Doolkoora Pty Ltd v Stumpy Gully Holdings Pty Ltd (No 2)
[2024] VSC 401
•9 July 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2022 02243
| DOOLKOORA PTY LTD (ACN 606 167 444) | First Appellant |
| PENINSULA PROPERTY GROUP AUST PTY LTD (ACN 620 720 130) | Second Appellant |
| v | |
| STUMPY GULLY HOLDINGS PTY LTD (ACN 614 628 616) | Respondent |
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JUDGE: | Gray J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 5 June 2024 |
DATE OF JUDGMENT: | 9 July 2024 |
CASE MAY BE CITED AS: | Doolkoora Pty Ltd & Anor v Stumpy Gully Holdings Pty Ltd (No 2) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 401 |
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ADMINISTRATIVE LAW — Determination of appropriate orders disposing of appeal following publication of substantive reasons for judgment and receipt of evidence and submissions about intervening events — Victorian Civil and Administrative Tribunal Act 1998 s 148(7)–(8) — Apportionment of costs — Application for costs certificate pursuant to Appeal Costs Act 1998 s 4.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | M Sharkey | DSA Law |
| For the Respondent | D Williams KC J Oswald-Jacobs | Carroll Goldsmith Lawyers |
HIS HONOUR:
What final orders will most appropriately dispose of this proceeding?
Introduction
The appellants (Doolkoora and Peninsula) appealed from orders of the Victorian Civil and Administrative Tribunal constituted by Member Kincaid (the Tribunal) made on 19 May 2022 and amended on 10 June 2022 in proceeding BP571/2018 (the VCAT Proceeding).
On 29 March 2024, I delivered my substantive reasons for judgment.[1]
[1]Doolkoora Pty Ltd & Anor v Stumpy Gully Holdings Pty Ltd [2024] VSC 155.
As explained in those reasons for judgment, the Tribunal’s orders were in part made under the Property Law Act 1958 (PLA) pt IV. The Tribunal declared that Doolkoora and Peninsula held the land the subject of the VCAT Proceeding on a resulting trust as to a specified proportional interest in favour of Stumpy Gully Holdings Pty Ltd (SGH) and made orders for sale and division of proceeds between co-owners. The Tribunal also concluded that, on or about 7 August 2017, SGH entered into a valid, subsisting and enforceable agreement with Doolkoora and Peninsula for a lease of the land to SGH, to which the Retails Leases Act 2003 applied. This conclusion underpinned a number of the Tribunal’s other orders.
As further explained in my reasons for judgment:
(a) I accepted the submissions of SGH that the appellants’ grounds in relation to the Tribunal’s jurisdiction under PLA pt IV and its conclusions as to the resulting trust should be dismissed, save for a minor downward adjustment of SGH’s equitable interest in the land that was conceded by SGH.
(b) I upheld Doolkoora and Peninsula’s grounds of appeal relating to the agreement for lease.
I indicated that I would hear the parties on the form of orders most appropriate to give effect to my reasons, on any appropriate consequential orders, and on costs.
After a process of iterative formulations and exchange of proposed minutes of orders between the parties, correspondence from the Court proposing particular orders, the filing and service of affidavits and submissions, and a hearing on 5 June 2024, the parties reached a common position about the form of orders to be made, save for three issues:
(a) whether the Tribunal’s order 8, a permanent injunction restraining Doolkoora and Peninsula from obtaining possession of the land in reliance on a notice to quit, should be set aside;
(b) the scope and form of one of the matters the parties wished the Tribunal to determine on the remitter (sub-paragraph (c) of the proposed remitter order, relating to monetary adjustments); and
(c) the costs of this proceeding.
In addition, there is a fourth issue I must determine: SGH seeks an indemnity certificate in respect of its costs pursuant to s 4 of the Appeal Costs Act 1998 (the Act). Doolkoora and Peninsula agree that I should grant an indemnity certificate to SGH.
Consideration
Satisfaction that the orders agreed between the parties are appropriate
On the face of the written submissions filed by the parties, in addition to the three issues in paragraph 7 above, there were other issues of apparent contention between them. However, by the end of the hearing, these other issues were ultimately agreed between the parties.
I will address one such issue, which related to the constitution of VCAT on the remitter.
Section 148(7)(c) of the Victorian Civil and Administrative Tribunal Act 1998 empowers the Court to make:
an order remitting the proceeding to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the court;
In the event the Court is to make such an order, s 148(8) provides that the Court:
… must give directions as to whether or not the Tribunal is to be constituted for the rehearing by the same members who made the original order.
