Lombardo v Dermatology and Cosmetic Surgery Services Pty Ltd

[2024] VSC 711

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
GROUP PROCEEDINGS

S ECI 2022 00739

IN THE MATTER of

TINA LOMBARDO & ORS (according to the schedule attached)	Plaintiffs
v
DERMATOLOGY AND COSMETIC SURGERY SERVICES PTY LTD (ACN 055 927 618) & ORS (according to the schedule attached)	Defendants

---

JUDGE:	FORBES J
WHERE HELD:	Melbourne
DATES OF HEARING:	11 November 2024
DATE OF RULING:	15 November 2024
CASE MAY BE CITED AS:	Lombardo & Ors v Dermatology and Cosmetic Surgery Services Pty Ltd & Ors (Costs)
MEDIUM NEUTRAL CITATION:	[2024] VSC 711

---

COSTS — Group proceeding — Pleadings — Leave to amend statement of claim — Refusal of summary dismissal and strike out — Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.17 — Discretion to otherwise order — Overlapping applications by various parties.

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	C Truong KC B House	Maddens Lawyers
For the First Defendant	P Over	L A Warren Lawyers
For the Second Defendant	A McClelland KC A Christophersen	Kennedys Law
For the Third, Fifth and Sixth Defendants	D Guidolin SC	Gilchrist Connell
For the Seventh Defendant	F McLeod AO SC L Barrett	Colin Biggers & Paisley Lawyers
For the Eighth Defendant	D Bongiorno	Colin Biggers & Paisley Lawyers

HER HONOUR:

A          Overview

1. At hearing on 11 November 2024 the parties argued those aspects of orders that had not been agreed to give effect to the reasons of the Court in Lombardo v Dermatology and Cosmetic Surgery Services Pty Ltd [2024] VSC 608 (the reasons). Largely, the contentious matters related to the costs of the applications. The first defendant raised issues with being required to file an amended defence prior to the foreshadowed discontinuance against the seventh defendant given the consequential amendments that would apply to it. The orders made on 14 November 2024 contemplate the timing of defences and replies will be raised at the case management conference on 6 December 2024 in the context of overall timetabling issues.

2. The remaining issues between the parties addressed the costs of the various summonses.[1]

   [1]The seventh and eighth defendants each noted that they do not object to exclusion from the order in circumstances where no costs are sought against them and they in turn seek no costs.

B          The plaintiffs’ summons filed 24 May 2024 for leave to amend

1. The plaintiffs were largely successful in their application to amend and although the summons did not seek costs, the plaintiffs seek an order that the first, second, and third to sixth defendants[2] pay their costs of the summons on a standard basis. The plainitffs submit that, although r 63.17 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules) provides that costs of an application for leave to amend a pleading when leave is given be costs in the proceeding, the Court should exercise its discretion in this case to ‘otherwise order’ as the rule provides. The plaintiffs submit an order for costs in this case would give effect to the principle that a successful party is generally entitled to their costs, a principle that has been described as ‘one of the most, if not the most, important principle’.[3] The plaintiffs submit that the Court is in a good position to determine where the justice between the parties lies and contend that it lies with the plaintiffs who have succeeded in their application.[4]

   [2]I note that the fourth defendant did not participate in the applications and I use the term third to sixth referring to the three active contradictors, namely the third, fifth and sixth defendants.

   [3]Northern Territory v Sangare (2019) 265 CLR 164, 173 [25] (‘Sangare’) citing Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co [No 2] [1953] 1 WLR 1481 at 1484; [1953] 2 All ER 1588 at 1590.

   [4]The plaintiffs relied on the observations of Attiwill J in Teico Investments Pty Ltd v WA Blue Gum Limited [2022] VSC 453 as to the exercise of the costs discretion in interlocutory applications.

2. The plaintiffs further relied on Wawryk & Anor v Mercedes-Benz Australia/Pacific Pty Ltd & Anor (Costs Ruling) (‘Wawryk’)[5] to suppost the proposition that the costs of their summons be otherwise ordered under r 63.17 as at the 11 and 12 July 2024 hearing the submissions addressing the plaintiffs’ summons were the mirror arguments made in respect of the second defendant and third to sixth defendants’ summonses. The plaintiffs made reference to paragraph [82] of Wawryk to submit that this overlap supports a discrete costs order when the fate of both applications is known.

   [5][2024] VSC 186. (‘Wawryk’).

3. The second defendant and third to sixth defendants submit that the Court should simply apply r 63.17 of the Rules and order the costs of the plaintiffs’ summons be costs in the proceeding. These defendants submit there is no basis to otherwise order. The defendants submit that Wawryk was distinguishable as leave to amend was refused so there was no occasion to consider r 63.17.

4. The first defendant submits that there should be no order as to costs against it in respect of the plaintiffs’ summons and if there are to be costs ordered then, as with the other defendants’ costs, they should be determined by applicaton of r 63.17 of the Rules and the Court should not otherwise order. The first defendant submits that it did not actively oppose the application to amend and did not put on a substantive argument or cause any costs to be incurred. The first defendant was required to appear because of its own costs summons, discussed below and, other than acknowledging that it would obtain a benefit if the other defendants succeeded in their opposition, did not actively participate in the application to amend.

