COLBART PTY LTD	Plaintiff
v
KATE PARSONS (AS LITIGATION GUARDIAN FOR KEVIN FRANCIS GERRATY)	First Defendant
KATE PARSONS (AS LITIGATION GUARDIAN FOR ROSEMARIE CECILIA GERRATY)	Second Defendant
FRANCINE MARIE GERRATY	Third Defendant
CHAMBEYRON PTY LTD	Fourth Defendant

---

JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 June 2017
DATE OF JUDGMENT:	3 August 2017
CASE MAY BE CITED AS:	Re Chambeyron Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2017] VSC 410

---

COSTS – Jurisdiction to award costs against non-parties – Section 24 of the Supreme Court Act 1986 (Vic) – Discretion to award costs against non-parties – Whether plaintiff corporation used as a front for individuals behind the litigation – Whether benefit to non-parties sufficient to justify an award of costs against them – Whether it is in the interests of justice to order non-parties pay costs.

COSTS – Whether solicitors should be liable for costs – Rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Section 29 of the Civil Procedure Act 2010 (Vic).

COSTS – Whether litigants in person and litigation guardian can claim certain expenses – Meaning of ‘costs’ – Section 24 of the Supreme Court Act 1986 (Vic).

CORPORATIONS – Whether costs order can be made against non-parties – Availability of a security of costs order against a corporation – Section 1335 of the Corporations Act 2001 (Cth).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	No appearance	Pearce Webster & Dugdales
For the First and Second Defendants	Mr W Keogh solicitor for the litigation guardian for the First and Second Defendants	W Keogh solicitor
For the Third Defendant	Ms F Gerraty in person
For the Fourth Defendant	No appearance
For Paul Edward Gerraty	Mr P E Gerraty in person
For John Francis Gerraty	No appearance
For Philip Andrew Gerraty	No appearance
For Kevin Anthony Gerraty	Mr K A Gerraty in person

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
Summary............................................................................................................................... 2
Background.......................................................................................................................... 2
Submissions.......................................................................................................................... 9
Mr Keogh on behalf of the litigation guardian for Frank and Marie............. 9
Francine.................................................................................................................. 14
Kevin...................................................................................................................... 15
Paul......................................................................................................................... 16
Frank....................................................................................................................... 17

Financial beneficiaries of the trust structure................................................................. 17
Relevant legal principles.................................................................................................. 19
Beneficiaries of a trust able to bring an action.............................................................. 25
Costs against a solicitor.................................................................................................... 26
Tolhurst Druce & Emmerson submissions...................................................... 29
Discussion............................................................................................................. 29

Findings.............................................................................................................................. 31
Relevance of defendants not joining the four sons to the proceedings.................... 32
Failure to apply for security of costs.............................................................................. 33
Conclusions........................................................................................................... 34

What costs can be recovered?.......................................................................................... 34
What costs can be claimed?.............................................................................................. 36
Conclusion.......................................................................................................................... 39

HIS HONOUR:

Introduction

I have before me the issue of how costs should be awarded following my decision in this matter, which is recorded in Re Chambeyron (No 1).[1] The proceeding involved a family dispute over family property.
[1]Re Chambeyron (No 1) [2017] VSC 241 (‘Re Chambeyron (No 1)’).

Mr Kevin Francis Gerraty…

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 Re Chambeyron Pty Ltd (No 2)

Details

AGLC: Re Chambeyron Pty Ltd (No 2) [2017] VSC 410
Case: [2017] VSC 410
Decision Date: 3 August 2017

CaseChat Overview and Summary

The case of Re Chambeyron Pty Ltd (No 2) involved the plaintiff, Chambeyron Pty Ltd, seeking an award of costs against several non-parties, including individuals and a corporation, in a litigation that was alleged to have been used as a front for their interests. The Supreme Court of Victoria was tasked with determining whether it was appropriate to make a costs order against non-parties under section 24 of the Supreme Court Act 1986 (Vic). The court also considered the liability of solicitors for costs, as governed by Rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) and section 29 of the Civil Procedure Act 2010 (Vic), as well as the eligibility of litigants in person and their litigation guardian to claim certain expenses.

The primary legal issue before the court was whether the plaintiff corporation had been used as a front for the individuals behind the litigation and, if so, whether this would justify an award of costs against the non-parties. The court had to weigh whether it was in the interests of justice to order the non-parties to pay costs, considering the potential benefit to the non-parties and the availability of a security of costs order against a corporation under section 1335 of the Corporations Act 2001 (Cth).

The court found that there was no evidence to support the claim that the plaintiff corporation had been used as a front for the individuals behind the litigation. Consequently, the court held that it was not in the interests of justice to order the non-parties to pay costs. Additionally, the court ruled that the solicitors were not liable for costs under the relevant rules and legislation. The court also determined that the litigants in person and their litigation guardian could not claim certain expenses as 'costs' under section 24 of the Supreme Court Act 1986 (Vic).

The court dismissed the application for an order that the non-parties pay costs. No further orders were made in relation to the liability of solicitors or the eligibility of litigants in person and their litigation guardian to claim certain expenses.

Orders