Pritchard v DJZ Constructions Pty Ltd; Gilles v DJZ Constructions Pty Ltd (No 2)

[2012] NSWCA 413

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Pritchard v DJZ Constructions Pty Ltd & Ors; Gilles & Anor v DJZ Constructions Pty Ltd & Ors (No 2) [2012] NSWCA 413

Hearing dates:

21 and 22 February 2012

Decision date:

13 December 2012

Before:

Bathurst CJ at [1]; Barrett JA at [50]

Decision:

In proceedings CA 269375 of 2005, order:

1 Appeal allowed in part.

2 Order 1 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the first defendant, including interest, in the sum of $543,490.

3 Order 2 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the second and third defendants, including interest, in the sum of $132,945.

4 Order 3 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the fourth defendant, including interest, in the sum of $29,527.

5 Order 5 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the cross-claimant against the third cross-defendant.

6 Orders 13 and 14 made by the primary judge on 9 March 2011 be set aside.

7 Order that the third cross-defendant pay the cross-claimant's costs of the cross-claim so far as it relates to the claim against him.

8 Order that the fourth defendant pay the plaintiff's costs of the claim made against him as agreed or assessed.

9 The stay of judgment and orders in Orders 16, 17 and 18 made by the primary judge on 9 March 2011 be discharged.

10 Order that the appellant pay 50 percent of the first respondent's costs of the appeal.

11 Order the second and third respondents pay the appellant's costs of the appeal so far as those costs relate to the orders sought in Ground 8 of the Notice of Appeal.

12 Order the fourth respondent pay the appellant's costs of the appeal so far as those costs relate to the orders sought against him in Ground 9 of the Notice of Appeal.

13 Order that the cross-appellant pay the cross-respondent's costs of the appeal.

In proceedings CA 269375-007 of 2005, order:

1 Appeal dismissed.

2 Order the appellant pay the first and second respondents' costs of the appeal.

3 No order as to costs of the other respondents.

4 The Court notes that the appellants reserve their right to make an application to the primary judge under r 36.17 of the Uniform Civil Procedure Rules for a variation of Order 11 made on 9 March 2011, by adding the words "up to the time that the first and second cross-defendants were joined as the second and third defendants to these proceedings".

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

COSTS - general rule that costs follow the event - trial costs - appeal costs.

COSTS - appeal costs - separate costs orders.

PROCEDURE - entry of judgments and orders - application to set aside or vary orders - UCPR r 36.16(3A).

Legislation Cited:

Supreme Court Act 1970 s 45AA
Uniform Civil Procedure Rules 2005 r 36.16(3A), r 36.17

Cases Cited:

James v Surf Road Nominees Pty Ltd [2004] NSWCA 475
Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411
Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2) [2008] NSWCA 205

Category:

Costs

Parties:

2005/269375
Paul Pritchard t/as Pritchard Law Group (Appellant)
DJZ Constructions Pty Ltd (First Respondent)
Joseph John Gilles (Second Respondent)
Gregory George Eliades (Third Respondent)
David McGovern SC (Fourth Respondent)
Vincent Palmieri (Fifth Respondent)
Palmieri's Developments Pty Ltd (Sixth Respondent)

2005/269375-007Joseph John Gilles (First Appellant)Gregory George Eliades (Second Appellant)DJZ Constructions Pty Ltd (First Respondent)Paul Pritchard t/as Paul Pritchard Law Group (Second Respondent)David McGovern SC (Third Respondent)

Representation:

A.J. McInerney, L.T. Livingston (05/269375: Appellant; 05/269375-007: 2nd Respondent)
C.J. Birch SC, M.P. Cleary (05/269375: 1st, 5th & 6th Respondents; 05/269375-007: 1st Respondent)
A. Bell SC, Ms K. Williams (05/269375: 2nd & 3rd Respondents; 05/269375-007: 1st & 2nd Appellants)
S.W. Gibb SC (05/269375: 4th Respondent, 05/269375-007: 3rd Respondent)
Yeldham Price O'Brien Lusk (05/269375: Appellant; 05/269375-007: 2nd Respondent)
Pryor Tzannes & Wallis (05/269375: 1st, 5th & 6th Respondents; 05/269375-007: 1st Respondent)
Sparke Helmore (05/269375: 2nd & 3rd Respondents; 05/269375-007: 1st & 2nd Appellants)
McCabe Terrill (05/269375: 4th Respondent; 05/269375-007: 3rd Respondent)

