Horesh v Sephardi Association of Victoria (No. 2)
[2013] VSCA 15
•14 February 2013
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| S APCI 2011 0023 | |
| DAN HORESH (in his capacity as Executor of the Estate of the late ALBERT SASSOON YEHUDA) | Appellant |
| v | |
| THE SEPHARDI ASSOCIATION OF VICTORIA & ORS (NO 2) | Respondents |
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| JUDGES | REDLICH, OSBORN JJA and CAVANOUGH AJA |
| WHERE HELD | MELBOURNE |
| DATES OF HEARING | 22 May 2012, 13 December 2012, 31 January 2013 |
| DATE OF JUDGMENT | 14 February 2013 |
| MEDIUM NEUTRAL CITATION | [2013] VSCA 15 |
| JUDGMENT APPEALED FROM | [2011] VSC 26 (Almond J) |
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JUDGMENTS AND ORDERS – Form of order – Breach of contract – Infringement of plaintiff’s naming rights over building – External sign inconsistent with plaintiff’s rights – Extent of appropriate remedy – Plaintiff entitled to removal of current sign but not prescriptive order as to replacement sign – Inappropriate to grant liberty to apply.
COSTS – Neither party wholly successful – Appellant failing on several claims and issues – Parties to bear their own costs of the trial – Respondent to pay 50% of the appellant’s costs of appeal.
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| Appearances: | Counsel | Solicitors |
| For the Appellant | Mr D B Sharp | Dan Horesh |
| For the First Respondent | Mr H A Aizen and Mr D V Aghion | Brygel Lawyers |
REDLICH JA
OSBORN JA
CAVANOUGH AJA:
We delivered reasons for judgment in this appeal on 13 December 2012.[1] In paragraph [75] we set out a provisional form of proposed order to give effect to our conclusions on the substantive aspects of the appeal. In paragraph [76] we made certain observations about costs. Directions were then given for the making of further submissions by the parties as to the appropriate form of order and as to costs. We have now received, heard and considered the parties’ written and oral submissions.
[1][2012] VSCA 308.
For the sake of convenience, we repeat paragraph [75] of our reasons for judgment:
75Accordingly, subject to any submission to the contrary as to form, we are minded to give effect to our conclusions by making orders in the following form:
(1) The appeal be allowed in part.
(2)Paragraph 1 of the order made by the Honourable Justice Almond on 15 February 2011 (being the order dismissing the proceeding) be set aside.
(3)In lieu of paragraph 1 of the order made on 15 February 2011, there be:
(a)a declaration that the inscribing and maintaining by the Sephardi Association of Victoria Inc (‘the Association’) of the name ‘Lyndi and Rodney Adler Sephardi Centre’ over the front entrance to the building at 79 Hotham Street, East Kilda amounts to a breach by the Association of the deed of agreement dated 9 November 1990 between the Association and Albert Sassoon Yehuda;
(b)an order that as soon as practicable the Association remove the name ‘Lyndi and Rodney Adler Sephardi Centre’ presently appearing over the front entrance to the building at 79 Hotham Street, East St Kilda;
(c)an order that there be liberty to apply within three months to a judge of the Trial Division for any further orders necessary or desirable for the working out of the judgment of this Court.
The Association stated in its written outline of submissions that it was content with our proposed form of order. As we will indicate below, the Association has now adjusted its position in relation to whether liberty to apply should be reserved. As to costs, the Association submits that the appellant, as executor of the Estate of Albert Sassoon Yehuda, has no entitlement to professional costs from the Estate in the absence of a charging clause in the will of the deceased; and that, as a result, the ‘indemnity principle’ operates to prevent the appellant from claiming costs against the Association. However, the Association accepts that this is not a point proper to be determined by this Court, but rather is a point which should be raised, if at all, in the Costs Court. Subject to that matter, the Association submits that the appellant and itself be required, in effect, to bear their own costs of the proceeding below and that the appellant should be allowed only one third of his costs of the appeal.
The appellant submits that the form of order which we proposed in our substantive judgment would be appropriate, but only as far as it goes. By his written outline of submissions, the appellant sought a further order, as follows:
The Association shall forthwith –
(a)re-name the Extended Building ‘The Sassoon Yehuda Sephardi Centre’; and
(b)shall erect or affix outside at the front of the Extended Building, an appropriate sign duly visible to the public, of a suitable size and format to indicate such name to be the name of the Extended Building, in an appropriate position to be agreed by the parties, the lettering on such sign to be of the same font, colour, and depth of colour as the sign referring to the Adlers and be at least 10% larger in size.
