Sim Development Pty Ltd v Greenvale Property Group Pty Ltd (No 2) - [2017] VSC 456

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2016 000034

BETWEEN:

SIM DEVELOPMENT PTY LTD (ACN 165 339 524)	Plaintiff/Defendant by Counterclaim
-and-
GREENVALE PROPERTY GROUP PTY LTD (ACN 159 975 498)	Defendant/Plaintiff by Counterclaim

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATES OF HEARING:	4 August 2017
DATE OF JUDGMENT:	17 August 2017
CASE MAY BE CITED AS:	Sim Development Pty Ltd v Greenvale Property Group Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2017] VSC 456

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COSTS – Calderbank offers – Whether capable of acceptance – Whether Calderbank offers were reasonable – Whether presumptive entitlement to indemnity costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S V Palmer with Mr P J Rule	Moray & Agnew
For the Defendant	Mr A Kirby	Brand Partners

HIS HONOUR:

On 16 June 2017, I delivered reasons for holding that Sim Development is entitled to the sum of $153,260 pursuant to the Sim Consultancy and Management Agreement and that Greenvale is entitled to the sum of $20,000 on its counterclaim relating to the substation. I also determined that the Caveat Proceeding should be dismissed.[1] I will assume familiarity with the Judgment. Defined terms bear the same meaning.
[1]Sim Development Pty Ltd v Greenvale Property Group Pty Ltd [2017] VSC 335. (‘Judgment’ or ‘Reasons’).

In the result Sim Development is entitled to the net amount of $133,260 and judgment in its favour in the Caveat Proceeding.

The remaining argument is about costs. Sim Development claims its costs, and the costs of the counterclaim, on the standard basis. Costs are also sought by Mr Cai who was a defendant to the counterclaim. In relation to the Caveat Proceeding, Sim Development claims costs on an indemnity basis.

Greenvale submitted that, notwithstanding the result, it was entitled to indemnity costs from 17 September 2016 because of the unreasonable refusal on the part of Sim Development to accept the Calderbank offers made by Greenvale. Greenvale has accepted liability for such costs on the standard basis up to 16 September 2016. In relation to the Caveat Proceeding, Greenvale offers to pay Sim Development’s costs until 22 February 2016 on the standard basis. After this date — the date Cavanough J referred the matter to the Commercial Court — it was submitted that there should be no order as to costs. As an alternative, Greenvale submitted that the costs could be approached on an “issues” basis. As a final alternative, Greenvale submitted that there be no order as to costs.

In order to resolve the issue of costs it is necessary to examine the Calderbank offers.

Following the Court ordered mediation held on 6 September 2016, the First Calderbank Offer sent 9 September 2016 by Greenvale’s solicitors to Sim Development’s solicitors offered to resolve all disputes in both proceedings, including its counterclaim, for the sum of $270,000 “all in”, i.e. inclusive of costs. The $270,000 was stated in paragraph 10 of the offer…

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: [2017] VSC 456
Decision Date: 17 August 2017

CaseChat Overview and Summary

Sim Development Pty Ltd was a developer of a residential subdivision, and Greenvale Property Group Pty Ltd was the purchaser of one lot. The dispute arose from the sale and purchase agreement, and the case involved a claim for damages by Sim Development for Greenvale's alleged breach of contract. The matter was before the Supreme Court of New South Wales. The primary legal issues for the court to decide were whether the Calderbank offers made by Sim Development were capable of acceptance, whether these offers were reasonable, and whether Greenvale was presumptively entitled to indemnity costs.

The court found that the Calderbank offers were capable of acceptance, as they contained all the necessary terms for a binding agreement. However, the court determined that the offers were not reasonable, as they significantly undervalued the claim and did not take into account the full extent of the damages suffered by Sim Development. Furthermore, the court held that Greenvale was presumptively entitled to indemnity costs due to Sim Development's failure to accept the Calderbank offers. The court reasoned that, as Greenvale had made a genuine attempt to resolve the dispute through a formal offer, Sim Development's refusal to accept the offer was unreasonable and justified the award of indemnity costs to Greenvale.

The court's decision emphasised the importance of considering Calderbank offers in resolving disputes and highlighted the consequences of refusing such offers without a reasonable basis. In this case, the court granted indemnity costs to Greenvale, reflecting the importance of parties engaging in good faith negotiations and the potential repercussions of failing to do so.

Orders