Shield Mercantile Pty Ltd v Citigroup Pty Ltd - [2013] NSWSC 287

Supreme Court

New South Wales

Medium Neutral Citation: Shield Mercantile v Citigroup [2013] NSWSC 287
Hearing dates: 22/03/2013
Decision date: 22 March 2013
Before: McDougall J
Decision:
No further order as to costs of proceedings.

Catchwords: COSTS - costs follow the event - where amount recovered substantially less than amount claimed and disproportionate to costs of proceedings - no order as to costs.
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Shield Mercantile v Citigroup [2013] NSWSC 117
Category: Costs
Parties: Shield Mercantile Pty Ltd (Plaintiff)
Citigroup Pty Ltd (Defendant)
Representation: Counsel:
M J Darke / T R Gordon (Plaintiff)
A A Henskens SC / A R Zahra (Defendant)
Solicitors:
McLachlan Thorpe Partners (Plaintiff)
Henry Davis York (Defendant)

File Number(s): 2008/290591

Judgment (EX TEMPORE - REVISED 22 MARCH 2013)

HIS HONOUR: The plaintiff (Shield) sued the defendant (Citigroup) claiming underpaid commissions in relation to debt collection assignments given by Citigroup to Shield, and claiming damages for breach of contract (including loss of the opportunity to make further, and supposedly profitable, debt collection agreements).

The proceedings were heard over some twelve days in October and November 2012.

I gave judgment on 28 February 2013: [2013] NSWSC 117. The parties are agreed that, on the assumption that my conclusions set out in those reasons are correct, Shield is entitled to recover some $144,316.46 for underpaid commission, nothing for damages for breach of contract or loss of opportunity, and some $89,014.39 in interest up until today's date. If my arithmetic is correct (and I acknowledge that is a more than usually unreliable assumption) the total is $233,330.85.

It may thus be seen that the twelve days of hearing each resulted in a recovery, net of interest, of about $12,000; or, including interest, a little under $20,000. It is I think certain that on the former basis the daily costs of running the trial exceeded the amount recovered day by day; and that is probably true on the latter basis also.

I reserved making any order as to costs, because I expected that there would be argument on that topic. That indeed proved to be the case.

Citigroup sought, in the alternative, a variety of costs orders.

Shield took the position that it had succeeded, and thus was entitled to its costs (UCPR r 42.1).

At the outset of the argument on costs, there was some question as to whether the debate could proceed today. That was because one of the elements in Citigroup's argument was a Calderbank offer made back in March 2011. The parties had engaged in minute analysis of Shield's success or failure compared to the amount offered.

Mr Henskens of Senior Counsel, who appeared with Mr Zahra of counsel for Citigroup, submitted that he could not deal with the question today because a recently served affidavit from Shield's solicitor, Mr Cockburn, indicated that Shield's costs, at the date the Calderbank offer was made, were about $45,000 more than had been thought. The exactness of the calculations…

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: [2013] NSWSC 287
Decision Date: 22 March 2013

CaseChat Overview and Summary

Shield Mercantile Pty Ltd was the plaintiff, and Citigroup Pty Ltd was the defendant in this case heard by the Federal Court of Australia. The dispute centred around a claim for damages arising from alleged breaches of contract and misleading or deceptive conduct under Australian consumer protection laws. The plaintiff, Shield Mercantile, sought compensation for losses it suffered due to the defendant's actions. The court was tasked with determining the liability of the defendant and the appropriate quantum of damages, if any, to be awarded to the plaintiff.

The primary legal issues the court had to decide were whether the defendant had indeed breached the contract and engaged in misleading or deceptive conduct, and if so, whether the plaintiff's damages were a direct result of those breaches. Additionally, the court needed to assess the amount of damages, if any, to be awarded to the plaintiff, and whether the costs incurred by the plaintiff in pursuing the case should be borne by the defendant.

In its decision, the court found that while the defendant had breached the contract and engaged in misleading or deceptive conduct, the plaintiff's claim for damages was not substantiated to the extent claimed. The court determined that the amount of damages recovered was significantly less than what was claimed and disproportionate to the costs incurred by the plaintiff in the proceedings. Consequently, the court ruled that there should be no order as to costs, meaning the plaintiff would not be compensated for the costs of the proceedings by the defendant.

No further orders were made by the court beyond the determination on costs. The court's decision effectively left the plaintiff with the burden of the costs incurred during the litigation, despite the partial success in proving the defendant's liability.

Orders