Coralie Ann Corlett as Executor of the Will of Ferenc Kocsis v Field - [2018] WASC 243

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS -v- FIELD [2018] WASC 243
CORAM:   LE MIERE J
HEARD:   15-18 JANUARY 2018
DELIVERED          :   17 AUGUST 2018
FILE NO/S:   CIV 1585 of 2015
BETWEEN:   CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS
First Plaintiff
CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS who was the Executor of the Will of ELSIE KOCSIS
Second Plaintiff
AND
RAYMOND FIELD
First Defendant
ALLEN FIELD
Second Defendant
MARIA CARMEN FIELD
Third Defendant

Catchwords:

Property law - Application for order for sale under s 126 of the Property Law Act 1969 (WA)

Property law - Adverse possession - Whether property was adversely possessed

Property law - Whether joint tenants or tenants in common

Contract law - Repudiation - Whether refusal to carry out term of contract was repudiation - Whether performing party was entitled to termination

Legislation:

Property Law Act 1969 (WA), s 126

Result:

Sale of land directed under s 126(1) Property Law Act 1969 (WA)
Net proceeds to be paid to parties pro rata in accordance with the extent of their registered interest in the property

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr D P H Engelter
Second Plaintiff	:	Mr D P H Engelter
First Defendant	:	In person
Second Defendant	:	In person
Third Defendant	:	In person

Solicitors:

First Plaintiff	:	Williams & Hughes
Second Plaintiff	:	Williams & Hughes
First Defendant	:	In person
Second Defendant	:	In person
Third Defendant	:	In person

Case(s) referred to in decision(s):

Carr v JA Berriman Pty Ltd (1953) 89 CLR 327
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
Warren v Lawton [No 3] [2016] WASC 285

LE MIERE J:

Summary

The plaintiff, Ms Corlett, is the daughter of Elsie Kocsis who died in 2010 and the step‑daughter of Ferenc Kocsis who died in 2013. Ms Corlett as executor of the will of Ferenc Kocsis and executor by representation of the will of Elsie Kocsis is the registered proprietor as tenant in common of two undivided quarter shares of the land situated at 307 Chapman Valley Road, Waggrakine (the Property). The first and second defendants, Raymond Field and Allen Field, who I will refer to as Raymond and Allen, are brothers. The third defendant, Maria Field (Maria), is the wife of Allen. The defendants collectively (the Fields) are the registered proprietors of the other two undivided quarter shares of the Property.
The plaintiffs seek an order under s 126 of the Property Law Act 1969 (WA) that the Property be sold and the proceeds be distributed between the parties. Section 126(1) provides that where a party or parties interested, individually or collectively, to the extent of a half share or upwards in land request the court to direct a sale of the land and a distribution of the proceeds, instead of a division of the land between or among the parties interested, the court shall, unless it sees good reason to the contrary, direct a sale accordingly.
Two instruments are of central importance. The first is a contract for sale of land by offer and acceptance by which Mr Kocsis offered to sell and Raymond, Allen and Maria offered to purchase a portion of the Property (the original contract). The second is a deed between Ferenc Kocsis and Raymond, Allen and Maria by which they agreed that the original contract be of no further force and effect and Mr Kocsis sell to Raymond, Allen and Maria a one undivided half share in the Property, and further agreed that the Property be partitioned upon the terms and conditions of the deed.
By the original contract signed on 6 September 1994 Mr Kocsis, as registered proprietor, sold to the defendants a portion, being 3.224 ha, of the Property. Settlement of the contract was not completed. By the deed signed on 25 August 1995 Mr Kocsis and the defendants agreed that the original contract was cancelled, Mr Kocsis sold to each of Allen and Maria one undivided quarter share and to Raymond two undivided quarter shares as tenants in common in the Property and that the payments made by the defendants to Mr Kocsis under the original contract be applied to the purchase price under the deed. The deed further provided that the parties would partition the Property so that Mr Kocsis would obtain ownership of land being 1.1947 ha and the defendants collectively would obtain ownership of land being 3.224 ha. The portions which Mr Kocsis and the defendants would obtain were defined on a sketch attached to the deed (the Sketch).
Mr Kocsis and the Fields executed a transfer by which Mr Kocsis transferred the Property to himself and the Fields in the shares stated in the deed. Mr and Mrs Kocis and the Fields executed a second transfer by which Mr Kocsis and the Fields transferred the Property to Mr and Mrs Kocsis and the Fields in the shares: Mr Kocsis ‑ 2/8 share, Mrs Kocsis ‑ 2/8 share, Raymond ‑ 2/8 share, Allen ‑ 1/8 share and Maria ‑ 1/8 share. As a result of the transfers Mr and Mrs Kocsis were each registered as the proprietor of a 2/8 share of the Property, Raymond was registered as the proprietor of a 2/8 share of the Property and Allen and Maria were each registered as the proprietor of a 1/8 share of the Property. The Property has never been partitioned.
The plaintiffs seek an order for sale on the grounds that they are interested to the extent of a half share in the Property and there is no good reason for directing a division of the Property instead of a sale.
The defendants resist the order for sale sought by the plaintiff on a number of grounds. First, the defendants say that the plaintiffs and the defendants each own a defined portion of the Property. The defendants say that their portion, being 3.224 ha, and the plaintiff's portion, being 1.1947 ha, are defined on the Sketch. The defendants' contention is that the deed adduced in evidence by the plaintiffs was not the deed executed by them. They say that someone fraudulently substituted pages in the deed for the pages in the deed executed by them. The defendants say that the deed executed by them provided that they were to purchase a portion, being 3.224 ha of the Property. Secondly, the defendants plead that the land, being their portion of 3.224 ha of the Property, is owned by them in adverse possession. Thirdly, the defendants referred to the Property having been held by Mr and Mrs Kocsis and the defendants as joint tenants and hence the defendants succeeded to Mr and Mrs Kocsis' interest in the property by survivorship.
For the reasons which follow I find as follows. Mr Kocsis and the Fields executed the deed as asserted by the plaintiffs. Exhibits 106 and 5 are each copies of the executed deed. Pursuant to the deed Mr Kocsis sold and the defendants purchased a one half undivided share in the Property. The defendants are not entitled to possession of their claimed portion of the Property by adverse possession. Mr and Mrs Kocsis and the Fields were proprietors of the Property as tenants in common not as joint tenants. The plaintiffs are interested to the extent of a half share in the Property. There is no good reason to direct the division of the Property instead of its sale. The court will direct a sale of the Property and the distribution of half of the proceeds to the plaintiff, one quarter of the proceeds to Raymond and one‑eighth of the proceeds to each of Allen and Maria. Ian Charles Francis will be appointed as trustee for sale of the Property. There will be consequential orders in relation to the sale of the Property