File Number(s):

2005/269375 2005/269375-007

 Decision under appeal 

Jurisdiction:

9111

Citation:

[2010] NSWSC 1024
[2010] NSWSC 1472

Before:

Schmidt J

File Number(s):

2005/269375

Judgment

1. BATHURST CJ: These appeals were heard together and judgment was delivered on 28 June 2012 (the primary judgment). In my judgment I reached the following conclusions and proposed the following orders:

"[101] In the result, in my opinion, the liability of Mr Pritchard for the loss of the benefit of the James guarantee should be reduced to the figure of $380,017 as concluded by Whealy JA.

[102] So far as the liability in respect to the costs incurred in the prosecution of the James proceedings, DJZ is entitled to damages measured by reference to 60 percent of the total costs less a discount of 30 percent thereof as a result of the contributory negligence of DJZ. To the extent the damage related to costs incurred up to 30 May 2002, the whole of the damage should be borne by Mr Pritchard. To the extent the damage was suffered between 30 May 2002 and 15 April 2003, it should be borne equally by Mr Pritchard and Giles Payne and thereafter 45 percent each by Mr Pritchard and Giles Payne and 10 percent by Mr McGovern. If the parties are unable to agree on the quantum in accordance with that conclusion, the matter should be remitted to the trial judge for determination.

[103] Due to the limited success each of the appellants had in the appeal, it seems to me that the orders for costs made by the primary judge should not be disturbed.

[104] So far as the costs of the appeal are concerned, no order for costs of the appeal should be made at this stage but each party should be given leave to file a motion seeking such costs orders as they may be advised. Any such motion should be filed within 14 days and will be listed before the Registrar of the Court of Appeal for directions as to their disposal.

Orders

[105] In these circumstances I would make the following orders:

1 Each appeal allowed in part.

2 In the event the parties are able to agree on orders to give affect to the conclusions reached in pars [101]-[102] of this judgment, a draft form of orders should be delivered to my Associate.

3 In the event the parties are unable to agree on the orders within 14 days, the proceedings are to be remitted to the trial judge for determination of the appropriate orders having regard to pars [101]-[102] of this judgment.

4 The parties have liberty to file Notices of Motion seeking orders for costs of the appeal within 14 days of the date hereof."

1. Barrett JA agreed with the orders I proposed and as a consequence the orders became the orders of the Court.

1. The parties have agreed on certain orders to give effect to the conclusions I reached in pars [101]-[104] but have filed a series of motions in relation to costs.

1. Whealy JA retired on 30 June 2012. The parties have agreed, pursuant to s 45AA of the Supreme Court Act 1970, that Barrett JA and I deal with the outstanding issues.

1. This judgment should be read with the primary judgment. However, to put the matter in context, it is appropriate to summarise the issues raised and the result.

1. The proceedings concerned the liability of professional advisers to the first respondent to each appeal (DJZ) arising out of a decision of this Court in James v Surf Road Nominees Pty Ltd [2004] NSWCA 475 that the entry into a deed in November 2003 had the effect of releasing the guarantees of Mr and Mrs James and New South Head Road Nominees Pty Ltd (the James guarantors) from their obligations under a guarantee contained in a deed dated 1 July 1999. That Court in obiter also held that the guarantee had been released by an earlier deed executed in February 2001. The relevant provisions of each deed and the decision of the Court of Appeal are set out in pars [2]-[28] of the primary judgment and it is unnecessary to repeat them. As a consequence, DJZ brought proceedings against its professional advisers. Its claims relevantly were for the loss of the monetary value of the guarantee and for the costs of the unsuccessful prosecution of the proceedings against the James guarantors.

