S F Cosentino Pty Ltd v Peaq Farms Pty Ltd

[2018] VCC 2237

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-17-00614

S F COSENTINO PTY LTD	Plaintiff
v
PEAQ FARMS PTY LTD & ORS	Defendant

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JUDGE:	HIS HONOUR JUDGE MACNAMARA
WHERE HELD:	Melbourne
DATE OF HEARING:	30 November 2018
DATE OF JUDGMENT:	30 November 2018
CASE MAY BE CITED AS:	S F Cosentino Pty Ltd v PEAQ Farms Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2018] VCC 2237

COSTS RULING

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr H. Kirimof	SMR Legal
For the First Defendant For the Second and Third Defendants	No Appearance In Person

HIS HONOUR:

1 In this proceeding, I published reserved Reasons for Judgment on 13 November 2018, medium neutral citation [2018] VCC 1775. The claim brought by the plaintiff was for monies allegedly payable by the second and third defendants, Mr Russell and Mr Glendining, under guarantees, which it appears they gave, of the obligations of the first defendant company which is now in liquidation. I determined the matter, in a general sense, favourably to the defendants, based upon findings relative to misleading or deceptive conduct engaged in by the plaintiff. I concluded, in accordance with the terms of the Australian Consumer Law, that there were grounds for declining to enforce the guarantees and indemnities against Messrs Russell and Glendining.

2       The matter is now before me on the question of costs.  The defendants say that they have been victorious.  They are now self-represented.  They accept that, in a general sense, costs ― as the word ‘costs’ is used in Costs Orders ― is constituted by monies which a litigant pays to his, her or its legal representatives.  Litigants in person therefore, by definition, have no costs which they can recover in the case that they are victorious.  However, Messrs Russell and Glendining say they were represented by solicitors and, no doubt, counsel in certain respects until April 2018.  Since they have been victorious in the proceeding, they say there should be a Costs Order covering those costs.  In addition, they say that they have funded 50 per cent of the costs of trial transcript and there should be an award in their favour for the amount of that outlay.

3       Mr Kirimof, who appeared on behalf of the plaintiff, resists the making of any such Costs Orders.  He says that, when analysed, the relative complexity of the manner in which the proceeding was determined means that the just outcome is that there should be no Costs Order made one way or the other.  Acknowledging that the general rule is that costs follow the event and that a victorious defendant or defendants should have his or their costs, Mr Kirimof says, in the special circumstances of this case, that would be inappropriate.  He notes that, whilst these defendants were legally represented, they relied upon a series of matters which were not those ultimately pressed at trial.  He noted that, when the defendants parted company with their legal advisers, a judicial registrar made orders providing for them to file and serve a revised set of defences and counterclaims.  The judicial registrar’s orders disclosed that, when the defendants pressed their case before her, they raised with her the matters which have ultimately proven to be winning arguments at trial.  Nevertheless, the document which was forthcoming seemed not to cover these or to cover them adequately.  Insofar as there was a counterclaim made, another judicial registrar observed ― correctly, if I may say so, with respect ― that the entitlement to bring that counterclaim resided solely with the first defendant, a company now in liquidation.  Attempts by the second and third defendants to obtain an assignment of the first defendant’s entitlement to counterclaim proved unavailing and a further application to a judge in the Trial Division of the Supreme Court to undo an assignment made by the liquidator of the first defendant in favour of the plaintiff was unavailing.

4       When the matter was called on for trial before me, Mr Russell, who has acted, substantially but not entirely, as spokesman for both himself and Mr Glendining, said that the documents, which were now in the Court’s file as disclosing the defendants’ defence, did not in fact raise the matters which the defendants wish to rely upon.  As a result, I stood the trial down for some days, directing the defendants to file a further document which did raise the matters which they sought to rely upon, which, incidentally, were matters that had been raised before Judicial Registrar Tran many months previously, and the trial proceeded on the basis of a resolution of those issues.  The other matters which had previously been pleaded fell by the wayside.

5       Mr Kirimof observes that his clients have had to incur costs in preparing for a trial raising those defence issues which ultimately were not pursued.  To put Mr Kirimof’s submission in a nutshell, it came down to this: yes, the defendants won, but they won a case different from the one that was being pressed on their behalf whilst they were represented.  It would therefore not be just that there should be a Costs Order in the defendants’ favour.  He says that, if there were a full assessment of costs which would make a determination as to precisely the value for legal costs purposes of each piece of work undertaken by the legal representatives of the parties, according to the principles that he advocated, the balance would fall in favour of the plaintiff and not in favour of the defendants.

6       Without an assessment of costs, as could be carried out by the Costs Court, or any detailed material on outlays and so forth, it is impossible for me to make any but the most broad brush assessment of the validity of this contention.  Ultimately, however, I am persuaded by Mr Kirimof that the defendants’ success at trial was on the basis of a materially different case than the one which was being pressed on their behalf whilst they were represented.  In those circumstances, I accept Mr Kirimof’s contention that, in a broad sense, the just outcome is that there be no order as to costs.

7       As to the issue of transcript, the matters to which I have just referred had really fallen away by the time trial commenced.  The trial did proceed upon what I might describe as the true issues between the parties.  The defendants won.  The defendants, in my view, should not be out of pocket as to the amount which they outlaid for transcription.  Therefore, they should have a Costs Order for the 50 per cent cost of transcript which they funded.  The only counter argument put by Mr Kirimof against this view that there was, if you will, a hangover of costs in favour of the plaintiff which might offset this amount.  I cannot be satisfied that this would be the case.  Therefore, I make a Costs Order in favour of the defendants, but limited to the 50 per cent cost of trial transcript.

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