NCON Australia Ltd v Spotlight Pty Ltd (No 7) - [2014] VSC 25

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

COMMERCIAL COURT

No. 8246 of 2009

NCON AUSTRALIA LIMITED (ARBN 099 019 851)	Plaintiff
v
SPOTLIGHT PTY LTD (ACN 005 180 861)	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 April 2013
DATE OF JUDGMENT:	11 February 2014
CASE MAY BE CITED AS:	NCON Australia Ltd v Spotlight Pty Ltd [No 7]
MEDIUM NEUTRAL CITATION:	[2014] VSC 25

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COSTS – Action for damages on alleged breach of contract – Plaintiff successfully established existence of contract – Plaintiff successfully established breach – Plaintiff failed to prove damage and awarded nominal damages – Costs awarded in favour of defendant – Discussion of relevant rules.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M.D.G. Heaton QC with Dr M.R. Sharpe	Philip Jones & Co
For the Defendants	Mr R.M. Garratt QC with Ms R.B. Sion	Cornwall Stodart

HIS HONOUR:

On 12 December 2012, I delivered judgment in this matter awarding nominal damages of $1 to the plaintiff. The plaintiff alleged that it entered into an agreement to rent chattels to the defendant, and that the defendant had breached and repudiated the agreement. The plaintiff sought to claim significant damages in excess of $1 million. For the reasons expressed in my decision,[1] I found that there was an agreement, that the agreement had been repudiated and breached by the defendant, and that the plaintiff had failed to prove the damages alleged. I awarded nominal damages of $1.
[1]NCON Australia Ltd v Spotlight Pty Ltd [No 5] [2012] VSC 604.

On 21 December 2012, the plaintiff issued a summons seeking leave to re-open its case, in substance to seek to prove its damages. I heard that summons on 8 April 2013, and on 19 April 2013 I delivered judgment refusing the application for the plaintiff to re-open its case.[2]
[2]NCON Australia Ltd v Spotlight Pty Ltd [No 6] [2013] VSC 186.

The parties indicated to me that they sought orders for costs and the parties agreed that if the parties were unable to agree as to the appropriate orders for costs, that written submissions would be filed and that I deliver my decision on the basis of the written submissions. The parties were unable to agree on costs.

On 2 May 2013, the plaintiff filed its written submission on costs. On 3 May 2013, the defendant filed its outline of submissions on costs.

The plaintiff accepts that the Court has a discretion as to costs, and that normally the successful party is entitled to the costs of the litigation. The plaintiff accepts that where a plaintiff has obtained only nominal damages, the defendant is usually treated as the successful party and is awarded costs.

The plaintiff contends, however, that in this case there should be an order for costs in favour of the plaintiff. The plaintiff says that the defendant made six separate contentions in its defence:

(1)that the ‘Lighting Systems Energy Reduction…

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: [2014] VSC 25
Decision Date: 11 February 2014

CaseChat Overview and Summary

In NCON Australia Ltd v Spotlight Pty Ltd (No 7), the plaintiff, NCON Australia, sued the defendant, Spotlight, for damages on the alleged breach of contract. The case was heard in the Supreme Court of Victoria. NCON Australia sought damages for breach of a contract for the supply of goods, claiming that Spotlight had failed to supply the agreed upon goods in the required quantities and quality. Spotlight denied the breach and argued that any failure to supply was due to unforeseeable circumstances beyond their control.

The primary legal issues the court had to decide were whether there was a binding contract between the parties, if there was a breach of that contract, and if the breach caused any damages to the plaintiff. The court found that a contract did exist between the parties and that there was indeed a breach by Spotlight. However, NCON Australia failed to prove that it suffered any financial loss as a result of the breach, and thus, the court awarded nominal damages to the plaintiff.

The court examined the relevant rules concerning the assessment of costs in actions for damages. Given that the plaintiff was successful in establishing the existence of the contract and the breach, but not in proving financial loss, the court awarded costs in favour of the defendant. The reasoning was that the plaintiff's failure to prove the extent of damages despite having a successful case on the existence of the contract and the breach warranted the awarding of costs to the defendant. The court concluded that this outcome was just and equitable under the circumstances.

Orders