1. In relation to the claim for loss of value of the guarantee, the primary judge held that the appellant Mr Pritchard breached his obligations to advise that the entry into the November 2003 agreement would cause the discharge of the James guarantees. Her Honour considered the possibility that the February 2001 deed had this effect but concluded that Mr Pritchard was neither retained nor owed a duty to advise DJZ in respect of that deed. She assessed damages at $542,882.13.

1. In relation to the costs of the James proceedings, the primary judge found that the costs amounted to $489,022, plus interest (at [412]). She concluded that 60 percent of those costs related to the pursuit of the guarantee whilst 40 percent related to other issues. After concluding that the damages should be reduced by 30 percent for the contributory negligence of DJZ in failing to accept an offer of settlement on 18 December 2003, she found that the second and third respondents (Giles Payne) were responsible for 50 percent of the costs incurred after 18 January 2004, whilst Mr Pritchard was responsible for the balance. As the respondent Mr McGovern SC had not advised DJZ on the entry into the November 2003 deed, the claim against him was dismissed. However, the primary judge ordered he pay additional costs incurred by reason of his withdrawal from representing DJZ as senior counsel when he was joined in the proceedings, on the basis that he should have perceived at an earlier point of time that he was in a position of conflict. A similar order was made against Giles Payne in respect of their withdrawal from the proceedings.

1. In the result the primary judge entered judgment against Mr Pritchard in the sum of $743,780 and Giles Payne in an amount of $130,701.31.

1. The nature of appeal and cross-appeals were summarised in pars [31]-[33] of the primary judgment:

"[31] Mr Pritchard has appealed against the orders of the primary judge in respect each of Giles Payne and Mr McGovern. The grounds of the appeal challenge the contention that the February 2001 deed had no causative effect on any loss suffered by DJZ. As a consequence it is contended that Giles Payne's liability in respect of costs should have commenced in May 2002 rather than 12 January 2004 and that Mr McGovern was liable to make contribution. He also contended that DJZ suffered no loss as the costs were paid by other companies associated with Mr Palmieri rather than DJZ.

[32] Giles Payne has appealed against the findings of the primary judge on the grounds that it was no part of its retainer to advise DJZ on this issue and that any breach of retainer was not causative of any loss. It also appealed against certain costs orders made by the primary judge on the assumption that it was otherwise unsuccessful. It also contended that DJZ suffered no loss as the costs were paid by other companies associated with Mr Palmieri, rather than by DJZ.

[33] Mr McGovern has cross-appealed on an order for costs made against him by the primary judge. By Notice of Contention Mr McGovern submitted that the primary judge's decision should be affirmed on the grounds that the proper application of s 5B, s 5D and s 5E of the Civil Liability Act 2002 would result in the finding that he was not negligent and there was a lack of causation between the alleged negligence and the loss incurred by DJZ."

1. It should be noted that the contention of Mr Pritchard referred to in par [31] of the primary judgment was based on a submission that the February 2001 deed discharged the guarantee and that he had no duty to advise in respect of that deed. I have summarised the position in par [20] of the primary judgment:

"[20] The issue in these appeals arises in a somewhat unusual fashion. The primary judge found negligence in failing to advise that the November 2003 sales agreement would operate as a release of the James guarantors and that that was the effect of that agreement. On appeal, Mr Pritchard argued that if there was a release of the James guarantors, it occurred by virtue of the February 2001 deed, in respect of which he owed no duty to DJZ. Therefore, he submitted, even if he was negligent in November 2003, that negligence did not result in any loss to DJZ. DJZ by contrast contended that it had retained Mr Pritchard in respect of the February 2001 deed, and that if it had the effect of releasing the James guarantors the consequent loss which resulted was caused by the negligence of Mr Pritchard in failing to warn of this effect."

1. On the appeal the majority held that the February 2001 deed had discharged the James guarantees, but that Mr Pritchard was under a duty to exercise reasonable care in advising DJZ on the deed, which duty was breached by failing to advise of this consequence. Thus Mr Pritchard remained liable. However, the damages were discounted by 30 percent to take account of the possibility that in February 2001 DJZ could not have negotiated a deed which would have avoided the discharge of the guarantee and of the difficulty of recovering money from the James guarantors, particularly Mrs James.