As at the commencement of the hearing on 5 June 2024, the parties were at odds over whether the Tribunal should be reconstituted for the rehearing on remitter, and whether the Court should direct that a judicial member hear the further proceeding on remitter.
However, by the end of the hearing on 5 June 2024, it was common ground that VCAT should be constituted for the further hearing on remitter by the same learned member who heard and determined it previously. I am satisfied that this is the correct outcome. I am satisfied that it is necessary that the proceeding be remitted to VCAT for further hearing and determination. The learned member is best placed to determine the issues the parties have identified for further hearing. Although those issues are of some complexity, they do not require the attention of a judicial member.
I am satisfied that all the other orders agreed upon by the parties on 5 June 2024 appropriately give effect to my reasons for judgment and should be made. I will make such orders, consistent with the position reached by the parties at the end of the hearing on 5 June 2024.
Under the next three headings, I address the three issues of contention between the parties noted in paragraph 7 above. Under the final heading, I address SGH’s application for an indemnity certificate.
Remitter order sub-paragraph (c)
The parties proposed that I order VCAT to determine six specific matters, which they listed in competing minutes of proposed orders, together with ‘any other matter properly requiring determination by the Tribunal’. I have power to make such orders under s 148(7)(d), provided I think them appropriate.
A brief reference to the context is needed to explain the parties’ proposed matters for determination on the remitter. It appears from the affidavits that have been filed that there are issues of contention between the parties relating to the occupancy of the land the subject of the proceeding during the period since the events considered by VCAT, and in relation to payments of amounts relating to occupancy of the land. Without intending to be exhaustive or make any findings, I note that that the former solicitors of the appellants are (or may be) now registered mortgagees of the land, that they have (or may have) entered into possession of the land in that capacity, and that they have (or may have) granted a lease to SGH in that capacity.
An attempt at judicial mediation to preclude the need for a remitter to the Tribunal has not been successful.
To the extent that the parties are in agreement about the matters to be determined on the remitter to the Tribunal, I will make the remitter order by consent as to those matters. I am satisfied that it is appropriate to do so.
One of the specified matters, proposed matter (c), is not the subject of consent, although both sides propose that a version of that matter should be determined by VCAT on the remitter. As I understand the competing positions:
(a) Doolkoora and Peninsula submitted that VCAT should be ordered to determine whether SGH should pay or repay (as the case may be) to them any and if so what sum for or in respect of SGH’s occupation of the land during the period of co-ownership;
(b) SGH submitted that VCAT should be ordered to determine whether ‘either’ (presumably, any) co-owner should pay or repay (as the case may be) to ‘the other’ (presumably, another) co-owner any and if so what sum for or in respect of SGH’s occupation of the land during the period of co-ownership.
I think the version formulated by SGH is more appropriate, with minor refinements making it clear that all three of the parties to the proceeding are referred to in the order. I will adopt this approach to the remitter order.
The Tribunal’s order 8
The parties are at odds over whether the Tribunal’s order 8 should be set aside. The Tribunal’s order 8 is as follows:
The respondents and/or their agents are permanently restrained from taking any action to recover possession of the land in reliance upon their notice to quit dated 3 April 2018.
The ‘respondents’ are Doolkoora and Peninsula. This order is, in effect, a permanent injunction preventing Doolkoora and Peninsula from being able to take any action to ‘recover possession of the land’ in reliance on their notice to quit dated 3 April 2018.
Doolkoora and Peninsula invite me to set order 8 aside. At the hearing on 5 June 2024, their counsel submitted that it might affect the calculation of amounts of compensation for SGH’s occupation of the land.
As far as I can see, the notice to quit is not included in the voluminous court book and is therefore not in evidence on the appeal. The Tribunal’s reasons for decision only mention it in passing, and the parties’ submissions on the substantive appeal did not address it in any detail. At the hearing on 5 June 2024, senior counsel for SGH submitted that I should not set order 8 aside, saying in this regard:
There's been no consideration by this court as to the circumstances or validity of the notice to quit independently of the issues that have been ventilated before you and determined by your reasons. And it would require Your Honour on a contested matter about that to delve into areas on which you don't have evidence, and about which you've not given any consideration, I imagine, and there's no need for such a new inquiry at this time, post-judgment, and where we're simply discussing orders that flow from the judgement.
