Krongold v Thurin [No 2]
[2023] VSCA 210
•5 September 2023
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2023 0032 |
| KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 149) | Applicant |
| v | |
| DAVID THURIN & ORS [NO 2] (ACCORDING TO THE ATTACHED SCHEDULE) | Respondents |
---
| JUDGES: | BEACH, McLEISH and NIALL JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | Determined on the papers |
| DATE OF JUDGMENT: | 5 September 2023 |
| MEDIUM NEUTRAL CITATION: | [2023] VSCA 210 |
---
PRACTICE AND PROCEDURE – Costs – Referral of questions by Trial Division to Court of Appeal – Costs of hearing and determination of referred questions – Parties enjoying mixed success – Costs awarded in favour of successful parties – No point of principle.
---
| Counsel | ||
| Applicant: | Mr JAF Twigg KC with Dr K Weston-Scheuber and Mr M Hosking | |
| First and Second Respondents: | Mr MG Roberts KC with Dr CO Parkinson KC and Mr N Guenther | |
| Third Respondent | Mr KJ Naish | |
| Fourth Respondent | Mr PG Cawthorn KC with Mr AE Klotz | |
Solicitors | ||
| Applicant: | Krongold Group of Companies | |
| First and Second Respondents: | Herbert Smith Freehills | |
| Third Respondent | DLA Piper Australia | |
| Fourth Respondent | Meridian Lawyers | |
BEACH JA
MCLEISH JA
NIALL JA:
On 24 March 2023, pursuant to s 17B of the Supreme Court Act1986, Stynes J referred three questions to this Court. On 17 August 2023, we answered those questions as follows:
Question 1
What is the effect of Justice Quigley’s order made on 13 December 2022 pursuant to s 77(3) of the Victorian Civil and Administrative Tribunal Act 1998 (as corrected on 15 December 2022), that VCAT proceeding BP715/2018 ‘be struck out and the matter referred to the Supreme Court of Victoria’ (the ‘Section 77 Order’)?
Answer: Subject to the answer to question 2, the effect of Quigley J’s order is to invoke the jurisdiction of the Supreme Court to hear and determine the referred matter, without the need for any further initiating process.
Question 2
Having regard to the answer in Question 1, is:
(a) Casper Architecture and Design Pty Ltd (ACN 078 809 604); and/or
(b) Swan Hardware & Staff Pty Limited (ACN 005 273 165),
a party to any proceeding in the Supreme Court of Victoria arising as a result of the Section 77 Order?
Answer: No.
Question 3
Having regard to the answer to Question 1, do sections 134 and/or 134A of the Building Act 1993 bar the Thurins’ claims against Krongold Constructions (Aust) Pty Ltd (ACN 103 839 149) and/or Casper Architecture and Design Pty Ltd?
Answer: No, with respect to the Thurins’ claims against Krongold Constructions (Aust) Pty Ltd (ACN 103 839 149); otherwise unnecessary to answer.[1]
[1]Krongold Constructions (Aust) Pty Ltd v Thurin [2023] VSCA 191.
The parties have now filed submissions on costs. In summary, those submissions are as follows:
(1)Krongold submits that there should be no order as to costs, essentially because the questions referred to the Court of Appeal involved matters of public importance and the answers given by this Court will provide guidance to many litigants who are or who will be subject to a referral order pursuant to s 77(3) of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’). Krongold submitted that, in a real sense, the questions referred to this Court presented a ‘test case’. In the alternative, Krongold submitted that it should only be required to pay the Thurins’ costs of questions 1 and 3, and that it should bear those costs equally with Casper because Casper supported and adopted Krongold’s case on those questions.
(2)The Thurins submitted that Krongold should pay their costs of the proceeding; and that they (the Thurins), should not pay the costs of any other party. They also submitted that Krongold’s proceeding seeking declaratory relief should be ‘disposed of’, there being no purpose in remitting that proceeding back to the Trial Division. Alternatively, if orders were not made disposing of Krongold’s proceeding, an order should be made that the Thurins’ costs may be taxed immediately as provided for in Rule 63.20.1 of the Supreme Court (General CivilProcedure) Rules 2015. In the further alternative, the Thurins submitted that in the event that this Court does not order Krongold to pay the Thurins’ costs of this proceeding, this Court should grant an indemnity certificate pursuant to s 19(1) of the Appeal Costs Act 1998.
(3)Casper submitted that the Thurins should pay its costs of the referral forthwith. It contended that, as a result of this Court’s answers to the three questions, Casper is not a party to the referred proceeding. Casper contended that, while it made some arguments which were not accepted by the Court, ‘there can be little doubt that as between Casper and the Thurins, Casper was the successful party’.
