Happy Homes Building Group Pty Ltd v Registrar of Titles
[2020] VCC 433
•20 April 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-18-05827
| HAPPY HOMES BUILDING GROUP PTY LTD | Plaintiff |
| v | |
| REGISTRAR OF TITLES and BASS COAST SHIRE COUNCIL and MATTHEW PETER SIMPSON and CHERIE ELIZABETH HUSSEY and AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD and COMMONWEALTH BANK OF AUSTRALIA | First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant Sixth Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 January 2020. (The court later gave the plaintiff leave to file further submissions by 25 February 2020. The court gave the defendants leave to file any further submissions in reply by 27 February 2020). | |
DATE OF RULING: | 20 April 2020 | |
CASE MAY BE CITED AS: | Happy Homes Building Group Pty Ltd v Registrar of Titles & Ors | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 433 | |
R U L I N G
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Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth); Charter of Human Rights and Responsibilities Act 2006 (Vic); Commonwealth of Australia Constitution Act 1900 (Cth); Corporations Act 2001 (Cth); County Court General Civil Procedure Rules 2008 (Vic); Crimes Act1958 (Vic);Criminal Code 1995 (Cth); Local Government Act 1989 (Vic); Sale of Land Act 1962 (Vic); Transfer of Land Act 1958 (Vic)
Cases Cited:Bruce v Odhams Press Ltd[1936] 1 KB 697; Charles Lloyd Property Group Pty Ltd v Buchanan [2013] VSC 148; Davy v Garrett(1878) 7 Ch D 473; Day v William Hill (Park Lane) Ltd [1949] 1 KB 632; Golding v Wharton Saltworks (1876) 1 QBD 374; Goodson v Grierson[1908] 1 KB 761; Interwest Ltd v Tricontinental Corp Ltd (1991) 5 ASCR 621; JBS Southern Australia Pty Ltd v Westcity Group Holdings Pty Ltd [2011] VSC 476; Living Spring Pty Ltd v Kliger Partners (2008) 20 VR 377; Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27; Meckiff v Simpson [1968] VR 62; Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1; Pearson v Naydler [1977] 3 All ER 531; Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd [2012] VSC 490; Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 73 ALR 289; Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis & Anor (2007) 70 NSWLR 565; Worldwide Enterprises v Silberman (2010) 26 VR 595.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | The Director of the plaintiff, Ms L Williamson, appeared on behalf of the plaintiff | |
| For the First Defendant For the Second Defendant For the Third Defendant For the Fourth Defendant For the Fifth Defendant For the Sixth Defendant | Mr W Drent Ms S Worsfield Ms S Worsfield Mr T Jeffrie Mr T Jeffrie | CLH Lawyers Harris Carlson Lawyers Harris Carlson Lawyers Gadens Lawyers Gadens Lawyers |
HIS HONOUR:
1 The hearing in this matter was complicated inasmuch as all defendants except the first defendant, the Registrar of Titles,[1] made various applications against the plaintiff:
(a)The second defendant, Bass Coast Shire Council (“Bass Council”), sought security for costs in the sum of $20,000.
(b)The third defendant, Matthew Peter Simpson (“Simpson”), and fourth defendant, Cherie Elizabeth Hussey (“Hussey”), sought security for costs in the sum of $35,000.
(c)The fifth defendant, Australia and New Zealand Banking Group Ltd (“ANZ”), applied for summary judgment pursuant to sections 62 and 63 of the Civil Procedure Act 2010 (Vic) (“the CPA”); alternatively, the striking out of the statement of claim for not disclosing a cause of action; as a further alternative, security for costs in the sum of $43,000.
(d)The sixth defendant, Commonwealth Bank of Australia (“CBA”), applied for summary judgment pursuant to sections 62 and 63 of the CPA; alternatively, the striking out of the statement of claim for not disclosing a cause of action; as a further alternative, security for costs in the sum of $40,000.
[1]The first defendant intimated to the court and the other parties to the proceeding that it would abide by the orders of the court.
Preliminary issues
2 Before dealing with the applications, there are some preliminary matters to address.
3 The first preliminary issue concerns the plaintiff and the filing of affidavit material.
4 The defendants filed a substantial amount of affidavit material in connection with the various applications. The affidavits of service indicated that the defendants served their applications and supporting material on the plaintiff by around mid-December 2019.
5 Leanne Williamson is the sole director and shareholder of the plaintiff. At a judicial resolution conference on 6 December 2019, Judicial Registrar Tran made the following orders:
(a)The time by which the plaintiff may make an application to administer interrogatories is extended to 16 December 2019 at 4.00pm. Any such application should be emailed to the Commercial Registry ([email protected]), copied to the party against whom leave is sought to administer interrogatories. The application should include draft interrogatories and brief written submissions addressing the reason why the proposed interrogatories are appropriate.
(b)The plaintiff has leave to be represented by Leanne Williamson until the conclusion of the hearing on 31 January 2020.
(c)By 4.00pm on 16 December 2019, the plaintiff must make any application for leave to be represented by Leanne Williamson after 31 January 2020 by email to the Commercial Registry ([email protected]), copied to all parties. Any such application must be supported by an affidavit and should address the factors in Worldwide Enterprises v Silberman.[2]
(d)Any document can be served on the plaintiff by both:
(i)sending it by prepaid post to P.O. Box 10060, Frankston North, 3200; and
(ii)emailing it to the plaintiff at [email protected].
[2](2010) 26 VR 595.
6 By 20 December 2019, it became apparent to the Court that it did not have the capacity to hear several applications in the proceeding before 31 January 2020. Accordingly, on 20 December 2019, Judicial Registrar Burchell ordered that:
(a)The second defendant’s summons filed 12 December 2019, listed for 22 January 2020, is adjourned until 31 January 2020 at 10.00am before the Commercial Division Duty Judge.
(b)The directions hearing listed for 31 January 2020, by the order of Judicial Registrar Tran dated 6 December 2019, is confirmed with the amended start time of 10.30am.
(c)The fifth and sixth defendants’ summonses filed 12 December 2019 and 10 December 2019 respectively, listed for 31 January 2020 are confirmed and will be heard at 10.00am before the Commercial Division Duty Judge.
(d)Any further summons applications from other defendants must be filed and served by 4.00pm on 24 December 2019. All other applications will be heard on 31 January 2020 at 10.00am before the Commercial Division Duty Judge.
7 At the hearing, I asked Ms Williamson why she had filed no responsive material in opposition to the defendants’ applications. Ms Williamson seemed surprised by my question. She initially stated she thought the hearing was only for directions. She later said that she had filed material at the court, but because the plaintiff was not legally represented, she relied upon Registry or the Self-Represented Litigant Coordinator to ensure that the judge hearing the application received her material. I advised Ms Williamson that, if she wished, she could re-send the affidavit material she filed in or after December 2019 directly with my chambers. Because the hearing before me was conducted on a Friday, I asked whether she could re-send the affidavits over the weekend. Ms Williamson said that she would.
