Selective Trade Pty Ltd v Ferngrove Pharmaceuticals Australia Pty Ltd (No. 2) [2022] NSWDC 312

District Court New South Wales

Medium Neutral Citation: Selective Trade Pty Ltd v Ferngrove Pharmaceuticals Australia Pty Ltd (No. 2) [2022] NSWDC 312 Hearing dates: 08 July 2022 Decision date: 01 August 2022 Jurisdiction: Civil Before: Coleman SC DCJ Decision: 1. The defendants' application for a non-party costs order against Mr Wang is dismissed; 2. The defendants pay 80% of the plaintiff's costs of the notice of motion filed 12 May 2022. Catchwords: COSTS – Party/Party – Orders against non-parties – Factors relevant to exercise of court's discretion to award costs against non-parties – whether in interests of justice to order non-party director of plaintiff company to pay costs Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(1)(b) Cases Cited: Brand2Content t/as Franchise Works v Dalby [2019] NSWCA 16 FPM Constructions v Council of the City of the Blue Mountains [2005] NSWCA 340 Selective Trade Pty Ltd v Ferngrove Pharmaceuticals Australia Pty Ltd [2022] NSWDC 131 Category: Costs Parties: Selective Trade Pty Ltd (Plaintiff) Ferngrove Pharmaceuticals Australia Pty Ltd (Defendant) Representation: Counsel: Mr S Burchett (Defendant)

Solicitors: Ms V Cha (Plaintiff) Mr A Labrooy (Defendant) File Number(s): 2020/00136755

Judgment

Background 1. On 29 April 2022 the Court published its reasons in respect of the principal claims in these proceedings: see Selective Trade Pty Ltd v Ferngrove Pharmaceuticals Australia Pty Ltd [2022] NSWDC 131 ("the principal judgement"). 2. This judgment will assume that the reader is familiar with the factual findings and legal conclusions otherwise made in the principal judgment. 3. By way of summary only, the Court found that: 1. There was no Collateral Contract entered into on 18 August 2018 as alleged by the defendants; 2. On a proper construction of the PEAA and NAA read together as the contractual documents, Selective Trade was granted a right of exclusive distributorship of the NTSA products in China for a period of three years from 1 November 2018; 3. A deposit of 30% of the Purchase Price was to be paid by Selective Trade before Ferngrove had an obligation to process the order; 4. The Purchase Price (and deposit) was GST inclusive; 5. On payment of the full amount of the 30% deposit, Ferngrove was obliged to manufacture the products ordered and have them packaged and delivered to Selective Trade's Australian warehouse (or some other place in Australia nominated by Selective Trade) or ready for collection by Selective Trade if otherwise arranged within 60 days from the payment of the full amount of the deposit; 6. Selective Trade was not in breach of its obligations under the contractual arrangements; 7. The final tranche of the deposit for the First Order was paid by Selective Trade on 12 April 2019. Accordingly, Ferngrove was obliged to have ready for delivery, and deliver, the balance of the First Order (apart from the 1500 units of lactoferrin already collected by Selective Trade) by 9 July 2019; 8. Ferngrove failed to deliver the balance of the First Order by that time and was thus in breach of contract; 9. The conduct of Ferngrove through Mr Tang and Mr Zhou relating to the complaints by Mr Song, together with the failure to deliver the products as referred to above constituted a repudiation of the contract by Ferngrove; 10. Selective Trade accepted the repudiation and validly terminated the contractual arrangements; 11. Neither Ferngrove nor Mr Tang engaged in any misleading or deceptive conduct in contravention of the Australian Consumer Law; 12. Selective Trade has failed to adduce any evidence on which expectation damages or loss of opportunity damages could be assessed and is entitled to nominal damages only (in addition to the $964.37 for its actual loss). 1. In respect of costs, the Court ordered that the plaintiff pay the defendants' costs of the proceedings (see [274]-[277] of the principal judgement). 2. By notice of motion filed 12 May 2022 the defendants' moved the Court for an order pursuant to s.98(1)(b) of the Civil Procedure Act 2005 (NSW) ('CPA') that Mr Wang, the sole director of the plaintiff, be jointly liable to pay the costs of the defendants ('the non-party order'). Other relief was sought in that notice of motion but that relief has been dealt with by consent orders. 3. The plaintiff and Mr Wang oppose the non-party costs order. 4. For the reasons that follow, the defendants' motion seeking the non-party costs order be dismissed with costs.