IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION	Revised
Not Restricted
Suitable for Publication	
Expedited List
Case No. CI-18-00509

THEODORE KASSINIDIS	Plaintiff	
		
V		
		
MARYSVILLE INVESTMENTS PTY LTD (ACN 165 573 875)

AND

GEORGE BYRON PETSELIS	First Defendant

Second Defendant	

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JUDGE:	HER HONOUR JUDGE A RYAN 	
WHERE HELD:	Melbourne	
DATE OF HEARING:	On the papers	
DATE OF JUDGMENT:	23 June 2020	
CASE MAY BE CITED AS:	Kassinidis v Marysville Investments Pty Ltd & Anor	
MEDIUM NEUTRAL CITATION:	[2020] VCC 868		

REASONS FOR RULING
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Subject:	PRACTICE AND PROCEDURE – Review of a decision by a judicial registrar

Catchwords:	COSTS – defendants’ application to review a costs order made by a judicial registrar – defendants ordered to pay the plaintiff’s costs of an adjourned trial on an indemnity basis – whether the defendants should pay the plaintiff a fixed sum now as part of the costs payable on an indemnity basis.

Legislation Cited:	County Court Civil Procedure Rules 2018 (Vic), Rule 84.03; Civil Procedure Act 2010 (Vic); Transfer of Land Act 1958 (Vic)

Cases Cited:	          Hewitt v Count Financial Limited [2017] VSCA 354

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	Ms K Moorhouse Perks	Katherine Moorhouse Perks	
			
For the Defendants	Mr T L Bevan	Tony Hargreaves & Partners	

HER HONOUR:

1	This is an application for review of a decision of a judicial registrar under Rule 84.03 of the County Court Civil Procedure Rules 2018 (Vic) (“the Rules”).
2	On 12 March 2020, Judicial Registrar Burchell made various orders in this proceeding and in a related proceeding, Barrese v Marysville Investments Pty Ltd, CI‑18‑04898 (“the Barrese proceeding”). A previous order has been made that the two proceedings be heard together.
3	Both proceedings were listed for trial on 16 March 2020.  The defendants applied to vacate the trial date at a directions hearing held on 12 March 2020. The plaintiffs in each proceeding opposed the application. The application to vacate the trial was granted by the judicial registrar.  
4	The proceedings have a lamentable procedural history in that the hearing date on 16 March 2020 was the fifth date upon which the two proceedings had been listed for trial. The history of the matter was referred to in “Other Matters” of the Order made on 12 March 2020. In particular, the Court reiterated there should not be another adjournment at the request of the defendants without serious cause, and the defendants had been given one last chance. 
5	A number of procedural orders consequent upon the adjournment were made by the judicial registrar. The proceedings are now listed for hearing on 29 June 2020.  The orders which the registrar made in respect of costs were as follows:
“6.	The defendants pay the plaintiff’s costs thrown away of and incidental to the adjournment of the trial fixed for 16 March 2020, on an indemnity basis.
 7.	By no later than 4.00pm on 26 March 2020:
(a)	the defendants pay the solicitors for the plaintiff in Proceeding CI‑18‑00509 the sum of $8,800 towards the costs payable under paragraph 6 above.  Such payment is to be made to the plaintiff’s solicitors by bank cheque or other cleared funds to be received by them at or before the time and date stated;
(b)	the defendants pay the solicitor for the plaintiff in CI‑18‑04898 the sum of $16,200 towards the costs payable under paragraph 6 above, such payment is to be made to the plaintiff’s solicitors by bank cheque or other cleared funds to be received by them at or before the time and date stated; and
(c)	the defendants must file and serve an amended defence and any counterclaim.”
6	Paragraph 8 of the orders made on 12 March 2020 stated that the orders set out above in paragraph 7 were self-executing orders.
7	A notice of review was filed on 25 March 2020 by the defendants.  The review is confined to the costs orders made, being Orders 6 and 7.
8	On 26 March 2020, his Honour Judge Woodward made an order which provided that the time by which the defendants must comply with Order 7 of the orders of 12 March 2020, be stayed until the review application was determined or further order. 
9	The defendants seek the following orders consequent upon the review, namely:
(1)	the defendants pay the sum of $8,800 into Court by 4pm on 26 March 2020;
(2)	the plaintiff’s indemnity costs be assessed for taxation;
(3)	following taxation, costs as assessed be payable to the plaintiff, with the balance, if any, to be remitted to the defendants;
(4)	the defendants file and serve any amended defence or counterclaim by 4.00pm on 9 April 2020.
10	In the Barrese proceeding, a notice of review was filed in identical terms, save that the amount of the costs referred to in Order 1 was $16,200.
Applicable principles in respect of review, 
11	Under Rule 84.03(5), the review of a judicial registrar’s decision is conducted by way of hearing de novo.  The Court considers the matters afresh, rather than examining the decision to determine if an error was made.
12	In conducting a review under Rule 84.03(6), a judge may:
(a)	exercise all the powers and discretions of the Court with respect to the subject matter of the review; and
(b)	confirm, set aside or vary the order of the Court constituted by the judicial registrar, or make such further or other orders as may be necessary or as the case requires.
13	The submissions relied upon by the parties in respect to the application for review are the defendants’ submissions dated 2 April 2020, the plaintiff’s submissions dated 9 April 2020, and the defendants’ reply submissions dated 16 April 2020.
14	In the hearing before the judicial registrar, the defendants relied upon an affidavit of George Petselis dated 12 March 2020 in support of their application for an adjournment of the trial. The plaintiff’s solicitor filed a written submission opposing that course. The parties made oral submissions to the judicial registrar at the directions hearing, following which the registrar provided a comprehensive oral ruling.
15	Pursuant to Rule 84.03(7)(b), additional materials can be produced upon a review if leave is sought of the Court.  The plaintiff wishes to rely upon an affidavit sworn by his solicitor, Ms Moorhouse-Perks on 9 April 2020.  Exhibited to the affidavit at “KMP-A” are copies of various documents that the plaintiff’s solicitor considered to be relevant to the exercise of the discretion before the judicial registrar on 12 March 2020.  The exhibit includes various emails and affidavits in respect of earlier applications, together with the transcript of the hearing before the judicial registrar on 12 March 2020. The plaintiff seeks to rely on p162-192 of the exhibits in Ms Moorhouse Perks’ affidavit sworn 9 April 2020.  This material was not before the judicial registrar. It is a historical company search of Byron and Thompson Legal and a personal name search of the solicitor, Ben Skinner.  The relevance of this material is set out in paragraphs 4-7 of the plaintiff’s submission dated 9 April 2020.
