In the matter of Love D&v XOXO Pty Ltd (Receiver and Manager Appointed) and D & v Vlahos Pty Ltd (Receiver and Manager Appointed) - Desmond Wei Liang Teng in his capacity as Receiver and Manager of Love D&v Xoxo

[2025] NSWSC 328

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Love D&V XOXO Pty Ltd (Receiver and Manager Appointed) and D & V Vlahos Pty Ltd (Receiver and Manager Appointed) – Desmond Wei Liang Teng in his capacity as Receiver and Manager of Love D&V XOXO Pty Ltd (Receiver and Manager Appointed) and D & V Vlahos Pty Ltd (Receiver and Manager Appointed) v Vlahos; Vlahos v Vlahos; Vlahos v Vlahos (No 2) [2025] NSWSC 328

Hearing dates:

On the papers

Date of orders:

9 April 2025

Decision date:

09 April 2025

Jurisdiction:

Equity - Corporations List

Before:

Nixon J

Decision:

See [56] – [60]

Catchwords:

COSTS – Costs Orders – where Receiver sought directions in respect of various proposed adjustments to director loan accounts – where proceedings were in substance adversarial – where separable issues – apportionment of costs

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 42.7

Cases Cited:

Access Training Group Ltd v Jane [2024] NSWCA 204

Australian Securities and Investment Commission, in the matter of GDK Financial Solutions Pty Ltd (in liq) v GDK Financial Solutions Pty Ltd (in liq) (No 4) (2008) 169 FCR 497; [2008] FCA 858

BE Australia WD Pty Ltd v Sutton (2011) 82 NSWLR 336; [2011] NSWCA 414

BostikAustralia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219

DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts (No 2) [2022] NSWCA 258

In the matter of Commercial Indemnity Pty Ltd [2016] NSWSC 1125

In the matter of Love D&V XOXO Pty Ltd (Receiver and Manager Appointed) and D & V Vlahos Pty Ltd (Receiver and Manager Appointed) [2025] NSWSC 230

Lavercombe v Auscott Ltd [2006] NSWSC 867

Morelli (liquidator), in the matter of FW Projects Pty Limited (in liq) v White Hills Pty Limited (No 2) [2024] FCA 955

Preston, in the matter of Sandalwood Properties Ltd (No 2) [2018] FCA 816

Re Minister for Immigration & Ethnic Affairs (Cth); ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6

Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation) [2022] NSWSC 579

Category:

Principal judgment

Parties:

Proceeding 2023/316575
Desmond Wei Liang Teng in his capacity as Receiver and Manager of Love D&V XOXO Pty Ltd (Receiver and Manager Appointed) and D & V Vlahos Pty Ltd (Receiver and Manager Appointed) (Applicant)
Danielle Vlahos (First Respondent)
Vicki Vlahos (Second Respondent)
Elizabeth Vlahos (Third Respondent)
Love D&V XOXO Pty Ltd (Second Defendant)
D & V Vlahos Pty Limited (Third Defendant)

Proceeding 2023/325408
Danielle Vlahos (Plaintiff)
Vicki Vlahos (Defendant)

Proceeding 2024/37235
Vicki Vlahos (Plaintiff)
Danielle Vlahos (Defendant)

Representation:

Counsel:
DR Stack (Applicant)
SE Gray (First Respondent)
MW Young SC (Second and Third Respondents)

Solicitors:
Amberlake Lawyers (Applicant)
W Advisers (First Respondent)
Finn Roache Lawyers (Second and Third Respondents)

File Number(s):

2023/316575
2023/325408
2024/37235

JUDGMENT

1. On 19 March 2025, I delivered reasons for judgment and made orders in these three related proceedings: In the matter of Love D&V XOXO Pty Ltd (Receiver and Manager Appointed) and D & V Vlahos Pty Ltd (Receiver and Manager Appointed) [2025] NSWSC 230 (Primary Judgment). This judgment assumes familiarity with, and adopts defined terms from, the Primary Judgment. As in the Primary Judgment, and without intending any disrespect, I will use first names to refer to each of Ms Vicki Vlahos, Ms Danielle Vlahos and Ms Elizabeth Vlahos.

