Food and Wine Travel Pty Ltd v Express Travel Group Pty Ltd
[2021] VSCA 280
•14 October 2021
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCI 2021 0087
| FOOD AND WINE TRAVEL PTY LTD (ACN 131 449 995) | Applicant |
| v | |
| EXPRESS TRAVEL GROUP PTY LTD (ACN 137 526 599) | Respondent |
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| JUDGES: | McLEISH JA and MACAULAY AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 5 October 2021 |
| DATE OF JUDGMENT: | 14 October 2021 |
| MEDIUM NEUTRAL CITATION: | [2021] VSCA 280 |
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PRACTICE AND PROCEDURE – Security for costs – Application for leave to appeal – Supreme Court (General Civil Procedure) Rules 2015 r 64.38 – Where the decision the subject of application for leave to appeal was an order for security for the costs of the trial of the proceeding – Where security for the costs of the trial had been ordered against only one of two plaintiffs (the applicant) – Prospects of success of leave to appeal application – Whether judge considered overlap between plaintiffs’ claims – Whether judge had evidentiary basis to set amount for security for costs – Whether reasons for assessed quantum adequately explained – Whether order for security for costs of application for leave to appeal would stifle a reasonably arguable case – Whether public interest militates against an order for security where security application would largely traverse issues of leave to appeal application – Application for security for costs granted.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J Levine | Matrix Legal |
| For the Respondent | Mr J Castelan | Colin Biggers & Paisley Lawyers |
McLEISH JA
MACAULAY AJA:
Introduction
The respondent, Express Travel Group Pty Ltd (‘Express Travel’), seeks security for its costs of defending an application for leave to appeal filed by Food and Wine Travel Pty Ltd (‘Food & Wine’). In its application for leave to appeal, Food & Wine wishes to appeal against an order made in the County Court that it pay security for costs of a County Court proceeding.
In the County Court, Food & Wine (as second plaintiff) issued a proceeding in which it alleged that Express Travel, as franchisor, breached agreements it made with Food & Wine, as franchisee, and alternatively that Express Travel engaged in misleading, deceptive and unconscionable conduct, causing Food & Wine loss and damage. Additionally, Food & Wine alleged that Express Travel had published defamatory statements and injurious falsehoods by publishing certain comments on Express Travel’s Facebook and Twitter pages in respect of which Food & Wine also claimed damages.
Express Travel’s comments were to the effect that it was ‘deeply disappointed’ by the conduct of Food & Wine in relation to an incident that had occurred in Mildura in December 2019 between the proprietors of Food & Wine and their neighbours (‘the incident’). Express Travel said that it had terminated its business arrangement with Food & Wine with immediate effect.
The first plaintiff in the County Court proceeding is Ms Karen Ridge, the director of Food & Wine. Her only cause of action was for alleged defamation arising from the incident, for which she claimed damages.
On 23 June 2021, a judge in the County Court ordered Food & Wine (but not Ms Ridge) to pay $50,000 by way of security for costs of the proceeding failing which
the proceeding would stand dismissed. Food & Wine did not provide security so its proceeding stands dismissed subject to the outcome of its application for leave to appeal against the County Court’s order.
In this Court, Express Travel seeks security for its costs of the application for leave to appeal in the sum of $61,067.77. Food & Wine opposes any order for security for costs.
For the reasons which follow, we will order that Food & Wine provide $30,000 by way of security for Express Travel’s costs of the application for leave to appeal (and any appeal). Further ancillary orders will be described later in these reasons.
Principles regarding security for costs
The Court has the power under r 64.38(4) of the Supreme Court (General Civil Procedure) Rules2015 (the ‘Rules’) to make an order that security be given for the costs of an application or appeal on such terms as the Court thinks fit.
The principles which inform the exercise of this Court’s power to grant security for the costs of an application for leave to appeal are well established, and are not in dispute. We set them out in another decision made today,[1] and we repeat them here.
