Firstnamed Plaintiff Secondnamed Plaintiff v Firstnamed Defendant Secondnamed Defendant

REMEDIES - Declaration - Extent to which issue moot or grant is of no practical utility - Discretion to grant - Ibeneweka v Egbuna [1964] 1 WLR 219 (PC); Wilcox v Kogarah Golf Club Ltd (1995) 14 ACLC 421 (SC (NSW); Young J).

1 On 31 March 2010, I handed down my reasons for judgment in this proceeding.[1] In summary, my reasons explained why I concluded that I should give judgment for the plaintiffs and dismiss the counterclaim. The same references to parties, contracts and agreements, and documents more generally, are used in this judgment as they appear in my previous judgment.

2 In summary, my previous judgment explained why I found that the 1 December 2009 letter did not result in a loss of Mitre 10's under the RFR Agreement, and why it followed that the letter of 5 January 2010 from WHT's solicitors to Mitre 10's solicitors - which followed Mitre 10 being provided with a complete copy (and information as to Schedule 7) of the BAA - must stand as critical notice for the purposes of sub-clause 1.1 of that Agreement. On this basis, I found that Mitre 10 was entitled to exercise its rights under the RFR Agreement, which it did by letter dated 20 January 2010.[2]

3 I also noted that this position was accepted by WHT's counsel, who said:

"We have sold the business and we just wish to know who is entitled to be the purchaser of the business."[3]

4 On publication of my previous judgment, I said that I would hear the parties in relation to the question of costs. For this purpose, orders were made for the provision of written submissions by the parties prior to the hearing in relation to costs issues.

5 Mitre 10 sought a declaration that WHT was required to comply with clause 1.1 of the RFR Agreement prior to selling the Business to Bunnings. The declaration sought expanded upon the declaration as initially set out in the statement of claim, but was said to now accommodate the findings in my previous judgment. Mitre 10 had also sought, in its statement of claim, injunctive relief against WHT to prevent it from selling the Business, selling the Business assets or a controlling interest in WHT, or from proceeding by any other means, directly or indirectly, which would cause the sale of the Business, until the requirements of the RFR Agreement were complied with. Additionally, Mitre 10 sought injunctive relief against Bunnings to restrain it from purchasing the Business, purchasing the assets or a controlling interest in WHT, or proceeding by any other means, directly or indirectly, which would cause the sale of the Business, until WHT complied with the requirements of the RFR Agreement.

6 Mitre 10 was successful at trial. I found, in particular, that WHT was required to comply with clause 1.1 of the RFR Agreement prior to selling the Business to Bunnings. Mitre 10 did not proceed with its claim for injunctive relief against WHT or Bunnings because, it submitted, the grant of an interlocutory injunction by Davies J on 24 December 2010 had the effect of preventing the proposed transaction proceeding. The injunction thereby maintained the then status quo, pending the final determination of all matters in dispute between the parties at an expedited trial which I ordered, and made directions for, on 13 January 2010. Mitre 10's position is that injunctive relief is no longer necessary because, unlike the situation prior to the grant of the interlocutory injunction on 24 December 2009, WHT and Bunnings are no longer threatening to complete the BAA.[4]

7 Mitre 10 was, in my view, successful in establishing the substance of its claims. The fact that it did not ultimately require permanent injunctive relief against WHT or Bunnings, for the reasons it submitted, does not detract from this position. Injunctive relief on an interlocutory basis was clearly necessary from Mitre 10's perspective for the purpose of maintaining the status quo. If the BAA had been completed, Mitre 10 would have been denied the possibility of enjoying its rights under the RFR Agreement, with those rights simply being converted to a claim in damages. Davies J apparently accepted, for the purposes of the interlocutory injunction proceedings on 24 December 2009, that damages would not be an adequate remedy. In all the circumstances, Mitre 10's pursuit of enjoyment of its rights under the RFR Agreement rather than damages for breach of the RFR Agreement appears entirely reasonable. I am of the view that it is reasonable in the circumstances as they now exist, for Mitre 10 not to pursue or seek permanent injunctive relief against WHT or Bunnings, where there is no threat to defeat Mitre 10's rights under the RFR Agreement.[5] This position reflects an appreciation, in my view, that equitable relief ought not be sought, and will not be granted, unless that relief is necessary to protect the rights of a party.

8 The plaintiffs sought the following orders in respect to costs:

(1) the defendants (WHT and Bunnings) pay the plaintiffs' (Mitre 10) costs of the proceeding, including reserve costs, on a party and party basis;

(2) the second defendant (Bunnings) pay the plaintiffs' (Mitre 10) costs of the counterclaim, including reserve costs, on a party and party basis.

These orders were sought subject to the further order that the second defendant (Bunnings) pay the plaintiffs' (Mitre 10) costs of the proceeding and the counterclaim, including reserve costs, from 5 February 2010 on a solicitor and own client basis. Additionally, an order was sought that the first defendant (WHT) indemnify the plaintiffs (Mitre 10) for the costs ordered to be paid by the plaintiffs (Mitre 10) to the second defendant (Bunnings) pursuant to orders of the Court made on 24 December 2010.

9 WHT sought orders that the proceeding as against the first defendant (WHT) be dismissed with costs, and that the counterclaim against the third defendant to counterclaim (WHT) be dismissed with costs.

10 Bunnings sought a variety of costs orders against the plaintiffs (Mitre 10) and the first defendant (WHT), on an issue by issue basis. It is convenient to refer to Bunnings' position as these issues are considered. More generally, Bunnings resisted the application by Mitre 10 for an order that it pay Mitre 10's costs of the proceeding and the counterclaim, including reserve costs, from 5 February 2010 on a solicitor and own client basis because of its non-acceptance of a Calderbank offer made on 28 January 2010 by Mitre 10 to Bunnings.

11 The jurisdiction of the Court as to costs is conferred by sub-s 24(1) of the Supreme Court Act 1986 (Vic), in the following terms:

"Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid."

12 This statutory provision, and the history of the jurisdiction to award costs, confirms that costs fall within the Court's general discretionary jurisdiction subject to the operation of other legislation or the rules of court.[6]

13 The usual order as to costs is an award of costs to the successful party on a party and party basis. This usual practice, and the basis for it, is set out and explained by McHugh J in Oshlack v Richmond River Council:[7]

"[67] The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party.[8] If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation."

