John Barr Investments Pty Ltd v Mordialloc Sporting Club Inc (No 2)
[2022] VSC 118
•9 March 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2018 01223
| JOHN BARR INVESTMENTS PTY LTD(ACN 005 225 274) | Appellant |
| v | |
| MORDIALLOC SPORTING CLUB INCORPORATED (ARN A0027737R) | Respondents |
| and | |
| 528 MAIN STREET, MORDIALLOC PTY LTD (ACN 614 378 040) (as Trustee for the 528 Main Street, Mordialloc Unit Trust) |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 March 2022 and by written submissions (4 and 7 March 2022) |
DATE OF JUDGMENT: | 9 March 2022 |
CASE MAY BE CITED AS: | John Barr Investments Pty Ltd v Mordialloc Sporting Club Inc & Anor (No 2) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 118 |
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COSTS – Standard and indemnity costs with respect to an appeal to the Trial Division of the Supreme Court of Victoria from the Victorian Civil and Administrative Tribunal – Appeal having been dismissed – Proceedings commenced in wilful disregard of known facts or clearly established law – Proceedings commenced and continued in circumstances where the applicant properly advised should have known that it had no chance of success – Unreasonable conduct – Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 – Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248 – Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 – Rosniak v GIO (1997) 41 NSWLR 608 – Stuart v Mordialloc Sporting Club [2019] VSC 555 – Martin v Norton Rose Fulbright Australia (No 12) [2020] FCA 1795 – Supreme Court Act 1986 s 24.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant (Appellant) | Mr T. North QC with Mr D. O’Brien and Mrs O. Callahan | McDonald Slater & Lay |
| For the First Respondent | Dr A. Hanak QC with Dr E. Kelly | Fitzpatrick Legal |
| For the Second Respondent | Mr S. Horgan QC with Mr N. Frenkel | HWL Ebsworth |
HIS HONOUR:
Introduction
The first respondent (“the Sporting Club”) applies for an order that the appellant (“JBI”) pay its costs of the proceeding, including reserved costs, on a standard basis and the second respondent (“528 Main Street”) applies for an order that JBI pay its costs of the proceeding, including reserved costs, on an indemnity basis. JBI opposes the application by 528 Main Street but not the application of the Sporting Club.
Applicable principles
The Court has a broad discretion as to costs and has the full power to determine by whom and to what extent costs are to be paid.[1] The manner in which this discretion is to be exercised has been the subject of numerous judicial decisions from which, relevantly, some key principles are established. Thus the exercise of the discretion to award costs over and above the ordinary, standard, basis is reserved for where there is “… a special or unusual feature in the case to justify the Court in departing from the ordinary practice”.[2]
[1]Supreme Court Act 1986 s 24.
[2]Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248 at 256-257.
The recognised categories or circumstances where the discretion has been exercised to award costs over and above the ordinary include where “… the proceedings were commenced in wilful disregard of known facts or clearly established law …”;[3] “… an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success …”;[4] and, or additionally, there has been unreasonable conduct.[5] Moreover, the Victorian Civil Procedure Act 2010 requires parties to proceedings in this and other courts to use reasonable endeavours to narrow the issues in dispute[6] and to ensure that legal costs and other costs are reasonable and proportional.[7]
[3]Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248, [24]; Martin v Norton Rose Fulbright Australia (No 12) [2020] FCA 1795, [18], [29].
[4]Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401.
[5]Rosniak v GIO (1997) 41 NSWLR 608 at 616; Rouse v Shepherd (No 2) (1994) 35 NSWLR 277; Stuart v Mordialloc Sporting Club [2019] VSC 555, [36].
[6]Civil Procedure Act 2010, s 23.
[7]Civil Procedure Act 2010, s 24.