[1]Djordjevich v Rohrt [2021] VSCA 279.
An order for security for costs of an application for leave to appeal is designed to ameliorate a risk — namely, that a successful respondent, put to the expense of defending a first instance decision in their favour, will be unable to recover costs against an unsuccessful applicant — which is unacceptable in all the circumstances.[2] Essential to any application for such an order is therefore the identification of the ‘nature and extent’ of that risk.[3] The party making the application for security bears the onus of establishing the matters which give rise to the risk.[4] Usually, the risk is said to arise because the applicant is impecunious.
[2]Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 38, [40] (Santamaria and McLeish JJA) (‘Australian Dream Homes’); Botsman v Bolitho [2018] VSCA 111, [50] (Whelan and Niall JJA).
[3]Australian Dream Homes [2016] VSCA 38, [40].
[4]Ibid [42].
Establishment of the necessary risk is not sufficient, of itself, to justify the making of an order for security. It must be shown as well that the risk is unacceptable in all the circumstances. In that regard, the power of the Court to order security for costs involves an exercise of discretion.[5] That discretion, while unconfined, is informed by the following familiar factors:[6]
[5]See Bodycorp Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd[No 3] [2016] VSCA 185, [19] (McLeish JA); Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2015] VSCA 169, [11] (Tate and McLeish JJA).
[6]See Timbercorp Finance Pty Ltd (in liq) v Tomes [2015] VSCA 322, [16] (McLeish JA, Santamaria JA agreeing at [40]); Australian Dream Homes [2016] VSCA 38, [38] (Santamaria and McLeish JJA); Rozenblit v Vainer [2019] VSCA 164, [45] (McLeish and Niall JJA).
(a) the prospects of success of the application for leave to appeal;[7]
[7]Any consideration of the prospects is necessarily provisional and ‘broad brush’: ASEA 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122, [26] (Kaye and McLeish JJA); Rozenblit v Vainer [2019] VSCA 164, [46].
(b) the degree of risk that a costs order might not be satisfied because of the impecuniosity of the applicant;
(c) whether the giving of security would be oppressive in that it would stifle a reasonably arguable claim;
(d) whether any impecuniosity of the applicant arises out of the conduct complained of by the applicant;
(e) whether there are aspects of the public interest which militate against the giving of security; and
(f) whether there are particular discretionary matters peculiar to the circumstances of the case.
Impecuniosity
In the County Court, Food & Wine was found to have insufficient assets in Victoria to be able to pay the costs of Express Travel if ordered to do so. It has not challenged that finding. On this application Ms Ridge has deposed that neither Food & Wine nor she herself have any ‘capacity’ to pay the security ordered in the County Court or any security for costs of the application for leave to appeal. In written submissions filed on its behalf, Food & Wine stated it ‘has no funds with which to pay the security for costs’.
On those facts the risk that a costs order made against Food & Wine in this Court would go unsatisfied must be assessed as being very high.
Prospects of success
The judge’s finding that there was reason to believe that Food & Wine had insufficient assets in Victoria to pay the cost of Express Travel if ordered to do so enlivened the County Court’s jurisdiction to order security for costs pursuant to r 62.02(1)(b) of the County Court Civil Procedure Rules2018. As stated, in submissions in this Court Food & Wine did not take issue with that finding. Rather, Food & Wine took issue with her Honour’s exercise of the discretion thus enlivened.
Observing the limitations that apply when appealing the exercise of a discretion,[8] Food & Wine proposes to contend that the judge failed to take into account a factor which the judge ought to have taken into account, and further, had no evidentiary basis on which to find that $50,000 was an appropriate amount for security.
[8]House v The King (1936) 55 CLR 499, 505 (Dixon, Evatt and McTiernan JJ).
The proposed grounds of appeal are these:
1. The Primary Judge erred in exercising her discretion to make an order for security for costs by failing to take into account the overlap between the claims of [Food & Wine] and [Ms Ridge].
