Carbon Black Lab Pty Ltd v Launer
[2015] VSCA 46
•23 March 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0144
| CARBON BLACK LAB PTY LTD (ACN 140 192 730) |
| v |
| DARRYL LAUNER |
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| JUDGES: | WHELAN and FERGUSON JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 23 March 2015 |
| DATE OF JUDGMENT: | 23 March 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 46 |
| JUDGMENT APPEALED FROM: | Unreported, Supreme Court of Victoria, 6 November 2014 (Digby J) |
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SECURITY FOR COSTS – Application for further security – Delay.
COSTS – Unjustified failure to suggest alternative amount until hearing.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J Kohn | Noble Lawyers |
| For the Respondent | Mr A Herskope | Fitzpatrick Legal |
WHELAN JA
FERGUSON JA:
By an application filed 24 February 2015, the respondent in the application for leave to appeal, Mr Launer, seeks additional security for costs from the applicant (‘Carbon Black’). The amount sought is $42,166.37.
On 28 November 2014, this Court made a number of orders, including an order by consent that Carbon Black provide security for Mr Launer’s costs on the application for leave to appeal in the sum of $28,584.40. The costs of that security application were reserved.
The Court also made directions as to the filing of written cases which we were told today had been complied with. In addition, the matter was referred to mediation. The mediation was held in December 2014. Unfortunately, that mediation was unsuccessful. The suggestion that the matter should be sent to mediation emanated from the Court itself. The parties acquiesced in that suggestion, having obtained instructions.
It is necessary to briefly outline the basis of the security order that was made before turning to this application.
The initial request for security was made by a letter from Mr Launer’s then solicitors, Kalus Kenny, to the solicitors for Carbon Black on 7 November 2014. What was sought then was the sum of $38,700 upon the basis that that amount would cover the entire proceeding, including an appeal hearing.
When formal application was made by an application filed 19 November 2014, the amount sought was $25,913.40. It was clear from the calculation of that amount, as set out in the affidavit of Michael Jonathan Kenny sworn 25 November 2014, that it did not include any allowance for the hearing of the application for leave to appeal or the appeal if leave were granted. It was also clear that the amount sought covered the preparation of the written case and the preparation of a response to the written case of Carbon Black. Carbon Black agreed to provide the security sought.
There was an issue between the parties as to whether an additional sum of $10,000 should be added to the amount sought in order to provide security for the costs of a stay application. That was eventually resolved on the basis that an additional sum of $2,671 would be added. Thus, by 25 November 2014, the parties had agreed that a security for costs order in the sum of $28,584.40 would be made. That order was duly made on 28 November 2014 by consent.
In addition to the other orders made that day, an order was made that the application for leave to appeal and any appeal be listed at the same time. A hearing date has since been given for the application for leave to appeal and any appeal if leave be granted. The date is 7 May 2015.
Mr Launer changed solicitors in mid‑January 2015 and, on 19 January 2015, his new solicitor sent an email to Carbon Black’s solicitor foreshadowing an application for further security. By a letter of 9 February 2015, Mr Launer’s new solicitors set out the calculation of the additional security they sought, which was the sum of $42,166.37.
Before this Court Carbon Black resisted any further order for security on the basis that Mr Launer had been guilty of delay in making the application. In that respect his counsel relied upon the decision of this Court in Rolfe v Investec Bank (Australia) Ltd.[1]
[1][2013] VSCA 293.
The order made on 28 November 2014 did not cover all of the projected costs of the application for leave to appeal and the appeal. The prospect of a further application for security had been foreshadowed prior to that consent order being made. A letter of 24 November 2014 from Mr Launer’s then solicitors to the solicitors for Carbon Black stated:
Our client reserves the right to seek further security for costs of the appeal, if your client is successful in obtaining leave to appeal.
Further, it is clear from the manner in which the amount ordered on 28 November 2014 was calculated that no provision had been made for the hearing of the application for leave to appeal or the appeal if leave were granted.
The submission made that Mr Launer is precluded from seeking further security by reason of delay is not well‑founded. The delay has not been great. This is not the same as a situation where there is considerable delay before a first application is made. This is an application for additional security which was foreshadowed before the first order was made and it is an application made in circumstances where the costs of the hearing had not been provided for in the original application or in the order that was made by consent.
We reject the submission that this application is precluded by delay.
As to the additional amount which should be ordered, it seems to us that we should not make an allowance for the costs of the mediation. The suggestion that the matter should be mediated emanated from the Court itself and the parties acquiesced in that situation. They are costs which have been incurred. The issue of how they should be dealt with was not raised at the hearing on 28 November 2014. It does not seem to us to be appropriate to require Carbon Black now to provide security for those costs.
Counsel who appeared on behalf of Mr Launer today properly conceded that a number of the items of additional security sought in the letter of 9 February 2015 ought not, on analysis, properly be the subject of a further order given the manner in which the amount the subject of the order of 28 November 2014 had been calculated. In particular, further allowance for preparation of the written case is not appropriate as the earlier agreed figure had included an allowance for that. He agreed that the figure provided for in relation to the solicitor’s attendance and instruction at the hearing was probably too high.
Counsel on behalf of Carbon Black submitted that the proper allowance for additional security that should now be made, if any is to be made, is an appropriate amount to cover the hearing itself, that being the only relevant matter which had not been provided for in the order made by consent on 28 November 2014. He suggested that an appropriate figure for senior and junior counsel and for the instructing solicitor would be $14,900.
Orders for security are not intended to be a complete indemnity. It does seem to us that counsel for Carbon Black is correct in submitting that the relevant item which was left out of the order already made is an allowance for the hearing itself. It also seems to us that his suggested figure of $14,900 is appropriate.
Accordingly, we are of the view that additional security of $14,900 should be ordered.
[Discussion re orders and costs]
Mr Launer seeks his costs of the application for further security fixed at the sum of $6,693. Carbon Black opposes that application and says that the costs should be costs in the appeal.
In this case, a letter preceded the application for further security for costs and sought an amount of $42,000. No response was given. In the end, the grounds upon which the application was opposed were only ventilated in Carbon Black’s written submissions in opposition.
Whilst it is true that Mr Launer originally claimed $42,000 as additional security and was successful in his application in relation to a much smaller sum, if Carbon Black had addressed the amount properly to be ordered before or shortly after the application was made, today’s hearing may have been unnecessary.
In those circumstances, we order that Mr Launer’s costs of this day, fixed at $3,699, be paid by Carbon Black. That sum represents counsel’s fees of $2,699 and solicitor’s costs of preparation and attendance at today’s hearing of $1,000.
Otherwise we will order that the costs of the application are costs in the appeal.
We take the view that the costs as fixed must be paid immediately. Reference was made to Rule 63.20.1 and the decision of Hollingworth J in Dale v Clayton Utz.[2] In our view that rule only applies to a situation where the costs are to be taxed.
[2][2013] VSC 593.
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