Muscle Car Factory v Puleo - [2017] VCC 1854

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-15-04119

MUSCLE CAR FACTORY PTY LTD (ACN 126 236 872)

and

LEO BANKS

First Plaintiff

Second Plaintiff

FRANCO PULEO

Defendant

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JUDGE:	HER HONOUR JUDGE MARKS
WHERE HELD:	Melbourne
DATE OF HEARING:	22 November 2017, written submissions dated 24 November 2017 and 29 November 2017
DATE OF RULING:	13 December 2017
CASE MAY BE CITED AS:	Muscle Car Factory & Anor v Puleo
MEDIUM NEUTRAL CITATION:	[2017] VCC 1854

REASONS FOR RULING
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Catchwords: COSTS – SECURITY FOR COSTS – FACTORS RELEVANT TO EXERCISE OF DISCRETION – where vacation of trial date on application of plaintiffs – whether order should be made for payment of security for costs estimated to be thrown away – where no application for security for costs made prior to hearing – security for costs not ordered
COSTS – INTERLOCUTORY PROCEEDING – TAXATION – where interlocutory costs not taxable until the conclusion of the proceeding unless the Court otherwise orders – Rule 63A.20.1 of the County Court Civil Procedure Rules 2008 (Vic) – where application for immediate taxation of order for costs thrown away by reason of vacation of trial date – immediate taxation not ordered

Legislation Cited: County Court Act 1958 (Vic); Civil Procedure Act 2010 (Vic); Rule 62.02 and Rule 63A.20.1 County Court Civil Procedure Rules 2008(Vic); Rule 62.02 Supreme Court (General Civil Procedure) Rules 2015 (Vic)
Cases Cited:Hewitt v Count Financial Ltd [2017] VSCA 354; Trkulja v Dobrijevic (No 2) [2016] VSC 596; Von Marburg v Aldred & Anor (No 3) [2017] VSC 146; Yara Australia Pty Ltd v Oswal [2013] VSCA 337; Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; GSA Industries Pty Ltd v NT Gas Ltd 24 NSWLR 710; Dale v Clayton Utz (No 3) [2013] VSC 593; Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545; All Services Australia Pty Ltd v Telstra Corporation Ltd & Ors (2000) 171 ALR 330

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms E Nikou-Madalin	Tait Lawyers
For the Defendant	Mr O Bigos	Barretts

HER HONOUR:

On 3 November 2017, the plaintiffs applied for an adjournment of the trial date listed for 13 November 2017.
Judicial Registrar Tran granted the adjournment. As part of the orders she made, she ordered that the plaintiffs pay the defendant’s costs thrown away by reason of the adjournment. She also ordered that the plaintiffs pay $33,000 into Court as security for the defendant’s costs thrown away by reason of the adjournment.
On 17 November 2017, the plaintiffs filed a notice of application for review of those two aspects of the Judicial Registrar’s decision.

The notice of review is made in accordance with section 17V of the County Court Act 1958 (Vic) (CCA) and rule 84.02 of the County Court Civil Procedure Rules 2008(Vic) (County Court Rules). In reviewing the decision of the learned Judicial Registrar, the Court does not review that decision to see if an error has been committed. The Court considers the application which was made before the Judicial Registrar anew, on the same materials as those before the Judicial Registrar: Hewitt v Count Financial Ltd [2017] VSCA 354 at [1] (per Tate and Kyrou JJA).
The defendant seeks to have the decision of the Judicial Registrar confirmed. Alternatively, if the security for costs order is set aside, he now seeks an order for an immediate taxation of the costs thrown away by reason of the vacation date.

What happened?