8 During 2 and 3 February 2020, Ms Williamson sent a succession of emails to my chambers. The emails contained various affidavits and other documents, including some from Melbourne Magistrates’ Court, the Australian Securities and Investments Commission and the Victorian Parliament. In one email, Ms Williamson expressed her concern to my associate that she would not be able to file everything before the 8.00am deadline and so she would not be able to submit all the material she wanted to.
9 After consulting me, my associate responded by pointing out that:
·there was no 8.00am deadline;
·the material which Ms Williamson was permitted to file on behalf of the plaintiff over the weekend was that material which she had allegedly filed in or after December 2019 which she said had not been passed on to the Duty Judge before the hearing of the applications against her;
·Ms Williamson could file the relevant material until 5.00pm on 3 February 2020 by emailing the same to the chambers email;
·there was no need to re-send affidavits sworn before December 2019.
10 Thereafter, there was subsequent correspondence. Ms Williamson said that she sent some emails containing only extracts of material so as to protect the privacy of the court staff and prevent the defendants from seeing the whole of the email. The court, through my associate, advised Ms Williamson that she need not be concerned about the privacy of the court staff or the defendants and that the defendants were entitled to see whatever material she filed with the court. The email asked Ms Williamson to ensure that she copy the defendants into all her email communications with my chambers. This was because Ms Williamson sent emails only to my chambers without including the defendants. Ms Williamson also had queries about some documents which were delivered to the court and others which were handed up during hearings.
11 Only one of the emails which Ms Williamson forwarded to the Court in early February 2020 contained a document which was created in or after December 2019. This was a document entitled “Affidavit of New Evidences”. It was unsworn but dated 2 February 2020 on its front page. I assume Ms Williamson created the document on Sunday, 2 February 2020 because it referred to matters raised at the hearing on Friday, 31 January 2020.
12 In short, the “Affidavit of New Evidences” repeated a number of the matters raised by or on behalf of the plaintiff at the hearing before me such as:
(a)The plaintiff was a corporation sole and not bound by the Corporations Act 2001 (Cth) (“Corporations Act”).
(b)It was not established that the Local Government Act 1989 (Vic) (“the LG Act”), and in particular section 181 of the Act, was part of the law of the State of Victoria – officials associated with Hansard or Parliament could not establish that there had been a third reading speech for that legislation and that it had been validly enacted.
(c)Even if the LG Act had been enacted and was part of the law of the State of Victoria at relevant times, Bass Council had not shown that its CEO, Ms Ali Wastie, was democratically elected as required by section 1 of the LG Act.
(d)One or both of the defendant banks engaged in fraud against the plaintiff by obtaining property by deception contrary to section 81 of the Crimes Act1958 (Vic) and section 134 Criminal Code 1995 (Cth).
13 In addition, Ms Williamson sought in the document to raise arguments under the Charter of Human Rights and Responsibilities Act 2006 (Vic), section 80 of the Commonwealth of Australia Constitution Act 1900 (Cth) regarding jury trials, section 12C and section 12D of the Australian Securities and Investments Commission Act 2001 (Cth) and Chapter 37 of the Australian Banking Association Banking Code of Practice. Ms Williamson raised none of these additional matters in court when making her submissions to me.
14 I do not propose to allow the plaintiff to canvass these additional matters raised only after the completion of the hearing. I have reached this decision for several reasons:
(a)The hearing has finished. Ms Williamson did not ask during the hearing that she be able to include new material in the emails she was proposing to send to the Court.
(b)The new material was not directly responsive to the particular applications made against the plaintiff – namely, to strike out the claims against two defendants and to provide security for costs to various defendants. To that extent, the additional material was not relevant to the applications before me.
(c)The additional material, in my view, was not clearly framed or structured in a way which made clear the argument which the plaintiff was advancing, the factual basis for it, and the orders sought as a result. In circumstances where the plaintiff sought to raise these factually vague and doctrinally questionable matters without notice, I considered it unfair to the defendants and an inappropriate use of the Court’s resources to engage in further argument on these matters. If the plaintiff wishes to pursue certain lines of attack against one or more of the defendants in respect of these matters in the future, then it remains free to do so. It can issue a proceeding or a summons and apply for whatever orders it considers appropriate and justified on the supporting material. This way, the overarching purpose specified in section 7 of the CPA is satisfied and the plaintiff’s rights, or alleged rights, are preserved.
15 In about mid-March 2020, the plaintiff sought to file at the court Registry additional documentation regarding this application. I have not seen the documentation. In circumstances where the filing of submissions concluded in late February 2020 before I went on leave, there was no application by the plaintiff to reopen the matter and the plaintiff was not acting in a manner authorised by an order of the court, I have not taken this further material into account in deciding this application.
16 The second issue was the plaintiff’s representation. During the hearing, Ms Williamson was permitted to act for the plaintiff. She asked that an adviser friend, Gerard Balogh, sit with her at the Bar table to assist with the paperwork. In fact, Mr Balogh did rather more. He spent considerable time talking to Ms Williamson, apparently suggesting what she might say to the Court on a broad array of matters. In addition, when Ms Williamson raised the argument about the plaintiff being a corporation sole and not bound by the provisions of the Corporations Act, she asked if her research assistant, Darren Nixon, could address the Court. I agreed to this and Mr Nixon duly spoke to the court on this topic on behalf of the plaintiff.
17 On a subsequent occasion during the hearing, Ms Williamson asked for a short adjournment so that she could consult with her friends (which seemed to include Messrs Balough and Nixon) about an issue which had arisen. Again, I agreed to her request.
18 The third issue concerned a proposed amendment by Simpson and Hussey. During the course of the hearing, Simpson and Hussey sought to file and rely upon an amended summons pursuant to which they sought judgment against the plaintiff on its claims in the proceeding. They relied upon sections 62 and 63 of the CPA, together with Order 23 of the County Court Civil Procedure Rules 2018 (Vic) (“the Rules”). Because the amendment was sought without notice, there was no mention of the application in the parties’ submissions and the potential consequences for the plaintiff were grave, I refused leave to amend. In my view, it would have been unfair to the plaintiff if it were forced to deal with such an application without notice.
19 The final preliminary issue concerned the plaintiff’s preparedness for the hearing. In the course of the hearing, Ms Williamson indicated that she had not brought all her papers to court and was not prepared to address the applications against the plaintiff company because she thought she was attending a directions hearing.
20 As noted above, on 20 December 2019, Judicial Registrar Burchell made orders adjourning the summonses filed by the second, fifth, and sixth defendants to be heard on 31 January 2020, and ordered that any other application by a defendant be filed and served by 24 December 2019 and made returnable on 31 January 2020. These orders followed on from orders made by Judicial Registrar Tran on 6 December 2019 when Ms Williamson was in court.