Evidence adduced by plaintiffs

Ms Corlett gave evidence in support of the plaintiff's case and was cross‑examined by Allen. I find her to have been a truthful and reliable witness. I accept her evidence.
The plaintiffs adduced evidence from Mr Brad Collard, a director of Hille Thompson & Delfos (HTD) who provided surveying and town planning services to Mr Kocsis in relation to the proposed subdivision of the Property. Mr Collard was cross‑examined. I accept his evidence.
The plaintiffs adduced evidence from Mr Peter Rock, a retired lawyer who was the senior partner of Altorfer & Stow. Mr Rock gave evidence that Mr and Mrs Kocsis and the defendants jointly retained him and gave him instructions in relation to the Property. The defendants claim that Mr Rock acted for Mr Kocsis and not for them. There is a conflict between the evidence of Mr Rock and each of the defendants concerning the instructions they gave to Mr Rock and the communications and dealings between them. Mr Rock says that the deed drafted by him and signed by the parties is the deed adduced in evidence by the plaintiffs. The defendants say that they signed a different deed and someone in Mr Rock's office has substituted pages in the deed adduced in evidence by the plaintiffs for the deed signed by them. I accept Mr Rock's evidence. He gave his evidence with the frankness that one would expect from a solicitor. His evidence is consistent with, and supported by, his notes, his firm's records, correspondence and the inherent probabilities of the matter. I accept his evidence in its totality.

Evidence adduced by defendants

Each of the defendants gave evidence and was cross‑examined. Allen was an unreliable witness. Allen was 83 years old at the time he gave his evidence. He gave evidence by witness statement and was cross‑examined. He had hearing difficulties but he was assisted by the use of a hearing loop at the trial which enabled him to hear and answer the questions put to him. Allen's hearing difficulties did not contribute to any inconsistency in his evidence or his failure to answer questions coherently. Allen exhibited poor episodic memory. He was unable to recollect events ‑ the what, where and when ‑ of even relatively recent significant events. For example, he has little or no recollection of giving instructions to his then solicitors to file the defendants' defence in May 2015 and so little recollection of swearing his affidavit of discovery on 9 July 2015 that he suggested it may not be his signature on the affidavit. Allen exhibited limited ability to recall information in context in a coherent whole. He was unable to present the events leading to and concluding in the execution of the deed in August 1995 in a coherent way. Allen is convinced that he, his wife and brother purchased 3 ha of the Property. He has no memory of giving instructions to Mr Rock to draw an agreement for the original contract to be replaced by an agreement under which the Fields were to receive a one half interest in the Property. Allen has confabulated a narrative that someone fraudulently substituted pages of the deed to fit his deficient memory that the deed, like the original contract, provided for the Fields to acquire a legal entitlement to 3 ha of the land.
Raymond was 81 years old at the time of trial. He also had hearing difficulties but was able to hear and answer questions put to him with the aid of a hearing loop and was not significantly disadvantaged in answering questions in cross‑examination. Raymond is an unreliable witness. He had little recollection of critical events. He denied that the deed adduced in evidence by the plaintiffs was the deed that he signed on 25 August 1995. The basis for his denial is that he 'would not sign one that was half each simple as that'. I do not accept his evidence in relation to the giving of instructions, drafting and execution of the deed.
Maria's statement was in substance the same as that of Raymond. When she was asked if she copied Raymond's statement she responded:
A few of them because, you know, I rely on both of them and they help, you know ‑ and everything that is happening now is ‑ I'm only a wife. They're the one … they handle things.
I am not satisfied that Maria's evidence is a record of what she perceived and recalls. Her evidence is unreliable.

Mr Kocsis and the Fields make the original contract

In 1994 Mr Kocsis was the registered proprietor of the Property. The Property consisted of 4.4187 ha. There was a residence and sheds on the front portion of the Property and a dwelling under construction on the rear portion. An estate agent, Charlie Brooks, introduced the defendants to the Property. The defendants variously claimed that Mr Brooks or Mr Kocsis said to them that the Property was capable of subdivision. By the original contract signed by each of the parties on 6 September 1994 the defendants agreed to purchase and Mr Kocsis agreed to sell part of the Property, being approximately 3 ha of land plus the dwelling for a purchase price of $135,000 of which a deposit of $50,000 was to be paid within 30 days, which was to be used by Mr Kocsis as a progress payment on the dwelling then being constructed on the rear portion of the Property. A further payment of $50,000 was to be made on 30 January 1995 and settlement was to be upon a Diagram of Survey being in order for dealing at the Office of Titles and was to be on or before 1 March 1995. The defendants paid the deposit of $50,000 and the further payment of $50,000 due on 30 January 1995. A Diagram of Survey was not in order for dealing at the Office of Titles before 1 March 1995 or by 25 August 1995.

