Finch v Arnold Thomas and Becker Pty Ltd (Ruling as to Costs)
[2018] VCC 255
•15 March 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERICAL DIVISION | Revised Not Restricted Suitable for Publication |
EXPEDITED LIST
Case No. CI-13-01273
| JO-ANNE LAURA FINCH | Plaintiff by Counterclaim |
| v | |
| ARNOLD THOMAS & BECKER PTY LTD | Defendant by Counterclaim |
---
JUDGE: | HIS HONOUR JUDGE O'NEILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | Determined upon written submissions of the parties | |
DATE OF RULING: | 15 March 2018 | |
CASE MAY BE CITED AS: | Finch v Arnold Thomas & Becker Pty Ltd (Ruling as to Costs) | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 255 | |
RULING AS TO COSTS
---
Subject: LEGAL COSTS
Catchwords: Claim by solicitors seeking costs and disbursements dismissed – counterclaim alleging negligence and breach of retainer against solicitors also dismissed – allegations against plaintiff by counterclaim of breach of various provisions of the Civil Procedure Act 2010 – failure by plaintiff to accept a number of offers of settlement – whether conduct by the plaintiff over the course of the proceeding such as to warrant a special order as to costs – whether costs on a standard or indemnity basis – disposal of moneys held in trust.
Legislation Cited: Civil Procedure Act 2010,
Cases Cited:Finch v Arnold Thomas & Becker Pty Ltd [2016] VSCA 117; Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; Commissioner of State Revenue v Challenger Listed Investments Ltd (as Trustee for Challenger Diversified Property Trust 1) (No 2) [2011] VSCA 398; Pepe v Platypus Asset Management Pty Ltd (No 2) [2011] VSC 21; Rosniak v Government Insurance Office (1997) 41 NSWLR 608; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Oshlack v Richmond River Council (1998) 193 CLR 72; Botany Municipal Council v Secretary, Department of Arts, Sport & Environment (1992) 34 FCR 412; Williams v Minister for Environment and Heritage [2004] FCAFC 58; Finch v Arnold Thomas & Becker Pty Ltd [2018] VCC 54
Ruling: Plaintiff by counterclaim to pay eighty per cent of the costs of defendant by counterclaim of the proceeding on an indemnity basis.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff by Counterclaim | The Plaintiff appeared in person | - |
| For the Defendant by Counterclaim | Ms A M Ryan QC with Mr J B Waters | Wisewould Mahony |
HIS HONOUR:
Preliminary
1 On 13 February 2018, I delivered Judgment in this proceeding.[1] I directed Ms Finch’s counterclaim should be dismissed.
[1]This proceeding is the re-trial of the earlier proceeding before his Honour Judge Macnamara as per Orders of the Court of Appeal of 24 May 2016 – Finch v Arnold Thomas & Becker Pty Ltd [2016] VSCA 117
2 Earlier, his Honour Judge Macnamara had, in the same proceeding, directed that Arnold Thomas & Becker’s (“ATB”) claim for costs and disbursements be dismissed.
3 I allowed each party to make written submissions as to costs which should follow, and any related orders. The solicitors for ATB provided written submissions dated 27 February 2018. Ms Finch provided written submissions dated 9 March 2018. Ms Finch’s submissions were, again, a long litany of complaints about my conduct of the proceeding, the judgment rendered and her desire to have that judgment “reviewed”. Her submissions were of little, if any, assistance in determining costs orders.
4 Details of the circumstances of the claim and counterclaim, and the facts relevant to this difficult proceeding, are set out in my Judgment.
5 I have had regard to the Ruling of his Honour Judge Macnamara of 18 June 2015[2] as to the appropriate costs orders to be made, both in respect of the claim and the counterclaim, although the Court of Appeal, in its Judgment,[3] set aside his Honour’s orders as to costs. No part of that Court’s Ruling was critical of the manner in which his Honour determined to award costs as he did. The criticism came as the Court determined Ms Finch had not, as a matter of procedural fairness, had the opportunity to conclude her case, make final submissions, or to make submissions as to costs.
Calderbank[4] and other offers of settlement
[2]Transcript (“T) 2007-2013
[3]Finch v Arnold Thomas & Becker Pty Ltd (supra)
[4]Calderbank v Calderbank [1975] 3 All ER 333
6 A number of offers of settlement were conveyed to Ms Finch, or her lawyers, commencing on 11 June 2014. On that date, a letter was sent to her then lawyers,[5] which referred to the fact that $100,000 in legal costs and disbursements had been incurred to date. The letter proposed that each party withdraw and bear costs. The offer was to remain open for fourteen days.