2. The Primary Judge erred in holding the Second Affidavit of John Louis McGirr dated 24 May 2021 was admissible in relation to the quantum of the security for costs.
3. The Primary Judge failed to give any reasons why the sum of $50,000 was an appropriate amount for security for costs.
4. The Primary Judge lacked an evidentiary basis for making a finding on the quantum of costs.
To understand the proposed grounds of appeal it is necessary to say a little more about the underlying proceeding in the County Court.
Ms Ridge is the sole director of Food & Wine which trades as Mildura Travel & Cruise. As already mentioned, in addition to the claims made in the proceeding by Food & Wine as briefly outlined above, Ms Ridge made her own claim for damages for alleged defamation by Express Travel. Both the alleged defamation (as claimed by Ms Ridge and Food & Wine) and the alleged injurious falsehood (as claimed only by Food & Wine) arose from the same incident.
Details about the incident are set out in various media reports annexed to the further amended statement of claim filed by the plaintiffs in the County Court. The media reports refer to an incident apparently captured on video which was widely distributed on social media. In one report dated 15 December 2019, the video was accessible above a caption which read:
A SHOCKING video showing a Mildura couple accusing their neighbour of only being ‘one per cent Aboriginal’ and trying to tear down his Aboriginal flag has gone viral on the internet and made international headlines.
The report continues:
Mildura resident and respected Indigenous artist Robby Wirramanda filmed the incident on Friday night after two neighbours — understood to be prominent Sunraysia businesspeople Rob Vigors and Karen Ridge — approached the property and began racially insulting him.
Shortly after the incident Express Travel posted a statement to its Facebook page (referred to as ‘the December post’) and Twitter page (referred to as ‘the December Twitter post’) in these terms:
Express Travel Group provides travel services and products to travel retailers throughout Australia and we employ over 80 staff nationally with diverse backgrounds and cultures all working within our company values of diversity and inclusiveness.
We are deeply disappointed by the comments made by the owners of Mildura Travel & Cruise who are an independently owned travel business and also hold a membership within the Express Travel Group.
In light of these events, membership of Mildura Travel & Cruise has been terminated with immediate effect.
Express Travel also allegedly reproduced on its Facebook and Twitter pages some social media comments about the incident made by others. Those social media comments accused Ms Ridge and Mr Vigors of being racist and congratulated Express Travel for distancing itself from Mildura Travel & Cruise (ie Food & Wine).
In the County Court proceeding Ms Ridge alleged that Express Travel's Facebook and Twitter posts conveyed imputations including that she is a racist, cannot be trusted and is not a fit and proper person to be a director, or to own a business which is a member of Express Travel. In that proceeding, Food & Wine alleged that the same posts conveyed the imputation that Food & Wine has company officers who act in a racist manner, and that the company cannot be trusted, is not a fit and proper business and is not fit to be a member of Express Travel.
These publications and the imputations conveyed by them are alleged to be defamatory of both Ms Ridge and Food & Wine. In addition, the same publications are alleged to constitute a false statement made by Express Travel that Food & Wine is not fit to be a member of Express Travel because it employs company officers who act in a racist manner. Both Ms Ridge and Food & Wine claim damages for defamation. Separately, Food & Wine claims to have suffered additional losses by way of loss of business for which it also claims damages because of the alleged injurious falsehood.
Returning to the judge’s decision, her Honour addressed an argument put to her by Food & Wine in opposition to the application for security for costs that the claims of Ms Ridge and Food & Wine so overlapped that Ms Ridge would be responsible for paying any costs order should the plaintiffs lose. Having heard the argument her Honour said:
[Food & Wine] submits that [Ms Ridge] will be responsible for paying any order for costs in the event that the plaintiffs are unsuccessful and the claims sufficiently overlap that there would be a single costs order. [Express Travel] submits that the claims of Ms Ridge and Food & Wine are distinct and there is virtually no overlapping of those claims.