Mr Kocsis and the Fields make a deed

In July 1995 Mr Kocsis, his wife Elsie Kocsis and the defendants attended upon Mr Peter Rock, the principal of solicitors Altorfer & Stow. Mr Rock gave evidence that Mr and Mrs Kocsis and the defendants jointly retained him and gave him instructions in relation to the Property. The defendants claim that Mr Rock acted for Mr Kocsis and not for them. I accept Mr Rock's evidence that he was retained by Mr and Mrs Kocsis and the defendants. Altorfer & Stow's file records that their clients were Mr and Mrs Kocsis and the defendants. Mr Rock's notes confirm that.
On 5 July 1995 Mr and Mrs Kocsis and each of the defendants met with Mr Rock. Mr Kocsis and the defendants instructed Mr Rock to draft an agreement and a transfer of land to give effect to an agreement they had reached. The agreement was that Mr and Mrs Kocsis were to have a half share as tenants in common, Raymond a quarter share and Allen and Maria together a quarter share, as tenants in common. The agreement was to include a right of first refusal if either party wished to sell and to provide for a subdivision of the Property in accordance with a sketch provided to Mr Rock as soon as it could be approved by the Shire of Greenough. Mr Rock's instructions included instructions written by Mrs Kocsis which stated:
Joint names to be placed on cert [sic] of title until such time as subdivision is approved or in the event of either party wishing to sell, then the other party must have first option.
On 15 or 16 July 1995 Mr Rock prepared a draft agreement. On 17 July 1995 Mr Rock perused and corrected the draft agreement and sent a letter to the defendants enclosing a copy of the agreement he had drafted for their perusal and comment. The draft sent by Mr Rock to the defendants is exhibit 111, which is a document discovered by the defendants. Clause 2 of the draft is that Mr Kocsis shall sell and the Fields shall purchase a one undivided half share in the Property for $135,000 as tenants in common in the shares: Raymond ‑ two undivided fourth shares, Allen ‑ one undivided fourth share and Maria ‑ one undivided fourth share.
Mrs Kocsis wrote to Mr Rock requesting an amendment to the deed. Mr Rock prepared a further draft deed which incorporated the amendment requested by Mrs Kocsis. On 18 August 1995 Allen and Mr and Mrs Kocsis attended upon Mr Rock. They told Mr Rock that they agreed the amendments to the draft. It was arranged that they were to come to the offices of Altorfer & Stow on 25 August to sign the documents. On 22 August Mr Rock caused the settled draft agreement to be engrossed and drafted transfers. On 24 August Mr Rock perused and corrected the draft transfers.
On 25 August 1995 Mr Kocsis and each of the defendants attended the offices of Altorfer & Stow to sign the agreement. Mr Rock was not present. Mr Kocsis and each of the defendants signed the agreement in the presence of, and under the supervision of, Mr Rock's secretary, Margaret Siedel who witnessed the signature of each of the parties to the agreement.
The defendants signed a transfer of land transferring the Property from Mr Kocsis to Mr Kocsis as to four undivided eighth shares, Raymond as to two undivided eighth shares, Allen as to one undivided eighth share and Maria as to one undivided eighth share. The consideration is stated to be pursuant to the terms of an agreement entered into on 25 August 1995 between Mr Kocsis and the defendants. The transfer is dated 25 August 1995 and witnessed by Margaret Siedel, Mr Rock's secretary.
The defendants signed a further transfer of land transferring the Property to Mr Kocsis as to two undivided eighth shares, Mrs Kocsis as to two undivided eighth shares, Raymond as to two undivided eighth shares, Allen as to one undivided eighth share and Maria as to one undivided eighth share. The transfer is dated 25 August 1995 and witnessed by Margaret Siedel.

Kocsis and Fields registered as proprietors

On 12 September 1995 Altorfer & Stow wrote to the State Taxation Department enclosing the deed for assessment of duty. The letter said that the offer and acceptance previously entered into by the parties for sale of portion of the land had not been able to proceed and sought cancellation of the duty assessed on that document and the application of such duty to the duty assessed on the deed. The letter also enclosed a transfer pursuant to the deed and a further transfer the effect of which is for Mr Kocsis to dispose of a one quarter share in the whole of the land to his wife on the basis of tenants in common for natural love and affection.
On 9 November 1995 Mr Kocsis as to two undivided eighth shares, Mrs Kocsis as to two undivided eighth shares, Raymond as to two undivided eighth shares, Allen as to one undivided eighth share and Maria as to one undivided eighth share as tenants in common were registered as the proprietors of the Property.

Deed signed by defendants is deemed adduced in evidence by plaintiffs

The draft deed drafted by Mr Rock with his handwritten corrections of 17 July 1995, a copy of the letter from Altorfer & Stow to the Fields of 17 July 1995 and the enclosed draft deed which is in the terms of Mr Rock's first draft together with his corrections of 17 July were all adduced in evidence. Mr Rock identified exhibit 69 as a final copy of the agreement prepared by him in final form for execution by the parties. Mr Rock identified exhibit 106 as the deed executed by the parties and indorsed with the payment of stamp duty by the Office of State Taxation. Exhibit 5 is a further signed copy of the deed.
The only copy or draft of the deed, produced by the defendants is exhibit 111. That is in the same terms as the draft sent by Mr Rock to the defendants. It provides at cl 2 that 'Kocsis shall sell and the Fields shall purchase a one undivided half share in the land for the price of $135,000 …'. The defendants have offered no explanation for how the drafts which all provide that Kocsis shall sell and the Fields shall purchase a one undivided half share resulted in an executed deed providing for Kocsis to sell and the defendants to purchase 3.224 ha of the Property. The defendants claim that someone in Mr Rock's office substituted pages of the deed produced by the plaintiffs for the pages of the deed executed by them is contrary to the evidence of Mr Rock, inconsistent with the drafts and correspondence and is implausible. I reject their contention. The deed executed by the parties, which I will refer to as the Deed, is the deed which is exhibit 106 and a further copy of which is exhibit 5.