[5]Letter, ATB to MLC Lawyers, dated 11 June 2014
7 On 2 March 2015, a further letter was sent to Ms Finch’s then solicitors, this time by ATB’s current lawyers.[6] That letter offered that each party dismiss their respective claims and bear their own costs of the proceeding, including in relation to any previous costs order made. Further, that each party execute a deed of settlement, releasing the other in respect of all claims arising out of the VCAT proceeding. The offer was said to remain open until Friday, 13 March 2015.
[6]Letter, Wisewould Mahoney to MLC Lawyers, dated 2 March 2015
8 Further, when this proceeding commenced before his Honour Judge Macnamara in March 2015, counsel for ATB, Mr Harrison, made an “open offer in court”. The transcript records:
“I have instructions to put this offer, as an open offer in court. We offer to settle the claim and to [settle] the counterclaim both on a walk-away, bear own basis. This is an open offer that I’m instructed to make today and I’m instructed to leave open until 10.30 tomorrow … .”[7]
[7]T2010, L17
9 The principles relating to a costs order which ought to follow the conclusion of a proceeding where Calderbank offers have been made is well known. In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2),[8] (“Hazeldene’s”) the Court of Appeal noted that the critical question was whether the rejection of an offer to settle a proceeding when a judgment obtained was less favourable to the offeree, was unreasonable in the circumstances. The Court set forth a number of relevant factors:
[8](2005) 13 VR 435
“(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;
(f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.”[9]
[9](Supra) at paragraph [25]
10 There is authority to the effect that when an offer of settlement does not involve a genuine compromise but, rather, an invitation to capitulate, it is not unreasonable for the offeree to have rejected it.[10] Even offers which propose settlement by the acceptance of a very modest amount in the face of a large claim may not trigger an order for indemnity costs.[11] However, in the present case, the various offers made, commencing with the offer by letter of 11 June 2014, did not represent a mere withdrawal and capitulation; they represented a preparedness on the part of ATB to forego their entitlement to costs and disbursements in respect of the VCAT proceedings. Even although that claim was subsequently dismissed, nonetheless, at the time, it represented a real and genuine compromise, given ATB were prepared to forego something in the order of $60,000 in costs and disbursements.
[10]Commissioner of State Revenue v Challenger Listed Investments Ltd (as Trustee for Challenger Diversified Property Trust 1)(No 2) [2011] VSCA 398
[11]Pepe v Platypus Asset Management Pty Ltd (No 2) [2011] VSC 21
11 At the time, Ms Finch had solicitors representing her and would have received the benefit of their advice. The offer was clear in its terms and foreshadowed an application for indemnity costs.
12 I am satisfied that well before that time, and in the course of the VCAT proceeding, Ms Finch had received advice from various solicitors who had represented her, including Mr Sanna, EMA Lawyers, and ATB, and counsel, Ms Ruth Hamnett, Mr Harris, and finally, Mr Staindl. From the evidence before me, Ms Finch was told that various offers which had been made on behalf of the Heat Group (her employer against which the VCAT proceeding was brought) should be accepted, and there were real risks her claim would be dismissed, or at least she would not recover sufficient in damages to beat the offers that had been made, and thus face an adverse costs order. Ms Finch doggedly persisted with the VCAT claim through to its final unsuccessful conclusion. For reasons which are unclear, but which are reflected in Ms Finch’s conduct of the litigation in this Court, she persisted against this advice and all good sense. These matters are relevant as it must have been obvious, even to a litigant in person, and from an early time, that given the outcome of the VCAT proceeding, the prospects of the success of Ms Finch’s counterclaim against ATB in this Court was minimal. There was no evidence before me to suggest that even if it could be said ATB breached its retainer or was negligent, that that breach or negligence was causative of any loss or damage to Ms Finch.
13 I am satisfied that from the earliest Calderbank offer of June 2014, the criteria established by Hazeldene’s were met. Ms Finch’s rejection of that first and each subsequent, offer was unreasonable. Costs should be awarded on an indemnity basis from 25 June 2014.
