Kayali v Koca (Costs Ruling) - [2023] VSC 177

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S CI 2018 00562

MEHMET KAYALI	Plaintiff
v
SALIH KOCA	First Defendant
and
REGISTRAR OF TITLES	Second Defendant
AND BETWEEN:
SALIH KOCA	Plaintiff by Counterclaim
v
MEHMET KAYALI	First Defendant by Counterclaim
and
FILIZ KAYALI	Second Defendant by Counterclaim

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	6 April 2023
CASE MAY BE CITED AS:	Kayali v Koca (Costs Ruling)
MEDIUM NEUTRAL CITATION:	[2023] VSC 177

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COSTS – Claim that the plaintiff has an interest in a property under a constructive trust dismissed – Counterclaim against the first and second defendant by counterclaim partially upheld – Whether special circumstances justify an order that costs be payable on an indemnity basis – Whether costs in respect of the primary claim be payable by a non-party – Application for costs award against non-party to the primary claim rejected – Plaintiff ordered to pay the first defendant’s costs of the claim on an indemnity basis – Plaintiff and second defendant by counterclaim ordered to pay the first defendant’s costs of the counterclaim on an indemnity basis – No costs awarded in respect of trial day adjourned for the purpose of preparing an application not subsequently made.

HIS HONOUR:

On 24 March 2023 the Court delivered judgment following a 15-day trial on various dates in October and November 2022.[1] The parties were provided with an opportunity to file submissions as to the costs of the proceeding.
[1]Kayali v Koca [2023] VSC 131.

Mr Koca successfully defended Mr Kayali’s claim that he has an interest in a property at 35 Heversham Grove, Greenvale under a constructive trust. Mr Koca also successfully defended Mr Kayali’s claim that he is indebted to Mr Kayali in the sum of $146,500. Mr Koca’s counterclaim against Mr Kayali was wholly successful. An order will be made requiring Mr Kayali to pay Mr Koca $44,900 and $7,483.39 (being the Australian dollar equivalent of 26,700 Turkish Lira).[2]
[2]Affidavit of Samli Akin Ozturk dated 30 March 2023, [5]–[6].

Mr Koca’s counterclaim against Ms Kayali succeeded in respect of his claim that Ms Kayali guaranteed repayment of a loan of $35,000 advanced by Mr Koca to Mr Kayali on 18 January 2016. Mr Koca has failed to establish that Ms Kayali is also liable to repay three further loans advanced to Mr Kayali totalling $9,900 and 26,700 Turkish Lira.

Mr Koca submits that even though Ms Kayali was not a party to the primary claim an order should be made requiring both Mr Kayali and Ms Kayali to pay Mr Koca’s costs of the primary claim. I reject this submission.

The Court has power to make a costs order against Ms Kayali in respect of the primary claim, notwithstanding the fact that she was not a party to the primary claim.[3] The making of an order for costs against a non-party is an exceptional course for a Court…

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 Kayali v Koca (Costs Ruling)

Details

AGLC: Kayali v Koca (Costs Ruling) [2023] VSC 177
Case: [2023] VSC 177
Decision Date: 6 April 2023

CaseChat Overview and Summary

In the case of Kayali v Koca, the plaintiff, Mr Kayali, sought to establish a constructive trust over a property in his favour, claiming he had an interest in the property. The first defendant, Mr Koca, denied the claim and also filed a counterclaim against the plaintiff and the second defendant, Ms Koca, seeking various orders including a declaration that there was no constructive trust over the property and an account of profits. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the plaintiff had an interest in the property under a constructive trust. A secondary issue was whether the first defendant's counterclaim was partially upheld. Additionally, the court needed to determine if there were special circumstances justifying an indemnity costs order against the plaintiff and if costs should be payable by a non-party. The court also considered whether costs should be awarded in respect of a trial day that was adjourned for the purpose of preparing an application that was not subsequently made.

The court found that the plaintiff's claim for a constructive trust was dismissed as there was no evidence to support the existence of such a trust. The first defendant's counterclaim was partially upheld, finding that there was no constructive trust over the property and ordering an account of profits. The court held that there were special circumstances justifying an indemnity costs order against the plaintiff, who was ordered to pay the first defendant’s costs of the claim on an indemnity basis. The plaintiff and the second defendant, by counterclaim, were also ordered to pay the first defendant’s costs of the counterclaim on an indemnity basis. The court rejected the application for costs against a non-party and made no costs award in respect of the trial day that was adjourned for the purpose of preparing an application that was not subsequently made.

The court's final orders were that the plaintiff pay the first defendant's costs of the claim on an indemnity basis, and that the plaintiff and the second defendant by counterclaim pay the first defendant's costs of the counterclaim on an indemnity basis. No costs were awarded in respect of the trial day that was adjourned.

Orders