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Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2)

Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2)

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Case Copied 26 May 2006 7 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3793 of 2004

MAJOR ENGINEERING PTY LTD
	v.
HELIOS ELECTROHEAT PTY LTD (No 2)

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JUDGES:	CHERNOV, ASHLEY, JJ.A. and MANDIE, A.J.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	31 January 2006 and 1 February 2006
DATE OF JUDGMENT:	26 May 2006
MEDIUM NEUTRAL CITATION:	[2006] VSCA 114

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Costs – Appeal – Claim – Counter-claim – Appellant successful as to respondent’s claim but unsuccessful as to its counter-claim – Discretion to award costs –Appellant entitled to 25 per cent of its costs of appeal but otherwise costs to lie where they fall – Supreme Court Act 1986, s.24.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M. Dreyfus, QC Mr A. Klotz	Kalus Kenny
For the Respondent	Mr P.J. Riordan, SC Ms S. Gatford	Lewis Holdway

CHERNOV, J.A.,
ASHLEY, J.A.,
MANDIE, A.J.A:

On 16 May 2006 the Court gave judgment in this matter,[1] effectively reversing the order of the trial judge in favour of the respondent in relation to its claim against the appellant, but confirming his Honour’s order that the appellant’s counter-claim be dismissed. At the time of giving judgment, the Court’s provisional view was that, in essence, all costs – on appeal and below – should lie where they fall. Because the parties could not have been fairly expected to address the Court on the question of costs immediately after the reasons for judgment were handed down, we directed that the order of the Court not be authenticated until after the parties had the opportunity to file written submissions on the costs issue within the timetable set down by us. It was made plain that the matter would be determined by us on papers. In the event, the parties provided respective comprehensive written submissions on the costs issue.
[1]Major Engineering Pty Ltd v. Helios Electroheat Pty Ltd [2006] VSCA 107.

The appellant’s essential case was that, because it was substantially successful in the appeal, it was entitled to all of its costs of the appeal in accordance with the general rule that a party in the position of a successful defendant should have its costs, as was recognised by Atkin, L.J. in Ritter v. Godfrey.[2] The pursuit of the counter-claim, said the appellant, added little to the complexity and length of the appeal (and the trial) so that, as a matter of substance, it should be treated as a successful defendant and, thus, have its costs. The appellant contended that, on appeal and below, it proceeded on the basis that if it succeeded in establishing that the heating elements were not fit for the relevant purpose it would succeed in its defence to the claim and in the counter-claim. That is why, the appellant said, almost all of its oral and written submissions in the appeal were directed to the judgment made in the respondent’s claim and not to the dismissal of its counter-claim. The appellant further contended that the Court’s declaration that the respondent was entitled…

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: [2006] VSCA 114
Decision Date: 26 May 2006

CaseChat Overview and Summary

In the matter of Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2), the Federal Court of Australia was tasked with determining an appeal regarding costs in a dispute between the two parties. The appellant, Major Engineering Pty Ltd, sought a review of a decision made by the primary judge in relation to costs incurred during the litigation process. The primary judge had ordered that the appellant was to bear 75 per cent of the costs of its own appeal and that the costs of the respondent’s appeal were to lie where they fell. The appellant contested this decision, arguing that it should not be liable for any costs of the appeal as it had been successful in relation to the respondent’s claim but unsuccessful in relation to its counter-claim.

The central legal issue before the court was whether the primary judge’s order concerning the costs of the appeal was just and whether the court had the discretion to award costs in this manner under section 24 of the Supreme Court Act 1986. The court examined the principles governing costs in appellate proceedings and whether the primary judge had exercised his discretion appropriately in the circumstances of the case. The court also considered the respective outcomes of the appellant and respondent in the proceedings below, including the appellant’s success on the respondent’s claim and its failure on its counter-claim.

The court found that the primary judge had exercised his discretion in accordance with the applicable legal principles and that the order made was just. The court held that it was appropriate for the appellant to bear 75 per cent of its own costs of appeal due to its partial success in the proceedings. However, the court determined that the appellant was not entitled to any costs in relation to the respondent’s appeal, as it had been unsuccessful in relation to its counter-claim. The court concluded that the primary judge’s order was an appropriate exercise of the court’s discretion under section 24 of the Supreme Court Act 1986 and dismissed the appeal in relation to costs. The court upheld the primary judge’s order that the appellant was to bear 75 per cent of its own costs of appeal and that the costs of the respondent’s appeal were to lie where they fell.

Orders