14 WHT argued that Mitre 10 had not been successful in establishing its claim in the proceedings. It submitted that no orders of the kind sought, whether declaratory or injunctive, needed to be made, because, on any view, WHT had complied with its obligations under the RFR Agreement by 6 January 2010 at the latest. Further, it submitted that Mitre 10 would not have been entitled to the declaration and injunction it sought against WHT because it did not establish, as was pleaded in paragraph 10 of its statement of claim, that "Wallington has threatened and unless restrained will proceed to sell the Business in breach of the RFR Agreement". WHT submitted that the first clear statement by Mitre 10 that it required a copy of the BAA was its letter of 4 December 2009 where it contained the following request:

"We therefore request in accordance with the Right of First Refusal either a true and complete copy of the offer or a true and complete statement in writing of all terms and conditions of the offer so that we may submit an appropriate offer to your client to consider. Until this occurs, your client is in no position to proceed with the Bunnings offer and we reserve our rights."

WHT further submitted that it was "unfortunate Mitre 10 did not make this position clear shortly after receiving the 4 November 2009 email".

15 In my view, the contents of the 4 November 2009 email from WHT to Mitre 10, and the contents of the 1 December 2009 letter, make the position of the parties clear, in the manner indicated in my previous judgment. As also indicated in those reasons, the provision of a complete copy of the BAA was not readily forthcoming. When a complete copy of the BAA was provided to Mitre 10, solicitors acting on behalf of WHT made it clear in correspondence that WHT was reserving its rights with respect to the RFR Agreement. This was on the basis that its provisions had been complied with by WHT by way of its 4 November 2009 email, and that Mitre 10 had failed to exercise its rights under the RFR Agreement as a result of the 1 December 2009 letter and that, accordingly, its rights were lost and WHT was free to complete the BAA.

16 Consequently, I do not accept the position as submitted by WHT. I am of the view that Mitre 10 is correct, on the basis of the matters set out in my reasons for judgment, in submitting that the conduct of WHT in purporting to comply with the RFR Agreement by way of the 4 November 2009 email, and the subsequent insistence that Mitre 10 had lost its rights under the RFR Agreement as a result of the contents or alleged deficiencies in the 1 December 2009 letter, was the reason why these proceedings were brought.

17 I am of the view that Mitre 10 is to be regarded as having succeeded in establishing the substantive claims in the proceedings. The fact that it was not necessary for it to press for permanent injunctive relief does not detract from this position.[9] Additionally, I do not accept the submissions against it that declaratory relief ought not now be granted in its favour. It would appear that, in a costs context, it might be said against Mitre 10 that the non-availability of declaratory relief would detract from its argument that it was the successful party. In my view, this position is misconceived with respect to the question whether declaratory relief ought to be granted and with respect to any costs consequences.[10]

18 No issue was raised by WHT in relation to the costs of the application for an interlocutory injunction before Davies J on 24 December 2009. Bunnings, however, sought an order for costs reserved on the application for the interlocutory injunction on the basis that no order was made against it by Davies J on 24 December 2009, and the application was never pressed when the matter came before me on 13 January 2010. As indicated, the result of that application was orders for an expedited trial, which would finally determine all issues in dispute, and undertakings by both WHT and Bunnings to maintain the status quo which had been established by the interlocutory injunction granted by Davies J against WHT, pending the outcome of the trial and further orders. As I have indicated, I am of the view that the application by Mitre 10 for interlocutory injunctive relief was a reasonable course for it to take to protect its rights under the RFR Agreement. In any event, there was no suggestion that Davies J was of a contrary view on 24 December 2009. In my opinion, the fact that Mitre 10 did not press for permanent injunctive relief or press the interlocutory injunction application before me on 13 January 2010 does not detract from its entitlement to costs as the successful applicant for an interlocutory injunction before Davies J. As events unfolded, permanent injunctive relief was not required and, in my view, Mitre 10 quite properly did not press for equitable relief by way of permanent injunctions where this was not necessary. No interlocutory injunctive relief was necessary on 13 January 2010, from Mitre 10's perspective, as WHT and Bunnings had agreed to maintain the status quo.

19 As no order was made against Bunnings on 24 December 2009 by Davies J, principally on the basis that Mitre 10's position was sufficiently protected by an order against WHT alone, it would not, in my view, be appropriate to order Bunnings to pay Mitre 10's costs of this application. Rather, Mitre 10, as the unsuccessful applicant vis-à-vis Bunnings, should pay Bunnings' costs of the application. Nevertheless, Mitre 10 succeeded against WHT in this application and, consequently, it is appropriate that WHT pay Mitre 10's costs of the application. Mitre 10 did not succeed against Bunnings in the application but, in my view, it was reasonable in all the circumstances that Mitre 10 should then have sought interlocutory injunctive relief against Bunnings on 24 December 2009.[11] Having regard to the part WHT played in the events leading up to the 24 December 2009 application, as indicated in my previous judgment, I am of the opinion that it is appropriate that WHT indemnify Mitre 10 for its liability to pay Bunnings' costs of the 24 December 2009 application.[12]

20 Bunnings also sought its costs of a second discovery application, which was determined by Daly AsJ in Bunnings' favour on 16 February 2010. Bunnings submitted that Mitre 10's further discovery was inadequate, compelling it to make a second discovery application, as numerous requests of Mitre 10 for further discovery were not satisfactorily addressed. Bunnings submitted that it succeeded on the second discovery application and that Mitre 10 then gave significant further discovery. Bunnings submitted that the costs of this application should follow the event.

21 Mitre 10 submitted that the Bunnings application sought discovery and inspection of a substantial number of documents and categories of documents.[13] The applications were refused by AsJ Daly except for an order that "By noon on 4 March 2010 the plaintiffs discover any emails or other documents authored by or received by Messrs Cooke, Burrowes and Reid which had been deleted from their laptops and/or desktop computers but have been retained on the plaintiffs' hard drives or servers". Mitre 10 submitted, by Supplementary Affidavit Documents of Mark William Burrowes sworn 5 March 2010, that it complied with the order and produced such emails which could be retrieved from its servers. It was further submitted that these documents, which at best Bunnings contended could relate to Mitre 10's subjective intent behind the 1 December 2009 letter, shed no light on this issue, which, as noted in my previous judgment[14] was, in any event, irrelevant. Consequently, Bunnings' second discovery application was only partly successful in terms of the extent of documents sought by way of this application. The documents which were ordered to be produced ultimately proved to be of no assistance. The fact that documents properly discovered in the course of proceedings are not relied upon or do not ultimately prove useful does not mean that they were not properly discoverable in the first instance. Nevertheless, in all the circumstances, having regard to the success of Mitre 10 in the principal issue the subject of this proceeding, I am of the view that it is not appropriate to make some marginal adjustment to the operation of the usual costs rules on account of Bunnings having partial success with respect to some documents in the application before Daly AsJ.