2. At the time of delivering the Primary Judgment, I gave directions for the parties to exchange proposed orders and submissions in relation to the following matters:

1. the costs of the Receiver’s Further Amended Interlocutory Process filed on 5 February 2025 in the Company / Trust Proceeding (proceeding 2023/316575) (Receiver’s Application);

2. the costs of Danielle’s Interlocutory Process filed on 12 October 2024 in the Company/Trust Proceeding (the Danielle / Elizabeth Application);

3. the costs of proceeding 2024/37235 (Vicki’s Loan Claim); and

4. the costs of proceeding 2023/325408 (Danielle’s Loan Claim) and the calculation of pre-judgment interest.

3. The only matter on which the parties have reached agreement is the calculation of interest in respect of Danielle’s Loan Claim. All issues of costs remain in dispute.

Relevant Principles

4. The starting point is the general rule in r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), namely, that if the Court makes any order as to costs, the Court is to order that the costs follow the event, unless it appears to the Court that some other order should be made as to the whole or any part of the costs.

5. The "event" typically refers to the event of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA).

6. In determining the “event” in circumstances where an application is made for advice or directions regarding the distribution of a fund, it is necessary to consider whether the proceedings were adversarial in nature. In BE Australia WD Pty Ltd v Sutton (2011) 82 NSWLR 336; [2011] NSWCA 414, Campbell JA (with whom McColl JA agreed) observed at [213] as follows (citations omitted):

“The form of the proceedings, as inter partes litigation, is not decisive of how the costs of that litigation should be dealt with. Courts exercising equity jurisdiction encounter a variety of situations where a fund is being administered subject to the control of the court, and a question arises about the proper manner in which that fund should be administered. Such a situation can arise concerning administration of deceased estates, concerning administration of trusts, concerning company liquidations, concerning administration of the estates of incapable people, and concerning DOCAs. In those situations, whether the costs of the court deciding the question that has arisen should be treated as costs of administration of the fund is significantly influenced by whether the proceedings are in substance adversarial ones. While where the costs should fall in litigation is always a matter of discretion, very commonly costs are paid from the fund for non-adversarial proceedings, and by the loser for adversarial proceedings.”

7. In Preston, in the matter of Sandalwood Properties Ltd (No 2) [2018] FCA 816, Colvin J reviewed the authorities concerning the costs of applications for judicial advice or directions, including BE Australia. His Honour noted (at [18]) that, in other cases, courts have approached the issue of costs on an application for directions by applying the ordinary rule as to costs where a trustee, beneficiary or personal representative brings an action relating to the construction of the trust instrument or some other issue arising in the administration of the trust, namely, that it is usual for orders to be made for costs to be paid out of the trust, fund or estate on an indemnity basis (referring to the authorities reviewed by Finkelstein J in Australian Securities and Investment Commission, in the matter of GDK Financial Solutions Pty Ltd (in liq) v GDK Financial Solutions Pty Ltd (in liq) (No 4) (2008) 169 FCR 497; [2008] FCA 858 at [8]–[10]).

8. Colvin J summarised the relevant principles as follows (at [20]-[22]):

“Therefore, if a party’s participation is adversarial in the sense that it goes beyond that which is necessary in order to present the facts and address the issues so as to enable the court to provide advice for the purposes of the administration being conducted (in this case the receivership) then the approach to costs that applies to adversarial litigation should be applied. This is all the more so where the intervener participates to agitate a claim or position that has arisen from steps taken by the intervener.

On the other hand, if a party participates as a proper contradictor solely for the purpose of assisting the court in addressing the issues necessary to provide proper and appropriate judicial advice to the party seeking directions, then the approach to costs on applications concerning the administration of a trust, estate or fund should be applied. In such cases it is usual for all parties properly participating to be entitled to their costs on an indemnity basis paid out of the trust, estate or fund on the basis that they are costs of due administration.