5. The costs observations in Northern Territory v Sangare[6] were in the context of the discretion to order costs at the conclusion of the proceeding. That principle may still be accommodated in the litigation overall with an order for costs in the proceeding. The issue is whether on this application, in which the plaintiffs have largely succeeded on the matters where agreement was not reached, a separate order as to their costs of their application should be made.

   [6]Sangare (n 3).

6. In my view it is appropriate to depart from the position under the Rules that the costs be costs in the proceeding and instead order that the plaintiffs recover their costs of the application. In the present circumstances, there was substantial overlap between the plaintiffs’ application for leave to amend and the applications of those defendants who sought to summarily dismiss or strike out the claims under Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the ACL), and other aspects of the existing pleadings. Given that all the summonses have been determined, the Court is in a position to determine where justice lies between the parties on the ventilated issues. It is in my view appropriate to approach the question of costs of all parties in the applications in a holisitic and discrete manner. On that basis, given the substantial success of the plaintiffs on contested matters, it is appropriate to make an order that the second defendant and third to sixth defendants pay the costs of the plaintiffs’ summons on a standard basis.

C          The first defendant’s summons filed 7 June 2024 for costs thrown away

1. The first defendant sought the balance of the costs of its summons not subject to the agreement reflected in the orders of 31 July 2024. It submitted that it was required to attend the hearing on 11 and 12 July 2024 as its summons remained outstanding and agreement as to costs was not reached until the second day of hearing. In those circumstances, I conclude it is appropriate to order that the balance of the costs of the first defendant’s summons be paid by the plaintiffs.

D          The remaining defendants’ summonses

1. The second defendant accepts that it should pay the plaintiffs’ costs of his summons filed 7 June 2024 for summary dismissal or strike out of parts of the plaintiffs existing statement of claim which did not succeed.

2. The third to sixth defendants take a different position in their summons filed 7 June 2024 for summary dismissal or strike out of parts of the plaintiffs’ existing statement of claim. They contend that they were not wholly unsuccessful in their summons having succeeded on the following three issues:

   (a)The case against the third and fifth defendants for direct liability was not adequately articularted and paragraphs [95](b) and [95](c) of the amended statement of claim were struck out;

   (b)The revision of paragraph [108] to apply to only the third and fifth defendants and not all other cosmetic doctor defendants; and

   (c)The deletion of references to a non-delegable duty of care as against the third to sixth defendants.

3. It is correct that some aspects of the third to sixth defendants’ summons did succeed. The direct liability claim remains only on a single basis against two of the defendants. A plea that the other cosmetic doctor defendants owed a non-delegable duty was also abandoned by the plaintiffs at the start of the hearing. The third to sixth defendants submit that their objections were, in these aspects, valid and upheld. As a result they submit there should be no order as to costs as between the plaintiffs and these defendants with respect to the the third to sixth defendants’ summons.

4. However, the third to sixth defendants joined in the substantive matters raised by the second defendant in almost all matters of common interest. The exception was the application of s 34 of the ACL. The matters upon which the second defendant and third to sixth defendants did not succeed in their common opposition to the proposed amendments were matters of substance, namely:

   (a)The inconsistency deficiencies at paragraphs [203] to [213];

   (b)The causation deficiencies which led to there being no cause of action for loss and damage under the ACL claims; and

   (c)The addition of a ‘Specialist Surgeon Representation’ and the change to representations made to ‘potential patients’.

5. In my view the same orders as made on the second defendant’s summons ought be made with respect to the third to sixth defendants’ summons. Namely that the plaintiffs have their costs of opposing the third to sixth defendants’ summons, notwithstanding those defendants did succeed on some issues.

6. I confirm that no costs are sought by or from the seventh and eight defendants in respect of the summonses determined at hearing on 11 and 12 July 2024.
   

S ECI 2022 00739
BETWEEN:
TINA LOMBARDO	First Plaintiff
TINA BONNICI	Second Plaintiff
SIMONE RUSSELL	Third Plaintiff
JULIE ROSE MORRISON	Fourth Plaintiff
- v -
DERMATOLOGY AND COSMETIC SURGERY SERVICES PTY LTD (ACN 055 927 618)	First Defendant
DANIEL LANZER	Second Defendant
DANIEL ARONOV	Third Defendant
JACQUELINE DARBYSHIRE AND TONY DARBYSHIRE (ON BEHALF OF THE ESTATE OF THE LATE DANIEL DARBYSHIRE)	Fourth Defendant
RYAN WELLS	Fifth Defendant
ALIREZA FALLAHI	Sixth Defendant
GEORGE SHU-KHIM WONG	Seventh Defendant
CANDICE WAINSTEIN	Eighth Defendant

SCHEDULE OF PARTIES