16	The defendants filed and served an affidavit of George Byron Petselis, the second defendant, affirmed on 7 April 2020.  His affidavit refers to some earlier costs orders which were made and subsequently taxed.  In this proceeding, the second defendant paid the plaintiff’s taxed costs ordered to be paid on 30 September 2019 in the sum of $8,770 on 24 March 2020.  In the Barrese proceeding, the costs ordered on 30 September 2019 have been referred to the Costs Court for taxation.  The Costs Court registrar has indicated that a preliminary estimate of $10,950 would be payable. The Costs Court required the plaintiff to file and serve an undertaking as to disbursements or to provide proof that counsel’s fees had been paid and file an affidavit of service deposing to the service of copy of the above-mentioned costs estimate before making a final order. These costs have not yet been paid. 
17	Mr Petselis deposes that he has not been provided with a copy of the undertaking or proof of payment and believes that no such undertaking has yet been filed with the Costs Court.  He refers to the statement made by counsel for the plaintiff at the hearing before the judicial registrar on 12 March 2020 as to whether or not the previous costs orders had been paid, and to which counsel for the plaintiff said words to the effect of a simple no, without providing any of the current particulars of the current status of the taxations.  But be that as it may, as at 12 March 2020, the earlier costs orders had not in fact been paid by the defendants.
18	The plaintiff refers to Mr Petselis’s affidavit and notes that the costs orders which went to taxation were ordered on a standard basis unlike the indemnity costs order made on 12 March 2020.  
19	Ms Moorhouse-Perks sought leave to rely upon the additional company searches which are referred to in her affidavit.  No objection has been made to that course. In the circumstances, I will grant leave to both the plaintiff and the defendants to rely upon the further material which they seek to adduce in this review. 
Background
20	This proceeding concerns a claim by Mr Kassinidis for the alleged wrongful sale of 74 Talintyre Road, Sunshine (“the property”) by the first defendant. The second defendant, Mr Petselis is a director of the first defendant. It is claimed that the first defendant failed to provide a notice as required under s76(1) of the Transfer of Land Act 1958 (Vic) (“TLA”), being a condition precedent to the power of sale by the first defendant as second mortgagee. Mr Kassinidis seeks to recover the net balance of the sale proceeds of $302,700, which he alleges was wrongfully retained by one or other of the defendants.
21	In the Barrese proceeding, CI‑18‑04898, Mr Barrese claims an interest as a chargee over the property to the surplus amount of $307,717.90 received after the sale by the defendants. He alleges the first defendant has breached its various obligations, including a statutory breach under s77 of the TLA. Mr Barrese alleges that the first defendant is liable to account to him for the surplus funds. The claims made against the second defendant include a knowing receipt claim of trust funds and unjust enrichment.
22	The defendants dispute the claims made against them in each proceeding. They have pleaded in their defence that any surplus has been since dissipated in its entirety and therefore they are not capable of paying the disputed amount into Court.
23	The proceeding has a protracted and difficult history.  On 11 March 2020, the defendants engaged their fourth set of solicitors, being the solicitors now on the record for the defendants.  The illness of the former solicitor who had the carriage of the proceedings was not first disclosed until the day of the directions hearing on 12 March 2020. His ill health was relied upon as the reason why various steps had not been undertaken in breach of orders made on 30 September 2019. It was not explained in Mr Petselis’s affidavit dated 12 March 2020 why he himself had not explored these matters with his solicitor well before the scheduled trial date. 
24	This was not the first occasion upon which the defendants had changed their solicitors at the last minute.  So much so that in her order of 30 September 2019, her Honour Judge Marks noted in other matters that the adjournment application by the defendants, “was made late and in circumstances where it seems nothing has been done by them since the adjournment of 20 June 2019”.  Her Honour also noted in other matters that the trial was not to be adjourned again in like circumstances, “without serious cause”.  
25	The defendants contend in their written submissions that the gross sums chosen by the judicial registrar were manifestly excessive and would exceed what the plaintiff would be entitled to on a taxation.  It is said that on previous occasions, the plaintiff has sought costs which well exceeded what they were able to justify in taxation.  Although as the plaintiff points out, the costs reduced mentioned in Mr Petselis’s affidavit were taxed on a standard basis whereas the costs sought here are on indemnity basis. The defendants argue the costs should be taxed in the usual way in default of any agreement.  The defendants do, however, offer security over any taxation assessments by way of a payment into Court with the balance (if any) to be remitted to the defendants.