1. So far as the costs of the proceedings against the James guarantors were concerned, the majority held that Giles Payne came under an obligation to advise DJZ of the fact that the February 2001 deed discharged the guarantee by 30 May 2002 and Mr McGovern by 15 April 2003. This led to the apportionment referred to in par [102]. The discount of 30 percent for contributory negligence remained.

1. In monetary terms, having regard to the agreed orders, the liability of Mr Pritchard was reduced to $543,490, the liability of Giles Payne marginally increased to $132,945, whilst Mr McGovern became liable to the plaintiff in the sum of $29,527.

The Motions filed by Mr Pritchard and his submissions in support

1. Mr Pritchard filed two Motions. He sought an order under UCPR r 36.16(3A) or r 36.17, or in the inherent jurisdiction of the Court, varying or correcting par [103] and par [597] of the primary judgment. The variation sought was that the costs order made by the primary judge in favour of Mr McGovern should be set aside and in its place it should be ordered that Mr McGovern pay Mr Pritchard's costs in the Court below in respect to Mr Pritchard's cross-claim against Mr McGovern.

1. In support of this submission Mr Pritchard pointed to the fact that contrary to the finding of the primary judge, Mr McGovern was held liable for at least part of the loss incurred as a result of the continued prosecution of the James proceedings. He contended that in those circumstances costs should follow the event. He submitted that the power to make such an order was contained either in UCPR 36.17, UCPR 36.16(3A) or under the Court's inherent jurisdiction.

1. Mr Pritchard also submitted that "as a matter of logic" the Court should also order that Mr McGovern indemnify Mr Pritchard for 10 percent of the costs payable by Mr Pritchard to DJZ pursuant to Order 7 made by the primary judge, as that would correspond with the order made by her against Giles Payne.

1. By a separate Notice of Motion filed on the same day, Mr Pritchard sought an order that his costs of the appeal be paid by DJZ Constructions, Giles Payne and Mr McGovern.

1. In his submission in support of the latter motion, Mr Pritchard contended that he had substantial success on the appeal. So far as DJZ was concerned he pointed to the fact that he had established that the February 2001 deed and not the November 2003 deed were causative of the loss suffered and had obtained a discount in the assessment of damages for the loss of the benefit of the James guarantee. So far as Giles Payne was concerned Mr Pritchard submitted that he had succeeded in establishing that Giles Payne was liable from an earlier point of time than that determined by the primary judge, increasing the amount of damages payable. In that context he submitted that Giles Payne was unsuccessful in its appeal and that Ground 8 of his own Notice of Appeal had been made out. In relation to Mr McGovern he contended he had been successful in upholding the conclusion that Mr McGovern breached his duty of care to DJZ and overturning the primary judge's conclusion on the issues of causation and damage.

1. Mr Pritchard submitted that in that context there was no reason in the appeal to depart from the usual rule that costs follow the event. He submitted that as a matter of substance and reality he had achieved a substantial reduction in damages, increased the amount of damages payable by Giles Payne and obtained a finding of liability and an award of damages against Mr McGovern. He submitted that the respondents should be jointly and severably liable for his costs having regard to the fact the proceedings were based on a common substratum of fact.

The first respondent's motion and submissions

1. By a Notice of Motion filed on 12 July 2012, the first respondent (DJZ) sought an order that Mr Pritchard pay 50 percent of its costs on the appeal. In addition, it sought an order pursuant to UCPR r 36.16(3A) or r 36.17, or in the inherent jurisdiction of the Court, that pars [103] and [597] of the primary judgment be corrected, varied, recalled or set aside insofar as they related to the costs orders made in the Court below in favour of the fourth respondent (Mr McGovern). The Motion sought that in lieu thereof an order be made that Mr McGovern pay the costs of DJZ in the proceedings in the Court below.