Further, having regard to the views expressed by the Court of Appeal in  Australia WD Pty Ltd v Sutton, the proper approach does not depend upon whether the issue raised is a complex one. Costs on an application for directions that raise complex matters that are dealt with in an adversarial way should be dealt with according to the principle that generally the discretion as to costs is to be exercised in favour of the successful party.”

9. This statement of principles has been applied in a number of subsequent decisions, including In the matter of Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation) [2022] NSWSC 579 at [6] (Black J); and Morelli (liquidator), in the matter of FW Projects Pty Limited (in liq) v White Hills Pty Limited (No 2) [2024] FCA 955 at [15] (Halley J).

10. Generally, a successful party should be entitled to the whole of its costs of the proceeding, including costs on an issue on which it has failed. However, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues. Relevant circumstances in which apportionment across different issues has been said to be appropriate include where a successful party has, in respect of one or more issues, unfairly, improperly or unnecessarily increased costs; where the bulk of the time has been taken on an issue on which the unsuccessful party has succeeded; or where a particular issue or group of issues is clearly dominant or separable: see Access Training Group Ltd v Jane [2024] NSWCA 204 at [190]-[191] (Ward P, Payne JA agreeing).

11. A separable issue can relate to any disputed question of fact or law before a Court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: BostikAustralia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA). Where there is a mixed outcome in a proceeding, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends on matters of impression and evaluation: ibid.

12. Where a claim is withdrawn by consent, the general expectation is that each party should bear its own costs, subject to some exceptions which are conveniently summarised by McHugh J in Re Minister for Immigration & Ethnic Affairs (Cth); ex parte Lai Qin (1997) 186 CLR 622 at 624-625; [1997] HCA 6 (which was quoted in the Primary Judgment at [264]). One such exception is that a costs order may be made where one party has acted unreasonably in a way which should be compensated by costs (Lavercombe v Auscott Ltd [2006] NSWSC 867 at [44] per Barrett J).

Costs of the Receiver’s Application

13. The Receiver’s Application was, in substance, an adversarial proceeding.

14. On 29 April 2024, the Court ordered the Receiver, Danielle and Vicki to file statements of facts, matters and circumstances, identifying the matters or issues in dispute as to the Loan Accounts.

15. In their respective statements of facts, matters and circumstances, Danielle and Vicki advanced various contentions regarding the Loan Accounts and the transactions which were, or were not, recorded in them.

16. The Receiver then applied to the Court seeking directions or advice in respect of various matters arising from the contentions advanced by each of Danielle and Vicki.

17. The Receiver’s evidence on his Application was, as would be expected, limited to identifying, based on his investigations, the matters in the Company’s books and records which were relevant to the issues in dispute. The Receiver was briefly cross-examined by Counsel for Danielle, and was not cross-examined by Senior Counsel for Vicki.

18. Likewise, the Receiver’s submissions on his Application sought to identify evidence and legal principles that were relevant to resolving the various issues which had been raised by Danielle and Vicki in relation to the Loan Accounts, without adopting any position on the matters in dispute.

19. In closing submissions, Counsel for the Receiver described the nature of his client’s application as follows:

“The very purpose of this proceeding was effectively to allow the Receiver to identify the issues that were really issues as between Vicki and Danielle, and then it was a matter for Danielle and Vicki to put forward the evidence that supported those positions for which they contend for. Although, for example, we frame certain relief in respect of, for example, the rejection of a particular claim and a particular sum, your Honour isn't fixed by that, because it was open to Danielle and Vicki to put forward some other sum, and if your Honour is satisfied in relation to that other sum then your Honour would naturally proceed with that other sum, rather than the sum that's put forward by the Receiver.

As I say, the very purpose of the [Receiver's Application] was to [flesh] out the issues between Danielle and Vicki and nothing more”

20. Each of Danielle and Vicki filed several lengthy affidavits and made extensive written and oral submissions in respect of the matters in dispute.

