Fayman International Pty Ltd v Cedar Meats (Aust) Pty Ltd
[2010] VCC 1641
•4 November 2010
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-09-05179
| FAYMAN INTERNATIONAL PTY LTD | Plaintiff |
| (ACN 002 797 079) | |
| v | |
| CEDAR MEATS (AUST) PTY LTD | Defendant |
| (ACN 007 149 402) |
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| JUDGE: | HIS HONOUR JUDGE O'NEILL |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 15 October 2010 |
| DATE OF RULING: | 4 November 2010 |
| CASE MAY BE CITED AS: | Fayman International Pty Ltd v Cedar Meats (Aust) Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 1641 |
| REASONS FOR RULING |
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Catchwords: Costs – indemnity costs – Calderbank offer.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D I Star | Kliger Partners |
| For the Defendant | Mr J Korman | Kennedy Guy |
| HIS HONOUR: |
1 On 15 October 2010, I gave judgement for the defendant in this proceeding.
2 Issues arose as to the costs order which ought to follow the event. Mr Korman, on behalf of the defendant, sought costs on an indemnity basis, given that a Calderbank offer had been made to the plaintiff on 11 May 2010, and that offer contained a result more favourable to the plaintiff than was subsequently achieved.
3 Mr Star, on behalf of the plaintiff, resisted the application for indemnity costs.
4 The parties made written submissions on the issue in accordance with directions made on 15 October 2010.[1] The plaintiff makes various submissions as to costs, which may be summarised as follows:
[1] The defendant’s submissions were several days out of time. I will allow those submissions, notwithstanding they were out of time.
•
There ought be no order as to indemnity costs as, notwithstanding the offer, there is no presumption that in rejecting the Calderbank offer, indemnity costs ought follow.
•
It was not unreasonable for the plaintiff to reject the defendant’s Calderbank offer as:
ƒ The trial was first listed for the 24 June 2010 and therefore the offer
was not made at an early stage of the proceeding.ƒ It was made before two substantial amendments to the defendant’s
Defence on 29 July and 10 August 2010.ƒ
The determination of the proceeding fell to an assessment of the credibility of various witnesses. At the time of the offer, the plaintiff could not have appreciated that the credibility of the witnesses would be the basis of the Court’s decision.
• Any order as to costs ought to exclude costs related to:
ƒ Costs order made by his Honour Judge Anderson on 15 April 2010. ƒ Costs of the amendments to the defendant’s Defence of 29 July
2010 and 10 August 2010.
ƒ Costs relating to the withdrawal of admissions made on the first day
of the trial, 9 August 2010.ƒ Costs relating to a summons seeking further discovery of 3 August
2010.• Any certification as to the costs of Court Books ought to take into account that the Court Book was prepared by the plaintiff. • On first day of trial, 9 August 2010, argument was principally taken up with an amendment to the defendant’s Defence and no cost ought to be awarded for that day. • Various allegations made in the defendant’s Defence were either not pursued, or of no substance, and an allowance ought be made in costs for that reason. • Taking these matters into account, there ought to be a reduction of, say, twenty to twenty-five per cent in the defendant’s costs (whether on a party/party basis, or on an indemnity basis).
5 In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2),[2] the Court of Appeal said:
[2] 2005 VSCA 298 at paragraph 25
“The discretion with respect to costs must, like every other discretion, be exercised taking into account all relevant considerations and ignoring all irrelevant considerations. It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:
(a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d)
the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed; (f)
whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.”
6 Taking all these matters into account, was the refusal by the plaintiff to accept the defendant’s Calderbank offer of 11 May 2010, unreasonable?
7 Mr Star argues that the offer was made prior to two amendments to the defendant’s Defence and as such, at the time the plaintiff could not make a true assessment of the prospects of success at trial. Further, he submits the offer was made relatively close to the original trial date, and further, that given the decision of the Court was in large part determined by the assessment of credibility of the witnesses for the plaintiff and the defendant, and that such an assessment could not be made until the time of the trial, it would not be appropriate to award indemnity costs.