On review of the pleading it is clear that there are distinct claims for [Ms Ridge and Food & Wine]. The claims arising pursuant to breach of contract, contravention of s 18 of the Australian Consumer Law (‘ACL’), and s 21 of the ACL have nothing to do with the defamation claim brought. There is a real prospect that, if [Food & Wine] was unsuccessful in these claims, [Ms Ridge] would not be ordered to pay the costs of [Food & Wine].
There are aspects of the claim in injurious falsehood that overlap with the claims in defamation. However there are distinct aspects to a claim in injurious falsehood which may result in a different outcome in that claim than the defamation claim, for example the requirement to prove actual loss. In the event that [Food & Wine] lost its injurious falsehood claim, there is a risk that [Ms Ridge] would not be ordered to pay its costs. In the circumstances I am not satisfied that the claims are so intertwined that the inevitable outcome of a loss by [Food & Wine] is that [Ms Ridge] would be required to pay its costs.
As for the amount of security, her Honour received into evidence, in the face of an objection to its tender, an affidavit sworn on 24 May 2021 by Express Travel’s solicitor, Mr McGirr. In that affidavit, Mr McGirr swore that he had been admitted to practice in 2012 and had practised solely as a litigation solicitor in Victoria for nine years. He said that he had had the care and conduct of many proceedings in State courts including the County Court. He stated that he was familiar with the costs scales and how they applied to contentious litigation conducted in the County Court and that he had participated in the taxation of those costs.
Mr McGirr explained that he had reviewed the further amended statement of claim and that, based on his experience and expertise as a litigation lawyer, he expected Express Travel’s costs (comprising solicitors’ costs, counsel’s costs and expert witness costs) for defending the proceeding to comprise a number of items which he enumerated in a table. The total cost was $137,820 for processes through to and including the conclusion of the trial. He set out the hourly rates on which he had calculated the fees for solicitor and counsel fees for the work he had taken into account.
Based on his experience, he estimated that at least 50 per cent of the costs would be incurred because of the claims advanced solely by Food & Wine, namely the breach of contract claim, the misleading and deceptive conduct claim, the unconscionable conduct claim and the injurious falsehood claim.
There was no contrary evidence filed on behalf of Food & Wine.
Her Honour gave reasons for assessing $50,000 as the appropriate amount for security for costs as follows:
The defendant relies on an affidavit of Mr McGirr dated 24 May 2021 in which he sets out his estimate of the likely costs of this matter to trial. Counsel submits that the likely costs of preparing for [Food & Wine]’s case will be about 50% of the total costs.
[Food & Wine] submits that the evidence of Mr McGirr is inadmissible as expert evidence, that the foundation for the costs assessment is misconceived and that the evidence ought to be disregarded. [Food & Wine] says that, as this evidence is inadmissible, there is no evidence before the Court of the likely costs such that the Court can make an appropriate order for security.
I do not accept that the evidence of Mr McGirr is inadmissible. He is not purporting to be a costs expert, but is giving evidence from his own knowledge and experience as a solicitor in litigation and evidence as to the costs. I accept that an hourly rate is a different assessment from an assessment on a standard basis, nevertheless the evidence of Mr McGirr is admissible, as evidence from an experienced litigation lawyer as to the time likely to be required in preparing a case for trial and the disbursements likely to be incurred.
An order for security for costs is not a precise mathematical calculation, nor does it undertake an examination akin to a taxation. Rather it takes a broad brush approach, having regard to the evidence adduced by the parties.
In the circumstances I consider that the appropriate order is that [Food & Wine] pay the amount of $50,000 as security for the costs of [Express Travel].
That the judge failed to take into account the overlap between the claims (ground 1)
Counsel for Food & Wine submitted that the overlap of up to 50 per cent of the costs constituted a discretionary factor against giving any order for security for costs or, at least, for discounting the quantum of the security for costs, and that her Honour failed to take into account the overlap for either purpose.
