Nathan v Macquarie Leasing Pty Ltd - [2024] VSC 794

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
GROUP PROCEEDINGS LIST

S ECI 2020 03924

DAIMIN NATHAN and TANIA NATHAN	Appellants
v
MACQUARIE LEASING PTY LTD (ACN 002 674 982)	Respondent

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JUDGE:	Delany J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 November 2024
DATE OF RULING:	18 December 2024
CASE MAY BE CITED AS:	Nathan & Anor v Macquarie Leasing Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 794

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PRACTICE AND PROCEDURE – Leave to appeal against decision of Associate Justice – Supreme Court Act 1986 (Vic) s 17(3) – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 77.06 – Group Proceeding – Group Costs Order – Security for costs required from a law practice – Supreme Court Act 1986 (Vic) ss 33ZDA(1), 2(b) – Two part test for leave to appeal – Fei v Hexin Pty Ltd [2024] VSCA 158, applied – Substantial injustice not demonstrated if decision left undisturbed – No House v R (1936) 55 CLR 499 error demonstrated – No jurisdictional error – Determinative factor what the interests of justice require – Supreme Court Act 1986 (Vic) s 33ZF – Inherent jurisdiction of the Court to order security of costs – Stuart v Said (2021) 65 VR 50, applied – Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377, discussed – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	William Edwards KC and Tom Rawlinson	Maurice Blackburn
For the Defendant	Justin Williams SC and Sam Gerber	Gilbert and Tobin

TABLE OF CONTENTS

Overview.............................................................................................................................................. 1

The applications for leave to appeal.............................................................................................. 4

The application for security for costs............................................................................................. 5

The evidence....................................................................................................................................... 6

The Reasons........................................................................................................................................ 9

The principles to be applied on an appeal under r 77.06......................................................... 11

No substantial injustice shown..................................................................................................... 11

The proper construction of s 33ZDA............................................................................................ 15

The Notice of Contention............................................................................................................... 17

No error of statutory construction................................................................................................ 17

Ground 1: No error in the House v R sense................................................................................. 21

No ‘jurisdictional fact’ error...................................................................................................... 22
No error concerning ’reason to believe’................................................................................... 23
The submissions................................................................................................................. 23
Findings27

Grounds 1.2, 1.8: giving no (or inadequate) weight to the fact the costs exposure was around $3m........................................................................................................................................................ 30

Grounds 1.1, 1.3: Evidence regarding the assets of the law practice...................................... 31

Grounds 1.4–1.9: The cashflow evidence..................................................................................... 32

Disposition........................................................................................................................................ 35

HIS HONOUR:

Overview

This is an application for leave to appeal a decision in a group proceeding requiring a law practice in whose favour a group costs order (‘GCO’) has previously been made pursuant to s 33ZDA(1) of the Supreme Court Act 1986 (Vic) (‘SCA’) to provide security for the defendants’ costs in the sum of $5,976,773.00 (‘appeal’).

The Order the subject of the appeal was made by Gobbo AsJ on 9 October 2024 (‘Order’):

1.Pursuant to s 33ZDA(2)(b) of the Supreme Court Act 1986 (Vic) and/or Order 62 of the Rules and/or the Court’s inherent jurisdiction, Maurice Blackburn Pty Ltd (‘Maurice Blackburn’), solicitors for the plaintiffs, give security for the defendant’s costs of this proceeding in the sum…

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 794
Decision Date: 18 December 2024

CaseChat Overview and Summary

In Nathan v Macquarie Leasing Pty Ltd, the appellant sought leave to appeal against the decision of an Associate Justice of the Supreme Court of Victoria, which dismissed the appellant's application for a group proceeding and costs order. The primary dispute centred around the application of the Supreme Court Act 1986 (Vic) and the Supreme Court (General Civil Procedure) Rules 2015 (Vic) in the context of group proceedings and security for costs. The Associate Justice had ruled that a law practice representing a group of plaintiffs was required to provide security for costs under ss 33ZDA(1), 2(b) of the Supreme Court Act 1986 (Vic).

The legal issues before the Court of Appeal involved the interpretation and application of s 17(3) of the Supreme Court Act 1986 (Vic) and r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). Specifically, the Court had to determine whether the Associate Justice's decision to require security for costs from the law practice was correct, and whether the appellant had demonstrated a substantial injustice that warranted leave to appeal. The Court also considered the two-part test for leave to appeal as outlined in Fei v Hexin Pty Ltd [2024] VSCA 158. The Court had to decide whether the Associate Justice's decision demonstrated a jurisdictional error or an error akin to the House v R (1936) 55 CLR 499 error. Additionally, the Court examined the inherent jurisdiction of the Court to order security for costs, referencing Stuart v Said (2021) 65 VR 50 and Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377.

The Court of Appeal found that the decision of the Associate Justice did not demonstrate a substantial injustice if left undisturbed and did not reveal a jurisdictional error. The Court applied the two-part test from Fei v Hexin Pty Ltd [2024] VSCA 158 and concluded that the determinative factor was what the interests of justice required under s 33ZF of the Supreme Court Act 1986 (Vic). The Court also affirmed the inherent jurisdiction of the Court to order security for costs, consistent with the principles in Stuart v Said (2021) 65 VR 50 and the discussion in Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377. The Court held that the appellant had not demonstrated a substantial injustice or a jurisdictional error. Consequently, the Court dismissed the appeal.

Orders