The Association opposes the making of an order of this kind.
As to costs, the appellant submits, primarily, that the Association should pay his ‘full costs’ of the trial and of the appeal.
We turn first to the question of the prescriptive additional order sought by the appellant. In our view, such an order would not be an appropriate one for this Court to make.
The presently relevant rights of the appellant arise under the settlement deed alone. The appellant conceded at trial, and conceded again during the hearing of the substantive appeal, that the settlement deed did not confer on the Estate, either explicitly or implicitly, a right to have the Yehuda name displayed on the outside, as distinct from the inside, of the building. However, the appellant now submits that the ‘over-riding requirement’ is that the name be so placed as to make clear to the public that what is being named is the building as a whole.[2] He says that ‘in the present circumstances’, this requires that a sign bearing the Yehuda name be visible from the street, ‘particularly if the only name visible from the street otherwise remains that of the Adlers’ [sic], even if the Adler name be restricted by using the word “Extension” or “Wing” rather than “Centre”’.[3]
[2]Outline of Submissions, [5].
[3]Ibid.
As we said in our reasons for judgment, the appellant is entitled to an order that the Association remove the name presently inscribed on the front of the building. He is also entitled to insist that the Association refrain from taking any steps inconsistent with his right to maintain the name ‘the Sassoon Yehuda Synagogue’ (or some agreed variation thereof) in respect of the extended building as a whole.
It would not be appropriate for us to try to anticipate, or to rule upon, a situation which has not yet arisen. Generally speaking, courts do not give advisory opinions or make rulings on hypothetical situations.
The form of the additional order sought by the appellant assumes that the Association will, after removing the present inscription, put up another inscription or sign at the front of the building referring to the Adlers. We cannot make an order based on such an assumption. We do not know what arrangements the respondent has made, or might make, with the Adlers. In the end the Association might not put up any replacement inscription or any sign at all on the outside of the building or in front of it. To take that course would be within the legal rights of the Association, as the appellant has twice conceded previously. Conversely, the Association may wish to put up an inscription or sign which refers to persons other than the Adlers. Many other things are possible. Without knowing precisely what the Association may do or propose by way of any new signage, we could not say whether an infringement of the appellant’s rights would necessarily be involved.
The appellant contends that a prescriptive order of the kind he seeks is necessary to prevent further costly disputation between the parties. We can do no more than give effect to what we understand to be the rights of the parties under the relevant contract, on its proper construction. We are not an arbitral body. We can give no further advance guidance to the parties than we have already given in our substantive judgment.
Further, as we pointed out to counsel for the appellant during oral argument on this application, his proposed form of additional order is out of line with our substantive judgment because it assumes that the appellant now has a right to have the extended building named ‘The Sassoon Yehuda Sephardi Centre’, as distinct from ‘The Sassoon Yehuda Synagogue’. No such right arises from the settlement deed itself. No case was put to the trial judge or to this Court alleging an agreement based on custom and practice arising subsequent to the execution of the deed.
Having regard to the inappropriateness of the additional order sought by the appellant and the protracted history of the disputes between the parties, we now doubt the wisdom of a grant of liberty to apply as foreshadowed in our proposed order. Such a grant may only prolong and exacerbate the remaining disputes between the parties and diminish the prospect of agreement, particularly if the appellant were to remain under the false impression that theoretical disputes could be raised before the Court for guidance or resolution. We raised these concerns with the parties. Counsel for the appellant submitted that the provision for liberty to apply should not be abandoned, saying that to do so might risk the waste of the considerable effort and expense so far expended on this case by all concerned. The Association took a different approach. Departing from its original position, the Association submitted that omitting the proposed provision for liberty to apply would be likely to aid the prospects of final settlement of the outstanding differences between the parties. Indeed the Association’s counsel informed us, without objection by counsel for the appellant, that the parties had been negotiating with each other extensively and productively since the delivery of our reasons for judgment; that the negotiations necessarily involve consultation with the Adlers; and that the parties were close to an agreement about future external signage.
This case has already taken up a great deal of Court time. The position of other litigants waiting to be heard must be considered. If, unfortunately, the present negotiations between the parties were to break down, and if the Association were then to take steps which the appellant considered to be in breach of the settlement deed, his claim would really be a fresh claim and it would not be unreasonable to expect him to bring any challenge by way of a fresh proceeding. Our substantive reasons for judgment in the present appeal would be available and would limit the scope for debate. Accordingly, we have decided not to include provision for liberty to apply in our orders.