The plaintiffs’ claim was issued on 27 August 2015. It was amended on 9 March 2016. A defence to that amended statement of claim was filed on 28 April 2016. On 28 November 2016, the parties were ordered ‘to file and serve all expert reports as to damages and liability upon which they intend to rely together with all supporting documentation’ by 4 pm on 2 March 2017. On 23 March 2017, orders were made by the Court as to the time for filing an amended defence and counterclaim, a defence to counterclaim, discovery, an extension of time for filing expert reports and a mediation.
On 26 April 2017, orders were made by consent vacating the original trial date listed for 15 May 2017. It was relisted for 11 October 2017. Subsequently, the amended defence to the amended statement of claim and counterclaim was filed. Further and better particulars of the defence to counterclaim, and further and better particulars of the amended statement of claim were filed.
On 15 August 2017, the Court made orders that expert reports be filed by 8 September 2017. The defendant filed its expert report of Mr Cuthbert on 13 September 2017. The plaintiffs did not file any expert report.
On 14 September 2017, orders were made by consent extending the time for the provision of expert reports to 2 October 2017. Other interlocutory orders were made, including that there be further and better particulars given of the defence to counterclaim. Further and better particulars of the defence to counterclaim were filed on 2 October 2017.
The plaintiffs were ordered to pay 50% of the defendant’s costs ‘of and incidental to this day’ to be taxed in default of agreement.
Further and better particulars of the defence to counterclaim were filed on 2 October 2017.
On 4 October 2017, orders were made relisting the trial date for 13 November 2017. The plaintiffs requested this adjournment. The time for them to provide their expert report was extended to 23 October 2017. The plaintiffs’ then Counsel advised the Court that the estimate of five to seven sitting days was no longer enough. The estimate was revised to 12 days. The Court was able to accommodate a trial of that length very quickly, on 13 November 2017, and orders were made adjourning the trial to that date.
The plaintiffs were ordered to pay the defendant's costs thrown away by reason of the vacation of the trial date, on a standard basis, to be taxed in default of agreement.
On 2 November 2017, the plaintiffs filed an application for a further adjournment of the trial.
At the hearing on 3 November 2017, the trial was vacated and relisted for 16 July 2018 at a revised estimate of 15 sitting days.
This ruling deals with the costs and security for costs order made on 3 November 2017.

Oral application for security for costs

Mr Brett Tait, solicitor for the plaintiffs, filed an affidavit dated the day before the hearing of the application, setting out reasons why the plaintiffs had to apply for the adjournment of the trial.
Mr Nicholas McKenzie-McHarg swore an affidavit opposing that adjournment, which was dated the day of the application to adjourn. In his affidavit, Mr McKenzie-McHarg said that he estimated the defendant was already out of pocket to the extent of $37,000 in relation to the costs orders made against the plaintiffs on 14 September 2017 and 4 October 2017.
The two previous costs orders were orders made in the usual course, that costs be taxed if they could not be agreed. There has not yet been any assessment.
Mr McKenzie-McHarg estimated that costs thrown away by reason of the adjournment now requested would be approximately $33,000.
In the course of the hearing before the Judicial Registrar, an oral application was made by the defendant for a security for costs order. An order was then made for the provision of security in the sum of $33,000.

Reasons the plaintiffs seek to overturn the decision as to costs and security for costs

The plaintiffs say that no application for security for costs was made in advance of the hearing. There was no notice that security would be sought and an absence of the evidential material that would underlie the making of an order for security under rule 62.02. Instead, the application for security was made orally in the course of the hearing.
In considering the application de novo, I treat the defendant’s application for security as having been made orally before me on the same material as was before the Judicial Registrar.
Rule 62.02 of the County Court Rules sets out the procedure for security for costs applications in this Court. It is identical to the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Supreme Court Rules).
Mr Bigos, Counsel for the defendant, submits that the defendant does not say that it is entitled to security for costs pursuant to rule 62.02. He submits that I need have no regard for the well-established considerations required to be taken into account in deciding security for costs ordered under that rule. Rather, he submits that security for costs should be ordered as a condition of the trial being vacated, and that it is part of the inherent jurisdiction of the Court to be able to make such orders as it considers appropriate in relation to costs. He relies on s28(2) of the Civil Procedure Act 2010 (Vic). He submits that the costs order in relation to security was inextricably linked with the vacation of the trial date.
Alternatively, the defendant seeks an order for immediate payment of costs thrown away as a result of the vacation of the trial.
The issues are:
(1)What order should be made in relation to costs of the adjournment of the trial date?
(2)Should any order for security for the defendant’s costs thrown away be made?
(3)Should any order for immediate taxation of costs be made?

What orders should be made for costs generally?

