Dumayne Property Group Pty Ltd v Balanced Securities Ltd
[2017] VCC 975
•24 July 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised (Not) Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-15-00798
| Dumayne Property Group Pty Ltd | Plaintiff |
| v | |
| Balanced Securities Ltd | Defendant |
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JUDGE: | Judicial Registrar Tran | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 June 2017 | |
DATE OF RULING: | 24 July 2017 | |
CASE MAY BE CITED AS: | Dumayne Property Group Pty Ltd v Balanced Securities Ltd | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 975 | |
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REASONS FOR JUDGMENT
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | D. Farrands | Kalus Kenny Intelex |
| For the Defendant | O. Bigos | Thomson Geer |
JUDICIAL REGISTRAR:
I have determined the Plaintiff’s application for the costs of and incidental to the preliminary question and Counterclaim in the Plaintiff’s favour. The following are my reasons for decision.
The background to this application is as follows. This proceeding was commenced on 19 February 2015 and ultimately set down for trial on 9 May 2016. On 6 May 2016, Judge Kennedy directed the parties to use their best endeavours to identify a preliminary question or questions which the Court should determine under Order 47.04. On 9 May 2016, the first day of trial, Judge Kennedy ordered the following preliminary questions to be resolved prior to any further hearing of the matter:
a) What was the "Repayment Date" (as defined) of the loan (Loan) made by Balanced Securities Limited to Dumayne Property Group Pty Ltd which was repayable in 2013?
b) Was the Loan repaid by the "Repayment Date"?
In reasons delivered on 24 June 2016, Judge Kennedy concluded that the “Repayment Date” was 27 June 2013 and the Loan was repaid by the “Repayment Date”. Ultimately these conclusions lead to the giving of judgment against the Defendant in the sum of $693,909.19 (inclusive of interest to 20 September 2016).
By application made by email to the Directions Group on 22 June 2017, the Plaintiff applied for its costs of and incidental to the preliminary question and for an order dismissing the Counterclaim and requiring the Plaintiffs’ by Counterclaim to pay the Defendants by Counterclaim’s costs of and incidental to the Counterclaim. By order made 26 June 2017, I directed that the Plaintiff’s application for its costs in relation to the preliminary hearing should be dealt with on the papers.
Ultimately, the orders sought by the Plaintiff were formulated as follows:
1) Pursuant to Rule 63A.04(1), the Plaintiff’s standard costs of and incidental to the preliminary questions referred to in Order 1 of the Orders made by Her Honour Judge Kennedy on 24 May 2016 be paid forthwith by the Defendant, to be taxed in default of agreement.
2) The Counterclaim dated 9 June 2016 by Balanced Securities Limited and Balanced Application Pty Ltd be dismissed and that those Plaintiffs pay the Defendants by Counterclaim’s costs of and incidental to the Counterclaim.
3) The Defendant pay the Plaintiff’s costs of and incidental to Orders 1 and 2 herein.
In an attachment to submissions dated 14 July 2017, the Defendant proposed the following orders:
1) The Plaintiff’s standard costs of and incidental to the preliminary questions referred to in Order 1 of the Orders of Her Honour Judge Kennedy made on 24 May 2016 be paid forthwith by the Defendant, and in default of agreement, those costs be taxed. For the avoidance of doubt, this order excludes any costs:
a) incurred prior to 29 June 2015;
b) related to the issue of damages;
c) associated with the mediation that took place on 22 March 2016; or
d) associated with the Rennick & Gaynor Proceedings (County Court Proceeding No. CI-15-01815).
2) The Counterclaim dated 9 June 2016 filed by the Plaintiffs by Counterclaim be dismissed, and the Plaintiffs by Counterclaim pay the Defendants by Counterclaim’s standard costs of the Counterclaim forthwith, and in default of agreement, those cost be taxed.
3) The parties’ costs of the Plaintiff’s costs’ application dated 22 June 2017 be their costs in the cause.
4) The Plaintiff’s costs application dated 22 June 2017 otherwise be dismissed.
As can be seen from the proposed orders extracted above, the principal area of dispute between the parties appears to be whether the order made should “for the avoidance of doubt” specifically exclude particular items.
In Comcare v Labathas (1995) 61 FCR 149, Finn J stated (at 154) that “A growing body of modern case law, for example, supports the view that a power to award costs "of and incidental to the proceedings" is of larger ambit than one to award costs "of the proceedings"”. The typical example given is that the costs of and incidental to proceedings may include costs incurred prior to the commencement of proceedings. I accept that in the present proceeding an order for “costs of and incidental to” the preliminary question may be broader than an order strictly limited to the “costs of the preliminary question”. For example, it may include work done prior to the order for the resolution of preliminary questions which was necessary or proper to be done for the resolution of the preliminary questions.
I also accept that such an order is appropriate in the present case. The general rule, where judgment is given for a party, is that costs should follow the event. A successful party may obtain its costs of the proceeding, even if it has failed to establish some of its heads of claim. In the present case, the Plaintiff has successfully established an entitlement to a significant judgment being entered in its favour and to the Counterclaim being dismissed. Had this been the judgment given at the conclusion of a trial on all issues, the starting point would have been that the Plaintiff was entitled to its costs of the proceeding. It would have been for the Defendant to establish that there should be an apportionment under Rule 63.04 in the particular circumstances of the case. In this context, it is appropriate that the Plaintiff receive not just its strict costs of the determination of the preliminary question but also costs incidental to the determination of the preliminary question and the Counterclaim.
It remains to be determined whether I should include in the Order “for the avoidance of doubt” the paragraphs suggested by the Defendant. If the parties’ cannot agree, it will be a matter for taxation what costs were “of and incidental” to the determination of the preliminary question and the Counterclaim. It is neither necessary nor appropriate to add specific exclusions such as are proposed by the Defendant. Ultimately (if the parties cannot agree) the question of what is a cost of and incidental to the preliminary question will be a matter for the Judicial Registrar hearing the taxation, with the benefit of a detailed bill of costs. Indeed, the proposed exclusions may distract from that task, which is to determine what is a cost of and incidental to the preliminary question rather than to determine what is a cost ‘associated’ with the Rennick and Gaynor proceeding or the mediation.
The Plaintiff has been substantially successful and should also have its costs of this application.
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Certificate
I certify that these 4 pages are a true copy of the reasons for judgment of Judicial Registrar Tran delivered on 24 July 2017.
Dated: 24 July 2017.
Larissa Travassaros
Associate to Judicial Registrar Tran
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