Nicholson v Hilldove Pty Ltd (No 4) - [2013] VSC 578

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

No. S CI 2013 2198

BETWEEN

JOHN DAVID NICHOLSON	Plaintiff
and
HILLDOVE PTY LTD (ACN 114 760 771)	First Defendant
and
TERRABRIDGE PTY LTD (ACN 115 615 097)	Second Defendant
and
BENJAMIN PATRICK NIALL	Third Defendant

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 October 2013
DATE OF JUDGMENT:	25 October 2013
CASE MAY BE CITED AS:	Nicholson v Hilldove Pty Ltd & Ors (No 4)
MEDIUM NEUTRAL CITATION:	[2013] VSC 578

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CONTRACT – Repudiation – No loss or damage established – Nominal damages awarded.

COSTS – Pyrrhic victory – Nominal damages – Trial in stages – Whether plaintiff should recover costs of liability stage of trial – Plaintiff succeeded on critical issue but later failed to establish any loss or damage – Whether and to what extent plaintiff should pay defendants’ costs.

COSTS – Calderbank and other offers – Reasonableness of offers – Failure to accept not unreasonable.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr K Hanscombe SC Ms K Bowshell	Williams Winter Solicitors
For the Defendants	Mr T Woodward SC Mr J Mereine	Minter Ellison

HIS HONOUR:

Introduction

On 14 December 2012 I published my reasons for concluding that the plaintiff (‘Nicholson’) had entered into a binding and enforceable agreement (‘the Agreement’) with the first defendant (‘Hilldove’) on 15 December 2011 in relation to the purchase by Nicholson of the Crown Hotel in Lilydale from Hilldove.[1]
[1]Nicholson v Hilldove Pty Ltd & Ors [2012] VSC 598 (‘the First Judgment’).

The Agreement contemplated a ten year lease (with three further options of ten years each) at a starting rental of $680,000 per annum with market reviews. The landlord, Terrabridge Pty Ltd (‘Terrabridge’), the second defendant in this proceeding, was not a party to the Agreement. It was not suggested by Nicholson that there was any obligation on the part of Terrabridge (whether promissory or representational) to grant a lease on the terms contemplated or at all. Rather, it was pleaded and submitted that there was an implied term of the Agreement that Hilldove, as a party related to Terrabridge, would procure the contemplated lease. It was further alleged that Hilldove had made representations to such effect.

It was held that there was no such implied term and that Hilldove had not made any representations to the effect alleged. [2]
[2]Ibid [127], [133]-[135].

In the final analysis the Agreement was subject to the execution of a lease on the terms contemplated. However there was no obligation on the part of Terrabridge or Hilldove to grant or procure such a lease. It was a matter for negotiation between the parties. Clearly Nicholson lost the opportunity to negotiate such a lease. Without a lease he would not have gone ahead with the purchase of the Crown Hotel.

On 7 May 2013 I dismissed an application by Nicholson to re-open the case on the grounds that there was evidence of an…

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: [2013] VSC 578
Decision Date: 25 October 2013

CaseChat Overview and Summary

Nicholson v Hilldove Pty Ltd (No 4) involved a dispute between the parties over a contract, with the central issue being the consequences of a repudiation of the contract and the associated damages. The matter was heard in the Federal Court of Australia. The plaintiff, Nicholson, alleged that the defendant, Hilldove Pty Ltd, repudiated a contract, and sought damages for that repudiation. The defendants denied the repudiation and, even if it occurred, denied any loss or damage resulting from it.

The court had to determine whether the plaintiff had established that the defendant repudiated the contract and, if so, whether the plaintiff had suffered any loss or damage as a result of that repudiation. The court found that the plaintiff did establish that the defendant repudiated the contract, but the plaintiff failed to prove any loss or damage resulting from that repudiation. The court awarded the plaintiff nominal damages for the repudiation. Regarding costs, the court considered the plaintiff's success in establishing the repudiation against their failure to prove any loss or damage. The court also examined the reasonableness of settlement offers made by the parties during the trial. Ultimately, the court ruled that the plaintiff should not recover the costs of the liability stage of the trial and should pay the defendants' costs to a certain extent.

The final orders of the court were that the plaintiff was awarded nominal damages for the repudiation of the contract. The plaintiff was ordered to pay the defendants' costs of the liability stage of the trial up to a specified amount and the costs of the damages stage in full. The court's decision highlighted the importance of establishing loss or damage resulting from a repudiation and the consequences of failing to do so in terms of costs recovery.

Orders