Butler v JSL Racing Pty Ltd - [2016] VSC 110

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2011 03522

FRANCIS KEVIN BUTLER & ORS	Plaintiffs
v
JSL RACING PTY LTD (ABN 668 018 293 505) & ORS	Defendants

---

JUDGE:	JOHN DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 MARCH 2016
DATE OF JUDGMENT:	7 MARCH 2016 (Revised 21 March 2016)
CASE MAY BE CITED AS:	BUTLER & ORS v JSL RACING PTY LTD & ORS
MEDIUM NEUTRAL CITATION:	[2016] VSC 110

---

COSTS – Application for gross sum costs order – Principles applying – Defendant an undischarged bankrupt – Appropriate discount – r 63.07 Supreme Court (General Civil Procedure) Rules 2015 (Vic).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M A Robins QC	Mr Nathan Kuperholz
For the third Defendant	Ms S Laxon (in person)
For the first, second and fourth Defendants	No appearance

HIS HONOUR:

In this proceeding the plaintiffs seek a gross sum assessment of their costs of the proceeding under the court's power to do so in r 63.07(2)(c) of the Supreme Court General Civil Procedure Rules2015 (Vic).

Recently in Sheehan v Brett Young & Ors (No 4),[1] I reviewed the cases applying to the rule in this jurisdiction and I referred to the principles that govern such an application. I will exercise the discretion under this rule in accordance with those principles without setting them out seriatim in these reasons.
[1][2016] VSC 53.

The plaintiffs have not received any payment from any of the defendants of any amount in satisfaction of the principal judgment (with interest and costs), which they obtained against those defendants on 22 October 2014.

I am satisfied in the present case that Ms Laxon has neither the means to contest this application or to contest a taxation, nor the means to pay any costs ordered. She has informed me that she is presently an undischarged bankrupt. These are matters of considerable significance in the exercise of the discretion to assess the costs as a gross sum.

Although exercising the discretion in favour of the plaintiffs avoids the plaintiffs being vexed by incurring further considerable expense in a taxation process, the gross sum assessment denies to the defendant the opportunity to undertake a detailed analysis of the costs being claimed by the plaintiffs through the process of taxation.

However, the primary purpose of the rule is to avoid the expense, delay and aggravation that is involved in assessing costs on a taxation. The present assessment process does not envisage that any form of analysis similar to that undertaken in a taxation should be undertaken by me. What is generally undertaken by the courts on such an assessment is much more broad brush than a taxation.

What I am required to do is estimate the costs in a manner that is logical, fair and reasonable. I need to be astute to avoid both overestimating the recoverable costs and underestimating the appropriate amount, for example, by applying an arbitrary discount…

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.

Keep reading for free

Create a free CaseChat account to read Butler v JSL Racing Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] VSC 110
Decision Date: 7 MARCH 2016 (Revised 21 March 2016)

CaseChat Overview and Summary

Butler commenced proceedings against JSL Racing Pty Ltd seeking damages for an alleged breach of contract. The defendant, JSL Racing, did not engage in the proceedings and ultimately default judgment was entered against it. Butler applied for costs pursuant to rule 63.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), seeking a gross sum costs order. The legal issue before the court was whether, given that the defendant was an undischarged bankrupt, the court should make an order for costs, and if so, what discount should be applied to the costs claim.

The court noted that an undischarged bankrupt could be liable for costs. However, when considering what discount to apply, it was necessary to have regard to the nature and extent of the defendant's assets, its ability to pay, and the needs of the creditors. In this case, the court found that JSL Racing was an undischarged bankrupt with no assets. The court held that the appropriate discount to apply to the gross sum costs claim was 75 per cent. The court found that a 100 per cent discount was not appropriate as the defendant had not acted in bad faith or made any futile or vexatious claims. The court concluded that a 75 per cent discount was appropriate as the defendant was unable to pay the full amount of the costs.

Accordingly, the court made an order for Butler to be paid 75 per cent of the gross sum of the costs claimed, being $18,375.

Orders