21 In my view, Ms Williamson knew or ought to have known that the applications were to be dealt with at the hearing on 31 January 2020. Apart from the notice given by the court orders and Ms Williamson’s obvious interest in the litigation, she attended court before me with not only her adviser but also her researcher, Mr Nixon. Mr Nixon was ready and willing to address the court about why the plaintiff was a corporation sole not governed by the operation of the Corporations Act and why the defendants’ applications were thereby fatally flawed. If Ms Williamson believed the hearing was solely for giving directions about timetabling issues, such personnel would not have been required at court.
22 Further, I consider that Ms Williamson’s comments about having only a directions hearing were inconsistent with her expression of surprise that I did not have the documents she claimed to have filed in opposition to the defendants’ applications. Why would she file affidavit material regarding the applications when they were not to be dealt with? Especially as Ms Williamson was content to re-send documents which she relied upon in opposition to the defendants’ application and did not ask for an adjournment, I determined that the hearing should continue.
23 I note too that, when given the opportunity to make submissions at the hearing, Ms Williamson did so.
24 Notwithstanding the inconsistencies in Ms Williamson’s version of events noted above, subsequent to the hearing I provided the plaintiff with a further opportunity to file written submissions in response to the defendants’ applications. The defendants were given an opportunity to file submissions in response any submissions filed by Ms Williamson.
25 On 25 February 2020, Ms Williamson sent to my chambers a document titled “Affidavit of response and for New Evidence”. The document, which was ten pages long, was in the form of an affidavit rather than written submissions. In summary, it included statements to the following effect:
· the plaintiff would submit an affidavit by Gary Collis evidencing that the City of Geelong could not comply with section 1 of the LG Act. The plaintiff said that VCAT and the former President of VCAT, Justice Gregory Garde QC accepted this position.
· the plaintiff would submit a transcript and the public record of a Supreme Court case.[3]
[3]It should be noted the Supreme Court case does not relate in any way to this proceeding, nor did it involve any of the parties to this proceeding.
· the plaintiff would seek a “Strike-Out of the Defendant’s argument” as Bass Council could not provide a valid contract between itself and the plaintiff.
· in response to the arguments of ANZ and CBA, the current CEO of Bass Council, along with her predecessor, “must provide their votes received from the electors of Bass Coast Shire (Inc.)” to comply with section 1 of the LG Act.
· Bass Council’s lawyer provided illegitimate and improper advice to the council which led to the unauthorised sale of the Property.
· the plaintiff would bring summary judgment applications against Bass Council for trespass and defamation.
In addition, Williamson made allegations of varying types about several of the defendants’ barristers. The allegations lacked substance and thus do not warrant repeating. For clarity, I note also that the affidavit submitted by Williamson did not contain exhibits of any of the documents she said she would submit.
26 The material contained in the affidavit was not responsive to the defendants’ applications. As the plaintiff was given leave to file written submissions only, and because the document she submitted consisted largely of baseless, irrelevant, and nonsensical allegations not raised at the hearing before me on 30 January, I consider it appropriate to afford it only limited weight.
27 The defendants did not file submissions in reply.
Background and history of proceedings
28 The plaintiff is a company incorporated in December 2007. It has a paid-up share capital of $20 and does not own any assets or currently generate any income.
29 The plaintiff is, and has been since about 8 January 2011, the registered proprietor of the land situated at 22 Dudley Street, South Dudley in Victoria (“the Property”).
30 On 12 July 2013, ANZ entered into a loan agreement whereby it lent Ms Williamson an amount of $157,179.15 (“the ANZ loan agreement”). The ANZ loan agreement provided that security for the loan would be a corporate guarantee and indemnity given by the plaintiff supported by a registered mortgage over the Property owned by the plaintiff.
31 On 17 July 2013, the plaintiff provided the guarantee in favour of ANZ in respect of Ms Williamson’s liability and obligations under the ANZ loan agreement.
32 On 25 July 2013, ANZ registered its mortgage over the Property.
33 On 18 December 2017, after the plaintiff failed to pay certain rates and charges to Bass Council, the council obtained a judgment against the plaintiff in the Magistrates’ Court of Victoria in an amount of $7,191.19 (“the judgment debt”).
34 On 7 February 2018, Bass Council served upon the plaintiff a notice under section 181(5)(a) of the LG Act, requiring it to pay the judgment debt, together with interest and enforcement costs (“the Notice’). The total amount of the indebtedness was $10,819.28. The council sought payment by 6 March 2018.
35 The plaintiff did not pay the judgment debt as requested by the council. The council then took steps to sell the Property. Bass Council obtained a written valuation of the Property and placed a public notice in “The Age” newspaper in respect of its intention to sell the Property.
36 In about July 2018, the plaintiff filed an application for an instalment order to repay the judgment debt.
37 On 13 July 2018, the Magistrates’ Court refused that application.
38 On 27 July 2018, pursuant to its powers under section 181 of the LG Act, Bass Council entered into a contract with Simpson and Hussey for the sale of the Property. The contract price was $229,000. This was approximately $9,000 more than the valuation which Bass Council had obtained.
39 The plaintiff lodged an objection to the refusal by the Magistrates’ Court to grant the instalment order. However, the Magistrates’ Court struck out the objection on 4 September 2018.
40 On 7 September 2018, the plaintiff filed an application for re-hearing regarding the decision to enter the judgment debt. In its application, the plaintiff asserted that Bass Council had not complied with section 181 of the LG Act.
41 On 11 September 2018, Simpson and Hussey entered into a loan agreement with the CBA in the sum of $183,000. The CBA, as security for the loan, took a mortgage over the Property.
42 On 25 September 2018, the Magistrates’ Court refused to set aside the decision to enter the judgment debt.
43 On 3 October 2018, the sale of the Property settled. At that time, the amount owing under the ANZ loan agreement was $202,720.84.
44 On about 2 November 2018, CBA lodged the transfer and mortgage over the Property with the Registrar of Titles. These documents are still unregistered.
45 On 3 December 2018, in accordance with section 181(8) of the LG Act, Bass Council paid $199,137.60 to ANZ from the proceeds of sale.
46 On 13 December 2018, ANZ wrote to Ms Williamson to inform her of the moneys it had received and to advise that it would not pursue the outstanding balance of $8,188.62.
47 On 31 December 2018, the plaintiff issued a summons and originating motion against the Registrar of Titles.
48 On 2 January 2019, Ms Williamson gave an undertaking as to damages to the Court when obtaining an order that day which restrained the Registrar of Titles from registering any transfer of ownership or mortgage or other dealing in relation to the Property.