When pressed to explain how the prospect of some overlap between the claims brought by the two plaintiffs should have resulted in there being no order for security for costs made against Food & Wine, counsel for Food & Wine put forward a rather elaborate argument which may have differed from the one which her Honour described as having been put to her.
As we understood it, Food & Wine submitted that: Ms Ridge would be able to advance her claim for defamation whether or not Food & Wine paid security for the costs associated with its claims; if Ms Ridge’s claims had wholly overlapped with Food & Wine’s claims, Express Travel would not be entitled to the benefit of protection for costs (from Food & Wine) which it would have had to incur in any event (defending Ms Ridge’s claim); therefore, where the two claims substantially overlapped (as they do here), a proper exercise of discretion would have involved taking into account the extent to which the claims of Food & Wine did not overlap with the claim of Ms Ridge; and, in this case, because the ‘factual foundation’ of all the claims pleaded was substantially the same, therefore, either there should have been no order for security for costs, or the quantum of security should have reflected the extent to which the costs of running the claims of Food & Wine exceeded those of running Ms Ridge’s claim. Food & Wine submitted that the judge failed to do either.
We do not need to say a great deal about this proposed ground. It appears to be ambitious in light of the fact that, self-evidently, the judge did address the argument as to the overlap between the claims in the passage from her reasons which we have extracted above. Even if a Court was to accept the methodological approach of reasoning advanced in the argument we have rehearsed above (which we need not decide), it is plain that the causes of action uniquely pleaded by Food & Wine required different proofs to those required for the defamation claim of Ms Ridge. Further, there was evidence before her Honour, from Mr McGirr (the admissibility of which we will turn to shortly), that at least 50 per cent of the costs that he projected were costs that would be incurred because of the claims advanced solely by Food & Wine.
To merely contend that her Honour did not accord adequate weight to the prospect of overlap between the claims, or did not discount the amount of security enough because of the extent of the overlap between the claims, is unlikely to meet the requirements of House v The King[9] on an application for leave to appeal a discretionary order of this kind.
[9](1936) 55 CLR 499.
In our view, the first proposed ground of appeal is, at best, very weak.
That the judge had no evidentiary basis to determine an amount for security for costs (grounds 2 and 4)
We understand that the alleged lack of evidentiary basis for the finding on quantum is said to follow from the alleged inadmissibility of Mr McGirr’s affidavit.
The proposed contention that the affidavit of Mr McGirr was inadmissible involves several propositions to be taken either individually or collectively. One was that the evidence of Mr McGirr concerned costs calculated on a time costing basis as opposed to the standard basis under the Rules and (presumably) was therefore irrelevant evidence. The second was that, in any event, the opinion contained a ‘mere assertion’ of the costs involved in each listed task. The third was that the opinion of Mr McGirr did not comply with the requirements of expert evidence because there was no basis expressed as to how Mr McGirr’s expertise produced his opinion on the costs that would be incurred.[10]
[10]Reliance was placed on Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, 602–4 [32], [35], [37], 605 [42] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ), 622–3 [91] (Heydon J).
In our view, Food & Wine will encounter difficulty succeeding on an argument that her Honour had no evidentiary foundation for concluding that $50,000 was an appropriate amount for security. As outlined above, Mr McGirr provided his credentials as an experienced litigation solicitor able to provide an estimate of the costs that would be involved in defending litigation in the County Court. Although it appears he provided his estimate of costs based upon a time costing basis, he also stated that he was familiar with the costs scales in State courts and he related the costs calculated on a time basis to scale costs saying that the ‘hourly rates average out to be less than 80% of the Supreme Court Scale’. Her Honour expressly acknowledged that an hourly rate is different from an assessment on the standard basis, which we take to mean that her Honour took that difference into account.
In our view, it is likely to be concluded that her Honour had admissible evidence of an opinion from a person with apparent specialised knowledge. It is unlikely to be construed as an opinion on an irrelevant matter. At the very least, the opinion constituted an intelligible starting point from which the judge could make a rational assessment on a broad brush basis of an appropriate amount for security for costs.
