Viterra v Youil - [2023] VSCA 304

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0062

VITERRA MALT PTY LTD (ACN 096 519 658) & ORS (ACCORDING TO THE ATTACHED SCHEDULE)	Applicants
v
PETER YOUIL & ORS (ACCORDING TO THE ATTACHED SCHEDULE)	Respondents

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JUDGES:	SIFRIS, WALKER and WHELAN JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	22 November 2023
DATE OF JUDGMENT:	7 December 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 304
JUDGMENT APPEALED FROM:	[2022] VSC 299 (Elliott J)

COSTS – Leave to appeal – Leave granted only in exceptional cases – Leave refused.

Supreme Court Act 1986, s 14C; Supreme Court (General Civil Procedure) Rules 2015 rr 26.08, 63.30, 63.30.1.

24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd [2015] VSCA 216; Bodycorp Repairers Pty Ltd v GDG Legal Pty Ltd [2018] VSCA 32; Hanlon v Brookes (1997) 15 ACLR 1626; House v The King (1936) 55 CLR 499; PCCEF Pty Ltd v Geelong Football Club Ltd [No 2] [2019] VSCA 148; Spotless Group Ltd v Premier Building and Consulting Pty Ltd [2008] VSCA 115; United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15.

COSTS – Whether judge erred in awarding indemnity costs – Finding proceeding had been instituted without merit – Whether proceeding must have been instituted in wilful disregard of known facts and clearly established law – Order may be made based upon what claimant ought to have known and advice it ought to have obtained.

Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41 applied.

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Counsel
Applicants:		Mr SR Senathirajah KC with Mr O Wolahan
First respondent:		Mr MJ Galvin KC with Mr DB Bongiorno
Second respondent:		Ms M Szydzik SC with Ms A Staker
Third respondent:		Mr C Archibald KC with Mr TK Jeffrie
Fourth respondent:		Mr ST Pitt SC with Ms CL Alden
Solicitors
Applicants:	LK Law
First respondent:	Gilchrist Connell
Second respondent:	Gilchrist Connell
Third respondent:	HWL Ebsworth
Fourth respondent:	Gilchrist Connell

SIFRIS JA
WALKER JA
WHELAN JA:

This is an application for leave to appeal a costs order.
The four applicants (together, the ‘Viterra Parties’[1]) unsuccessfully defended a very substantial claim made against them by Cargill Australia Ltd (‘Cargill’). In that proceeding, the Viterra Parties joined a number of third parties, including the four respondents.[2]
[1]In submissions little or no differentiation was made between the four applicant companies. For the purposes of this judgment, we adopt the same approach.
[2]Solely for ease of reference, where it is necessary to refer to individual respondents, we will refer to them by their surnames.
Cargill succeeded on claims against the Viterra Parties for misleading or deceptive conduct and in deceit. It recovered damages of $168.9 million, being the difference between the price which it paid the Viterra Parties for certain assets, $420 million, and the true value of those assets, $251.1 million. Damages in the nature of interest were awarded in the sum of approximately $124.2 million.
Cargill commenced the proceeding on…

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: [2023] VSCA 304
Decision Date: 7 December 2023

CaseChat Overview and Summary

Viterra sought leave to appeal a decision awarding indemnity costs to Youil, arguing the judge erred in awarding the costs. The proceeding was instituted by Viterra against Youil, but the matter was ultimately dismissed. The dispute centred on whether the judge was correct in finding the proceeding was instituted without merit, and whether it was instituted in wilful disregard of known facts and clearly established law. The court considered the relevant criteria for awarding indemnity costs and whether the proceeding was brought without reasonable cause.

The court examined the criteria for awarding indemnity costs, which includes whether the proceeding was instituted without merit and whether it was instituted in wilful disregard of known facts and clearly established law. The court noted that the order for indemnity costs may be made based upon what the claimant ought to have known and the advice it ought to have obtained. The court held that the proceeding was instituted without merit, and the party bringing the proceeding ought to have known this based on the facts and advice available.

The court found that Viterra had instituted the proceeding without reasonable cause and in wilful disregard of known facts and clearly established law. The court held that the judge was not in error in awarding indemnity costs to Youil. The court found that Viterra's argument that the judge had erred in his assessment of the proceeding's merit was unpersuasive. The court held that the proceeding was brought without reasonable cause and in wilful disregard of known facts and clearly established law, and thus the award of indemnity costs was appropriate.

The court refused Viterra's application for leave to appeal. The court held that leave to appeal should only be granted in exceptional cases, and this was not such a case. The court held that the judge's decision was correct and that Viterra's application for leave to appeal should be refused. The court's decision was in line with the relevant authorities, which held that indemnity costs may be awarded in cases where the proceeding is brought without reasonable cause and in wilful disregard of known facts and clearly established law.

Orders