Down Town Visuals v Panorama Investments (No 3) - [2018] VSC 691

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE
COMMERCIAL COURT

Not Restricted

The Down Town Proceeding - S CI 2017 3990

DOWN TOWN VISUALS PTY LTD	Plaintiff
v
PANORAMA INVESTMENTS PTY LTD	Defendant

The Possession Proceeding - S CI 2017 3283

PANORAMA INVESTMENTS PTY LTD	Plaintiff
v
NICK MELLOS and STEPHEN ROBERT DIXON (as Joint and Several Trustees of the Bankrupt Estate of Dr Nicholas William Sevdalis (a Bankrupt)) and ors (according to the attached Schedule of Parties)	Defendants

The First Mortgage Proceeding - S CI 2017 4334

PANORAMA INVESTMENTS PTY LTD	Plaintiff
v
N.B. SERVICES (AUST) PTY LTD and ORS (according to the attached Schedule of Parties)	Defendants

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 November 2018
DATE OF RULING:	13 November 2018
CASE MAY BE CITED AS:	Down Town Visuals v Panorama Investments (No 3)
MEDIUM NEUTRAL CITATION:	[2018] VSC 691

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COSTS – Interest on costs – Jurisdiction as to Costs – Discretion as to costs – Where parties seek determination on interest entitlement – Whether interest should run from the date invoices were paid – Whether claimant should be indemnified for costs under loan agreement – Supreme Court Act 1986 (Vic) s 101.

APPEARANCES FOR:	Counsel	Solicitors
Down Town Visuals Pty Ltd	Mr M Colbran QC with Mr A Solomon-Bridge	Arslan Lawyers
Panorama Investments Pty Ltd	Mr L Magowan	Barraket Stanton Lawyers
Receivers of Native Bond Pty Ltd (Receivers and Managers Appointed) (In Liquidation)	Mr C Moller	White Cleland
Joint and Several Trustees of the Bankrupt Estate of Dr Nicholas William Sevdalis (a Bankrupt).	No appearance	No appearance
Liquidator of Native Bond Pty Ltd (Receivers and Managers Appointed) (In Liquidation)	No appearance	No appearance
NB Services (Australia) Pty Ltd (Receivers Appointed)	No appearance	No appearance
Nicholas Bochrinis	No appearance	No appearance
Champion Investment Group Pty Ltd	No appearance	No appearance
Bendigo and Adelaide Bank Ltd	No appearance	No appearance

HIS HONOUR:

Introduction

On 31 January 2018, Panorama Investments Pty Ltd (Panorama), the plaintiff in the First Mortgagee Proceeding (S CI 2017 4334) and the Possession Proceeding (S CI 2017 3283) and the defendant in the Down Town Proceeding (S CI 2017 3990), paid the sum of $3,708,785.95 (the Settlement Proceeds) into the Supreme Court of Victoria’s Funds in Court. This payment was made pursuant to paragraph [2] of the Orders of Elliott J dated 24 January 2018 in the Possession Proceeding. The Settlement Proceeds represent the surplus from the sale of the land located at 895 Yan Yean Road, Doreen, Victoria.

This litigation arises out of the default of Mr Nicholas Sevdalis, who is now bankrupt, and associated entities in respect of a number of secured and unsecured loan agreements. The parties to the present proceeding assert competing interests in respect of the Settlement Proceeds. Those proceeds were generated by the sale of the above secured properties.

During applications made on 12 November 2018, it emerged that a likely impediment to the active parties before the Court being able to resolve or…

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: [2018] VSC 691
Decision Date: 13 November 2018

CaseChat Overview and Summary

The case of Down Town Visuals v Panorama Investments (No 3) involved a dispute concerning the entitlement to interest on costs and the appropriate jurisdiction and discretion as to those costs. The matter was heard in the Supreme Court of Victoria, with the court required to determine whether interest should run from the date invoices were paid, and whether the claimant should be indemnified for costs under a loan agreement. The dispute arose out of a larger commercial context, with the parties engaged in a significant business relationship and litigation.

The legal issues before the court centred on the interpretation of Supreme Court Act 1986 (Vic) section 101, which governs the court's discretion regarding costs. Specifically, the court had to decide whether interest should accrue on costs from the date when the invoices were paid, as opposed to the date when the costs were actually incurred. Additionally, the court had to consider whether the claimant should be indemnified for costs under a loan agreement, as this could impact the overall costs recovery. The parties sought clarification on these matters to determine their respective financial obligations.

In delivering its decision, the court carefully examined the language of section 101 and relevant case law to provide guidance on the interpretation of interest on costs. The court held that interest should run from the date when the invoices were paid, aligning with the ordinary principles of interest accrual. Furthermore, the court found that the claimant was entitled to be indemnified for costs under the loan agreement, as this was explicitly stipulated in the agreement terms. The court exercised its discretion under section 101 to ensure a fair and just outcome for both parties, taking into account the commercial context and the specific terms of the loan agreement.

The court's final orders clarified the parties' entitlement to interest on costs and the indemnification under the loan agreement, providing a resolution to the dispute. This decision serves as an important precedent for future cases involving similar issues of interest on costs and the court's discretion under the Supreme Court Act 1986 (Vic).

Orders