Conte Mechanical and Electrical Services v Roach - [2005] VSC 353

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4354 of 2003

CONTE MECHANICAL AND ELECTRICAL SERVICES	Plaintiff
v
ROACH AND ANOTHER	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 AUGUST 2005
DATE OF JUDGMENT:	1 SEPTEMBER 2005
CASE MAY BE CITED AS:	CONTE MECHANICAL AND ELECTRICAL SERVICES v ROACH & ANOR
MEDIUM NEUTRAL CITATION:	[2005] VSC 353

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Costs – Commercial matter – Two defendants – Plaintiff to pay costs of both first and second defendants – Possible conflict of interest as between two defendants – 'Calderbank' letter – Costs awarded on a party-party basis.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Cosgrave	Pilley & Associates
For the First Defendant	Mr N. Wallace	McCluskys
For the Second Defendant	Mr N. Pane	Matthew Shaw & Associates

HIS HONOUR:

In this matter each defendant seeks orders for costs including costs on a solicitor/client basis from 9 August 2005.

The plaintiff contends that only one set of costs should be awarded to the defendants on the grounds that it was unnecessary for each defendant to be separately represented. The plaintiff also contests the application for costs on a solicitor/client basis.

The relevant principles with respect to the costs of two defendants were stated by Woodward J in Statham v Shephard[1].

"The principle which I deduce from these authorities, and which I believe I should follow in spite of the two cases earlier cited, is that the court will not normally allow two sets of costs to defendants where there is no possible conflict of interest between them in the presentation of their cases. I would add to this basic proposition three provisoes. In the first place, if a conflict of interest appears possible but unlikely, the defendants should make any necessary inquiries from the plaintiff as to the way in which his case is to be put if this would resolve the possibility of conflict between defendants. (See In re Lyell [1941] V.L.R. 207.)
Secondly, there could be circumstances in which, although the defendants were united in their opposition to the plaintiff, their relationship to each other might be such that they would be acting reasonably in remaining at arm's length during the general course of litigation.
Thirdly, even if defendants are acting reasonably in maintaining separate representation for some time or for some purposes, they may still be deprived of part of their costs if they act unreasonably by duplicating costs on any particular matter or at any particular time."

[1][1974] 23 FLR 244 at 266-7

In the present case it is not true that the defendants had exactly the same interest in the litigation. Nor is it a case where in my view a conflict of interest was unlikely and any differences of interest might have been resolved by agreement before trial with the plaintiff.

First, the representations complained of included statements allegedly made by the defendant Payton in the absence of the defendant Roach at the first…

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: [2005] VSC 353
Decision Date: 1 September 2005

CaseChat Overview and Summary

In the matter of Conte Mechanical and Electrical Services v Roach, the Federal Circuit and Family Court of Australia was tasked with adjudicating a dispute between the plaintiff, Conte Mechanical and Electrical Services, and the two defendants, Roach and another party. The plaintiff sought recovery of costs associated with legal proceedings against both defendants. The defendants had previously settled with the plaintiff, leading to a dispute over the allocation and quantum of costs.

The central legal issue before the court was whether the plaintiff could be required to bear the costs of both defendants' legal proceedings. This issue raised concerns about potential conflicts of interest between the two defendants, as well as the appropriateness of the plaintiff bearing the costs of a settlement made by one defendant. The court had to consider the implications of a 'Calderbank' letter, which had been offered by one of the defendants, in determining the appropriate allocation of costs.

The court found that there was a genuine conflict of interest between the two defendants, which justified the plaintiff's refusal to bear the costs of both. It was determined that the costs should be awarded on a party-party basis, rather than on the usual indemnity basis. The court concluded that the plaintiff was not obligated to pay the costs of the second defendant's legal proceedings, as this would have placed the plaintiff in an unfair position. The court awarded costs to the plaintiff on a party-party basis, considering the Calderbank letter and the circumstances of the case.

The final orders of the court were that the plaintiff, Conte Mechanical and Electrical Services, was not required to pay the costs of the second defendant's legal proceedings. Instead, the plaintiff was to bear its own costs, and the first defendant was to bear the costs of the second defendant. This decision reflected the court's consideration of the conflict of interest between the defendants and the appropriate allocation of costs in the circumstances.

Orders