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Kevin Hughes Investments Pty Ltd v Ebert Unit Developments Pty Ltd

Kevin Hughes Investments Pty Ltd v Ebert Unit Developments Pty Ltd

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Case Copied 8 April 2020 37 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2019 05370

KEVIN HUGHES INVESTMENTS PTY LTD ACN 115 518 299	Plaintiff
v
EBERT UNIT DEVELOPMENTS PTY LTD ACN 121 394 367 (ATF FOR THE EBERT UNIT TRUST AND IN ITS OWN CAPACITY)	Defendant

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers.
DATE OF JUDGMENT:	8 April 2020
CASE MAY BE CITED AS:	Kevin Hughes Investments Pty Ltd v Ebert Unit Developments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 167

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COSTS – General principles – Exercise of discretion – Relief granted by consent – No adjudication on the merits – Defendant effectively surrendered or capitulated – Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; Yue’e Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, applied – Alleged breaches of the Civil Procedure Act 2010 (Vic) not established – No occasion for costs order pursuant to s 29 of the Civil Procedure Act 2010 (Vic) – General observation regarding the need for a proper basis when alleging a breach of the overarching or other obligations imposed upon parties or practitioners under the Civil Procedure Act 2010 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Barber	Moray & Agnew Lawyers
For the Defendant	Dr M Wolff	Aqua Law

HIS HONOUR:

INTRODUCTION AND SUMMARY

The issue for determination is what order should be made in relation to the costs of the proceeding. The plaintiff, a unitholder in the Ebert Unit Trust (Trust), says the defendant, which is the trustee of the Trust, should pay its costs of the proceeding on a standard basis.[1] The defendant says that there should be no order as to costs.[2] It was common ground that the defendant is entitled to its reasonable costs of copying and producing to the plaintiff certain documents relating to the Trust.[3]
[1]Having abandoned its claim that costs should be paid on an indemnity basis: reply submissions at [1].
[2]Not pressing in its submissions the contention in the defendant’s solicitors’ earlier correspondence that the plaintiff should pay the defendant’s costs of the proceeding.
[3]Referred to in more detail later in these reasons.

The plaintiff relied upon two affidavits of its director, Mr Kevin Hughes, the first sworn on 25 November 2019 and the second on 20 February 2020. The defendant relied on the affidavit of its solicitor, Mr Timothy Horne, sworn 19 February 2020 and on Mr Hughes’ first affidavit. The plaintiff filed written submissions dated 20 February 2020 and reply submissions dated 20 March 2020. The defendant relied on its undated written submission provided to the Court on 13 March 2020.[4] At the request of the parties the issue has been determined on the papers.[5]
[4]Subsequently filed on 30 March 2020.
[5]As was ordered at the instigation of the parties on 21 February 2020 after concerns had been raised by the Court regarding proportionality, time, cost and expense…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2020] VSC 167
Decision Date: 8 April 2020

CaseChat Overview and Summary

The case of Kevin Hughes Investments Pty Ltd v Ebert Unit Developments Pty Ltd presented before the court involved a dispute between the plaintiff, Kevin Hughes Investments, and the defendant, Ebert Unit Developments. The nature of the dispute was primarily centred on whether the defendant had breached the Civil Procedure Act 2010 (Vic) and whether the plaintiff was entitled to costs under the general principles of costs in Australian civil litigation. The court was required to consider whether the defendant's conduct warranted an order for costs and whether the plaintiff's allegations of breaches of the Civil Procedure Act 2010 (Vic) were substantiated.

The legal issues before the court encompassed the discretion of the court in awarding costs, particularly in situations where a party has effectively surrendered or capitulated without an adjudication on the merits. The court was required to determine whether the defendant had breached the overarching or other obligations imposed upon parties under the Civil Procedure Act 2010 (Vic) and whether the plaintiff had established the necessary basis for such allegations. The court also considered whether an order for costs under section 29 of the Civil Procedure Act 2010 (Vic) was appropriate in light of the circumstances of the case.

In reaching its decision, the court noted that the defendant had effectively surrendered or capitulated without an adjudication on the merits, as evidenced by the relief granted by consent. The court applied the principles from Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 and Yue’e Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, which underscored that an order for costs is not warranted in such cases. The court observed that the plaintiff had not established the alleged breaches of the Civil Procedure Act 2010 (Vic) and, therefore, no occasion arose for a costs order under section 29. The court made a general observation regarding the necessity for a proper basis when alleging breaches of the Civil Procedure Act 2010 (Vic) by parties or practitioners.

The court concluded that the plaintiff was not entitled to an order for costs under the general principles of costs in Australian civil litigation. It was determined that no costs order should be made as the defendant had effectively surrendered or capitulated without an adjudication on the merits. The court emphasised the importance of ensuring that any allegations of breaches of the Civil Procedure Act 2010 (Vic) are substantiated by a proper basis.

Orders