Motium Pty Ltd v Arrow Electronics Australia Pty Ltd
[2011] WASCA 65 (S)
•18 MARCH 2011
MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2011] WASCA 65 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASCA 65 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:5/2010 | 13 SEPTEMBER 2010 & ON THE PAPERS | |
| Coram: | McLURE P NEWNES JA MURPHY JA | 18/03/11 | |
| 11/05/11 | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in part Nominal damages awarded to appellant Appellant to pay respondent's costs of appeal | ||
| B | |||
| PDF Version |
| Parties: | MOTIUM PTY LTD ARROW ELECTRONICS AUSTRALIA PTY LTD |
Catchwords: | Practice and procedure Whether party awarded nominal damages entitled to its costs of the proceedings Relevant principles No requirement for alternative claim for nominal damages where substantial damages claimed |
Legislation: | Nil |
Case References: | Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 Baume v Commonwealth [1906] HCA 92; (1906) 4 CLR 97 Beaumont v Greathead (1846) 2 CB 494 Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 Huppert v Stock Options of Australia Pty Ltd [1965] HCA 30; (1965) 112 CLR 414 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286 Motium Pty Ltd v Arrow Electronics Australia Pty Ltd [2011] WASCA 65 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 The Mediana [1900] AC 113 Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2011] WASCA 65 (S) CORAM : McLURE P
- NEWNES JA
MURPHY JA
DECISION : 11 MAY 2011 FILE NO/S : CACV 5 of 2010 BETWEEN : MOTIUM PTY LTD
- Appellant
AND
ARROW ELECTRONICS AUSTRALIA PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : SCOTT DCJ
Citation : MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2009] WADC 184
File No : CIV 2346 of 2007
(Page 2)
Catchwords:
Practice and procedure - Whether party awarded nominal damages entitled to its costs of the proceedings - Relevant principles - No requirement for alternative claim for nominal damages where substantial damages claimed
Legislation:
Nil
Result:
Appeal allowed in part
Nominal damages awarded to appellant
Appellant to pay respondent's costs of appeal
Category: B
Representation:
Counsel:
Appellant : Mr A Metaxas
Respondent : Mr D C Harrison
Solicitors:
Appellant : Metaxas & Hager
Respondent : Cooper Mills Lawyers
Case(s) referred to in judgment(s):
Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
Baume v Commonwealth [1906] HCA 92; (1906) 4 CLR 97
Beaumont v Greathead (1846) 2 CB 494
Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232
Huppert v Stock Options of Australia Pty Ltd [1965] HCA 30; (1965) 112 CLR 414
(Page 3)
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286
Motium Pty Ltd v Arrow Electronics Australia Pty Ltd [2011] WASCA 65
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
The Mediana [1900] AC 113
Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166
(Page 4)
1 JUDGMENT OF THE COURT: On 18 March 2011, we delivered reasons for decision in this appeal: Motium Pty Ltd v Arrow Electronics Australia Pty Ltd [2011] WASCA 65. It was the unanimous opinion of the court that the appellant had failed to make out any of its grounds of appeal. At the time the reasons for decision were delivered there remained for determination issues as to whether the appellant was entitled to an order for nominal damages and what orders should be made as to the costs of the action and the appeal. Accordingly, no substantive orders were made and each party was directed to file a minute of the orders it sought and submissions as to why those were the appropriate orders.
2 The question as to nominal damages arose in the following way. At the trial in the District Court the appellant had claimed against the respondent damages for, among other things, breach of contract in supplying to the appellant imitation Vishay mosfets instead of the real Vishay mosfets it had contracted to supply. The appellant quantified its damages at $77,689.30. The primary judge found that whilst the appellant had established that the respondent had breached the contract, the appellant had failed to prove that it had suffered any loss as a result of the breach. The primary judge did not, however, consider whether, in light of his finding that the respondent had breached the contract, the appellant was entitled to nominal damages and no such order was made. It seems the subject was not touched upon below.
3 On the appeal, the appellant failed in its contention that the primary judge had erred in finding that the appellant had suffered no loss. There was no ground of appeal contending in the alternative that the primary judge should have made an order for nominal damages.
4 The respondent submits that no order should be made by this court for nominal damages. It says that that was not part of the appellant's case at trial or on appeal. The appellant's case was that it was entitled to substantial damages. It has failed to make good that case. The appellant, on the other hand, submits that as the primary judge found that the respondent had breached the contract, his Honour should have made an order for the nominal damages to which the appellant was plainly entitled, and this court should now make such an order.