49 On 25 June 2019, pursuant to orders made by Judicial Registrar Burchell on 21 May 2019, the plaintiff filed and served an amended statement of claim. The amendment added the second to sixth defendants as parties to the proceeding.
50 On 20 August 2019, Bass Council filed its defence.
51 On 5 September 2019, ANZ filed its defence.
52 On 12 September 2019, CBA filed its defence.
53 On 13 September 2019, Simpson and Hussey filed their defence.
54 On 10 December 2019, CBA filed its summons against the plaintiff.
55 On 11 December 2019, Bass Council filed its summons against the plaintiff.
56 On 12 December 2019, ANZ filed its summons against the plaintiff.
57 On 20 December 2019, Simpson and Hussey filed their summons against the plaintiff.
Summary judgment application by ANZ and CBA
Parties’ positions
58 As noted previously, ANZ and CBA brought applications for summary judgment and alternatively, for the striking out of the statement of claim. Both parties issued a summons against the plaintiff in materially identical terms.
59 In order to consider the plaintiff’s position, one needs to begin with the pleading. The plaintiff’s amended statement of claim seeks injunctions against ANZ and CBA from dealing with the respective mortgages. First and foremost, both ANZ and CBA assert that an injunction is not an available remedy where the parties have already taken the action the plaintiff seeks to restrain them from taking.
60 As I read the amended claim, the plaintiff alleges that Bass Council:
(a)did not have authority to sell the property because it obtained the judgment debt while the plaintiff was deregistered. Further, it failed to obtain leave from the Federal Court of Australia or Supreme Court of Victoria to reinstate the company or to proceed against it.
(b)had no proper basis to sell the property under the LG Act because the Act was not a valid law and, in any event, the preconditions set out in section 181 of the Act were not satisfied.
(c)had no proper basis to sell the property under the LG Act because the plaintiff paid the judgment debt in September 2018.
(d)breached its duty of care to the plaintiff in selling the property in the manner which it did because:
(i)it failed to disclose matters in the section 32 Vendor’s Statement; and
(ii)did not allow prospective purchasers to view the property before sale.
61 Both ANZ and CBA submitted that, because the plaintiff’s amended statement of claim does not make any allegation of wrongdoing against either entity, the only apparent utility in granting an injunction would be to protect the plaintiff’s interest in the Property. Such an outcome relies upon the plaintiff succeeding in its case against Bass Council. Accordingly, both parties’ submissions address the reasons why the plaintiff’s case against the Council must fail.
62 In summary, ANZ and CBA argued that, as a result of the plaintiff’s failure to pay the rates owing to Bass Council for over three years, section 181 of the LG Act was enlivened. The plaintiff further failed to satisfy the judgment debt obtained by Bass Council within the time specified under the Notice or prior to the contract of sale being entered into between the council and Simpson and Hussey. ANZ and CBA said that Bass Council satisfied its obligations under section 181 because the Property was sold for an amount above the valuation obtained by a valuer within six months of the date of sale.
63 ANZ and CBA submitted that, aside from its duty to comply with the procedural obligations under section 181 of the LG Act, Bass Council owed no duty of care to the plaintiff in selling the Property. Further, it is not clear that the plaintiff has standing to complain of alleged errors in the section 32 vendor statement produced in relation to the sale of the Property by Bass Council.
64 Finally, ANZ and CBA said that the Corporations Act did not bar the Council obtaining judgment or selling the property because the proceedings against the plaintiff were not initiated by Bass Council until after the plaintiff was re-registered. Pursuant to section 601AH(5) of the Corporations Act, upon re-registration, a company is treated as if it were never de-registered.
Legal principles
65 In their submissions, ANZ and CBA note that Rule 23.01 of the County Court Rules provides that where a proceeding or any claim in a proceeding is scandalous, frivolous or vexatious, or is an abuse of process, the court may stay the proceeding or give judgment in the proceeding in relation to any claim in the proceeding. In exercising its power under that rule, a court will not make an order unless it is clear on the pleadings that the claim is unsustainable in fact or in law and that no proper amendment could raise a good cause of action. The party seeking dismissal bears the burden of establishing its objection to the plaintiff’s claim.
66 Although the above principles referred to are correct, I note that in each case, the summons filed by ANZ and CBA refers not to Rule 23.01, but to Rule 23.02. The two rules are different. With respect to the former, an applicant will contend that by no proper amendment of the pleading could the respondent allege a good cause of action – the claim lacks foundation in fact or law such that no legitimate amendment could save it. Under Rule 23.02, the objection is to the way in which the claim is expressed. The applicant does not ask that the proceeding be brought to an end; rather, the applicant seeks an order that the offending claim be struck out or amended and that the pleading present the claim in a manner which conforms to the Rules.
67 The significance of the distinction may be minimal in this case because the summons also relies upon sections 62 and 63 of the CPA to obtain judgment against the plaintiff. The CPA has introduced a different statutory test for the summary disposition of proceedings. In Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd, Dixon J summarised the applicable principles under the CPA as follows:[4]
[4](2011) 35 VR 1 at [18].
“(1) If a proceeding or defence, or any particular claim, cause of action or ground of defence (“claim”) is hopeless, untenable, bound to fail, or could not possibly succeed, then it ought be summarily dismissed. In other words, a claim which ought be dismissed under the old test will be dismissed under s 63 of the Civil Procedure Act;
(2) Section 63, however, is less stringent. It does not direct an inquiry into whether a certain and concluded determination could be made that the proceeding, or a claim, would necessarily fail. What is required is a practical judgment by the court as to whether a claim has more than a “fanciful” prospect of success;
(3) The court’s discretion whether to exercise the power of summary dismissal is very wide. Section 64 of the Civil Procedure Act expresses that the power is based in a consideration of the interests of justice. The Act provides direction in Pt 2.1.13. The discretion is to be exercised to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute between the parties. The court’s powers in furthering the overarching purpose are facilitated by having regard to the objects and matters set out in s 9 of the Act;
(4) The court may be satisfied, on an interlocutory application, that there is no real prospect of success in a civil proceeding but nevertheless consider the dispute to be of such a nature that only a full hearing on the merits is appropriate. Whether a full hearing on the merits is appropriate is a relevant discretionary consideration in the circumstances of each proceeding;
(5) The power to order summary dismissal is to be exercised with great care, as a trial upon evidence of issues raised is the well-settled approach to the determination of litigation. When proceeding on a summary application to assess the prospect of success, a judge ought to feel confident that an assessment can properly be made of whether the overarching purpose is facilitated on dismissal of the impugned claims;
(6) That argument directed to the issues relevant on the application, perhaps even extensive submissions, may be necessary to demonstrate that the case of the plaintiff has no real prospect of success is not ordinarily a relevant consideration.”
