IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION
general list	Revised
Not Restricted
Suitable for Publication	

Case No. CI-20-04636

LISA GROSSMAN	Plaintiff	
		
V		
		
SIMON ANDREW GEPP	Defendant	

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JUDGE:	HER HONOUR JUDGE A RYAN	
WHERE HELD:	Melbourne	
DATE OF HEARING:	On the papers – written submissions filed 3 and 9 July 2024	
DATE OF RULING:	16 July 2024	
CASE MAY BE CITED AS:	Grossman v Gepp (No 2)	
MEDIUM NEUTRAL CITATION:	[2024] VCC 1039		

RULING 
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Subject:	PRACTICE AND PROCEDURE – COSTS
	
Catchwords: 	Apportionment of costs sought – costs to follow the event – quantum of interest payable
		
Legislation Cited:	County Court Civil Procedure Rules 2018; County Court Act 1958

Cases Cited:	APN Funds Management Limited v Australian Property Investments Strategic Pty Ltd (Costs) [2012] VSC 365; David Weiping Chen v Kim Man Chan (No 2) [2009] VSCA 233		

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	Mr D Coombes	Harwood Andrews	
			
For the Defendant	Mr A Richardson	R D Silverstein	

HER HONOUR:

1	On 25 June 2024, I delivered reasons for judgment in this matter (“the principal reasons”). I found that the plaintiff was entitled to recover sums owed to her by the defendant, including interest under two loan agreements. These reasons assume familiarity with the principal reasons and adopt the same terminology.
2	The parties were directed to file submissions regarding the orders to be made consequent upon the judgment, including costs and interest, if they were unable to agree on the form of orders.
3	The plaintiff filed submissions dated 3 July 2024, together with a proposed minute of order and two schedules relating to calculations of interest. Having been largely successful in her claim, the plaintiff submitted that costs should follow the event.
4	The plaintiff also made submissions regarding the appropriate calculation of interest due under both the first and second loan agreements. The plaintiff noted the Court had found the defendant was obliged under the two agreements to pay off the loans by their respective dates by paying off the principal sum monthly in arrears together with the interest specified, and that the defendant did not do so.  Both agreements contained a clause which provided that failure to pay the interest monthly constituted an event of default. Accordingly, the defendant had been in default under the First Loan Agreement since 1 August 2016, and under the Second Loan Agreement since 1 July 2016.
5	On that basis, the plaintiff sought an order for judgment in her favour of $290,250.65. In respect to the First Loan Agreement, the sum of $112,648.21 in principal was sought, together with interest totalling $180,606.36 calculated to 3 July 2024. The interest on the first loan was calculated in accordance with the attached schedule to the submissions headed ‘Alternative 1’.
6	The same process was adopted for the Second Loan Agreement. The amount in principal owed was $25,000. Interest was calculated in the sum of $40,143.84 to 3 July 2024.  In accordance with the principal reasons, the plaintiff accepted that the sum of $68,141.76 should be deducted, being the defendant’s entitlement to an offset.
7	If the plaintiff was incorrect about this interpretation of the principal reasons in respect of the date from which penalty interest should be calculated, she provided different calculations attached to the submissions headed ‘Alternative 2’. The interest payable was calculated from at least the day after the respective due dates for repayments of the advances under the two loan agreements. If the methodology in the second alternative is allowed, then the total indebtedness was $265,691.46. This net figure was calculated by taking into account the offset to the defendant.
8	The defendant filed submissions dated 3 July 2024, together with an annexure and proposed minute of order.
9	The defendant sought to reagitate the calculation of the further advances which was one of the five claims referred to in the principal reasons. These matters were dealt with in paragraphs 4 to 9 of the outline of submissions. The defendant sought to reargue his case relating to the way in which the further advances should be attributed so as to reduce the amount owing under the First Loan Agreement and then recalculated interest according to those adjustments.
10	Such an approach is  clearly impermissible and inconsistent with the direction from the Court to file submissions to reflect the orders to be made consequent upon the principal reasons. This was not a fresh opportunity to seek to reargue matters which have already been determined by the Court.
11	The defendant accepted the calculations made by the plaintiff in respect to the second loan agreement, namely, that $25,000 in principal is outstanding, together with an amount of interest of $39,702.05.
12	In respect of costs, the defendant submitted the appropriate order was that each party should bear its own costs of the proceeding. The basis for this submission was that there should be, in effect, an apportionment given that the parties enjoyed mixed success in relation to the issues in the claim and counterclaim citing David Weiping Chen v Kim Man Chan (No 2).
13	It was submitted that the plaintiff and defendant had both succeeded in various claims in issue. The defendant noted he won on the following issues:
(a)	from an initial amount of $131,010, being further advances contended for by the plaintiff, $24,000 was conceded as having not been made at the commencement of the trial, and the court found a further $44,090.33 was not established by the plaintiff;
(b)	the defendant had made 13 separate cash repayments to the plaintiff totalling $40,141.76;