The Deed

The Deed recites the principal terms of the original contract, the payments made by the defendants under the original contract and that the Diagram of Survey was not, on or before 1 March 1995, in order for dealing at the Office of Titles and continues at the date of the Deed to be not in order for dealing, by reason of their proposal for subdivision not being in accordance with the zoning requirements of the Shire of Greenough. The Deed then recites that in the circumstances of the sale and purchase envisaged by the original contract not being capable of settlement, Mr Kocsis and the defendants have agreed for the original contract to be of no further force or effect and in lieu thereof for the sale by Mr Kocsis to the defendants of a one undivided half share of the Property and for the partition of the land upon terms and conditions of the Deed.
Clause 1 of the Deed provides that Mr Kocsis and the defendants agree that the agreement in the Deed shall replace the original contract and there shall be no further claim under the original contract by any of them against the other of them.
Clause 2 provides that Mr Kocsis shall sell and the defendants shall purchase one undivided half share in the Property for $135,000 as tenants in common in the following shares: Raymond two undivided fourth shares, Allen one undivided fourth share and Maria one undivided fourth share.
Clause 3 provides that the purchase price was to be paid by the sum of $100,000 already paid by the defendants to Mr Kocsis under the original contract and the sum of $35,000 was to be paid on or before the date of the agreement which was described as the settlement date.
Clause 4 provides that the parties agreed and acknowledged that possession of the Property had been given and taken on 23 January 1995 which is described as the possession date.
Clauses 6, 7 and 8 comprise an agreement for partition. Clause 6 provides that Mr Kocsis and the defendants agree for the partition of the land into two portions in accordance with the attached sketch (Sketch). The Sketch shows a proposed subdivision of the Property into Lot A and Lot B. Lot A is the front portion abutting Chapman Valley Road with an area of 3.224 ha and includes an existing residence and existing shed. Lot B is the rear portion of 1.1947 ha which includes a dwelling under construction, and access way from Chapman Valley Road. Clause 7 provides that in consideration of the transfer referred to in cl 8 Mr Kocsis transfers and assigns and conveys all his estate and interest in the portion of the land described as Lot A on the Sketch to the defendants to the intent that the defendants shall become the proprietors of that interest as tenants in common in the following shares: Raymond two undivided fourth shares, Allen one undivided fourth share and Maria one undivided fourth share. Clause 8 provides that in consideration of the transfer in cl 7 the defendants transfer, assign and convey all their estate and interest in that portion of the land described as Lot B on the Sketch to the intent that Mr Kocsis shall become the proprietor of that interest. Clause 9 provides that Mr Kocsis and the defendants agree that for the purpose of the partition Lots A and B are of equal value and no sum is to be paid by either party to the other by way of equality on partition. Clause 10 provides that the agreement for partition is conditional upon a Diagram of Subdivision prepared in accordance with the Sketch being in order for dealing at the Office of Titles on or before 1 January 2075, and if such a Diagram does not become so in order the agreement for partition shall be at an end and there shall be no further claim under the agreement by either Mr Kocsis or the defendants.
Clause 11 provides that Mr Kocsis and the defendants covenant with each other that they will sign, execute and do all such documents, deeds and things as shall be required for the purpose of ensuring that the Diagram of Survey shall become in order for dealing at the Office of Titles as soon as possible.
Clause 13 provides that Mr Kocsis and the defendants agree that they have respectively been in possession since 23 January 1995 of Lot B and Lot A respectively and that as from that date all rates and taxes in respect of the Property shall be paid in equal proportions by Mr Kocsis and the defendants.
Clauses 15, 16 and 17 comprise a pre-emption agreement or right of first refusal by which a party wishing to sell their interest must offer that interest to the other parties before disposing of their interest. Clauses 15 and 16 provide that Mr Kocsis and the defendants covenant with each other that they will not sell, assign, mortgage, charge or otherwise dispose of their interest in the Property unless they shall first have offered to sell the same to the other in accordance with the terms of the option contained in the agreement. The option set out in cl 17 provides that the proposed vendor shall make an offer in writing to the proposed purchaser to sell his or their share to the proposed purchaser and such offer shall remain open for acceptance for three months.
Clause 18 provides that the pre‑emption agreement in cls 15, 16 and 17 shall not apply to a disposal by Mr Kocsis of his one undivided half share in the land to himself and his wife Elsie as tenants in common in equal shares.
Clause 19 provides that Mr Kocsis and the defendants agree that the costs of and incidental to the instructions for and the preparation and execution and stamping of the agreement and of all documents, deeds and things prepared and executed and done for the purpose of implementing the terms of the agreement, subject to some specific provisions about stamp duty, shall be paid by Mr Kocsis and the defendants in equal proportions.

Mrs Kocsis dies

Mrs Kocsis died on 2 July 2010. On or about 1 October 2010 probate of the will of Mrs Kocsis was granted to Mr Kocsis. On or about 1 November 2010 Mr Kocsis as executor was registered as a proprietor of the Property in respect of Mrs Kocsis' interest.

Mr Kocsis takes steps for subdivision

As at November 1995 the Property was subject to the City of Geraldton‑Greenough Town Planning Scheme No 4. The scheme did not support a subdivision of the Property into smaller lots. On or about 17 April 2010 the City of Geraldton‑Greenough Local Planning Scheme No 5 (TPS No 5) came into operation. In TPS No 5 the Property was identified as Rural Residential Zone 4 and capable of subdivision in accordance with a structure plan indorsed by the City and the Western Australian Planning Commission (WAPC). On or about 21 December 2010 the City adopted the Waggrakine Rural Residential Structure Plan in which the Property was identified as being within a development investigation area and shown as a proposed two lot subdivision in a battle axe configuration. That is the configuration of the lots on the Sketch. On or about 7 July 2011 the Structure Plan was indorsed by the WAPC.
Between February 2011 and April 2012 the City advised HTD that it would support a subdivision of the Property into two lots incorporating a battle axe lot of at least 1 ha. That is consistent with the subdivision into lots shown on the Sketch.

