Gold Valley Iron Ore Pty Ltd v; FE Accommodation Pty Ltd & Anor (Costs) - [2024] NTCA 3

CITATION:Gold Valley Iron Ore Pty Ltd v
FE Accommodation Pty Ltd & Anor (Costs) [2024] NTCA 3

PARTIES: GOLD VALLEY IRON ORE PTY LTD
(ACN 618 094 634)

v

FE ACCOMMODATION PTY LTD
(ACN 160 943 082)

and

G & C PASTORAL CO PTY LTD
(ACN 008 039 405)

TITLE OF COURT:  NORTHERN TERRITORY COURT OF APPEAL
JURISDICTION:  APPEAL from SUPREME COURT exercising Northern Territory jurisdiction
FILE NO:No. AP 10 of 2020 (21830728)
DELIVERED:  16 August 2024
HEARING DATES:  On the papers following written submissions filed on 9 and 23 October and 14 November 2023
JUDGMENT OF:  Grant CJ, Barr and Brownhill JJ

REPRESENTATION:
Counsel:
Appellant:R Sanders
Respondents:  A Harris KC
Solicitors:
Appellant:HWL Ebsworth Lawyers
Respondents:  Maher Raumteen Solicitors
Judgment category classification:    C
Number of pages:  8

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Gold Valley Iron Ore Pty Ltd v FE Accommodation
Pty Ltd & Anor (Costs) [2024] NTCA 3
No. AP 10 of 2020 (21830728)

BETWEEN:

GOLD VALLEY IRON ORE PTY LTD
(ACN 618 094 634)
Appellant

AND:

FE ACCOMMODATION PTY LTD
(ACN 160 943 082)
First Respondent

AND:

G & C PASTORAL CO PTY LTD
(ACN 008 039 405)
Second Respondent

CORAM:GRANT CJ, BARR and BROWNHILL JJ

REASONS FOR JUDGMENT ON COSTS
(Delivered 16 August 2024)
THE COURT:

On 11 September 2020, the Supreme Court delivered its decision on the preliminary issue of which party bore liability for damages for breach of a contract for the sale of chattels (‘Contract’).[1] The Court held that the purchaser (defendant/appellant) is liable to the vendor (plaintiffs/respondents) for the wrongful repudiation of the Contract of Sale, with damages to be assessed.[2]
The defendant/appellant appealed from that decision. On 16 August 2021, this Court delivered its decision on the appeal from the decision of the Supreme Court.[3]
The appeal was dismissed, save for grounds 19 and 20, upholding the trial Judge’s conclusion about the purchaser’s/appellant’s liability for damages. The appeal was allowed in respect of grounds 19 and 20, with a declaration that the term ‘Ex WDR Plant & Equipment’ as used in the Contract of Sale included the drilling rig.
The assessment of damages trial has been heard by the Supreme Court and judgment is reserved.
The parties now seek orders for costs in respect of the appeal and the liability trial.
Costs of the appeal
The respondents seek an order that the appellant pay 90% of the respondents’ costs of the appeal on the basis that the respondents succeeded in the appeal on the major issue regarding repudiation of the Contract and liability for damages, and failed on the minor issue regarding whether the drilling rig was included in the Contract, and it was the major issue which occupied the vast majority of the Court’s time in the hearing of the appeal and the parties’ time and expense in the conduct of the appeal.
The appellant seeks an order that each party pay their own costs of the appeal on the basis that, of the two issues on the appeal, being which party bore the risk of claims by third parties under the Contract and whether the drilling rig was included in the Contract, success (and failure) were shared equally. It is said that the Court cannot assess which issue has greater significance for the overall outcome of the proceedings, and the Court cannot make allowance for the fact that greater time was spent on the former issue than the latter.
The appellant argued that the respondents may not be entitled to any more than nominal damages because the proceeds of sales of the chattels to third parties potentially exceed the Contract price, and because the value of the drilling rig, retained by the respondents and necessarily deductible from their losses, was estimated to be between $200,000 and $300,000 for the purposes of an injunction application. The appellant submitted, citing Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at [242], that ‘whether the outcome of the appeal will enure to either party’s substantial benefit is not a matter upon which the Court can speculate’.
In Plaintiff M76/2013, the plaintiff had obtained declaratory relief, but substantial aspects of her case had been rejected. In dissent on the issue of costs, Kiefel and Keane JJ held (at [242]) that although whether the plaintiff's success would enure to her substantial benefit was not a matter upon which the Court could speculate, she had largely had a Pyrrhic victory and that was not a sound basis on which to make an award of costs in her favour. While Kiefel and Keane JJ would have made no order for costs, the majority (Crennan, Bell and Gageler JJ, with French CJ agreeing) held that the defendant Minister should pay the plaintiff’s costs, although it is not entirely clear why. The case is of little assistance in the determination of the present application.
The conclusion on the appeal that the trial Judge was correct to find that it was the respondents and not the appellant who were entitled to damages for breach of the Contract can hardly be described as ‘a Pyrrhic victory’, regardless of the ultimate award of damages in the Supreme Court. To find that the respondents were substantially successful on the appeal is not to speculate about whether the appellant’s success on the drilling rig issue will enure to its substantial benefit in the assessment of damages trial. The appeal is a separate proceeding in which the appellant sought to overturn the decision on liability and failed.
The appellant argued that there is good reason when assessing costs on an appeal to avoid apportionments based on degrees of difficulty of issues, time taken to argue them and the like, citing Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 90 ALJR 270 at [6]. In that case, the appellant had limited success in the appeal and was unsuccessful on all other issues. The High Court held as follows (at [5]-[6]):
If the question of costs is to be determined on the basis of success on issues, rather than on the outcome of the appeal, these factors would not suggest as appropriate an order apportioning costs, let alone one that Firebird and Nauru pay their own costs, for which Firebird contends.
In any event, the preferable approach in this case is the one usually taken, that costs should follow the outcome of the appeal. This is not a case where it may be said that the event of success is contestable, by reference to how separate issues have been determined. There are no special circumstances to warrant a departure from the general rule, and good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like. The fact that Firebird retains its registration is immaterial to the overall outcome of this appeal.
In that case, the High Court determined to make the usual order as to costs, that they follow the event, on the basis that the event of success in that appeal was not contestable.
In this case, both parties accept that the event of success was contestable in that each party had some success on an issue that may bear on the ultimate outcome of the case. For that reason, we accept that the usual order as to costs is not appropriate. However, it does not follow that the order should be that each party bears its own costs.
We accept the respondents’ submission that it was the liability issue which dominated the appeal, with the appellant both denying the respondents’ claims and pressing its own entitlement to damages. The vast majority of the Court’s and the parties’ time on the appeal was occupied by the issue of which party had validly terminated the Contract leaving the other party liable in damages for breach, with the drilling rig issue occupying a very small proportion of the total submissions and the hearing time. There were 20 grounds of appeal, with only two of those relating to the drilling rig. The reasons of the Court of Appeal were 46 pages long, with the drilling rig issue occupying eight pages. The transcript of the appellant’s argument on the appeal was 50 pages long (including reply), with the argument relating to the drilling rig occupying two pages. The transcript of the respondents’ argument on the appeal was 27 pages long, with less than two pages relating to the drilling rig.
While it may be accepted, as the appellant submitted, that the relationship between costs of an appeal and time spent on any particular issue is not linear, the appellant naturally carries a greater burden of the costs of an appeal than a respondent, and there are difficulties with precise apportionment between issues, it is clear that a Court may apportion costs as between parties who have each had a measure of success, and those are reasons why mathematical precision is illusory and the exercise of the discretion as to costs will often depend upon matters of impression and evaluation.[4]
For the reasons set out above, using a broad brush approach based on the time taken up by the issues on which each party was successful, we consider that a fair and just result is to order the appellant to pay the respondents 90% of their costs, to be agreed or taxed.
Costs of the liability trial
No order for costs was made by the Supreme Court after the liability trial. Neither party pursued any order for costs until long after the appeal was determined.
For similar reasons as those relating to the costs of the appeal, the plaintiffs/respondents seek an order that the defendant/appellant pay 90% of the plaintiffs/respondents costs of the liability trial.
The defendant/appellant argues that orders for costs in relation to the liability trial should await the outcome of the assessment of damages and be determined on the basis of the final outcome of the matter as a whole. Reference was made to an offer to settle the matter made before the liability trial, the impact upon costs of which can only be determined once the outcome of the matter is known.
We decline to make any order for costs in relation to the liability trial at this stage for the following reasons.
First, no order was made by the Supreme Court in relation to costs so the issue of costs before that Court was not strictly before this Court on the appeal.
Secondly, it is appropriate that the costs of the trials at first instance be dealt with together after the assessment of damages trial is determined in order to ensure that the outcome of the proceedings, and the measure of success of each party, is taken into account when orders for costs are made. The existence of an offer of settlement made by the defendant/appellant and rejected by the plaintiffs/respondents prior to the liability trial makes that determination important and distinguishes the present case from that of Diakou Nominees Pty Ltd v Gouger Street Pty Ltd (No 2) [2017] SASC 115, where the Supreme Court of South Australia ordered the unsuccessful party to pay the successful party’s costs of a trial of a preliminary issue prior to the trial of the remaining issues. We do not accept the plaintiffs’/respondents’ submission that whether or not they fail to better a settlement offer they rejected prior to the liability trial should only bear upon the award of costs for the assessment of damages trial.
Disposition
For the reasons set out above, we make the following orders:
1.The appellant is to pay 90% of the respondents’ costs of and incidental to the appeal.
2.The issue of the costs of the liability trial is to be dealt with by the Supreme Court after the result in the assessment of damages trial has been determined.

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[1]FE Accommodation Pty Ltd v Gold Valley Iron Ore Pty Ltd [2020] NTSC 61.

[2]FE Accommodation Pty Ltd v Gold Valley Iron Ore Pty Ltd [2020] NTSC 61 at [195].

[3]Gold Valley Iron Ore Pty Ltd v FE Accommodation Pty Ltd [2021] NTCA 2 (‘Reasons’).

[4]See McCasker v Omad (NT) Pty Ltd (No 4) [2023] NTSC 89 at [36] per Brownhill J, and the authorities there cited. See also A, DC v Prince Alfred College Inc (No 2) [2016] SASRC 27, esp at [11]-[13] per the Court.