26	The plaintiff submits that the registrar’s reasoning was sound and it is relevant that the defendants’ lawyers took no issue with the alleged prejudice to their clients being required to go to trial without a special costs order being made and self-executing orders.  Orders were made appropriately on an indemnity basis.  The quantum for the payment towards such costs was made through inquiry by the judicial registrar as to the amounts charged by each of the solicitors for the respective plaintiffs and counsel appearing.  No objection to quantum or the method of its determination was taken by counsel for the defendants.  The defendants, through their counsel, in fact conceded that such orders were appropriate.
27	These submissions are mainly directed towards the issue of whether the judicial registrar made an error. This is not a consideration in an application of this sort where the hearing is a de novo one based on the evidence before the judicial registrar and any further evidence permitted upon the hearing of the review.
Consideration
28	The defendants were seeking the indulgence of the Court, namely, the vacation of the trial date and they recognised that cost penalties should be ordered against them if an adjournment was ordered.  It was accepted by counsel that any such order should be made on an indemnity basis.  This order is not challenged upon this review – see paragraph 2 of the orders proposed in the defendants’ notice to review.
29	Given this, then a number of alternatives arise, namely, whether the costs ordered on an indemnity basis by reason of the vacation of the trial should be taxed or such costs should be fixed or a combination of the two.  Such alternatives are open to the Court pursuant to Rule 63A.07. The order made by the judicial registrar was that part of the costs were fixed and such amount was to be paid towards the costs ordered to be paid on an indemnity basis.  Such an order, of course, contemplates that there may be other costs recoverable and that therefore the question of the taxation could still arise. Once an order is made for costs in favour of a party, that party is entitled to taxed costs as of right: r63A.07(1).
30	Dal Pont’s text, Law of Costs, deals with the circumstances which merit an order fixing costs. The main purpose is to avoid the expense of delay and aggravation involved in protracted litigation arising out of taxation or the assessment process.  It may also be appropriate where evidence reveals that the party awarded costs is unlikely, due to the opponent’s financial position, to be able to recover all its taxed costs in due course.  In such a case, the costs would add a further burden, or they could potentially be out of pocket in respect of costs as a result of the litigation. There has been no suggestion that this is a factor that applies here.  
31	A gross sum costs order may be appropriate in cases where a party has wasted court time and resources, failed to properly progress the litigation or comply with Court orders, so as to avoid a further waste of time and money that may prove readily recoverable.
32	At [15.18], the learned author states as follows:
“However especially in family law cases, if the parties cannot agree on a figure for costs where there is a marked difference in estimates, courts are reluctant to impose a figure lest it appear unfair to one party or the other.  Alternatively, to ensure a weak party is not disadvantaged by a gross sum costs order, courts may adopt a careful and conservative approach to fixing the quantum and to this end often apply a discount to the costs claimed (although the extent of any discount may be more confined in the face of an indemnity costs order).” [citations omitted].  
33	Various other well-known principles relating to the fixing of costs are helpfully set out in the written submissions failed on behalf of Mr Barrese at paragraphs 12 to 16 of those submissions. These include that the court is entitled to adopt a broad-brush approach and does not sit as a taxing court when determining a fixed sum. Such an order is not confined to complex cases and may be made where the circumstances warrant its exercise. The fixing of an amount by reference to flat fees charged by legal practitioners is an acceptable method of assessment.
34	Given the egregious conduct of the defendants in causing further delay and preventing the matter from proceeding to trial by switching solicitors on the eve of trial yet again, it is entirely appropriate in my view, that the defendants be ordered to pay a fixed sum by a certain date with a view to providing some compensation to the plaintiff more promptly than would otherwise be the case had the matter proceeded to assessment of taxation in the usual way.  The repeated failures of the defendants to get ready for trial is an inexcusable breach of their overarching obligations under the Civil Procedure Act 2010 (Vic) and deserves the censure of the Court. I am also of the view that an appropriate sum to fix is the two days of fees thrown away in each proceeding, being a day of lost preparation and the day of the aborted hearing. The figures provided to the judicial registrar were not challenged by the defendants. If, in fact, there are any other costs which were thrown away, then those costs can be claimed separately and will be the subject of taxation, if agreement cannot be reached.  I consider this was an appropriate case to make it a fixed costs order, even though accepting that it may not necessarily include all the costs which would be thrown away by reason of the adjournment.  