Although there appears to be much force in SGH’s position, there is an important countervailing consideration. Two of the matters the parties agree must be remitted for further hearing and decision by the Tribunal seem to necessitate the Tribunal having the ability to decide, by reference to all the relevant facts and unconstrained by any perceived legal operation of order 8, the basis on which SGH has occupied the land since 7 August 2017 and whether or not the notice to quit dated 4 April 2018 is valid. In this regard, agreed sub-paragraphs (b) and (e) of the remitter order are as follows:
(b) whether on and from 7 August 2017, Stumpy Gully Holdings Pty Ltd has occupied the land pursuant to an occupation licence as alleged by Doolkoora Pty Ltd and Peninsula Property Group Aust Pty Ltd in the VCAT Proceeding, and
(i) if so - on what terms, and
(ii) if not - then on what other basis or bases;
…
(e) whether the notice to quit (as defined in the decision of Member Kincaid delivered on 22 May 2022 in the VCAT Proceeding) issued by Doolkoora Pty Ltd and Peninsula Property Group Aust Pty Ltd to Stumpy Gully Holdings Pty Ltd on 4 April 2018 is valid;
On my reading of the points of claim and defence in the VCAT Proceeding, the notice to quit dated 3 April 2018 was alleged by SGH to be invalid because SGH and Doolkoora and Peninsula had entered into the agreement for lease or lease by parol for a three-year term and two three-year options to renew.[2] Doolkoora and Peninsula claimed there was no such agreement, and they were entitled to possession subject only to an occupation licence under which SGH had been occupying the land. The notice to quit, they claimed, brought SGH’s occupation licence to an end.[3]
[2]Third Further Amended Points of Claim dated 10 December 2019, Application Book 218–40, [15]–[20], prayer for relief [A]–[B].
[3]Fourth Amended Points of Defence of Respondents to the Third Further Amended Points of Claim and Counterclaims dated 18 November 2020, Application Book 242–58, [61], [65].
It is not clear from the reasons for decision of VCAT whether order 8 was made solely in reliance on VCAT’s conclusion that the parties entered into an agreement for lease, or whether there was some other basis on which it was made. For example, it might be arguable that the notice to quit could not be served by legal owners on SGH because of its status as an equitable tenant in common under a resulting trust.
As a result of my reasons for judgment, there is now a further possibility that may have to be considered. As an equitable tenant in common, SGH may wish to argue that it had a right to (at least) co-occupation of the land. SGH may wish to argue that this could affect the Tribunal’s consideration of the validity of the notice to quit. Yet another possibility is that, even if Doolkoora and Peninsula were not entitled to serve a notice to quit, the fact that they did so may be relied upon as a communication that is relevant to the question of whether SGH can be said, on the facts, to have had permission from the co-owners to exclusive possession of the land after that communication occurred.
In mentioning these possibilities, I do not intend to suggest what the answers may be. I merely illustrate the scope of decisional freedom that the Tribunal must be accorded in order to carry out the remitter.
I have decided to vary order 8, with the intention of according the Tribunal the decisional freedom it will need.
If the Tribunal’s order 8 is left to stand in its current form, this might be thought to preclude or constrain consideration of one of remitter matters (b) and (e), extracted above. In this sense, there is a risk of internal inconsistency if I remit those matters, at the same time as leaving in place a permanent injunction against reliance on the notice to quit. The use of the word ‘permanently’ in the Tribunal’s order 8 suggests that it was intended be final, even though the Tribunal’s order 10 reserved liberty to apply generally. There is, at least, a risk that order 10 does not apply to order 8, because of the way order 8 is expressed.
I have not given any real weight to the appellants’ submission that I should set aside order 8 entirely because otherwise it may affect the calculation of compensation attributable to SGH’s occupation of the land. I do not think I need to set aside order 8 entirely in order to accord the Tribunal appropriate decisional freedom over the matter of compensation. The fact that the injunction has been in place, and the competing arguments about whether it should have been in place, are — no doubt — circumstances that the Tribunal will weigh in approaching the question of compensation. Order 8 does not need to be set aside for this to occur.
Given that I did not hear evidence or detailed argument on the basis or significance of order 8, my aim is to preserve the status quo ante in the way that is best tailored to the Tribunal being permitted the freedom to perform the remitter. That will be achieved by a minor variation to order 8.
I will vary order 8 by deleting ‘permanently’ and including a proviso making it clear that the Tribunal is free to lift the injunction in order 8 if it sees fit to do so following its deliberations on the remitter.
