Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (No 2)
[2015] VSCA 56
•8 April 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2013 0181
| COSMOPOLITAN HOTEL (VIC) PTY LTD (ACN 115 145 198) & ANOR | Applicants |
| v | |
| CROWN MELBOURNE LIMITED (ACN 006 732 262) | Respondent |
S APCI 2013 0180
| COSMOPOLITAN HOTEL (VIC) PTY LTD (ACN 115 145 198) & ANOR | Applicants |
| v | |
| CROWN MELBOURNE LIMITED (ACN 006 973 262) | Respondent |
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| JUDGES: | WARREN CJ, WHELAN and SANTAMARIA JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 24 March 2015 |
| DATE OF JUDGMENT: | 8 April 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 56 |
| JUDGMENT APPEALED FROM: | Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2013] VSC 614 |
| CASE MAY BE CITED AS: | Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (No 2) |
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APPEAL – Issue to be remitted to VCAT – Whether remitter should specify a differently constituted tribunal.
COSTS – Determination of which party substantially succeeded – Potential significance of offers of settlement.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr M Pearce SC with Mr R Hay SC | Mills Oakley Lawyers |
| For the Respondent | Mr N Hopkins SC with Mr B Jellis | Minter Ellison |
WARREN CJ
WHELAN JA
SANTAMARIA JA:
Judgment was delivered in this matter on 22 December 2014.[1] This judgment assumes knowledge of that judgment and the terms used in this judgment are as defined in that judgment.
[1]Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd [2014] VSCA 353.
On 24 March 2014 we heard submissions upon orders and costs.
Two matters were controversial. The first was the terms of the remitter, and in particular, whether the order remitting the matter to the Victorian Civil and Administrative Tribunal (‘VCAT’) should specify that the issue remitted should be determined by a differently constituted tribunal. The second was as to who should pay the costs both at first instance and on appeal.
Terms of the Remitter
As to the remitter, in our view the matter remitted could properly be determined by the Senior Member who heard and determined the applications. This is likely to be the most efficient and cost effective approach. In the end, the decision as to case allocation is one for the President of VCAT, and we would, of course, not preclude the Senior Member from recusing himself if he considered that to be appropriate.
Crown submitted that the remitter should be to a differently constituted tribunal for three reasons. First, it was submitted that the Senior Member had already reached erroneous conclusions and that justice would be better seen to be done if the tribunal were differently constituted. Secondly, it was submitted that the Senior Member had expressed ‘strong views’ in his earlier reasons and had made observations adverse to Crown. Finally, it was submitted that there would be no great difference between the cost and efficiency of remitter to the Senior Member who decided the matter or to a different tribunal.
The enquiry which VCAT must undertake now is quite different to that which has already been undertaken. We do not consider that the Senior Member who determined the applications is precluded from undertaking the remitted enquiry because of the conclusions he reached previously.
As to the suggestion that the Senior Member has already expressed ‘strong views’ and that they are adverse to Crown, we also reject that submission. The passages relied upon in Crown’s written submissions and at the hearing simply do not make good the assertion that the Senior Member has expressed strong views adverse to Crown. In the passages relied upon, the Senior Member rejected a particular submission Crown had made in relation to damages,[2] expressed the view that the Senior Member was not persuaded that the applicants had failed to establish a particular matter,[3] and made a general observation as to the doubtful utility of evidence on a speculative aspect of a matter concerning damages coupled with an observation that such evidence from Crown would be ‘likely to be self-serving, influenced by the disapproving view that Crown had ultimately taken of Mr Zampelis and his companies’.[4] In the context, these passages do not warrant a conclusion that the Senior Member will be unable to bring an impartial mind to the new enquiry which must now be undertaken. If the Senior Member takes a different view he will recuse himself.
[2]Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd [2012] VCAT 1407 [16] (‘VCAT Damages Reasons’).
[3]VCAT Damages Reasons [22].
[4]VCAT Damages Reasons [37].
In a supplementary note forwarded to the Court after the hearing Crown referred to additional passages in the Senior Member’s liability decision in this context. The first group of passages relied upon concerned what was said to be adverse observations as to the credit of the principal witness for the tenants. The tenants do not object to the matter being determined by the Senior Member who decided the matter. In fact, they urge that course. The other group of passages relied upon are passages where it is said that the Senior Member made a finding ‘in respect of’ the credit of a particular witness called by Crown, Mr Boesley. The relevant finding was that Mr Boesley was an honest and reasonably careful witness.[5] The fact that the Senior Member then preferred the evidence of a witness who had made a contemporaneous note of the critical conversation[6] is not, in our view, a conclusion adverse to Mr Boesley’s credit.