21. The claims or positions which each advanced on the issues in dispute were in their own respective financial interest. I do not mean to suggest that either of them behaved in any way inappropriately by adopting the positions they did, but only to observe, as is obviously the case, that each stood to benefit from any decrease in the balance of their own Loan Account and any increase in the balance of the other’s Loan Account.

22. As set out above, where proceedings for advice or directions are substantially adversarial in nature, costs should generally be borne by the unsuccessful party.

23. The difficulty in applying this principle in the present case is that multiple (and distinct) issues were raised by the Receiver’s Application.

24. As set out in the Primary Judgment, and leaving aside an issue which fell away prior to the hearing (Prayer 16) and the issue of costs (Prayer 23), there were some twenty-one matters in respect of which advice or directions were sought (Prayers 1-15 and 17-22).

25. Vicki and Danielle consented to the positions proposed by the Receiver in respect of eight of those matters, namely, Prayers 1, 3, 4, 9, 15 and 17-19: see Primary Judgment, [61]-[66], [86]-[89], [148]-[149], [198]-[201], [204]-[207].

26. In addition, Prayer 13 can be put to one side for present purposes, since its resolution wholly depended upon the resolution of Danielle’s Loan Claim against Vicki (see Primary Judgment, [179]-[183]). I do not consider that the costs of this Prayer could sensibly be divided from the costs of that claim, which I address below.

27. In respect of the remaining twelve issues arising from the Receiver’s Application:

1. Prayer 2 (PayPal Account, Primary Judgment [67]-[85]): Vicki proposed one reduction to her own expenditure which was accepted by Danielle and the Receiver. Danielle proposed a further adjustment to increase Vicki’s expenditure in respect of purchases from Wayfair, and I found that an adjustment should be made only to the extent conceded by Vicki in closing address (being approximately 25% of the adjustment proposed by Danielle). Vicki also proposed a number of adjustments to increase Danielle’s expenditure. I accepted only one such adjustment (with which Danielle agreed in closing submissions). There was mixed success on this issue.

2. Prayer 5 (Reliance on MYOB Accounts, Primary Judgment [90]-[122]): I rejected Vicki’s contention that the closing balances of the Loan Accounts in the Old MYOB as at 30 September 2017 should be adjusted so as to equalise the balances of the Loan Accounts. Danielle had success on this issue.

3. Prayer 6 (Payment to Mr Tehrani, Primary Judgment [123]-[132]): I rejected Vicki’s contention that the payment made to Mr Tehrani in January 2021 should be treated as a business expense of the Company. Danielle had success on this issue.

4. Prayer 7 (VAS accommodation claim, Primary Judgment [133]-[141]): I rejected Vicki’s claim that $146,300 was payable by the Company in respect of accommodation services provided by Vicki’s company, VAS. As set out in the Primary Judgment, Vicki conceded in closing address that VAS is the proper claimant for any such amount, and that the figure claimed was, in any case, incorrect. Danielle had success on this issue.

5. Prayer 8 (VAS Payment of $53,757, Primary Judgment [142]-[147]): I accepted Danielle’s contention that Vicki’s Loan Account should be increased in respect of payments made to VAS totalling $53,757. Danielle had success on this issue.

6. Prayer 10 (Vicki’s credit card claim, Primary Judgment [150]-[159]): I rejected Vicki’s claim that payments on her personal credit card and VAS’s credit card should be treated as business expenses of the Company. Danielle had success on this issue.

7. Prayer 11 (Underpayment of wages, Primary Judgment [160]-[171]): I rejected Vicki’s claim that she had been underpaid wages and superannuation in the amount of $173,876. Danielle had success on this issue.

8. Prayer 12 (Unpaid leave, Primary Judgment [172]-[178]): I rejected Vicki’s claim for unpaid annual leave. Danielle had success on this issue.

