Zelcliff Pty Ltd v Container Exchange (Qld) Ltd - [2022] QSC 239

SUPREME COURT OF QUEENSLAND

CITATION:

Zelcliff Pty Ltd v Container Exchange (Qld) Ltd [2022] QSC 239

PARTIES:

ZELCLIFF PTY LTD AS TRUSTEE FOR THE MAGNUM DISCRETIONARY TRUST
ACN 010 729 441

(plaintiff)

v
CONTAINER EXCHANGE (QLD) LTD
ACN 622 570 209

(defendant)

FILE NO/S:

BS 10836 of 2019

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

3 November 2022

DELIVERED AT:

Brisbane

HEARING DATE:

31 October 2022

JUDGE:

Kelly J

ORDER:

The plaintiff pay the defendant’s costs of and incidental to the proceeding to be assessed on the standard basis and limited to those costs incurred by the defendant up to and including 24 October 2022.

CATCHWORDS:

PROCEUDRE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DISCONTINUANCE OF OR WITHDRAWAL FROM PROCEEDING – where the plaintiffs applied to discontinue the proceeding shortly before the listed trial – where 10 days prior to the hearing of the application for leave to discontinue, the plaintiff offered to pay the defendant’s costs of and incidental to the proceeding on the standard basis, and offered an undertaking to not bring any fresh claim against the defendant arising out of the subject matter of the proceeding, in return for the defendant’s consent to the discontinuance – where the defendant rejected that offer – where the defendant ultimately did not positively oppose the grant of leave – where the defendant contended that its costs should be paid by the plaintiff on the indemnity basis – where the defendant did not make any formal, informal or Calderbank offer to settle the proceedings prior to the application for leave to discontinue – where the defendant never applied to strike out and never sought summary judgment in respect of the claim – whether the plaintiff should pay the defendant’s costs on the indemnity basis

Uniform Civil Procedure Rules 1999 (Qld), r 304, r 307, r 309, r 685
Waste Reduction and Recycling Act 2011 (Qld), s 99S, s 99ZA

Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, cited
Covell Matthews & Partners v French Wools Ltd [1997] 1 WLR 876, cited
Ghougassian v Fairfax Community Newspapers Pty Ltd [2015] NSWCA 307, cited
Fairfield Services Pty Ltd (in liq) v Leggett (2020) 5 QR 50, cited
Palmer v Parberry& Ors [2018] QCA 268, considered
Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622, cited
Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, cited

COUNSEL:

R Anderson KC and S Forrest for the plaintiff

R Perry KC and C Curtis for the defendant

SOLICITORS:

Rostron Carlyle Rojas for the plaintiff
HWL Ebsworth for the defendant

A contested application for leave to discontinue

This proceeding was commenced on 4 October 2019. It was managed by way of caseflow reviews for a number of years. On or about 18 February 2022, the proceeding was set down for trial before me for 10 days between 31…

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: [2022] QSC 239
Decision Date: 3 November 2022

CaseChat Overview and Summary

Zelcliff Pty Ltd v Container Exchange (Qld) Ltd involved a dispute between the plaintiff, a scrap metal recycling business, and the defendant, the product responsibility organisation for a container refund scheme established under the Waste Reduction and Recycling Act 2011 (Qld). The plaintiff alleged that the defendant had wrongfully terminated a container collection agreement and sought damages for the loss of the benefit of the agreement and the lost opportunity to earn profits. The plaintiff applied to discontinue the proceeding shortly before the listed trial, offering to pay the defendant’s costs on the standard basis and provide an undertaking not to bring any fresh claim against the defendant, in return for the defendant’s consent to the discontinuance. The defendant rejected this offer and ultimately did not oppose the grant of leave but contended that its costs should be paid by the plaintiff on the indemnity basis.

The legal issues before the court included whether the plaintiff should pay the defendant’s costs on the indemnity basis, given the plaintiff's offer to pay costs on the standard basis and the defendant's rejection of that offer. The court considered relevant precedent, including Colgate Palmolive Company v Cussons Pty Ltd, which established that indemnity costs may be awarded in cases involving groundless allegations and undue prolongation. The court also noted that the defendant had not made any settlement offers prior to the application for leave to discontinue and had neither applied to strike out the proceeding nor sought summary judgment.

The court held that the plaintiff should pay the defendant’s costs on the standard basis, as the plaintiff had offered to pay such costs and the defendant had rejected this offer. The court found that the defendant's costs should not be assessed on the indemnity basis because the defendant had not made any settlement offers prior to the application for leave to discontinue. The plaintiff's offer to pay costs on the standard basis and provide an undertaking not to bring any fresh claim was a significant factor in the court's decision.

The final orders were that the plaintiff pay the defendant’s costs of and incidental to the proceeding to be assessed on the standard basis and limited to those costs incurred by the defendant up to and including 24 October 2022.

Orders

Orders of the court

The plaintiff pay the defendant’s costs of and incidental to the proceeding to be assessed on the standard basis and limited to those costs incurred by the defendant up to and including 24 October 2022.