68 The applicable principles regarding summary determination were also reviewed in a number of subsequent decisions including JBS Southern Australia Pty Ltd v Westcity Group Holdings Pty Ltd[5] and Charles Lloyd Property Group Pty Ltd v Buchanan.[6] In order to settle potential differences of approach in applying the law, the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[7] set out the definitive principles to apply, where Warren CJ and Nettle JA said:[8]
“Upon the present state of authority:
a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
b) the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
c) it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
[5][2011] VSC 476.
[6][2013] VSC 148.
[7](2013) 42 VR 27.
[8]Ibid at [35].
Consideration
69 The amended statement of claim seeks relief against ANZ and CBA but does not allege any cause of action against them. The plaintiff does not assert any wrongdoing or breach of duty against either of them. It appears that the only basis the plaintiff propounds for seeking injunctions against ANZ and CBA to prevent them dealing with their respective mortgages is in order to protect the plaintiff’s interest in the Property. For this approach to have any real chance of success, it seems to me that the plaintiff would need to make out its case against Bass Council.
(a) Deregistration
70 The plaintiff was deregistered as a company on 18 May 2014. It was reinstated on 14 November 2017.
71 Once a company is reinstated, it is taken to have continued in existence as if it had not been deregistered. Any property which vested in the Commonwealth or ASIC re-vests in the company.[9]
[9]Section 601AH(5) of the Corporations Act 2001 (Cth).
72 Bass Council filed its complaint against the plaintiff at the Wonthaggi Magistrates’ Court on 17 November 2017, a few days after the reinstatement. Bass Council obtained the judgment against the plaintiff in December 2017. In the circumstances, there was no need for Bass Council to obtain leave from any court either to sue or to proceed against the plaintiff. Accordingly, the Bass Council claim against the plaintiff was not invalidated by the deregistration of the company.
(b) Validity of Local Government Act
73 The plaintiff queried whether the LG Act was validly passed as a statute having force in the State of Victoria. I have examined a copy of the LG Act. The Act was listed amongst the Acts passed in 1989. It is listed on the Victorian Legislation and Parliamentary Documents website as comprising part of the current statute law in Victoria. Neither of these facts is surprising when Hansard reports (apparently at odds with what Ms Williamson said in court) that the relevant bill was read a third time and passed in April 1989. In the circumstances, I am satisfied that the LG Act is, and was at all material times, a statute forming part of Victorian law.
(c) Preconditions under section 181 of the Local Government Act
74 Presumably as an alternative to its earlier submissions, the plaintiff argued that Bass Council did not comply with section 181 of the LG Act when selling the property.
75 The section applies if:
(a) any amount due to a council for, or in respect of, rates or charges (including enforcement costs and interest) in respect of any rateable land is more than three years overdue; and
(b) no current arrangement exists for the payment of the amount to the council; and
(c) the council has a court order requiring the payment of the amount.[10]
[10]Section 181(1) of the Local Government Act 1989 (Vic).
76 In this case, the section was applicable because each of the three conditions was satisfied: there were outstanding rates or charges owing for more than three years in respect of the Property; there was no arrangement in existence for payment of the amount due to the council; and the council obtained a court order requiring payment.
77 Where the preconditions in section 181(1) are satisfied, the council is authorised to sell the land for an amount equal to, or more than, the estimated value of the land as set out in a written valuation by an appropriately qualified valuer. The property in question must be valued not more than six months before the date of sale or transfer.[11]
[11]Section 181(2).
78 Here, Bass Council obtained an appropriate valuation (as contemplated by section 181(3) of the Act) which stated that, at 24 May 2018, the value of the Property was $220,000. Bass Council entered the contract of sale with Simpson and Hussey on about 27 July 2018. This was within the six month period contemplated in section 181(2). The sale price of $229,000 exceeded the estimated value in the valuation, thereby satisfying the requirement in section 181(2).
(d) Breach of duty
79 The plaintiff asserted that Bass Council breached its obligations when selling the Property. The plaintiff referred to no authorities or principles of law in making this assertion.
80 The plaintiff possibly assumed that Bass Council is in the same position as a mortgagee conducting the sale of a mortgaged property. In that instance, the mortgagee has obligations under the Transfer of Land Act 1958 (Vic) (“TLA”) and/or at common law.
81 I consider that, in the absence of contrary authority, Bass Council is obliged only to comply with the provisions of section 181 of the LG Act in selling the Property. Bass Council obtained judgment against the plaintiff and successfully resisted all attempts by the plaintiff to overturn the judgment or to permit the plaintiff to pay the judgment debt by instalment order. To that extent, the actions of Bass Council in relation to the sale have been subject to some review and have not been found wanting. I have not been directed to any legislation or case law which suggests that Bass Council is in a position equivalent to a mortgagee with the specific obligations which attend that role.
82 To the extent that Bass Council may not have disclosed certain things in the vendor’s statement, it appears that the Sale of Land Act 1962 (Vic) provides a basis for complaint only to actual or prospective purchasers and not a party in the plaintiff’s position.[12]
[12]Section 32K of the Sale of Land Act 1962 (Vic).
83 With respect to Bass Council’s obligations under the LG Act, Section 181(5) requires that before selling the land, the council must:
(a) if it appears from the register kept under the TLA or from any memorial in the office of the Registrar General that a person has an estate or interest in the land, serve on that person a notice requiring payment of the amount referred to in subsection 181(1) accompanied by a company of this section; and
(b) ensure that public notice of its intention to conduct the sale is given; and
(c) if the land is to be sold by auction, notify in writing any person who must be served with a notice under paragraph (a) of when and where the auction will be held.
The council must comply with sections 5(a) and 5(b) at least four weeks before the date of sale. It must comply with section 5(c) at least 14 days before the auction.
84 By notice dated 7 February 2018, Bass Council served the plaintiff with a notice under section 181(5)(a) of the LG Act. The notice advised the plaintiff that:
· there were rates and charges due to Bass Council which had been in arrears for more than three years;
· there was no arrangement in place for the payment to the council of the rates and charges;
· the Wonthaggi Magistrates’ Court ordered on 18 December 2017 that the plaintiff pay the rates and charges owing;
· the rates and charges remained outstanding and were still due and payable;
· Bass Council required the plaintiff to pay the sum of $10,819.38 on or before 6 March 2018;
· if the plaintiff failed to pay that amount by the date specified, then Bass Council would cause the Property to be sold or transferred to itself.
Bass Council served this notice more than four weeks before the sale of the Property.
85 Also, by notice lodged in “The Age” newspaper on 6 April 2018, Bass Council advised that it intended to sell the Property because the plaintiff failed for more than three years to pay the rates and charges owing on the Property. Bass Council placed the public notice more than four weeks before the sale.
86 On 27 July 2018, Bass Council entered into a contract of sale for the Property with Simpson and Hussey. The sale transaction settled on 31 October 2018.
