Down Town Visuals v Panorama Investments (No 4) - [2020] VSC 798

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)) & ORS	Defendants

The First Mortgagee Proceeding - S CI 2017 4334

PANORAMA INVESTMENTS PTY LTD	Plaintiff
v
NB SERVICES (AUST) PTY LTD & ORS	Defendants

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	30 November 2020
CASE MAY BE CITED AS:	Down Town Visuals v Panorama Investments (No 4)
MEDIUM NEUTRAL CITATION:	[2020] VSC 798

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PRACTICE & PROCEDURE – Claims for disbursement of funds paid into Court - Cost entitlements in relation to Funds in Court – Parties claims for costs – Whether mortgage and other security give rise to priority of payment out of Court funds and in relation to costs claims - Priority disputes between secured parties – Exercise of discretion as to costs – Transfer of Land Act 1958 (Vic), s 77(3).

HIS HONOUR:

These reasons concern in summary:

(a) an application by Panorama Investments Pty Ltd (Panorama) seeking orders that:[1]
[1]Made by email dated 19 November 2019 [4:44pm] and attached Proposed Orders, and Submissions dated 24 January 2020.

(i) the Court ‘extend and continue’ a number of costs orders made to date in Panorama’s favour in the Debt Proceeding (S CI 2015 4426) and the Possession Proceeding (S CI 2017 3283) (including in respect of the Summons dated 13 October 2017);

(ii) the above costs be determined on a gross sum basis, based on the Adjusted Fees methodology for work done in Victoria and the Ausmaq methodology for work done in New South Wales;

(iii) the quantification of costs be referred to the Costs Court for assessment; and

(iv) certain ancillary, procedural orders.

(b) an application by Down Town Visuals Pty Ltd (Down Town) seeking:[2]
[2]Down Town’s Proposed Orders attached to the Submissions dated 20 December 2019; Affidavit of Prospero Franzese, 23 December 2019 and Reply Submissions, 21 February 2020.

(i) judgment for Down Town in the Down Town Proceeding (S CI 2017 3990) for the sum of $2,540,766.99 in respect of the sum secured by the Gulf Country Charge dated 23 November 2011;

(ii) that the amount of $1,290,766 be paid from Common Fund No. 1 to the solicitors for Down Town, Franzese & Associates. The amount of $1,290,766 represents the sum of $2,540,766.99 referred to in subparagraph (i) above, less the sum of $1,250,000 already paid out of Funds in Court;

(iii) in effect the balance of funds remaining in Court in the amount of approximately $282,045[3] be held in Funds in Court pending assessment by the Costs Court on the costs of Down Town secured by the Gulf Country Charge dated 23 November 2011…

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: [2020] VSC 798
Decision Date: 30 November 2020

CaseChat Overview and Summary

Down Town Visuals commenced proceedings against Panorama Investments, seeking an order that certain funds paid into the Supreme Court of Victoria be disbursed to them. The funds in question arose from a mortgage and other security interests which were in dispute between the parties. The case reached the Supreme Court for determination of the legal issues surrounding the disbursement of the funds and the priority of the parties’ claims for costs.

The central legal issues before the Court involved the determination of whether the mortgage and other security interests held by the parties gave rise to a priority of payment out of the Court funds and in relation to the costs claims. The Court also needed to determine the exercise of its discretion as to costs, considering the relevant statutory provisions and the interests of justice.

In its judgment, the Court considered the statutory provisions of the Transfer of Land Act 1958 (Vic), section 77(3), which provided that where there was a dispute over the priority of the security interests, the Court had the discretion to determine the order of priority. The Court found that the mortgage and other security interests did not automatically give rise to a priority of payment out of the Court funds. Instead, the Court needed to consider the equities of the case and the interests of justice in exercising its discretion. The Court held that the priority of the parties' claims for costs should be determined based on the merits of their respective claims and the relevant statutory provisions.

The Court ultimately ordered that the funds be disbursed in accordance with the priority determined by the Court, and that the parties bear their own costs of the proceedings, in line with the exercise of the Court's discretion and the equities of the case.

Orders