8 In my view, the timing of the offer was not a matter of significance. It was made at a time when the plaintiff was in a position to make an assessment of the prospects of success of its claim. It is correct that the outcome of the case was determined in significant part upon the assessment of the credibility of the various witnesses. However, that matter would have been well known to the plaintiff and its advisers. It was clear from an early time that the crucial issue in the proceeding was whether or not it was a term of the agreement between the parties that the defendant affix a secondary label to the boxes containing the lamb which was to have an expiry date twenty-four months from the slaughter date. That was clear from the plaintiff’s Statement of Claim. It was further clear that the defendant disputed that claim and denied that was a term of the agreement. In those circumstances, the central issue in the proceeding was which version of events to be given by the principal witnesses relating to that term of the agreement, was to be believed.
9 While the defendant did amend its Defence on two occasions after the offer, those amendments did not affect the plaintiff’s assessment of that central issue. In fact, on the first day of the trial, Mr Star, for the plaintiff, stated that the case involved a simple breach of contract.[3] The various amendments to the defendant’s Defence pleaded a range of defences, but did not, in my view, detract from the central issue; that is whether it was a term of the agreement that the defendant affix a secondary label with a twenty-four month expiry date.
[3] T1 L15
10 In those circumstances, I am of the view the plaintiff’s rejection of the offer of compromise was unreasonable and that it is appropriate to award costs in favour of the defendant on an indemnity basis, from 11 May 2010.
11 Mr Star argues that instead of certification for a fee upon brief and seven refreshers, that I ought to award a fee upon brief and six refreshers, given that much of the first day of the proceeding, the 9th August 2010, was taken up with argument about the late amendment to the defendant’s Defence. A significant proportion of the first day was taken up in that argument. As was submitted by Mr Korman, in large part the amendment came about as a result of the discovery made by the plaintiff, in particular of an email provided shortly before trial, and which contained words which had been earlier omitted.[4] That, I am satisfied, provided a significant basis for the amendment of the Defence. I will allow the defendant’s claim for a brief and seven refreshers.
[4] Judgment at paragraph 121
12 Mr Star further argues there ought to be a reduction in costs claimed by the defendant on the various bases as set out above. Generally, Mr Star submits there should be a reduction of twenty to twenty-five per cent.
13 On 15 April 2010, his Honour Judge Anderson made an order[5] that:
“The defendant will not, in any event, receive its costs of amending its defence or complying with paragraph 2 or the costs of the hearing today or the correspondence between solicitors leading up to the hearing.”
[5] Order 6(b)
14 In my view, it is not appropriate to disturb his Honour’s order, and the order will remain extant.
15 Mr Star further submits that the defendant ought be awarded no costs in respect of the amendments to its Defence on 29 July 2010 or 10 August 2010. In my view, the defendant ought be entitled to the costs of this amendment for the reasons set forth above.
16 On the other hand, the amendments to the defendant’s Defence of 6 May 2010 was a matter that could have been pleaded in the original Defence. It is not appropriate that the defendant be entitled to costs of that amendment.
17 True it is that the Defence in its finally amended form did contain issues which were either not pressed, or not relevant given the Court’s findings; however, it was not inappropriate for the defendant to plead these various matters, even although they were not relied upon at trial. Costs ought be disallowed only where it can be shown that a pleading is frivolous, of no merit or vexatious. In my view, it is appropriate that the defendant be entitled to the costs of those pleadings. Likewise, the application by the defendant to withdraw admissions was based upon late discovery. Any costs related to such a matter ought be allowed.
18 Given the defendant succeeded in its application for further discovery by summons of 3 August 2010, its costs of that application should not be disallowed.
19 Costs in relation to the Court Book ought be allowed to the defendant only to the extent to which it contributed to the preparation and service thereof.
20 There is no basis upon which the defendant ought not be entitled to its costs of written submissions. Written submissions were appropriate in the circumstances.
21 I shall make final orders reflecting this ruling.
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