Costs of this proceeding
The parties are in dispute as to the question of the costs of this proceeding. Each claims, with justification, to have had a measure of success against the other side. Doolkoora and Peninsula seek an order that SGH pay 50% of their costs of the proceeding. For its part, SGH seeks the opposite: an order that the appellants pay 50% of its costs of the proceeding.
It is well settled that, in civil litigation, the general rule is that costs follow the event. However, where the parties have enjoyed mixed success on a multiplicity of issues, the court may take a pragmatic approach in framing an order with respect to costs, taking into consideration the success (or lack of success) of the parties on an issues basis.[4] Costs may be apportioned to a particular question or part of a proceeding.[5]
[4]Chen v Chan (No 2) [2009] VSCA 233, [10(1),(3)].
[5]Supreme Court (General Civil Proceedings) Rules 2015 r 63.04.
The appellants’ written submissions said in this regard:
28. There were 4 overarching areas the subject of this appeal:
(a) the jurisdiction of the Tribunal, comprised of grounds 1, 2 and 3;
(b) the solicitor’s knowledge, comprised of ground 4;
(c) an error as to the calculation of the Respondent’s interest in the land, comprised of ground 5; and
(d) the purported agreement for lease, comprised of grounds 6 and 7.
29. The Appellants were successful on grounds 5, 6 and 7. These are important findings, particularly as the Tribunal’s findings which have been set aside were based upon conclusions where were not open to it, including findings which failed to properly take into account the evidence of Ms Fraser.
30. The Respondent says that the findings of this Court give it an alternative basis for ongoing possession, independent of the Lease. This is not a relevant consideration because this asserted basis of its possession was not sought or argued below.
31. Further, the conduct of the Respondent in entering into a Lease agreement with BSA Legal, at least prima facie, appears to frustrate the findings of this Honourable Court.
32. The Appellants submit, that having had material success, the appropriate order in the circumstances is an order that the Respondent pay 50% of its legal costs of this appeal.
33. Alternatively, if this Honourable Court is not satisfied the Appellants should have an order that the Respondent pay their costs, the appropriate order is no order as to costs and the parties bear their own costs.
SGH submitted that the matters on which it was successful consumed more preparation and hearing time than the matters on which it was unsuccessful.
I agree with SGH in this regard. Using a broad-brush approach, I estimate that the matters on which SGH was successful involved two-thirds of the overall costs expended by the parties in the matter, and the matters on which Doolkoora and Peninsula were successful, one-third.
Two courses appear open. I could order that Doolkoora and Peninsula are to pay two-thirds of SGH’s costs of the proceeding and SGH is to pay one third of their costs.
Alternatively, I could make an assumption that the costs of the two sides in the proceeding are likely to be roughly equal and, after a notional offsetting of SGH’s liability to pay one-third of the appellants’ costs, I would simply make an order reflecting the net outcome: that Doolkoora and Peninsula pay one-third of SGH’s costs.
I raised this efficient and pragmatic approach with the parties at the hearing on 5 June 2024. However, although it may be more efficient, in the end I have decided against it. It may present unforeseen difficulties to the parties with respect to the indemnity certificate that I intend to grant to SGH, including possible consequences that are not contemplated by the Act.
I will order that the appellants are to pay two-thirds of SGH’s costs of the proceeding and SGH is to pay one-third of their costs.
Indemnity certificate application
Finally, I address SGH’s application for an indemnity certificate.
As a respondent to a (partially) successful appeal I consider that SGH comes within the scope of s 4 of the Act. It does so only insofar as the appeal was successful. I return to that point later, when imposing limitations on the certificate.
Section 4 of the Act relevantly provides:
(1) If an appeal against a decision of a court in a civil proceeding—
(a) to the Trial Division of the Supreme Court; …
…
succeeds, a respondent to that appeal may apply to the Supreme Court for, and the court may grant, an indemnity certificate in respect of costs.
…
VCAT is a ‘court’ for the purposes of s 4 of the Act.[6]
[6]Appeal Costs Act 1998 s 3, definition of ‘court’ (Act).
The appellants agree that SGH is entitled to a certificate.[7] However, the parties do not have naturally opposing interests on the question; rather, their interests might be seen to converge.[8] I must determine SGH’s application for an indemnity certificate on its merits, regardless of the appellants’ position.
[7]Appellants’ Written Outline of Submissions dated 3 June 2024, [34].
[8]Act ss 5(1)(a) and 6.
