Giurina v Deak (No 2)
[2019] VSC 237
•10 April 2019 (given ex tempore, revised 12 April 2019)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
IN THE JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 00168
| ERMANNO GIURINA | Applicant |
| v | |
| MARIA DEAK & ORS (according to the attached schedule) | Respondents |
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JUDICIAL REGISTRAR: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 10 April 2019 |
DATE OF RULING: | 10 April 2019 (given ex tempore, revised 12 April 2019) |
CASE MAY BE CITED AS: | Giurina v Deak & Ors (No 2) |
MEDIUM NEUTRAL CITATION: | [2019] VSC 237 |
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PRACTICE AND PROCEDURE – Security for costs – Principles to apply in appellate context where appellant is an individual – Non-payment of numerous previous costs orders sufficient evidence of risk that future costs order if the appeal is unsuccessful will not be satisfied – Consideration of discretionary factors weigh in favour of granting security – Houlahan & Ors v Trentham Investment Management Pty Ltd & Anor (No 2) [2016] VSC 445 – Morag Atwell v Dennis Turner & Ors [2017] VSC 212
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APPEARANCES: | Counsel | Solicitors |
| The Applicant appeared in person | ||
| For the Respondents | Ms G S J. Berlic | Wisewould Mahony Lawyers |
JUDICIAL REGISTRAR:
By way of summons filed 15 February 2019, the respondents seek from the applicant security for their costs of the appeal.[1]
[1]By order made on the Court’s own motion, the application for security for costs was referred to me for hearing and determination, pursuant to r 84.04 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’).
Background
This proceeding concerns an appeal from orders made by Associate Justice Ierodiaconou on 31 July 2018 following the decision made by her Honour in Giurina v Deak & Ors.[2] In that decision, her Honour declined the applicant’s application for a stay until a related proceeding had been determined, and granted the respondents’ application for summary dismissal of the applicant’s application for leave to appeal a decision of the Victorian Civil and Administrative Tribunal (‘VCAT’) to refuse to reinstate a proceeding brought in that tribunal (‘VCAT Decision’).
[2][2018] VSC 409 [‘Reasons’].
In support of their application for security for costs, the respondents rely on an affidavit of Robert Michael McGirr, sworn 15 February 2019 (‘Fourth McGirr Affidavit’). Mr McGirr is a partner at the firm Wisewould Mahony Lawyers (‘WML’), solicitors for the respondents. The respondents also rely on an affidavit of Raymond John De La Rue, sworn 4 March 2019. Mr De La Rue is a legal costs consultant.
In opposition to the application for security for costs, the applicant, Ermanno Giurina, relies on two affidavits sworn by him, one on 4 March 2019 (‘First Giurina Affidavit’), and one on 22 March 2019 (‘Second Giurina Affidavit’).
The background to these proceedings is lengthy and extensive, and I see no utility in setting that out here. The background to the proceeding can be found in the Reasons and unless otherwise referred to below, I see no reason to repeat it.
Whether to order security for costs
Applicable principles
The respondents rely on decisions by judges in the Trial Division of this Court as setting out the applicable principles for applications such as this one.
In Houlahan & Ors v Trentham Investment Management Pty Ltd & Anor (No 2),[3] which concerned an appeal from an associate judge to a judge in the Trial Division of a decision where Mukhtar AsJ refused an application to set aside a default judgment, McMillan J stated:[4]
The Court has an inherent jurisdiction to order security for costs as part of its power to regulate its own procedure. The principles in relation to the ordering of security for costs in a first instance matter and at the appellant level differ. Whilst the general rule at the first instance level provides that poverty is no bar to a litigant and that a plaintiff’s impecuniosity will not on its own justify an order for security for costs, there is a difference at the appellate level. This is because there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal or to an appeal will be deprived of his costs, such an outcome would clearly be unjust.
The justification behind the cases where security for costs is ordered is that an injustice to a successful litigant may be caused if he or she is compelled to contest the matter for a second time without a probability of obtaining his costs, if ultimately successful.
[3][2016] VSC 445 (‘Houlahan’).
[4]Houlahan, [11]-[12].
