In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932 Hearing dates: 27 July 2012 Decision date: 14 August 2012 Jurisdiction: Equity Division - Corporations List Before: Ward J Decision: Parts of earlier judgment recalled and varied. Ruling on costs orders to be made in relation to the proceedings and defendants' application of 17 July 2012. Catchwords: PRACTICE AND PROCEDURE - application to reopen judgment of 1 June 2012 on basis of denial of procedural fairness - HELD - application to reopen judgment granted - judgment of 1 June 2012 varied

COSTS - offers of compromise - whether first offer was a valid offer of compromise under the Uniform Civil Procedure Rules 2005 (NSW) where it included offer to pay plaintiffs' costs as agreed or assessed - HELD - first letter was not a letter of under the Uniform Civil Procedure Rules 2005 (NSW) nor a Calderbank offer - whether first offer should be treated as a Calderbank offer - HELD - in absence of statement of intention to treat as Calderbank offer, Calderbank principles not enlivened - OBITER - rejection of first offer was not unreasonable

COSTS - Calderbank offer - whether rejection of Calderbank offer expressed to be "inclusive of costs" was unreasonable in the circumstances - HELD - rejection of second letter of offer was not unreasonable

COSTS - apportionment of costs - where plaintiffs succeeded overall, but defendants succeeded on a significant factual issue in the proceedings - where ultimate outcome obtained by plaintiffs was disproportionate to the costs involved in the litigation - whether costs should be apportioned according to the principle of proportionality - HELD - costs of the hearing apportioned in light of the factual issue on which the defendants succeeded and having regard to principles of proportionality Legislation Cited: Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth) Supreme Court Rules 1970 (NSW) Trade Marks Act 1995 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 A11 ER 685 Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120 Anglo Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 at 302; (1993) 111 ALR 385 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (Formerly GIO Insurance Ltd) [2006] NSWSC 583 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586 Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790 Commonwealth of Australia v Gretton [2008] NSWCA 117 Compagnie Noga d'Importation et d'Exportation SA v Abacha [2001] 3 All ER 513 Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153 Coombs v Dynasty Pty Ltd (1994) 14 ACSR 60 Cretazzo v Lombardi (1975) 13 SASR 4 Dais Studio Pty ltd v Bullet Creative Pty Ltd [2008] FCA 42 De L v Director-General, NSW Dept of Community Services (No 2) (1997) 190 CLR 207 Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141 Dobrodinski v Salievic [2001] SASC 277 Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555 Dunstan v Rickwood (No 2) [2007] NSWCA 266 Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Elite Protective Personnel Pty Limited v Salmon (No 2) [2007] NSWCA 373 Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 Expo Aluminium (NSW) v Patman Pty Ltd (No.2) (unreported, NSWCA, 29 April 1991) Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 Golding v Vella (No 2) [2001] NSWSC 731 Hanave Pty Ltd v LFOT Pty Ltd (formerly Jagar Pty Ltd) [1998] FCA 1429; (Unreported Judgment of the Federal Court of Australia, Moore J, 11 November 1998) Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 Hodge v TCN Channel 9 (No 2) [2006] NSWSC 1272 Hughes v Western Australian Cricket Association (1986) ATPR 40-748 In re Swire; Mellor v Swire (1885) 30 ChD 239 Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642 James v Surf Road Nominees (No 2) [2005] NSWCA 296 Jones v Bradley (No 2) [2003] NSWCA 258 JT Stratford & Son Ltd v Lindley [1969] 3 All ER 1122 Lavender View Regency Pty Ltd v North Sydney Council (No 2) [1999] NSWSC 775 Leallee v Cmr of the NSW Department of Corrective Services [2009] NSWSC 518 Leichhardt Municipal Council v Green [2004] NSWCA 341 LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2002] NSWSC 72 Lownds v Home Office [2002] EWCA Civ 365 M T Associates Pty Ltd v Aqua-Max Pty Ltd [2000] VSC 163 Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 Monie v Commonwealth of Australia (No2) [2008] NSWCA 15 Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520 NRMA Ltd v Morgan (No 3) [1999] NSWSC 768 New Cap Reinsurance Corporation v Grant [2009] NSWSC 950 Newmont Yandal Operations Pty Ltd v J Aron Corporation and Goldman Sachs Group Inc [2007] NSWCA 195 Old v McInnes and Hodgkinson [2011] NSWCA 410 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Pacific General Securities Limited v Soliman & Sons Pty Limited [2006] NSWSC 724 Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343 Penrith Rugby League Club Ltd (t/as Cardiff Panthers) v Elliot (No 2) [2009] NSWCA 356 Pritchard v Trius Constructions Pty Ltd (No 2) [2011] NSWSC 1114 R v Nitin Gin (No. 2) [2001] NSWCCA 234 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Roads and Traffic Authority v McGregor (No 2) [2005] NSWCA 453 Rogers v Ingham (1876) 3 Ch D 351 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Sahab Holdings Pty Ltd v Registrar-General (No 3) [2010] NSWSC 403 Short v Crawley (No 40) [2008] NSWSC 1302 Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 Standard Commodities Pty Ltd v Societe Socinter Department Centragel [2005] NSWSC 493; (2005) 54 ACSR 496 Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446 Sydney City Council v Geftlick [2006] NSWCA 280 Tarabay v Fifty Property Investments Pty Ltd [2009] NSWSC 951 Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 153 Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 42 FLR 213 Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 Turkmani v Visvalingam (No 2) [2009] NSWCA 279 Twenty-First Australia Inc v Shade (Unreported, Supreme Court of NSW, Young J, 31 July 1998) Uniline Australia Ltd (ACN 010 752 057) v Sbriggs Pty Ltd (ACN 007 415 518) (No 2) [2009] FCA 920; (2009) 82 IPR 56 Waterman v Gerling Australia Insurance Co Limited (Costs) [2005] NSWSC 1111 Waters v P C Henderson (Australia) Pty Ltd (Unreported, NSW Court of Appeal, 6 July 1994) Wilding v Sanderson [1897] 2 Ch 534 Windsurfing International Incorporated v Petit (1987) AIPC 90-441 Wentworth v Rogers [2002] NSWSC 921 Wentworth v Wentworth [1999] NSWSC 638 Texts Cited: Quick on Costs (R Quick and D Garnsworthy, Thompson Reuters) Category: Costs Parties: Simone Leah Fitzpatrick (First Plaintiff) ACN 089 142 870 Pty Ltd (Second Plaintiff) James Mitchell Cheal (First Defendant) Cheal Industries Pty Ltd (Second Defendant) Chilli Surfboards Pty Ltd (Third Defendant) Representation: Counsel M B Evans (Plaintiffs) Ms R Francois (Defendants) Solicitors Lathams Lawyers (Plaintiffs) Brown Wright Stein (Defendants) File Number(s): 09/291052