9. Prayer 14 (Amounts paid in Elomar Proceedings, Primary Judgment [184]-[197]): I rejected Danielle’s contention that half of the Settlement Sum and legal costs paid by the Company in the Elomar Proceedings should be allocated to Vicki and added to her Loan Account. Vicki had success on this issue.

10. Prayers 20-21 (Correct treatment of payments made to Danielle, Primary Judgment [208]-[213]): These two issues are properly grouped together, as they did not receive any separate treatment in submissions. I rejected Vicki’s contention that the payments in question should be treated as loans by the Trust to Danielle, rather than as loans made by the Company to Danielle. Danielle had success on this issue.

11. Prayer 22 (Valuation of Gladesville Property, Primary Judgment [214]-[227]): I rejected Vicki’s contention that a valuation of $1.35m should be adopted for the Gladesville Property and Danielle’s contention that a valuation of $1.6m should be adopted, determining that the Receiver would be justified in proceeding on the basis that the Gladesville Property had a value of $1.425m. There was mixed success on this issue.

28. For the most part, these issues were separable. They arose from separate transactions or arrangements, raised separate questions for determination, and were separately addressed in submissions. The exceptions are Prayers 20-21 (which I have grouped together above), and the following issues in respect of which there was some factual overlap and some common issues: Prayers 6-7, which both concerned accommodation claims by VAS; and Prayers 11-12, which concerned Vicki’s claims for unpaid wages and for annual leave.

29. If each of those pairings – Prayers 6-7, 11-12 and 20-21 – are treated as a single issue, then the overall position is as follows: a consent position was reached in respect of eight issues; a mixed outcome in respect of two issues; success for Vicki in respect of one issue; and success for Danielle in respect of six issues.

30. It is undesirable that the Court make costs orders in respect of the Receiver’s Application on an issue-by-issue basis, which would only increase both the complexity and costs of any assessment. I accept Danielle’s submission that, in such circumstances, the preferable course is to make a single order that covers all of the issues on what is often referred to as a “broad axe” basis: see In the matter of Commercial Indemnity Pty Ltd [2016] NSWSC 1125 at [44] (Brereton J). The question of apportionment is very much a matter of discretion and depends on matters of impression and evaluation: Bostik Australia at [38]. The Court should seek to make an order that is fair in all the circumstances, taking account of the extent to which issues are separable, and without aspiring to the false hope of mathematical precision: DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts (No 2) [2022] NSWCA 258 at [9] (Leeming JA, Kirk JA, Basten AJA).

28. Danielle submitted that, in respect of some of the directions which were ultimately given by consent, I should award costs against Vicki, having regard to her late capitulation on those issues. However, this was a matter where the evidence developed significantly over an extensive period of time, with multiple affidavits being filed by Danielle and Vicki, including shortly before the hearing. In those circumstances, I am not satisfied that Vicki behaved unreasonably by maintaining a position of opposition in respect of some of the matters in issue until the commencement of the hearing.

29. Vicki submitted that consideration of many of these issues was complicated by the state of the Company’s books and records, contending that: “if proper account keeping had occurred on the part of the Company, it is likely that very few if any of the matters the subject of the Receiver’s [Application] would have been litigated at all, as the answers would have been apparent simply by looking at the accounts”. Vicki further submitted that the “lion’s share” of any blame for the state of the books and records “must fall on the shoulders of Danielle”, since she “personally maintained the accounts up to 30 June 2017”.

30. I do not accept this submission. First, a number of the contested issues related to payments made by or to VAS, Vicki or her partner, Mr Tehrani. Any failure to provide documentation to substantiate those claims is a failure on the part of Vicki, not Danielle. Secondly, many of the contested issues related to transactions or payments which occurred after June 2017 (and therefore after Danielle ceased to have primary responsibility for maintaining the Company’s accounts). Thirdly, insofar as there was a dispute about the state of the “Old MYOB” records maintained by Danielle up to 30 June 2017 (Prayer 5), I found that Vicki’s criticisms of those records were not established.