This was applied by Kennedy J in Morag Atwell v Dennis Anthony Turner & Ors,[5] where her Honour further stated:[6]
There is power to order security where there is a risk of injustice to a successful litigant. This is particularly so in the current context which is concerned with appellate jurisdiction.
[5][2017] VSC 212 (‘Atwell’).
[6]Atwell, [16].
As noted in Atwell, whether security should be granted turns on discretionary factors. Kennedy J stated:[7]
[7]Atwell, [19]; Referring to Australian Dream Homes v Stojanovski [2016] VSCA 38, [38] and Bodycorp Repairers Pty Ltd v Maisano [2017] VSCA 39, [23].
The power to order security for costs is discretionary, although the following six matters are generally relevant to the exercise of the Court’s discretion in an appellate context:
(1) the prospect of success of the application, and any appeal;
(2) the extent of the risk that a costs order will not be satisfied;
(3)whether the making of an order for security would be oppressive by stifling a reasonably arguable claim;
(4)whether any impecuniosity of the applicant/appellant arises out of the conduct complained of;
(5)whether there are aspects of the public interest which militate against the making of an order for security; and
(6)whether there are particular discretionary matters peculiar to the circumstances of the case.
In resisting the application for security for costs, the applicant frames his submissions by reference to the decision of Lindgren J in Knight v Beyond Properties Pty Ltd.[8] He submits that:
Many cases can be cited for the proposition that there is a disinclination to order an applicant both at first instance and at an appellate level, as in this case, who is a natural person to provide security, at least in the absence of some factors in addition to impecuniosity.
[8][2005] FCA 764 (‘Knight’).
The applicant refers to paragraph 32 of Knight in support of this proposition. I note that this paragraph of Knight does not refer to an appellant, it only refers to an applicant. In further reliance on that paragraph, the applicant says that natural persons, even impecunious ones, should have free access to the courts, which is an accurate reflection of his Honour’s comments.
The applicant also submits that the additional factors apart from impecuniosity which are required in order to support an application for security for costs are whether the applicant is resident outside Australia, whether the claim is brought for the benefit of others, and where there is a lack of prospects of success. He relies on paragraph 33 of Knight for this proposition.
In my view, the applicable principles in regards to this application are those summarised in paragraphs 7 to 9 above. The reliance by the applicant on Knight is misplaced, as that decision concerns a first instance application for security for costs and not one concerning an appeal. When I raised this with the applicant during the course of the hearing, he submitted that as Knight did not state that it did not apply to appeals, it was applicable. I do not find this submission to be persuasive.
Accordingly, I approach this application in the same manner as adopted by McMillan J in Houlahan and by Kennedy J in Atwell. This requires consideration of the discretionary factors as outlined in paragraph 9 above.
Consideration of the discretionary factors
Both parties filed written submissions, and also made oral submissions. It is unnecessary to reiterate them in full here; they have all been considered.
Prospects of success
The respondents rely on the principle that there is a presumption that the decision appealed from is correct.[9] The respondents say that since the present appeal is the appeal of a discretionary decision of an associate judge, that is in the nature of a rehearing and not de novo, the applicant will need to show error on the part of the associate judge before the appellate power may be exercised. The respondents say that there is nothing in the applicant’s affidavit material that has identified any error or other relevant reason on the part of the associate judge which would invite the Court to interfere with the decision of the associate judge. They say that the applicant’s appeal has poor prospects of success and that this is a factor weighing in favour of granting security.
[9]Protec Pacific Pty Ltd v Steuler Services GmBH & Co KG (No 2) [2015] VSCA 123.
In response, the applicant’s written submission sets out in some detail why he says that he has good prospects of success. In oral submissions, the applicant said that his prospects of success are excellent. The applicant spent a great deal of time on this factor, describing the VCAT Decision and the Reasons as containing ‘blatant errors’. I do not need to set the submissions out here, suffice to say that I have taken all of them into account. In my view it is appropriate for me to say little about the prospects of success given that ultimately that will be a matter determined by the judge hearing the appeal. Nor do I propose to engage with the strong language used by the applicant when describing those decisions.
