Firstnamed Plaintiff Secondnamed Plaintiff v Firstnamed Defendant Secondnamed Defendant

Firstnamed Plaintiff Secondnamed Plaintiff v Firstnamed Defendant Secondnamed Defendant - [2010] VSC 174 - VSC 2010 case summary — Zoe

[48]

"11. Reasonableness in this context is informed by what was known by Bunnings at the time of the offer.[18] Mitre 10 submits that as at 28 January 2010, the weakness of Bunnings' position was perfectly clear.[19] By that stage, Bunnings had copies of the RFR Agreement, the 4 November 2009 email from Wallington to Mitre 10, and Mitre 10's letter of 1 December 2009 and 4 December 2009 seeking copies of the BAA.[20] It also had notice that Wallington's position was that Wallington had not yet complied with its obligations under the RFR Agreement, at least before 24 December 2009.[21] Indeed, the mismatch between the 'summary' set out in the 4 November 2009 email and the complicated transaction contemplated by the BAA and the Lease was evident from the face of those documents.

12. Those matters made clear that at no stage had Mitre 10 waived its rights under the RFR Agreement or otherwise elected not to pursue them. As was noted in the Mitre 10 offer, Mitre 10 had by its nominee exercised those rights and, as such, the relevant condition precedent under the BAA had not been fulfilled.

13. This was not a proceeding in which, for example, Bunnings might have some uncertainty as to the quantum of a plaintiff's damages or the nature of the relief sought. The proceeding involved relatively straightforward questions, involving the application of settled principles to the objective assessment of contractual terms and documents. It also can be assumed that Bunnings was properly advised as to its prospects of success.[22] Rather than accept the obvious deficiencies in its position, however, Bunnings proceeded to follow a course of conduct in which it aggressively sought further discovery from Mitre 10 and which culminated in over 100 pages of written closing submissions.

14. The Mitre 10 offer was timely, being made shortly after Mitre 10 exercised its option under the RFR Agreement. As was noted in the Bunnings offer, a period of acceptance of 7 days was reasonable in light of the expedited timetable (and indeed, it can be inferred from the making of the Bunnings offer that Bunnings in any event had already carefully considered the parties' positions in detail by that stage). In the Mitre 10 offer Bunnings was warned that Mitre 10 would seek solicitor/own client costs from 4 February 2010. In the circumstances, there is no reason why Mitre 10 should not receive its costs from that date on that basis."

[82]

51 In relation to Mitre 10's application for indemnity by WHT of the costs it was ordered to pay Bunnings with respect to the 24 December 2009 hearing, I am of the opinion, as indicated previously, that it is appropriate that such an order be made.[69] I am of this view on the basis that it was reasonable at that time for Mitre 10 to have joined Bunnings as a defendant, given its then understanding of the facts and, particularly, having regard to the important fact that Mitre 10 did not then have a copy of the BAA and was not aware of its terms, save to the extent that they were accurately recorded in the 4 November 2009 email. However, as indicated previously, there were many deficiencies in that email in terms of its accuracy in summarising the relevant provisions of the BAA. Additionally, I do accept, as indicated previously, that the need for these proceedings was substantially the result of WHT's failure to comply with the terms of the RFR Agreement. Of importance in this respect was its significantly deficient attempt to do so by way of the 5 November 2009 email and WHT's subsequent conduct in refusing to provide, or not procuring, a copy of the BAA for the purpose of providing it to Mitre 10 in accordance with the requirements of the RFR Agreement. Had Bunnings not vigorously participated in the proceedings and pressed arguments in support of the position that the 1 December 2009 letter was an election by Mitre 10 to exercise rights inconsistent with its rights under the RFR Agreement, and on this basis and otherwise lost its rights under that agreement, then these proceedings would have been much shorter in duration and complexity. It may also be the case that without this pressure from Bunnings by way of its participation in the proceedings, and in circumstances where WHT had contractual obligations to it under the BAA, they may not have occurred at all. Additionally, I accept the submissions that WHT was not a mere passive party and that it took an active part in the proceedings, principally supporting Bunnings.

[86]

"[8003] ... the power to grant declaratory relief is limited only by the discretion of the court.[71] The modern approach to the exercise of that discretion is encapsulated in Viscount Radcliffe's famous advice in Ibeneweka v Egbuna:[72]

'[The] two primary considerations [are] that the power to make declarations is conferred, surely not by accident, in wide and general terms, and that what is conferred is a discretion to be exercised according to the facts of each individual case. ... [I]t is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making.'

...

[8004] As with equitable coercive relief, it is possible to point to a number of general factors which may, in the circumstances of the particular case, affect the discretion to grant declaratory relief. ...

...

(ii) That the issue is moot. The courts will not generally grant declarations in respect of issues which are hypothetical or theoretical.[73] Using the classifications developed by Dr Zamir,[74] we may say that an issue may warrant this description where: there is no dispute in existence;[75] the dispute is not attached to the facts;[76] the dispute is based on hypothetical facts;[77] or, the dispute has ceased to be of practical significance.[78] The justification of this consideration is a strong policy against advisory opinions.[79] But, even in such cases justice may require the grant of a declaration in the light of the importance of the question and/or the practical utility of an answer.[80]

(iii) That the grant of a declaration is of no practical utility. This will be the case where the grant of a declaration will be futile,[81] or will give rise to a multiplicity of proceedings,[82] or will not otherwise assist in the solution of the dispute between the parties[83] because, for example, the dispute has reached the stage at which other relief is called for,[84] as, perhaps, where the defendant has demonstrated that he will not act in accordance with the declaration.[85]

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