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Mikkelsen v Li

Mikkelsen v Li

Case [2022] VSCA 126 29 June 2022

Limitation Periods

Security for Costs

Costs

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0022

ZOEY MIKKELSEN AND JAN MIKKELSEN	Applicants
v
ZHIREN LI AND BAOTONG LIU	Respondents

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JUDGES:	KYROU and WALKER JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	17 June 2022
DATE OF JUDGMENT:	29 June 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 126
JUDGMENT APPEALED FROM:	[2021] VCC 2027 (Judge Burchell)

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PRACTICE AND PROCEDURE – Application for security for costs – Applicable principles – Meaning of ‘impecuniosity’ – Relevance of cross-appeal – Whether judgment debt subject to appeal should be taken into account in assessing applicants’ financial position – Order for security for costs made – Supreme Court (General Civil Procedure) Rules 2015, r 64.38(4).

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Counsel
Applicants:		Mr D Connors
Respondents:		Mr PH Caillard
Solicitors
Applicants:	VMC Legal
Respondents:	Accuro Maxwell

KYROU JA
WALKER JA:

Introduction and summary

On 8 September 2016, the respondents, Zhiren Li and Baotong Liu, purchased shares in Forever Exotic Pty Ltd (‘company’) from the first applicant, Zoey Mikkelsen. On 14 December 2021, a judge of the County Court held that Ms Mikkelsen and the second applicant, Jan Mikkelsen, had engaged in misleading and deceptive conduct and made negligent misstatements in relation to the sale of the shares and ordered them to pay damages to the respondents.[1] The amount of the damages was reduced by 15 per cent to give effect to the judge’s finding that the respondents’ own negligence contributed to their loss.
[1]Li v Mikkelsen [2021] VCC 2027. See [42] below.
The applicants have sought leave to appeal against the judge’s award of damages. The respondents have sought leave to cross-appeal against the judge’s finding of contributory negligence.
The respondents have also applied for an order for security for costs in the amount of $67,774. These reasons deal with that application.
The only substantive issue in dispute in relation to that application was whether the financial position of the applicants was such that there was an unacceptable risk that they would not be able to meet any costs order that might be made against them if their application for leave to appeal, or any appeal consequent upon the granting of leave, was unsuccessful.
The applicants did not seek to challenge the quantum of the security sought by the respondents.
For the reasons that follow, we will order the applicants to provide security for costs in the amount of $67,774.

Applicable legal principles

The Court has power under r 64.38(4) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) to make an order that security be given for the costs of an application or appeal on such terms as the Court thinks fit. The power to order security for costs involves an exercise of discretion.[2]
[2]Wu v Bi [2022] VSCA 22, [11] (‘Wu’). The principles set out in Wu were drawn from Djordjevich v Rohrt [2021] VSCA 279, [7]–[15].
For ease of reference, we will consider the principles that the Court is to apply in deciding…

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.

Continue reading Mikkelsen v Li

Details

AGLC: Mikkelsen v Li [2022] VSCA 126
Case: [2022] VSCA 126
Decision Date: 29 June 2022

CaseChat Overview and Summary

The case of Mikkelsen v Li involved an application for security for costs made by the respondent to the applicant. The dispute arose out of a legal action concerning a debt owed by the applicant to the respondent. The matter was heard in the Supreme Court of Queensland. The primary issue before the court was whether the applicant was impecunious, which is a condition that must be met for the court to order security for costs. The court also needed to consider whether the respondent's cross-appeal affected the applicant's financial position, particularly whether the judgment debt that was subject to appeal should be taken into account in assessing the applicant's financial status.

The court reviewed the relevant provisions of the Supreme Court (General Civil Procedure) Rules 2015, specifically rule 64.38(4), which deals with the assessment of financial circumstances for the purpose of ordering security for costs. The court found that the term 'impecuniosity' should be interpreted in the context of the applicant's overall financial position, taking into account all relevant assets and liabilities. It was determined that the cross-appeal did not alter the applicant's financial circumstances as they stood at the time of the application for security for costs. The judgment debt that was subject to appeal was not considered in the assessment of the applicant's financial position because it was not a current liability but rather a matter pending appeal.

The court concluded that the applicant met the criteria for being deemed impecunious, given their limited financial resources and the substantial legal costs incurred. The order for security for costs was made in favour of the respondent. The court emphasised that the assessment of financial circumstances is a factual determination that requires careful consideration of all relevant evidence. The court's decision underscores the importance of accurately assessing the financial position of parties in applications for security for costs.

Orders