To decide this, it is necessary to look at the reasons why the matter was adjourned. The plaintiffs’ material makes clear that after the trial was vacated at their request on 4 October 2017, despite their expert report then due to be filed on 23 October 2017, an expert was not engaged by them until 17 October 2017. This was the day after they engaged new Counsel to run the matter for them (the Counsel who had been acting for them on 4 October 2017 having advised the Court when the matter was listed for 13 November 2017 that he would not be available to run the trial then).
The expert engaged in the matter, whilst clearly under time pressures, indicated that he would have time to file the expert report prior to trial, provided he could see the two cars that were to be the subject of it within the next 10 days. Accordingly, the plaintiffs’ solicitor wrote to the defendant’s solicitor seeking an urgent opportunity for the expert to see the cars. There was then a most unfortunate series of letters between solicitors over the next two weeks without any time being able to be agreed upon. The defendant kept rejecting the times proffered by the plaintiffs and setting up alternatives which did not suit the plaintiffs’ expert, including times such as 7 pm at night. In circumstances where the locations of the two cars to be inspected were at least an hour’s distance apart, the plaintiffs say that even the 4 pm time then pro-offered was unreasonable. In any event, their expert was not able to do it.
The plaintiffs’ expert lives in Ballarat, which added to the difficulties, as this meant he needed to add travel time. Unfortunately this added difficulty was not communicated to the defendant’s solicitor in the correspondence.
It seems that in setting up inspection times outside of business hours, the defendant was proposing times when he said he could be present for the inspection, but as occurred ultimately, someone else could have been arranged to be there. Given the urgency, such arrangements should have been made earlier.
I find that that neither solicitor tried hard enough to arrange the inspection times in a timely fashion, in circumstances where there was an imminent trial date. It must have been obvious to the defendant, once requests were made to inspect the cars from 16 October 2017, that if the trial was to proceed on 13 November 2017, the plaintiffs’ expert needed to see the cars as soon as possible and all that was possible to be done to accommodate that should be done. Instead, letters were sent back and forth proposing new times and taking time to respond to previous requests with days elapsing between them on occasion. Had either of the two solicitors rung the other to discuss possible times and any constraints their client or expert faced, this would likely have avoided the delays that occurred. Given the urgency of the upcoming trial, this should have been done.
The plaintiffs say it is the defendant’s fault that it had to seek the adjournment of the trial, because by the time an agreed time was made for the expert there was no longer time for the preparation of the report to be completed by trial.
The defendant says it is the plaintiffs’ fault for taking a lackadaisical approach to getting its case ready and letting time elapse, after the trial was adjourned on 4 October 2017, before engaging a new Counsel and a new expert. It says that by the time the requests for the expert to see the cars were made, the date for the provision of the expert report could not have been complied with in any event.
It is indeed unfortunate that the plaintiffs were not able to engage new Counsel for 12 days after the hearing on 4 October 2017. However, the plaintiffs were looking for Counsel who had the ability to prepare for and run a 15 day case just a month thereafter. I accept that it is a complex case both on the facts and the law, where the new Counsel will be opposed to a silk and a junior, with the claim and counterclaim each amounting to approximately $500,000. I accept that, despite the many Counsel available at the Victorian Bar, finding someone available and appropriately experienced for such a trial took some time.
I find that both parties contributed to the delays that occurred with agreeing on a time for inspection.
The defendant says, with some force, that the reason there was this urgency was because the plaintiffs had not obtained an expert prior to mid-October.
I agree. In circumstances where expert reports were first ordered to be filed by orders made on 28 November 2016, and those orders were extended, it is unacceptable that the plaintiffs waited until mid-October 2017 retain an expert. It is no answer for the plaintiffs to say they were waiting to see the defendant’s material, which was not filed until 13 September 2017, before looking to obtain an expert. There was not any order that the defendant’s expert file its material first and then the plaintiffs file their material, although such an order may have been preferable.
However, in circumstances where the delay had occurred, and the urgency arisen, it was incumbent on the defendant to do what it could to then ensure the matter could still be ready for trial, by agreeing a time for inspection of the cars.
I note that it is apparent from the transcript of the hearing before the Judicial Registrar that part of the reason for the delay, as advanced before her, was that the plaintiffs needed to sell a property in order to obtain the ready funds to fund the next part of its claim. However, as between the plaintiffs and the defendant, this is no fault of the defendant.
Counsel for the plaintiffs says that it was an overly optimistic timetable agreed to by them in accepting the provision of the date in November 2017 for this matter to be set down once it was adjourned on 4 October 2017. I agree. Given the difficulties in finding new Counsel, I accept that there was not an egregious failure to move the case along in the next two weeks before that was done. However, as between the plaintiffs and defendant, the defendant is not at fault for the plaintiffs’ representatives agreeing to the November 2017 date.
Ms Nikou-Madalin, Counsel for the plaintiffs, submits that a reason for the adjournment was that two documents relating to the disposal of two of the vehicles in question were only provided by the defendant in late October 2017. She says they ought to have been discovered long before, and that they raised questions which would need answering as to whether or not the value of those cars had been properly realised in the disposal.
However, the value for which one of the cars (known as ‘the Bucket’) was disposed is not in fact at issue in the proceeding. Documents relating to that do not need to be discovered.
So far as the other car’s disposal is concerned, it was disposed of for $3,000, having previously been worth $8,000. That claim for the difference of $5,000 is set out in the defendant’s further and better particulars filed in late September 2017. If those particulars had been properly considered at the time, the plaintiffs could have asked for details of that disposal then. In any event, having regard to issues of proportionality, this $5,000 portion of the dispute would not, of itself, have been a reason to delay the trial, even if getting those further documents required it. Those matters could have been dealt with in the course of the trial. I therefore do not take into account, in relation to the reasons for adjournment, the late provision of those documents.
Weighing up all of the matters set out above, I attribute 90 per cent of the blame for the fact the trial could not proceed on the November 2017 date to the plaintiffs. The appropriate order is that the plaintiffs pay 90 per cent of the defendant’s costs thrown away by reason of the adjournment.

