendant pay two-thirds of the plaintiff’s costs of the proceedings;
vii) Order that the respondent pay one-half of the appellants’ costs of the appeal and application for leave to appeal (for the benefit of the second and third appellants) and a further one-quarter of the appellants’ costs of the appeal and application for leave to appeal (for the benefit of the first appellant).
**********