[5]Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd [2012] VCAT 225 [70(d)] (‘VCAT Liability Reasons’).
[6]VCAT Liability Reasons [79] and [84].
Finally, we do not agree with the submission that there is likely to be no great difference between remitter to the Senior Member who determined the applications and to a differently constituted tribunal. The hearing before the Senior Member was complex and the material was voluminous. Although a considerable period of time has now elapsed since the three determinations which he made, he is likely to be in a better position to determine the matter than a person with no background at all in the dispute.
In the circumstances, we will not specify in the order that the tribunal be differently constituted.
Two other issues concerning the terms of the remitter arose.
It was submitted by Crown that the order ought to describe the nature of the enquiry to be undertaken, the suggestion being that the terms of the second sentence of paragraph [204] of this Court’s judgment might be used. We do not consider this to be appropriate. It potentially elevates one short passage above the rest of the judgment and removes it from its context.
It was submitted by the tenants that the order should not admit of the possibility that no equitable relief should be granted. The draft order submitted by Crown included the qualification ‘if any’ which had that effect. There are a number of potential scenarios which may now need to be addressed. It is conceivable that a conclusion could be reached that no relief should be granted. By way of illustration only, it seems from the Senior Member’s reasons that the critical representation was prompted on Crown’s part by a desire to encourage the tenants to undertake a higher standard of finish in the renovations than would otherwise have been undertaken.[7] If that were accepted and if it was also established (hypothetically) that the tenants did not alter the finish as a consequence of the representation, that may give rise to an argument that no relief is warranted. Accordingly, we will include the qualification ‘if any’.
[7]VCAT Liability Reasons [84] and [118].
Costs
Before VCAT, the tenants succeeded on the basis of a collateral contract. In fact, the Senior Member recorded the tenants as having abandoned all claims put on any alternative basis.[8] Notwithstanding that position, as explained in this Court’s judgment, estoppel was part of the pleaded case, it was relied upon and was dealt with by VCAT to some extent, it was the subject of the notice of contention before the trial judge, and the trial judge permitted the tenants to rely upon that notice of contention in asserting that the VCAT orders should be upheld.
[8]VCAT Liability Reasons [20].
Before the trial judge, Crown succeeded on the arguments they raised concerning VCAT’s conclusions on the collateral contract, including whether the statement made was promissory, the meaning of the statement, whether it was sufficiently certain, and whether the alleged collateral contract was consistent with the leases. This Court upheld the trial judge’s analysis, and Crown’s submissions, on all of these issues.
The notice of contention filed and relied upon before the trial judge sought to uphold the VCAT liability finding relying upon estoppel. The notice characterised that estoppel claim as being an estoppel from denying the collateral contract. To the extent that that notice of contention sought to uphold the VCAT liability finding, it was unsuccessful both at first instance and on appeal. After this appeal, the VCAT orders as to liability which the tenants sought to uphold are still to be set aside.
In substance, Crown succeeded before the trial judge and, if the trial judge had adopted the same analysis as this Court, in our view the position would still be that Crown substantially succeeded on their appeal from the VCAT judgment. Instead of having the proceeding dismissed, the estoppel issue would have been remitted.
Before this Court the tenants have succeeded in the sense that they have persuaded the Court that the estoppel claim ought to have been upheld, although in a different form to the way they contended it to be, and that the matter now must be remitted. The tenants were not successful in attempting to overturn the trial judge’s decision on the collateral contract claim. Although the matter is less clear in relation to the appeal than it is in relation to the decision at first instance, it seems to us that the tenants have succeeded on the appeal.
But for the matter referred to below, in the unusual circumstances of this case we would have concluded that the appropriate course is that each party bear its own costs at first instance and on appeal. The alternative would be to order the tenants to pay the costs at first instance and Crown to pay the costs on the appeal. It seems to us that an order that each party bears its own costs reflects that position in a more efficient and less complex manner.
However, we were advised by the parties that there are offers of settlement which have been made which could become critical on the costs questions depending upon the eventual outcome. The tenants sought to address that position by reserving liberty to apply as to the basis for taxation, the assumption being that the costs orders would be made in their favour. That is not the conclusion we have reached. In all the circumstances, it seems to us that costs both at first instance and at trial should be reserved to this Court, pending a position being reached where the significance of any offers made can be assessed.
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