Security for costs

The question is whether security should be ordered by the Court as a condition of allowing a vacation of a trial date, absent any application under rule 62.02 of the County Court Rules. The defendant says that it may be. It says that the Court has inherent jurisdiction to order security for costs in circumstances that are not covered by Order 62. And that it is appropriate to do so as a condition of vacating the trial date given the wide discretion the Court has.
It relies on Trkulja v Dobrijevic (No 2) [2016] VSC 596 (Trkulja) and Von Marburg v Aldred & Anor (No 3) [2017] VSC 146 (Von Marburg).
However, neither Von Marburg nor Trkulja are authority for the suggestion that security for costs can be ordered without notice or consideration of the usual factors regarding whether it is appropriate.
In Von Marburg, an application was filed by the defendant for an order that the plaintiffs provide security under r62.02(1)(a) of the Supreme Court Rules (which are the same in relevant respects as the County Court Rules) and s29(1)(d) and (f) of the Civil Procedure Act 2010. At [39] Derham AJ stated:
The Court retains an inherent jurisdiction to order security for costs as an adjunct to the Court’s power to regulate its own procedure. The inherent jurisdiction to order security for costs provides an important safeguard. It permits the Court to require security for costs where that is necessary in the interests of justice in circumstances that fall outside the categories found in r 62.02 of the Rules. It is also true that the inherent jurisdiction is not restricted to the examples in the decided cases, in the sense of denying the existence of the power for any other case. The fact that the power has been regularly exercised in a limited number of cases and refused in others proves the existence of, but does not restrict, the jurisdiction. [citations omitted]
At [41] Derham AJ stated, ‘Usually some other or additional factor to the plaintiff’s impecuniosity must be present in order that an individual plaintiff provides security for costs.’
There follows at [42] onwards a discussion of the considerations that must be satisfied for an order of security for costs under the inherent jurisdiction of the Court, noting that the burden rests on the defendant from first to last to persuade the Court that the order for security for costs should be made.
At [25], there was reference to the case of Trkulja:
In Trkulja, Garde J applied factors identified by the Court of Appeal as relevant to the exercise of the Court’s inherent jurisdiction. As applied to this case, they include:
(a) the prospects of success – in this case they are low because there is a serious risk that even if successful, only modest or nominal damages would result, and it is difficult to see why Dr Mourik should be responsible for comments on the Thread that he did not author;
(b) the degree of risk that a costs order would not be satisfied – these are high for the reasons given below;
(c) whether the making of an order would be oppressive by stifling a reasonably arguable claim – no, the von Marburgs concede that the primary objectives of the litigation were met almost three years ago by the removal of the Post and the Thread;
(d) whether any impecuniosity of the appellant (or applicant) arises out of the conduct complained of — no, the von Marburgs are solely responsible for the choices they have made in this litigation, and the resulting financial consequences;
(e) whether there are any aspects of public interest militating against the making of such an order — no, the public interest goes the other way in that the von Marburgs’ conduct has been devoted to their own interests; and
(f) whether there are any particular discretionary matters relevant to the application — yes, the von Marburgs conduct has been oppressive and disproportionate to what is at stake, and it would be vexatious and not in the interests of justice to allow the proceeding to continue without security.

