GM Fascia and Gutter Pty Ltd v Trailer Trash Franchise Systems Pty Ltd

[2017] VCC 1123

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-16-00098

GM FASCIA & GUTTER PTY LTD	Plaintiff
v
TRAILER TRASH FRANCHISE SYSTEMS PTY LTD	First Defendant
and
DALE COONEY	Second Defendant
and
THOMAS JAMIESON	Third Defendant

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JUDGE:	HIS HONOUR JUDGE COSGRAVE
WHERE HELD:	Melbourne
DATE OF HEARING:	15 August 2017 (prior to the hearing both parties made submissions to the court by email)
DATE OF RULING:	17 August 2017
CASE MAY BE CITED AS:	GM Fascia & Gutter Pty Ltd v Trailer Trash Franchise Systems Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2017] VCC 1123

REASONS FOR RULING
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Subject:PRACTICE AND PROCEDURE; COSTS

Catchwords:               Practice and procedure – application for stay pending outcome of appeal – whether trial should be vacated – whether any prejudice compensable by an order for costs

Costs – costs thrown away as result of vacation of trial

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L Magowan	PCL Lawyers
For the Defendants	(No appearance)	Mills Oakley Lawyers

HIS HONOUR:

Introduction

1       This application by the defendant relates to whether the proceeding should be stayed pending an appeal by the defendant to the Court of Appeal in regard to orders for security for costs made by Judge Morrish on 27 July 2017.

Background

2       The trial in this proceeding was due to commence on 16 August 2017.

3       On 27 and 28 July 2017 Judge Morrish heard the defendant’s application for security for costs. This followed an earlier award of security and the defendant sought additional security for the next part of the litigation.

4       When she made orders on 28 July 2017 Judge Morrish noted in Other Matters that a director of the plaintiff company, Terence Maher, gave an undertaking to pay any adverse costs order as against the plaintiff.  The undertaking was for a maximum amount of $10,580 and related to the period between the completion of mediation and the first day of trial. Her Honour also ordered that:

(a)     the plaintiff provide in electronic form a proposed index to the court book by 6pm on 28 July 2017;

(b)     the first and second defendants must serve in electronic form any amended proposed index to the court book on the plaintiff by 12 noon on 3 August 2017;

(c)     the plaintiff file and serve the joint court book by 4pm on 7 August 2017.

5       In an affidavit sworn by Shannon Jenkins, an employee solicitor at Mills Oakley, the solicitors for the defendants, he said that on 31 July 2017 he emailed the associate to Judge Morrish seeking a copy of the audio recording of the security for costs application before Her Honour. He said that the defendants wanted the hearing transcribed so as to consider an appeal of the judge’s decision. The court confirmed on 3 August 2017 that the recording could be collected. On 7 August 2017 Spark & Cannon advised Mills Oakley that it had the audio recording for the transcript. I inferred from the affidavit that Spark & Cannon was proposing to transcribe the hearing immediately.

6       At 10:13am on 9 August 2017 Mills Oakley sent the plaintiff’s solicitors an email advising them that the defendants had asked for a copy of the recording and intended to appeal the orders of Judge Morrish. It appears that Mills Oakley received the transcript later the same day. Mr Jenkins in his affidavit said that the appeal documents would be filed on the afternoon of Friday 11 August or the morning of Monday 14 August 2017.

7       The Mills Oakley letter of 9 August 2017 to the plaintiff’s solicitors also said that:

‘We anticipate that the trial scheduled to commence on 16 August 2017 will need to be vacated to enable the appeal to be heard and determined. Given this, our client will not attend to serving an amended court index or supplementary court book or take any further steps in preparing for trial’ (my emphasis).

8       It seems that having received this advice from the defendants that they were not intending to take any more steps in preparing for trial, the plaintiff sought an urgent directions hearing before Judicial Registrar Burchell. At that hearing, Judicial Registrar Burchell noted in Other Matters that:

·      the defendants said that they would take no more steps towards preparing for trial;

·      the defendants intended to seek  both leave to appeal the decision of Judge Morrish and a stay of the legal proceedings.

The Judicial Registrar then ordered:

(a)     the trial date of 16 August 2017 be confirmed;

(b)     the time by which the first and second defendants are to file and serve their court book be extended to 12 noon on 15 August 2017;

(c)     the first and second defendants pay the plaintiff’s costs of and incidental to the hearing this day, on a standard basis, to be taxed in default of agreement.