31. Having regard to the principles outlined above, the efforts by both parties to narrow the issues in dispute, the outcome on each of the issues which remained in dispute, and my impression and evaluation of the time taken dealing with, and the significance of, each of the various issues in the proceedings, I have determined that, in respect of the Receiver’s Application, Vicki should pay one-third of the costs of Danielle.

32. Further, I accept Danielle’s submission that there should be an order that those costs be payable forthwith. I set out the relevant principles in the Primary Judgment at [270]-[271]. Although the Receiver’s Application was interlocutory, it was brought in respect of discrete issues which have now been finally determined and there is presently no other process before the Court in the Company/Trust Proceeding (and therefore it is unclear when the Company/Trust Proceeding will finally conclude for the purposes of UCPR r 42.7(2)).

33. In addition, Vicki should indemnify the Company and the Trustee as to one-third of the amount paid to the Receiver in respect of his costs of the Receiver’s Application. This is an appropriate order in circumstances where the various disputes between Vicki and Danielle in respect of the Loan Accounts caused the Receiver to bring, and incur costs in relation to, the Receiver’s Application and where, unless such an order is made, the Receiver’s costs will, in effect, be borne equally by Danielle and Vicki, by reason of their equal beneficial interests in the Company and the Trust.

Costs of the Danielle / Elizabeth Application

37. In the Danielle / Elizabeth Application, Danielle succeeded in challenging the Receiver’s decision that the Trust was indebted to Elizabeth in the amount of $80,000. I determined that Elizabeth’s claim against the Trust was statute-barred (Primary Judgment, [231]-[261]). I also determined that Danielle, having succeeded, is entitled to her costs of this application, and invited the parties to make submissions on the appropriate form of costs order.

38. Elizabeth submitted that the appropriate form of order is that the Company pay Danielle’s costs of the application, with Elizabeth bearing her own costs. The basis for this submission was as follows:

“Once again, the issue was enlivened by the manner in which the Company kept its accounts, with the Company repeatedly acknowledging in those accounts that a debt of $80,000 was owing to Elizabeth Vlahos”.

39. I do not accept this submission. First, the relevant accounts were not those of the Company, but of the Trust. Secondly, the fact that the loan owing to Elizabeth was recorded in the Trust’s financial statements from FY18 to FY22 does not provide a basis for ordering Danielle’s costs to be paid out of the Trust’s assets. It was common ground that the Trust’s accounts were accurate in recording that there was a current liability to Elizabeth in the amount of $80,000 in each of those financial years. That is because the Trust had received that amount from Elizabeth by way of a loan, which was repayable on demand, and which therefore created an immediate debt (Primary Judgment [236]-[238]). The cause of action to recover that sum was not statute-barred until December 2023, well after the date of the relevant financial statements (Primary Judgment, [259]).

40. Although the Receiver was a party to the application, the Receiver adopted a neutral role, limiting his submissions to identifying documents and legal principles which were relevant to determining the dispute between Danielle and Elizabeth. Each of Danielle and Elizabeth led evidence on, and made written and oral submissions on, the application.

41. Given that this application was, in substance, an adversarial proceeding between Danielle and Elizabeth, and given Danielle’s success on the application, it is appropriate that there be an order that Elizabeth pay Danielle’s costs of the application, as agreed or assessed.

42. Again, I accept Danielle’s submission that there should be an order that such costs are payable forthwith. The application concerned a discrete issue in respect of the Trust’s liability to Elizabeth, which has been finally determined; Elizabeth’s role in the Company/Trust Proceeding is now at an end; and it is presently unclear when the Company/Trust Proceeding will conclude for the purposes of UCPR r 42.7(2).

Costs of the Loan Claims

43. It is convenient to address the costs of Vicki’s Loan Claim at the same time as the costs of Danielle’s Loan Claim, having regard to the submissions advanced by the parties.