35	Since the matter was before the judicial registrar, the defendants have now offered to pay the amounts ordered into Court by way of security. Such an offer gives the plaintiffs the protection they deserve for the payment of the adjournment costs thrown away. It also means that if the costs payable end up being less than the fixed sums ordered, then the defendants can be refunded the balance without having to pursue those moneys from the plaintiffs directly. It strikes a balance between the possibility that the fixed sums may be too high with the need to impose a sanction on the defendants in recognition of their persistent failures and dilatory conduct with the hope that such conduct will not be repeated. Accordingly, I will vary order 7 to take into account the willingness of the defendants to provide security for the fixed sum ordered.
36	I will also amend order 6 to record that the costs be payable immediately so that the plaintiffs can go to taxation quickly in the absence of agreement on the costs payable. It may well be that there are other costs thrown away such as court fees, witness expenses and the like in addition to the fees thrown away for the legal practitioners. 
37	I will order that paragraphs 6 and 7 of the Orders made by the judicial registrar on 12 March 2020 be varied and, in their place, the following orders be made:
“6. 	The defendants pay the plaintiff’s costs thrown away of and incidental to the adjournment of the trial fixed for 16 March 2020 on an indemnity basis, to be assessed by the Costs Court in default of agreement and payable immediately.
7.	By no later than 4pm on [    ] June 2020:
(a)	the defendants pay into Court the amount of $8,800 in Proceeding CI-18-00509 as security for the plaintiff’s costs ordered to be paid under Order 6 above.
(b) 	the defendants pay into Court the amount of $16,200 in Proceeding CI-18-04898 as security for the plaintiff’s costs ordered to be paid under Order 6 above.
38	The time limit in Order 8 will also need to be extended and I will hear from the parties before setting a date.
39	The orders have been varied but principally because of the defendants’ offer to provide security for the first time upon the hearing of this review. The quantum of the fixed costs ordered has not been disturbed on review. So, to that extent, it cannot be said that either party has secured a clear “win” such that costs should follow the event. The fair result in my view and subject to hearing from the parties, is that the parties’ costs of the application for review should be costs in the cause. 
40	The defendants filed an amended defence and counterclaim, initially on 15 April 2020, and then refiled a Form 10 notice in respect of the counterclaim on 22 April 2020.  The plaintiff objected to the filing of this document and the parties were asked to submit written submissions on this topic.  Each party provided submissions on 27 April 2020.  The Court agreed that this aspect would be determined as part of the reasons given in dealing with the application for review.
41	The plaintiff contends that the document filed should not have been accepted by the registry in circumstances where order 7 of the orders made on 12 March 2020 was stayed. The plaintiff also argues that the document in its current form is impermissible in that it differs from proposed pleadings for which leave had been granted on an earlier occasion.
42	The defendants submit that the document was properly filed and that they should be permitted to rely upon it.  
43	I consider the plaintiff’s submission is correct in that the pleading should not have been accepted for filing given the stay in effect. So that document should be uplifted from the Court file. But the other issue, namely whether the defendants can file a document in a form different to the earlier versions remains to be resolved. It is not unexpected that with new lawyers, amendments to pleadings may be sought. Providing the proposed pleading is otherwise in an acceptable form and no prejudice is occasioned by reason of the proposed amendment, then ordinarily a party is entitled to amend its pleading. The counterclaim is certainly quite different and seeks to join Mr Barrese as a defendant to the counterclaim but curiously seeks no relief against him.
44	These matters have been listed for a directions hearing on 25 June 2020. The issue of leave relating to the filing of the amended defence and counterclaim can be considered further at this hearing, together with several interlocutory applications which are currently on foot in both proceedings.
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Certificate
I certify that these 12 pages are a true copy of the Reasons for Ruling of Her Honour Judge A Ryan delivered on 23 June 2020.
Dated: 23 June 2020
Associate to Her Honour Judge A Ryan