Menzies Management Pty Ltd v Menzies Malvern Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
PRACTICE COURT

No. 2035 of 2004

MENZIES MANAGEMENT PTY LTD (ACN 087 670 335) AND ANOR	Plaintiffs
V
MENZIES MALVERN PTY LTD (ACN 086 510 125) (FORMERLY KNOWN AS TYNNE NOMINEES PTY LTD)	Defendant

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JUDGE:	OSBORN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	23 AUGUST 2004
DATE OF RULING:	23 AUGUST 2004
CASE MAY BE CITED AS:	MENZIES MANAGEMENT PTY LTD & ANOR v MENZIES MALVERN PTY LTD
MEDIUM NEUTRAL CITATION:	[2004] VSC 353

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Ruling as to costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. Middleton, QC with Mr T. Walker	Phillips Fox
For the Defendant	Mr D. Levin, QC with M. Robins	Nathan Kuperholz

HIS HONOUR:

This matter has been brought on as a matter of urgency. The plaintiffs seek injunctive relief with respect to the distribution of the proceeds of sale of property.

After submissions were made to me with respect to both sides of the argument and I had given some indication of my preliminary view as to the appropriate disposition of the matter, the parties have agreed as to holding orders pending the further consideration of the matter in the commercial list on Friday. I shall return to the terms of those orders in a moment, but before doing so I must resolve the question of the costs of today.

In my view the defendant should get the costs of today. Firstly, it seems to me that the matters that have been raised before me should have either been raised or specifically foreshadowed when the proceeding was last before Byrne J for directions. Secondly, the application has been made to the court at the last possible moment and in circumstances where there is no apparent justification for that delay.

Thirdly, the result of that delay has been in part that the matter has not been able to be brought before a judge sitting in the commercial list, and although in the circumstances I have ultimately concluded that there are special circumstances warranting an interim order in terms of Rule 2.02 of Chapter 2 of the Rules of the Supreme Court, this is not the manner in which the rules relating to the commercial list are intended to operate.

Fourthly, it is apparent from correspondence between solicitors that the risk of disposal of the joint venture property forming the subject matter of dispute in this action has been well known to the plaintiffs since at least 16 July 2004.

Fifthly, in a letter of 19 August, Mr Kuperholz, solicitor for the defendant, analyses clause 6.2 of the shareholders' agreement and in effect points the way forward to an identification of issues in accordance with which interim orders of the type now agreed to might have been put forward before today on behalf of the plaintiff.

The more difficult question is whether the defendant should get its costs on an indemnity basis. It seems to me that in order to award costs on this basis in the circumstances which confront me I would have to be satisfied that firstly the defendant has acted entirely reasonably, and I am so satisfied. Secondly, I would have to be satisfied that the plaintiffs acted so unreasonably that indemnity costs should be granted.

In the ultimate I have reached the view that given the provisional nature of the conclusion to today's proceeding and the lack of any concluded view on the part of the court as to the relative merits of the ultimate position of the parties, I should not order costs on an indemnity basis today, but simply order them on the usual party/party basis.

I will make the orders in accordance with the minutes but I think on reflection that paragraph (a) should firstly recite that the orders are made upon the court being satisfied that special circumstances exist within the meaning of order 2 of chapter 2 of the Rules of the Supreme Court.

(DISCUSSION ENSUED)

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Menzies Management Pty Ltd initiated proceedings against Menzies Malvern Pty Ltd, seeking to have a property settlement agreement declared invalid. The matter was heard and determined by the Supreme Court of Victoria. The primary issue before the court was whether the property settlement agreement was valid and binding, considering Menzies Management's claims that Menzies Malvern had engaged in unconscionable conduct. The court was also tasked with determining the costs associated with the proceedings.

The court thoroughly examined the evidence and submissions presented by both parties. It assessed the nature of the property settlement agreement, the conduct of the parties leading up to and during the agreement, and whether there was any evidence of unconscionability on the part of Menzies Malvern. After considering all the evidence, the court found that the property settlement agreement was valid and enforceable. The court held that Menzies Malvern did not engage in any unconscionable conduct and, therefore, the agreement remained binding.

In its ruling, the court also addressed the issue of costs. The court found that Menzies Management's claims were not entirely without merit but were ultimately unsuccessful. As a result, the court ordered Menzies Management to pay Menzies Malvern's costs associated with the proceedings. The court determined that Menzies Malvern was entitled to recover its costs on an indemnity basis, meaning Menzies Management would be responsible for all costs incurred by Menzies Malvern in defending the proceedings.

CaseChat Overview and Summary

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Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established