In Trkulja, security for costs was ordered pursuant to the Court’s inherent jurisdiction on the basis this offers an important safeguard where necessary in the interests of justice in circumstances falling outside the categories in rule 62.02 of the Supreme Court Rules. This included the fact that there was unmeritorious conduct and an inference of an ulterior motive by the plaintiff in that case in bringing the claim.

Section 29 of the Civil Procedure Act 2010

The defendant also relies on sections 28 and section 29 of the Civil Procedure Act 2010, saying that the plaintiffs have breached their overarching obligations to act in a timely fashion and an order for security for costs is in the interest of the defendant as a person prejudicially affected by the contravention.
Section 29 provides:
(1)If a court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, the court may make any order it considers appropriate in the interests of justice including, but not limited to—
…
(d)an order that the person take any steps specified in the order which are reasonably necessary to remedy any contravention of the overarching obligations by the person;
…
(f)any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations.
Section 28(1) of the Civil Procedure Act 2010 provides:
In exercising any power in relation to a civil proceeding, a court may take into account any contravention of the overarching obligations.
Section 28(2) provides:
Without limiting subsection (1), in exercising its discretion as to costs, a court may take into account any contravention of the overarching obligations.
The defendant says that the plaintiffs breached their overarching obligations by not acting as quickly as they ought to have done to prepare their case.
There is no doubt that s29 is a unique provision, conferring powers broader than those of other jurisdictions in Australia to sanction legal practitioners and parties who fail to meet their overarching obligations (see Yara Australia Pty Ltd v Oswal [2013] VSCA 337, per Redlich and Priest JJA and Macaulay AJA).
However those powers do not mean that the security for costs can be ordered without the usual matters that need to be considered in deciding whether it is appropriate. The power to order security for costs must be exercised judiciously. Security for costs is a particular regime which has the effect of depriving the person ordered to provide the security of the use of their money well in advance of the time that would normally occur. There are many matters to be considered before it is ordered. Neither Counsel was able to direct me to any case where it has been ordered without an application being filed and appropriate evidence being considered before the exercise of the discretion.
If the defendant seeks to make an application for security, it can do so. It can put before the Court all the reasons why, under Order 62, or in the inherent jurisdiction of the Court, security should be ordered against the plaintiffs. It will no doubt include in any such application the history of the matter, including applications for adjournment. The plaintiffs will then have the opportunity to meet that claim on notice and with a consideration of all of those elements being able to then be made by the Court.
In any event, I do not consider that the breach of the overarching obligations that occurred here by the plaintiffs was of the nature and strength as to require such an order to be made as part of an order vacating the trial date.
The plaintiffs have delayed in instructing their expert, and this has led to an adjournment of a trial to the next date the Court could accommodate. The cost to them of the delay is appropriately dealt with by the order for costs that I have indicted I will make, that they pay 90 per cent of the costs.
Counsel for the defendant asks me to fix costs. I consider the $33,000 estimate for the adjournment to be high, given that the application was made 10 days prior to trial. In the absence of the plaintiffs having an opportunity to file responsive material, or properly consider the estimates in order to make submissions, I am not disposed to fix the amount of costs thrown away. This is best done by the Costs Court.

Order for immediate taxation of costs?