In applying these principles in the present context, the nature of the appeal proceeding under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”) must be kept firmly in mind. As is made clear in the reasons in the appeal proceeding itself, John Barr Investments Pty Ltd v Mordialloc Sporting Club Inc & Anor[8] and the authorities to which reference has been made, the s 148 appeal proceeding is a proceeding of narrow compass. It is confined to errors of law and it is not a proceeding in which the fact finding function of the Victorian Civil and Administrative Tribunal (“the Tribunal”) is to be usurped or second guessed in any way by the Court in the appeal process. This is very clear and has been well established in the authorities over many years. It is not a position that ought to surprise parties properly advised. It is well established as a matter of law.
[8][2022] VSC 100.
Procedural background
JBI commenced the proceeding against the Sporting Club on 7 September 2018. On 18 October 2018, the Sporting Club filed submissions contending that JBI’s application for an extension of time and leave to appeal should be dismissed because it had identified no error of law made by the Tribunal. On 5 February 2019, the Sporting Club filed further submissions contending that JBI’s application for an extension of time and leave to appeal should be dismissed because it had identified no error of law by the Tribunal.[9]
[9]Court Book doc 18, pp 170–176.
The Sporting Club continued to oppose JBI’s claim in the proceeding until 22 March 2019, at which time the composition of the Sporting Club’s Board changed and Mr Braden Williams became its chairman.[10] On 30 April 2019, Mr Williams instructed the Sporting Club’s lawyers to waive privilege over all contemporaneous communications between the Sporting Club and its lawyers, in response to subpoenas filed by JBI, which it did.[11] Since that date, the Sporting Club aligned itself with JBI in the proceeding.
[10]Court Book doc 30, p 304.
[11]The waiver is recorded in the orders of Derham AsJ dated 30 April 2019 (Court Book doc 11, p 54); see also Court Book doc 30, p 304.
The change in position of the Sporting Club resulted in 528 Main Street filing a summons seeking to be joined as the second respondent to the proceeding. On the first return of the summons, on 10 December 2019, Randall AsJ ordered that 528 Main Street file Points of Claim that were filed on 3 February 2020. They included, in paragraph 23, a statement that it intended to take the position, and maintain the submissions, previously filed by the Sporting Club in its submissions dated 18 October 2018 and 5 February 2019. The Sporting Club submissions were attached to the 528 Main Street’s points of Points of Claim. At a hearing on 11 May 2021 at which both JBI and the Sporting Club opposed the 528 Main Street summons, Randall AsJ granted 528 Main Street’s application to be joined as the second respondent and reserved the costs of the summons.[12]
[12]Court Book doc 12, pp 59-60; John Barr Investments Pty Ltd v Mordialloc Sporting Club Incorporated [2021] VSC 244, [201]–[326]
During the course of five subsequent hearings between 30 April 2019 and 24 February 2020, Derham AsJ and Randall AsJ, at various times, suggested to JBI that a separate proceeding would be required to determine the factual allegations made in JBI’s Second Further Amended Notice of Appeal.[13] At the hearing of the appeal on 1 March 2022, JBI suggested that it had been dissuaded from filing a fresh proceeding in view of the reasons of Randall AsJ in Stuart v Mordialloc Sporting Club Inc.[14] There is, in my view, nothing in those reasons to suggest that JBI should not have filed a fresh proceeding in lieu of its s 148 appeal in this proceeding.
[13]Court Book doc 20, pp 210-241 (Transcript 30 April 2019 (Derham AsJ), pp 46–47; Transcript 30 July 2019 (Derham AsJ), pp 5–10; Transcript 26 September 2019 (Derham AsJ), pp 25–26; Transcript 10 December 2019 (Randall AsJ), pp 120-124; Transcript 24 February 2020 (Randall AsJ), pp 74–78 and 91–100).
[14][2021] VSC 244, [169].
Submissions
The second respondent, 528 Main Street, contends that the proceeding by way of appeal could not have succeeded because JBI had identified no error of law made by the Tribunal and that, consequently, the appeal proceeding was doomed to fail. Moreover, it is contended that JBI was repeatedly warned by the respondents and also by the Court that its s 148 appeal was misconceived. As the history of this proceeding indicates, JBI pressed on regardless and, even now, it seems that its position has never been satisfactorily explained.