22 In relation to reserved costs with respect to the hearing of the matter before me on 13 January 2010, I am of the view that costs orders should be made in favour of Mitre 10 on the basis of its success with respect to the substantive issue in the proceedings, as indicated previously.

23 By letter dated 21 January 2010 from Lander & Rogers, solicitors for Bunnings, to Middletons, solicitors for Mitre 10, an offer was made following a summary of Bunnings' position with respect to the 1 December 2009 letter and its consequences with respect to the operation of the RFR Agreement. The summary in this letter included the proposition that "Accordingly, WHT was free to contract to sell the Business subject to any first right of refusal and it has done so. Any first right of refusal conferred on Mitre 10 was not expressed to be and cannot operate as a first, second and ongoing right of refusal". Concluding the summary of Bunnings' position, the letter stated as follows:

"In short, any such right, once exercised on 1 December 2009, was extinguished and the current proceeding is destined to fail".

24 On the basis of this summary, an offer was put by Bunnings to Mitre 10:

"We therefore invite your client to reconsider its position and discontinue the entire proceeding against all parties within 7 days from the date of this letter. If it does so Bunning's will accept payment of 50% of all costs in the proceeding to date on a party/party basis, including 50% of those ordered in its favour on 24 December 2009. We estimate that its costs to date be in excess of $60,000. Should your client seek further time to consider that offer, please let us know. Otherwise, we take the view, particularly having regard to the expedited timetable given for the trial and determination of the proceeding, that your client is being given a reasonable time to consider this offer."

The remainder of the letter made it clear that it was intended by way of a Calderbank offer and attention was drawn, specifically to the decision in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2)[15] and the principles there stated.

25 The Bunnings offer was rejected by Mitre 10 by letter dated 28 January 2010 from its solicitors, Middletons, to the solicitors for Bunnings, Lander & Rogers. After responding in relation to the position as put in the 21 January 2010 letter, the letter continued:

"Our clients are prepared to settle this proceeding with your client on the following basis:

(a) the email from the first defendant to the plaintiffs dated 4 November 2009 was not a valid exercise of the RFRA; and

(b) the RFRA was validly exercised by the plaintiffs on 20 January 2010; and

(c) the Business Acquisition Agreement between the first and second defendants is not enforceable.

1. 2. your client consents to the injunction made on 13 January 2010 being vacated;
2. 3. your client consents to an order that it will not seek to complete the BAA, unless the plaintiffs (or their nominee) do not complete an agreement for the sale of the Business pursuant to our client's notice exercising the Option dated 20 January 2010;
3. 4. your client otherwise consents to discontinuance of the proceeding, including discontinuing its counter-claim against our clients and WHT;
4. 5. your client pays our clients 50% of their costs in the proceeding to date (save for the costs of 24 December 2009) on a party/party basis, to be set-off by the amount owed by our clients to your client pursuant to order 5 of the orders made by The Honourable Justice Davies on 24 December 2009.

Our clients' offer remains open for 7 days from the date of this letter.

This offer is made in accordance with the principles set forth in Calderbank v Calderbank [1975] 3 All ER 333 and Cutts v Head [1983] EWCA Civ 8; (1984) 1 All ER 597 and adopted in an unreported decision of Mr Justice Byrne in the Supreme Court of Victoria on 28 April 1993 in the case of Mutual Community Limited v Loran Holdings Pty Ltd & Ors."

The offer was open for acceptance until 4 February 2010. Bunnings did not accept the Mitre 10 offer.

26 On the basis of this exchange of Calderbank offers, Mitre 10 submitted that it had achieved a better result than contemplated by both the Bunnings offer and the Mitre 10 offer, in that it had succeeded in its claims and in defending the counterclaim. As a result, it submitted, it is entitled to a special costs order to the effect that its costs incurred after 4 February 2010 be recovered on a solicitor and own client basis.

27 Mitre 10 acknowledged in its submissions that entitlement to a special costs order does not necessarily follow Bunnings' rejection of Mitre 10's Calderbank offer but, rather, that the matter is one going to the Court's discretion with respect to costs.[16] In particular, Mitre 10 submitted that the rejection of its offer by Bunnings was unreasonable in the circumstances and that it follows that a special costs order should be made.[17]

28 In relation to reasonableness, Mitre 10 made the following submissions:

"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."

29 In response, Bunnings addressed the critical question whether its rejection of the 28 January 2010 offer by Mitre 10 was reasonable. On the basis of a comparison with the position in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2),[23] Bunnings made the following points:[24]

"20. (a) First, the offer was received prior to discovery of documents and expired on 4 February 2010, being one day prior to the date ordered for discovery.[25] Bunnings was reasonably entitled to ascertain whether Mitre 10 had determined to exercise its right of first refusal;

(b) Secondly, the extent of the compromise offered was extremely limited. A Calderbank letter which is properly characterised as a demand for capitulation is not an 'offer of compromise'[26] and it will be reasonable for a party not to accept it.[27] In truth, there was no offer to compromise. Bunnings was simply asked to capitulate. No compromise was offered on the claim or the counterclaim. The only element of compromise was as to the percentage of costs the plaintiffs would accept. Contrast Hazeldene Chicken, where the Court regarded as 'particularly significant the real element of compromise represented by the terms offered';[28]

(c) Thirdly, Bunnings' prospects of success, assessed at the date of the offer, were not such as to make rejection of the offer unreasonable;

(d) Fourthly, the second plaintiff sought no relief in the proceeding. It should not benefit from any order for costs;

(e) Fifthly, in the circumstances that Mitre 10 abandoned its only cause of action against Bunnings on the first day of trial, there is no real compromise in an offer that Bunnings pay 50 per cent of all Mitre 10's costs of the proceeding."

