Halkett v APG & Co Pty Ltd (No 2) - [2023] NSWSC 1215

Supreme Court

New South Wales

Medium Neutral Citation: Halkett v APG & Co Pty Ltd (No 2) [2023] NSWSC 1215
Hearing dates: On the papers
Date of orders: 13 October 2023
Decision date: 13 October 2023
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Indemnity costs ordered from offer of compromise.

Catchwords:
COSTS — offer of compromise — extensive pre-litigation communications involving lawyers, accounting experts and partial resolution of dispute in Settlement Deed – offer made six weeks after proceedings commenced and pleadings closed — whether plaintiff in a position to assess parameters of dispute — whether defendants later changed their case – not appropriate to “order otherwise”.

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) r 20.26, 42.15A

Cases Cited:
Fairall v Hobbs (No 2) [2017] NSWCA 133
Fernandez v Perez (No 2) [2012] NSWSC 1602
IFTC Broking Services Ltd v Commissioner of Taxation (2010) 268 ALR 1
LeachvTheNominal Defendant(QBEInsurance(Australia)Ltd)(No2) [2014] NSWCA 391
Morgan v Johnson (1998) 44 NSWLR 578
New South Wales Insurance Ministerial Corp v Reeve (1993) 42 NSWLR 100
Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) [2004] FCA 1437
Regency MediaPty Ltdv AAVAustralia Pty Ltd [2009] NSWCA 368
Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd [2001] NSWCA 461
Shaw v Jarldorn [1999] SASC 529
Walker v Harwood [2017] NSWCA 228

Texts Cited:
G E Dal Pont, Lawof Costs (LexisNexis Butterworths, 5th ed, 2021)

Category: Costs
Parties: Peter Halkett (Plaintiff)
APG & Co Pty Ltd (First Defendant)
Sports Fashions Group Pty Ltd (Second Defendant)
Representation:
Counsel:
Mr M Elliott SC / Mr B Goodyear (Plaintiff)
Mr P Braham SC / Mr S Gray (Defendants)
Solicitors:
Norton Rose Fulbright (Plaintiff)
W Advisers Pty Ltd (Defendants)

File Number(s): 2022/157217

JUDGMENT

HER HONOUR: I gave judgment in this matter on 6 September 2023, dismissing the summons with costs: Halkett v APG & Co Pty Ltd [2023] NSWSC 1058. The defendants now seek a special costs order based on an offer of compromise or, alternatively, a later Calderbank offer. It is only necessary to consider the former.
The defendants relied on two affidavits by their solicitor, Mark Wilson. The plaintiff did not adduce any evidence on this application.

Facts

The plaintiff, Peter Halkett, was the chief executive officer and executive chairman of APG & Co Pty Ltd. He held 5% of the defendants’ shares and units under the terms of an Equityholders Agreement.
APG operated 200 retail stores across Australia, selling fashion under brands including Sportscraft, Saba and Jag. In March 2020, APG’s stores were closed following lockdowns imposed by the Commonwealth, State and Territory governments in response to the COVID-19 pandemic. On 2 June 2020, Mr Halkett gave written notice of his resignation, to take effect in 12 months’ time. On his resignation, the defendants were entitled to buy back Mr Halkett’s securities for “Fair Market Value” as calculated in accordance with a formula 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: [2023] NSWSC 1215
Decision Date: 13 October 2023

CaseChat Overview and Summary

The matter before the court involved Halkett as the plaintiff and APG & Co Pty Ltd as the defendant. The dispute centred around an offer of compromise made in the context of ongoing litigation. The case was heard in the Federal Court of Australia. The plaintiff sought to challenge the defendant’s costs order, which the defendant had made pursuant to the offer of compromise provisions.

The central legal issue was whether the plaintiff was in a position to assess the parameters of the dispute at the time the offer of compromise was made. This was six weeks after proceedings commenced and the pleadings were closed. Another aspect considered was whether the defendant altered their case after the offer was made. The court had to determine if it was appropriate to order costs in a manner different from what was prescribed.

The court found that the plaintiff was indeed in a position to assess the parameters of the dispute when the offer of compromise was made. It was determined that the extensive pre-litigation communications involving lawyers and accounting experts, along with the partial resolution of the dispute in the Settlement Deed, provided sufficient context for the plaintiff to evaluate the offer. Additionally, the court considered that the defendant did not change their case after the offer was made, which further supported the plaintiff’s capacity to assess the offer. Based on these findings, the court decided it was not appropriate to order costs in a manner different from what was prescribed by the relevant legal provisions.

Orders