Gaudry v Rello Finance Pty Ltd (Costs Ruling)
[2023] VSC 713
•30 November 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
COMMON LAW DIVISION
S ECI 2023 04697
| ANTON GAUDRY | Plaintiff |
| v | |
| RELLO FINANCE PTY LTD ACN 633 994 859 & ORS (in accordance with the attached schedule of parties) | Defendants |
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JUDGE: | GRAY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers (written submissions dated 20 November 2023) |
DATE OF JUDGMENT: | 30 November 2023 |
CASE MAY BE CITED AS: | Gaudry v Rello Finance Pty Ltd (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 713 |
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COSTS — Where plaintiff successful in obtaining orders for removal by Registrar of Titles of recordings of warrant of seizure and sale on title to properties in accordance with principles in Capital Finance Australia Limited v The O’Bryan Group Pty Ltd [2003] VSC 355 and ancillary temporary injunctions — Whether orders were interlocutory — Whether costs of proceeding to date should be costs in the cause or whether successful plaintiff should receive an order for his costs — Supreme Court (General Civil Procedure) Rules 2015 r 63.20.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W Rimmer | King & Collins |
| For the First Defendant | Mr M Grady | SLF Lawyers |
| For the Second Defendant | Ms K Finemore | Blue Rock Law |
| For the Third Defendant | Ms H Tiplady | Victorian Government Solicitor’s Office |
| For the Fourth Defendant | No appearance |
HIS HONOUR:
Following my publication of reasons and orders on 1 November 2023,[1] two of the parties made submissions as to the costs of the proceeding to date.
[1]Gaudry v Rello Finance Pty Ltd [2023] VSC 630.
Overview
The plaintiff, Mr Gaudry, seeks orders that his costs be paid by the first defendant, Rello, on the standard basis, and that there be no costs order against the second, third or fourth defendants.
Rello submits that costs in relation to the plaintiff’s summons filed 10 October 2023 should be the parties’ costs in the proceeding, on the standard basis.
I have decided that Rello should pay Mr Gaudry’s costs of the proceeding to date, on the standard basis. There will be no order as to the other parties’ costs.
Rule 63.20
Rello submits that an order for the parties’ costs in the proceeding is consistent with ‘the default position under r 63.20 of the Supreme Court (General Civil Procedure) Rules … with respect to costs on any interlocutory application’.
Rule 63.20 of the Supreme Court (General Civil Procedure) Rules 2015 provides:
Where an interlocutory or other application is made in a proceeding and —
(a) no order is made on the application; or
(b) the order made is silent as to costs —
the costs are the parties’ costs in the proceeding, unless the court otherwise orders.
Rule 63.20 has been described as setting out the ‘default position that costs of an interlocutory application are costs in the proceeding unless the court otherwise orders’.[2] An order for ‘costs in the proceeding’ used to be known as an order for ‘costs in the cause’.
[2]Allen v G8 Education Ltd (No 3) [2022] VSC 302, [5(d)].
If I were to make the order sought by Rello, the costs of the proceeding to date would ultimately be paid by the party that loses the proceeding.
The first issue before me is whether the orders made to date were made on an ‘interlocutory or other application’, with the result that r 63.20 is engaged. Secondly, if r 63.20 is engaged, I must consider whether there is sufficient reason to depart from the default position. Under s 24 of the Supreme Court Act 1986 I have a broad discretion as to costs. I must exercise that discretion judicially and on facts connected with the litigation.
First issue: interlocutory or other application?
As to the first issue, Rello made submissions about the nature of the orders I made on 13 and 17 October, and 1 November, 2023. Rello submitted that the test for determining whether an order is final or interlocutory is whether the order finally determines the rights of the parties, having regard to the legal rather than practical effect of the order.[3]
[3]Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, 248. See also Brereton v Sinclair [2000] 2 VR 424, [15]; Wenco Industrial Pty Ltd v WW Industries Pty Ltd (2009) 25 VR 119, [10].
Applying this test, Rello submitted that the orders for the removal of the recording of the Warrant from both Unit 1 and Unit 2, together with the injunctions preventing Rello from reapplying to the Registrar to record the Warrant, were interlocutory.
Rello drew an analogy in this regard between the orders for removal of the recording of the Warrant on the one hand, and decisions refusing to set aside a default judgment[4] or refusing to set aside a search warrant on the other.[5] In both these other contexts, for the purposes of ascertaining appeal rights, courts have recognised such decisions to be interlocutory. They give rise to no issue estoppel and there is no bar to a further application being made by the disappointed party. I do not think these analogies are very strong. Although decisions refusing such relief are interlocutory, is does not necessarily follow that decisions granting such relief are also interlocutory.[6] If the proceeding to date is viewed simply as a controversy as to which form of sale process should govern to the Units while in the possession of Mr Gaudry as mortgagee, then (subject to appeal rights) there might be a compelling argument that the orders were final. However, the injunctions I granted were clearly interlocutory, and were expressly made subject to liberty to apply. Rello correctly pointed out that, in the absence of the injunctions, it was technically at liberty to re-notify the Warrant to the Registrar. I am satisfied that the orders were interlocutory.
[4]Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 248, 254.
