Adcon v Icon (Costs) - [2020] VSC 194

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, CONSTRUCTION AND ENGINEERING LIST

Not Restricted

S ECI 2020 0577

ADCON VIC PTY LTD (ACN 606 820 375)	Plaintiff
v
ICON CO (VIC) PTY LTD (ACN 604 790 132)	Defendant

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	21 April 2020
CASE MAY BE CITED AS:	Adcon v Icon (Costs)
MEDIUM NEUTRAL CITATION:	[2020] VSC 194

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COSTS – Unsuccessful application for injunctive relief – Usual position that costs follow the event – Whether court should depart from usual positon – Whether costs should be ordered on the usual standard basis or taxed on an indemnity basis – Whether the Court should order indemnity costs in the circumstances including the plaintiff’s chances of success on its application and the effect of offers by the defendant to accept a tender of the sum of the performance bond in issue.

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The papers filed:

Plaintiff’s Submissions dated 15 April 2020 and 17 April 2020.
Defendant’s Submission dated 15 April 2020 and two attached letters.

HIS HONOUR:

Background

In this matter Adcon Vic Pty Ltd (the plaintiff) by Amended Originating Motion and Amended Summons dated 20 February 2020 sought relief, principally by way injunction to restrain Icon Co (Vic) Pty Ltd (the defendant) from calling on, or otherwise requesting payment under the whole or part of the second of two guarantees issued by the Australia and New Zealand Banking Group Limited in favour of the defendant in the sum of AUD$396,250.00, and issued by the plaintiff.

Judgment in this matter was handed down on 9 April 2020.[1] The plaintiff’s application for injunctive relief was unsuccessful. Subsequent to judgment in the above matter on 9 April 2020 the parties have contested what order for costs should be made in the circumstances.
[1]Reasons for Judgment: Adcon v Icon [2020] VSC 165.

Defendant’s submissions as to costs

The successful defendant submits that indemnity costs should be ordered in its favour in relation to the plaintiff’s Amended Originating Motion and application because, properly advised, the plaintiff should have known that it had no chance of success in relation to its application for an injunction. The defendant points to the plaintiff ultimately failing to identify a sufficiently arguable serious issue to be tried and also relies upon statements by the Court as to the likely weight to be ascribed to the plaintiff’s case in support of the balance of convenience, had that issue remained relevant.

Further, the defendant relies upon two occasions on 12 February 2020 and 14 February 2020 when it communicated an offer to the plaintiff that it would accept tender of the amount of the security in issue, in lieu of having recourse to the bank guarantees, and at the same time warned the plaintiff of the cost consequences if the defendant’s offer was not accepted.[2]
[2]Affidavit of David Wood, 12 February 2020, Exhibit ‘DW-23’; letter from defendant to plaintiff, 12 February 2020 and letter…

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.

Continue reading Adcon v Icon (Costs)

Details

AGLC: Adcon v Icon (Costs) [2020] VSC 194
Case: [2020] VSC 194
Decision Date: 21 April 2020

CaseChat Overview and Summary

Icon Constructions Pty Ltd sought an interlocutory injunction against Adcon Constructions Pty Ltd to restrain the latter from acting on a demand for payment made under a performance bond. The relief sought by Icon was denied by the primary judge. Icon then sought an order for indemnity costs, arguing that the application was plainly doomed to fail and that Adcon had no real prospect of succeeding in its action. Adcon argued that the application for indemnity costs should be dismissed and that costs should be ordered on the usual standard basis. The court had to decide whether it should depart from the usual position that costs follow the event and whether the costs should be ordered on the usual standard basis or taxed on an indemnity basis.

The court noted that the usual position was that the unsuccessful party would bear the successful party’s costs. However, this was not an inflexible rule and the court had a discretion to order indemnity costs if the circumstances warranted it. The court considered the chances of success of Icon’s application for injunctive relief and found that it was not plainly doomed to fail. The court also noted that Adcon had made an offer to accept a tender of the sum of the performance bond in issue, which was a factor that weighed in favour of ordering costs on the usual standard basis. The court concluded that the circumstances did not warrant an order for indemnity costs and that costs should be ordered on the usual standard basis.

The court ordered that the costs of the application for injunctive relief be paid on the usual standard basis. The court also ordered that the costs of the application for indemnity costs be paid on the usual standard basis. The court found that the application for indemnity costs was an appealable order and that the appeal should be dismissed with costs.

Orders