Nonetheless, taking into account the extensive history of this proceeding and the disputes between these parties, along with the extensive Reasons, in my view the prospects of the applicant succeeding on his appeal cannot be described as ‘good’ or ‘excellent’. The appeal concerns a discretionary decision of an Associate Judge, where the applicant needs to show both error of law and that the discretion has miscarried in such way as to justify the Judge altering the outcome. This is a high threshold for the applicant to have to meet.
In light of all of this, I regard this factor as one tending in favour of granting security.
Risk of a costs order not being satisfied
The respondents rely on the fact that a number of costs orders previously made in their favour against the applicant have not been satisfied. In this proceeding, there is a total of $64,610.30 in costs orders payable by the applicant to the respondents that have not been paid (‘Previous Costs Orders’).[10] In other related proceedings, there is a total of $22,194.10 in costs orders payable by the applicant to the third respondent (‘Owners’ Corporation’) that have not been paid (‘Other Costs Orders’).[11] The respondents say that the applicant has not paid any of these costs orders made against him in their favour and he has not deposed that he would pay any potential costs orders made against him in this proceeding if his appeal was unsuccessful. He has also not deposed that he is able to pay any potential costs order made against him in this proceeding. The respondents say that there is a real risk that he will not pay any further costs orders against him and that this will place increased financial strain on the Owners Corporation, which presents a significant risk of injustice to the respondents.
[10]This comprises $24,770 pursuant to an order made by Member Dea on 7 May 2018 and $39,840.30 pursuant to the order made by Gourlay JR on 6 December 2018 (pursuant to the orders made by Ierodiaconou AsJ on 30 July 2018): Fourth McGirr Affidavit, [53].
[11]Fourth McGirr Affidavit, [54]. At the hearing, counsel for the respondents acknowledged that the orders referred to in paragraph 54(d) of the Fourth McGirr Affidavit for $11,161.72 was a judgment amount and not a costs order, so this should be deducted from the total referred to by Mr McGirr, which I have done to produce the figure of $22,194.10.
In response, the applicant says that in Lines v Tana Pty Ltd,[12] the then Full Court of this Court made clear that where there may be other costs orders in other proceedings where payment has not been demanded, then that is not a relevant factor to require security for costs and in any event, in any other proceedings where costs orders exist, the option remains to employ one of the remedies available for the recovery of costs. The applicant says that this applies to the Other Costs Orders. He also says that those costs orders were the subject of bankruptcy proceedings against him which were successfully defended by him. In relation to the Previous Costs Orders, the applicant says that there has been no demand made on him to pay those sums and in a practical sense they may not eventually be required to be paid because they could be affected by the final determination of this current appeal process. In addition, the applicant says that he has a ‘strong counterclaim’ to any attempt to enforce the costs orders as the Owners Corporation still owes him about $80,460 as a result of a loan agreement and some other matters.
[12][1987] VR 641, 644 (‘Lines v Tana’).
In response to these submissions, the respondents say that the purported debts of the Owners Corporation to the applicant do not affect his liability to pay the various costs orders that have been made against him, and that in any event the evidence does not establish any debt is in fact owed by the Owners Corporation to the applicant. In this regard, the respondents rely on similar arguments made by the applicant at VCAT where the tribunal ultimately found that it was not satisfied on the evidence that the Owners Corporation had passed a resolution agreeing to the loan or that the funds were in fact advanced or are repayable. The applicant says that this finding at VCAT was made without him having access to certain material which he has now provided,[13] and that this means the debt from the Owners Corporation to him arising from the loan has been established.
[13]Exhibit EG-9 to the First Giurina Affidavit.
The respondents also say that the belief that he may not be required to pay the Previous Costs Orders because they could be affected by the final determination of this current appeal process is misconceived, in that these are now due and owing and there has been no relevant stay of those orders pending the outcome of this appeal.
The applicant says that the onus is not on him to show that he is not able to pay any further costs orders, rather, he says the onus is on the respondents to show that he cannot. He says that they have failed to discharge this onus. This submission appears to be based on the applicant’s reading of Knight.[14]
[14]Knight (n 8) [27].