[5]Coles v Wood [1981] 1 NSWLR 723, 727.
[6]In fact, one of the authorities indicates that a decision granting a declaration of invalidity would be final: Coles v Wood [1981] 1 NSWLR 723, 727.
I note, however, that rule 63.20 does not refer to the orders made by the Court, but rather to the process that was before the Court. Rule 63.20 is engaged where ‘an interlocutory or other application is made in a proceeding…’. Here Mr Gaudry made an application by summons on originating motion seeking precisely the form of final relief set out in his originating motion. All the relief he sought was final in nature, including the injunctive relief.[7] That suggests that the application was not ‘interlocutory’, although it was certainly an ‘application’ in the proceeding. In the event, the proceeding did not come to an end when I made orders determining the application. On the other hand, there was no certainty that any further step would be taken in the proceeding, either. No party had yet sought any further relief in the proceeding, or undertaken to do so. The recitals to my orders invited the parties to file consent orders dismissing the proceeding with no order as to additional costs, if the mortgagee sale process occurred without controversy.
[7]In light of submissions from the Registrar, ultimately I did not order any permanent injunctions.
In all the circumstances, I am satisfied that r 63.20 is engaged, and so the default position is that the costs of the proceeding to date will be the parties’ costs in the proceeding unless I am persuaded to exercise my discretion to order otherwise.
Second issue: sufficient reasons to depart from default position?
Turning to the second issue before me, I am satisfied that I should depart from the default position under r 63.20. Having regard to the features of the case identified in the following paragraphs, I am persuaded that this is a case in which the plaintiff, who was substantially successful in obtaining the relief he sought in his application, should have the benefit of a separate costs order. That decision should not await the ultimate outcome of the proceeding.
First, the essence of the controversy before me was whether a sale by the Sherrif would be futile, or (to put it another way), which of the mortgagee’s sale or Sheriff’s sale should proceed. As noted above, nothing else was sought in the proceeding at the time, and there is no certainty that anything else will ever be sought in the proceeding. My determination of that controversy was not provisional or subject to the making of further findings on a final basis later in the proceeding. It is true, as Rello submitted, that I was not in a position to make conclusive findings about the precise sums owed by Mr Rogers and secured by Mr Gaudry’s registered mortgage in priority over Rello’s charge. However, I was satisfied that Rello would not have received any proceeds from a Sheriff’s sale in execution of the Warrant. This was the crucial point. The plaintiff persuaded me that the Sheriff’s sale process would have been futile. It is also true, as Rello points out, that there might well remain disputed issues of fact and law concerning the priority Rello’s chargee interest might receive in distribution of proceeds from the mortgagee sale process. However, to my mind, the fact that a mortgagee’s sale might result in a distribution to Rello only goes to show that Mr Gaudry was right to insist on the removal of the recordings of the Warrant, clearing the way for the mortgagee sale process to proceed.
Secondly, the application brought by Mr Gaudry was not analogous with a typical application for an interlocutory injunction where an applicant succeeds in establishing a prima facie case but the final merits of that case remain to be determined at trial. The interlocutory injunctions in this case were ancillary to the removal of the recordings of the Warrant from the titles. The primary relief was removal of the recordings of the Warrant. This relief was granted on the basis of the Court’s positive satisfaction, on (at least) the balance of probabilities, that a Sheriff’s sale process in execution of the Warrant would be futile. I was satisfied that there was no realistic prospect that Rello would receive a return from a sale by the Sheriff.[8]
[8]Gaudry v Rello Finance Pty Ltd [2023] VSC 630, [54](I), [85], [89], [95].
Thirdly, in the lead up to the commencement of the litigation, Mr Gaudry outlined the basis on which he ultimately brought and prosecuted his application in correspondence to Rello, doing so in sufficient detail and in a manner supported by an undertaking in similar terms to the one he ultimately gave to the Court, relating to any surplus from the proceeds of sale of Unit 2. Although Mr Gaudry’s case was not identical in every respect with the arguments and offers he made in the lead up to the litigation, it was in essence very similar. Mr Gaudry acted reasonably, both in the lead up to the litigation and in its conduct, and he has been vindicated by the outcome.
Conclusion
The default position in the case of orders of an interlocutory nature resulting from an interlocutory or other application in a continuing proceeding is that the costs of the application are the parties’ costs in the proceeding. However, in the circumstances of this case, I have concluded that there are sufficient reasons to depart from the default position.
I will order that Rello pay Mr Gaudry’s costs of the proceeding to date. As I indicated in my written reasons on 1 November 2023, my expectation was then, and remains, that if the mortgagee’s sale process for Unit 2 duly takes place, in due course the parties should inform the court that the proceeding can then be dismissed, with no further order as to costs.
SCHEDULE OF PARTIES
PLAINTIFF: | |
| ANTON GAUDRY | Plaintiff |
DEFENDANTS: | |
| RELLO FINANCE PTY LTD ACN 633 994 859 | First Defendant |
| DARREN ANDREW ROGERS | Second Defendant |
| THE SHERIFF FOR THE STATE OF VICTORIA | Third Defendant |
| REGISTRAR OF TITLES | Fourth Defendant |
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