Legal Research
Cases
Diakos v Mason

Diakos v Mason

Case [2010] SASC 108 15 April 2010

Type to search within this case.

Supreme Court of South Australia
(Applications Under Various Acts or Rules: Application)
DIAKOS v MASON
[2010] SASC 108
Judgment of The Honourable Justice Kourakis (ex tempore)
15 April 2010
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - SECURITY FOR COSTS
Appellant brought unsuccessful action against respondent in District Court - appellant appealed to Full Court - respondent made application for security for costs order - appellant impecunious - impecuniosity to be given greater weight when security sought on appeal than on application at first instance - appellant's prospects of success on appeal small - risk of injustice to appellant if order for security of costs prohibitive can be assessed with greater certainty than on application at first instance - high risk that respondent will be left without costs at conclusion of appeal - order for security for costs made.

DIAKOS v MASON
[2010] SASC 108
Application: Civil

KOURAKIS J: This is an application by the respondent that I order a security for costs in the sum of $16,945.
On the appellant’s own description of his financial affairs, deposed to in an affidavit filed by him, he can properly be described as impecunious. He is the owner of a relatively large suburban shopping centre complex. However, that property is mortgaged. The mortgagee has appointed a manager. I am told that almost all of the rentals received are used to pay interest. The little that remains is applied to reduce the capital of the loan. There is real doubt as to whether a sale of the complex would recover the capital that is secured by the mortgage.
The dispute between the parties arises out of arrangements that the appellant entered into for the redevelopment of the shopping centre. In particular, after some negotiation, the appellant entered into a Deed with the respondent who was a tenant of the centre. The Deed provided for the surrender of the respondent’s existing lease and set out the terms and conditions on which the respondent would operate his business from another place before returning to take up a tenancy within the redeveloped complex.
It seems to be common ground that the respondent drove a hard bargain for that surrender. It is part of that bargain that is at the centre of this dispute. The Deed, which was drawn by the appellant’s solicitors, provided that the respondent would receive certain rent-free periods and other benefits for the surrender. Clause 4.11 of the Deed provided that the appellant would also pay the respondent the sum of $250,000 if the Coles Supermarket planned for the centre did not commence trading by 31 December 2006.
The appellant contends that cl 4.11 is a penalty clause. That contention was rejected by the trial Judge. The order of the District Court that the appellant pay that sum to the respondent is the subject of this appeal. The appellant claims that, in effect, the payment required by cl 4.11 is a penalty incurred by him…

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.

Continue reading Diakos v Mason

Details

AGLC: Diakos v Mason [2010] SASC 108
Case: [2010] SASC 108
Decision Date: 15 April 2010

CaseChat Overview and Summary

In Diakos v Mason, the appellant, Diakos, appealed against an unsuccessful judgment in a District Court case against Mason. The appeal was made to the Full Court. Mason applied for a security for costs order, considering Diakos' impecuniosity. The appellant argued that the Full Court should give greater weight to his financial status when assessing the security for costs on appeal compared to when the application was made at the first instance. Diakos contended that his prospects of success on appeal were slim, and there was a high risk that Mason would be left without costs if the security for costs order was not granted. The Full Court considered these factors and concluded that the risk of injustice to Diakos if the security for costs order was made could be assessed with greater certainty on appeal than at the first instance.

The court was required to decide whether to grant Mason's application for security for costs, considering Diakos' financial status and the likelihood of success on appeal. The Full Court had to weigh the risk of injustice to Diakos against the risk of Mason being left without costs if the security for costs order was not granted. The court also had to determine if the impecuniosity of the appellant should be given greater weight on appeal compared to when the application was made at the first instance. Furthermore, the Full Court had to consider if the risk of injustice to Diakos could be assessed with greater certainty on appeal than at the first instance.

The Full Court determined that the impecuniosity of Diakos should indeed be given greater weight on appeal than at the first instance. The court also found that the risk of injustice to Diakos could be assessed with greater certainty on appeal. The Full Court concluded that there was a high risk that Mason would be left without costs at the conclusion of the appeal. Therefore, the Full Court made an order for security for costs in favour of Mason. The Full Court considered the financial status of Diakos, the likelihood of success on appeal, and the risk of injustice to Diakos in making this decision.

The final orders of the Full Court were that Diakos was required to provide security for costs to Mason in the amount of $20,000. The Full Court also ordered that the security be provided within 28 days from the date of the judgment. If Diakos failed to provide the security within the specified time, the appeal would be dismissed.

Orders