ACN 007 212 885 Pty Ltd (in liq) v Heritage Glass Joint Venture Pty Ltd
[2006] VSC 79
•10 March 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8128 of 2005
| ACN 007 212 885 PTY LTD (IN LIQUIDATION) | Plaintiff |
| v | |
| HERITAGE GLASS JOINT VENTURE PTY LTD (ACN 060 568 765) | Defendant |
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JUDGE: | COLDREY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 2 MARCH 2006 | |
DATE OF JUDGMENT: | 10 MARCH 2006 | |
CASE MAY BE CITED AS: | ACN 007 212 885 PTY LTD (IN LIQ.) v HERITAGE GLASS JOINT VENTURE PTY LTD | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 79 | |
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APPEAL FROM MASTER – Security for costs – Quantum fixed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | D. Christie | Mills Oakley Lawyers |
| For the Defendant | C. Northrop | Scammell Black Mileo |
HIS HONOUR:
This is an appeal from an order by Master Efthim of 13 February 2006 in which he ordered security for costs in the above action in the sum of $70,000 up to and including mediation. In that proceeding, and before this Court, the plaintiff conceded that an order for security for costs was appropriate in the circumstances. However, the defendant, being dissatisfied with the quantum of costs ordered by the Master, and his method of arriving at that sum, has launched this appeal. It proceeds, of course, as a hearing de novo, and the plaintiff has availed itself of the opportunity of arguing that a lesser amount is appropriate.
In the course of submissions various authorities setting out the relevant applicable principles were cited by counsel. These included Farmitalia Carlo Erba SRL v Delta West Pty Ltd[1], a decision of Heerey J; and decisions of Byrne J in Premier Building and Consulting Pty Ltd v Spotless Group Ltd (Nos. 5 and 7)[2]. I see no need to regurgitate what was stated in those cases.
[1]28 IPR 336
[2][2002] VSC 19 and [2005] VSC 275 respectively
There will always be an element of speculation in fixing an amount of security for costs. It is an art rather than a science. This proposition is exemplified by the conflicting figures presented in the affidavit material. Moreover, a Judge is not likely to have the expertise of a Master familiar with costing. Nonetheless, the matter having been appealed, it is necessary for a determination to be made.
The statement of claim in this matter reveals an action for the relatively modest sum of $234,494 for works performed, and material supplied, by the plaintiff. By its defence, the defendant seeks to set off amounts in excess of this sum, which would extinguish the plaintiff's claim.
A perusal of the defence filed indicates allegations that works and services performed by the plaintiff were defective. Two projects involving the MCG and Exhibition Street are the subject of these claims. In each case a number of discrete failures are particularised.
Against this background I turn to the affidavit material.
The defendant relies upon the opinion of a Mr Mark Mileo who, I note, is a principal in the firm of solicitors acting for the defendant. His opinion is to the effect that the litigation will involve the examination of 7,000 plans and drawings and 112 lever arch folders of documents. In advancing this opinion Mr Mileo apparently relies upon the instructions of the defendant.
Mr Graeme Arnold, a solicitor practising in the field of legal costing, supports Mr Mileo's view based upon this information.
On the other hand, Ms Louise Gehrig, a solicitor employed by the firm acting for the plaintiff, disputes the figures proffered on behalf of the defendant. Whilst she has practised as a solicitor for a lesser period than the previous deponents, unlike them, she swears to having conducted large scale litigation in building disputes.
On my assessment of the material before the Court, it is inconceivable that 7,000 plans and some 28,000 pages in the lever arch folders would require examination. On the contrary, I would expect the documentation relating to the discrete allegations to be relatively easily identified. On this matter I regard the opinion of Ms Gehrig as the most realistic. Further, in approaching my task, I bear steadily in mind that it does not involve that of a Taxing Master to a bill of costs but the calculation of an objectively fair amount to protect the successful litigant against the risk that an order for party and party costs may not be satisfied.
Certain of the costs claimed are not in dispute; namely costs to date and costs of mediation ($4,943.20 and $5,702.60 respectively). Of those in dispute, I am not persuaded that all of them should be taken into account at this time. Into that category I place the Grocon subpoena and interrogatories and answers thereto.
Of the other matters in dispute being items 7, 8, 9 and 11, on the schedule prepared by the defendant (which I attach to this judgment) I am not satisfied that the defendant has made out its claim as to the extent of the work required although I am prepared, where relevant, to make the calculations on a per folio rather than a time costed basis. Accordingly, I allow $44,000 for item 7, $8,000 for item 8, and $8,000 for item 9 – in each case approximately one third of the amount sought. I fix item 11 at $3,000 taking the estimate of Ms Gehrig of 1,000 pages as the starting point.
I am not persuaded on the material before me that a forensic accountant is a necessary witness in this case. It follows that I would not allow any amount claimed in items 15 and 17 for that purpose.
On my calculations the total amount would therefore be $87,645.80.
In all the circumstances I would discount that amount by 20% giving a total of $70,116.64, which I would round off to $70,000.
Accordingly, the amount which the plaintiff must provide as security for the defendant's costs of the proceedings, calculated up to the conclusion of mediation, is $70,000.
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