Kocsis seeks Fields' co-operation for subdivision

On 19 October 2011 Mr Kocsis wrote to Allen advising that he intended to apply for subdivision of the Property and requested Allen's co‑operation. The letter included a copy of a quote from HTD to prepare and lodge a subdivision application and work to render survey documents in order for dealing.
By letter to Mrs Corlett, who was assisting Mr Kocsis, on or about 18 April 2012 HTD provided the parties with a proposed survey plan for a two lot subdivision of the Property in accordance with the Deed and with a WAPC subdivision application form to be signed by the parties and requested payment of the application lodgement fee of $1,603. By letter dated 5 July 2012 HTD provided the defendants with a copy of the survey plan and a copy of the application for signing and requested payment by the defendants of half of the application lodgement fee.
Mr Kocsis signed the application ‑ which is in the form of a WAPC Application for Approval of Freehold or Survey Strata Subdivision. Ms Corlett took a copy to the Fields. Allen and Raymond were there. They looked at the documents and said words to the effect that they did not understand it, did not like HTP and would not pay. Allen said that it was Mr Kocsis' mess and he could pay for it if he wanted to subdivide. Ms Corlett and Mr Kocsis went to see Mr Rock and asked him to write to the Fields asking them to proceed with the subdivision application.
On 21 June 2012 Altorfer & Stow wrote to the defendants stating that Mr Kocsis had advised them that HTD had prepared an application for subdivision in terms of the Deed, that Mr Kocsis had signed the application but the defendants had not yet done so. The letter stated that Mr Kocsis requests that the defendants sign the application and pay their half portion of the fee of HTD.
On 5 July 2012 HTD wrote to Allen. The letter referred to discussions on 18 April when it was decided that the original application for a two lot subdivision was the most viable option to begin the process of separating title. The letter attached a copy of the application plan and the application form and requested that Allen sign the application form and return it together with $801.50, being half of the application fee to the WAPC.
Shortly after 5 July 2012 Ms Corlett received a phone call from Allen. Allen said he had received a letter from HTP asking him to sign the subdivision application and pay half the application cost. Allen said that he could not afford to pay for the subdivision, he had 45 cents in his savings account and Mr Kocsis wanted to subdivide so he must pay for it.
On 9 August 2012 HTD wrote to Ms Corlett stating that they have received no correspondence from Allen in regard to their letter of 5 July 2012.
On 2 October 2012 Williams and Hughes, solicitors for Mr Kocsis wrote to Raymond, Allen and Maria. The letter recited the history of the parties' dealings in relation to the Property, that Mr Kocsis had signed the subdivision application and provided a copy to the Fields but that they have refused to sign the application or to pay half of the application fee. The letter expressed the opinion that there were significant benefits to the Fields in completing the partition and that in any event they were contractually obliged to complete the partition. The letter stated that by continuing to refuse to sign the application and pay half of the application fee the Fields were in breach of their obligations under the Deed. The letter requested that the Fields sign the application and pay their share of the application fee. The letter further stated:
If you do not sign the Application and pay your share of the Application Fee by Friday 19 October 2012, [Mr Kocsis] may have no alternative but to commence legal proceedings against you for breach of contract, and seeking to compel you to take the necessary steps to complete the partition.
Allen delivered to Ms Corlett a letter dated 18 October 2012 which was expressed to be an offer to Mr Kocsis and stated that:
It is the only way this can be satisfactory for you and [Mr Kocsis'] family to each get their share.
The offer was written out on a tax invoice/statement dated 18 October 2012 addressed to Mr Kocsis from Raymond, Allen and Maria. The offer states:
We are offering our three hectares of land and two houses and three sheds.
Two houses $550,000.
Three sheds $32,000
Three hectares land $675,000
Total $1,257,000.
On 1 November 2012 Williams and Hughes wrote to Raymond, Allen and Maria referring to and rejecting their offer of 18 October 2012. The letter stated that Mr Kocsis remained committed to completing the partition required by the Deed, was taking steps to effect it and intended to take whatever steps are necessary to complete the partition.
The Fields engaged Mid West Lawyers to act for them. On 6 November 2012 Mid West Lawyers wrote to Williams and Hughes. The letter requested that Williams and Hughes state the obligations the Fields must comply with under the Deed and asked for details of the obligations which it was claimed they had not complied with.
On 27 November 2012 Williams and Hughes wrote to Mid West Lawyers. The letter referred to the parties' obligations under the Deed to do all things necessary for the Survey Diagram to become in order for dealings including by sharing costs equally. The letter asked whether the Fields intend to assist Mr Kocsis to complete the partition of the Property. Williams and Hughes wrote to Mid West Lawyers again on 7 December 2012. They provided an estimate provided by an electrical contractor to complete necessary works and asked Mid West Lawyers to confirm whether their clients would proceed with the partition as per their obligations contained in the Deed. On 12 December 2012 Mid West Lawyers replied. The letter concluded by stating that it was their client's view that
[U]ntil it is clearly established, firstly what is required to be done to affect [sic] the Partition, secondly the cost in that regard and thirdly who was legally obliged to meet that cost, nothing is required of them.
On 2 February 2013 Allen wrote to Ms Corlett. The letter stated that the Fields:
[I]ntend to make a clean up soon, do a bit of painting etc and then get a valuation done on our 3 hectares and all the buildings, and if agreeable with you people to do the valuation on your end of the property, it can be advertised all over Australia.
Williams and Hughes wrote to Mid West Lawyers on 3 May 2013. The letter stated that the Property is now amenable for subdivision and Mr Kocsis had repeatedly sought the Fields' co‑operation in the subdivision process but the Fields had refused to proceed. The letter concluded by stating that Mr Kocsis had instructed the solicitors to commence proceedings unless the Fields advise by 15 May 2013 that they will promptly co‑operate with subdivision. On 13 May 2013 Raymond, Allen and Maria responded to Williams and Hughes' letter of 3 May 2013. They stated:
It is no use talking subdivision until property is made ready for it.
Mid West Lawyers ceased acting for the Fields. On 17 June 2013 Williams and Hughes wrote to the Fields. Williams and Hughes said that by the Deed, the Fields were contractually bound to co‑operate with Mr Kocsis in the subdivision process and to contribute equally to the cost of doing so, and the only thing holding up subdivision was the Field's lack of co‑operation in the process. On 23 June 2013 Allen, Raymond and Maria wrote to Williams and Hughes stating:
The reason the property has not been subdivided is because Mr Kocsis did not connect the underground power line when he connected his water pipeline underground on his land which is his driveway, 19 years ago when it was agreed upon.

Plaintiffs terminate Deed

Mr Kocsis died on 23 June 2013. Ms Corlett was granted probate of Mr Kocsis' estate on or about 7 August 2013.
On or about 15 November 2013 Williams and Hughes wrote to the Fields on behalf of Mr Kocsis' estate. The letter stated that the Fields have refused to assist in undertaking the steps required to be taken by the parties together such that a Diagram of Survey can become in order for dealings, refused to proceed with the subdivision and refused to share the costs associated with those steps. The letter stated that the Fields' conduct was a breach and repudiation of the Deed which their client accepted and thereby terminated the Deed.

Partition Deed cancelled original contract

It is a term of the Deed that the agreement in the Deed replaced the original contract and that there should be no further claim under the original contract by either of Mr Kocsis or the defendants against the other of them. The original contract was terminated. The interest of Mr Kocsis and the defendants in the Property was determined by the terms of the Deed executed by them.

