Manildra Laboratories v Campbell - [2010] NSWSC 70

CITATION: Manildra Laboratories v Campbell [2010] NSWSC 70

HEARING DATE(S): 5 February 2010

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 5 February 2010

DECISION: I order that the second and third defendant's application for indemnity costs be dismissed. I order the second and third defendants to pay the plaintiffs' costs of that application.

CATCHWORDS: COSTS – indemnity costs – whether plaintiff should have known that case was unsustainable – plaintiff not precluded from persisting with case where some, but not all, bases are unfounded – where plaintiff called opposing party as witness – where witness gave evidence unfavourable to plaintiff – whether plaintiff precluded from submitting that Court should take a view of facts on a particular point different to that given by witness – plaintiff not precluded from submitting that, upon consideration of all circumstances in evidence, Court should take a view of facts that stands against evidence of witness – applications for indemnity costs dismissed.

CATEGORY: Consequential orders

CASES CITED: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
McPhilemy v Times Newspapers Ltd (No 2) [2000] 1 WLR 1732
Richards v Morgan (1863) 4 B and S 641

PARTIES: Manildra Laboratories Pty Limited (First Plaintiff)
Honan Holdings Pty Limited (Second Plaintiff)
John Bruce Campbell (First Defendant)
The Young Roller Flour Mill Company Ltd (Second Defendant)
YSF Pty Ltd (Third Defendant)
Aust Asia Milling Pty Ltd (Fourth Defendant)

FILE NUMBER(S): SC 2009/298784

COUNSEL: F M Douglas QC / L T Livingston (Plaintiffs)
F G Lever SC / L R Young (Second and Third Defendants)

SOLICITORS: Baker & McKenzie (Plaintiffs)
Bartier Perry (Second and Third Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

5 February 2010 (ex tempore revised 5 February 2010)

298784/09 HONAN HOLDINGS PTY LIMITED & ANOR v CAMPBELL & ORS

JUDGMENT

1 HIS HONOUR: This is an application by the second and third defendants (Young) for an indemnity costs order arising out of reasons that I gave on 23 September 2009, following a four day hearing that commenced on 25 August 2009 ([2009] NSWSC 987). Rather than recount the factual background and other relevant matters in these reasons, I shall assume that those to whom these reasons are directed, and those who may read them, have some familiarity with my earlier reasons.

2 Nonetheless, it is necessary to know a little bit about the issues. The first plaintiff (Manildra) alleged that the first defendant (Mr Campbell), who had been a senior employee for about 12 years up until 24 April 2009, had breached fiduciary and contractual obligations, and statutory obligations, owed by him to Manildra. That is said to have happened because, for some time before and after the termination of his employment, Mr Campbell had negotiated to buy the flour mill operated by Young. The inevitable result of a successful consummation of those negotiations would have been that Mr Campbell came into competition…

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 Manildra Laboratories v Campbell

Details

AGLC: Manildra Laboratories v Campbell [2010] NSWSC 70
Case: [2010] NSWSC 70
Decision Date: 5 February 2010

CaseChat Overview and Summary

Manildra Laboratories initiated legal proceedings against Campbell, seeking indemnity costs on the basis that Campbell's case was unsustainable. The dispute centred on whether Campbell should have been aware that the case was not viable and whether Campbell's persistence with the case, despite some unfounded bases, warranted the imposition of indemnity costs. The case was heard in the Supreme Court.

The legal issues revolved around whether Campbell was precluded from persisting with the case even though some of the grounds were unfounded. Additionally, the court had to determine if Campbell was precluded from submitting that the court should take a different view of the facts than that presented by the opposing witness, who provided evidence unfavourable to Campbell. The court also considered whether Campbell's submission that the court should take a different view of the facts, considering all the evidence, was permissible.

The court dismissed the applications for indemnity costs, holding that Campbell was not precluded from persisting with the case despite some unfounded bases. The court reasoned that it was not the case that Campbell was precluded from submitting that the court should take a different view of the facts than that presented by the opposing witness. The court found that Campbell was not precluded from arguing that, upon considering all the circumstances in evidence, the court should adopt a view of the facts that stood against the evidence of the witness. Consequently, the applications for indemnity costs were dismissed.

No specific orders were made in relation to the indemnity costs.

Orders