Virtus Property Group Pty Ltd v Kosmopoulos (costs of security for costs application)

[2024] VCC 1547

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-23-03490

Virtus Property Group Pty Ltd (ACN 163 632 620)	Plaintiff
v
Joanne Kosmopoulos	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	2 October 2024 (and written submissions on 3 October 2024)
DATE OF RULING:	7 October 2024
CASE MAY BE CITED AS:	Virtus Property Group Pty Ltd v Kosmopoulos (costs of security for costs application)
MEDIUM NEUTRAL CITATION:	[2024] VCC 1547

RULING
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Subject:COSTS

Catchwords:              Costs of security of costs application – Offer and counter offer in pre-hearing correspondence – No reference to party intending to claim indemnity costs

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R L Moore	TM Collins
For the Defendant	Mr C Twidale	Sanicki Lawyers

HIS HONOUR:

1On 2 October 2024, I handed down written reasons for decision upon the defendant’s application for security of her costs of the proceeding. I determined that the plaintiff should provide security in the sum of $96,990.24 in two tranches, the first of $24,990.24 and the second of $72,000.00.

2In further written submissions, the parties have addressed three outstanding issues:

a.     the order that should be made for the costs of the application;

b.     what further security should be ordered in respect of the costs of the application;

c.     the final form of the orders to be made on the application.

3.The defendant has been successful in her application for security for costs. I consider that if she successfully defends the action, she should be entitled to the costs of the application. If, however, the plaintiff succeeds on its claim, I consider that justice demands that the defendant should not be entitled to her costs of the application in that event. Accordingly, I will order that the defendant’s costs of the summons dated 23 May 2024, including the costs of the hearing on 2 October 2024, and the further written submissions shall be costs in the cause.

4.The defendant submits that her costs of the application, if the plaintiff becomes liable to pay them, should be assessed on an indemnity basis. The defendant by letter dated 3 April 2024 made an offer to accept $95,652.00 as security. The Court’s order for $96,990.24 exceeded that sum and, if further allowance is made for the costs of the application, the total sum ordered will significantly exceed the amount of $95,652.00 that the defendant offered to accept.

5.I consider, however, that the defendant’s submission in this regard should be rejected. In my view, the plaintiff’s failure to accept the defendant’s offer in the letter should not be regarded as having been made unreasonably. The defendant’s solicitors’ letter was a response to a letter from the plaintiff’s solicitors dated 25 March 2024 which had offered to provide a bank guarantee as security for the defendant’s costs for sums totalling $85,00.00 divided between pre-trial costs of $58,368.00 and trial costs of $18,923.20.

6.The defendant’s solicitors’ letter dated 3 April 2024 purported to accept part of the plaintiff’s offer (security in the form of a bank guarantee and the pre-trial costs quantum of $58,368.00) and counter-offered the sum of $37,284.00 as the acceptable trial costs. The letter concluded, “If your client does not accept this offer and our client is forced to make an application to the Court to obtain security, we will produce this letter to the Court on the question of costs.”

7.The defendant’s solicitors did not indicate in the letter that, if the plaintiff failed to accept the counter-offer, indemnity rather than standard costs would be sought. Further, no time limit to accept the counter-offer was specified. In these circumstances, I do not consider that an order for indemnity costs, in the event that the defendant were successful at trial, would be appropriate.

8.It is appropriate that the plaintiff should provide security, in addition to the sums I foreshadowed on 2 October 2024 for the defendant’s costs of the security for costs application, if she were to successfully defend the proceeding.

9.The costs of the application suggested by the parties (and the mid-point between their estimates) were as follows:

Item no.	Item description	Defendant’s estimate	Plaintiff’s estimate	Mid-point
4	Defendant’s security for costs summons dated 23 May 2024
4a	Solicitors’ costs	$14,261.80	$5,784.00	$10,022.90
4b	Counsel’s costs	$13,440.00	$6,000.00	$9,720.00
4c	Disbursements (filing and printing)	$1,592.50	$1,592.50	$1,592.50
$29,294.30	$13,376.50	$21,335.40

10.Accordingly, I consider that the sum of $21,335.40 should be added to the second tranche of security to be paid by the plaintiff.

11.The parties each submitted draft proposed orders. I will make the following orders:

1.The plaintiff must provide security for the defendant’s costs of the proceeding (up to and including the trial estimated at 5 sitting days) in the total amount of $118,325.64 in two tranches:

a.$24,990.24 to be paid by the Plaintiff on 7 October 2024 at 4.00pm;

b.$93,335.40 to be paid by the Plaintiff on 10 October 2024 at 4.00pm.

2.The payments referred to in paragraph 1 must be paid to the Registrar of the County Court, unless both parties have agreed in writing to an alternative form by which security in the said sum is to be provided. The monies paid to the Registrar, or otherwise provided as the parties have agreed, shall not be disbursed without further order of the Court or by a written authority executed by both parties.

3.If the security required under paragraph 1, or either of the tranches, is not provided by the dates ordered, the proceedings as against the Defendant shall, subject to order 4:

a.be stayed until the security is provided; and

b.the trial set down for 14 October 2024 be vacated.

4.If the proceeding against the defendant is stayed under the order in paragraph 3, and remains stayed as on 2 December 2024 at 4.00pm, by reason of the plaintiff’s failure to provide the security ordered, the proceeding against the defendant shall be dismissed with a further order that the plaintiff must pay the defendant’s costs of the proceeding including any reserved costs and the costs of and incidental to the defendant’s summons on a standard basis, to be assessed by the Costs Court in default of agreement by the parties.

5.If the defendant is successful in the proceeding, otherwise than as set out in paragraph 4, the plaintiff must pay the defendant’s costs of and incidental to the defendant’s summons filed 23 May 2024 on a standard basis to be assessed by the Costs Court in default of agreement by the parties.

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Certificate

I certify that these 4 pages are a true copy of the ruling of his Honour Judge Anderson delivered on 7 October 2024.

Dated: 7 October 2024

Associate to his Honour Judge Anderson