Mitrov Homes Pty Ltd v Mustafa (No 4) - [2024] VSC 740

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2019 05718

MITROV HOMES PTY LTD (ACN 618 266 247)	Plaintiff
v
BUJAR MUSTAFA	First Defendant
NEZ LOCI	Second Defendant

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	22 October 2024 and 28 November 2024
DATE OF JUDGMENT:	Ex tempore; Revised 2 December 2024
CASE MAY BE CITED AS:	Mitrov Homes Pty Ltd v Mustafa (No 4)
MEDIUM NEUTRAL CITATION:	[2024] VSC 740

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PRACTICE AND PROCEDURE — Issue regarding costs of a security for costs application resolved by agreement — Plaintiff agreed to pay defendants’ costs of application — Defendant seeking order that the defendant be entitled to tax the costs of the interlocutory application immediately — Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.20.1 — General principles regarding orders for immediate taxation of the costs of an interlocutory application — Dale v Clayton Utz (No 3) [2013] VSC 593 — Immediate taxation order application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	S Angelatos (solicitor appearing) (until 12:30pm) J Levine (from 12:30pm)	Taylor Rose
For the First Defendant	C Fitzgerald	Zarifi Lawyers
For the Second Defendant	S Mullaly	Rose Legal Costing

HIS HONOUR:

Introduction

These reasons address a costs-related issue in respect of one of two security for costs applications (Security Applications) against the plaintiff that were recently resolved by agreement during the period between the first hearing day on 22 October 2024 and the date for the further hearing of the Security Applications on 28 November 2024.

The Security Applications comprised an application by the first defendant (Mr Mustafa) by summons to provide further security for his costs (Mustafa Further Security Application), and an application by the second defendant (Ms Loci) by summons (Loci Summons) seeking security for her costs in the sum of $145,094.20 (Loci Security Application).

The Court was informed that the Security Applications were relevantly resolved on the basis that:

1) The plaintiff’s sole director and shareholder, Mr Nikola Mitrov, would give an undertaking to the Court to abide by any costs orders made in the proceeding against the plaintiff and be personally liable to pay any cost order made against the plaintiff in favour of another party in the proceeding.

2) Consent orders will be made to the following effect:

(a) each of the Security Applications will be dismissed;

(b) the plaintiff will pay Mr Mustafa’s costs of and incidental to the Mustafa Further Security Application up to and including 21 October 2024, taxed on a standard basis if not agreed (Mustafa Further Security Costs Order);

(c) the plaintiff will pay Ms Loci’s costs of and incidental to the Loci Security Application up to and including 21 October 2024, taxed on a standard basis if not agreed (Loci Security Costs Order);

(d) save for the costs referred to, and the costs referred to in paragraphs 6…

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: [2024] VSC 740
Decision Date: 28 November 2024

CaseChat Overview and Summary

Mitrov Homes Pty Ltd initiated legal proceedings against Mustafa, resulting in a dispute that reached the Supreme Court of Victoria. The plaintiff sought a security for costs, which was contested by the defendants. The defendants succeeded in their security for costs application, leading to a subsequent interlocutory application regarding the costs of that application. The plaintiff agreed to cover the defendants' costs for the security for costs application, but the defendants sought an order allowing them to immediately tax the costs of the interlocutory application.

The legal issue before the court was whether the defendants were entitled to an order that would permit them to immediately tax the costs of the interlocutory application, in accordance with Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.20.1. The court considered the principles established in Dale v Clayton Utz (No 3) [2013] VSC 593 and examined whether an immediate taxation order was appropriate in the circumstances. The court held that, despite the plaintiff's agreement to pay the defendants' costs for the security for costs application, the defendants were not entitled to an immediate taxation order for the costs of the interlocutory application.

The court found that the defendants' application for an immediate taxation order did not meet the criteria set out in the relevant rules and case law. The court emphasised the importance of maintaining the balance between the parties' rights and obligations and the need to avoid unnecessary costs and delays. The court's decision was grounded in the principle that immediate taxation orders should only be granted in exceptional circumstances, and the defendants had not demonstrated that such an order was warranted in this case. As a result, the application for an immediate taxation order was refused.

The court did not make any orders for immediate taxation of the costs of the interlocutory application. The defendants were not granted the relief they sought, and the matter proceeded with the existing arrangements for the taxation of costs. The decision highlighted the importance of adhering to the principles governing interlocutory applications and the need for parties to carefully consider the implications of their agreements regarding costs.

Orders