Hapisun Pty Ltd v Rikys & Moylan Pty Ltd - [2013] VSC 730

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2013 04466

HAPISUN PTY LTD (ACN 005 318 687)

- and -

DARREN MARK MUNRO (in his capacity as executor of the estate of the late Vincent Chiodo)

First Plaintiff

Second Plaintiff

RIKYS & MOYLAN PTY LTD
(ACN 059 596 539)

- and -

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL

First Defendant

Second Defendant

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JUDGE:	DALY AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	2 December 2013
DATE OF JUDGMENT:	23 December 2013
CASE MAY BE CITED AS:	Hapisun Pty Ltd v Rikys & Moylan Pty Ltd
MEDIUM NEUTRAL CITATION:	[2013] VSC 730

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JUDICIAL REVIEW – Section 79 of the Victorian Civil and Administrative Tribunal Act – Decision of VCAT to refuse to make an order for security for costs – Application of principles developed under s 1335 of the Corporations Act2001 (Cth) to applications for security for costs at VCAT – “Threshold test” – Difference between “real risk” and “reason to believe” that a party may be unable to meet an order for costs – Other policy considerations – Appropriateness of using order 56 proceeding rather than s 148 of the VCAT Act to review decisions of VCAT

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R Andrew	Noble Lawyers
For the Defendants	Mr D Clough	Riordan Legal Pty Ltd

HER HONOUR:

The parties to this proceeding are engaged in a building dispute which is currently underway in the Victorian Civil and Administrative Tribunal (“VCAT” or “tribunal”). The plaintiffs, Hapisun Pty Ltd and Mr Darren Munro (in his capacity as executor of the estate of the late Vincent Chiodo) (“Hapisun”) have issued an originating motion under Order 56 of Chapter 1 of the Supreme Court (General Rules of Civil Procedure) Rules 2005 (“Rules”) seeking to set aside the decision of Deputy President Aird of VCAT (“Deputy President” or “Tribunal”) made on 31 July 2013 to refuse Hapisun’s application that the defendant, Rikys & Moylan Pty Ltd (“Rikys”) provide security for costs pursuant to s 79 of the Victorian Civil and Administrative Tribunal Act1998 (Vic) (“VCAT Act”).

Rikys, the applicant in the proceeding at VCAT, is a company which has been engaged in the business of residential construction in the Goulburn Valley area for approximately 20 years. On 27 December 2012 Rikys commenced a proceeding at VCAT claiming that Hapisun owed it $179,532.61 in respect of unpaid invoices for construction works carried out by it for Hapisun on a domestic building project in the period between January 2010 and May 2011. The claim in respect of unpaid invoices was said to arise pursuant to an agreement made between Rikys and Hapisun or, in the alternative, on a quantum meruit basis. Hapisun has defended the claims on the basis that the alleged contracts are unenforceable, and that Rikys is not entitled to payment of any monies, or, in the alternative, the amounts claimed are inflated.

Hapisun’s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 730
Decision Date: 23 December 2013

CaseChat Overview and Summary

Hapisun Pty Ltd applied for judicial review of a decision of the Victorian Civil and Administrative Tribunal (VCAT) to refuse to make an order for security for costs. Rikys & Moylan Pty Ltd were the respondents to the original VCAT proceedings. The primary issue was whether VCAT erred in law by applying principles developed under section 1335 of the Corporations Act 2001 (Cth) to determine if Hapisun was entitled to an order for security for costs. The court had to consider whether VCAT was correct to find that Hapisun had not satisfied the threshold test for security for costs and whether there was a difference between the concepts of “real risk” and “reason to believe” that a party may be unable to meet an order for costs.

The court found that VCAT had correctly applied the principles of the Corporations Act in determining the application for security for costs. The court held that the threshold test required Hapisun to demonstrate a real risk that it would be unable to pay the respondent’s costs if they were ordered to do so. The court further found that VCAT had correctly concluded that Hapisun had not satisfied the threshold test. The court noted that the concepts of “real risk” and “reason to believe” were not the same and that VCAT was correct to require a higher standard of proof. The court also found that VCAT had appropriately considered other policy considerations in declining to make an order for security for costs. The court held that the use of an order 56 proceeding was an appropriate means of reviewing VCAT’s decision.

The application for judicial review was dismissed. The court held that VCAT had not erred in law in declining to make an order for security for costs. The court held that the use of an order 56 proceeding was an appropriate means of reviewing VCAT’s decision and that there was no error in VCAT’s approach to the application for security for costs.

Orders