Royal Fresh International Pty Ltd v Nutracare Life Sciences Pty Ltd (No 2)

[2019] VCC 601

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-17-03920

ROYAL FRESH INTERNATIONAL PTY LTD	Plaintiff
v
NUTRACARE LIFE SCIENCES PTY LTD (IN LIQ) (as trustee for the Nutracare Life Sciences Unit Trust)	Defendant

---

JUDGE:	HIS HONOUR JUDGE COSGRAVE
WHERE HELD:	Melbourne
DATE OF HEARING:	Both parties filed written submissions on 2 May 2019 and reply submissions on 3 May 2019
DATE OF RULING:	7 May 2019
CASE MAY BE CITED AS:	Royal Fresh International Pty Ltd v Nutracare Life Sciences Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VCC 601

REASONS FOR RULING (No 2)
---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Clarke	Celtic Legal
For the Defendant	Mr J Castelan	Tisher Liner FC Law

HIS HONOUR:

1       After a hearing which began on 21 March and continued on 10 April, I gave judgment in the proceeding on 29 April 2019.  When discussing Royal Fresh International Pty Ltd’s (“RFI”) application, I gave directions for the filing of submissions in order to produce minutes of order giving effect to the decision.  Both parties have filed submissions. 

2       The parties are agreed on the orders save as to costs. RFI seeks an order that it pay costs on a standard basis while the non-parties seek an order that the costs be taxed on an indemnity basis. 

3       The general principles about indemnity costs are clear and are conveniently summarised in cases referred to in the parties’ submissions, including Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [7], ACCC v Amcor Printing Papers Group Limited [2000] FCA 163 at [7]-[8], and United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2018] VSC 501 at [17].

4       The non-parties sought to justify departure from the more common costs order on several grounds:

(a)    RFI continued with the application for orders against the non-parties notwithstanding a warning given by Judicial Registrar Tran about the difficulties associated with such applications;

(b)    the non-parties’ solicitor wrote a letter on 20 February 2018 to RFI pointing out problems with the application and warning that they would apply for indemnity costs if RFI proceeded with its application;

(c)     RFI’s application against the non-parties failed and the reasons for that failure referred to various problems within the application.

5       I am satisfied that it is appropriate in the circumstances to order that the non-parties’ costs be taxed on a standard basis.  Although the application failed, it did not readily fall into one of the categories identified by the authorities as justifying an indemnity order for costs.  For example, there was no suggestion of an ulterior motive or that RFI was conducting a litigation in wilful disregard of known facts or law. 

6       Ultimately, I found that the facts did not justify the order sought.  However, this conclusion was reached only after a careful examination of the material.  RFI’s application was not so hopeless and RFI’s conduct of the application was not so compromised or improper as to justify an award of costs on the higher scale. 

7       Accordingly, I order that:

(a)    the plaintiff’s summons filed 22 February 2019 be dismissed;

(b)    the plaintiff pay the non-parties’ costs of and incidental to the application, such costs to be taxed on a standard basis in default of agreement.