(c)	there was no liability to the plaintiff in respect to the credit card loans; and
(d)	the plaintiff had converted the 1948 Ford Prefect vehicle which was valued at $4,000, and therefore he was entitled to a setoff.
14	Additionally, the defendant succeeded in his counterclaim with the court ruling that he was entitled to recover the E27 Fordson Major Tractor and the 1926 Lister Mobile Sharing Plant motor engine (collectively “the machinery”).
15	It was contended by the defendant that significant time was spent on the issue of cash repayments, the extent of the advances and amounts owing on the credit card, the conversion of the car, and refusal of the plaintiff to return the machinery.
16	The defendant submits that a substantial amount of costs were needlessly incurred by the defendant as a result of the plaintiff unreasonably disputing a large number of repayments. The defendant argues that more than half of the trial time was committed to proving a large number of repayments disputed by the plaintiff. Had the plaintiff been more forthcoming with appropriate admissions, then the evidence would have required only one to one and a half days of hearing time.
17	In the circumstances, the defendant argues that the Court should take a flexible and pragmatic approach to costs. The result being that each party should bear their own costs of the proceeding.
18	The defendant also proposed an order that the plaintiff should deliver up the machinery to the defendant whereas the plaintiff had proposed it be collected from her property.
19	The plaintiff filed reply submissions on 9 July 2024.
20	The plaintiff noted that the Court had found the principal sums of $112,648.21 and $25,000 remained owing under the first and second loan agreements. After conducting an analysis of the various other claims regarding advances and repayments, the Court had determined that the defendant was entitled to offset an amount of $68,141.76.
21	The plaintiff noted that the defendant was seeking to reagitate issues determined at trial rather than being confined to submissions supporting the appropriate form of order to give effect to the reasons. The plaintiff submitted that the defendant’s submissions were outside the scope of the invitation of the Court to make submissions on an appropriate form of order, including interest and costs.
22	As for interest, the plaintiff noted that the defendant accepted the calculation of interest on the amount owing under the second loan agreement prepared by the plaintiff.
23	The plaintiff submitted that the calculation under the Second Loan Agreement was done on the basis of the interest rate of 5 per cent until the first date of default on 2 July 2016, after which the penalty interest rate of 20 per cent is applied.
24	For reasons already set out in the earlier submissions, the plaintiff contends the same principles apply to the First Loan Agreement, and the first event of default occurred on 2 August 2016. That being so, the appropriate calculation of interest set out in ‘Alternative 1’ attached to the plaintiff’s first submissions should be adopted.
25	As for the delivery up of the machinery the subject of the counterclaim, the plaintiff accepts that an order for delivery up should be made, but noted that the machinery had been brought onto her property by the defendant. Given the evidence at trial, the defendant had the means and expertise to transport the machinery and not the plaintiff.
26	The plaintiff argued that the delivery up of the machinery ought to be confined to collection from the plaintiff’s property. To limit the prospect of further dispute, the plaintiff proposed a further order be made as follows:
“For the purposes of order 4 above, by 4.00pm on [seven days after authentication of orders] the plaintiff will propose in writing to the defendant’s solicitors three dates/times on which the plant will be available for collection from the property, from which the defendant will nominate in writing to the plaintiff’s solicitors the date/time for collection which nomination in writing should be at least seven days before the nominated date.”
27	The plaintiff does not object to the defendant entering onto her property for the purposes of collecting the machinery.
28	As for costs, the plaintiff noted that she had been successful in six of the eight prayers for relief sought in the amended statement of claim. In particular, the claim for principal and interest owing under the first and second loan agreements and the declaration sought in respect of the charge over the defendant’s assets.
29	The plaintiff was successful in obtaining the relief sought save for that relevant to the further advances and credit card transactions. As a result of the hearing, the parties were able to ventilate all the debits and credits between them, including the further advances and credit card transactions in order for the Court to arrive at an offset in favour of the defendant.
30	The defendant established an offsetting claim which only reduced his indebtedness to the plaintiff but the defendant’s pleadings were in a constant state of flux. For example, the return of the machinery was not sought until the defendant’s third amended defence and counterclaim filed on 28 February 2023.
31	The plaintiff submits there was nothing in the defendant’s submissions which displaced the convention that costs follow the event. Primarily, this was a proceeding commenced because of the defendant’s breaches of loan agreements in which the plaintiff has been successful in obtaining relief.
Analysis
Apportionment of costs
32	The defendant submits that, as each party has experienced both success and failure, it is appropriate to order that each party bears its own costs of the proceeding.
