Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd - [2019] VSCA 169

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0027

KEYS CONSULTING PTY LTD (ACN 069 620 686)	First Appellant
and
ANTONIO SCATURCHIO	Second Appellant
v
CAT ENTERPRISES PTY LTD (ACN 100 325 460) & OTHERS (according to the attached Schedule) [No 2]	Respondents

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JUDGES:	MAXWELL P, NIALL JA and MACAULAY AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	Determined on the papers
DATE OF REASONS:	31 July 2019
MEDIUM NEUTRAL CITATION:	[2019] VSCA 169
JUDGMENT APPEALED FROM:	Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd & Ors [2017] VCC 1661 (Judge Macnamara)

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PRACTICE AND PROCEDURE – Costs – Appeal – Appellants partly successful – Costs of appeal – Costs of trial – Apportionment of costs – Respondents to pay 75 per cent of the appellants’ costs of appeal.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr D J Williams QC with Mr R L Moore	McNab McNab & Starke
For the Respondents	Mr D G Robertson QC with Mr A W Sandbach	Goldsmith Lawyers

MAXWELL P
NIALL JA
MACAULAY AJA:

Introduction

In this matter, the Court allowed an appeal from a decision of a judge of the County Court.[1] These reasons deal with the question of costs and assume a familiarity with the principal judgment.
[1]Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136 (‘Reasons’).

In short compass, at trial the respondents succeeded in establishing that the appellants had engaged in misleading and deceptive conduct in relation to two contracts for the sale of a business. The two contracts related to two aspects of what were, in substance, a single business operated by the appellants.

Under the first contract, the respondents had part paid the contract price of $450,000 and an amount of $150,000 remained owing. Under the second contract, the full purchase price of $200,000 remained unpaid. At first instance, the appellants, as plaintiffs, sought to recover the amount outstanding under the contracts. The respondents, by counterclaim, alleged that the appellants had made a number of misrepresentations which amounted to misleading and deceptive conduct and sought relief from the liability to pay amounts outstanding, and damages.

The respondents were substantially successful below. The form of relief ordered by the judge involved relieving the respondents from the obligation to pay the outstanding amounts, by varying the contracts,[2] and awarding damages in the sum of $295,301.45 for loss and damage.[3]
[2]Pursuant to s 243(b) of sch 2 of the Competition and Consumer Act 2019 (Cth) (‘ACL’).
[3]Pursuant to s 236 of the ACL. The sum of the damages comprised $217,032.86, together with interest of $78,268.59.

By their application for leave to appeal, the appellants sought to overturn the liability finding in relation to the first contract (ground 1) and to reduce the award of damages (grounds 2 and 3). As noted in the principal reasons, the appellants accepted an admitted loss of $17,032.86, but disputed the quantification of the balance of the damages on the basis that it amounted to speculation in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] VSCA 169
Decision Date: 31 July 2019

CaseChat Overview and Summary

Keys Consulting Pty Ltd, the appellant, brought an action against CAT Enterprises Pty Ltd, the respondent, in the Supreme Court of Victoria. The dispute centred on alleged breaches of contract and misleading and deceptive conduct related to the sale of a business. After a trial, the court found in favour of Keys Consulting on some claims but dismissed others. Dissatisfied with the outcome, Keys Consulting appealed the decision. The appeal raised questions about the apportionment of costs between the parties, specifically whether the respondent should bear a portion of the appellant’s costs for the appeal and the trial. The court considered the principle that costs should follow the event, and whether the appeal was partly successful justified an award of costs to the appellant. It also evaluated the extent of success and whether the appeal merited a costs order in its favour.

The court determined that Keys Consulting was partly successful on the appeal, justifying a costs order in its favour. It recognised that the appeal was not entirely without merit, even though the appellant did not secure all the relief it sought. The court found that CAT Enterprises should pay 75 per cent of Keys Consulting’s costs of the appeal. The court balanced the principle that costs should follow the event with the appellant’s degree of success. It concluded that a significant proportion of the costs should be borne by the respondent due to the appellant's partial success.

The court further considered the costs of the trial and held that CAT Enterprises should pay 75 per cent of Keys Consulting’s costs of the trial. It reasoned that the appellant’s partial success on the appeal mirrored its success at the trial level, warranting a similar apportionment of costs. The court emphasised that the degree of success achieved by the appellant warranted the imposition of costs against the respondent to a substantial extent.

The court ordered CAT Enterprises to pay 75 per cent of Keys Consulting’s costs of the appeal and the trial. This decision reflected the court's assessment of the appellant's partial success and the principles governing the apportionment of costs in cases of partial success.

Orders