Plaintiff's own half share of the land

The terms of the Deed are that Mr Kocsis shall sell and the defendants shall purchase one undivided half share in the Property as tenants in common in the shares specified. The Deed further provided in effect that Mr Kocsis may transfer his one undivided half share in the Property to himself and Mrs Kocsis as tenants in common in equal shares. After the Deed was executed, transfers were executed by Mr and Mrs Kocsis and the Fields to give effect to the agreement in the Deed. Mr and Mrs Kocsis were registered as proprietors of one‑undivided half share. On their deaths, Ms Corlett, as the executor of each of their estates, was registered as the proprietor of a one undivided half share in the Property. The plaintiffs are collectively the registered proprietors of one undivided half share in the Property.

Plaintiffs say Deed was terminated

The plaintiffs say that the defendants repudiated the agreement in the Deed, the plaintiffs accepted their repudiation and as a consequence the agreement in the Deed has been terminated. It is necessary to decide whether the Deed has been terminated. The Deed contains an agreement for partition and confers a right of first refusal if a party wishes to sell their interest in the Property. A contractual provision giving a co‑owner a right of first refusal to purchase the interest of another co‑owner does not expressly preclude the other co‑owner from applying under Property Law Act s 126(2) for an order for sale of the land. However, an agreement conferring on one tenant in common a right of pre-emption on the sale of the other co‑owners share impliedly precludes an exercise of a right to apply for and to obtain an order for sale of the land: Warren v Lawton [No 3] [2016] WASC 285 [234].

Termination of contract for breach ‑ legal principles

A party may breach a contract by manifesting unwillingness or inability to perform a contractual obligation. The manifestation may accompany an actual breach when the required performance is not given when due. Alternatively, a manifestation of unwillingness or inability may occur before performance is due. Such a breach is called an anticipatory breach. The innocent party has a right to terminate the contract if the breach, actual or anticipatory, constitutes repudiation.
A breach of a contract by a repudiation occurs when a party evinces an intention to no longer be bound by it, or to fulfil it only in a manner substantially inconsistent with their obligations: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 [44]. Repudiation is also defined as the manifestation of an intention to perform only 'if and when it suits', or 'as and when it suits': Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 (Carr), (351); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 (Laurinda), (634).
An actual intention to repudiate is not necessary; the issue is resolved objectively by reference to the effect it would have on a reasonable person: Laurinda (657 ‑ 658). A party may repudiate a contract while at the same time maintaining a claim under it: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 (Progressive Mailing House) 37. Conduct by a party that indicates an unwillingness to perform may constitute a repudiation: Carr (347 ‑ 348, 350 ‑ 351); Laurinda (636 ‑ 637). Repudiation is a serious matter and is not to be lightly found or inferred: Progressive Mailing House (32), Laurinda (643) and (657). A party may commit an anticipatory breach of contract by manifesting an inability or unwillingness to perform it before performance is due. If the manifestation is of unwillingness or inability to perform the contract at all or in substance it constitutes repudiation. The innocent party may terminate the contract forthwith without waiting until performance is due.

The Deed was terminated

The Deed includes terms by which the parties agreed to partition the land into two portions in accordance with the Sketch. The agreement for partition is conditional upon a Diagram of Subdivision prepared in accordance with the Sketch being in order for dealing at the Office of Titles by 2075. A Diagram of Subdivision prepared in accordance with the Sketch has never been in order for dealing at the Office of Titles. The partition of the Property has never been effected.
The Deed includes a term that Mr Kocsis and the defendants covenant with each other that they will sign, execute and do all such documents, deeds and things that shall be required for the purpose of ensuring that the Diagram of Survey shall become in order for dealing at the Office of Titles as soon as possible. For a Diagram of Survey to be in order for dealing, the property must have been subdivided and the Diagram of Survey showing the subdivided land must be in order for dealing that the Office of Titles so that the parties then cause themselves to be registered as proprietors of the new lots in accordance with the terms of the Deed. Thus, the contractual term requires the parties to do all things that shall be required for the Property to be subdivided, and subsequently a Diagram of Survey to be in order for dealing at the Office of Titles, and must do those things as soon as possible. By 2011 it was possible for the Property to be subdivided. The Deed also contains a term that the costs of all documents, deeds and things prepared, executed and done for the purpose of implementing the terms of the Deed shall be borne and paid by Mr Kocsis and the defendants in equal proportions.
Mr Kocsis and Ms Corlett on behalf of Mr Kocsis and his estate took steps for the Property to be subdivided so that a Diagram of Survey should become in order for dealing at the Office of Titles. The defendants refused to do things necessary for the Property to be subdivided and for a Diagram of Survey to be in order for dealing. In particular they refused to retain a surveyor for that purpose or to pay the half share of the surveyor's fee. The defendants refused to sign the application form or pay half the application fee. The defendants informed Ms Corlett that if Mr Kocsis wanted to proceed with the subdivision he would have to pay for it. That is contrary to their obligation under the deed. The defendants evinced an intention not to fulfil their contractual obligations or to fulfil them only in a manner substantially inconsistent with their obligations under the Deed. The defendants repudiated the agreement constituted by the Deed. The plaintiffs accepted the defendants' repudiation.
The Deed is terminated. The agreements in the Deed for partition of the land and the rights of pre-emption are no longer in force.

No adverse possession

In their written defence the defendants assert that at all times they have held the Property in adverse possession.
The acquisition of a possessary title by adverse possession in Western Australia requires the adverse possessor to be in continual possession of the relevant land without the licence of the true owner and to the exclusion of the true owner for a period of not less than 12 years. This is the limitation period for an action by the true owner to recover possession of his land pursuant to s 19 and s 65 of the Limitation Act 2005 (WA).
The defendants have been in possession of that part of the Property described as Lot A on the Sketch since 23 January 1995. The defendants have not been in adverse possession of 'Lot A'. The defendants went into possession initially with the express or tacit agreement of Mr Kocsis. From the time of the execution of the Deed on 25 August 1995 the defendants' possession has been pursuant to the agreement of Mr Kocsis contained in the Deed. The possession of the defendants is not adverse to Mr and Mrs Kocsis or their estates. The defendants' possession has been with the licence of Mr Kocsis contained in the Deed by which the parties acknowledge and maintain their co‑ownership of the Property. The defendants have not established any entitlement to any part of the Property by adverse possession.

