Cityrose v Booth (Costs) - [2014] VSC 46

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION S CI 2008 5673

CITYROSE TRADING PTY LTD (ACN 077 934 671)	Appellant
v
NOEL BOOTH	First Respondent
and
KAY & BURTON PTY LTD (ACN 005 488 175)	Second Respondent
S CI 2008 5719
KAY & BURTON PTY LTD (ACN 005 488 175)	Appellant
v
NOEL BOOTH	First Respondent

and

CITYROSE TRADING PTY LTD (ACN 077 934 671)

Second Respondent

- - -

JUDGE:	WHELAN JA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 February 2014
DATE OF JUDGMENT:	26 February 2014
CASE MAY BE CITED AS:	Cityrose v Booth & Anor (Costs)
MEDIUM NEUTRAL CITATION:	[2014] VSC 46

- - -

PRACTICE AND PROCEDURE – Costs – Appeals from VCAT – One appellant (Cityrose) responsible for drafting of clause which led to initial dispute and subsequent litigation – Provision eventually declared void for uncertainty - Findings of misleading conduct by that appellant – That appellant ordered to pay costs of other parties to both appeals.

- - -

APPEARANCES:	Counsel	Solicitors
For Cityrose	Mr M Clarke	Madgwicks
For Mr Booth	Mr M Flynn	Russell Kennedy
For Kay & Burton	Ms R Sofroniou	Colin Biggers & Paisley

HIS HONOUR:

Background

On 26 May 2006, after an auction where the property was ‘passed in’, Noel Booth executed a contract pursuant to which he purchased a property in Sorrento, Victoria from Cityrose Trading Pty Ltd (‘Cityrose’). The contract contained a special condition which had been inserted on the instructions of an employee of Cityrose, one Jason van der Slot, by Cityrose’s then solicitors, B2B Lawyers. The objective of Cityrose’s employee and its lawyers was to impose a liability for GST on the purchaser. The particulars of sale in the contract specified a purchase price without reference to that additional liability. No reference was made to it by Cityrose’s selling agent, Kay & Burton Pty Ltd (‘Kay & Burton’), during the auction or in any dealings with Mr Booth as a prospective purchaser before or after the auction.

Cityrose insisted that Mr Booth pay the GST before settlement. The amount was paid under protest and was held in a trust account by Cityrose’s solicitors.

Litigation has extended over several years about whether Cityrose was bound to repay the sum which Mr Booth had paid under protest. There have been two hearings and determinations before VCAT. Each of those determinations of VCAT was appealed to this Court, and each of those appeals resulted in VCAT’s orders being set aside.[1]
[1][2008] VSC 495 (21 November 2008) (Whelan J) and [2013] VSC 504 (19 September 2013) (Emerton J).

In the first VCAT determination the Tribunal declared that the contract price in the particulars of sale was inclusive of GST, but then went on to find that both Cityrose and Kay & Burton were liable to Mr Booth for misleading and deceptive conduct. I allowed appeals by Cityrose and Kay & Burton on the ground that the VCAT orders were inconsistent with each…

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: [2014] VSC 46
Decision Date: 26 February 2014

CaseChat Overview and Summary

The matter before the court involved an appeal regarding costs between Cityrose and Booth. The dispute originated from a clause in a contract which was found to be void for uncertainty. The initial case had been heard by the Victorian Civil and Administrative Tribunal (VCAT), with subsequent appeals being heard in the Supreme Court of Victoria. The appellant, Cityrose, had been responsible for drafting the clause in question and had engaged in conduct that was found to be misleading. As a result, the court was required to determine the appropriate costs to be awarded to the respondent, Booth, in relation to both the VCAT proceedings and the subsequent appeals.

The primary legal issue before the court was the allocation of costs between the parties, particularly given Cityrose's role in drafting the problematic clause and its subsequent misleading conduct. The court had to consider whether the appellant's actions warranted an order that it pay the costs of the other parties, as well as the appropriate amount of those costs. The court also needed to determine the extent to which the costs should cover both the VCAT and appeal proceedings.

In determining the appropriate costs, the court considered the conduct of Cityrose throughout the litigation process. Given that Cityrose was responsible for the clause which led to the initial dispute and that it had engaged in misleading conduct, the court found that it was just and equitable for Cityrose to pay the costs of the other parties to both the VCAT and appeal proceedings. The court noted the significant time and resources expended by the other parties in addressing the issues raised by Cityrose, and the importance of ensuring that parties do not benefit from their own wrongdoing. The court ultimately ordered Cityrose to pay the costs of Booth in relation to both the VCAT and appeal proceedings, reflecting the seriousness of Cityrose's conduct.

Orders