Shimshon v MLC Nominees Pty Ltd [No 2]

[2022] VSCA 18

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0027

DAVID SHIMSHON	Appellant
v
MLC NOMINEES PTY LTD (ACN 002 814 959)	First Respondent
and
NULIS NOMINEES (AUSTRALIA) LTD (ACN 008 515 633) [No 2]	Second Respondent

---

JUDGES:	SIFRIS, WALKER and WHELAN JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	25 February 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 18

---

COSTS – Costs of successful appeal – Whether costs should follow the event – Necessary argument whether proceeding properly commenced as group proceeding under pt 4A of the Supreme Court Act 1986 – Matter of public importance – Costs in the proceeding.

---

REPRESENTATION:	Counsel	Solicitors
For the Appellant	Ms M Szydzik with Ms S Chordia	Maurice Blackburn
For the Respondents	Ms K E Foley SC with Mr C Tran	Allens

SIFRIS JA
WALKER JA
WHELAN JA:

1. On 20 December 2021, we published reasons for granting leave to appeal and allowing an appeal from a decision of a judge of the trial division.[1]  The judge held that this proceeding was ‘a proceeding … concerning property subject to a trust’[2] and therefore not properly commenced as a group proceeding.  We will assume familiarity with our Reasons.

   [1]Shimshon v MLC Nominees Pty Ltd [2021] VSCA 363 (‘Reasons’).

   [2]Section 33B(2)(b)(ii) of the Supreme Court Act 1986 excludes such cases from the operation of Part 4A of the Act dealing with group proceedings. In answer to a question pursuant to r 47.04 of the Rules, as to whether the proceeding was validly commenced as a group proceeding, the judge answered, ‘No’. On appeal, we answered that question ‘Yes’.

1. Orders were made on 20 December 2021, including orders for the filing of submissions on costs, in the event that the parties were unable to agree on an appropriate order.  The orders provided that costs would be dealt with ‘on the papers’.

1. The parties had previously agreed that the costs below would be costs in the proceeding.  However they disagree about the costs of the application for leave to appeal and the appeal.

1. The appellant submitted that costs should follow the event.  It was submitted that there was no reason to depart from the usual or general rule, even in circumstances concerning ‘whether the court is properly seized of a matter’.  It was submitted further that the respondents should have adopted a neutral position or should have agreed to an earlier suggestion that the proceeding be cross-vested to the Federal Court of Australia, where there was no equivalent exclusion.

1. The respondents submitted that costs should be in the proceeding.  It was submitted that the issue needed to be determined by this Court and that it was proper for the respondents to make submissions rather than remain neutral.  Jurisdiction could not be consented to and the respondents were in effect substantially in the position of contradictors, in an important issue that had not been decided in Victoria.  It was submitted further that no criticism should be made of its decision not to consent to the cross-vesting of the proceeding to the Federal Court.

1. In our opinion, costs should be costs in the proceeding.

1. As the respondents contended, it was necessary to have the argument as to the applicability and ambit of the exclusion provision.  Given the decision of the judge, it was not open to the parties and in particular the respondents to simply consent to jurisdiction.  In such a situation, it was desirable for the respondents to have acted as a contradictor.  Further, the proper construction of the exclusion provision is a matter of public importance in the State of Victoria.  In these circumstances, which differ from the usual interlocutory appeal, where ordinarily costs follow the event, costs should be in the proceeding.

1. The cases referred to by the appellant do not assist.  In Cash Converters International Ltd v Gray,[3] the judge at first instance held that the court was properly seized of the matter.  Because that was so, the unsuccessful appeal was at the risk of the appellant, unlike the case before us.  Caason Investments Pty Ltd v International Litigation Partners No 3 Ltd[4] involved a different situation.  In neither case was costs argued, nor did either case provide detailed reasons for the decision on costs.

   [3](2014) 223 FCR 139; [2014] FCAFC 111.

   [4](2018) 265 FCR 487; [2018] FCAFC 176.

1. Finally, we do not consider that the fact that the respondents did not agree to the appellant’s offer to cross-vest the proceeding to the Federal Court provides a sufficient basis for a costs order.  The Supreme Court of Victoria was seized of the matter and the respondents were entitled to remain in the forum and argue the preliminary question.

1. We will order that the costs of the application for leave to appeal and the appeal be costs in the proceeding.

–––