That the judge did not adequately explain her reasons for assessing quantum at $50,000 (ground 3)
We assume that what Food & Wine means by this proposed ground is that, being unexplained (as Food & Wine would have it), the assessment as to the quantum of security must be taken to be an arbitrary decision and not a judicial decision.[11]
[11]Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 278–9 (McHugh JA).
For our part, we think Food & Wine will have real difficulty persuading the members of this Court hearing the leave to appeal application that the assessment of the amount of security so lacked adequate explanation that it was an arbitrary decision. We say so for these reasons:
(g) First, unless the challenge to admissibility succeeds, which we strongly doubt, her Honour had evidence of the likely costs of the proceeding through to trial, albeit calculated on an hourly rate basis rather than a standard basis (as the judge acknowledged), in the sum of $137,820.
(h) Secondly, having already taken into account the argument that the two plaintiffs’ claims overlapped, her Honour referred to Mr McGirr’s estimate that the likely costs of preparing for Food & Wine’s case would be about 50 per cent of that total. His evidence was not contradicted.
(i) Thirdly, her Honour noted, correctly, that assessing the amount for an order for security for costs is not a precise mathematical calculation but takes a ‘broad brush’ approach having regard to the evidence adduced by the parties.
(j) Fourthly, allowing for those matters (ie, ‘In the circumstances I consider …’), her Honour arrived at a sum of $50,000. That sum was a very significant reduction from the $137,820 assessed by Mr McGirr as being the total costs of Express Travel for defending the proceeding to trial.
Accordingly, we consider it likely that her Honour’s reasons for arriving at her decision will be found to have been adequately disclosed.
In conclusion, overall we think that Food & Wine’s prospects of success on its leave to appeal application are very weak.
Whether an order for security would stifle a reasonably arguable case
Food & Wine submitted that if security for costs is ordered in this Court, it will effectively be denied the right to make an application for leave to appeal on the basis of impecuniosity, against a decision for security which itself was based upon impecuniosity and which resulted in the dismissal of its claim.
There are several considerations to weigh against this argument, which is essentially one of oppression. First, the ‘arguable case’ being considered at this stage is the case for overturning the decision to order security in the County Court rather than the underlying claim for damages to be litigated there. As we have said, we consider the prospects of the application for leave to appeal to be very weak.
Secondly, although Food & Wine has stated that it does not have the ‘capacity’ to pay the security ordered in the County Court or the security sought in this Court, it is apparent from the evidence that Food & Wine is the trustee of a family trust. Although it has produced evidence that Ms Ridge (its director) also does not have the wherewithal to pay security (or, we infer, Express Travel’s costs of the leave to appeal application if Food & Wine is ordered to pay them), Food & Wine did not provide any evidence of the identity or means of those who, through the trust, are likely to benefit from the fruits of the litigation and who may be able to provide security if ordered. The absence of that evidence is a matter we take into account in giving weight to any prospect that an order for security might stifle a reasonably arguable case.
As Whelan and Niall JJA said in Botsman v Bolitho:
Relevantly, where an applicant alleges that the making of an order for security would stifle or stultify the appeal, it is not sufficient for it to simply rely on its alleged impecuniosity. The mere fact that the applicant is unable to provide security does not necessarily lead to the conclusion that the making of an order for security would stultify the appeal given that there may well be someone else standing behind the applicant who would satisfy any adverse costs order. Further, whether an appeal will be stultified by an order for security is a question of fact that will generally require evidence.[12]
[12][2018] VSCA 111, [39] (citations omitted); see also Bell Wholesale Co Ltd v Gates Export Corp (1984) 2 FCR 1, 4 (Sheppard, Morling and Neaves JJ); Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377, 383 [22] (Maxwell P and Buchanan JA).
In combination, the two considerations we have mentioned substantially reduce the weight of this factor.