1. In its written submissions DJZ pointed to the fact that Mr Pritchard's Notice of Appeal contained nine grounds of appeal, seven of which related only to the appeal as between Mr Pritchard and DJZ. It submitted that the only ground of appeal against DJZ which was successful was the ground which asserted that damages should be reduced because of the contingency that DJZ could not have negotiated a deed which would have avoided the discharge of the guarantee and the difficulty of recovering money from the James guarantors (see par [12] above). It pointed out that Mr Pritchard was otherwise wholly unsuccessful against DJZ. It further submitted that it was incorrect to state that Mr Pritchard was successful in the appeal on the issue of causation as his (Mr Pritchard's) negligence in respect of giving advice in relation to the February 2001 deed caused the loss claimed by DJZ.

1. DJZ submitted that the Court has an unfettered discretion to award costs and that the appropriate order depends on the circumstances of each case. It submitted that in cases where distinct defences are raised, it is appropriate in certain circumstances to make individual costs orders as between the parties.

1. So far as its claim for a variation of the judgment was concerned, DJZ submitted that an order that Mr McGovern pay the costs of the proceedings in the Court below would properly reflect the judgment and finding of the Court to the effect that Mr McGovern was liable to contribute to the loss suffered by it.

The motions and submissions of Giles Payne

1. Giles Payne filed two Notices of Motion, one in its capacity as a respondent in Mr Pritchard's appeal, the other as the appellant in its own appeal.

1. In its Notice of Motion filed in the appeal of Mr Pritchard, it sought orders that the first respondent, the second and third respondents jointly and severally, and the fourth respondent, each pay one third of the appellant's costs of the appeal.

1. In its Notice of Motion filed in its own appeal it accepted that it should pay Mr Pritchard's costs of that appeal but claimed that there should be no order as to the costs of DJZ or Mr McGovern.

1. In its written submissions Giles Payne accepted that Mr Pritchard was entitled to an order for the costs of the appeal. It acknowledged that the general rule was that costs in favour of a successful party against multiple unsuccessful parties are usually ordered in terms that render the unsuccessful parties jointly and severally liable for the costs. However, it contended that this was not a universal rule and that it was appropriate in certain circumstances to make separate orders against unsuccessful parties for a proportion of the successful party's costs where the unsuccessful parties have raised distinct defences. It submitted this was what had occurred in the present case and that the result of the appeal was that the separate orders made by the primary judge against each respondent had been varied.

1. In further support of the submission it pointed to the risk that if separate orders were not made and DJZ enforced the orders for damages and interest against Mr Pritchard, Giles Payne and Mr McGovern and dispersed the funds before the amount of costs payable to Mr Pritchard was assessed or agreed upon, then DJZ may not be in a position to meet any obligation to pay costs in respect of the appeal and the whole burden of the costs orders would fall upon Giles Payne and Mr McGovern.

Mr McGovern's submissions on costs

1. In its submissions in the Giles Payne appeal, Mr McGovern pointed to the fact that he had filed a submitting appearance except as to costs and took no further part in the appeal. He submitted in those circumstances he should have his costs to that appeal.

1. In his submissions on the Pritchard appeal, Mr McGovern acknowledged that costs generally should follow the event. However, he submitted that a contrary order could be justified when an otherwise successful party has failed on substantial issues that occupied a substantial part of the time taken in the litigation, or where there were dominant or other issues which were clearly separable from the matters on which the party succeeded.

1. He submitted that in the present case Mr Pritchard should have an order that Mr McGovern pay only Mr Pritchard's costs of the appeal attributable to the issues of breach of duty and causation which resulted in Mr McGovern's liability to DJZ.

1. Mr McGovern referred to the fact that he was joined belatedly, following an amendment by Mr Pritchard to his defence to plead proportionate liability of Mr McGovern and that it was this that led to DJZ amending its Statement of Claim to make a claim against him.

1. Mr McGovern pointed to the fact that he had conducted a separate and distinct case from Mr Pritchard's defence of the claim of DJZ and from Giles Payne's involvement. He submitted that it was reasonable in considering the issue of costs to take into account the limited amount of time involved in this aspect of the appeal and the fact that Mr McGovern's proportionate liability represented only a little over four percent of the total amount of the judgments in favour of DJZ against Mr Pritchard, Giles Payne and himself as concurrent wrongdoers. In those circumstances he submitted it was unfair to make an order that he be jointly and severally liable with the other respondents for the whole of Mr Pritchard's costs of his appeal.