Our substantive orders will otherwise be in accordance with paragraph [75] of our reasons for judgment of 13 December 2012. We will not include an additional order of the prescriptive kind sought by the appellant.
We turn to the issues relating to costs. The appellant’s claim in his outline of submissions is, as mentioned above, that the respondent should pay his ‘full costs’ of the trial and also his costs of the appeal. During oral argument the appellant submitted in the alternative that he should at least be awarded a proportion of his costs at trial (as well as his costs of the appeal).
It will be recalled that Mr Horesh added Mr Jaffe and Mr Lelah as defendants in the proceeding below. They obtained separate legal representation which, as the trial judge later found, was necessary and proper.[4] Mr Horesh alleged, among other things, that Mr Jaffe and Mr Lelah had made wilful misrepresentations to him about the Association’s intentions in connection with the naming of the synagogue building. He asserted that the alleged wilful misrepresentations were attributable to the Association as well. He failed completely in these respects at trial. Indeed, he failed generally. There was an extensive debate about costs. On 31 March 2011 Almond J published a detailed judgment as to costs. His Honour found, among other things, that Mr Horesh’s allegations of wilful misrepresentation had no foundation and that Mr Horesh had pressed them even after their weakness had been duly pointed out in pre-trial Calderbank offers, being offers which Mr Horesh had unreasonably refused to accept. Subject to a minor exception, Mr Horesh was ordered to pay the Association’s costs of the proceeding and to do so on a solicitor/client basis as to 50% of the costs incurred by the Association after the expiry of its Calderbank offer. He was also ordered to pay the costs of Mr Jaffe and Mr Lelah, and to do so on an indemnity basis in respect of the costs incurred after the expiry of their Calderbank offer.
[4]Horesh v Sephardi Association of Victoria (No 2) [2011] VSC 117, [28]–[37].
The appellant has not filed any independent appeal against his Honour’s judgment as to costs.
Undaunted, the appellant now contends, primarily, that we should require the Association to pay his costs of the proceeding below generally, including even the costs he incurred in prosecuting his claims of wilful misrepresentation against Mr Jaffe and Mr Lelah and including also his claims of wilful misrepresentation against the Association.
The appellant so contends on two main bases – first, that he has now succeeded in achieving what was always his ‘primary goal’, namely establishing his right to the name of the extended building; and, second, that his joinder of the second and third defendants was a ‘direct consequence’ of the Association’s failure to conduct the proceeding below in an adequate and proper manner.
The appellant’s subjective ‘primary goal’ is not particularly relevant. More significant is the degree of success or failure of the parties in relation to the claims actually made and the issues actually raised. The appellant has always claimed more than the right to have the extended building named after Sassoon Yehuda. He has claimed a right to have the Yehuda name displayed externally on or in front of the building. That may yet occur as a direct or indirect consequence of this case, but it is not actually required to be done by any order of this Court. Moreover, the appellant has sought exclusivity. He has claimed the right to have the Yehuda name, only, displayed externally, ie with no reference to the Adler name or any other name. He has not achieved that. Nor has he achieved a prescriptive order of the kind he claimed in this application. Further, he has failed to establish that the building must be named the ‘Sassoon Yehuda Sephardi Centre’, as distinct from the ‘Sassoon Yehuda Synagogue’.
We agree in substance with the Association’s response to the appellant’s submissions concerning the trial costs. The proceeding at first instance was essentially divided into two parts – the contractual claims and the wilful misrepresentation claims. The appellant does not dispute the Association’s contention that the wilful misrepresentation claims (on which the appellant was wholly unsuccessful) took up the greater part of the trial. Further, we cannot go behind the findings of the learned trial judge that this part of the appellant’s case lacked any foundation and that the pressing of it after the service of the Calderbank offers warranted special orders against the appellant as to 50% of the costs incurred from that point on. The bringing of the wilful misrepresentation case did not advance the achievement of the appellant’s ‘primary goal’. And it led to the incurring of significant expense on the part of the Association.
The Association further points out that it presently has the benefit of an order for costs made by Warren CJ in relation to a failed injunction application issued by the appellant and of an order for costs made by Daly AsJ in respect of an interlocutory matter.
