Towercom Pty Ltd v Fahour (No 4) - [2013] VSC 585

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

SCI 2011 02146

TOWERCOM PTY LTD (ACN 074 312 922)	Plaintiff
and
MOUSTAFA FAHOUR	First Defendant
and
FAHOH PTY LTD (ACN 139 527 709)	Second Defendant

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JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 October 2013
DATE OF JUDGMENT:	29 October 2013
CASE MAY BE CITED AS:	Towercom Pty Ltd v Fahour (No 4)
MEDIUM NEUTRAL CITATION:	[2013] VSC 585

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PRACTICE AND PROCEDURE — Costs — Unsuccessful application by defendant for summary judgment pursuant to s 62 of the Civil Procedure Act 2010 – Whether costs should be costs in the proceeding (that is whether the costs should follow the costs order made at the conclusion of the trial) — Whether there is a usual practice followed by the Court in summary judgment applications.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Jonathan Evans	Pryles & Co
For the Second Defendant	Mr Simon Pitt	Mills Oakley Lawyers

HIS HONOUR:

Introduction

The second defendant (“Fahoh”) applied by amended summons filed on 26 March 2013 for summary judgment either under rule 23.03 of the Supreme Court (General Civil Procedure) Rules 2005 (the “Rules”), on the basis that Fahoh had a good defence to the claims of the plaintiff (“Towercom”) on the merits, or under s 62 of the Civil Procedure Act 2010 on the basis that Towercom’s claim against it had no real prospect of success.

On 2 October 2013, I handed down my judgment on that application determining that the application should be dismissed.

Towercom applied for its costs of successfully opposing the application. Fahoh submitted that the costs should be costs in the proceeding so that the costs should follow the costs order made at the conclusion of the trial.

Submissions

Second defendant’s submissions

Fahoh submitted that:

(a) the order that costs be costs in the proceeding was the practice adopted in respect of summary judgment applications;

(b) The rationale underpinning the practice is that whichever party is successful in the litigation will get the costs of the application: Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd;[1]
[1](1978) 29 ACTR 21 at 22-23.

(c) The practice was adopted by Zammit AsJ in an application by a defendant for summary judgment in Webb v Ryan.[2] In that case her Honour was particularly critical of the defendants for making the application and yet still did not penalise them with a costs order, instead following the practice of ordering costs in the cause;
[2][2011] VSC 461 (at [49]); Her Honour states “I would be inclined to follow the practice of ordering costs in the cause, but am willing to hear the parties on costs”. It is confirmed by Whelan J in Webb & Ors v Ryan & Anor (No 2) [2012] VSC 431 at [17] that Her Honour made such an order after hearing submissions.

(d) in Cullia v Gook

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.

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Details

Case: [2013] VSC 585
Decision Date: 29 October 2013

CaseChat Overview and Summary

Towercom Pty Ltd v Fahour (No 4) concerned a dispute between the plaintiff, Towercom Pty Ltd, and the defendant, Fahour, regarding the amount of costs awarded following an unsuccessful application by the defendant for summary judgment. The case was heard in the Supreme Court of Victoria. The defendant had previously been unsuccessful in an attempt to have the proceedings against them dismissed under section 62 of the Civil Procedure Act 2010. The central legal issue the court had to decide was whether the costs incurred in the unsuccessful summary judgment application should be treated as costs in the proceeding or whether they should be considered as costs of the proceeding.

The court examined whether there was a usual practice in the Supreme Court regarding the treatment of costs in summary judgment applications. The court noted that there was no clear precedent on this matter, but it found that the nature of the summary judgment application, which is an interlocutory step in the proceeding, suggested that the costs should be treated as costs in the proceeding. This approach aligned with the broader principle that costs of unsuccessful interlocutory applications should follow the order made at the conclusion of the trial.

Ultimately, the court held that the costs of the unsuccessful summary judgment application should indeed be costs in the proceeding. This decision was based on the view that such costs are directly related to the substantive proceeding and should be accounted for within the overall costs of that proceeding. Consequently, the court ordered that the costs of the summary judgment application would be costs in the proceeding, meaning they would follow the costs order made at the conclusion of the trial. This outcome provided clarity for future cases involving similar applications and ensured that the costs were appropriately allocated within the legal process.

Orders