No joint tenancy

The defendants also made an allegation that they and Mr Kocsis held the Property as joint tenants but did not elaborate upon that allegation. The defendants' reference to joint tenancy appears to arise from the note Mrs Kocsis gave to Mr Rock at the meeting on 5 July 1995. Whatever Mrs Kocsis meant by that note, the Deed did not provide for Mr Kocsis and the defendants to hold the Property as joint tenants. The parties were subsequently registered as tenants in common.
By the Deed Mr Kocsis agreed to sell and the defendants agreed to purchase one undivided half share in the Property as tenants in common. Mr Kocsis and the defendants were subsequently registered as proprietors of the Property as tenants in common. The plaintiffs and the defendants are registered as proprietors of the Property as tenants in common. The defendants were not joint tenants of the Property with Mr Kocsis and have not acquired any rights to the half share of Mr Kocsis or his estate by survivorship.

Plaintiffs entitled to half interest in Land

There is no good reason for the court to direct a division of the Property instead of a sale of the Property. The defendants did not propose a division of the Property, have refused to co‑operate to take the steps necessary to subdivide the Property and do not have the means to pay half the costs of subdivision. Accordingly, the court will direct a sale of the Property pursuant to s 126(1) of the Property Law Act.

Defendants to withdraw caveat

On 17 December 2013 the defendants lodged an absolute caveat on the Property claiming an estate or interest described as 'co‑owners of one undivided share 3 hectares'. The caveat stated that the defendants claimed that estate or interest by virtue of the Deed of Partition dated 25 August 1995 between the defendants and Mr Kocsis. The Deed does not create an interest in the Property of an undivided share of 3 ha. The defendants must withdraw the caveat.

Mr Francis to be trustee for sale of the Property

It would be inappropriate to appoint the defendants to conduct the sale. They made no submission about the conduct of the sale. They are antagonistic to Ms Corlett and do not display an aptitude to undertake such a responsibility. Counsel for the plaintiffs informed the court that Ms Corlett is reticent to conduct the sale because of the relationship between her and the Fields and the risk of conflict. It is appropriate that an independent, professional person be appointed to conduct the sale. Ian Charles Francis is a registered liquidator and trustee. He has consented to be appointed trustee for sale of the Property. The defendants have raised no opposition to Mr Francis being appointed as trustee for the sale of the property. He will be appointed as trustee for sale of the Property.

Conditions of sale

Each party will have liberty to bid at the sale, whether by auction or private treaty. There will be liberty to apply in relation to any matter concerning the sale of the Property.

Division of proceeds of sale

The defendants have not established that they are entitled to more than a one undivided half share of the Property. The defendants have not established that they are entitled to any compensation in relation to improvements on the Property. The net proceeds of sale after payment of encumbrances, cost charges and expenses of the sale and the trustee's costs and expenses should be divided between the parties. The plaintiffs seek an order that the net proceeds be paid to the parties pro rata in accordance with the extent of their registered interest in the Property after payment of the plaintiffs' costs of the action. That is an appropriate order.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RK
ASSOCIATE TO THE HONOURABLE JUSTICE LE MIERE

17 AUGUST 2018

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS -v- FIELD [2018] WASC 243 (S)
CORAM:   LE MIERE J
HEARD:   ON THE PAPERS
DELIVERED          :   30 AUGUST 2019
FILE NO/S:   CIV 1585 of 2015
BETWEEN:   CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS
First Plaintiff
CORALIE ANN CORLETT as Executor of the Will of FERENC KOCSIS who was the Executor of the Will of ELSIE KOCSIS
Second Plaintiff
AND
RAYMOND FIELD
First Defendant
ALLEN FIELD
Second Defendant
MARIA CARMEN FIELD
Third Defendant

Catchwords:

Costs - Application for indemnity costs - Whether defence at trial was hopeless - Whether defendants' conduct was improper - Whether rejection of Calderbank offers was unreasonable - Turns on own facts

Legislation:

Property Law Act 1969 (WA), s 126

Result:

The defendants pay the plaintiffs' costs on an indemnity basis

Category: B

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Williams & Hughes
Second Plaintiff	:	Williams & Hughes
First Defendant	:	In person
Second Defendant	:	In person
Third Defendant	:	In person

Case(s) referred to in decision(s):

Calderbank v Calderbank [1975] 3 All ER 333
Coralie Ann Corlett as Executor of the Will of Ferenc Kocsis v Field [2018] WASC 243
Fazio v Fazio [2008] WASC 161
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1

LE MIERE J:

Summary

On 17 August 2018, I delivered reasons for judgment in this matter: Corlett v Field.[1] I ordered that the land the subject of the action be sold pursuant to s 126 of the Property Law Act 1969 (WA), appointed a trustee for sale of the property and made related orders. I ordered that orders for costs be determined on the papers. Subsequently, the plaintiffs sought an order that the defendants pay the plaintiffs' costs on an indemnity basis. The defendants were subsequently given opportunities to put on evidence in opposition to the orders sought, but they have not done so.
[1] Coralie Ann Corlett as Executor of the Will of Ferenc Kocsis v Field [2018] WASC 243 (Corlett v Field).
For the reasons which follow, I order that the defendants pay the plaintiffs' costs on an indemnity basis.

The issue

The court will generally order that the successful party to any action will recover their costs. The plaintiffs were wholly successful. The defendants must therefore pay the plaintiffs costs of the action.
Indemnity costs are all costs incurred by a party in undertaking proceedings provided they have not been unreasonably incurred or are not an unreasonable amount.
The plaintiffs seek an order for indemnity costs on a number of grounds. First, the plaintiffs made multiple offers of compromise to the defendants that would have afforded them a better outcome than the final result. Secondly, the defendants conduct, in not complying with court orders and processes and not fulfilling their obligations, caused unnecessary time and cost to the plaintiffs. Thirdly, the defendants made numerous allegations which were unfounded and unsubstantiated.