528 Main Street also contends that JBI’s approach in this proceeding has been ‘scattergun’, with every conceivable point being taken at, it is said, enormous cost to the respondents. Moreover, as is observed, the issues raised and points taken in this proceeding were not matters agitated in, much less determined in any way, by the Tribunal. In my view there is considerable force in these contentions for the reasons advanced and the examples relied upon by the second respondent.
Examples relied upon in support of assertion of a ‘scattergun’ approach by JBI to the proceedings are said by to be provided by:[15]
[15]Second respondent’s Submissions on Costs (4 March 2022), [22].
(a)the [Appellant] Landlord’s Second Further Amended Notice of Appeal comprised 15 pages of mostly unstructured allegations;
(b)the exhibits to David Barr’s affidavit dated 11 October 2021 comprised 1,962 pages and 728 documents, with little guidance in the affidavit as to how the [Appellant] Landlord would use them;
(c)the [Appellant] Landlord’s primary Submissions dated 24 December 2021 comprised 72 pages of allegations;
(d)on 14 February 2022 (15 days before the hearing was due to commence) the [Appellant] Landlord filed and served a 17 page Notice to Admit, which was wholly inappropriate given that the proceeding had been brought under s 148 VCAT Act;
(e)even the [Appellant] Landlord’s Submissions in Reply dated 24 February 2022 comprised 37 pages and raised entirely new arguments;
(f)the [Appellant] Landlord’s Chronology filed 24 February 2022 comprised 65 pages and was hyperlinked to numerous documents, some of which were not in the Court Book.
On these basis, 528 Main Street, the second respondent, contends that JBI should be ordered to pay its costs on an indemnity basis because:[16]
(a)the proceedings were commenced in wilful disregard of known facts or clearly established law;
(b)the action has been commenced or continued in circumstances where the Landlord, properly advised, should have known that he had no chance of success;
(c)there has been unreasonable conduct by the Landlord; and/or
(d)the Landlord has not used reasonable endeavours to narrow the issues in dispute and has not ensured that legal costs and other costs are reasonable and proportional.
[16]Second respondent’s Submissions on Costs (4 March 2022), [23].
The responsive submissions of the appellant, JBI, again seem to fail to grasp the narrowness of an appeal proceeding under s 148 of the VCAT Act. Reference is made in those submissions to the possibility of an appeal under s 148 providing a basis, even in the context of a consent order, for a finding of jurisdictional error, natural justice, denial of natural justice or abuse of process, referring to findings of Ginnane J in the Big Apple decision.[17] None of these matters, however, arose in the present proceeding and, whether or not they may arise in other contexts, that is not relevant to the present application, particularly as there is no basis upon which any of those matters arose or might have thought to have arisen or possibly arisen.
[17]John Barr Investments Pty Ltd v Mordialloc Sporting Club Inc & Anor [2022] VSC 100 ,[23]; The Big Apple Group v Melbourne City Council [2020] VSC 393 at [46]; and see Appellant’s Submissions as to Costs (7 March 2022).
Then it is suggested by JBI, with respect to the Stuart proceeding, that it will in those proceedings challenge the conduct of the second respondent and the status of the non-disclosure of the On-Sale Deed and Related Agreements. JBI submits that the issue of joinder has a flow-on effect as to the determination of cost, having regard to the reasoning of Randall AsJ:[18]
Although 528 Main is successful in their joinder application, I decline to make costs orders at this time. I reserve the question of costs to the hearing judge as the hearing judge will be in the best position to determine if 528 Main is able to make submissions and the effect of what ensues from the Stuart proceeding.
Moreover, the issue of the alleged status of the non-disclosure of the On-Sale Deed and Related Agreements are not issues raised before VCAT and have nothing to do with matters of relevance to a s 148 appeal in the present proceeding. Yet again, this appears to indicate how misconceived the present appeal proceeding was in the mind of JBI and its advisers.