Consequently, Bunnings submitted that no special order for costs is warranted.

30 Taking these points separately, the first point made by Bunnings does not, in my view, have any merit having regard to the strong assertions made on behalf of Bunnings in the 21 January 2010 letter from its solicitors, Lander & Rogers, to Mitre 10's solicitors, Middletons, in which strong views were expressed on behalf of Bunnings as to the weakness in Mitre 10's case and the strength of the Bunnings case. It is simply not consistent with this clearly expressed position for Bunnings to be submitting that it was not in a position to assess the strength or weakness of its case pending finalisation of the Mitre 10 discovery, which is the substance of the point being made in paragraph 20(a) of its submissions. Additionally, the implicit assertion of Bunnings' strong prospects of success, in paragraph 20(c) of the Bunnings submissions, is consistent with its solicitors' letter of 21 January 2010, but similarly inconsistent with paragraph 20(a). The fourth point, contained in paragraph 20(d), that the second plaintiff sought no relief in the proceeding and should not benefit from any orders for costs, was responded to by Mitre 10 at the hearing of this aspect of the proceeding.[29] The fifth point, contained in paragraph 20(e) of the Bunnings submissions is, in my view, unmeritorious because it ignores the substance of the proceedings and the very significant part that Bunnings took in the proceedings in support of WHT's position in its own interests in seeking to achieve completion of the BAA.[30]

31 I return now to the second point, contained in paragraph 20(b) of the Bunnings submissions, that the Mitre 10 "offer of compromise" is in truth a "demand for capitulation". In support of the submission that a "demand for capitulation" is not an "offer of compromise", reference was made to the judgment of Callaway and Nettle JJA in Berrigan Shire Council v Ballerini (No. 2),[31] as follows:

"On 8th December 2003, before the trial, the Commission's solicitors wrote to the Council's solicitors. They said that their expert evidence indicated that the land from which the accident site was accessed was under the Council's management and control and the log was embedded in that land. Accordingly, the letter continued, if by 13th January 2004 the Council withdrew its notice of contribution against the Commission and agreed to indemnify the Commission in respect of the proceeding the Commission would be prepared to bear its own costs.[32] A warning followed that, if the offer were not accepted and the matter proceeded to judgment and the Council obtained a result no more favourable than that offered by the Commission, the letter would be produced on the question of costs. Reference was made to the same three cases as in the plaintiff's subsequent Calderbank letter to the Council.

The Commission's application for an indemnity costs order as against the Council may be dealt with more briefly. In substance the offer was that the Commission would bear its own costs of the appeal if the Council would give up the benefit of its judgment (for contribution of 30%) against the Commission and indemnify the Commission against Mr Ballerini's claims against the Commission (which included a claim to have reduced the percentage of contributory negligence determined against him at trial). In effect it was an offer to walk away in return for the Council agreeing to give up against Mr Ballerini and protect the Commission from him."

Additionally, it was said in that case that it will be reasonable for a party not to accept something in the nature of a demand for capitulation, rather than an offer of compromise. Callaway JA said:[33]

"I accept the Council's submission in response that the letter of 8th December 2003 was not so much an offer of compromise as a demand to capitulate and that it was reasonable for the Council not to accept it. That conclusion is reflected in para 5 of the order I have proposed in [3] above."

32 In my view, the Mitre 10 offer is in the nature of a "demand for capitulation", rather than an "offer of compromise". On this basis and on the basis of the authorities to which reference has been made, I find that it was not unreasonable for Bunnings to refuse this offer and, consequently, that refusal does not provide any basis for making a special order for costs in favour of Mitre 10. Accordingly, none will be made.

33 Bunnings submitted that Mitre 10 abandoned its only cause of action against Bunnings at trial. Consequently, Bunnings submitted that any costs order should reflect both the lateness of the abandonment of this cause of action, and the significant work undertaken by Bunnings and its legal representatives wasted in investigating and preparing up to trial on this claim. In consequence, Bunnings submitted that it should either be awarded its costs up to the abandonment of the claim on an indemnity basis or, alternatively, that Mitre 10's costs up to the abandonment of that claim should be significantly reduced.

34 In support of these submissions, reference was made to Peet Limited v Richmond (No. 2),[34] where the plaintiff accepted that it was appropriate that it pay the costs thrown away by reason of its abandonment (on the first day of the trial) "of most of its claims".[35] Costs were ordered to be taxed on an indemnity basis by Hollingworth J and leave to appeal was refused.[36]

35 With reference to the particular circumstances of this proceeding, Bunnings submitted:[37]

"13. While it is inappropriate to conduct and determine a hypothetical trial in order to determine where the costs liability on an abandoned claim should lie,[38] several flaws in Mitre 10's abandoned claim should be noted: (1) Mitre 10 had knowledge before issuing the proceeding that Bunnings had expressly contracted with WHT on terms that acknowledged the existence of the right of first refusal and required WHT to comply with its obligations under that agreement;[39] (2) the threatened interference, as particularised, concerned conduct commencing as late as 18 December 2009;[40] (3) accordingly, all conduct complained of took place after Mitre 10's 1 December offer; (4) the elements of the tort could not be made out on the affidavits that were filed and served; (5) Mitre 10's material made plain that Bunnings did not induce or procure the doing of what it knew would be a breach of contract;[41] (6) Bunnings was not guilty of 'inducing or procuring' a breach of the RFR by WHT,[42] let alone could it be said that it 'intentionally procured the breach';[43] (7) Bunnings was not aware of the specific terms of the RFR Agreement; (8) the evidence showed that despite requests of WHT Bunnings was not provided with a copy of the RFR Agreement until 17 December 2009.[44]

14. Critically, where WHT refused to give it a copy of the RFR Agreement, Bunnings contracted (and told Mitre 10 that it had contracted) on the express basis which acknowledged and addressed Mitre 10's rights under the RFR Agreement.[45]

15. Properly advised, Mitre 10 should have recognised that it had no prospect of success in its alleged cause of action against Bunnings.[46]"

36 In relation to the particular matters raised in these submissions, I note the submission that Bunnings had expressly contracted with WHT, that is, in the BAA, "on terms that acknowledged the existence of the right of first refusal and required WHT to comply with its obligations under that agreement". In the latter part of the paragraph which includes this submission, it is said that Bunnings was not provided with a copy of the RFR Agreement until 17 December 2009. Even on the basis of this material, it seems difficult to accept that Bunnings had no reason to believe that its entering into the BAA and pressing for its completion may not affect the rights of Mitre 10 under the RFR Agreement unless the provisions of the RFR Agreement were carefully and strictly complied with.

