At the first directions hearing in this matter, on 15 April 2013, the Tribunal ordered ("the April 2013 Order") the Respondents to file and serve various documents. Paragraphs 1 to 4 of the April 2013 Order required the Respondents to file and serve a Statement of Account, particulars of agreements concerning the Respondents' receipt and expenditure of money, and an Affidavit of Documents by 6 May 2013.
[4]
By 4 June 2013 the Respondents had retained Argus Lawyers. The First Respondent swore an affidavit on 4 June 2013 in support of the application for an extension of time, and at a directions hearing on that date they obtained an extension of time within which to comply with paragraphs 1 and 2 of the order of 15 April 2013.[1] No extension was granted in respect of paragraphs 3 and 4 of the April 2013 Order.
[5]
On 15 August 2013, the Applicant, via her legal practitioner John Di Santo, applied for orders under section 78 of the VCAT Act on the basis that the Respondents had not complied with the April 2013 Order. That application was first heard on 18 December 2013.
[6]
On 18 December 2013 the First Respondent, apparently on behalf of himself and the Second, Fourth and Fifth Respondents, emailed a collection of documents to the Tribunal and the Tribunal adjourned the section 78 application to a date to be fixed.
[7]
The section 78 application was further heard on 7 March 2014, on which date the Tribunal ordered the Applicant to file and serve, by 7 April 2014, an affidavit identifying each alleged breach by the Respondents of the April 2013 Order, and granted the Respondents until 28 April 2014 to file and serve an affidavit in reply. Paragraph 4 of the Order directed that there be a further hearing after 5 May 2014, with an estimated duration of 3 hours, at which time the Applicant could make an application for further discovery. Significantly, though, the Order did not dispose of the section 78 application and it was clear that on the return of the matter, which took place today, the section 78 application would be heard.
[8]
The Applicant filed and served an affidavit on 10 April 2014. This was days after 7 April 2014 but the Tribunal is empowered to extend time limits and it could be expected to do so in this case. No opposing party could take the view that such a slight delay excused it from responding, or from complying with Orders of the Tribunal.
[9]
By email dated 14 April 2014 the First Respondent acknowledged receipt of the Applicant's affidavit. It is clear in these circumstances that the First, Second, Fourth and Fifth Respondents were not prejudiced by the slightly late service of the Applicant's affidavit.
[10]
The First, Second, Fourth and Fifth Respondents did not file or serve an affidavit under paragraph 3 of the Order made 7 March 2014. Accordingly, they do not deny the contents of the Affidavit of the Applicant sworn 10 April 2014.
[11]
The Respondents did not appear at the hearing today. I make clear, though, that the Orders made today were not made on the basis of the Respondents' non-appearance. They were made on the basis of the history of the proceeding as evidenced by the Tribunal's file, including the affidavit of the Applicant sworn 10 April 2014 and noting that the Respondents had not replied to that Affidavit. I accept the evidence of the Applicant, given in her affidavit sworn 10 April 2014.
[12]
I find that the First, Second, Fourth and Fifth Respondents have conducted and are continuing to conduct this proceeding in a way that unnecessarily disadvantages the Applicant, by their failure to comply with paragraphs 1, 2, 3, and 4 of the April 2013 Order.
[13]
I find that the First, Second, Fourth and Fifth Respondents have done so without reasonable excuse. The absence of any affidavit in reply to the Applicant's affidavit and the complete absence of the documents required by paragraphs 1 to 4 of the April 2013 Order compels me to reach that conclusion.
[14]
The Tribunal notes that the First, Second, Fourth and Fifth Respondents acknowledged receipt of the Affidavit of the Applicant sworn 10 April 2014.
[15]
As to the Third Respondent, despite it having engaged Argus Lawyers between June and December 2013, it has also failed to comply with paragraphs 1 to 4 of the April 2013 Order or to file an affidavit in reply to the Applicant's affidavit. As a result I find that the Third Respondent has conducted and is continuing to conduct this proceeding in a way that unnecessarily disadvantages the Applicant, by its failure to comply with paragraphs 1, 2, 3, and 4 of the April 2013 Order, without reasonable excuse.
[16]
Under section 78(1)(a) of the VCAT Act, section 78 applies in these circumstances.
[17]
Where section 78 applies, sub-section 78(2)(b)(i) empower the Tribunal to determine the proceeding in favour of the Applicant and to make any appropriate orders, and sub-section 78(2)(c) empowers the Tribunal to make an order for costs under section 109 of the VCAT Act.
[18]
The Applicant applied for orders that the proceeding be determined in her favour on the issue of liability against all Respondents, and that the issue of quantum be determined at a later hearing, and that all Respondents pay the Applicant's costs.
[19]
I am satisfied that it is appropriate to determine the proceeding in favour of the Applicant on the issue of liability against all Respondents. The Respondents' failure to comply with paragraphs 1, 2, 3, and 4 of the April 2013 Order is inexcusable. The extraordinary delay to which the Applicant has been put has undoubtedly unnecessarily disadvantaged her.
[20]
The Applicant was not in a position to give evidence on the issue of quantum today, and it is appropriate to list a separate hearing on the issue of quantum.
[21]
On the question of costs, sub-sections 109(2) and (3) of the VCAT Act empower the Tribunal, at any time, to order a party to pay all or a specified part of the costs of another party only if satisfied that it is fair to do so, having regard to certain criteria. Those criteria include whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as failing to comply with an order or direction of the Tribunal without reasonable excuse[2] which mirrors sub-section 78(1)(a) of the VCAT Act. I have found that this criterion is satisfied.
[22]
Another criterion is whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding.[3] In this case the Respondents have in effect been in breach of the April 2013 Order for over 12 months, and there is no doubt that they have prolonged unreasonably the time taken to complete the proceeding.
[23]
Further, other relevant criteria are the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;[4] and the nature and complexity of the proceeding.[5] I am satisfied that both of these criteria have been satisfied: the claim asserted by the Applicant is that the Respondents have engaged in misleading and deceptive conduct in trade in commerce and in breach of contracts arrangements and understandings with the result that the Applicant has been deprived of over one million dollars. The web of companies utilised by the First Respondent in this conduct created the sort of complexity which necessitated the Applicant engaging legal practitioners.
In these circumstances, I am satisfied that it is fair to order the Respondents to pay the Applicant's costs of the proceeding to date. The costs should be assessed on a party/party basis under the County Court Scale.
[24]
The Applicant's costs of and incidental to the anticipated hearing on quantum are reserved.
[25]
[1] I note in passing that on 17 December 2013 Argus Lawyers withdrew as legal practitioners for all Respondents and that in his Affidavit sworn 4 June 2013 the First Respondent deposed that he had no involvement with the Third Respondent. I am unable to reconcile that statement with Argus Lawyers having acted for all Respondents.
Parties
Applicant/Plaintiff:
Beck
Respondent/Defendant:
Skouras
Cases Cited (1)
Beck v Skouras (Civil Claims) [2014] VCAT 639 (23 May 2014)