Australian Funding Partners Limited (ACN 167 628 597) v Wendy Dianne Botsman

[2019] VSCA 1

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0120

AUSTRALIAN FUNDING PARTNERS LIMITED (ACN 167 628 597)	Applicant
v
WENDY DIANNE BOTSMAN	Respondent

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JUDGES:	WHELAN and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	Determined on the papers
DATE OF JUDGMENT:	14 January 2019
MEDIUM NEUTRAL CITATION:	[2019] VSCA 1
JUDGMENT APPEALED FROM:	Australian Funding Partners Ltd v Botsman [2018] VSC 303 (Robson J)

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APPEAL – Application for leave to appeal – Applicant claimed institution of application for leave to appeal by respondent in separate proceeding constituted breach of funding agreement – Respondent successful in the separate proceeding – Application dismissed by consent.

COSTS – Whether applicant ‘surrendered’ in recognition that application was bound to fail or whether proposed appeal had been rendered futile by supervening events – Proposed appeal rendered futile – No order as to costs – Re Minister for Immigration and Ethnic Affairs (Cth); Ex parte Lai Qin (1997) 186 CLR 622, Hunter Development Corp v Save Our Rail NSW Inc [No 2] (2016) NSWLR 704 applied.

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APPEARANCES:	Counsel	Solicitors
No appearances

WHELAN JA
NIALL JA:

1. In December 2012 a group proceeding was commenced in this Court against the directors of Banksia Securities Ltd, its auditors, and the trustee for its debenture holders.  The respondent, Mrs Botsman, was one of the group members.  Mrs Botsman entered into a litigation funding agreement (‘the funding agreement’) with the applicant, Australian Funding Partners Limited (‘AFPL’). 

1. A settlement agreement in relation to the group proceeding was entered into and on 30 January 2018 a judge in the trial division made orders approving that settlement.[1]  Mrs Botsman then filed an application in this Court seeking leave to appeal from those orders.  On 1 November 2018 this Court delivered judgment on Mrs Botsman’s application for leave to appeal and on that appeal.[2]  Mrs Botsman was substantially successful.  In a judgment on 17 December 2018 Mrs Botsman obtained costs orders in her favour.[3] 

   [1][2018] VSC 47.

   [2][2018] VSCA 278.

   [3][2018] VSCA 348.

1. Prior to the determination of Mrs Botsman’s application for leave to appeal, AFPL issued this proceeding alleging that the institution of Mrs Botsman’s application for leave to appeal constituted a breach of the funding agreement and seeking a mandatory injunction restraining her from seeking leave to appeal.  In the alternative, AFPL sought damages.  AFPL’s claim against Mrs Botsman was dismissed by Robson J in the trial division on 7 June 2018.[4]

   [4][2018] VSC 303.

1. On 3 October 2018 AFPL applied for leave to appeal from Robson J’s judgment.  On 6 November 2018 Mrs Botsman filed her written case, together with a notice of contention. 

1. The Court arranged for AFPL’s application for leave to appeal from Robson J’s judgment to be listed for mention on 11 December 2018 as it seemed possible that the further prosecution of that application for leave to appeal had been rendered futile by this Court’s judgment on 1 November 2018.  At that hearing counsel for AFPL did not concede that the application for leave to appeal had been rendered futile as, it was submitted, the damages claim could still be pursued should the appeal from the judgment of Robson J be successful.  The Court raised with counsel for AFPL potential problems with that damages claim and then directed AFPL to file and serve a statement of loss and damage on or before 4.00 pm on 18 December 2018.  Further directions for the hearing of the application for leave to appeal were also made. 

1. By a letter and an email on 13 and 14 December 2018 the solicitors for AFPL advised the Registry and Mrs Botsman that, having considered the matters raised in the hearing on 11 December 2018, they had been instructed to seek orders for the dismissal of the application for leave to appeal with no order as to costs.  In a further email that day to counsel for Mrs Botsman, copied to the Registry, the solicitors for AFPL submitted that the proper exercise of the costs discretion in the circumstances was to make no order as to costs.  They relied in that respect upon Re Minister for Immigration and Ethnic Affairs (Cth); Ex parte Lai Qin[5] and Hunter Development Corp v Save Our Rail NSW Inc [No 2].[6]

   [5](1997) 186 CLR 622, 625.

   [6](2016) 93 NSWLR 704, 719–20 [74]–[79] (‘Hunter Development’).

1. Counsel for Mrs Botsman advised the Registry that Mrs Botsman consented to an order dismissing the application for leave to appeal but submitted that there should be an order for costs in her favour.  He advised that a written submission on behalf of Mrs Botsman would be forwarded and requested that the issue of costs be determined ‘on the papers’.  The solicitors for AFPL agreed with that course.  The written submission then sent to the Registry on behalf of Mrs Botsman contended, also relying upon Hunter Development, that this was not a position where events had rendered the proposed appeal futile but rather was a case where one party had ‘surrendered’ in recognition that the application was bound to fail. 

1. In our opinion AFPL has not consented to an order dismissing the application for leave to appeal in recognition that it was bound to fail on the substantive issue raised by the application and proposed appeal.  AFPL does not concede that Mrs Botsman was not in breach of the funding agreement by instituting her application for leave to appeal.  The position is, however, that it is pointless to further pursue that matter because her application for leave to appeal and her appeal have now been heard and determined.  Accordingly, in our opinion, this is a matter where further prosecution of AFPL’s application for leave to appeal has been rendered futile, rather than a position where AFPL has in effect ‘surrendered’. 

1. It is true, as Mrs Botsman also submitted, that AFPL’s recognition of the futility of continuing with its application for leave to appeal was somewhat belated.  Costs have been incurred by Mrs Botsman between the judgment on 1 November 2018 and AFPL’s recognition that its application had become futile.  In our opinion, however, AFPL’s delay has not been significant.  It recognised the futility of continuing with the application very soon after the issue was squarely raised.  Parties should be encouraged to adopt that course. 

1. The application for leave to appeal will be dismissed by consent.  There will be no order as to costs.