Public interest
An argument was advanced by Food & Wine that there was a public interest militating against an order for security. Essentially, as we understood the argument, it was similar to the argument just discussed. Further, Food & Wine added the supposed ‘incongruity’ of ordering security for the costs of an application for leave to appeal an order for security for costs. That ‘incongruity’, it was said, exists especially because the issues to be addressed on the security application would largely traverse the issues to be covered on the leave application. Hence, the task of preparing for and conducting the leave to appeal application would, in effect, have substantially been performed in undertaking the security for costs application.
Perhaps this is an argument about an arguable cost inefficiency of any security for costs application. However, as stated earlier, orders for the security of the costs of an appeal serve a particular purpose, namely to avoid any unacceptable risk of injustice to a party put to the expense of defending a first instance decision in their favour. The evaluation of prospects is necessarily ‘broad brush’ and provisional, and is undertaken in the interests of identifying and ameliorating any such risk.
More appropriately, the argument advanced by Food & Wine on this factor goes to the issue of the quantum of security for costs that should be provided.
We have concluded that it is appropriate to order that Food & Wine provide security for Express Travel’s costs of the application for leave to appeal (and any appeal). We turn to the question of the amount to be provided.
Quantum
In determining a sum that is sufficient for security for costs, the Court does not undertake precise mathematical calculations but, rather, adopts a ‘broad brush’ approach. Nevertheless, the Court must have an evidentiary basis for its calculation, although it is not bound by the parties’ evidence. The amount fixed is not intended to be a full protection for the estimated costs of the party seeking security: but it is not to be so low that it fails to provide real protection nor so high that it is oppressive to the party required to provide the security.[13]
[13]Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293, [63]–[65] (Tate and Kyrou JJA); ASEA 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122, [31]; Bria v Wilson [2020] VSCA 338, [26] (Emerton and Sifris JJA).
Express Travel relied upon a report from a costs lawyer, Ms Jenny Young, who estimated Express Travel’s costs to the conclusion of the appeal on a standard basis, including costs already incurred, at $61,067.77. Past costs were estimated at $4,459 and future costs were the balance. Future costs include $21,877 for the costs of this application for security for costs.
Food & Wine relied upon a report of a lawyer, Mr Sam Angelatos, who estimated Express Travel’s costs to the conclusion of the appeal to be $24,202 which he discounted by 25 per cent ‘for the vicissitudes of litigation’, arriving at $18,151.50. He took issue with various items in the report of Ms Young including the daily rate to be allowed for counsel’s fees, and the number of hours that should be allowed for specific tasks of reviewing and preparing documents for the leave to appeal application and any appeal. He also reduced a number of Ms Young’s allowances for the costs of the application for security for costs.
We take into account the nature of this particular application for leave to appeal which we consider to be quite confined and narrow in compass. We also take into account the fact that there is a significant degree of overlap between the preparation required for this application and that required for the application for leave to appeal itself.
Applying the principles we have outlined to the evidence before us, we consider that a just and reasonable sum for security for Express Travel’s costs of defending the application for leave to appeal and any appeal is $30,000.
Conclusion
If security for costs was to be ordered, Express Travel sought a further consequential order that the time within which it must file its written case in response to the substantive application pursuant to r 64.11 of the Rules be extended until 28 days of the payment of security by Food & Wine. Although no written or oral submissions were addressed to this particular application, it is one we are minded to make as a matter of practical sense.
Accordingly, we will order:
(k) By 4:00 pm on 4 November 2021, the applicant provide to the Associate Judge who is the Senior Master, by payment into Court or in another form acceptable to the Registrar of the Court of Appeal, security for the respondent’s costs of the application for leave to appeal and any appeal if leave be granted, in the sum of $30,000.
(l) The proceeding is stayed until the applicant provides security for costs in accordance with paragraph 1 of this order.
(m) The time within which the respondent must file its written case in response to the substantive application pursuant to r 64.11 of the Rules be extended until 28 days after the payment of security by the applicant.
(n) The costs of the application for security for costs be costs in the application for leave to appeal and, if leave is granted, the appeal.
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