37 In any event, Mitre 10 submitted that its claim against Bunnings was based on Bunnings' threat to induce WHT to complete the transaction the subject of the BAA without WHT first complying with the RFR Agreement by providing a copy of the BAA to Mitre 10. Further, it was submitted that the Bunnings' threat to induce WHT to breach the RFR Agreement was very real because Bunnings had rejected repeated requests that WHT be permitted to provide a copy of the BAA to Mitre 10, and made clear that it intended to require WHT to complete the BAA.[47]

38 It was further submitted that Bunnings' threat was only removed as a result of the interlocutory injunction granted by Davies J on 24 December 2009, restraining WHT from completing the sale, combined with the undertakings given by both WHT and Bunnings on 13 January 2010 that pending the hearing and determination of the proceeding, or further order, neither would complete any contract for the sale or purchase of the business. Concluding on this point, Mitre 10 submitted:[48]

"18. On 22 January 2010, Bunnings amended its defence to include a comprehensive defence based on election principles, and filed its counterclaim. Thereafter, it can fairly be said that Bunnings took over the lead as the party driving the issues for determination, and was vigorous in pursuing those issues.

19. The statement of claim did not allege that Bunnings did induce a breach of contract but only that it threatened to induce a breach of contract. In fact Bunnings expressly threatened to complete its contract with Wallington, which as has been found by the Court would have been in breach of the RFR Agreement. The breach of contract was only averted by the injunction granted and undertaking given as a result of Mitre 10 filing this proceeding."

39 In my opinion, the reality of the Bunnings threat was established by Mitre 10, certainly as at 24 December 2009 when the interlocutory injunction was obtained from Davies J. The threat was apparently still alive on 13 January 2010, hence the perceived need for undertakings to be given in circumstances where, if they had not been given, I would have heard an application for further or continued interlocutory injunctive relief following on from the orders of Davies J on 24 December 2009. Additionally, the material before the Court indicated, at the very least, a reluctance on the part of Bunnings to provide a copy of the BAA, or to permit a copy to be provided, to Mitre 10 for the purpose of WHT complying with the RFR Agreement.[49]

40 Additionally, it was very clear from the trial that Bunnings had taken on the role of the principal defendant. In so doing, it raised and argued a comprehensive defence based on election and a multiplicity of other issues in opposition to Mitre 10's claim to be entitled to the benefit of the RFR Agreement. In addition to the extensive cross-examination and argument on behalf of Bunnings, it filed very extensive and detailed submissions. This was in marked contrast to the position taken by WHT, which was, as discussed further below, generally to support the Bunnings position. However, WHT sought to argue, at the same time, that it was simply awaiting a determination by the Court on which party, Mitre 10 or Bunnings, was entitled to purchase the Business upon resolution of Mitre 10's claimed rights under the RFR Agreement.[50]

41 In my opinion, it is not, in all the circumstances, an accurate or helpful characterisation of Mitre 10's position with respect to this claim against Bunnings to say that it was "abandoned". This implies that the basis of the claim ceased to be relevant to the proceedings and that work, and consequently costs, were thrown away by the party that would have been required to meet such a claim. For the reasons advanced by Mitre 10, I accept that following undertakings given by WHT and Bunnings on 13 January 2010, the "threat" was dealt with and the rights of the parties would be argued at the trial. Mitre 10 did not claim that Bunnings had consummated its threat. All that was necessary from Bunnings' perspective was to argue in support of its claimed rights at trial, which it did so very forcefully. I do not accept that Bunnings was prejudiced in relation to work and costs thrown away with respect to the threat allegation by Mitre 10, save to the extent that this was relevant to the application made by Mitre 10 on 24 December 2009 for an interlocutory injunction. Any prejudice in this respect has, however, been addressed separately.[51] For present purposes, I am of the opinion that the success or failure of Mitre 10 vis-à-vis Bunnings is to be determined on the basis of the matters of substance in dispute. These matters were raised in Bunnings' counterclaim, but Bunnings failed to establish. As a result, Mitre 10 is to be taken to have succeeded in these matters.

42 Mitre 10 was ordered to pay Bunnings' costs of the hearing of 24 December 2009, where interlocutory injunctive relief was sought from, and granted by, Davies J. Costs were otherwise reserved. Mitre 10 submitted that the basis upon which Bunnings sought costs was because it said the inclusion of Bunnings as a defendant was unnecessary, as the grant of the injunction sought against WHT was sufficient to address Mitre 10's concerns.

43 Mitre 10 sought recovery of costs paid to Bunnings with respect to the 24 December 2009 hearing on the following bases:[52]

"21. Mitre 10 seeks an order that Wallington indemnify it in respect of that costs order. The factors on which Mitre 10 relies in this regard are as follows-

1. a. It was reasonable for Mitre 10 to have joined Bunnings as a defendant based on its understanding of the facts at the time.[53] Before 24 December 2009, Mitre 10 did not have a copy of the BAA and otherwise was not aware of its terms. What Mitre 10 did know was that requests made of Bunnings by both Wallington and Mitre 10 that Bunnings consent to Mitre 10 being given a copy of the BAA had been refused.[54]
2. b. In light of Mitre 10 and Bunnings' relationship as competitors, it was unlikely that Bunnings would stand by idly when there was on foot proceedings that might impact upon its entitlements under the BAA. Indeed, Mitre 10's decision to include Bunnings as a defendant was vindicated by the manner in which the proceedings unfolded. From 13 January 2010 onwards Bunnings emerged as the driving force behind the issues to be determined on both Mitre 10's claim and Bunnings counterclaim.

1. c. Although purporting to stand back and abide by the Court's decision,[55] Wallington nevertheless endorsed Bunnings' position in relation to important matters. Notably, Wallington's counsel stated in his closing that 'Certainly we do contend that the letter of 1 December has legal effect beyond simply a statement of intention or a wish to buy on the terms set out in it. it does have a legal effect on the right of first refusal'.[56] This is consistent with Wallington's counsel's cross-examination of Mitre 10's CEO, Mr Burrowes;[57] that cross-examination primarily was directed to issues said by Bunnings to be relevant to the question of election, such as Mitre 10's understanding of its rights under the RFR Agreement, its belief in a need to respond to the 4 November 2009 email within 28 days, it intentions in providing the 1 December 2009 letter, and the availability of other options.