In my view, there may be a number of reasons why there is a risk that a costs orders will not be satisfied, which may include the impecuniosity of an appellant, or some other matter. In this case, there is extensive evidence before me as to the existence of a number of previous costs orders both in this proceeding and in other proceedings which the respondents have obtained against the applicant and which the applicant has not satisfied. In my view, this is evidence that there is a substantial risk that a costs order made in relation to this appeal will not be satisfied.
At no point does the applicant say that he will pay a costs order arising from the appeal, nor for that matter does he say that he can pay such a costs order. Rather, during the course of oral submissions he said that the respondents are free to pursue enforcement measures regarding those earlier costs orders and indicated that he would oppose those enforcement measures.
The applicant’s attempts to minimise or eliminate the impact of both sets of earlier costs orders as showing there is a risk that he may not satisfy a future costs order are rejected.
In relation to the Other Costs Orders, the applicant’s reliance on the setting aside of a bankruptcy notice issued to enforce those costs orders is misconceived and disingenuous. That a bankruptcy notice in relation to those costs orders was set aside does not mean that these are finalised as he submits; rather, absent any evidence to the contrary, those costs orders remain payable, it is just that the bankruptcy notice which was issued was set aside and so was not able to be relied upon to enforce them. When pressed on this point during the hearing, the applicant acknowledged that this was the case.
Further, the applicant did not explain how it could be said that no demand had been made for payment of the Other Costs Orders in circumstances where the Owners Corporation had served him with a bankruptcy notice in respect of some of those orders. Again, when I raised this with him, the applicant acknowledged that this was a demand for payment.
In relation to the Previous Costs Orders, the applicant says that these cannot be relied upon as a basis for granting security as no demand has been made of him to pay them. He acknowledges that he received the orders. The respondents say that he had received the orders and that WML had written to the applicant on 8 February 2019 in this proceeding setting out all of the unpaid costs orders, including the Previous Costs Orders, and stating that these would be relied upon in a security for costs application.[15] The respondents say that the applicant can be under no misapprehension as to their position in relation to the Previous Costs Orders and that these are to be paid.
[15]Exhibit RMM-16 to the Fourth McGirr Affidavit.
In my view, it is disingenuous of the applicant to rely on this issue of whether demands have been made in respect of either sets of costs. First, the applicant’s summary of the ratio in Lines v Tana is not accurate. There, the Full Court said that non-payment of costs in the circumstances described in that case (where there were two unpaid costs orders for interlocutory steps of $325 and $350) did not afford the occasion for ordering security. The Full Court also stated that if it is ‘established that a plaintiff has neglected to discharge a costs order in circumstances where payment might be considered appropriate, the correct course is to employ one of the remedies available for the recovery of costs’.[16] I do not consider the circumstances of this case to be on all fours with that obtaining in Lines v Tana. Second, the applicant has been served with copies of the orders as made and he has made no effort to pay them. These are orders of the Court. To say that there is not a demand in terms that he do so is therefore no barrier to the view that that there are existing costs orders in this proceeding, which are substantial and have not been paid.
[16]Lines v Tana (n 12) 644.
Further, the applicant has said he will not pay the Previous Costs Orders because they may be affected by the ultimate outcome on this appeal. His position in this regard is rejected and I accept the respondents’ submission on that point.
I do not need to make findings as to whether the debts allegedly owing to the applicant by the Owners Corporation are owing or not. No submissions were made that there was a right of set-off in this regard. Even if the debts were owed and able to be set off, including as against the first and second respondents where there is no allegation of a debt owed by them to the applicant, there would still be an amount owing to the respondents.
I am satisfied that there is a real risk that a future costs order will not be paid. In security for costs applications at first instance, once the Court is satisfied that there is ‘credible testimony’ for ‘reason to believe’ that a plaintiff will be unable to pay a costs order, which is a low threshold,[17] the onus then shifts to the person resisting the application for security to negate that belief.[18] The applicant has not led any evidence as to his financial position (see paragraph 39 below).
[17]Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377, [10], [16], [21] (‘Livingspring’).
[18]FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd (2000) 33 ACSR 739, 745.