The grant of an indemnity certificate is discretionary.[9] Section 4 confers a discretion to grant — not a discretion to refuse — a certificate.[10] Prior to 1998, the predecessor legislation required an error of law. This is no longer the case: any successful appeal attracts the potential operation of the discretion to grant a certificate under s 4.[11] The grant of a certificate pursuant to s 4 of the Act will generally lead to the expenditure of public money. It is not sufficient that a case merely falls within one of the descriptions in s 4. The Court must be satisfied that it is appropriate in all the circumstances for a certificate to be granted.[12] Remarks by the then Attorney-General in the bill’s second reading speech support a relatively generous approach to the exercise of discretion under s 4.[13]
[9]Eureka Funds Management Limited v Freehills Services Pty Ltd (No 2) [2008] VSCA 177 (Eureka).
[10]Eureka [7].
[11]A ‘court’ is defined in s 3 as including any tribunal or other body from whose decision there is an appeal to a superior court on a question of law, but an ‘appeal’ includes an appeal by way of re-hearing, application for a new trial and any proceeding in the nature of an appeal.
[12]Eureka [7].
[13]Eureka [7], citing Victoria, Parliamentary Debates, Legislative Assembly, 8 October 1998, 458 (Jan Wade).
As I explain in my reasons for judgment in relation to grounds 6 and 7, in my view the Tribunal erred in various ways in reaching its conclusion that the parties had entered into a valid, subsisting and enforceable agreement for lease of the land to SGH for a fixed term of three years with two further three-year options to renew. Some of the matters on which the Tribunal relied arose from submissions put on behalf of SGH that invited findings on fact, which I concluded were not open on the evidence. Should this result in me declining to grant SGH a certificate?
In this respect, I must consider whether the present case falls within the circumstances considered in Eureka. In that case, the Court of Appeal did not consider that any of the arguments succeeding at trial or failing on appeal ‘should not have been put’ or that the appeal was generated by any ‘inappropriate conduct’ of the respondent.[14]
[14]Eureka [9].
There was certainly no inappropriate conduct here. Although I characterised the re-examination of a witness as involving interruptions and as yielding no probative evidence, this is not to say that anything resembling inappropriate conduct was involved.
The matter turns on whether the arguments I have found to have contributed to VCAT’s error ‘should not have been put’.
In one sense, perhaps, it might be said that SGH ‘should not have put’ the argument that contributed to the error, on the basis that I have found that the conclusion urged was not open on the evidence.
Senior Counsel for SGH made the general observation that, if there were an invariable requirement that an unsuccessful respondent must not have contributed to the circumstances that led to the success of the appeal, then an indemnity certificate would almost always be refused. Senior Counsel submitted that a decision which is overturned on appeal is almost always going to be a decision which was reached at the urging of the party which becomes the respondent to the appeal.[15] I agree.
[15]See Transcript 5 June 2024 51–52.
However, a finding invited in circumstances where the appeal court later finds the finding not to have been open on the evidence raises difficult issues. There may be circumstances in which it should have been very clear that the finding was not open, and if a party invited a finding in those circumstances and contributed to the relevant error, it might be said that the invitation ‘should not’ have been made.
Other cases may be closer to the line.
I think the present case is in the latter category. Questions of whether a finding is or is not open on the evidence can be contestable. The phrase ‘should not have been put’ suggests something more egregious than an incorrect judgement-call on such a question. I do not think it appropriate to conclude that SGH ‘should not have put’ the relevant submission in the sense meant by the Court of Appeal in Eureka.
I will grant a certificate. I will be particular in limiting the scope of the certificate, pursuant to s 31A of the Act, to only those costs relating to successful grounds. I apportion to those grounds one-third of the parties’ costs.
Further, I note that s 5(1) of the Act refers to two different ways in which the same certificate can result in an entitlement to the respondent to be paid money by the Board:
(a) payment of an amount equal to the appellant’s costs (if any) that the respondent was ordered to pay and has actually paid; and
(b) payment of an amount equal to the respondent’s own costs of the appeal in respect of which the indemnity certificate was granted.
Subsection 5(1) is stated to be subject to subsection (2), which provides that the maximum amount payable to a respondent pursuant to an indemnity certificate granted under s 4 is $50,000. This cap applies to the sum of both amounts, not to each separately.
Likewise, to the extent that the appellants may become entitled to a right of indemnification through the certificate granted to SGH in the event that SGH does not pay the appellants’ costs ordered in this proceeding, the appellants’ recovery is jointly capped at $50,000 by s 6(3) of the Act.
For abundance of clarity, I will make orders in terms that reflect these aspects of the operation of the Act.
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