VM Romano v BCG - [2023] VSCA 312

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0034

VM ROMANO CONSTRUCTION GROUP PTY LTD (ACN 097 418 874)	Applicant
v
BCG (AUST) PTY LTD (ACN 114 332 017) & ORS (ACCORDING TO THE ATTACHED SCHEDULE)	Respondents

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JUDGES:	NIALL and WHELAN JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	1 December 2023
DATE OF JUDGMENT:	1 December 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 312
JUDGMENT APPEALED FROM:	VM Romano Construction Group Pty Ltd v BCG (Aust) Pty Ltd (County Court of Victoria, Judge Burchell, 3 March 2023)

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PRACTICE AND PROCEDURE – Security for costs – Whether persons behind company must depose to financial situation where it is suggested that action will be stultified if security ordered – Leave to appeal refused.

Domestic Building Contracts Act 1995 ss 8, 9.

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1; Black Hill Residents Group Inc v Marist Youth Care Ltd (2021) 250 LGERA 379; House v The King (1936) 55 CLR 499; Impex Pty Ltd v Crowner Products Ltd (1994) 13 ACSR 440; Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436T [2021] VSCA 72.

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Counsel
Applicant:		Mr R Andrew KC with Mr LJ Hogan
First respondent:		Mr BG Mason
Second respondent:		Mr KJ Naish
Third respondent:		No appearance
Fourth respondent:		No appearance
Solicitors
Applicant:	Alderuccio Solicitors
First respondent:	Colin Biggers & Paisley
Second respondent:	HFW Australia
Third respondent:	CLP Lawyers
Fourth respondent:	CLP Lawyers

NIALL JA:

I will invite Whelan JA to give judgment on the application.

WHELAN JA:

This is an application for leave to appeal an order for security for costs.
In 2009, the applicant entered into a building contract under which the applicant agreed to construct a new 10-storey residential apartment complex on land in North Melbourne. The first respondent, BCG Australia Pty Ltd (‘Checkpoint’), is a building surveying consultancy engaged on the project.
On 15 May 2009, Checkpoint issued a regulatory compliance report to the applicant. That report did not raise any issue with the use of combustible cladding as part of the exterior walls of the building.
During 2010 and 2011, Checkpoint issued staged building permits under the Building Act 1993.
The building was substantially completed by the applicant in 2011, and an occupancy permit was issued by Checkpoint on 21 July 2011.
Apartments in the building were subsequently sold. The common property is owned by two owners corporations. The applicant builder ceased trading in 2016.
In 2019, a building surveyor from the City of Melbourne inspected the building and formed the opinion that the building was a danger due to the use of combustible cladding on the exterior walls. Consequently, the municipal building surveyor issued a building notice under the Building Act 1993. On 19 July 2021, the owners corporations obtained a fire engineering report setting out the works required to make…

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: [2023] VSCA 312
Decision Date: 1 December 2023

CaseChat Overview and Summary

In the case of VM Romano v BCG, the dispute arose between the plaintiff, VM Romano, and the defendant, BCG. VM Romano sought to recover damages under the Domestic Building Contracts Act 1995, specifically sections 8 and 9. The case was heard in the Supreme Court of Victoria, where the primary legal issue was whether the persons behind the defendant company were required to disclose their financial status if it was suggested that the action would be rendered futile by the requirement for security for costs.

The court was tasked with determining whether the defendants, who were behind the corporate entity BCG, needed to depose to their financial situation in response to the plaintiff's claim for security for costs. This issue was examined in light of existing case law, including Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc, Bell Wholesale Co Ltd v Gates Export Corporation, and others. The court considered the principles established in these cases to understand the circumstances under which disclosure of financial information by individuals behind a company might be necessary.

After reviewing the relevant case law and the particular circumstances of the case, the court concluded that the persons behind BCG were not required to depose to their financial situation. The court found that the existing authority did not mandate such disclosure in the specific context presented. Consequently, the application for security for costs was dismissed. The court's decision was based on the understanding that the imposition of security for costs could potentially stultify the action, but this did not necessitate the disclosure of financial information by the individuals behind the corporate defendant. The leave to appeal this decision was subsequently refused.

Orders