Further, the applicant’s conduct and attitude to date in relation to both sets of earlier costs orders gives me no confidence that he will pay a future costs order. Indeed, when referring to two of the Other Costs Orders which were the subject of the bankruptcy notice that was set aside, the applicant submitted that these were coming up against the 6 year limitation period and so shortly would not be able to be enforced. I asked him whether he was sure about that, and he said that he was, apparently relying on s 5(1) of the Limitations of Actions Act 1958 (Vic) (‘LAA’). I note, however, that judgment debts are not subject to s 5(1) of the LAA and that s 5(4) of the LAA is relevant, which states that an action shall not be brought upon any judgment after the expiration of 15 years from the date on which the judgment became enforceable. Even so, this only applies to new actions upon a judgment and not to steps taken in the enforcement of a judgment.[19] In any event, the applicant’s response is indicative of his unwillingness to pay these earlier costs orders and I have no reason to believe his attitude is any different in respect of any future costs order.
[19]Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158, [18].
I am therefore satisfied that there is credible evidence for reason to believe that a future costs order will not be satisfied.
Stultification of a reasonably arguable claim
The respondents submit that the applicant has provided no evidence that the making of an order for security for costs would be oppressive by stifling his appeal. Therefore, they say this is a neutral factor in the exercise of the discretion.
The only evidence from the applicant touching upon this factor is in the Second Giurina Affidavit, where the applicant deposes:[20]
It is my professional belief that given the tightness of the timetable set down by the orders of Judicial Registrar Clayton of 6 February 2019 in this proceeding any order requiring me to give security would in the circumstances be oppressive by stifling the appeal which has good prospects of success.
[20]Second Giurina Affidavit, [3].
If the applicant wishes to argue that ordering security would be oppressive as it would stifle his claim, leaving aside the question of whether his claim is reasonably arguable, then it is incumbent upon him to lead evidence of that alleged stultification.[21] He has not done so. As set out above, the only evidence of this is his assertion in his affidavit that in his professional judgement ordering security would stifle the proceeding. That is not evidence, it is mere assertion. Even if it is evidence, it is equivocal, as it seems to me that he is saying that it is the short timetable ordered for the procedural steps which may stifle the proceeding. At the hearing, the applicant’s submission was similarly ambiguous and so I asked him whether he was saying that having to provide security would stifle the appeal, as that was the relevant issue. He said that he may have to seek funding and there was not much time to do so. The applicant has not given any specific evidence, backed by information about his financial situation, that establishes he is unable to pay security for the respondents’ costs. Nor has he given any evidence that it would stifle him continuing with the appeal.
[21]Ariss v Express Interiors Pty Ltd (in liq) [1996] 2 VR 507; Livingspring, [22].
Therefore, I do not see this as a factor weighing against granting security.
Whether any impecuniosity of the applicant arises out of the conduct complained of
The respondents say that the applicant has not given any evidence of his impecuniosity or evidence that any impecuniosity he has arises out of the conduct of the respondents. They say that this is therefore a neutral factor.
As indicated above, the applicant does not say that he is impecunious, rather he says that the respondents have to prove he is in order to establish that security should be ordered.
This is not a factor weighing against granting security.
Public interest
The respondents say that there are no public interest aspects that weigh against the granting of security here, and nor are there any other relevant discretionary factors in play. The applicant did not make submission in this regard.
I do not regard this as a factor weighing against making an order for security for costs.
Other matters
By reference to the additional factors referred to in Knight,[22] the applicant says that he has not brought his claim at VCAT for the benefit of others, but rather as a lot owner and former manager, that he is not resident outside Australia or even outside Victoria, and he also says that he has good prospects of success. I have already indicated that the first two of these are not the relevant factors in this application, but even if they were, they do not apply here and so do not weigh in favour of granting security. I have already addressed the prospects of success as a factor.
[22]See paragraph 12 above.
In his written outline, the applicant refers to other matters which he says mean that he should not be ordered to provide security.
One of these aspects is said to be that he has brought his claim because he has real concerns about the conduct of Maria Deak and Strata Connect Pty Ltd, the first and second respondents, which he says were acknowledged in an earlier VCAT proceeding. Whether this is accurate or not is of no consequence to this application, since I do not see that it is a factor which ought to weigh in the discretion of whether to grant security for costs. If this is said to be some sort of public interest element then I reject that contention. When asked about this, the applicant said that it shows he has real concerns and so is not a nominal plaintiff, which I accept. Nonetheless, it does not tell against granting security.