(4)Swan Hardware submitted that it was entitled to have its costs of the proceeding paid by the Thurins. The Thurins were the only party who submitted that Swan Hardware was a party to the referred proceeding. Swan Hardware succeeded on that issue. Swan Hardware also submitted that it should never have been necessary to refer question 2(b) to this Court, having regard to this Court’s decision in Thurin v Krongold Constructions (Aust) Pty Ltd.[2]
[2][2022] VSCA 226.
Resolution
In our view, Krongold should pay the Thurins’ costs of the referred questions. The Thurins were wholly successful against Krongold in this Court. While we will come to the position of Casper in a moment, we do not see any basis upon which (having regard to the success Casper enjoyed in this proceeding) Casper should share Krongold’s liability for the costs of the Thurins. While the answers given by this Court to the questions are of public importance, and will provide guidance to other litigants, we do not accept that this case was, in any real sense, a test case so as to disentitle the Thurins to an order for costs. Krongold pursued the case in its own interests.
We also reject Krongold’s alternative submission, that it should not have to pay costs with respect to question 2. Although Krongold contended that question 2 was unnecessary to answer, that submission flowed from its submissions as to question 1, and it would be artificial to treat the two questions separately for the purpose of costs.
As we have already said, Swan Hardware seeks its costs from the Thurins. The Thurins contend that they made (and make) no claim against Swan Hardware in the referred proceeding, and that they have no interest in Swan Hardware being a party. In those circumstances, they submit that, ‘on no view should the Thurins be ordered to pay Swan Hardware’s costs’. The difficulty for the Thurins on this issue is that, in this Court, they were the only party who advanced submissions in this Court in support of the proposition that Swan Hardware is a party to the referred proceeding.[3] They failed on that issue — the only issue which Swan Hardware took a position on in this Court. In the circumstances, the Thurins should pay Swan Hardware’s costs of the referred questions.
[3]Krongold’s position on question 2, in this Court, was that it was unnecessary to answer.
The position with Casper is slightly different — Casper made submissions in respect of all three questions. It was successful in respect of question 2, but unsuccessful in respect of questions 1 and 3. In the circumstances, we think that the Thurins should pay one third of Casper’s costs of the referred questions.
Other issues
We do not see any basis for making any order in favour of the Thurins or Casper that the costs orders we will make in their favour may, contrary to the prima facie position set out in Rule 63.20.1, be taxed immediately. Those parties did not advance any reason for departing from the usual position.
We do not propose to make any order, as sought by the Thurins, disposing of Krongold’s proceeding in which the three questions were referred to this Court. Final orders in relation to that proceeding should be dealt with in the Trial Division.
In relation to Krongold’s application for an indemnity certificate under s 19 of the Appeal Costs Act 1998, we are not persuaded that it is appropriate to grant any such certificate in this case. As we have said, Krongold pursued the issues in this matter in its own interests and has been unsuccessful.[4] While s 19 provides for a certificate in favour of a moving party even in those circumstances, we are not persuaded that is appropriate in this case. In light of the costs orders we will make against Krongold, the Thurins’ application for a certificate is moot.
[4]No submission was made as to whether Krongold would be eligible for payment under that Act, by virtue of not being a corporation having a paid up share capital of $200,000 or more, or a subsidiary of such a corporation (s 35A(1)(a)).
Conclusion
We will make orders requiring Krongold to pay the Thurins’ costs of the referred questions; the Thurins to pay Swan Hardware’s costs of the referred questions; and the Thurins to pay one third of Casper’s costs of the referred questions. There will be no other order as to costs. Additionally, we will not make any order disposing of Krongold’s proceeding.
Finally, we will not grant Krongold an indemnity certificate under s 19(1) of the Appeal Costs Act 1998.
---
SCHEDULE OF PARTIES
KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 149) Applicant v DAVID THURIN First Respondent LISA THURIN Second Respondent CASPER ARCHITECTURE AND DESIGN PTY LTD (ACN 078 809 604) Third Respondent SWAN HARDWARE & STAFF PTY LTD (ACN 005 273 165) AND SWAN HARDWARE & STAFF PTY LTD (IN ITS CAPACITY AS TRUSTEE OF THE SWAN HARDWARE & STAFF UNIT TRUST) (ABN 80 597 079 103) Fourth Respondent BICON PTY LTD (ACN 070 741 374) Fifth Respondent
2
2
0