Stuart v Mordialloc Sporting Club Inc (No 2)
[2020] VSC 744
•12 November 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 01124
| RAYMOND JOHN STUART | Plaintiff |
| v | |
| MORDIALLOC SPORTING CLUB INC (ARN A0027737R) & ORS (ACCORDING TO THE SCHEDULE) | Defendants |
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JUDGE: | Kennedy J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | Determined on the papers; submissions received on 19 October 2020, 27 October 2020, and 9 November 2020. |
DATE OF RULING: | 12 November 2020 |
CASE MAY BE CITED AS: | Stuart v Mordialloc Sporting Club Inc (No 2) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 744 |
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PRACTICE AND PROCEDURE - Costs – Whether costs should be taxed immediately – Where there is a discrete issue - Where also prospects of considerable delay – Costs to be taxed immediately - Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.20.1.
PRACTICE AND PROCEDURE – Whether appeal costs certificate available in relation to appeal from judicial registrar – Certificate granted - Appeal Costs Act 1998 (Vic) ss 3, 4.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W Stark | Mahons Lawyers |
| For the Sixth Defendant | Mr S Horgan QC with Mr N Frenkel | HWL Ebsworth |
HER HONOUR:
On 8 October 2020 I determined that an appeal should be allowed against certain orders made by Matthews JR on 13 March 2020. In particular, in reasons delivered that day, I determined that the plaintiff should provide security for Mr Said’s costs up to, and including mediation (the Reasons).[1]
[1]Stuart v Mordialloc Sporting Club Inc [2020] VSC 658 (‘the Reasons’).
Subject to providing the parties with an opportunity to address the precise form of order, the Reasons proposed a number of orders at paragraph 137 as follows:
1 The appeal is granted.
2 Orders 2 - 4 of the orders made by Judicial Registrar Matthews on 13 March 2020 are set aside.
3 The plaintiff provide security of $227,678.27 for the sixth defendant’s costs up to, and including mediation, by payment of that amount into Court, or by provision of such other form of security as is acceptable to the Associate Judge who is the Senior Master.
4If the plaintiff does not comply with order 3 within 14 days, the proceeding be stayed.
5 The plaintiff pay the sixth defendant’s costs of and incidental to the sixth defendant’s application for security for costs made by summons filed 3 September 2019, and of this appeal, on a standard basis.
The parties were also invited to give consideration to whether any certificate should be granted under the Appeal Costs Act 1998 (Vic) (at paragraph 138 of the Reasons).
Following exchange of written submissions, there was general agreement with the proposed form of order save for the following issues:
(a) whether costs the subject of proposed order 5 should be taxed immediately under r 63.20.1 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules); and
(b) whether costs orders should be made in relation to the service of a notice to produce.
It was also necessary to consider whether an appeal costs certificate ought to be granted (which Mr Said did not appear to oppose).
Whether costs should be taxed and paid immediately
Principles
Rule 63.20.1 of the Rules provides:
If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.
As highlighted by Hollingworth J in Dale v Clayton Utz (No 3)[2] there are a number of relevant policy factors which justify rules such as r 63.20.1. Such factors include avoiding multiple taxations; avoiding interlocutory applications being used as a means to exhaust the funds of an opposing party; and avoiding unfairness where, for example, a party who is ultimately successful is unable to set off their judgment against an earlier liability to pay costs.
[2][2013] VSC 593, [58].
However, r 63.20.1 provides for a discretion to order that costs may be taxed immediately. In reliance, inter alia, on the decision of the Court of Appeal in Setka v Abbott (No 2) (‘Setka’),[3] I recently stated the following in relation to this discretion:[4]
The Court’s discretion under r 63.20.1 to order that costs be taxed immediately is not circumscribed in any way by the rule itself, although it must be exercised judicially. But it has been held, depending upon the circumstances of the particular matter, that the default position may be upset where – (1) there is prospect of considerable delay in completion of the proceeding; (2) the issue the subject of the interlocutory order was discrete from what will finally require determination; (3) the party against whom the substantive order was made was guilty of unsatisfactory conduct- described variously as ‘unreasonable’ or ‘reprehensible’, or as involving a want of ‘competence and diligence’. These categories are not closed.
[3][2013] VSCA 376.
[4]In the Matter of Infant Nutrition Company of Australia Pty Ltd (Administrators Appointed) [2019] VSC 595, [76].
In the current case Mr Said relies on the following matters:
(a) that the appeal and resolution of the application for security for costs involved a discrete issue;
(b) that there is a prospect of considerable delay; and
(c) that there was relevantly unsatisfactory conduct.