22. Although the reasonableness of joining Bunnings as a defendant is the basic factor in determining whether to make an order in the terms sought,[58] Mitre 10 submits that the Court also should have regard to the fact that the present dispute is largely of Wallington's making. Wallington, by attempting to summarise parts of the BAA and the Lease, adopted a course that was not open to it under the RFR Agreement;[59] that summary was, in any event, inaccurate. This was done because, as the Court observed, Wallington was faced with a dilemma of having burdened itself with what it considered to be conflicting contractual obligations.[60] On one view, the present proceedings were the almost inevitable result of Wallington adopting the course of action that it took."

44 WHT, on the other hand, submitted that it ought not to be ordered to pay Mitre 10's costs of the proceeding because there was no dispute between Mitre 10 and WHT that needed to be resolved by legal proceedings, and that subsequent to Mitre 10's letter of 4 December 2009, WHT never threatened to or intended to proceed with the sale. Rather, it says that the issues raised at trial arose from Bunnings' defence and counterclaim.[61]

45 Further, WHT submitted that it did not adopt Bunnings' pleadings or its submissions but, rather, that it was careful to confine its submissions to the issues of the proper construction of the RFR Agreement and whether Mitre 10 had elected to treat the "admittedly deficient" 4 November 2009 email as the commencement of the "option period". WHT submitted that these were issues raised in the counterclaim, and were relevant to Bunnings' allegation that the condition precedent in clause 4.1(g) of the BAA meant that, in substance, Mitre 10 had no further rights until the RFR Agreement had been satisfied. Further, WHT said that it had always accepted that clause 1.1 of the RFR Agreement required the provision of a copy of the BAA to Mitre 10 before clause 1.2 of the RFR Agreement operated. In other words, WHT said, the provision of the complete copy of the BAA triggered the beginning of the relevant period of notice. Additionally, WHT submitted that it never contended that clause 1.2 of the RFR Agreement had any operation independent of clause 1.1 of that Agreement, or that clause 1 was ambiguous.

46 In relation to Bunnings' counterclaim against WHT, WHT that its position, as set out in the letters preceding the commencement of the action, had been vindicated, and thus Bunnings' counterclaim against WHT as third defendant should be dismissed with costs.

47 Bunnings submitted that it should not be required to provide any indemnity to WHT in respect of any costs it is ordered to pay Mitre 10. In particular, Bunnings submitted that the dispute which led to the proceeding "essentially arose from WHT's failure to comply with the express obligations of the RFR Agreement; in particular, by WHT in its email of 4 November 2009, providing a mere summary of the 'Offer' (which was found to be inadequate and for which no satisfactory explanation for those inadequacies was given)[62] and in repeatedly refusing to provide a copy of the BAA up to and on 1 December 2009".[63]

48 Further, Bunnings submitted that, contrary to WHT's submission that its position was akin to a stakeholder which was entitled to certainty about which of Mitre 10 of Bunnings was entitled to purchase,[64] it did not simply take the position that it would abide any order of the Court save as to costs but, rather, took an active role in the litigation and defended the plaintiffs' claims throughout the entirety of the proceeding. In particular, Bunnings submitted that WHT's defence positively alleged that the plaintiffs were not ready, willing or able to purchase the Business on the same terms as those contained in the BAA and positively alleged the plaintiffs were not entitled to an injunction".[65] "WHT denied and then actively sought - and failed - to defend itself from a finding of breach of the RFR Agreement".[66] Additionally, Bunnings said that the submissions made on behalf of WHT were rejected in my previous judgment.[67]

49 For these reasons, Bunnings submitted that adverse costs orders against WHT in favour of Mitre 10 should not be visited upon Bunnings.

50 In relation to the costs of the counterclaim, Bunnings submitted that no order for costs should be made in favour of WHT against Bunnings on the counterclaim. Bunnings submitted that the pleadings and WHT's conduct at trial demonstrated that WHT took no issue with Bunnings and would simply abide the result. It was also submitted by Bunnings that my previous judgment confirms that the stance or role taken by WHT at trial was not merely passive, but substantially aligned with that taken by Bunnings.[68] Consequently, Bunnings submitted that WHT was not a wholly successful litigant, and thus, should not receive an award of its costs. Bunnings further submitted that the Court's broad discretion with respect to the award of costs should not be exercised in favour of WHT, having regard to its conduct, established at trial, in declining requests to provide Mitre 10 with a copy of the BAA and Bunnings with a copy of the RFR Agreement.

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.

52 In relation to Bunnings' counterclaim and WHT's position, I am of the view that the submissions advanced by Bunnings in this respect are correct and that no order for costs should be made in favour of WHT on the counterclaim. As indicated previously, I am of the view that WHT was not merely a passive party and, further, that its conduct with respect to its obligations under the RFR Agreement was most unsatisfactory, from the 4 November 2009 email to the resolution of its declining requests to provide Mitre 10 with a copy of the BAA. Additionally, the fact that WHT did not advise Mitre 10 at any relevant time that it would not proceed to complete the sale of the business to Bunnings under the BAA prior to the determination of Mitre 10's rights under the RFR Agreement is a very strong indication that it was not behaving as a mere "passive" party or "stakeholder". In light of all these circumstances, I am of the opinion that it is appropriate to order that both WHT and Bunnings bear the obligation to pay Mitre 10's costs.

53 WHT submitted that declaratory relief ought not be granted to Mitre 10 because the issue to which the declaratory relief was addressed, namely WHT's compliance with clause 1.1 of the RFR Agreement, was moot and that the grant of the declaratory relief would have no practical utility.

54 In support of its submissions, WHT made reference to Tilbury, Civil Remedies:[70]

"[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]

..."

55 Reference was also made to Wilcox v Kogarah Golf Club,[86] a case in which a declaration was sought that a resolution suspending Mr Wilcox's membership of the Club for one month was invalid; in circumstances where the suspension had been served. Young J said:[87]

"A person who seeks a declaration needs to show that the declaration is of utility at the time when the Court makes its order. There are some cases where the Court has granted a declaration after a suspension has been served if it can see that a real question is involved and the Court's decision will give some practical guidance. Thus in Merricks v Nott-Bower [1965] 1 QB 57 the police had been transferred in 1957 and in 1963 those police successfully sought declarations that their transfer was contrary to natural justice. That, however, is an exceptional situation and ordinarily the Court will hesitate to find that there is any utility in making a declaration particularly well after a period of suspension has been served."