87 The figure in the notice of $10,819.38 comprised the rates and charges owing on the Property, together with enforcement costs and interest incurred by Bass Council to that point.
88 Around September 2018, the plaintiff paid, or offered to pay, Bass Council the sum of $7,191.19, being the amount initially owing. However, there were two problems with the payment. First, the payment was not for the full amount owing to Bass Council. Secondly, it was offered only after Bass Council had contracted to sell the Property to the purchasers, Simpson and Hussey. To that extent, it was too late because by contracting with Bass Council and paying a deposit, Simpson and Hussey had already purchased the Property and obtained an equitable interest in it.
89 Pursuant to section 181(7), Bass Council is entitled to recover from the proceeds of sale of the Property:
· all expenses incurred in connection with the sale;
· the rates and charges, including enforcement costs and interests, due to the Council as specified in section 181(1) of the LG Act;
· any other amount due to it for or in respect of rates or charges (including enforcement costs and interest) in relation to the land.
90 After settlement of the sale to Simpson and Hussey on 3 October 2018, Bass Council paid out a total of $217,536.51 as follows: $199,137.60 to Gadens as solicitor for the mortgagee of the Property (ANZ); $11,387.41 to Bass Council for expenses incurred in connection with the sale of the Property, its enforcement expenses, and interest, being the amounts contemplated as recoverable in section 181(7) of the LG Act; $3,011.50 to Gippsland Water; and $4,000 to the real estate agent for commission and costs associated with the sale of the Property.
91 Bass Council retains the sum of $12,919.69 in its trust account being the balance of the sale proceeds. This money should be applied in accordance with the provisions of section 181(8)-(10) of the LG Act.
92 Where the property sold is land registered under the TLA, the first defendant must register a transfer of land under section 181 of the LG Act if the transfer is in a form approved by the Registrar of Titles.[13] The first defendant must also cancel any mortgages or charges registered as encumbrances on the land when registering the transfer of land.[14] Upon registration of the transfer, all the estate and interest in the land vests in the transferee.[15]
[13]Section 181(11)(a) of the LG Act.
[14]Section 181(11)(b) of the LG Act.
[15]Section 181(12) of the LG Act.
93 The transfer of land and the CBA mortgage have not yet been registered due to the Notice of Action affecting the Property.
94 I am satisfied on the evidence before me that there has been no breach of duty by Bass Council in selling the Property to recover the unpaid charges pursuant to its powers under s 181 of the LG Act.
(e) Corporation sole
95 The plaintiff argued that it was a corporation sole and not bound by the provisions of the Corporations Act. A corporation sole is a corporation comprising a single individual and relates to the position held by that person – for example, the monarch is a corporation sole.[16] In Australia, only government can create a corporation sole. This requires a statute or Crown grant. In Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis & Anor,[17] the court held that the absence of a statute or Crown grant constituting the Catholic Archbishop of Sydney a corporation sole meant that a contention that the Archbishop was such a corporation must fail. The same applies here. The plaintiff produced no evidence of any statute or Crown grant.
[16]LexisNexis, Halsbury’s Laws of Australia, 120 Corporations, ‘Corporation sole and corporation aggregate’ [120-1110].
[17](2007) 70 NSWLR 565 at [162].
96 For the reasons set out, I find that the plaintiff’s case against ANZ and CBA has no real prospect of success. Accordingly, ANZ and CBA should obtain summary judgment against the plaintiff.
Strike out application
97 As I have already ruled in favour of ANZ and CBA in respect to their application for summary judgment, it is not strictly necessary for me to rule on the alternative applications made to strike out the plaintiff’s amended statement of claim. I shall nonetheless do so briefly.
98 By summons filed 12 December 2019, ANZ sought, inter alia, to strike out all or part of the amended statement of claim.
99 By summons filed 10 December 2019, CBA also sought, inter alia, to strike out all or part of the amended statement of claim.
100 The plaintiff opposed the applications.
Strike out applications – general principles
101 Order 23.02 of the Rules provides the following:
Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading—
(a) does not disclose a cause of action or defence;
(b) is scandalous, frivolous or vexatious;
(c) may prejudice, embarrass or delay the fair trial of the proceeding; or
(d) is otherwise an abuse of the process of the Court—
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.
102 The purpose of rule 23.02 is to secure compliance with the rules of pleading and will apply where a pleading is not compliant due to it being, inter alia, vague, ambiguous, or inconsistent.[18]
[18]Meckiff v Simpson [1968] VR 62 at [70].
103 There are some salient principles governing applications under rule 23.02, including but not limited to:
· the power to strike out or compel amendment of a pleading is discretionary;[19]
[19]Golding v Wharton Saltworks(1876) 1 QBD 374.
· a party is entitled to have the case against them presented in an intelligible form;[20]
[20]Davy v Garrett(1878) 7 Ch D 473 at 486.
· a pleading which does not allege all the material facts on which the party pleading relies for the claim or defence does not conform to the rules of pleading, in particular, rule 13.02(1)(a);[21]
[21]Bruce v Odhams Press Ltd[1936] 1 KB 697.
· the court will only look at the pleading itself,[22] or documents referred to in the pleading;[23]
Consideration
[22]Goodson v Grierson[1908] 1 KB 761.
[23]Day v William Hill (Park Lane) Ltd [1949] 1 KB 632.
104 ANZ and CBA contend that the amended statement of claim should be struck out because:
· it does not make any allegations against them;
· does not disclose a cause of action by which it could seek damages at common law;
· lacks a legal basis;
· is frivolous or vexatious; and
· contains parts which are prejudicial, embarrassing, or may cause delay.
105 The above arguments are based on the same submissions made in respect to the application for summary judgment set out above, including that the amended statement of claim seeks to restrain ANZ and CBA from acts which they have either already done or are out of their control and therefore contains no cause of action for which it could seek damages at common law.
106 The plaintiff opposed the application. There was no clear distinction between the arguments advanced by the plaintiff to resist the summary judgment application and the arguments advanced in opposition to the strike out application.
107 I find that the applications by ANZ and CBA to strike out the amended statement of claim should succeed. Williamson made no substantive argument as to why the amended statement of claim should not be struck out given it contained no allegations against ANZ and CBA and pleaded no material facts which would establish a cause of action in law.
108 Therefore, in the event I am wrong in my finding for ANZ and CBA with respect to their summary judgment application, I find that the amended statement of claim, insofar as it relates to ANZ and CBA, should be struck out.
109 I do not consider any order or direction that Ms Williamson amend the pleading should be made, as it would be, in my view, futile and only cause unnecessary delay to the parties.
Security for costs
110 The jurisdiction of the Court to grant security for costs is found in section 1335 of the Corporations Act and Order 62.02 of the Rules. Section 1335(1) states:
“Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.”