33	Under Rule 63A.04 of the County Court Civil Procedure Rules 2018, the Court may make an order for costs in relation to a particular question or a particular part of the proceeding. This power permits orders depriving an ultimately successful party of its costs or part of its costs, or awarding an unsuccessful party some of its costs.  A successful party may recover only a portion of its costs where the party has been unsuccessful in respect of certain discrete issues. That should not be done as a matter of course. An issue does not necessarily mean a precise issue in the pleading but relates to any disputed question, fact or law.
34	Where there has been a multiplicity of issues of mixed success, a court may take an approach in making costs orders by taking into account the success or lack of success on an issues basis.  Generally, the order may result in a successful party being awarded a proportion of its costs but not the full amount. A relevant consideration will be whether the issue is raised unreasonably.
35	I am not persuaded by the matters set out in the defendant’s submissions that there should be an apportionment of costs or that there should be no order as to costs.
36	As is apparent, the plaintiff has succeeded in her action, which was primarily based on two loan agreements with the defendant. The Court has found that the amounts of principal, together with amounts of interest are due and payable by the defendant and that he has breached the terms of each of those agreements. This aspect formed the main part of the plaintiff’s claim.
37	The plaintiff is entitled to the declaration sought, being the charge claimed over the defendant’s assets, which was a matter that was contested unsuccessfully by the defendant. She is also entitled to penalty interest, despite the defendant’s submissions to the contrary. I am not persuaded, as events turned out, that the plaintiff acted unreasonably in prosecuting any of her claims.
38	As indicated in the principal reasons, the constant changing of the framing of the claims in respect of various items was most unsatisfactory. The trial was largely an inquiry into what was really a running account between the parties as to what was owed and by whom. It is highly regrettable that the parties did not resolve the matter at mediation despite having several opportunities to do so. Although some of the offsets which the defendant claimed were contested unsuccessfully by the plaintiff, I am not persuaded overall that this warrants a departure from the usual rule that costs follow the event.
Interest payable
39	As for the interest claim, the alternative calculations made by the defendant in his submissions dated 3 July 2024 cannot be accepted in circumstances where they are based on a misguided attempt to challenge the findings of the Court made in the principal reasons.
40	The defendant has acknowledged that the calculation of interest in respect of the Second Loan Agreement is appropriate. I am also satisfied that the same methodology should be adopted in respect of the First Loan Agreement. I therefore accept the accuracy of the interest calculations set out in ‘Alternative 1’ attached to the plaintiff’s first submissions dated 3 July 2024. The amount of interest payable is amended to include interest from 3 July 2024 to 16 July 2024.
41	The plaintiff sought an order that interest continue to accrue at the rate of 20 per cent, being draft order number two in her proposed minute. The position, however, is that once judgment is entered, the plaintiff is entitled to recover any interest upon a judgment entered from the date of judgment up until execution in accordance with s73(4) of the County Court Act 1958. Consequently, this proposed order is otiose.
Conclusion
42	For the reasons set out, I make the following orders:
1.	There be judgment for the plaintiff against the defendant on the plaintiff’s claim in the sum of $291,231.16, made up as follows:
	(a)	in respect of a loan agreement between the parties dated 1 June 2016:
			(i)	$112,648.21 in principal; and
			(ii)	interest in the sum of $181,402.79,
			calculated to 16 July 2024;
	(b)	in respect of a loan agreement between the parties dated 11 June 2016:
			(i)	$25,000 in principal; and
			(ii)	interest in the sum of $40,321.92,
			calculated to 16 July 2024; and
	(c)		less the sum of $68,141.76, being the defendant’s entitlement to an offset.
2. 	It is declared that the defendant has charged his legal and beneficial interest in his assets, including his shares in CMS Vic Pty Ltd and his units in the CMS Unit Trust, as security for amounts owing by the defendant to the plaintiff in respect of the loan agreements referred to in paragraph 1 of this order.
3.	The plaintiff deliver up to the defendant to be collected from the plaintiff’s property situated at 25 Ashmore Road, Torquay, the following machinery:
(a)	E27 Fordson Major Tractor;
(b)	1926 Lister Mobile Sharing Plant Motor Engine,
(collectively “the machinery”).
4. 	For the purposes of order 3, by 4.00pm on 24 July 2024, the plaintiff will propose in writing to the defendant’s solicitors three dates/times on which the machinery will be available for collection from the property from which the defendant will nominate in writing to the plaintiff’s solicitors the date/time for collection, which nomination in writing shall be at least seven days before the nominated date.
5. 	The defendant’s counterclaim is otherwise dismissed.
6.	The defendant pay the plaintiff’s costs of and incidental to the claim and counterclaim on the standard basis to be taxed in default of agreement.
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Certificate
I certify that these 10 pages are a true copy of the ruling of Her Honour Judge A Ryan delivered on 16 July 2024.

Dated: 16 July 2024
Associate to Her Honour Judge A Ryan