56 The authorities and commentary relied upon by WHT do not, in my opinion, support its position. Instead, they indicate very clearly that the grant of declaratory relief is discretionary and, in the words of Lord Radcliffe in Ibeneweka v Egbuna,[88] "ought not to be issued unless there are circumstances that call for their making". In the present circumstances, real controversy and dispute arose between Mitre 10, as plaintiff, and WHT and Bunnings, as defendants, as to Mitre 10's rights under the RFR Agreement. WHT concluded its case with an assurance that it would abide the order of the Court as to the purchase of the business.[89] As indicated previously, this position has obviated the need for Mitre 10 to pursue its claim for injunctive relief,[90] but it has not, in my opinion, obviated the need for an order of the Court as to entitlements in this respect. This is quite a different situation and one which affects existing rights, as distinct from the issues arising with respect to the past rights in Wilcox v Kogarah Golf Club.[91] The declaratory order in the form now sought by Mitre 10 addresses the entitlement of the parties with respect to the purchase of the business in the present circumstances, on the basis of the findings made in my previous judgment. It is, in the present context, the substantive relief sought in this respect which has the effect of a declaration of right affecting all parties. For those reasons it is, in my opinion, appropriate that declaratory relief be granted in the form now sought. It is also, in my opinion, appropriate that an order be made, formally, that judgment be entered for Mitre 10 on the basis of this declaration of right.[92]

57 For these reasons, I will make the following orders:

The first defendant first complied with its notice obligations under sub-clause 1.1 of the Right of First Refusal Agreement dated 26 March 1991, with respect to the sale proposed by the Business Acquisition Agreement dated 30 October 2009, by its letter dated 5 January 2010.

1. Subject to paragraphs 5 and 6, the defendants pay the plaintiffs' costs of the proceeding, including reserved costs, on a party and party basis.
2. Subject to paragraphs 5 and 6, the second defendant pay the plaintiffs' costs of the counterclaim, including reserved costs, on a party and party basis.
3. The plaintiffs pay the second defendant's costs of the application for interlocutory injunctive relief made on 24 December 2009 before Davies J.
4. The first defendant indemnify the plaintiffs with respect to their liability for the second defendant's costs pursuant to paragraph 5.

58 Bunnings stated in its submissions that it would appeal these orders, and sought further orders that would preserve the status quo so that it could seek to obtain corresponding relief from the Court of Appeal pending an appeal. At the conclusion of the hearing on 23 April 2010, the plaintiffs and the first defendant gave undertakings to the Court which preserve the status quo as sought by Bunnings. Thus, no further orders are necessary.

[1] [2010] VSC 95; which is referred to as "my previous judgment".

[2] See Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [102].

[3] See transcript pp 218-219 (Mr Northrop); and see the passage set out at Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [103].

[4] See above, paragraph 3, referring to Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [103].

[6] See Knight v F.P. Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178.

[7] [1998] HCA 11; (1998) 193 CLR 72 at 97-8.

[8] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 per Mason CJ, at 562-563 per Toohey J, at 566-567 per McHugh J; Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 at 410 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ.

[13] The number and categories of documents are set out in the Amended Statement of Orders dated 28 February 2010 and a letter from Lander & Rogers, solicitors for Bunnings, dated 25 February 2010.

[14] Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [87].

[15] [2005] VSCA 298; (2005) 13 VR 435.

[16] See Tenth Vandy v Natwest Markets (No. 2) [2010] VSC 70, referring to s 24(1) of the Supreme Court Act 1986 and order 63 of the Supreme Court (Civil Procedure) Rules 2005.

[17] See Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) (2005) 13 VR 436; Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 13) [2007] VSC 516 per Byrne J at [13]; and also Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2005] NSWSC 481 per McDougall J at [30].

[18] See, for example, Fried v National Australia Bank Ltd [2001] FCA 1280 per Gray J at [17].

[19] See also Aljade & MKIC v OCBC [2004] VSC 351 per Redlich J at [87].

[20] Refer to the affidavit of Anthony Watson dated 23 December 2009; see also paragraph 5 of the affidavit of David Attrill dated 19 February 2010 [CB 792] and paragraph 13 of Bunnings' Amended Defence and Counterclaim in relation to the RFR Agreement.

[21] Refer to exhibits JDW-3, JDW-5 and JDW-7 to the affidavit of John Webb dated 8 January 2010 [CB 599-610]; see also paragraph 8A of Wallington's defence.

[22] See, for example, Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 13) [2007] VSC 516 per Byrne J at [14].

[23] (2005) 13 VR 436.

[24] Second defendant's outline of submissions, paragraph 20.

[25] In fact Mitre 10's discovery was not completed until the last business day before trial.

[26] Berrigan Shire Council v Ballerini (No. 2) [2006] VSCA 65 at [15] and [38].

[27] Berrigan Shire Council v Ballerini (No. 2) [2006] VSCA 65 at [17] per Callaway JA; Chernov JA agreeing at [20]; Nettle JA at [38]-[39].

[28] [2005] VSCA 298; (2005) 13 VR 435 at 443 [30].

[31] [2006] VSCA 65 at [15] and [38].

[32] The Commission's further submissions dated 6th February 2006 interpret that to mean its own costs to that time.

[33] Berrigan Shire Council v Ballerini (No. 2) [2006] VSCA 65 at [17] (with which Chernov JA at [20] and Nettle JA at [38] and [39] agreed); see also Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) [2005] VSCA 298; (2005) 13 VR 435 at 433, [30].

[34] [2009] VSC 585.

[35] [2009] VSC 585 at [83].

[36] Peet Limited v Richmond [2010] VSCA 71.

[37] Second defendant's outline of submissions, [13]-[15].

[38] ASIC v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194 and Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia: Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622.

[40] CB 9: Particulars to paragraph 14 of the statement of claim.

[41] Short v City Bank of Sydney [1912] HCA 54; (1912) 15 CLR 148 at 160 per Isaacs J.