Discrete issue
Mr Said submitted that the appeal and resolution of the application for security for costs involved a discrete issue separate from that which will require determination at the trial of the proceeding.
The plaintiff did not challenge this, but submitted that the mere establishment of a discrete issue is not, of itself, a sufficient reason to justify that costs be taxed immediately, citing Fanissa Pty Ltd v Versace, where Hargrave J stated:[5]
… The winning defendant [in Setka v Abbot (No 2)] sought immediate taxation on the basis that all he had to do to succeed on his application was demonstrate the existence of one of the three reasons summarised by Hollingworth J in Dale v Clayton Utz (No 3) as giving rise to the exercise of the Court’s discretion. The Court of Appeal disagreed with that contention … and recognised that the three reasons summarised by Hollingworth J may justify departure ‘depending upon the circumstances of the particular matter’. In other words, the mere establishment of one of the three reasons stated by Hollingworth J is not of itself a sufficient reason to justify or require that an order for immediate taxation be made.
[5][2016] VSC 416, [27].
Therefore, while I accept that the appeal and resolution of the application for security for costs does involve a discrete issue, I also accept that the mere establishment of this category does not, of itself, warrant the making of the relevant order. Rather, as expressed above, it is relevant to consider all the circumstances.
Prospect of considerable delay
Mr Said also emphasised that the case was commenced more than two years ago and that, notwithstanding eight attempts, the plaintiff has been unable to produce a viable pleading. He further submitted that there has already been considerable delay, primarily as a result of the conduct of the plaintiff, and that the completion of the proceeding is likely to be years away. He submitted that it would be unfair in such circumstances for him to be deprived of the benefit of the costs order for such a lengthy period.
The plaintiff, however, emphasised that any relevant delay was only constituted by eight months being the period between 9 July 2019 (when Mr Said was served with the amended writ joining him as a party) and 25 March 2020 (at which time Randall AsJ reserved his decision in respect of the plaintiff’s application to replead). The plaintiff denied that any such delay could solely be attributed to him and submitted that, even if he had brought about the eight month delay, this did not of itself justify an immediate taxation since a period of eight months was not a very great delay (citing Setka).[6]
[6][2013] VSCA 376, [29].
In the Reasons, I set out the relevant chronology in relation to this matter.[7] I further ultimately determined (at paragraphs [92]-[93]):
… the continual inability to properly plead a case means that, as the evidence stands today, the plaintiff has been unable to articulate a properly defined claim of merit despite having extensive opportunities to do so.
I consider that this failure, taken together with the associated costs and delay, supply the relevant ‘additional factor’ on this application
[7]The Reasons (n 1) [6]-[33].
These findings were made in a context where the plaintiff had already been given eight opportunities to plead a viable cause of action. I consider that this delay was unacceptable in circumstances where the plaintiff has still not produced a viable pleading, and has caused unnecessary costs to be incurred in the process.
In any event, at the heart of this category is the likelihood of there being a considerable lapse of time between the interlocutory application and the final determination of the proceeding, thereby making it unfair to deprive the successful party of the benefit of their costs order for a lengthy period.[8] Even if the period of delay to date was acceptable, given there is still no viable pleading, it is likely that Mr Said will not receive the benefit of the order for costs in his favour for a considerable period of time. This is distinguishable from the situation in Setka where the Court considered that the trial would not have been much delayed.[9]
[8]Dale v Clayton Utz (No 3) [2013] VSC 593, [68].
[9]Setka v Abbott (No 2) [2013] VSCA 376, [29].
I am thereby satisfied that there is an additional category justifying immediate taxation depending on all the circumstances, namely, the prospect of considerable delay in completion of the proceeding.
Unsatisfactory conduct
For reasons given already, I consider that the plaintiff’s delay in the provision of a viable pleading is unreasonable and constitutes unsatisfactory conduct.
However, Mr Said also relied upon unsatisfactory conduct in relation to the evidence concerning the Wangaratta property, as well as the plaintiff’s attempt to withdraw the admission as to stultification.
Insofar as the Wangaratta property is concerned, I did find that the plaintiff’s submissions were ‘somewhat disingenuous’.[10] However, I am unable to be satisfied that this of itself constitutes unsatisfactory conduct in the sense required.
[10]The Reasons (n 1) [80].
It is also in the public interest for people to be held to admissions so as to avoid unnecessary appeals. However, I do not consider that the ineffective attempt to withdraw the admission justifies an immediate taxation in this case.
Summary
I consider that the appeal and resolution of the application for security for costs is a discrete issue. I further consider that there is likely to be a significant delay before the final completion of this proceeding.