The applicant also says that whether the Owners Corporation legally retained WML has never been determined. He says that he has been asking for years for evidence of a resolution of the Owners Corporation retaining WML and he has never been given it. I reject this as a relevant factor in the exercise of the discretion. Even if it were a factor, I give it no weight as the applicant did not when asked articulate how this ought deprive the respondents of security for their costs of the appeal.
The applicant says that there is no evidence before this Court that the Owners Corporation has lawfully authorised the bringing of this application for security, which he says is required as it is one of the respondents. The applicant says that s 18(1) of the Owners Corporation Act 2006 requires there to be a special resolution passed by financial members of the Owners Corporation authorising the bringing of this security for costs application. This submission is misconceived and is rejected. Section 18(1) of the Owners Corporation Act 2006 states that an owners corporation must not bring legal proceedings unless it is authorised by special resolution to do so.
The Owners Corporation has not brought this legal proceeding, it is simply responding to an appeal initiated by the applicant and this is an application in that appeal. The applicant says that making an application is bringing legal proceedings but was unable to provide me with any authority expressly dealing with that proposition.[23] Even if it did encompass this application, I do not see this as a factor weighing against the grant of security. I also consider it possible that if such a resolution was required in this instance and has not been passed, it may well be that it can be done so with retrospective effect or could be cured by subsequent ratification by resolution.[24]
[23]I gave him the opportunity to provide me with a reference to a case (the name of which he could not then recall) that he referred to during oral submissions, which he subsequently did. That case, Wheeler v Reynolds (1988) 20 FCR 185, does not stand for the proposition stated by the applicant.
[24]Burbank Australia Pty Ltd v Owners Corporation [2015] VSC 160.
It is clear that the applicant has a series of ongoing disputes with the Owners Corporation and the other respondents (indeed, during the course of the hearing, he said that this was the fifty-second hearing in his disputes with the Owners Corporation). That he has not seen evidence of what he says the Owners Corporation requires by way of authority is of no moment for this application. In fact, the nature of his long-running disputes with the Owners Corporation reinforces my views as to the significant risk that the applicant will not satisfy a future costs order.
Conclusion – security for costs should be ordered
In conclusion, I consider that the factors considered above weigh in favour of granting the respondents security for their costs of the appeal. In my view, there is a significant risk that the applicant will not meet a future costs order, since any previous costs orders in this and other proceedings have not been met. I consider that this poses a risk of injustice to a successful litigant as the respondents already have the benefit of the judgment below.
It remains for me to consider the quantum sought by the respondents.
Quantum
Applicable principles
In relation to the principles applicable to the quantum of security to be ordered, the respondents rely on my earlier decision in Raventhorpe Pty Ltd & Ors v Westpac Banking Corporation.[25] In that case, I summarised the applicable principles and said that the approach to be taken by the Court is as follows:
[25][2017] VSC 362.
(a) the amount of security is within the Court’s discretion;
(b) the amount is that which the Court thinks just, having regard to all of the circumstances;
(c) in ordering security, the Court does not set out to give the defendant a complete and certain indemnity for costs; and
(d) the Court’s task is not akin to a taxation of the defendant’s probable costs.
Evidence
The respondents rely on the De La Rue Affidavit to seek security for their costs of the appeal. These are estimated in two amounts:
(a) $20,066.88 as security for the respondents’ costs of the security for costs application; and
(b) $41,918.86 as security for the respondents’ costs of the appeal.
Mr De La Rue is a legal costs consultant, who has prepared his affidavit in conformity with the Expert Witness Code of Conduct in Form 44A of the Rules. He sets out his qualifications and experience as a legal costs consultant and I accept that he is an expert in that field and able to provide the Court with opinion evidence. Mr De La Rue says that he has estimated the costs and disbursements of both the security application and the appeal based on the letter of the respondents’ solicitors to the applicant dated 8 February 2019 and by perusing a copy of Judicial Registrar Clayton’s orders made on 6 February 2019. Mr De La Rue says that he has based his estimate on the costs that would likely be allowed on a standard basis in accordance with the Supreme Court scale of costs.