[18]Stuart v Mordialloc Sporting Club Inc [2021] VSC 244 (Randall AsJ), [326]; and see Appellant’s Submissions as to Costs (7 March 2022), [5].
Other submissions on the part of the appellant with respect to the tendered interrelatedness of other proceedings again, in my view, misunderstand the extent to which factual and collateral issues are able to be agitated in the context of an appeal under s 148 of the VCAT Act.[19]
[19]See Appellant’s Submissions as to Costs (7 March 2022), [8], [10]-[12].
In relation to the question whether this s 148 appeal was commenced and continued ‘in wilful disregard of known facts of clearly established law’, it is contended by the appellant, JBI, that the prevailing authorities, in particular the Big Apple decision, indicated that the court did have jurisdiction under s 148 of the VCAT Act to set aside orders made in circumstances based on the grounds of jurisdictional error, denial of natural justice or abuse of process as errors of law within the meaning of s 148 of the VCAT Act. As I have indicated, even if these issues may arise in other contexts and circumstances, none arose in the present proceedings. Additionally, whilst it may be the position that the Big Apple decision was one of the first, if not the first, decision of this Court in relation to the operation of s 93 of the VCAT Act in the context of an appeal under s 148 of that Act, this was certainly a matter that had been considered previously by Deputy President Dwyer in AGL Loy Yang Pty Ltd v Department Head of Economic Development, Jobs, Transport and Resources,[20] a decision which I considered in detail in the reasons dismissing the appeal in this proceeding. That decision, in itself, should, in my view, have alerted the appellant, JBI, and its advisers to the nature and extent of an appeal proceeding under s 148. Moreover this was certainly known law from the end of June 2020, some 18 months or so before this appeal was pursued and pressed in its full dimensions as set out in the Second Further Amended Notice of Appeal.
[20][2016] VCAT 1249.
Further, the ‘wilful disregard of known facts of clearly established law’ which has materially affected the nature, extent and, consequently, costs of these proceedings is the disregard of established authority which, as discussed in detail in the reasons for dismissing the appeal, clearly indicates that factual matters are not matters for consideration and determination by this Court on such an appeal. As discussed in those reasons, the Second Further Amended Notice of Appeal comprises 15 pages of allegations which raise a raft of factual and legal issues, none of which was before the Tribunal, much less determined by the Tribunal. As such, it was at all times abundantly clear that they could not be brought into a s 148 VCAT appeal proceeding.
Conclusion and orders
For the preceding reasons, I accept the 528 Main Street submissions that costs on an indemnity basis should be awarded against JBI. In my view, it is quite clear that JBI proceeded without regard to the established law with respect to the extent to which new factual and legal issues could be introduced in the process of an appeal and that this very substantial attempt to do so was clearly in wilful disregard of known facts or clearly established law. On the basis of the clearly established legal position, it is, in my view, quite clear that were JBI properly advised, it should have known that it had no chance of success in this appeal. Moreover, the extent of additional matters sought to be introduced and the vast array of documents sought to be relied upon was unreasonable conduct by JBI. There was a belated attempt to narrow the issues on appeal at the hearing on 1 March 2022 by the appellant, which was, of course, far too late in terms of costs consequences. In my view JBI has not used reasonable endeavours to narrow the issues in dispute and has not ensured that legal costs and other costs have been reasonable and proportional. In the latter respect, it is no answer, as the appellant contends, that 528 Main Street could have refrained from seeking to be joined to the proceedings or that it could have taken other steps to resolve or narrow the dispute. In respect of joinder there is nothing to suggest that 528 Main Street was not seeking to protect interests which it seriously claimed and the latter is unhelpful speculative assertion. In any event, JBI was driving the proceeding and taking every point regardless of the well settled nature and scope of an appeal under s 148 of the VCAT Act.
The parties are to bring in orders for a standard costs order in favour of the first respondent, the Sporting Club, and an indemnity costs order in favour of the second respondent, 528 Main Street.
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