Definity Clinic v AMD Rifat (No 2) - [2021] VSC 378

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2018 02498

DEFINITY CLINIC HOLDINGS PTY LTD (ACN 621 388 298) ATF DEFINITY CLINIC HOLDINGS TRUST	Plaintiff
v
A.M.D RIFAT HOLDINGS PTY LTD (ACN 106 065 516)	Defendant

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JUDGE:	MOORE J
WHERE HELD:	Melbourne
DATE OF HEARING:	Written submissions filed on 15 June 2021
DATE OF RULING:	28 June 2021
CASE MAY BE CITED AS:	Definity Clinic v AMD Rifat (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 378

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COSTS – Contract litigation – Whether costs should follow the event – Costs of claim and counterclaim dealt with together – Where plaintiff raised irrelevant matters at trial – Where late abandonment of issues and litigation unnecessarily prolonged – Where matter should properly have commenced in County Court – Where Calderbank offer not unreasonably refused by defendant – Defendant pay pre-trial costs of plaintiff on standard basis – Defendant pay 60% of costs of plaintiff on standard basis from date of trial onwards – Interest awarded at statutory maximum from date of demand for payment – Supreme Court Act 1986, ss 24, 58(1) – Penalty Interest Rates Act 1983, s 2 – Milne v A-G (Tas) (1956) 95 CLR 460, applied – Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) (2005) 13 VR 435, applied – Lollis v Loulatzis (No 2) [2008] VSC 35, applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D F McAloon	DW Fox Tucker Lawyers
For the Defendant	Mr T P Mitchell	Mills Oakley

HIS HONOUR:

I delivered judgment in this proceeding on 1 June 2021.[1] This ruling concerns the final orders to be made to give effect to my judgment, and the costs of the proceeding.
[1]Definity Clinic v AMD Rifat [2021] VSC 325 (the judgment). The abbreviations used in the judgment are also used in this judgment.

The key issue in the proceeding was the determination of the proper construction of a clause of a contract for the sale and purchase of a property.[2] The clause made the contract conditional upon the vendor, AMD, obtaining ‘a medical permit for the premises for two (2) practioners [sic].’ Definity paid a $135,000 deposit after entering into the contract. Just over a year later, after the local council issued a permit that Definity alleged was not suitable for its purposes, Definity commenced this proceeding and sought the repayment of its deposit.
[2]‘Special condition 3.1’

At the commencement of the trial, the parties were agreed that there were seven issues for determination. Two of these issues were not pressed by Definity in its closing submissions. Because I upheld the construction of the clause advanced by Definity, I answered Issue 1 in the negative and the remaining questions did not arise for determination.[3] In the result, Definity is entitled to recover the deposit that it paid under the contract and AMD’s counterclaim fails.[4]
[3]See the issues for determination set out in

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: [2021] VSC 378
Decision Date: 28 June 2021

CaseChat Overview and Summary

Definity Clinic took action against AMD Rifat over matters pertaining to contractual disputes. The case was heard in the County Court of Victoria. The primary dispute centred on whether the costs of the litigation should follow the event and the handling of the costs of both the claim and counterclaim. Additionally, the case examined the plaintiff's introduction of irrelevant matters during the trial, the late abandonment of certain issues, and the unnecessary prolongation of the litigation. The court also considered whether the matter should have been filed in the County Court instead of the Supreme Court.

The legal issues revolved around the appropriate allocation of costs in light of the plaintiff's introduction of irrelevant matters and the late abandonment of issues, which unnecessarily extended the litigation. The court had to determine if the plaintiff's decision to raise irrelevant matters and delay the abandonment of issues warranted a costs penalty. Another significant point was whether the matter should have been commenced in the County Court, as it might have been more suitable given the nature and complexity of the case. Furthermore, the court evaluated the defendant's refusal of a Calderbank offer, determining whether it was unreasonable.

The court held that the plaintiff's introduction of irrelevant matters and the unnecessary prolongation of the litigation justified awarding costs to the defendant. The court ruled that the matter should have been filed in the County Court due to its nature and complexity. It found that the defendant's refusal of the Calderbank offer was not unreasonable. Consequently, the court ordered the defendant to pay the plaintiff's pre-trial costs on a standard basis and 60% of the costs from the date of the trial onwards, also on a standard basis. Additionally, interest was awarded at the statutory maximum rate from the date of demand for payment. This decision was in line with relevant statutes and precedents, including the Supreme Court Act 1986, the Penalty Interest Rates Act 1983, and cases such as Milne v A-G (Tas), Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority, and Lollis v Loulatzis.

The final orders of the court were that AMD Rifat was to pay Definity Clinic's pre-trial costs on a standard basis and 60% of the costs from the date of the trial onwards, also on a standard basis. Interest was to be paid at the statutory maximum rate from the date of demand for payment. These orders reflected the court's assessment of the plaintiff's conduct during the litigation and the overall appropriateness of the case's venue.

Orders