In addition, as the Association submits, the appellant as plaintiff below amended his statement of claim three times, and his reply three times.
We accept also the Association’s submission that the contract case that the appellant ultimately ran at trial and took on appeal was a matter of interpretation of documents against a background of relatively uncontentious facts.
We note again the observations made in paragraph [76] of our earlier reasons to the effect that the points on which the appellant succeeded on appeal ‘were thickly obscured, especially at trial, by his pleadings and by the multitude of mostly unsuccessful points raised by him’ and that ‘parts of his evidence were simply not accepted at trial’.
The Association’s counsel estimate that, on a taxation, its costs of successfully defending the allegations of wilful misrepresentation would exceed (even if only narrowly) the plaintiff’s costs of the contractual claims, taking into account that the Association’s costs would in part be taxable on a solicitor client basis. Counsel for the appellant did not dispute this. At one stage of his oral submission he agreed with a suggestion from Justice Osborn that, in the circumstances of the present case, if the appropriate course were to set off the one set of costs against the other, it would make little sense to require that both sets of costs be taxed. Nevertheless, shortly thereafter, counsel for the appellant submitted that that very thing should indeed be done in preference to the Association’s suggested course of requiring, in effect, that the relevant parties bear their own costs of the proceeding below. We reject the submission that both parties’ costs be taxed and set off against each other.
The second basis of the appellant’s resistance to the proposal that the parties should bear their own costs of the proceeding below involves various criticisms of the way in which the Association conducted the proceeding at first instance. As the Association points out, all of the matters now relied upon were canvassed in detail during the costs hearing before the trial judge, who was not persuaded by them. In the absence of an independent appeal in relation to costs, the appellant cannot raise these matters again.
As we have indicated, the Association submits that an appropriate balance of these various considerations is that there should be no order as to the costs of the trial. To achieve such a result, the Association is prepared to give up the benefit of all of the orders for costs so far made in its favour, including in particular the costs of the injunction application and of the interlocutory matter.
The primary principle is that ‘costs follow the event’. However, the parties have had mixed success. Further, courts have a discretion to deprive a successful party of some or all of its costs of a proceeding or, indeed, to require a successful party to pay some or all of the costs of the unsuccessful party.[5] In our view, the Association’s proposal is more than fair. We will make orders or receive undertakings the effect of which will be that the parties will bear their own costs of the trial.
[5]Oshlack v Richmond River Council (1998) 193 CLR 72, 97–98.
As to the costs of the appeal, we note that, in his written outline of submissions, the appellant not only sought costs but also an order that the costs be paid on an indemnity basis from the time of service by the appellant of a Calderbank offer dated 9 December 2011 in respect of the appeal. However, the appellant no longer presses his claim for indemnity costs based on the Calderbank letter.
In response, as we have mentioned, the Association submits that the appellant should have only one third of his costs of the appeal.
In our view, the proper order is that the Association pay one-half (50%) of the appellant’s costs of the appeal.
As mentioned above, and as the Association submits, the appellant has never accepted that the Adler name (or any other name) may appear on the front external wall of the synagogue building at the same time as the Yehuda name. This Court has interpreted the parties’ agreements in such a way that a result of that kind would be possible, contrary to the appellant’s case both at trial and on appeal. That is no doubt a significant thing for the Association given that it apparently feels an obligation of some kind to the Adlers. Indeed, as we have already indicated, the appellant has by no means enjoyed a complete victory. Nor has he achieved a result equal to or better than what he sought in his Calderbank offer of 9 December 2011, which presumably explains why he no longer relies on it.
On the other hand, the appellant has established, contrary to the Association’s position, that the entire extended building is required to be named after Sassoon Yehuda.
Although the hearing of the appeal only occupied a single day, a large part of the hearing time and the bulk of the written submissions was occupied in connection with the appellant’s unsuccessful attempt to rely on the memorandum of understanding as the source of a right – indeed an exclusive right – to have the Yehuda name appear on the outside of the premises.
The Association asserts that the appellant’s case on appeal has had the following procedural difficulties:
(a)Multiple amendments to the notice of appeal;
(b)Additional documents filed with the Court in the absence of any order permitting the appellant to file those documents – each of those documents, although not formally on the record, had to be read and analysed;
(c)The appellant’s failure to agree upon a summary of facts;
(d)The failure of the appellant to comply with the order of this Court made on 6 September 2011 as to the parties’ summaries of facts;
(e)The failure of the appellant to provide the Court with any summary of facts, which meant that the first respondent had to set out its own summary in full in its written outline;
(f)The prolix and overly complex nature of the notice of appeal and outline of submissions; and
(g)The lack of merit in several of the propositions advanced.
