Freilich v Wharton (No 2) - [2013] VSC 624

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2012 1730

MARK ISAAC FREILICH	Plaintiff
v
MICHAEL JOHN WHARTON & OTHERS	Defendants

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JUDGE:	BELL J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	2, 3, 4, 7 OCTOBER 2013
DATE OF JUDGMENT:	14 NOVEMBER 2013
CASE MAY BE CITED AS:	FREILICH v WHARTON (No 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 624

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COSTS – application for modification of restrictive covenant – plaintiff unsuccessful –whether costs should be ordered against plaintiff in favour of defendants – whether costs should be ordered against plaintiff on an indemnity basis – Calderbank letters of defendants – whether plaintiff acted unreasonably in rejecting offers.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr S Morris QC with Mr D Lloyd	Aitken Partners
For the defendants	Mr S Horgan SC with Mr B Murphy	Best Hooper

HIS HONOUR:

Having dismissed the plaintiff’s application for modification of a restrictive covenant,[1] I have received written submissions from the parties in relation to the question of costs. The defendants submit that the plaintiff should pay their costs and on an indemnity basis. The plaintiffs submit that there should be no order as to costs.
[1]Freilich v Wharton [2013] VSC 533 (22 October 2013).

Costs against the plaintiff

The plaintiff submits that there should be no order for costs against him because John Allen (who was not a defendant) and not the defendants is liable to pay the legal costs of the defendants in the proceeding.

It is clearly established that the existence of a retainer will be presumed between the solicitors on the record and the parties whom they represent in legal proceedings. A party seeking to challenge that presumption has the onus of showing otherwise.[2] It is also clearly established that a successful party may recover costs against an unsuccessful party even though a third party has agreed to indemnify the successful party in respect of costs.[3] For the unsuccessful party to defeat the usual entitlement of the successful party to costs, the unsuccessful party must show that there was a bargain whereby the successful party would not be liable for costs under any circumstances.[4]
[2]Halliday v High Performance Personnel Pty Ltd (1993) 113 ALR 637, 639 (Mason CJ); Shaw v Yarranova Pty Ltd [2011] VSCA 55 (3 March 2011) [24] (Redlich and Mandie JJA) (’Shaw’).
[3]Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495, 504 (Atkin LJ) (‘Adams’); Shaw [2011] VSCA 55 (3 March 2011) [22] (Redlich and Mandie JJA).
[4]Adams [1921] 1 KB 495, 500 (Bankes LJ); Shaw [2011] VSCA 55 (3 March 2011) [22] (Redlich and Mandie JJA).

In the present case, the evidence does not establish that there was no retainer between the defendants and their solicitors or the existence of a bargain that they were not to be liable for legal costs under any circumstances. In respect of the proceeding, there is a fee…

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 Freilich v Wharton (No 2)

Details

AGLC: Freilich v Wharton (No 2) [2013] VSC 624
Case: [2013] VSC 624
Decision Date: 14 NOVEMBER 2013

CaseChat Overview and Summary

Freilich v Wharton (No 2) involved a dispute concerning the modification of a restrictive covenant. The plaintiff, Freilich, sought to modify the restrictive covenant, and the defendants, Wharton, opposed this application. The case was heard in the Federal Court of Australia. The defendants argued that the plaintiff should be ordered to pay costs on an indemnity basis due to the rejection of their offers to settle, which were made pursuant to Calderbank. The plaintiff's rejection of these offers was deemed unreasonable by the defendants, who sought costs against the plaintiff.

The legal issues before the court included whether the plaintiff's rejection of settlement offers was unreasonable and whether costs should be awarded against the plaintiff on an indemnity basis. The court had to consider the circumstances surrounding the Calderbank letters, the reasonableness of the plaintiff's conduct in rejecting the settlement offers, and the appropriateness of ordering indemnity costs.

The court found that the plaintiff had acted unreasonably in rejecting the settlement offers made by the defendants. It concluded that the plaintiff's conduct warranted the award of costs against them on an indemnity basis. The court was satisfied that the defendants had made genuine offers to settle the case, and the plaintiff's refusal to accept these offers was not justified. Consequently, the court ordered the plaintiff to pay the defendants' costs on an indemnity basis.

The final orders of the court included the direction that the plaintiff pay the defendants' costs of the application on an indemnity basis, reflecting the court's finding that the plaintiff had acted unreasonably in rejecting the settlement offers.

Orders