[42] Sanders v Snell (1998) 196 CLR 329 at [22] per Gleeson CJ, Gaudron, Kirby and Hayne JJ.

[43] See Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 at [177] (Court of Appeal).

[44] Under cover of the letter dated 17 December 2009 from Middletons to Bunnings: exhibit ABW-11 (CB 97-98).

[45] See cl. 4.1 - 4.2 BAA at CB 716-717.

[46] See Peet, supra [2010] VSCA 71 at [12] per Nettle JA, Neave JA agreeing at [42].

[47] See paragraphs 15 and 16 of the Mitre 10 submissions, referring as to the reality of the Bunnings threat to, for example, exhibit JDW-6 to the affidavit of John Webb dated 8 January 2010 [CB 606-607].

[48] Plaintiffs' outline of submissions as to orders and costs, [18] and [19].

[49] See Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [16] to [20].

[52] Plaintiff's outline of submissions as to orders and costs, [21] to [22].

[53] See, for example, Altamura v Victorian Railways Commissioners [1974] VicRp 4; [1974] VR 33.

[54] See, for example, paragraph 8 and 9 of the affidavit of John Gillam dated 26 February 2010 [CB 811]; the correspondence set out at exhibits ABW-9 to ABW-16 to the affidavit of Anthony Watson dated 23 December 2009.

[55] See paragraphs 5 and 6 of Wallington's written submissions and transcript at p 218.

[57] Transcript, pp 66-85. Also see pp 68, 73, 76-81.

[58] Besterman v British Motor Cab Company Ltd [1914] 3 KB 181.

[59] See paragraph [53] of his Honour's reasons.

[60] See paragraph [66] of his Honour's reasons.

[61] Referring to the issues raised by Bunnings as summarised in Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [24].

[62] Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [67]; see also [69] to [72].

[63] See second defendant's outline of submission, [26].

[65] Defence of WHT at [11A] and [11B].

[66] Second defendant's outline of submissions [29].

[67] Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [35], [45], [76], [83]-[84], [89]-[91] and [95].

[68] Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [34], [35], [45], [76], [84], [85], [88], [89], [91] and [95].

[70] Vol 1, (1990, Butterworths), 349-51.

[71] Esp Hanson v Radcliffe UDC [1992] 2 Ch 490, 507 per Lord Sterndale MR; Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421, 435. See also Slee v Warke [1949] HCA 57; (1949) 86 CLR 271, 279.

[72] [1964] 1 WLR 219, 224-5. See also esp Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421; Sutherland SC v Leyendekkers (1970) 91 WN (NSW) 250; Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corp [1977] 1 NSWLR 43.

[73] Id ("The question must be a real and not a theoretical question ..."); University of NSW v Moorhouse [1975] HCA 26; (1975) 133 CLR 1; Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297, 305 per Barwick CJ.

[74] I Zamir, The Declaratory Judgment (Stevens, 1962) pp 50-67. Cf AH Hudson, "Declaratory Judgments in Theoretical Cases: The Reality of the Dispute" (1977) 3 Dalhousie LJ 706.

[75] Egs Hume v Monro (No 2) [1943] HCA 7; (1943) 67 CLR 461; University of NSW v Moorhouse [1975] HCA 26; (1975) 133 CLR 1; AMP Fire and General Insurance CO Ltd v Dixon [1982] VicRp 83; [1982] VR 833; Re McKenzie [1974] Qd R 171.

[76] Eg Australian Boot Trade Employees' Federation v Commonwealth [1954] HCA 9; (1954) 90 CLR 24.

[77] Eg Swift Aust Co (Pty) Ltd v South British Insurance Co [1970] VicRp 47; [1970] VR 368.

[78] Egs Howard v Pickford Tool Co Ltd [1951] 1 KB 417, esp 421 per Asquith LJ; DC Wagemaker & Sons Pty Ltd v Commonwealth Development Bank of Aust (1970) 91 WN (NSW) 617.

[79] Consider In Re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257 (advisory opinions not within judicial power of the Commonwealth). Major considerations are the ripeness of the dispute and the difficulty of now formulating an order which will not hereafter prejudice the parties or third parties: cf [6044].

[80] See The Trustees of the Church Property of the Diocese of Newcastle v Ebbeck [1960] HCA 88; (1960) 104 CLR 394, 400-1 per Dixon CJ; Re O'Sullivan [1969] Qd R 516; Ku-ring-gai MC v Suburban Centres Pty Ltd [1971] 2 NSWLR 335 (future rights). Thorne v Motor Trade Association [1937] AC 797, a "friendly" proceeding, is the classic case, which Zamir, op cit n 23, treats as exceptional, but, once it is realised that the issue does not go to "jurisdiction", there is no need so to regard it. See also BMI Ltd v Federated Clerks Union of Aust (1983) 51 ALR 401, 413-4; Lissenden v Yorkville Nominees Pty Ltd (in liq) [1984] 3 NSWLR 138, 140.

[81] Forbes v NSW Trotting Club Ltd [1979] HCA 27; (1979) 143 CLR 242, 281; Parkes Rural Distribution Pty Ltd v Glasson (1986) 7 NSWLR 332.

[82] Integrated Lighting & Ceilings Pty Ltd v Philips Electrical Pty Ltd (1969) 90 WN (Pt 1) (NSW) 693, 702.

[83] See esp Rivers v Bondi Junction-Waverley RSL Sub-Branch Ltd (1986) 5 NSWLR 362.

[84] Esp Neeta (Epping) Pty Ltd v Philips [1974] HCA 18; (1974) 131 CLR 286. And see Meagher et al para 1924, and authorities there cited. Consider also HA Warner Pty Ltd v Williams [1946] HCA 45; (1946) 73 CLR 421, 427 per Starke J; McCoist v Daly [1948] QWN 24.

[85] Consider Webster v Southwark LBC [1983] QB 698, 708.

[86] (1996) 14 ACLC 421 (SC (NSW); Young J; 23 November 1995).

[87] (1996) 14 ACLC 421 at 424.

[88] [1964] 1 WLR 219 at 224-5; set out above, paragraph 54.

[89] See Southern Region Ltd v Wallington Hardware & Timber Pty Ltd [2010] VSC 95 at [103].

[91] (1996) 14 ACLC 421.

[92] See, generally, Seton's Judgments and Orders (7th ed., 1912) Sweet and Maxwell, 163-5.