The appellant takes issue with the Association, on one basis or another, in relation to each of these assertions. Nothing is to be gained by examination of every one of these disputed matters. As already indicated, we do accept that costs would have been reduced on both sides if the appellant had not obscured the points on which he succeeded by taking so many other points. On the other hand, we are not in a position to penalise the appellant for failing to agree upon a summary of facts. Nor, for present purposes, would we give any significant weight to the other matters listed by the Association, even if they were established to be wholly attributable to the fault of the appellant.
On the other hand, as we said in paragraphs [49] to [51] and [54] of our previous reasons, the appellant’s case as run on appeal represented a substantial departure from the way in which the case was run below, and we think that this should be taken into account against the appellant in relation to the costs of the appeal.
In all the circumstances, we will order that the Association pay one-half (50%) of the appellant’s costs of the appeal.
Form of order
It is common ground that the sum of $212,500 already paid by the appellant to the Association's solicitor on account of the Association's costs of the trial should be returned forthwith and that an order to that effect should be included.
Further, this is clearly a proper case for a certificate under s 4 of the Appeal Costs Act 1998.
No mechanism for disposing of the appellant’s liability to the Association for costs in relation to the orders made by Warren CJ on 14 May 2010 and Daly AsJ on 19 May 2010 has as yet been agreed between the parties. The orders are not presently under appeal. However, in order to produce the result that the parties be required to bear their own costs of the proceeding below, the Association in effect invites us to give it leave to appeal against the orders out of time; to treat the Association as having commenced such an appeal; to allow the appeal instanter; and to set aside the orders insofar as they relate to the appellant and itself. Given that, so far as relevant, the orders were made entirely in favour of the Association and against the appellant, and given our overall conclusions as to costs, the appellant could not be heard to oppose such a course. Unless some other, equivalent course is agreed, we will include orders along those lines accordingly.
So, for the reasons we have given, we propose to make orders substantially in the following form:
THE COURT ORDERS THAT:
1.The appeal be allowed in part.
2.Paragraph 1 of the order made by the Honourable Justice Almond on 15 February 2011 (being the order dismissing the proceeding) be set aside.
3.In lieu of paragraph 1 of the said order made on 15 February 2011, there be:
(a)a declaration that the inscribing and maintaining by the Sephardi Association of Victoria Inc (‘the Association’) of the name ‘Lyndi and Rodney Adler Sephardi Centre’ over the front entrance to the building at 79 Hotham Street, East St Kilda amounts to a breach by the Association of the deed of agreement dated 9 November 1990 between the Association and Albert Sassoon Yehuda; and
(b)an order that on or before 16 March 2013 the Association remove the name ‘Lyndi and Rodney Adler Sephardi Centre’ presently appearing over the front entrance to the building at 79 Hotham Street, East St Kilda.
4.(a) The First Respondent has leave to appeal out of time against the orders for costs as between the Appellant and the First Respondent made by Warren CJ on 14 May 2010 and Daly AsJ on 19 May 2010.
(b)The First Respondent is taken to have duly commenced an appeal pursuant to such leave.
(c)The appeal is allowed instanter.
(d)The orders for costs as between the Appellant and the First Respondent made by Warren CJ on 14 May 2010 and Daly AsJ on 19 May 2010 be set aside.
5. Paragraphs 1, 2 and 4 of the order made by the Honourable Justice Almond on 31 March 2011, insofar as those paragraphs relate to the claim by the Plaintiff (Appellant) against the First Defendant (First Respondent), be set aside.
6.In lieu thereof, it be ordered that the Plaintiff (Appellant) and the First Defendant (First Respondent) each bear their own costs of the proceeding in the Trial Division.
7.The First Respondent pay one-half of the Appellant’s costs of the appeal.
8.The amount of $212,500 paid by the Estate of Albert Sassoon Yehuda to the solicitor for the First Respondent by way of the First Respondent’s costs of the trial, as presently held by him in an interest bearing trust account, be returned to the Estate forthwith, together with the interest accrued thereon.
OTHER MATTERS:
9.The First Respondent is granted an indemnity certificate pursuant to s 4 of the Appeal Costs Act 1998.
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