I have considered the policy reasons behind the introduction of r 63.20.1 as set out above. However, I am satisfied that the demands of justice require a departure from the general rule in the particular circumstances of this case.
Notice to produce
The form of order proposed in the Reasons only makes provision for the plaintiff to pay Mr Said’s costs of and incidental to the application for security for costs (with no mention of the notice), as well as the costs of the appeal. Thus, if there are any identifiable extra costs associated with the notice at first instance these will not be covered.
However, the plaintiff submitted that Mr Said should actually pay the plaintiff’s costs of dealing with the notice. He also submitted that the vast majority of the costs of the hearing before the judicial registrar were wasted on this issue.
Mr Said opposed this, submitting that the notice was merely an incident of his application for security for costs, and became irrelevant once that application had succeeded. Further, attempts to separate the costs of the notice from the balance of the substantive application would be difficult and not proportionate to the sums involved.
I am not satisfied that Mr Said should pay the plaintiff’s costs of dealing with the notice for the following reasons:
(a) the plaintiff did not support his assertion that the ‘vast majority’ of the costs of the hearing before the judicial registrar were wasted on this issue. There is also no support found in the form of order granted by the judicial registrar for such a position given she made no specific provision for the costs of the notice;
(b) in any event, the issue of impecuniosity was integral to the judicial registrar’s determination on this issue (as apparent at paragraphs [55]-[56] of her reasons[11]) which issue has been decided adversely to the plaintiff;
(c) insofar as it was necessary to determine the issue on appeal the issue was disposed of in two paragraphs by a straightforward examination of the notice (see paragraphs [135]-[136] of the Reasons).
[11]Stuart v Mordialloc Sporting Club Inc & Ors (No 2) [2019] VSC 847.
In the light of the above matters, I see no reason to differ from the judicial registrar in making no specific order as to the costs of the notice incurred in relation to the hearing before the judicial registrar. Given the insignificance of the issue on appeal I am also satisfied that costs should follow the event without any apportionment for the notice.
Appeal costs certificate
The plaintiff sought an indemnity certificate pursuant to s 4 of the Appeal Costs Act 1998 (Vic).
Section 4 provides as follows:
(1) If an appeal against a decision of a court in a civil proceeding—
(a) to the Trial Division of the Supreme Court; ….
succeeds, a respondent to that appeal may apply to the Supreme Court for, and the court may grant, an indemnity certificate in respect of costs.[12]
[12](emphasis added).
An ‘appeal’ includes ‘any proceeding in the nature of an appeal’.[13] I accept that this covers an appeal to the Trial Division under r 84.05(3) of the Rules.
[13]Appeal Costs Act 1998 (Vic) s 3 (def ‘appeal’).
I further accept that the judicial registrar constituted a ‘court’ since r 84.04(3)(a) expressly provides that the judicial registrar constituted ‘the Court’ in hearing the matter referred to her by Derham AsJ.[14]
[14]The matter was referred to Matthews JR by order of Derham AsJ on 21 November 2019.
I am otherwise satisfied that it is appropriate to grant an appeal costs certificate.
Conclusion
The following orders will be made:
1 The appeal is allowed in part.
2 Orders 2 - 4 of the orders made by Judicial Registrar Matthews on 13 March 2020 are set aside, with the orders hereinafter to be substituted in their place:
A The plaintiff provide security of $227,678.27 for the sixth defendant’s costs up to, and including mediation, by payment of that amount into Court, or by provision of such other form of security as is acceptable to the Associate Judge who is the Senior Master.
B If the plaintiff does not comply with order 2A within 14 days, the proceeding be stayed.
C The plaintiff pay the sixth defendant’s costs of and incidental to the sixth defendant’s application for security for costs made by summons filed 3 September 2019, on a standard basis to be taxed immediately.
3 The plaintiff pay the sixth defendant’s costs of and incidental to this appeal, on a standard basis to be taxed immediately.
4 The plaintiff is granted an indemnity certificate pursuant to s 4(1) of the Appeal Costs Act 1998 (Vic).
5 The appeal is otherwise dismissed.
SCHEDULE OF PARTIES
BETWEEN:
| RAYMOND JOHN STUART | Plaintiff |
| v | |
| MORDIALLOC SPORTING CLUB INC. (ARN A0027737R) | First Defendant |
| LANCE DRAPER | Second Defendant |
| TREVOR WARREN | Third Defendant |
| ANDREW WISE | Fourth Defendant |
| JULIAN KNIPE | Fifth Defendant |
| KEVIN SAID | Sixth Defendant |
| NICK MAZZEO | Seventh Defendant |
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