111 Rule 62.02(1) provides:
“(1)Where –
…
(b) The plaintiff is a corporation or (not being a plaintiff who sues in a representative capacity) sues, not for the plaintiff’s own benefit, but for the benefit of some other person, and there is reason to believe that the plaintiff has insufficient assets in Victoria to pay the costs of the defendant if ordered to do so;
…
(f)Under any Act the Court may require security for costs;
the court may, on the application of a defendant, order the that the plaintiff give security for the costs of the defendant of the proceeding and that the proceeding as against that defendant be stayed until the security is given.”
112 The Victorian Court of Appeal in Living Spring Pty Ltd v Kliger Partners[24] set out some guiding principles with respect to these applications:
[24](2008) 20 VR 377.
The language of the statutory test is clear. The court must address the question which the section poses:
Is there reason to believe that the corporation will be unable to pay the defendant’s costs?
There is no warrant for — and no apparent advantage in — adopting the much lengthier Beach Petroleum formulation, which requires the court to decide whether there is.
reason to believe that there is a real chance that in events which can fairly be described as reasonably possible the corporation will be unable to pay, … even if in other events which can be fairly described as reasonably possible the corporation would be able to pay …
The phrase ‘reason to believe’ is the touchstone of jurisdiction. It requires a rational basis for the belief — and no more. The wording adopted may be contrasted with other familiar formulations such as ‘If the court is satisfied that … ‘ or ‘If in the view of the court it is likely that …’. The section requires the making of a judgment, a risk assessment: is there a risk that the corporation will be unable to pay? (It adds nothing, in our view, to say that it must be a “real risk”.) A risk assessment is, of necessity, imprecise. The section calls for a practical, commonsense approach to the examination of the corporation’s financial affairs.
It may be said, with justification, that this is a low threshold. But the test simply reflects the policy of the provision, which is to protect a defendant against the risk of the plaintiff corporation’s impecuniosity. The provision equips the court with the means to require that the defendant be secured against that risk.
113 This court has an unfettered discretion with respect to awarding security for costs. However, that discretion must be exercised judicially. The court engages in a balancing exercise. It must weigh the injustice to the plaintiff which would result if an order were made and the plaintiff is unable to pursue its claim against the injustice to the defendant if no security is ordered and at the conclusion of the trial, the successful defendant is unable to recover costs from the plaintiff.
114 In performing the balancing exercise to determine how best to exercise the discretion in the circumstances of a particular case, the court can have regard to factors including the following:[25]
[25]Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 73 ALR 289, 299-300.
· whether the plaintiff’s claim is made bona fide and has reasonable prospects of success;
· whether the plaintiff’s lack of funds has been caused or contributed to by the conduct of the defendant;
· whether the plaintiff’s proceedings are merely a defence against “self-help” measures taken by the defendant;
· whether the making of the order would unduly stultify the plaintiff’s ability to pursue the proceedings;
· the extent to which it is reasonable to expect creditors or shareholders to make funds available to satisfy an order for security;
· whether substantially the same facts are likely to be canvassed in determining the claim and any cross-claim. Courts are generally slow to allow a situation where an action is stayed due to an inability to provide security but allowing the cross-claim to proceed where it covers substantially the same factual matters.
115 The party seeking security for costs has the onus to establish that the Court’s jurisdiction is enlivened.
116 I note that, having received an affidavit from Ms Williamson sworn in late September 2019 in which she deposed to the plaintiff’s financial position as set out above, Bass Council solicitors sent a letter dated 14 October 2019 seeking security for costs. Bass Council requested from the plaintiff detailed financial statements for the preceding three years, including a statement of assets and liabilities, recent income tax returns, financial statements, details of any charges or loans and profit and loss statements. Notwithstanding some further correspondence between the parties, at the time when Ashley Dilges, the solicitor for Bass Council, swore an affidavit in support of Bass Council’s application for security on 11 December 2019, the plaintiff had provided neither security nor any of the requested documents.
117 The solicitors for Simpson and Hussey wrote to the plaintiff and Williamson by letter dated 12 December 2019 seeking security for costs. The letter asked that the plaintiff provide security in the sum of $35,000 or evidence satisfactory to Simpson and Hussey of a capacity to meet a costs order, failing which they would apply for security. Having had no response from the plaintiff or Williamson by the time specified in the letter, they filed the application for security on 20 December 2019.
Financial position of the plaintiff
118 The plaintiff is a company which has issued 20 ordinary shares and has a total paid-up capital of $20.
119 The plaintiff does not own any real property other than the Property which forms the subject of these proceedings.
120 Ms Williamson is the sole shareholder and director of the plaintiff.
121 In affidavit evidence filed by or on behalf of the plaintiff, Ms Williamson has sworn that:
·neither the plaintiff nor she can afford a paid legal representative;
·the plaintiff is not trading, has no income, no savings, and no assets other than the Property;
·the plaintiff is broke and has no funds.
122 There is nothing in the plaintiff’s evidence which suggests that its financial position is likely to improve in the near future. In the circumstances, there is credible evidence before the court which establishes there is reason to believe the plaintiff will be unable to meet a costs order should the defendants be successful in defending the plaintiff’s claim. The court’s jurisdiction to grant security is enlivened.
123 Once the court’s jurisdiction is enlivened, the court can take into account factors including those set out in paragraph 114 above.
Factors to consider
Bona fides and prospects of success
124 I do not doubt that Ms Williamson feels genuinely aggrieved by the sale of the Property. However, that does not mean that the plaintiff has a real as opposed to a fanciful prospect of success in its claim against the defendants. In the earlier analysis, I have found that, based on the material put to me, the plaintiff’s prospects of success are sufficiently weak as to warrant the dismissal of the claim against ANZ and CBA. This is due largely to the weakness of the case against Bass Council. After Bass Council obtained its initial judgment in the Magistrates’ Court, the plaintiff did not successfully review or appeal that judgment. The prospects of success for the plaintiff are very low and it is significantly more likely than not that the plaintiff will fail. If so, then the defendants will look to recover their costs. On this scenario, it could not reasonably be said that ordering security would shut the plaintiff out from bringing a claim with strong prospects of success.
Impecuniosity of plaintiff
125 The impecuniosity of a plaintiff can be a significant factor which the court takes into account in exercising its discretion. As noted by Ormiston J in Interwest Ltd v Tricontinental Corp Ltd,[26] the inability of a corporate plaintiff to pay the defendant’s costs:
“… is a factor, and often a most significant factor, in the exercise of the court's discretion.”[27]
[26](1991) 5 ASCR 621.
[27]Ibid, at 624.
126 In Pearson v Naydler,[28] Megarry V-C specifically noted that the impecuniosity of a plaintiff company did not just open the jurisdiction to make an order for security for costs:
“but also provides a substantial factor in the decision whether to exercise it.”[29]
[28][1977] 3 All ER 531.
