Nine Network Australia Pty Ltd v Birketu Pty Ltd

[2016] NSWSC 694

Supreme Court

New South Wales

Medium Neutral Citation:	Nine Network Australia Pty Ltd -v- Birketu Pty Ltd [2016] NSWSC 694
Hearing dates:	2 & 16 May 2016
Decision date:	01 June 2016
Jurisdiction:	Equity - Commercial List
Before:	Hammerschlag J
Decision:	Judgment for the plaintiff against the defendant in the sum of $2,131.15 in respect of interest. The defendant pay the plaintiff’s costs of the proceedings.
Catchwords:	PROCEDURE– interest and costs – where defendant paid the amount claimed by the plaintiff shortly after proceedings commenced – s 100(2) of the Civil Procedure Act (NSW) 2005
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	WIN Corporation Pty Ltd v Nine Network Australia Pty Limited [2016] NSWSC 523
Category:	Principal judgment
Parties:	Nine Network Australia Pty Ltd - Plaintiff Birketu Pty Ltd - Defendant
Representation:	On the papers
File Number(s):	2016/104563

Judgment

1. HIS HONOUR:   On 6 April 2016, the plaintiff (Nine) commenced proceedings against the defendant (Birketu) claiming the sum of $1,100,000 (the claimed sum), being the balance of monies which Birketu owed it under the terms of a written Variation Agreement (the Variation Agreement) made between Nine, Birketu and WIN Corporation Pty Ltd (WIN) on 31 December 2015. Birketu and WIN are related.

2. By the Variation Agreement, Nine and WIN varied an earlier Program Supply Agreement (the PSA), which had been made between them on 3 June 2013.

3. By cl 2.1 of the Variation Agreement, Birketu agreed to pay Nine a substantial sum of money (significantly exceeding $1,100,000) on or before 31 March 2016.

4. On 30 March 2016, Birketu wrote to WIN telling it, amongst others, that it proposed to withhold the claimed sum because of alleged breaches by Nine of various obligations.

5. On 31 March 2016, Birketu paid the amount it owed, less the claimed sum.

6. On 1 April 2016, Nine demanded payment of the claimed sum by 5:00pm on 5 April 2016, but Birketu did not pay.

7. This led Nine to start these proceedings on 6 April 2016 by Summons and Commercial List Statement. The Summons was returnable on 15 April 2016.

8. However, Birketu capitulated on 13 April 2016 and paid the claimed sum.

9. All that remains to be determined are the questions of costs and interest. The parties agreed that the Court should determine these questions on the papers. Nine and Birketu each provided affidavit material and written submissions.

10. As to interest, Nine claims interest of $2,131.15 for the period 31 March 2016 to the date of payment, relying on s 100(2) of the Civil Procedure Act 2005 (NSW) (the CPA), which provides that:      

In proceedings for the recovery of a debt or damages in which payment of the whole or a part of the debt or damages has been made after the proceedings commenced, but before, or without, judgment being given, the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit:

(a)    on the whole or any part of the money paid, and

(b)    for the whole or any part of the period from the time the cause of action arose until the time the money was paid.

11. The calculation of interest is not in issue.

12. Birketu resists paying interest because there is no contractual provision entitling Nine to it, there was no judgment, or any need for judgment, on which an interest order may be based, and the Court should decline to award interest because Nine hastily and unreasonably commenced proceedings in a precipitate fashion putting Birketu to unnecessary expense.

13. As to costs, Nine puts that it has been successful, and they should follow the event. It seeks indemnity costs from 27 April 2016, on the footing that on 23 April 2016, it made a Calderbank offer to Birketu, open until 5.00pm on 27 April 2016, to settle the proceedings on terms that Birketu paid Nine’s costs in the sum of $10,000 (inclusive of GST) plus interest of $2,000, upon receipt of which, Nine would consent to orders dismissing the proceedings by consent, which Birketu did not accept.

14. Birketu resists any order as to costs, submitting that Nine “hastily and unreasonably” commenced proceedings in a “precipitate fashion”, and thereby put Birketu to unnecessary expense. It complains that the letter of demand was unreasonably made on the afternoon of 1 April 2016, when the focus of officers of WIN and Birketu was instead on the hearing in proceedings between WIN and Nine, which was to commence on 4 April 2016, see: WIN Corporation Pty Ltd v Nine Network Australia Pty Limited [2016] NSWSC 523.

15. Birketu submits that the deadline imposed for repayment was also unreasonable, having regard to the involvement of those officers in the other proceedings.

16. Birketu puts that Nine should pay its costs, or that there should be no order as to costs.

17. In my opinion, it may safely be inferred that Birketu’s capitulation was because it had no defence. There was a contractually fixed time for payment, which Birketu deliberately, and in anticipation, chose not to meet. Nine then demanded payment, and Birketu ignored the demand. The suggestion that it is relevant that officers of Birketu were otherwise engaged in the WIN and Nine proceedings rings hollow.

18. Nine was fully entitled to commence proceedings for what is a substantial sum of money, and there is no reason why it should not be awarded interest to compensate it for the loss it has suffered as a consequence of Birketu’s breach.

19. So far as costs are concerned, I see no reason to depart from the usual position that costs should follow the event. However, I do not consider that any of those costs should be on the indemnity basis. Nine’s Calderbank letter did not offer a genuine compromise. Birketu did not act unreasonably in declining to accept it.

20. As to interest, the concession was a mere $131.15. As to costs, Nine claims that its (presumably assessable) costs substantially exceed $10,000, but has led no evidence (beyond its own assertions) to satisfy the Court that this is the case. I observe that the Summons and List Statement were models of simplicity.

21. Accordingly, I order that there be judgment for the plaintiff against the defendant in the sum of $2,131.15 in respect of interest, and that the defendant pay the plaintiff’s costs of the proceedings.

Decision last updated: 01 June 2016