44. In the Primary Judgment:

1. I rejected Vicki’s Loan Claim, and found that Danielle had repaid Vicki both the principal of $645,000 and interest (Primary Judgment, [278]-[297]); and

2. I upheld Danielle’s Loan Claim, and found that Vicki had borrowed $170,000 from Danielle (rather than from the Company) and was liable to repay that amount, together with interest to the date of the judgment (Primary Judgment, [298]-[314]). As I have noted above, the parties have agreed on the amount of interest that is payable ($29,978.22).

45. The starting point is that, in each proceeding, costs should follow the event.

46. On that basis, Danielle sought an order for costs in both proceedings.

47. Vicki, however, contended that there should be no order as to costs in either proceeding. She submitted as follows.

1. In respect of Vicki’s Loan Claim, the Court found that Danielle and Vicki had agreed for Vicki’s loan to be repaid via entries made in the Loan Accounts, but that this arrangement was not properly documented. As a result of the adjustments necessary to give effect to this arrangement, Vicki will receive a $122,382.91 credit to her Loan Account, which represents a substantial recovery by her.

2. In respect of Danielle’s Loan Claim, while the Court found that Danielle was entitled to recovery of the principal of $170,000 plus interest, the Court also determined that Vicki was entitled to a credit to her Loan Account in the amount of $170,000, with a corresponding debit to Danielle’s Loan Account. In circumstances where “Danielle is being given $170,000 with one hand and having the same sum taken away with the other (and the same being the case in relation to Vicki), in real terms Danielle’s success on this claim against Vicki is limited to the $29,978.22 interest claim.”

3. Danielle’s success on her loan claim therefore represents, in percentage terms, a smaller success than Vicki’s success in the corresponding loan claim.

4. Having regard to those matters, if Danielle is to be awarded costs on her claim against Vicki, then Vicki should be awarded costs on her claim against Danielle. However, it is more sensible that there should not be any costs order in either proceeding, which would “reflect the fact that both plaintiffs recovered in real terms only a fraction of the money claimed and would also obviate the need for a costs assessment in either of those two proceedings”.

48. These submissions fail to acknowledge that Danielle accepted, in her evidence and submissions, that it was a necessary corollary of the position which she adopted in respect of her Loan Claim and Vicki’s Loan Claim that the adjustments which I have determined should be made to the Loan Accounts would need to be made. Further, this had been Danielle’s position since well before the trial.

49. For example, in respect of Danielle’s Loan Claim, the Receiver’s Statement of Facts, Matters and Circumstances which was filed on 8 May 2024 referred to the fact that in January 2023, Danielle paid a sum of $170,000 to the Company, and that the same sum was then paid by the Company to Vicki, with those payments being recorded in the Company’s accounts as, respectively, a loan by Danielle to the Company and a loan by the Company to the Vicki. The Receiver’s Statement of Facts continued as follows:

“Danielle claims that the $170,000 was a personal loan to Vicki, it should not have been recorded in the Company’s accounts and Danielle’s loan account should be increased by $170,000 and Vicki’s reduced by $170,000 given the personal nature of the loan.”

50. Similarly, in respect of Vicki’s Loan Claim, the Receiver’s Statement of Facts referred to the fact that Danielle had made a payment of $400,000 to the Company, which was applied to reduce the balance of Vicki’s (rather than Danielle’s) Loan Account. The Receiver’s Statement of Facts recorded that “Danielle asserts that the above transaction represents her repayment of a personal loan to Vicki”, but that Vicki disputed this. Further, the Receiver’s Statement of Facts stated that an amount of $244,028 had been withdrawn by Vicki from the Company’s account and that the full amount had been recorded as an increase in the balance of Vicki’s Loan Account, but that: “Danielle has advised that she allowed half of this payment to be paid to Vicki as a repayment of her personal loan to Vicki”.

51. In circumstances where Danielle acknowledged that, if she was successful in establishing her Loan Claim and in defending Vicki’s Loan Claim, the Loan Accounts would need to reflect the substance of the transactions which had occurred, the fact that I have determined that such adjustments should be made as a result of Danielle’s success, does not provide a basis for concluding that there was mixed success on those claims.