1. Mr McGovern acknowledged that there should be an order that he pay the costs of the respondent to his cross-appeal.

1. In relation to Mr Pritchard's application to vary pars [103] and [597] of the primary judgment, Mr McGovern pointed to the fact that Mr Pritchard was unsuccessful in establishing that there was no causal link between Mr Pritchard's negligence in relation to the November 2003 sale agreement and any alleged loss, that no loss was suffered by DJZ and that Mr Pritchard's services were protected by advocate's immunity. He submitted that this provided justification for the conclusions reached in the primary judgment.

1. Mr McGovern also pointed to the conduct of the trial, his late joinder and the relatively limited amount of time that his defence to the cross-claim took up. He submitted it was reasonable to assume that the issue of his liability probably took less than 10 percent of the time devoted to the trial and that it would be unjust in those circumstances to make an order that he pay Mr Pritchard's costs of the proceedings.

1. Alternatively, Mr McGovern submitted that if an order was made it should be attributable only to the issues of breach of duty and causation, or alternatively should be limited to a percentage less than 10 percent of Mr Pritchard's costs of the trial.

The applications to vary the judgment

1. It is convenient to deal first with a claim for the variation of pars [103] and [597] of the primary judgment. Paragraph [103] was directed to the fact that Mr Pritchard and Giles Payne had only limited success in disturbing the orders of the primary judge. No variation was sought in relation to my conclusion that the costs orders made against them should not be disturbed.

1. However, in reaching the conclusion in par [102], the position of Mr McGovern was not taken into account. There were two costs orders made in favour of Mr McGovern in the Court below. The first was that Mr Pritchard pay Mr McGovern's costs as agreed or assessed up to and including 15 April 2010 and on an indemnity basis thereafter (Order 13) and that DJZ also pay his costs (Order 14).

1. The intention of par [102] was to maintain the costs orders made by the primary judge in respect of the appellants who, in the case of Mr Pritchard, had limited success on the appeal and, in the case of Giles Payne, no substantive success. It was not an intended consequence that Mr McGovern retain the costs order in the Court below that could only be justified by his success in defending the cross-claim which was overturned on appeal. In these circumstances it is appropriate, in my opinion, to exercise the power under UCPR r 36.16(3A) to vary pars [103] and [597] of the primary judgment to take account of this oversight and to set aside the orders for costs in favour of Mr McGovern: Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411; Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2) [2008] NSWCA 205.

1. The question remains what order should be made in their place. Mr Pritchard submitted that he should have his costs of the cross-claim and that Mr MrGovern should indemnify him for 10 percent of the costs payable by him to DJZ pursuant to par [7] of the Order made by the primary judge. Mr McGovern opposed any orders being made against him for the reasons referred to in his submissions above or, alternatively, sought the orders referred to in par [38] above.

1. In my opinion the submissions made by Mr McGovern outlined in pars [36]-[38] above, do not provide a basis for refusing to order that Mr McGovern pay Mr Pritchard's costs of the cross-claim against him. Such an order would not render Mr McGovern liable for the costs referred to in par [37] above which do not relate to the cross-claim and would take into account the relatively limited time spent on his defence to the cross-claim. This is consistent with the general rule that costs follow the event.

1. However, I do not believe that Mr McGovern should be ordered to indemnify Mr Pritchard in respect of 10 percent of the costs payable by Mr Pritchard to DJZ. Mr McGovern's liability was limited to the claim made by DJZ for costs of the proceedings against the James guarantors. His total liability was approximately four percent of the total liability of the various defendants to DJZ. In these circumstances I do not propose to make the order sought although as I indicate below, I will order that Mr McGovern pay the costs of the claim made against him by DJZ.

