Paragreen v Lim Group Holdings Pty Ltd (No 2)

[2020] VSCA 97

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0163

MICHAEL  PARAGREEN	First Appellant
and
JUSTINE PARAGREEN	Second Appellant
v
LIM GROUP HOLDINGS PTY LTD (ACN 074 598 646) [No 2]	Respondent

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JUDGES:	TATE, KAYE and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	Determined on Written Submissions
DATE OF JUDGMENT:	27 April 2020
MEDIUM NEUTRAL CITATION:	[2020] VSCA 97

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COSTS – Appellants successfully challenged trial judge’s finding of fraud under ss 42 and 43 of Transfer of Land Act 1958 for appellants to disregard restrictive covenant – General rule that costs follow the event applied – No order as to costs of appellants’ application to reopen case before trial judge.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr S Palmer	Boris Pogoriller
For the Respondent	Mr J Arthur	Ellinghaus Weill Lawyers and Consultants

TATE JA

KAYE JA
NIALL JA:

1. In this matter, we delivered judgment on 8 April 2020.  As a consequence, we made orders that the appellants have leave to appeal, that the appeal be allowed, that the order made by Judge Macnamara on 22 November 2018 be set aside, and that in its place the proceeding be dismissed, and the plaintiff pay the defendants’ costs of and incidental to that proceeding, including reserved costs on a standard basis.[1]

   [1]Paragreen v Lim Group Holdings Pty Ltd [2020] VSCA 84, [94] (‘Reasons’).

1. We also directed that the parties provide written submissions in respect of the costs of the application for leave to appeal and the appeal.  Those submissions have now been received.  It is evident from them that there are two primary points that are in dispute.  First, whereas the appellants seek an order for costs with respect to the appeal, it is contended on behalf of the respondent that, because the appellants were not successful on a number of the grounds the appeal relied on, they should not be entitled to the whole of their costs of the application for leave to appeal and the appeal.  Secondly, the appellants seek an order, which is resisted by the respondent, to the effect that an order of the primary judge made on 20 November 2018 be set aside. 

1. In respect of the first issue, the respondent has noted that while the appellants sought to rely on eight grounds of appeal, ultimately leave was only granted, and the appeal allowed, in respect of four of those grounds.  The grounds, upon which the appellants were unsuccessful, were the subject of detailed written submissions by the parties, and were fully argued by them in the course of oral submissions. 

1. In response, it is submitted, on behalf of the appellants, that the grounds of appeal on which they were unsuccessful (grounds 1 to 4) were closely interrelated with the grounds on which they were successful (grounds 5 to 8).  The points raised in grounds 1 to 4 were straightforward and addressed matters of construction which formed the background to the points that were the subject of contention on grounds 5 to 8.  Ultimately, as a result of the decision on appeal, the respondent wholly failed in its action against the appellants.  Further, counsel noted, in the course of the proceeding below, the appellants had made various Calderbank offers.  At the hearing of the appeal, the respondent had submitted that the appellants were guilty of fraud, a submission that was comprehensively rejected by this Court. 

1. The well-established general rule is that, ordinarily, costs should follow the event.  Accordingly, in the usual course, a successful party should recover its costs even in a case in which it has not succeeded on all of its heads of claim or arguments.  On the other hand, it is recognised that where multiple issues have been agitated, and the successful party has only enjoyed mixed success in respect of some of them, a court may, in an appropriate case, adopt a pragmatic approach by which it awards the successful party a proportion of its costs, but not the full amount.[2]

   [2]See, eg, Pricom Pty Ltd v Sgarioto (Supreme Court of Victoria, Eames J, 24 April 1995) 8;  McFadzean v Construction, Forestry, Mining and Energy Union (2007) 20 VR 250, 289–92 [152]–[159] (Warren CJ, Nettle and Redlich JJA); Chen v Chan (No 2) [2009] VSCA 233, [10] (Maxwell P, Redlich JA and Forrest AJA).