In relation to quantum, the applicant deposes that ‘It is my professional belief that the quantum ... is excessive as there is, in my belief, no need for two counsel for a one ground interlocutory appeal’.[26] This is a reference to the costs of the appeal. The applicant says nothing about the estimated costs of the security application. In the Second Giurina Affidavit, the applicant says that he is an ‘Australian Lawyer’, but says nothing further about his qualifications and experience. He does not say whether he is a practising solicitor[27] or whether he is an experienced litigation lawyer accustomed to estimating the likely costs of litigation. Therefore, there is no basis for this asserted ‘professional belief’ or the Court accepting this opinion evidence.
[26]Second Giurina Affidavit, [4].
[27]Apparently, Mr Guirina was once a solicitor although as at the time of the hearing before Ierodiaconou AsJ he no longer held a practising certificate: Reasons, [72]. See also Reasons [143]-[147]. The Fourth McGirr Affidavit sets out the periods during which Mr Giurina did not hold a practising certificate: [54].
At the hearing, counsel for the respondents stated that the respondents were seeking security for the appeal and were not seeking security for this application, and confirmed that the respondents sought $41,918.86 in this regard.
Consideration
Mr De La Rue estimates the costs and disbursements on a standard basis in accordance with the Supreme Court scale of costs of the appeal to be $41,918.86. He has exhibited a schedule setting out the likely items making up that amount and the professional charges for each, as well as the disbursements. In relation to the likely appeal costs, these are said to comprise $31,418.86 by way of professional charges, and disbursements in the amount of $10,500. The disbursements are fees for senior and junior counsel. Upon reviewing that schedule, however, the stated breakdown between professional charges and disbursements seems to be an error. Some of the counsel fees are listed under professional charges rather than under disbursements. Therefore, the correct breakdown so far as I can ascertain is $27,300 by way of counsel fees and $14,618.86 by way of professional fees for the solicitors. At the hearing, counsel for the respondents confirmed this. Senior counsel has been calculated at a rate of $5,400 per day and junior counsel at $3,000 per day. These rates are less than the maximum counsel rates on the Supreme Court’s scale of costs.
I have reviewed the items contained in that schedule and I consider them all to be tasks which are reasonably necessary for the purpose of the respondents dealing with the applicant’s appeal, and I regard the estimates given therein as generally reasonable.
I do not regard it as unreasonable in the context of this appeal for the respondents to engage junior and senior counsel. However, I do consider it appropriate to reduce the amount of security by a modest amount, given that there is quite a sizable amount of the security allocated to the combination of junior and senior counsel, and it is not readily apparent to me from the materials that all of that is necessary. Taking a broad brush approach, as the authorities commend in relation to quantum,[28] I would reduce the amount by $3,000 such that the amount of security attributable to the appeal is $38,918.86.
[28]Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293, [64].
I will then round that figure to $38,900. I consider this to be a just amount of security, in the circumstances of this case and in keeping with security not being a complete and certain indemnity.
Conclusion
Therefore, I will make orders that the applicant provide security for the respondents’ costs of the appeal in the amount of $38,900. The respondents seek the usual order that if the applicant fails to pay the security as ordered, then the proceeding be stayed. I see no reason not to make that order. The respondents seek the security to be paid by 10 May 2019 and the applicant says that he would need two months to make the payment. There is no evidence before me as to why such a lengthy period is necessary. Given that the appeal is listed for hearing on 3 June 2019 and that the purpose of giving security is so that the respondents are secured for their costs of the appeal, it is not appropriate to give the applicant more time than that suggested by the respondents. I will order the security to be paid by 10 May 2019 and for the proceeding to be stayed if that order is not complied with.
The respondents seek orders that the applicant pay their costs of this security application. The applicant stated that on the basis that costs follow the event, he did not resist that order. I will therefore make orders that the applicant pay the respondents’ costs of the application, as I consider it appropriate that costs follow the event in the circumstances of this case.
SCHEDULE OF PARTIES
BETWEEN:
ERMANNO GIURINA Applicant - and - MARIA DEAK First Respondent STRATA CONNECT PTY LTD Second Respondent OWNERS CORPORATION PLAN NO. 1579 Third Respondent
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