5 The debate is, unsurprisingly, not in truth over the amount the appellant would recover by way of nominal damages. It is the peg on which the appellant seeks to hang its application for the costs of the trial and the appeal: see Beaumont v Greathead (1846) 2 CB 494, 499 (Maule J).
(Page 5)
6 Nominal damages were described by Lord Halsbury in The Mediana [1900] AC 113 in the following oft-cited passage:
'Nominal damages' is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet it gives you a right to the verdict or judgment because your legal right has been infringed. But the term 'nominal damages' does not mean small damages (116).
- See, too, Baume v Commonwealth [1906] HCA 92; (1906) 4 CLR 97, 116 - 117 (Griffiths CJ).
7 It is clear that a breach of contract by one party always gives the other party a right to recover damages for the breach: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 [58]. If the breach is not proved to have caused any loss, the party that has breached the contract is liable to pay nominal damages: see Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286, 301; Huppert v Stock Options of Australia Pty Ltd [1965] HCA 30; (1965) 112 CLR 414, 424, 431; Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 [93], [149].
8 While the court has a broad discretion as to costs, generally the successful party is entitled to its costs: Rules of the Supreme Court 1971 (WA), O 66 r 1(1). But it does not follow that a party which is awarded nominal damages is entitled to an order for the costs of the proceedings. The question is whether a party that is awarded nominal damages is to be regarded as the successful party. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873, Devlin J said:
No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct. In applying that rule, however, it is necessary to decide whether the plaintiff really has been successful, and I do not think that a plaintiff who recovers nominal damages ought necessarily to be regarded in the ordinary sense of the word as a 'successful' plaintiff. In certain cases he may be, eg, where part of the object of the action is to establish a legal right, wholly irrespective of whether any substantial remedy is obtained. To that extent a plaintiff who recovers nominal damages may properly be regarded as a successful plaintiff, but it is necessary to examine the facts of each particular case (874).
9 In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, McHugh J noted that the principle that a successful party is
(Page 6)
- entitled to an order for costs was grounded in reasons of fairness and policy [67]. His Honour went on to observe that, consistent with that principle, the court may award costs in favour of a defendant where the plaintiff has obtained only nominal damages, on the basis that, in reality, the successful party lost the litigation and the unsuccessful party won [70]. (Although McHugh J was in dissent in that case, his statement of principle concerning costs was not in dispute.)
10 While each case must depend upon its own facts, where it is not a primary purpose of proceedings simply to establish or vindicate some legal right but the primary purpose is to recover substantial damages, ordinarily an award of nominal damages will not entitle a party to the costs of the proceedings: see Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166 [9]. In such a case, the party has obtained something of no real use to them and something which, if they had known it was all that was available, they would not have brought proceedings to recover. It would be contrary to modern notions of the efficient and cost-effective use of judicial resources to enable a party to recover its costs for a pyrrhic victory, having substantively failed in the action.
11 This case is such an instance. It is clear enough that the appellant's only purpose in bringing the action was to recover substantial damages. Having failed to prove at trial that it had suffered any damage, it was entitled to no more than nominal damages. On the appeal, the appellant sought to establish that his Honour erred in finding that no damage had been proved, but failed. The finding of breach was not in issue on the appeal.
12 In addition, the appellant failed at trial to make out its further claim that the respondent had engaged in misleading or deceptive conduct in relation to the mosfets, and on the appeal it failed in its endeavour to overturn the finding of the primary judge that that claim had not been made out.
13 On neither the trial nor the appeal can the appellant be regarded as having been successful. We would not, therefore, disturb the order of the primary judge that the appellant pay 75% of the respondent's costs of the trial. The respondent is entitled to an order that the appellant pay its costs of the appeal.
14 It was, in our view, unnecessary for the appellant expressly to seek an order for nominal damages in the alternative to its claim for substantial
(Page 7)
- damages at trial. Upon a finding that the respondent was in breach of the contract it necessarily followed that the appellant was entitled to an order for nominal damages if it failed (as it did) to establish that it had suffered substantial damages, and such an order should have been made by the primary judge. In the absence of such an order, it is appropriate for this court to remedy the omission.
Conclusion
15 We would make the following orders:
1. order 1 of the orders of the primary judge be set aside and there be in lieu an order that the respondent pay to the appellant damages in the sum of $100;
2. the appeal otherwise be dismissed;
3. the appellant pay the respondent's costs of the appeal to be taxed.
0
10
1