The conduct of the proceeding by Ms Finch and special costs orders
14 ATB seeks costs on an indemnity basis even before the offer of June 2014. There are circumstances which warrant the making of a special costs order.[12] Those circumstances may include delinquency on the part of an unsuccessful party.[13] Ethical and moral delinquency is a matter to be taken into account.[14] In Rosniak v Government Insurance Office,[15] the New South Wales Court of Appeal held as sufficient that the party establish “unreasonable conduct” though “it need not rise as high as vexation”. The pursuit of a claim which cannot succeed where its futility has been drawn to the attention of the losing litigant has been recognised as a circumstance supporting a special costs order.[16]
[12]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
[13]Oshlack v Richmond River Council (1998) 193 CLR 72
[14]Botany Municipal Council v Department of Arts Sport & Environment (1992) 34 FCR 412 per Gummow J
[15](1997) 41 NSWLR 608 at 616
[16]Williams v Minister for Environment and Heritage [2004] FCAFC 58
15 With these principles in mind, it should be noted that the proceeding in this Court was fixed for trial on six separate occasions, which were vacated either at Ms Finch’s behest or because of her conduct.[17] At the commencement of the trial before his Honour Judge Macnamara in May 2015, and invoking the provisions of the Civil Procedure Act 2010, his Honour made an order preventing Ms Finch from making any further applications to prevent the trial proceeding.
[17]See submissions of ATB dated 27 February 2018 – at paragraph [8]
16 In particular, I bear in mind his Honour’s comments about the manner in which Ms Finch sought to frustrate the matter proceeding effectively and in the most cost-efficient manner. His Honour’s comments reflect my experience with Ms Finch. Judge Macnamara said:
‘I could go on an[d] elaborate further, but I think it is accurate enough, as Mr Harrison said, that Ms Finch’s conduct of this proceeding is a case study in sabotage, disregard of overarching obligations, and obstruction of the overarching purpose.”
17 In his Honour’s costs Ruling, he said:
“My involvement in this proceeding commenced in March of this year [2015] and I can say that at every turn Ms Finch has sought to obstruct the attainment of the overarching obligation as defined in the Civil Procedure Act. Her approach seems to have been to revel in interlocutory warfare in this proceeding but to seek to avoid it being brought to a head and brought to any sort of resolution, either by an adjudication or by some sort of compromise as was proposed in the offers which I have referred.
Further, she has at every point sought to argue collateral issues paradoxically, and almost comically, she has repeatedly relied upon the Civil Procedure Act in a manner which I can only describe as a perversion. She took up two days in March arguing meritless applications allegedly based upon the Civil Procedure Act, as I see, it in retrospect, for no purpose other than to sabotage the commencement of trial on its sixth appointed date in March this year.
Therefore, she has, far from acting to ‘facilitate the just efficient, timely and cost-effective resolution of the real issues in dispute’, acted to obstruct the just timely and cost-effective resolution of the real issues in dispute and sought to delay matters and waste costs and the court's time on matters other than the real issues in dispute.”[18]
[18]T2009-2010
18 I said in my Reasons for Judgment:
“At every opportunity in this Court, be it before his Honour Judge McNamara, or other Judges involved in pre-hearing applications, then before Judge Saccardo and finally before me, Ms Finch sought to derail the trial, particularly when she perceived a Judge was not favourably disposed to her arguments. She regularly made recusal applications which had little, if any, merit, and a host of other unsubstantiated applications.”[19]
[19]Finch v Arnold Thomas & Becker Pty Ltd [2018] VCC 54 at paragraph [143]
19 In my view, Ms Finch has been given every reasonable assistance by the judges of this Court, their staff and registry officials. Every attempt has been made to help to bring the real issues in dispute before the Court for determination, in the face of a counterclaim that was destined to fail. The waste of judicial and Court resources and, ultimately, legal costs, has been extraordinary. The responsibility for that waste lies squarely at the feet of Ms Finch.
20 In those circumstances, this case is entirely appropriate for a special or extraordinary costs order.
21 Bearing in mind:
(a)the failure by Ms Finch to accept the offers of compromise commencing in June 2014 was unreasonable;
(b)the fact that ATB’s claim for costs and disbursements was dismissed, and Ms Finch’s counterclaim was dismissed;
(c)the fact that overwhelmingly, the time and effort directed to the proceeding in this Court was related to Ms Finch’s counterclaim, rather than to ATB’s claim for costs;
(d)the conduct on the part of Ms Finch throughout the proceeding and the trial; and
(e)her flagrant breaches of the various provisions of the Civil Procedure Act 2010,
a special costs order is warranted.
22 Doing the best I can, it is my view there ought be no order for costs in favour of Ms Finch in respect of ATB’s claim. There ought be an order that Ms Finch pay 80 per cent of ATB’s costs of the whole proceeding (both claim and counterclaim) and on an indemnity basis.
23 I accept the submissions on behalf of ATB in respect of the return of the funds held in trust on behalf of Ms Finch.
24 I shall make orders to that effect.
- - -
11
0