Director of Consumer Affairs Victoria v Glenvill Pty Ltd (No 2)
[2009] VSC 83
•17 March 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 7458 of 2008
| DIRECTOR OF CONSUMER AFFAIRS VICTORIA | Appellant |
| v | |
| GLENVILL PROPRIETARY LIMITED (ACN 007 034 451) | Respondent |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 13 March 2009 | |
DATE OF JUDGMENT: | 17 March 2009 | |
CASE MAY BE CITED AS: | Director of Consumer Affairs Victoria v Glenvill Pty Ltd (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 83 | |
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COSTS – Successful appeal from decision of magistrate dismissing charge against respondent – Effect of “without prejudice” offer by respondent to appellant during proceedings before magistrate.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr C.M. Caleo SC with Mr J.P. Moore | Elias Rallis, Solicitor Consumer Affairs Victoria |
| For the Respondent | Mr D. Aghion | David Naidoo and Associates |
HIS HONOUR:
This matter came before me on appeal by the Director of Consumer Affairs Victoria (“the Director”) against a decision of the Magistrates’ Court at Melbourne, dismissing a charge brought by the appellant against the respondent, Glenvill Pty Ltd (“Glenvill”), pursuant to s 31(1) of the Domestic Building Contracts Act 1995. On 13 March 2009, I gave judgment[1] by which I allowed the appeal of the Director, set aside the order of the Magistrates’ Court, and ordered that the case be remitted to be determined by the same magistrate in accordance with my reasons for judgment.
[1]Director of Consumer Affairs Victoria v Glenvill Pty Ltd [2009] VSC 76.
After I published my reasons for judgment, Mr J. Moore, who appeared for the appellant, sought an order for payment by the respondent of the costs of the appeal. Mr D. Aghion, who appeared for the respondent, opposed that order. Rather, he submitted that I should make an order that the appellant pay the respondent’s costs on an indemnity basis. That submission was based on a letter dated 4 July 2007, entitled “Without prejudice save as to costs”, sent by the respondent’s solicitors to the legal representative of the appellant. The letter contained an offer then made on behalf of the respondent in the following terms:
(1) The respondent would plead guilty to charges 1, 2 and 3 on the charge sheet.
(2) The Director would apply for leave to withdraw the remaining four charges against Glenvill.
(3) Glenvill would undertake to cease using preliminary agreements in the form which was the subject of the prosecution.
(4) Glenvill would refund $17,000 to Ms Kaur and Mr Kumar.
(5) Glenvill would pay the Director’s party and party legal costs of the prosecution.
Mr Aghion submitted that the outcome of the appeal by the Director has produced a result substantially less favourable to the Director than that contained in the offer made by Glenvill. He referred to the decision of the New South Wales Court of Appeal in Ettinghausen v Australian Consolidated Press Limited.[2] In that case the plaintiff, in the course of a defamation proceeding, made an offer to the defendant. That offer was not accepted. The plaintiff succeeded at trial for a large sum of damages, which were set aside on appeal. On the re-trial, the plaintiff was awarded another sum of damages in excess of the offer made by him to the defendant in the first trial. However, the trial judge declined to award the plaintiff indemnity costs on that basis. The Court of Appeal held that the plaintiff’s offer was not “exhausted” after the first trial, and that it remained efficacious, for the purposes of costs, in respect of the second trial. Accordingly, the Court of Appeal ordered that the plaintiff should have an order against the defendant for his costs in respect of his claim assessed on an indemnity basis.
[2](1995) 38 NSWLR 404.
In support of his submissions, Mr Aghion also referred to remarks made by the magistrate at the conclusion of the case. There his Honour, having dismissed all of the charges brought by the Director against Glenvill, was highly critical of the Director for not accepting Glenvill’s “without prejudice” offer, and he described the prosecution as a “terrible waste of public money”, in light of the offer which had been made by Glenvill to the Director. Accordingly, the magistrate ordered the Director to pay the costs of Glenvill on an indemnity basis. Mr Aghion submitted that, notwithstanding that I have set aside the order of the magistrate dismissing the first charge against Glenvill, the remarks made by the magistrate nevertheless are apposite. In particular, he has pointed out that, in the course, or in consequence, of a no case submission, six of the seven charges initially laid by the Director against Glenvill were dismissed or withdrawn. In those circumstances, he submitted that, whatever the outcome of the “re-trial” of charge 1 against Glenvill, the Director will not achieve a result as favourable as that contained in the offer made by Glenvill’s solicitor to the Director on 4 July 2007. Finally, Mr Aghion also relied on the fact that his client would not be entitled to a certificate, under the Appeal Costs Act, in respect of the appeal, as a further basis upon which the respondent ought to be entitled to an order for indemnity costs.