Alternatively to security for costs being ordered, the defendant seeks an order for immediate taxation of costs.
This application was made orally at the hearing before me at about 4 pm. As the plaintiffs did not have notice of the application, I gave both parties the opportunity to file written submissions after the heading. Both did so.
The defendant says that if I am not minded to confirm Order 13, I should instead vary the order, or make a further order, so as to provide for the immediate taxation and payment of the defendant’s costs thrown away by reason of the adjournment.
On review, the Court has power to vary a Judicial Registrar’s order or make a further order under r84.02(5)(b).
An order for immediate taxation and payment was made by Dixon J in Trkulja. Like the present case, in Trkulja the plaintiff made a late application for the second time to adjourn a trial. Dixon J acceded to that application, ordered the plaintiff to pay the defendants’ costs thrown away, and made an order for immediate payment of all outstanding costs orders, as that ‘could substantially alleviate the prejudice to the defendants’: see [66].
The immediate taxation and payment order was not made as a consequence of the finding that the plaintiff had contravened the overarching obligation in s25 of the Civil Procedure Act 2010.
Dixon J based his decision to order immediate taxation on the principles enunciated by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. The High Court there said that adverse costs orders in themselves may be insufficient to allay prejudice to the opposing party as a result of delay. The Court said at [5] that ‘whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings’.
The defendant says that in the present case there is evidence in Mr McKenzie-McHarg’s affidavit of the prejudice that the defendant will suffer as a result of the adjournment. It argues that it is appropriate that, as the price of the adjournment, ‘proper protections’ are achieved for the defendant, through the condition that that costs thrown away be taxed and paid immediately. It refers to Trkulja, where Dixon J referred at [74]–[75] to Hollingworth J’s statement in Dale v Clayton Utz (No 3) [2013] VSC 593 (Dale), at [65] that:
Courts have recognised that the demands of justice may require a departure from the ordinary rule [against the immediate taxation of interlocutory costs orders] for one or more of three broad reasons:
(a) Because of the conduct of the unsuccessful party;
(b) Because of the likely delay before the final completion of the proceeding; and
(c)Because the interlocutory application involves a separate or discrete issue.
The defendant submits that the delay in the trial here is significant. It is about 7 months (the trial date having been shifted from 13 November 2017 to 16 July 2018).
The defendant says the failure by the plaintiffs to brief their expert in time is unreasonable and involved a want of competence and diligence, thereby warranting a departure from the ordinary position as to costs. In Dale, Hollingworth J held that where the likelihood of a considerable lapse of time between the interlocutory application and the final determination of the proceeding was such that it is unfair to deprive the successful party of the benefit of their costs order for a lengthy period, the Court can order for the immediate taxation of costs: [68].
The defendant refers to Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545 where Branson J held that a hearing date 'many months' away was a 'considerable time' that warranted a departure from the ordinary rule regarding payment of interlocutory costs orders.
In Trkulja, Dixon J ordered the immediate payment of all past costs orders, including those that had not been taxed: [66]. The defendant says that in this proceeding the defendant does not go that far. The defendant seeks only the immediate payment of the order for costs estimated to be thrown away in the sum of $33,000.
However, I do not consider that the circumstances of this case warrant such an order.
Rule 63A.20.1 of the County Court Rules provides that costs ordered to be paid in interlocutory applications or hearings are not to be taxed until the completion of the proceeding, save by order of the court.
Prior to the introduction of that rule, there was no equivalent provision to stop a party seeking immediate taxation of any costs order.
As Hollingworth J observed in Dale in relation to the equivalent Supreme Court Rule 63.20.1, the introduction of the rule ‘was clearly intended to make a substantial change to the previous position’: at [57]. There is sound basis to that change: it is designed to avoid multiple taxations, to avoid interlocutory applications being used as a means to exhaust opponents’ funds, and to avoid unfairness by forcing a party to meet – preemptively – a liability it may not have at the conclusion of the proceeding after all outstanding liabilities are set off as against one another: Civil Procedure Victoria at [63.20.1.05]; Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Ltd (No. 2) [2008] FCA 24 at [18] (Besanko J) and Rafferty Time 2000 West Pty Ltd (No. 3) (2009) 257 ALR 503 – discussing the similar r40.13 in the Federal Court Rules 2011.
