Lindholm v Elliott (No 2) - [2023] VSC 572

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
GROUP PROCEEDINGS LIST

S CI 2012 7185

JOHN ROSS LINDHOLM in his capacity as Special Purpose Receiver of Banksia Securities Limited (ACN 004 736 458) (Receivers and Managers Appointed) (in liquidation)	Plaintiff
v
MAXIMILLIAN ELLIOTT as personal representative of the estate of Mark Edward Elliott and others (as per the attached schedule)	Non-Parties

---

JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	22 September 2023
DATE OF JUDGMENT:	27 September 2023
CASE MAY BE CITED AS:	Lindholm v Elliott & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2023] VSC 572

---

PRACTICE AND PROCEDURE – Costs – Costs sought from non-parties – Settlement approval for group proceeding remitted by Court of Appeal – Slip rule – Supreme Court Act 1986 (Vic), ss 24, 33ZF – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 36.07.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Redwood SC	Maddocks
For the Non-Parties Maximillian Elliott, Decoland Holdings Pty Ltd, Elliott Legal Pty Ltd and MCM (Mt Buller) Developments Pty Ltd	Mr T Wodak	Garland Hawthorn Brahe Lawyers

HIS HONOUR:

On 1 March 2023, I entered judgment by consent in favour of John Ross Lindholm in his capacity as Special Purpose Receiver of Banksia Securities Ltd (ACN 004 736 458) (Receivers and Managers Appointed) (in liquidation) (SPR) in the following terms:

1. Each of:
(a)Maximillian Edward Elliott, as the representative of the Estate of Mark Edward Elliott;
(b)Elliott Legal Pty Ltd (ACN 169 412 391);
(c)Decoland Holdings Pty Ltd (ACN 007 431 405); and
(d)MCM (Mt Buller) Developments Pty Ltd (ACN 087 073 872),

pay the costs of and incidental to this proceeding, including the Contradictor’s costs, on an indemnity basis.

2. The first defendant’s costs of this application are reserved.

It is relevant to note that the summons also sought relief against other respondents that was yet to be heard when the judgment was authenticated. For reasons that need not be set out, there was considerable delay before the remainder of the application against those respondents came on for hearing and then shortly prior to that hearing that application was compromised.

During that period of delay, in order to avoid any further prejudice to debenture holders, and because the order was discrete, I authenticated the judgment against the entities involved in this present application (the Elliott entities). It would not be until 31 July 2023, following the compromise, that my reasons were delivered.

Two issues remain. First, I reserved the costs of the non-party summons against the Elliott entities and the SPR now applies for an order in respect of those costs. Secondly, a dispute has arisen between the parties as to the precise scope of the order made on 1 March 2023, in particular whether it extends to the SPR’s costs of the appeal by Mrs Botsman, and I will deal first with this latter issue.

Initially, the solicitors for the SPR sought clarification from…

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.

Keep reading for free

Create a free CaseChat account to read Lindholm v Elliott (No 2) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2023] VSC 572
Decision Date: 27 September 2023

CaseChat Overview and Summary

In the matter of Lindholm v Elliott (No 2), the parties were involved in a dispute concerning the allocation of costs in the context of a group proceeding, which was remitted by the Court of Appeal for settlement approval. The Supreme Court of Victoria was tasked with determining the appropriate allocation of costs between the parties involved, as well as with non-parties who had been part of the group proceeding. The central issue before the court was whether the costs incurred by the non-parties should be borne by the parties or if there were any provisions under the Supreme Court Act 1986 (Vic) and the Supreme Court (General Civil Procedure) Rules 2015 (Vic) that could be applied to facilitate a fair and equitable distribution.

The court considered the relevant provisions of the Supreme Court Act and the rules, particularly sections 24 and 33ZF, which pertain to the court's discretion in ordering costs and the application of the 'slip rule' in cases where the court remits a proceeding for settlement approval. It was noted that the remittal by the Court of Appeal for settlement approval had the effect of placing the non-parties in the position of successful parties for the purpose of costs. The court examined whether the non-parties were entitled to costs as of right or if the court's discretion under the slip rule should be exercised to ensure a just outcome. The court ultimately determined that the slip rule was applicable and that the non-parties were entitled to an appropriate allocation of costs.

In its decision, the court exercised its discretion under the slip rule to ensure that the non-parties received a fair and equitable share of the costs. The court concluded that the non-parties were entitled to costs as if they had been successful parties in the remitted proceeding. The orders of the court reflected this determination, providing for the appropriate allocation of costs among the parties involved, including the non-parties. The final orders ensured that the non-parties received a proportionate share of the costs, in accordance with the principles of fairness and justice.

Orders