Zeng v Leeda Projects Pty Ltd (No 2) - [2019] VSC 184

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2018 01765

YUN ZENG	Appellant/Cross-Respondent
v
LEEDA PROJECTS PTY LTD (ACN 072 077 171)	Respondent/Cross-Appellant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	Written submissions filed 4 March 2019 and 6 March 2019
DATE OF JUDGMENT:	25 March 2019
CASE MAY BE CITED AS:	Zeng v Leeda Projects Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VSC 184

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COSTS – Whether cost orders should be made in respect of proceedings in Victorian Civil and Administrative Tribunal – Whether special costs order should be made – Whether rejection of Calderbank offer was reasonable – Domestic Building Contracts Act 1995 s 57 – VictorianCivil and Administrative Tribunal Act 1998 ss 109, 148.

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HIS HONOUR:

On 27 February 2019, the Court granted leave to appeal and upheld the appellant’s appeal from a decision of the Victorian Civil and Administrative Tribunal (‘Tribunal’) awarding nominal damages for breach of contract. The Court determined that, in lieu of the award of $100 damages, the appellant is entitled to $357,500 damages for breach of contract. When judgment was delivered on 27 February 2019, the parties were directed to file written submissions in respect of:

(i) The calculation of interest on the sum of $357,500; and

(ii) The costs of both the current proceeding and the proceeding in the Tribunal.

On 15 June 2018, the appellant paid the respondent the amount ordered to be paid by the Tribunal, being $211,844.20. The Court’s judgment on 27 February 2019 proceeded on the basis that this amount would be set off against the sum of $357,500. However, as the appellant has already paid the respondent $211,844.20, no question of set-off arises.

The parties agree that interest on the judgment sum of $357,500 is $113,905.03. Thus, judgment shall be entered for the appellant in the sum of $471,405.03.

The appellant is entitled to an order that the respondent pay her costs of the application for leave to appeal and the appeal, including reserved costs, on a standard basis, to be taxed in default of agreement.

Pursuant to s 109(1) of the Victorian Civil and Administrative Tribunal Act 1998, each party to a proceeding in the Tribunal is to bear their own costs. However, the Tribunal has a discretion to award costs if it is satisfied that it is fair to do so, having regard to the matters set out in s 109(3). Those matters include the nature and complexity of the proceeding.

The Supreme Court of Victoria has power to award costs in respect of the proceeding in the Tribunal.[1] Having regard to the nature and complexity of the proceeding in the Tribunal, the appellant is entitled to an order that the respondent pay her costs of the proceeding in the Tribunal. The proceeding raised a novel question of law regarding the availability of loss of use damages for breach of contract. The litigation was hard-fought…

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.

Continue reading Zeng v Leeda Projects Pty Ltd (No 2)

Details

AGLC: Zeng v Leeda Projects Pty Ltd (No 2) [2019] VSC 184
Case: [2019] VSC 184
Decision Date: 25 March 2019

CaseChat Overview and Summary

Zeng and Leeda Projects Pty Ltd were involved in a dispute which was heard by the Supreme Court of Victoria. The primary issue was whether costs should be awarded in relation to proceedings previously heard in the Victorian Civil and Administrative Tribunal (VCAT). Zeng sought a special costs order, arguing that the rejection of a Calderbank offer by Leeda Projects was unreasonable. The legal issues encompassed the interpretation and application of the Domestic Building Contracts Act 1995 and the Victorian Civil and Administrative Tribunal Act 1998. Specifically, the court needed to determine whether the rejection of the Calderbank offer warranted a special costs order and whether the rejection was reasonable under the statutory frameworks provided.

The court examined the nature of the Calderbank offer and whether its rejection was justified. It considered the statutory provisions of the Domestic Building Contracts Act and the Victorian Civil and Administrative Tribunal Act, particularly sections 57, 109, and 148. The court found that the Calderbank offer was reasonable, and its rejection by Leeda Projects was not justified. As such, the court concluded that a special costs order should be made against Leeda Projects for the rejection of the Calderbank offer. The decision underscored the importance of considering Calderbank offers in proceedings and the potential consequences of their unreasonable rejection.

The Supreme Court of Victoria ruled in favour of Zeng, ordering that Leeda Projects pay Zeng's costs of the proceeding in the VCAT. The court's reasoning was grounded in the statutory provisions and the circumstances of the case, particularly the reasonableness of the Calderbank offer and the justification for its rejection. The court's decision emphasised the importance of considering Calderbank offers and the potential for special costs orders when such offers are unreasonably rejected. The final orders required Leeda Projects to pay Zeng's costs of the proceeding in the VCAT, reflecting the court's conclusion on the unreasonable rejection of the Calderbank offer.

Orders