Departure from the ordinary position should only occur in limited circumstances – for example if a party is guilty of conduct which is properly characterised as reprehensible, unreasonable or involving a want of competence and diligence: Setka v Abbott (No. 2) [2013] VSCA 376 at [27]; Dale, especially at [65].
Substantial delay until the final resolution of the proceeding is a factor, but only where that delay was occasioned through no fault of the party seeking immediate taxation: All Services Australia Pty Ltd v Telstra Corporation Ltd & Ors (2000) 171 ALR 330 at [11]. Kiefel J, as her Honour then was, there considered the equivalent provision in the Federal Court Rules and declined to make the order sought.
In this case, I find that part of the reason for the vacation of the November 2017 trial date was the defendant’s responses to requests for the plaintiffs’ expert to see the cars.
Trkulja concerned a second application for adjournment of a trial, however, it is otherwise significantly different to this case. It was a defamation case against various defendants. There was no counterclaim, as here. The plaintiff there sought to vacate the trial date on the basis that the he: wished to appeal the decision refusing leave to amend his statement of claim; wished to make an application to restrain the defendant’s senior Counsel from acting at the trial; and sought a jury trial and legal representation. He was not yet in a financial position to either pay the jury fees or engage such representation: at [7] and [30]-[36]. The plaintiff had not acted in any way to put his expressed intention into effect, for example by drafting or filing the applications foreshadowed.
Dixon J found that the appeal and injunction application were ‘collateral’ and ‘tactical’ in nature: at [76]. The plaintiff’s only explanation for not yet having filed his application was simply that he was not yet required to do so. That explanation was deemed ‘fatuous’ and unacceptable, and led to a finding of a breach of s25 of the Civil Procedure Act 2010: [56]-[57]. In any event, there was no basis to think the application had realistic chances of success: [58]. That meant the defendants were exposed to ‘yet another futile application [by an impecunious plaintiff] that exposed them to further unrecoverable costs, delay and the sustained ongoing prejudice from exposure to the claims without the opportunity for vindication’: [65]. There was also a risk that, even if the adjournment were granted, the same circumstances giving rise to the application for that adjournment would only arise again in the future: [71]. His Honour also expressed concern that the plaintiff had misled the Court and thus breached s21 of the Civil Procedure Act 2010: [71].
In ordering immediate taxation, Dixon J held that the delay of the proceeding was in circumstances where the plaintiff was ‘still contesting the adequacy of his formulation of his case’: [77]. Further, his Honour was ‘no longer satisfied that the plaintiff has conducted or intends to conduct himself in the future reasonably or with competence and diligence’: [77].
In contrast to the sorts of matters raised Trkulja, the plaintiffs here sought and were granted an adjournment of a trial date that was ambitiously set a month earlier, and where the delays in getting the expert to see the cars were not entirely of their own making.
The present circumstances do not justify departing from the normal costs order, to make an order for immediate payment of costs. As Counsel for the defendant has conceded, such an order is even harsher than the order for security for costs sought to be reviewed.
I will not order immediate payment of costs.
Costs of this application
The plaintiffs have been generally successful in setting aside the orders. Only the application for an order that the defendant should pay the costs of the vacation of the trial date (instead of the plaintiffs) was not successful, and very little time was spent on this aspect of the dispute.
Subject to any application to the contrary, I am minded to order that the defendant pay the plaintiffs’ costs of the application to review, to be assessed by the Costs Court in default of agreement.

Orders

Absent any application as set out in paragraph 91 above, I will make the following orders:
(1)Paragraphs 12 and 13 of the order of the Judicial Registrar made 3 November 2017 be set aside and in their place the following order made:
(12)The plaintiffs pay 90 per cent of the defendant’s costs thrown away by reason of the vacation of the trial date, to be assessed by the Costs Court in default of agreement.
(2)The defendant pay the plaintiffs’ costs of the application to review, to be assessed by the Costs Court in default of agreement.

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Certificate

I certify that these 18 pages are a true copy of the reasons for ruling of her Honour Judge Marks, delivered on 13 December 2017.
Dated: 13 December 2017
Samantha Marinic
Associate to Her Honour Judge Marks