1. In the present case, the grounds of appeal on which the appellants did not succeed — grounds 1 to 4 — concerned the construction and effect of the Terms of Settlement between the respondent and Judisco Pty Ltd.  Most of the propositions advanced on behalf of the appellants were reasonably arguable.  The ambit of the argument was relatively confined, as is reflected by the relatively short section of our reasons for judgment that was directed to them. 

1. By contrast, the principal focus of the application for leave to appeal, and the appeal, concerned grounds 5 to 8, on which the appellants were successful. Relevantly, those grounds were directed to the finding by the judge that there had been actual fraud by the appellants, for the purpose of ss 42 and 43 of the Transfer of Land Act 1958, in refusing to recognise the Terms of Settlement between the respondent and Judisco Pty Ltd.  In the application for leave to appeal, the respondent sought to defend that finding.  Its submissions, in that respect, were comprehensively rejected by this Court.  In particular, it was concluded that the conduct of the appellants could not, on any analysis of the facts, be found to constitute actual fraud for the purpose of the Transfer of Land Act;  nor, we added, could that conduct be a sufficient foundation for a finding of equitable fraud.[3]

   [3]Reasons [87].

1. In those circumstances, we do not consider that this is an appropriate case in which to depart from the usual rule, namely, that costs should follow the event.  Accordingly, we will make an order that the respondent pay to the appellants the costs of the application for leave to appeal and of the appeal, including reserved costs, on a standard basis. 

1. As mentioned, the second issue, that has been raised by the submissions of the parties, concerns an order made by the trial judge on 20 November 2018.  After his Honour delivered reasons for judgment on 24 October 2018, the appellants made an application to reopen the proceeding, in order to contend that the judge, in his reasons, erred in proceeding on the basis that the plan of subdivision (an annexure to the Vendor’s Statement) ‘included the Terms of Settlement’.  The judge having heard that application, made orders dismissing it, and directed the appellants to pay the respondent’s costs of the summons on a standard basis. 

1. In support of the application, to set aside the order, counsel for the appellants noted that in our reasons for judgment, we found that the categories of documents, referred to in paragraph 8 of the Vendor’s Statement, did not include the Terms of Settlement, so that the trial judge’s finding to that effect was fundamentally incorrect.[4]  Accordingly, it is submitted, it was reasonable for the appellants to have made an application to reopen the matter before the trial judge.

   [4]Ibid [80].

1. In response, counsel for the respondent noted that, as the order for costs made by the judge on 20 November 2018 was not the subject of an application for leave to appeal and appeal the appellants are precluded from making an application that it be set aside.  Counsel further submitted that, in any event, the application by the appellants to reopen the judge’s findings of fact was no more than an attempt by them to re-agitate the judge’s decision, a course which is contrary to the principle stated in cases such as Wentworth v Woollahra Municipal Council,[5] and Autodesk Inc v Dyason [No 2].[6]

   [5](1982) 149 CLR 672, 684 (Mason ACJ, Wilson and Brennan JJ).

   [6](1993) 176 CLR 300, 303 (Mason CJ), 308 (Brennan J).

1. The submissions made by the respondent should be accepted for two reasons.  First, as noted by counsel for the respondent, the order made by the judge, on 20 November 2018, was not the subject of the application for leave to appeal in this case.  Secondly, in the absence of materials demonstrating the points that were originally agitated before the judge, and the matters that were raised before his Honour on 20 November, it is not possible for this Court to determine whether the trial judge, in the exercise of his discretion, ought to have permitted the appellants to reopen the argument on the point in issue.  Accordingly, we reject the submission made on behalf of the appellants that an order should be made setting aside the order of the primary judge made on 20 November 2018 and directing that the respondent pay the costs of the appellants in respect of the application that was made before his Honour on that date.

Summary of conclusions

1. For the foregoing reasons, we will make an order that the respondent pay the appellants’ costs of and incidental to their application for leave to appeal and the appeal, including all reserved costs, on a standard basis such costs to be assessed by the Costs Court in default of agreement.

1. The respondent has applied for an indemnity certificate under s 4(1) of the Appeal Costs Act 1998. We consider that this is an appropriate case in which such a certificate should be granted to the respondent.