Esposito v The Victorian Legal Services Board (No 2)

[2022] VSC 38

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2020 04021

DOMINIC ESPOSITO	Appellant
v
THE VICTORIAN LEGAL SERVICES BOARD	Respondent

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JUDGE:	Gorton J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	10 February 2022
CASE MAY BE CITED AS:	Esposito v The Victorian Legal Services Board (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 38

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PRACTICE AND PROCEDURE – Costs – Where extension of time application successful but appeal ultimately dismissed – Where offers of compromise made before lower court’s decision – Whether costs should be applied on a standard or indemnity basis. 

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Dominic Esposito Solicitors & Attorneys
For the Respondent	Corrs Chambers Westgarth

HIS HONOUR:

Background

1. On 21 September 2020, the Magistrates’ Court of Victoria ordered Mr Esposito to pay the Victorian Legal Services Board’s (‘the Board’) costs of complying with a subpoena with the quantum of those costs, failing agreement, to be determined by the Costs Court.  Mr Esposito filed, shortly out of time, a Notice of Appeal in this Court against the Magistrates’ Court decision.  I granted leave to file that notice of appeal out of time, but dismissed the appeal.[1]  These reasons assume familiarity with that decision. 

   [1]Esposito v The Victorian Legal Services Board [2021] VSC 834.

1. The Board has applied for an order that Mr Esposito pay its costs on the indemnity basis, alternatively on the standard basis.  Mr Esposito accepts that he ought to pay the Board’s costs of the appeal but contends that those ought to be on the standard basis.  He does not accept that he ought to pay the Board’s costs of his (successful) application for leave to appeal and contends that those costs ought lie where they fall.  He further sought an indication that the Board’s costs of the appeal should not include costs of its application to introduce evidence that was not before the Magistrate.

Standard or Indemnity Basis

1. On 9 June 2020, the Board served an offer of compromise by which it offered to accept the sum of $7,090 in settlement of its claim for its costs of complying with its subpoena and this figure was inclusive also of its costs associated with its application for costs from the Magistrate.  On 5 October 2020, the Board served another offer of compromise by which it offered to accept the sum of $13,313.41 on the same basis.  The offers were accompanied by correspondence in which it was said that these figures represented a genuine compromise as the Board’s actual costs were higher than those figures.  On the strength of those offers, the Board sought indemnity costs.  Both offers were made before the Magistrates’ Court made its decision.  The Board did not rely on any offers made after the Magistrates’ Court had made its decision but before I had made mine.

1. I accept that I am entitled to have regard to the fact that those offers were made when exercising my discretion as to the costs of the appeal to me.  But, at the moment, there has not been a taxation of the Board’s costs of complying with the subpoena.  The Board’s offers assume that those costs will be taxed essentially in accordance with the claimed amount.  They may well be, but that is a matter that I cannot presently assume.  If Mr Esposito were to be successful in having the Board’s costs significantly reduced on taxation, then these offers would have a very different flavour.  In those circumstances, I am not prepared to order Mr Esposito to pay the Board’s costs on an indemnity basis.

1. Accordingly, I will order that Mr Esposito pay the Board’s costs of the appeal to be taxed in default of agreement on the standard basis.

The application for leave to appeal

1. As my substantive reasons indicate, the circumstances in which Mr Esposito was late with his notice of appeal were exceptional.   Although the Board was not responsible for Mr Esposito’s late filing of the notice of appeal, and Mr Esposito was seeking ‘an indulgence’, Mr Esposito’s application had such obvious merit that I was somewhat surprised that the Board took the position that it did.  That is not to say that it was not entitled to take the position that it did; but in the circumstances I do not consider that it would be fair for Mr Esposito to have to pay its costs of doing so.  In forming this view, I have not overlooked the fact that Mr Esposito did not file his affidavit material in support of this application until 9 November 2021.  That is one reason for which I would not have ordered the Board to pay his costs of his application.  But the letter he sent to the Board on 21 October 2020 indicating his intention to appeal, and the fact that he was only one day late, and the lack of any prejudice occasioned by the delay, together with the confusion as to the correct ‘date of order made’, to my mind make it fair that the costs of the application for leave to appeal fall where they lie.

1. Accordingly, I will make an order that there be no costs of the application for leave to appeal.  It is my intention by this order to exclude from recovery the costs of opposing the application for leave to appeal that would not have been incurred simply in responding to the appeal itself, that is, the ‘non-common’ costs of the application for leave to appeal. 

The ‘new material’

1. Mr Esposito has submitted that the Board’s costs in relation to certain affidavit material should be excluded.  I assume that the affidavit referred to is the affidavit sworn by Isabella Cecere, a solicitor with the solicitors for the Board, on 4 March 2021.  Mr Esposito submitted that the Board ought not have the costs of that affidavit because it referred to material that was not put before the Magistrate and was therefore inadmissible.

1. Ms Cecere’s affidavit was filed in accordance with a direction from this Court that the Board file and serve any affidavits upon which it intended to rely on or before 5 March 2021.  Prior to her filing her affidavit, Mr Esposito had filed and served affidavits dated 29 October 2020 and 5 February 2021.  Both Mr Esposito’s and Ms Cecere’s affidavits exhibited documents and made factual assertions beyond the mere sending and receipt of those documents.

1. In my view, the issue as to the extent to which the Board can recover its costs of Ms Cecere’s affidavit is a matter that is appropriately determined by the Costs Court (if agreement is unable to be reached and the issue goes to taxation).  Having said that, I make the following observations:

(a)   to the extent that her affidavit was prepared in response to the application for leave to appeal, I have determined above that the Board ought not recover those costs;

(b)  to the extent that her affidavit merely exhibited for a second time documents that had already been exhibited to the affidavits filed by Mr Esposito, the costs of doing so were not reasonably incurred; but

(c)   to the extent that her affidavit responded to or sought to place in context factual assertions made by Mr Esposito in his affidavits, in my view the costs of doing so were reasonably incurred (whether or not those assertions or the responses were strictly admissible).

Orders

1. For the above reasons, I will make the following orders:

(a)        There be no order as to the costs of the application for leave to appeal.

(b)       The appellant pay the respondent’s costs of the appeal to be taxed by the Costs Court in default of agreement on the standard basis.

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