1. For the same reasons as those in relation to the order for variation sought by Mr Pritchard, I would vary par [102] of my judgment to exclude the order made by the primary judge (Order 14 of her orders) to the effect that DJZ pay Mr McGovern's costs of the proceedings. In my opinion the appropriate order is that Mr McGovern pay the costs of DJZ in respect to the claim brought by that company against him. The order for costs should not extend to the whole costs of the proceedings. Mr McGovern's liability related to a discrete part of the claim, the costs of the proceedings against the James guarantors and even in respect of that claim his liability was limited compared to that of Mr Pritchard and Giles Payne. In these circumstances, in my opinion, this is an appropriate case for separate costs orders.

The costs of the appeal

A The appeal by Mr Pritchard

1. Mr Pritchard's success was limited. He sought an order that the whole of the claim against him be dismissed. As against DJZ he raised seven grounds of appeal which included 24 additional sub-grounds and only succeeded on one sub-ground, which resulted in a reduction of liability of some 26 percent. It follows that DJZ was substantially successful in resisting the appeal. As submitted by it, in those circumstances an appropriate order is that Mr Pritchard pay 50 percent of its costs. Mr Pritchard should have his costs of his appeal against Mr McGovern so far as that appeal related to the cross-claim brought by him against Mr McGovern.

1. In its submissions Giles Payne accepted that Mr Pritchard's appeal against it was successful. It submitted that DJZ, the second and third respondents (Giles Payne) and Mr McGovern, should each pay one third of the appellant's costs. I have not accepted the submission that Mr Pritchard should have his costs against DJZ, nor do I consider it appropriate that Mr McGovern pay any costs other than the costs of the appeal so far as it related to him. An order similar to that made in respect of Mr McGovern should be made against Giles Payne.

1. So far as the Giles Payne appeal is concerned, Giles Payne accepted it should pay Mr Pritchard's costs but suggested no order should be made in respect of the costs of DJZ or Mr McGovern. So far as DJZ was concerned, Giles Payne in its appeal sought an order that the judgment obtained by DJZ against it should be set aside. Giles Payne was unsuccessful in this regard and in those circumstances there is no reason why that firm should not pay the costs of DJZ. Mr McGovern filed a submitting appearance. In the absence of any evidence of any costs occasioned by him as a submitting respondent, there should be no order as to his costs of the appeal.

1. In these circumstances I would make the following orders incorporating the matters agreed between the parties and the conclusions reached in this judgment.

In proceedings CA 269375 of 2005, order

1 Appeal allowed in part.

2 Order 1 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the first defendant, including interest, in the sum of $543,490.

3 Order 2 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the second and third defendants, including interest, in the sum of $132,945.

4 Order 3 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the plaintiff against the fourth defendant, including interest, in the sum of $29,527.

5 Order 5 made by the primary judge on 9 March 2011 be set aside and, in place thereof, judgment be entered for the cross-claimant against the third cross-defendant.

6 Orders 13 and 14 made by the primary judge on 9 March 2011 be set aside.

7 Order that the third cross-defendant pay the cross-claimant's costs of the cross-claim so far as it relates to the claim against him.

8 Order that the fourth defendant pay the plaintiff's costs of the claim made against him as agreed or assessed.

9 The stay of judgment and orders in Orders 16, 17 and 18 made by the primary judge on 9 March 2011 be discharged.

10 Order that the appellant pay 50 percent of the first respondent's costs of the appeal.

11 Order the second and third respondents pay the appellant's costs of the appeal so far as those costs relate to the orders sought in Ground 8 of the Notice of Appeal.

12 Order the fourth respondent pay the appellant's costs of the appeal so far as those costs relate to the orders sought against him in Ground 9 of the Notice of Appeal.

13 Order that the cross-appellant pay the cross-respondent's costs of the appeal.

In proceedings CA 269375-007 of 2005, order

1 Appeal dismissed.

2 Order the appellant pay the first and second respondents' costs of the appeal.

3 No order as to costs of the other respondents.

4 The Court notes that the appellants reserve their right to make an application to the primary judge under r 36.17 of the Uniform Civil Procedure Rules for a variation of Order 11 made on 9 March 2011, by adding the words "up to the time that the first and second cross-defendants were joined as the second and third defendants to these proceedings".

1. BARRETT JA: I agree with the Chief Justice.

**********

Decision last updated: 13 December 2012