Background

Background to the litigation

In Fairfield Services, Bond J also considered the discretion to order costs to be assessed on an indemnity basis and made reference to Colgate Palmolive Company v Cussons Pty Ltd.[2] His Honour noted that that there was no doubt that an award of indemnity costs may be warranted in circumstances where, relevantly, allegations have been made which ought never to have been made and there has been an undue prolongation of a case by groundless contentions.[2](1993) 46 FCR 225.Relevant factual background The plaintiff carried on a scrap metal recycling business. The Waste Reduction and Recycling Act 2011 (Qld) (“the Recycling Act”) established a container refund scheme (“the Scheme”) which commenced on 1 November 2018. The defendant was the product responsibility organisation for the Scheme. The Scheme was solely funded by contributions provided by manufacturers and distributors who sold beverages in Queensland. On 17 July 2018, the plaintiff and defendant entered into a container collection agreement (“the Agreement”) within the meaning of s 99ZA of the Recycling Act. Schedule 2 to the Agreement (“Schedule 2”) identified the services to be performed and the minimum performance requirements in respect of those services. Clause 2.3(b)(ii)(C) of Schedule 2 provided:“The Operator is required to reasonably ensure that all Containers: are, to the extent the Operator reasonably believes, purchased in Queensland after the [S]cheme Commencement Date”. By letter dated 19 April 2019, the defendant required the plaintiff to show cause why the defendant should not terminate the Agreement pursuant to clause 19.6 of the Agreement on the basis that the plaintiff was not, or was no longer, a fit and proper person to provide the services pursuant to the Agreement. By letter dated 29 April 2019, the plaintiff responded to the show cause letter. By letter dated 31 May 2019, the defendant terminated the Agreement on the basis that it had formed the view that the plaintiff was not, or was no longer, a fit and proper person to provide the services pursuant to the Agreement. The plaintiff commenced the proceeding alleging that, relevantly, any opinion held by the defendant in relation to whether the plaintiff was not or was no longer a fit and proper person was not reasonable. The plaintiff further alleged that by terminating on the basis of that opinion, the defendant had repudiated the Agreement. The plaintiff sued for the loss of the benefit of the Agreement and the lost opportunity to earn profits “on eligible containers processed through the Scheme”.[3] The claim for loss and damage was particularised as follows:[4]“By reason of the matters aforesaid the plaintiff has lots the benefit of the said Agreement and lost the opportunity to earn profit on eligible containers processed through the Scheme that it would otherwise have received thereunder and has suffered loss and damage, as follows:[3]Amended Statement of Claim [18].[4]Ibid. By its written submissions, the defendant described “the fundamental issue in [the proceeding]” as being whether “large quantities of pre-Scheme containers were not and effectively could not be eligible under the Scheme”.[5] [5]Defendant’s submissions on application for leave to discontinue filed 25 October 2022 [67].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Zelcliff Pty Ltd v Container Exchange (Qld) Ltd [2022] QSC 239
PARTIES:	ZELCLIFF PTY LTD AS TRUSTEE FOR THE MAGNUM DISCRETIONARY TRUST ACN 010 729 441 (plaintiff) v CONTAINER EXCHANGE (QLD) LTD ACN 622 570 209 (defendant)
FILE NO/S:	BS 10836 of 2019
DIVISION:	Trial Division
PROCEEDING:	Claim
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	3 November 2022
DELIVERED AT:	Brisbane
HEARING DATE:	31 October 2022
JUDGE:	Kelly J
ORDER:	The plaintiff pay the defendant’s costs of and incidental to the proceeding to be assessed on the standard basis and limited to those costs incurred by the defendant up to and including 24 October 2022.
CATCHWORDS:	PROCEUDRE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DISCONTINUANCE OF OR WITHDRAWAL FROM PROCEEDING – where the plaintiffs applied to discontinue the proceeding shortly before the listed trial – where 10 days prior to the hearing of the application for leave to discontinue, the plaintiff offered to pay the defendant’s costs of and incidental to the proceeding on the standard basis, and offered an undertaking to not bring any fresh claim against the defendant arising out of the subject matter of the proceeding, in return for the defendant’s consent to the discontinuance – where the defendant rejected that offer – where the defendant ultimately did not positively oppose the grant of leave – where the defendant contended that its costs should be paid by the plaintiff on the indemnity basis – where the defendant did not make any formal, informal or Calderbank offer to settle the proceedings prior to the application for leave to discontinue – where the defendant never applied to strike out and never sought summary judgment in respect of the claim – whether the plaintiff should pay the defendant’s costs on the indemnity basis Uniform Civil Procedure Rules 1999 (Qld), r 304, r 307, r 309, r 685 Waste Reduction and Recycling Act 2011 (Qld), s 99S, s 99ZA Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, cited Covell Matthews & Partners v French Wools Ltd [1997] 1 WLR 876, cited Ghougassian v Fairfax Community Newspapers Pty Ltd [2015] NSWCA 307, cited Fairfield Services Pty Ltd (in liq) v Leggett (2020) 5 QR 50, cited Palmer v Parberry& Ors [2018] QCA 268, considered Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622, cited Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, cited
COUNSEL:	R Anderson KC and S Forrest for the plaintiff R Perry KC and C Curtis for the defendant
SOLICITORS:	Rostron Carlyle Rojas for the plaintiff HWL Ebsworth for the defendant