Deutsch v Rodkin (No 2) - [2012] VSC 543

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2011 06667

BETWEEN:

TZIPORAH DEUTSCH	Plaintiff
- and -
PEARL RODKIN & ORS	Defendants

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 November 2012
DATE OF JUDGMENT:	12 November 2012
CASE MAY BE CITED AS:	Deutsch v Rodkin & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2012] VSC 543

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COSTS – Successive caveats lodged without reasonable cause – Proceeding to remove caveats and recover compensation – Whether indemnity costs should be ordered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Jones	Glesson & Co
For the Defendants	Mr S Anderson SC with Mr J Slattery	Holding Redlich

On 28 September 2012, the Court delivered to principal reasons for judgment in the proceeding (the ‘principal reasons’).[1] The principal reasons disclose successive abuses of the caveat procedure by the first, second, third, fourth, sixth and eighth defendants, who are described in those reasons as ‘Robert and the caveators’. Not only was there no arguable interest sufficient to support any of the relevant caveats, but the Court found that the caveats were lodged, pursuant to an agreement between Robert and the caveators, for the dominant purpose of injuring the plaintiff and her husband (Tziporah and Erwin respectively).
[1][2012] VSC 450.

Compensatory and exemplary damages were awarded in Tziporah’s favour.

Tziporah seeks an order that Robert and the caveators pay her costs of the proceeding on an indemnity basis. That course is opposed.

The power to award indemnity costs is reserved for exceptional cases. As a general rule, it is the conduct of the unsuccessful party in conducting the litigation which is the determining factor – not the underlying conduct which gave rise to the litigation.[2] The underlying conduct may, however, be relevant to an assessment of the party’s conduct in the litigation. This is especially so where an unsuccessful party has continued a case, by prosecution or defence, in circumstances where, properly advised, there was objectively no chance of success. In such cases, the Court may presume the continuation of the case was for some ulterior purpose.[3]
[2]For example, NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77.
[3]For example, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.

In Ugly Tribe Company Pty Ltd v Sikola& Ors,[4] Harper J summarised some of the special circumstances which may be sufficient to give rise, either alone or in combination with other factors, to an order that the unsuccessful party pay costs on an indemnity basis:
[4][2001] VSC 189.

In seeking costs on an indemnity basis, the first defendant is asking the Court to depart from its usual course. Special circumstances must be present to justify such a departure. These include:
(i)The making of an allegation, known to be false, that the opposite party is guilty of fraud.
(ii)The making of an irrelevant allegation of fraud.

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.

Continue reading Deutsch v Rodkin (No 2)

Details

AGLC: Deutsch v Rodkin (No 2) [2012] VSC 543
Case: [2012] VSC 543
Decision Date: 12 November 2012

CaseChat Overview and Summary

In Deutsch v Rodkin (No 2), the parties involved were Deutsch, the registered proprietor of a property, and Rodkin, who had lodged successive caveats against the property. The dispute centred on the validity and reasonableness of the caveats, and whether Deutsch was entitled to an order for indemnity costs against Rodkin for the proceedings brought to remove the caveats and recover compensation. The case was heard in the Supreme Court of New South Wales.

The central legal issue before the court was whether the successive caveats lodged by Rodkin were without reasonable cause and if Deutsch was entitled to an order for indemnity costs from Rodkin. The court needed to assess whether the caveats were lodged in bad faith, or whether there was a reasonable basis for them, and if the proceedings to remove the caveats and recover compensation were justified.

The court found that Rodkin's successive caveats were indeed lodged without reasonable cause, as there was no substantial or bona fide basis for the claims made. The court determined that Deutsch's proceedings to remove the caveats and recover compensation were justified, as Rodkin's actions were vexatious. As a result, the court ordered Rodkin to pay Deutsch's indemnity costs for the proceedings. The court emphasised that the order for indemnity costs was not punitive, but rather intended to compensate Deutsch for the unnecessary legal expenses incurred due to Rodkin's actions.

The final orders of the court included an order for Rodkin to pay Deutsch's costs of the proceedings, including indemnity costs. The court also made orders for the removal of the caveats and the payment of compensation to Deutsch for the losses incurred due to the unreasonable lodging of the caveats.

Orders