9       Later the same day, upon receipt of correspondence and a draft summons issued by the defendants seeking a stay of the proceeding, Judicial Registrar Tran ordered that the defendants’ application for vacation of the trial date be determined on the papers and any further material or submissions be emailed to her associate. As a result, there was a reasonably detailed exchange of emails between the parties and the court on 14 August and again on 15 August 2017. Due to some technology glitches, there was an element of confusion as to whether the court should be reconvened in order for the parties to be heard on a number of issues. However, I am satisfied that all parties have been given sufficient opportunity to propound the various positions for which they contend.

10      In summary, the defendants argued that they acted promptly to seek and obtain the transcript of the hearing before Judge Morrish. They said that they copied the plaintiff’s solicitors into the relevant email correspondence to keep them informed of the situation and they expressly advised the plaintiff’s solicitors on 9 August 2017 that they were appealing the decision of Judge Morrish. The defendants argued that they would suffer substantial prejudice if the trial continued as scheduled and no stay was granted. The defendants argued that they had spent considerable time and money working on the appeal application while the plaintiff was able to continue preparing for trial. It was said that any prejudice to the plaintiff resulting from the loss of the trial date could be compensated in costs. They argued that there was no loss or prejudice in any event because the work done in preparation for the trial was not wasted. Whatever work was done would be equally relevant to the adjourned trial.

11      For its part, the plaintiff argued that there should be no postponement of the trial because the defendants’ conduct regarding the appeal was in substance tactical and an excuse for not preparing properly for the trial.

12      In my view, the ends of justice are best served by vacating the trial. If the trial were to proceed, the defendants might suffer significant prejudice whereas the defendants are correct to say that the prejudice which the plaintiff might suffer due to the delay in the hearing is substantially compensable by an order for costs.

13      In reaching this view, I should not be taken as necessarily endorsing the conduct of the defendants. The order complained of relates to a limited period. There was nothing to prevent the defendants from applying on the first day of trial for additional security for the period of the hearing. Seeking to appeal the earlier interlocutory order in the existing circumstances is disruptive to the plaintiff and the court. I question also whether it is a prudent use of the parties’ and the court’s resources. At the same time, I accept that a party is free to exercise its rights. However, sometimes there is a cost attached to such conduct.

14      Contrary to the defendants’ primary submission on the point, in my view, the plaintiff will suffer a burden of wasted expenditure in preparing a case for a trial which is now to be vacated. Although the preparatory work is not wasted in its entirety, plainly counsel and solicitors will have to reacquaint themselves with the detail of the case before the new trial at the end of February next year. It is quite unrealistic to assume that, having prepared to conduct the trial this week, the plaintiff’s legal representatives will retain a sufficiently detailed recollection of the proceeding throughout the next six months that they can run the trial without further work. Accordingly, I propose to allow the plaintiff:

·      $8,000 being two days’ work for counsel at $4,000 per day;

·      $4,000 being ten hours’ work by the solicitor at $400 per hour;

·      $2,500 being costs associated with the accommodation, travel and care of the director of the plaintiff, his pregnant wife (both of whom are witnesses) and their children. Mr and Mrs Maher have three children aged under 6 and, in order to be available for conferences and the like, they arranged to stay in an apartment in William Street in the city rather than remain at home in Doreen. The accommodation arranged was sufficient to include Mrs Maher’s parents too so that they could mind the children. These costs have been incurred and are not refundable.

·      costs associated with the defendants’ application to vacate the trial and obtain a stay. As noted there was a hearing before Judicial Registrar Burchell and later a flurry of emails between the parties and court including the associates to Judicial Registrar Tran and myself. I will allow $1,000 in relation to this work. It was caused by the defendants’ desire to appeal and/or refusal to participate further in the trial.

15      In the circumstances, I am satisfied that the defendants should reimburse the above costs to the plaintiff so that the plaintiff is not significantly out of pocket due to the lost trial date. It is appropriate to fix the costs and make them payable shortly rather than defer the payment until after completion of the trial.

16      Although the defendants have sought a stay of the proceeding, it seems to me that this is currently unnecessary. Because the application for leave to appeal is to be made soon to the Court of Appeal, I would expect that court to have heard and determined the matter before the adjourned trial date. If, for whatever reason, my assumption proves to be incorrect, then the defendants should contact the plaintiff with a view to agreeing upon a stay. If the matter cannot be resolved by agreement, then the defendants can apply to the court.

Conclusion

17      Accordingly, having regard to the above matters, I order that:

(a)     the trial of this matter fixed for 16 August 2017 be vacated and refixed for hearing on 26 February 2018 (on an estimated duration of 5 sitting days);

(b)     the defendants pay the plaintiff’s costs thrown away by reason of the vacation of the trial, including the costs of the application, fixed in the sum of $15,500. The defendants are to pay these costs by 25 September 2017, failing which their defence will be struck out.