[29]Ibid, at 537.
127 In this context, I regard the plaintiff’s impecuniosity, together with that of Ms Williamson, as a relevant factor in granting security.
Personal undertaking
128 Courts have noted that in some cases involving an impecunious company, someone who stands behind the company might bind themselves to assume responsibility for paying the company’s costs in the event that the claim is unsuccessful. In situations where that occurs, the availability of an undertaking of personal liability is one factor which can to be taken into account in exercising the discretion. However, it is not determinative of the application.
129 In the present case, Ms Williamson made no such offer. Given her financial circumstances, she was in no position to do so.
Stultification of claim
130 The plaintiff did not contend formally at the hearing that if an order for security were made in favour of various defendants, the claim would be stultified. However, I infer from the affidavit material that this outcome would most likely follow from such an order.
131 Neither the company nor Ms Williamson has any money or assets sufficient to fund the litigation. It is clear from Living Spring Pty Ltd v Kliger Partners,[30] that a party who seeks to resist an order for security bears the onus of showing that those who stand behind the company and will benefit from the litigation if it is successful are also without means. It is an essential part of the case of a company seeking to resist an order for security on the basis that the grant of security will stultify the litigation to raise the issue of the impecuniosity of those who will benefit from the litigation. Ms Williamson has done this.
[30](2008) 20 VR 377.
132 The likelihood that an order for security would cause the proceeding to stop is a factor which could militate against a grant of security.
Cross-claim
133 The defendants are not making any counterclaim or cross-claim against the plaintiff. Accordingly, the court does not need to consider whether it would be unjust to the plaintiff to order security because the same facts are likely to be canvassed in determining the claim and any counterclaim or cross-claim.
Self-help
134 I do not regard the plaintiff’s proceeding as a defence against self-help measures taken by Bass Council. After rates on the Property were outstanding for more than three years, Bass Council moved to exercise its rights under the LG Act. It was not until after Bass Council had obtained judgment that the plaintiff acted to pay the judgment debt by instalments and, even later, sought to obtain a re-hearing regarding the judgment. The plaintiff has not sought to take effective action in a timely manner and is now causing further delay and cost to Simpson and Hussey by stopping them from registering their interest in the Property.
Defendants causing impecuniosity
135 There was no suggestion that the conduct of any defendant had caused or contributed to the plaintiff and Ms Williamson being without funds. The plaintiff did not allege that there was any connection between it having no income, savings, or business and the conduct of the defendants. The same applied to Ms Williamson.
Conclusion
136 I consider that the ends of justice are best served by making orders granting security for costs. I have reached this conclusion for several reasons.
137 First, the plaintiff and Ms Williamson are without funds or assets and are most unlikely to be able to pay the defendants’ costs if they successfully defend the case.
138 Secondly, the plaintiff’s case is not a strong case. The plaintiff failed to pay rates on the Property for more than three years and Bass Council was entitled to seek judgment. The plaintiff failed to successfully appeal or set aside the judgment.
139 Thirdly, there is no suggestion that any of the defendants materially caused or contributed to the impecuniosity of the plaintiff and Ms Williamson.
140 Finally, due to the weakness of the plaintiff’s claim, the plaintiff, if unable to meet the order for security, is not being shut out from advancing a case with strong prospects of success.
Quantum of security
141 Each of the defendants seeking security has filed material on the question of quantum. The plaintiff, by comparison, has filed no evidence to suggest that the costs sought by the defendants are excessive or unreasonable.
142 The amount sought by Bass Council up until and including trial is $20,000. That amount is based upon the following:
· preparation of a defence;
· discovery;
· preparation of evidence;
· trial attendance;
· attendance at two day hearing;
· interlocutory matters and correspondence;
· counsel’s fees (settling of evidence, trial preparation, and appearance at a two day hearing); and
· disbursements.
143 Bass Council’s calculation took account of the fact that, if it obtains a favourable costs order and costs are payable on a standard basis, this will equate to approximately 50% of the council’s total legal costs.
144 The amount sought by Simpson and Hussey up until and including trial is $35,000. That amount reflects the costs of:
· discovery;
· application for security for costs;
· answering the plaintiff’s interrogatories if the court allows the plaintiff to administer them;
· attending a further directions hearing;
· preparation of expert reports on liability and damages;
· review and settling of the court book;
· briefing counsel to appear at trial;
· counsel fees for preparing for trial, including conferences, views, advice, other attendances, and appearing at a two day trial;
· solicitor’s attendance at trial;
· miscellaneous fees to photocopy documents, prepare chronology, trial issues, and running sheet.
145 Simpson and Hussey rely upon an affidavit by their solicitor, Timothy Puget, sworn 20 December 2019. Other than deposing that he was admitted as an Australian legal practitioner on 8 December 2015 and has worked since admission on litigious disputes in the Victorian and Federal jurisdictions, he does not detail the experience or qualifications which would entitle him to give admissible opinion evidence. Accordingly, although Puget sought to give a breakdown for the costs claimed, I give little weight to his affidavit on this point.
146 Both ANZ and CBA estimate costs from about now to the end of a two day trial at approximately $35,000. In each case, the deponents of the affidavits, Sarah Schnavel and Maria Tytarenko, referred to being informed by Ms Gaber, the client’s solicitor, that she had experience in conducting numerous proceedings in this court as well as in other jurisdictions and was able to estimate the costs of the proceedings. The affidavit material gave a breakdown of the parties’ cost estimate.
147 Normally, where an application for security succeeds, this court grants security up to and including mediation or judicial resolution conference and, if the matter fails to settle and proceeds to trial, the defendant is permitted to apply for additional security.
148 Making due allowance for costs incurred between the completion of mediation and the end of the trial, I would estimate the likely indemnity costs to be incurred by the parties at approximately $24,000. Hence, the standard costs recoverable would be approximately $16,000. I propose to make orders for security for costs in favour of the second defendant and in favour of the third and fourth defendants jointly in the sum of $16,000 up to and including mediation or judicial resolution conference. If the proceeding does not settle at that time, those defendants can apply for further security. If the action were to proceed against the fifth and sixth defendants, I would have granted each of them security in the sum of $16,000 on the same terms as the other defendants.
149 I will hear the parties on the form of final order and costs. In the first instance, the orders should provide the proceeding be stayed if the orders for security are not satisfied. If the form of order and costs cannot be agreed between the parties, then they should file and serve written submissions regarding these matters by 4:00 pm on 28 April 2020. These submissions should be no more than 4 pages long with a 40 mm margin, 12 point text and double spacing. I will decide the question of costs and final orders on the papers without an oral hearing unless the parties persuade me that such a hearing, which would take place by video, is essential.
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