In response, Mr Moore submitted, first, that the Director may achieve a more favourable result than that contained in the offer made by Glenvill’s solicitors in its letter of July 2007. In particular, he drew my attention to clause 4 of that offer. The Director is seeking compensation on behalf of the house owners, and, Mr Moore submitted, an order in excess of $17,000 may be made on that application. Secondly, Mr Moore pointed out that when the case is re‑heard by the magistrate, the Director will press for a conviction on charge 1. The offer made in the solicitor’s letter of July 2007, on its own, may not have necessarily resulted in a conviction being recorded against Glenvill. Thirdly, Mr Moore submitted that the Director was perfectly entitled to conduct the appeal. The point decided against the Director by the magistrate was an important point of law, and the Director succeeded on its appeal from that ruling. Fourthly, Mr Moore submitted that the remarks made by the magistrate on the exercise of his discretion as to costs are no longer apposite. In the event of the successful prosecution of Glenvill on Count 1, the magistrate would need to exercise his discretion as to costs afresh. For those reasons, Mr Moore submitted that I should not accede to Mr Aghion’s application but, rather, I should make an order for the costs of the appeal in favour of the Director.
In my view, the matters to which Mr Aghion has referred do not justify me in departing from the ordinary rule, namely, that costs should follow the event. I have reached that conclusion for two principal reasons. First, the decision of the magistrate, which was the subject of the successful appeal to this Court by the Director, was itself based on a submission made on behalf of Glenvill before the magistrate. In those proceedings, counsel for Glenvill had submitted that the contract in question is not a major domestic building contract, largely for the reasons which were advanced before me. The magistrate accepted that submission and accordingly dismissed the first charge against Glenvill. On appeal, the respondent, Glenvill, sought to uphold the decision of the magistrate, substantially on the same grounds which it had advanced before the magistrate. Those submissions were unsuccessful before me. The respondent, Glenvill, had every right to seek to support the decision of the magistrate. However, in a real sense, the proximate cause of the appeal was the submission advanced by the respondent, Glenvill, before the magistrate, which his Honour has accepted. The respondent has failed to sustain the magistrate’s reasoning on appeal. Those circumstances, in my view, require that I make an order that Glenvill pay the Director’s costs of the appeal.
It is true, as Mr Aghion observes, that if the Director had accepted the offer made on behalf of Glenvill in July 2007, the magistrate would not have been required to have ruled on the point of law raised by Glenvill, which was unsuccessful on the appeal before me. However, that historical circumstance does not detract from the proposition which I have stated above, namely, that the real and proximate cause of the appeal was that the magistrate accepted the submission made to him on behalf of Glenvill. In my decision on the appeal, I have concluded that the magistrate made an error of law in accepting the respondent’s submissions. The respondent chose to support the magistrate’s decision on appeal. It is appropriate that it pay the Director’s costs of the appeal.
Furthermore, I agree with Mr Moore’s submissions that it is possible that the Director may, ultimately, achieve a result before the magistrate which, at least in one respect, is more “favourable” than that set out in the offer of Glenvill’s solicitors of July 2007. In particular, if Glenvill is convicted on the charge, which is the subject of this appeal, it may be that the magistrate makes an award of compensation to the owners which is of an amount greater than that contained in the letter of offer. It is thus premature to postulate whether or not the letter of offer made by the solicitors contains a result which is more favourable to the Director than has thus far been achieved.
As I have stated, Mr Aghion referred to the decision of the New South Wales Court of Appeal in Ettinghausen v Australian Consolidated Press Limited.[3] Mr Aghion correctly pointed out that that decision may be authority for the proposition that an offer of compromise made in a trial may be relevant and efficacious for the purposes of the costs of a re-trial. However, in Ettinghausen, the Court of Appeal did not make an order for indemnity costs in favour of the plaintiff in respect of the costs of the first appeal. Rather, the Court of Appeal expressly preserved the order for costs already made, in favour of the defendant, in the first appeal.[4] I note that in the first appeal[5], the Court of Appeal made an order that the respondent plaintiff pay one‑quarter of the appellant defendant’s costs of that appeal. Thus, the fact that the plaintiff succeeded, on the re-trial, for an amount of damages in excess of the offer made on his behalf, did not disturb the order for costs, made against him, on the first appeal.
[3]Above.
[4]Above, p.411.
[5]Australian Consolidated Press Limited v Ettinghausen (Unreported, BC 9302147).
Finally, I observe that although the magistrate made strong remarks about the conduct of the Director in this matter, it is possible that the magistrate may reach a different conclusion about the conduct of the Director, after hearing the matter which was remitted to him. I do not express any view in relation to that matter. However, I agree with Mr Moore that, by reason of that consideration, the remarks made by the learned magistrate on the question of costs do not apply, at least in their full force, in respect of the claim by the successful appellant for his costs of this appeal.
For those reasons, I reject the submission made on behalf of the unsuccessful respondent that the appellant pay its costs of the appeal on an indemnity basis. In my view the usual rule should apply, namely, that costs follow the event. Accordingly, I shall order that the respondent pay to the appellant the costs of the appeal, including any reserve costs.
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