Flynn v PPK Mining Equipment Pty Ltd (No 4) - [2024] NSWSC 894

Supreme Court

New South Wales

Medium Neutral Citation: Flynn v PPK Mining Equipment Pty Ltd (No 4) [2024] NSWSC 894
Hearing dates: 22 July 2024
Date of orders: 26 July 2024
Decision date: 26 July 2024
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Defendants to pay 50% of plaintiff’s costs of proceedings until date of Calderbank offer, then plaintiffs to pay the defendants’ costs on indemnity basis.

Catchwords:
COSTS – proceedings travel to Court of Appeal, application for special leave and back – plaintiff get $500,000 – apart from curious damages claim pitched at its peak at $72 million, case should have been brought in District Court – defendants spend $2.5 million defending proceedings – 80% of trial occupied by issues on which plaintiffs failed – apportionment – principles at [21]-[23] – plaintiffs entitled to 50% of their costs on a party-party basis.
CALDERBANK OFFER – defendants offer $2 million for damages and costs of three proceedings – plaintiffs contend unable to ascertain whether they did better than the offer where their costs are not known (nor disclosed) – principles at [38]-[40] –assuming plaintiffs incurred same costs as the defendants (which was obviously not the case), the offer was better than the outcome achieved – unreasonable to reject offer in the circumstances.

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) r 42.34

Cases Cited:
Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd [2008] FCAFC 173
Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219
Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
Flynn v PPK Mining Equipment Pty Ltd [2023] NSWCA 201
Flynn v PPK Mining Equipment Pty Ltd (No 2) [2022] NSWSC 1640
Flynn v PPK Mining Equipment Pty Ltd (No 3) [2024] NSWSC 663
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (No 2) [2002] NSWSC 72
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Mobis Parts Australia Pty Ltd v XL Insurance Co SE (No 2) [2019] NSWCA 19
Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC 816
Ryde Developments Pty Ltd v Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) (2011) 86 ACSR 119; [2011] NSWCA 256
Windsurfing International Inc v Petit [1987] AIPC 90-441

Category: Costs
Parties: Daniel Flynn (First Plaintiff)
Flynfam Pty Ltd as trustee for Flynn Family Trust (Second Plaintiff)
PPK Mining Equipment Pty Ltd (First Defendant)
PPK Group Ltd (Second Defendant)
Representation:
Counsel:
Mr AD Justice (Plaintiffs)
Mr AJ Bulley (Defendants)
Solicitors:
MRM Lawyers (Plaintiffs)
Moray & Agnew (Defendants)

File Number(s): 2019/11615

JUDGMENT

HER HONOUR: This judgment concerns the costs of proceedings which began in 2019 in the Commercial List…

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: [2024] NSWSC 894
Decision Date: 26 July 2024

CaseChat Overview and Summary

The parties involved in this matter were Flynn, the plaintiff, and PPK Mining Equipment Pty Ltd, the defendant. The dispute centred around the costs incurred during the litigation, particularly the plaintiff's claim for damages amounting to $500,000. The case was heard in the Supreme Court of New South Wales. The plaintiff's claim for damages, which reached a peak of $72 million, was deemed more suitable for the District Court, while the defendants incurred approximately $2.5 million in costs to defend the proceedings. The trial was dominated by issues on which the plaintiffs were unsuccessful, with 80% of the trial focusing on these matters. The court was required to determine the apportionment of costs and evaluate the reasonableness of the plaintiff's decision to reject a settlement offer from the defendants.

The primary legal issue was the apportionment of costs between the parties, considering the principles outlined in paragraphs [21]-[23] of the decision. The court found that the plaintiff was entitled to 50% of their costs on a party-party basis, reflecting the unsuccessful nature of their claim. Another significant issue was the evaluation of a Calderbank offer made by the defendants, which proposed a settlement of $2 million for damages and costs of three proceedings. The plaintiff argued that they could not determine if they were better off than the offer due to the undisclosed nature of their costs. The court considered the principles set out in paragraphs [38]-[40] and concluded that even if the plaintiff had incurred the same costs as the defendants, which was not the case, the offer was more advantageous than the outcome achieved. The court deemed the plaintiff's rejection of the offer unreasonable under the circumstances.

The court ordered that the plaintiff was to receive 50% of their costs on a party-party basis, reflecting the unsuccessful nature of their claim. Additionally, the court found that the plaintiff's rejection of the Calderbank offer was unreasonable, and the defendants' offer should have been accepted. As a result, the plaintiff was not entitled to any costs beyond those already awarded. The defendants were awarded their costs of the appeal, as well as the costs of the application for special leave to appeal and the subsequent application back to the Supreme Court.

Orders