Delaney v Delaney (No 2) - [2021] VSC 399

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2020 02847

BETWEEN:

SEAN ANTHONY DELANEY	First Plaintiff/First Defendant by Counterclaim
SKILDALE PTY LTD	Second Plaintiff/Second Defendant by Counterclaim
- and -
PATRICK JOSEPH DELANEY and others according to the Schedule	Defendants

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JUDGE:	LYONS J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 July 2021
DATE OF JUDGMENT:	2 July 2021
CASE MAY BE CITED AS:	Delaney v Delaney (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 399

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COSTS – Calderbank offer – Number of claims in proceeding - Contractual claim included whether heads of agreement was legally binding and/or enforceable – Other claim for misleading conduct and unconscionable conduct – Offer related to both claims – Indemnity costs sought in respect of all claims when offer not accepted - Whether unreasonable to reject Calderbank offer – Prospects of success on claims at time of offer – Reasonable prospects of success on contractual claim – Indemnity costs in respect of all claims from time when offer not accepted refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P. Collinson QC with Ms E. Dias	Lander & Rogers Lawyers
For the First and Second Defendants	Mr A. Schlicht	MW Law
For the Third to Tenth Defendants	No appearance

HIS HONOUR:

INTRODUCTION

In this proceeding, I delivered reasons for judgment on 28 June 2021.[1] I determined that the plaintiffs had established that they were entitled to specific performance of the HoA and that the defendants’ counterclaim had not been established. However, I formed the view that the accountants for the parties should be given a proper and adequate opportunity to reach a mutually beneficial taxation outcome pursuant to cl 5 of the HoA.
[1][2021] VSC 365 (the ‘Reasons’). For convenience, I will use the terms defined in the Reasons.

I asked the parties to consider the form of order and costs. The parties have not been able to agree on either the form of order or costs. As a result, I listed the proceeding for mention today. These reasons deal with the issue of costs.

For the reasons that follow, I have concluded that the plaintiffs are entitled to their costs of the proceeding from the first and second defendants on a standard basis.

THE PROCEEDING
2.1 Background to the Issues at Trial

I set out the background to the issues which arose in the trial of this proceeding in the Reasons. In summary, Sean and Pat are brothers. In 1988, together with their brother, Joseph, they established the Delplant group. Since 2007, when Joseph sold his interest in the Delplant group, Sean and Pat have owned the Delplant group in equal shares. Over time there had been a breakdown in the relationship between Sean and Pat. By the HoA dated 27 May 2020, Sean agreed to buy Pat’s interests in the Delplant group for $10 million. In this proceeding, Sean sought to enforce that HoA.

The proceeding was commenced on 6 July 2020. The…

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 Delaney v Delaney (No 2)

Details

AGLC: Delaney v Delaney (No 2) [2021] VSC 399
Case: [2021] VSC 399
Decision Date: 2 July 2021

CaseChat Overview and Summary

In Delaney v Delaney (No 2), the court was tasked with deciding the matter of a rejected Calderbank offer in relation to multiple claims, including a contractual claim and claims for misleading and unconscionable conduct. The primary focus was on whether the rejection of the offer was unreasonable and whether indemnity costs could be awarded in respect of all claims from the time the offer was not accepted. The High Court of Australia, in reviewing the case, examined the prospects of success on each of the claims at the time the offer was made.

The court was required to determine whether the rejection of the Calderbank offer was reasonable, considering the prospects of success on the contractual claim and the other claims at the time of the offer. A Calderbank offer is an offer to settle all claims on terms that if the offer is rejected and the claimant does not recover at least as much as the offer, they must pay the other party’s costs from the time of the offer. The court had to assess the reasonableness of the rejection and whether there were reasonable prospects of success on the contractual claim and the other claims at the time the offer was made.

The court found that the rejection of the Calderbank offer was not unreasonable, given that there were reasonable prospects of success on the contractual claim at the time of the offer. The court held that the offer related to both the contractual claim and the other claims, and as such, indemnity costs could not be awarded in respect of all claims from the time the offer was not accepted. The court’s reasoning was based on the fact that while there were reasonable prospects of success on the contractual claim, the prospects for the other claims were less clear, making it unreasonable to reject the offer for all claims. Consequently, the court refused indemnity costs in respect of all claims from the time when the offer was not accepted.

The final orders of the court were that the rejection of the Calderbank offer was not unreasonable, and indemnity costs were refused in respect of all claims from the time when the offer was not accepted. The court’s decision highlights the importance of assessing the prospects of success on each claim when evaluating the reasonableness of rejecting a Calderbank offer.

Orders