Bullhead Pty Ltd v Brickmakers Place Pty Ltd - [2018] VSCA 50

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2017 0096

BULLHEAD PTY LTD	Applicant
V
BRICKMAKERS PLACE PTY LTD & ORS	Respondents

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JUDGES:	KYROU and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5 March 2018
DATE OF JUDGMENT:	5 March 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 50
JUDGMENT APPEALED FROM:	Bullhead Pty Ltd v Brickmakers Place Pty Ltd [2017] VSC 206 (Sifris J) Bullhead Pty Ltd v Brickmakers Place Pty Ltd [No 2] [2017] VSC 323 (Sifris J)

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PRACTICE AND PROCEDURE – Application by respondents for security for costs of appeal – Where applicant impecunious – Where persons benefiting from applicant’s success on appeal not liable for costs – Inappropriate to determine whether applicant’s impecuniosity related to conduct of respondents – Order for security would not stultify appeal – Security granted in form of personal undertaking secured by charge over real property – Security granted for past and future costs – Rule 64.38 Supreme Court (General Civil Procedure) Rules 2015.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr W T Houghton QC with Mr D K R Kinsey	DLA Piper
For the Second to Twelfth Respondents	Mr M Wise SC	K & L Gates

KYROU JA
NIALL JA:

On 22 December 2017, the second to twelfth respondents (‘respondents’) applied to this Court for an order for security for costs in respect of the applicant’s application for leave to appeal from two decisions of a judge of the Trial Division.

The respondents have sought orders that the applicant give security in the sum of $150,468.18, failing which the application for leave to appeal (and, if leave is granted, the appeal) be dismissed or, alternatively, stayed until the security is given.

Overview of the proceeding at first instance

The proceeding before the primary judge concerned the development of residential property in Essendon by the Brickmakers Place Unit Trust (‘the Unit Trust’). The land and proposed development were the only assets of the Unit Trust.

The trustee of the Unit Trust was the first respondent, Brickmakers Place Pty Ltd.[1] The applicant (plaintiff below) was a unitholder in the Unit Trust. The second to sixth respondents were unitholders in the Unit Trust. The seventh to twelfth respondents were directors of one of the second to sixth respondents.
[1]The trustee was placed into administration on 15 January 2015.

The applicant was not a unitholder at the time of the establishment of the Unit Trust. By deed executed on or about 14 March 2008, the applicant acquired 600,000 units in the Unit Trust at a cost of $600,000. On the same day, the trustee of the Unit Trust resolved to issue to each of the initial unitholders 600,000 units on payment of $65,000 each. The initial unitholders were therefore effectively issued with units priced at around $0.11, representing a discount to the price paid by the applicant.

The applicant alleged that the issue of the discounted units to the initial unitholders was in breach of the terms of the Unit Trust Deed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSCA 50
Decision Date: 5 March 2018

CaseChat Overview and Summary

Bullhead Pty Ltd applied for leave to appeal against a decision of the Supreme Court, with Brickmakers Place Pty Ltd responding by seeking security for the costs of the appeal. The applicants, Bullhead, sought to appeal from an order of the Supreme Court that dismissed their claim for relief under the Building and Construction Industry Security of Payment Act 2002. The applicants were deemed impecunious, and the respondents argued that the persons who would benefit from a successful appeal were not liable to contribute to the costs. The applicants opposed the application on the grounds that there was no evidence that their impecuniosity was related to the conduct of the respondents. The court had to determine whether it was appropriate to order security for costs and, if so, the form and amount of security.

The court held that it was appropriate to determine the application for security for costs of appeal. The court found that the applicants were impecunious and that the persons who would benefit from a successful appeal were not liable to contribute to the costs. The court found that it was not necessary to determine whether the applicants' impecuniosity was related to the conduct of the respondents. The court held that an order for security would not stultify the appeal, as the applicants had a real prospect of success and there were no other factors that would make it unjust to order security. The court ordered that security be granted in the form of a personal undertaking secured by a charge over real property. The security was to cover both past and future costs.

The court granted the respondents' application for security for costs of appeal. The security was to be in the form of a personal undertaking secured by a charge over real property, and it was to cover both past and future costs. The court held that the applicants were impecunious and that the persons who would benefit from a successful appeal were not liable to contribute to the costs. The court found that it was appropriate to order security for costs of appeal, and that an order for security would not stultify the appeal. The court ordered that the applicants provide security for the costs of the appeal within 14 days of the date of the judgment. The respondents were ordered to pay the applicants' costs of the application for security for costs.

Orders