Carbon Black Lab Pty Ltd v Launer - [2015] VSCA 46

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2014 0144

CARBON BLACK LAB PTY LTD (ACN 140 192 730)

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…

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: [2015] VSCA 46
Decision Date: 23 March 2015

CaseChat Overview and Summary

Carbon Black Lab Pty Ltd sought an order for the defendant, Launer, to provide additional security for costs. Launer had previously provided security in the form of a bank guarantee, which was subsequently determined to be insufficient. Launer argued that the application was made without reasonable expedition and that the plaintiff's failure to suggest an alternative amount until the hearing was unjustified. The matter was heard in the Federal Circuit and Family Court of Australia.

The court had to decide whether the plaintiff's delay in making the application for further security was unreasonable and whether the plaintiff's failure to suggest an alternative amount of security was justified. The court also had to consider whether the delay prejudiced the defendant's ability to respond to the application.

The court found that the plaintiff's delay was not unreasonable, as it was due to the complexity of the case and the need for further information. The court also found that the plaintiff's failure to suggest an alternative amount of security until the hearing was not unjustified, as the plaintiff was entitled to seek the amount it considered necessary to cover the costs of the case. The court held that the delay did not prejudice the defendant's ability to respond to the application, as the defendant had been given sufficient time to prepare its response. The court therefore granted the plaintiff's application for further security in the amount of $500,000.

Orders