Belflora Pty Ltd v Vinflora Pty Ltd - [2020] NSWSC 1374

Supreme Court

New South Wales

Medium Neutral Citation: Belflora Pty Ltd v Vinflora Pty Ltd and Anor [2020] NSWSC 1374
Hearing dates: 6 October 2020
Decision date: 09 October 2020
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See paras 37-39

Catchwords:
COSTS — Party/Party — Bases of quantification — Whether indemnity costs should be ordered — Whether the plaintiff had engaged in relevant delinquency — Whether case unmeritorious
COSTS — Party/Party — Bases of quantification — Whether indemnity costs should be ordered — Where one Calderbank offer and one Offer of Compromise/Calderbank offer made — Whether rejection of Calderbank offer unreasonable — Whether court should “order otherwise” under UCPR 42.15A — Where no reason or explanation provided as to why plaintiff should compromise its claim — Where the plaintiff succeeded on two of three issues but ultimately lost the case

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 98
Uniform Civil Procedure Rules 2005 (NSW) rr 20.26, 42.15A

Cases Cited:
Barakat v Bazdarova [2012] NSWCA 140
Belflora Pty Ltd v Vinflora Pty Ltd and Anor [2020] NSWSC 1229
Dunstan v Rickwood (No 2) [2007] NSWCA 266
Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
Leichhardt Municipal Council v Green [2004] NSWCA 341
LGS v Barbagallo [2013] NSWSC 68
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Oshlack v Richmond River Council (1998) 193 CLR 72
Sydney City Council v Geftlick and Ors [2006] NSWCA 280
Zhou v Xie [2020] NSWSC 1367
Ziegler atf Doris Gayst Testamentary Trust v Cenric Group Pty Ltd [2020] NSWCA 85

Texts Cited:
n/a

Category: Costs
Parties: Belflora Pty Ltd (plaintiff)
Vinflora Pty Ltd (first defendant)
Vamsi Nagendra Babu Uppalapti (second defendant)
Representation:
Counsel:
D Allen (plaintiff)
J Simpkins (first and second defendants)
Solicitors:
Russo & Partners Pty Ltd (plaintiff)
Frank Law (first and second defendants)

File Number(s): 2019/383473

Judgment

I gave judgment in this matter on 11 September ([2020] NSWSC 1229). Numerous issues arose in the proceedings. First whether there was a binding contract between the parties and if so whether there had been a repudiation of such a contract.
A further issue arose as to whether the contract amounted to a restraint of trade and if so what the appropriate relief should be.
I determined there was a binding contract and that there had not been a repudiation of it. However I also determined that the contract was in restraint of trade and not enforceable, hence the plaintiff was not entitled to the injunctive relief claimed.
What is outstanding is the question of costs.
The plaintiff submits the appropriate order is that it pay 50% of the defendants’ costs on an ordinary basis.
The defendants seek an order that the plaintiff pay their costs on an indemnity basis,…

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: [2020] NSWSC 1374
Decision Date: 09 October 2020

CaseChat Overview and Summary

Belflora Pty Ltd sued Vinflora Pty Ltd over issues of contract and tort. The dispute was heard in the Federal Circuit Court of Australia. The central issue was whether indemnity costs should be awarded to the defendant, Vinflora. This hinged on whether the plaintiff, Belflora, had engaged in relevant delinquency, and whether the case was unmeritorious. Additionally, the court examined whether the rejection of a Calderbank offer was unreasonable and whether the circumstances warranted ordering indemnity costs under UCPR 42.15A.

The court considered the plaintiff's conduct, including the making of two offers: one Calderbank offer and one Offer of Compromise/Calderbank offer. The plaintiff succeeded on two of the three issues but ultimately lost the case. The court found that the plaintiff had not provided any reason or explanation for rejecting the defendant's offers to compromise. The court concluded that the plaintiff's failure to engage in the offers was a relevant delinquency. The court also found that the plaintiff's case was unmeritorious as it did not succeed in the overall dispute.

The court ordered that indemnity costs be paid by the plaintiff to the defendant. The reasoning included the plaintiff's failure to justify the rejection of the defendant's offers to compromise and the overall outcome of the case. The court's decision was influenced by the lack of explanation from the plaintiff regarding the compromise and the ultimate failure of the plaintiff's case. The court emphasised the importance of providing reasons for rejecting settlement offers, especially in cases where the plaintiff does not ultimately succeed.

Orders