52. The reason why each of Vicki’s Loan Claim and Danielle’s Loan Claim proceeded to hearing was because Vicki disputed Danielle’s evidence regarding the substance of the transactions which had occurred and Danielle’s contentions regarding the adjustments which should be made to the Loan Accounts to reflect the substance of those transactions. Those were the essential issues which arose for determination in respect of those claims, and I determined those issues in Danielle’s favour.

53. It follows that Danielle is entitled to her costs of each of the proceedings on the ordinary basis, as agreed or assessed.

54. Each of Danielle’s Loan Claim and Vicki’s Loan Claim was commenced in the District Court. In respect of each of those proceedings, a Summons was filed in this Court seeking an order for transfer of the proceedings. At the time that the transfer order was made in each proceeding, the costs of the Summons seeking the transfer order were “reserved for consideration at [the] hearing” of the main proceeding. Accordingly, it is appropriate that there be a notation, in respect of each of Danielle’s Loan Claim and Vicki’s Loan Claim, that the costs order includes the costs of the Summons seeking the transfer order and the costs of the proceedings in the District Court prior to their transfer to this Court.

55. Finally, Vicki submitted that, in light of the findings made in respect of Danielle’s Loan Claim, the Court should give a direction to the Receiver that he would be justified in crediting Vicki’s Loan Account in the sum of $170,000 and debiting Danielle’s Loan Account in the same amount. However, I have already taken those adjustments into account in the directions which I have already given to the Receiver (see Primary Judgment, [181]-[183] and [316], Order (13)). It is therefore unnecessary for any further direction to be given.

Orders

56. For the reasons given above, I make the following orders.

57. In respect of the Receiver’s Further Amended Interlocutory Process filed on 5 February 2025 in proceeding 2023/316575 (the Receiver’s Application):

1. The Second Respondent (Vicki Vlahos) pay one-third of the First Respondent’s (Danielle Vlahos) costs of the Receiver’s Application as agreed or assessed on the ordinary basis, with such costs to be payable forthwith.

2. The Second Respondent indemnify the Second Defendant (Love D&V XOXO Pty Ltd) and the Third Defendant (D&V Vlahos Pty Limited) as to one-third of the amount paid to the Receiver in respect of the Receiver’s costs of the Receiver’s Application.

58. In respect of Danielle’s Interlocutory Process filed on 12 October 2024 in proceeding 2023/316575 (the Danielle / Elizabeth Application):

1. The Third Respondent (Elizabeth Vlahos) pay the Applicant’s costs of the Danielle / Elizabeth Application as agreed or assessed on the ordinary basis, with such costs to be payable forthwith.

59. In proceeding 2024/37235 (Vicki’s Loan Claim):

1. The Plaintiff pay the Defendant’s costs of the proceedings as agreed or assessed on the ordinary basis.

2. The Court notes that the costs of the proceedings referred to in order 1 are to include:

1. the costs of the Summons filed on 16 October 2024 in proceeding 2024/380550 seeking transfer of the proceedings to this Court; and

2. the costs of the proceedings in the District Court prior to their transfer to this Court.

60. In proceeding 2023/325408 (Danielle’s Loan Claim):

1. Judgment for the Plaintiff against the Defendant in the amount of $199,978.22 inclusive of principal and pre-judgment interest as follows:

1. Principal: $170,000.00

2. Interest: $29,978.22

3. Total: $199,978.22.

2. The Defendant pay the Plaintiff’s costs of the proceedings as agreed or assessed on the ordinary basis.

3. The Court notes that the costs of the proceedings referred to in order 2 are to include:

1. the costs of the Summons filed on 16 July 2024 in proceeding 2024/261684 seeking transfer of the proceedings to this Court; and

2. the costs of the proceedings in the District Court prior to their transfer to this Court.

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Decision last updated: 09 April 2025