Indemnity cost principles

In Flotilla Nominees Pty Ltd v Western Australian Land Authority[2] Pullin J said in relation to the principles applying to indemnity costs order:
The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice. In effect, the court has jurisdiction to make an indemnity costs order whenever justice requires such an order. Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190 at 191; Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233. When the justice of the case does require such an order, then the court will have a discretion as to whether the order should be made.
Many examples can be found where an indemnity costs order has been made. Suffice it to say that most of these involve some element of improper, or at least unreasonable, conduct on the part of the parties or their legal advisors in relation to the case. See the examples given by Sheppard J in Colgate‑Palmolive v Cussons (supra) at page 233 and the circumstances referred to in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 and in Unioil's case. Thus, the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or in wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders. See Colgate‑Palmolive v Cussons (supra) at 233. The creation of false issues by tactical denials or failures to admit the facts may, in the circumstances of particular cases, lead to such an order: Unioil's case.
[2] Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [8] ‑ [11].
In Fazio v Fazio[3] Martin CJ said:
The next question that arises is whether the defendant should also be ordered to pay those costs on an indemnity basis. There is discretion with respect to making orders of that kind, although the authorities establish that, in general, that discretion will not be exercised unless there is something in the conduct of the party against whom the order is sought that makes it appropriate for the court to take the unusual step of ordering indemnity costs: Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [25], SDS Corp Ltd v Pasdonnay Pty Ltd [2004] WASC 26 (S2), Taylor‑White (an infant) v Taylor‑Bowman [2004] WASC 281 [24] ‑ [31]. An example of such conduct would be where the conduct of that party has been unreasonable and that unreasonable conduct has magnified the costs of the proceedings or where there is something in the conduct of the party that merits censure or reproof or the defence or the claim has been pursued for some collateral or improper purpose.

The defendants' defence

[3] Fazio v Fazio [2008] WASC 161 [16].

The plaintiff sought a sale of the land pursuant to s 126 of the Property Law Act 1969 (WA). The issues arising from the defendants' defence are set out in my reasons for judgment.[4] The basic contentions of the defendants were as follows. First, the deed adduced in evidence by the plaintiffs was not the deed executed by the defendants. The defendants said that someone fraudulently substituted pages in the deed for the pages in the deed executed by them. Secondly, the defendants said that a portion of 3.224 ha of the land was owned by them in adverse possession. Thirdly, the defendants said that the land had been held by Mr and Mrs Kocsis and the defendants as joint tenants and hence the defendants succeeded to Mr and Mrs Kocsis' interest in the property by survivorship.
[4] Corlett v Field.
I found that none of the defendants' contentions had any merit. The defendants claimed that someone in the office of Mr Rock, the solicitor who drafted and arranged for the execution of the deed, substituted pages of the deed produced by the plaintiffs for pages of the deed executed by the defendants. That is a serious allegation. That claim was contrary to the evidence of Mr Rock, inconsistent with the drafts and correspondence between the parties, was implausible and was not supported by any evidence. Further, when pressed on the matter, the defendants did not challenge the evidence of Mr Rock and conceded that Mr Rock's notes and the firm's records were more likely to be an accurate representation of what occurred rather than their own recollection.
The defendants' original defence, which was drafted by their former solicitors Mid West Lawyers, admitted the deed relied upon by the plaintiffs. The defendants also discovered a copy of the deed at trial. In the original defence, Mid West Lawyers did not make any allegations of fraud, these allegations were only made after they had ceased acting for the defendants. The defendants were subsequently represented by Taylor Smart. During the time Taylor Smart were acting for the defendants there were no amendments made to the defence to either resile from the admission made through Mid West Lawyers or to plead fraud. Those contentions were made after the solicitors had ceased acting for the defendants.
The defendants were in possession of their claimed portion of the land with the express or tacit agreement of Mr Kocsis. The possession of the defendants was not adverse to Mr and Mrs Kocsis or their estates. There was no basis for the defendants' claim of adverse possession.
The defendants made an allegation that they and Mr Kocsis held the land as joint tenants but did not elaborate upon that allegation. There was no evidence to support it.
In short, the defendants based their defence on contentions that were not supported by evidence.

The defendants conduct of the proceeding

The defendants did not comply with their obligations to give discovery. During the trial a significant number of documents were produced by the defendants which had not been previously produced, notwithstanding orders for discovery. The defendants' conduct in relation to discovery caused the plaintiffs' solicitors to expend significantly more time on matters than would have happened if the defendants had observed their obligations.
The defendants' conduct caused inconvenience and costs to the plaintiffs and delayed and prolonged the proceedings as well as the trial. Mr Raymond Field walked out of the mediation. The defendants refused to pay a costs order made against them by the registrar. The defendants did not fulfil their obligations concerning discovery, pleadings and witness statements and ignored the trial programming directions.
The defendants' conduct caused lost time to the court and the plaintiffs of a nature justifying the court's sanction.

Offers by plaintiffs

The plaintiffs made multiple offers to the defendants to compromise the proceedings which would have afforded the defendants a better outcome than the final result. The offers advanced by the plaintiffs are set out in the affidavit of their solicitor, Dominque Engelter sworn 17 August 2018 at pars 5 ‑ 24.
At least two of the offers were expressly made in accordance with the principles of Calderbank v Calderbank.[5] In Ford Motor Company of Australia Ltd v Lo Presti[6] Buss JA, (Wheeler JA agreeing) summarised the applicable principles as follows:
[5] Calderbank v Calderbank [1975] 3 All ER 333.
[6] Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1 [16] – [19].
A Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable.
All of the relevant facts and circumstances must be considered in determining whether a party's rejection of a Calderbank offer was unreasonable.
The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable.
As the Court of Appeal of Victoria noted in Hazeldene's Chicken Farm, deciding whether conduct is 'reasonable' or 'unreasonable' always involves matters of judgment and impression. Although it is neither possible nor desirable to enumerate exhaustively all circumstances which must be taken into account, in a particular case, in deciding whether the rejection of a Calderbank offer was unreasonable, the Court of Appeal said that, ordinarily, regard should be had to, at least, the following:
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for…indemnity costs in the event of the offeree's rejection it.
(Citations omitted)

The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in his or her favour.
Having regard to all of the relevant facts and circumstances, the defendants' rejection of the plaintiffs' offers was unreasonable.

Conclusion

The defendants must pay the plaintiffs' costs on an indemnity basis. The order should be that the defendants pay all the costs incurred by the plaintiffs (including reserved costs) except so far as they are of an unreasonable amount or have been unreasonably incurred so that, subject to those exceptions, the plaintiffs are completely indemnified by the defendants for their costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MS
Associate to the Honourable Justice Le Miere

30 AUGUST 2019