Braham v Stephan (No 2) - [2015] VSC 194

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2015 00456

MICHAEL STANLEY BRAHAM and CHARIS QUINCEY BRAHAM	Plaintiffs
v
ANTHONY STEPHAN	First Defendant
and
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	Written submissions filed 23 and 30 March 2015
DATE OF JUDGMENT:	8 May 2015
CASE MAY BE CITED AS:	Braham v Stephan & Anor (No 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 194

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DAMAGES – Breach of lease – Whether legal costs caused by breach – Whether damages for loss of reputation and/or distress recoverable – Baltic Shipping Company v Dillon (1993) 176 CLR 344.

COSTS – Plaintiffs achieved partial success in respect of unparticularised claim only – First defendant successful in respect of the primary issues in the proceeding – Whether plaintiffs should pay a proportion of the first defendant’s costs – Chen v Chan [2009] VSCA 233.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J D McKay	Hub Property Specialists
For the First Defendant	Mr J L-M Leung	Aitken Partners
No appearance by the Second Defendant, Registrar of Titles

HIS HONOUR:

On 13 March 2015 the Court published reasons for judgment in this proceeding (the ‘principal reasons’).[1] These reasons for judgment concern damages and costs. They assume familiarity with the principal reasons and adopt the same terminology.
[1]Braham v Stephan & Anor [2015] VSC 87.

In the principal reasons, the Court answered all questions posed for determination in the negative, and refused to grant any of the specific relief sought by the plaintiffs in their originating motion. The Court determined, however, that the plaintiffs had established a breach of the Lease by Mr Stephan and an entitlement to damages in respect of that breach. In order to further the overarching purpose in the Civil Procedure Act 2010, particularly to contain the costs of this unfortunate dispute, the Court directed that issues of damages and costs be determined on written submissions without further appearance by the parties.

What amount of damages should be awarded to the plaintiffs?

The plaintiffs contend that they have suffered three categories of loss by reason of Mr Stephan’s breach of the Lease.

First, the first plaintiff, Mr Braham, claims the costs awarded against him by the Magistrates’ Court, in the sum of $223.30. I am satisfied that this adverse costs order was caused by Mr Stephan’s breach of the Lease, and will include $223.30 in the plaintiffs’ damages award.

Second, the plaintiffs claim their legal costs arising from Mr Stephan’s breach of the Lease which pre-date the commencement of the proceeding and, as such, do not form part of their costs of the proceeding. The claimed costs fall into three categories:

(1) $1,631.20 in respect of the costs of their previous solicitors. These costs relate to the period commencing in November 2011, when the Building Notice was issued by the Council, and ending in March 2013, while the Council was still considering…

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: [2015] VSC 194
Decision Date: 8 May 2015

CaseChat Overview and Summary

The parties in this case were Braham, the first plaintiff, and Stephan, the first defendant, with the second defendant also being a party to the proceedings. The dispute centred on a breach of lease, with the plaintiffs seeking damages for legal costs incurred due to the breach, as well as damages for loss of reputation and/or distress. The matter was heard in the Supreme Court of Victoria.

The primary legal issues before the court were whether the plaintiffs were entitled to recover legal costs that arose from the breach of lease, and whether damages for loss of reputation and/or distress were recoverable. In addressing these issues, the court referred to the principles established in Baltic Shipping Company v Dillon. The plaintiffs argued that the first defendant's breach of lease caused them to incur legal costs, and that these costs were recoverable as damages. The court had to determine whether these costs were a direct consequence of the breach and whether they were reasonably foreseeable.

In delivering the judgment, the court held that the plaintiffs were not entitled to recover legal costs caused by the breach of lease. The court found that these costs were not a direct consequence of the breach and were not reasonably foreseeable. Additionally, the court held that damages for loss of reputation and/or distress were not recoverable in this case. The plaintiffs had only achieved partial success in respect of an unparticularised claim, and the first defendant was successful in respect of the primary issues in the proceeding. The court further found that the plaintiffs should pay a proportion of the first defendant’s costs, in accordance with the principles established in Chen v Chan.

The final orders of the court were that the plaintiffs were not entitled to recover the legal costs they sought, nor were they entitled to damages for loss of reputation and/or distress. The plaintiffs were also ordered to pay a proportion of the first defendant’s costs, reflecting their partial success in the proceedings.

Orders