MLW Technology Pty Ltd v May [2003] VSC 293 | Case summary

Supreme Court of Victoria|2003-07-29|Before: Byrne J

Costs - where nominal damages only are obtained by the plaintiff - where defendants' defences and counterclaims substantially failed.

This was a claim in which the plaintiff sought a substantial sum of money in the form of a specific performance of a clause in an agreement whereby Mr May, the defendant, in effect warranted the value of certain shares on the anniversary date of the agreement.

Under the agreement, provision was made in the event that the shares would not achieve the warranted value, that the plaintiff might either sell the shares or give Mr May notice requiring him to re-purchase the shares at the warranted price. The case as it was commenced and, to a large extent, conducted, was for specific performance of the second alternative course available to the plaintiff.

The defendant took a number of defences, some by way of defence and some by way of counterclaim, with a view to persuading the court that the agreement was either not enforceable or on its proper construction inapplicable, or in the case of the counterclaim, for various reasons the agreement had been determined for repudiation or breach by the licensee.

Mr Robins for the plaintiff observed correctly that Mr May's defences and counterclaims substantially failed. He did succeed however on a plea which said in effect that the notice was bad, and the apparent success of that plea emerged fairly late in the trial. The plaintiff in these circumstances shifted its ground and sought damages. In the event after a trial which I understand took some seven days, the plaintiff succeeded in obtaining a finding that the defences were bad, that the agreement was effective and that it was entitled to such damages as should be appropriate.

Following the matter being re-listed for further argument as to damages, it appeared that the measure of damages was that of nominal damages only, and accordingly judgment for $5 has been given against Mr May.

In the circumstances of this case the case should be treated as was mentioned in Anglo-Cyprian Trade Agencies Limited v Paphos Wine Industries Limited[1] as being for practical purposes a win for the plaintiff, but a win which should not be treated as entitling the plaintiff to costs. His Lordship held that in circumstances in a case such as the present where the claim in truth was for a substantial sum of money, the plaintiff who has succeeded for nominal damages only, should not be regarded as successful for the purposes of costs order.

Counsel for the plaintiff said the issues should be severed in the sense that I should appropriate a portion of the costs for the part of the case in which his client was successful. Again this is a practice which is not readily adopted, and to my mind this is not a case where it is appropriate. The defence which was successful was the one among a bundle of defences which were run, and in order to succeed the plaintiff had to overcome all of them, and this it did not do. It was forced therefore to fall back on its alternative position.

So far as the second basis of affecting the ordinary order for costs is concerned, it was suggested that many of the defences were of such a kind that a court should in effect make a punitive order for costs against a defendant for raising them and wasting the court's time. Accepting that the defences were unsuccessful, I do not think that they should be castigated in such a way. It seems to me that they were defences which should not take the position at this stage should not have been raised.

In the circumstances it seems to me that the ordinary course should follow, so that the defendant should have its costs. The costs of the claim and of the counterclaim were all intertwined and there seems little point in trying to disentangle them. Accordingly the order so far as costs are concerned will be that the plaintiff pay the costs of the first defendant, Mr May, of the claim and of the counterclaim, including reserved costs.

MLW Technology Pty Ltd v May