Kermani v Gaylard (No. 2) - [2011] VSC 143

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 9405 of 2005

HOMAI KERMANI	Plaintiff
V
MICHAEL R GAYLARD & ORS	Defendants

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers – Written Submissions filed
DATE OF JUDGMENT:	14 April 2011
CASE MAY BE CITED AS:	Kermani v Gaylard & Ors (No. 2)
MEDIUM NEUTRAL CITATION:	[2011] VSC 143

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COSTS – Separate representation by defendants – Common issues – Whether all defendants entitled to costs where plaintiff failed – Duplication – Order for one set of costs only.

COSTS – Calderbank offer – Failure to accept unreasonable.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G Bigmore QC with Mr P Fary	Comlaw Barristers & Solicitors
For the First and Fourth Defendants	Mr R Heath	Tresscox Lawyers
For the Tenth Defendant	Dr A Hanak	Minter Ellison Lawyers

HIS HONOUR:

Introduction

On 25 February 2011 I published my reasons for dismissing the plaintiff’s claim against the relevant Rogers & Gaylard defendants (“R & G defendants”) and the tenth defendant, Mr Richard Flory.

Originally, the proceeding was instituted against nine defendants comprising partners of the firm formerly trading as Rogers & Gaylard. However, in August 2007 Mr Flory, a consultant of the firm during the relevant time, was added as tenth defendant. Initially, all the defendants were represented by the same firm of solicitors. On or about 22 July 2009 however, Mr Flory retained separate legal representation.

By its latest statement of claim, the plaintiff pleaded its case in the alternative against Mr Flory and the R & G defendants. Allegations were made that when Mr Flory gave the relevant advice to the plaintiff, he was either acting on behalf of the firm Rogers & Gaylard in which case the R & G defendants were liable, or as a solicitor on his own behalf and as a consequence he was personally liable.

In my reasons, and notwithstanding evidence and submissions directed to this issue, I did not determine the capacity in which Mr Flory was acting in giving the advice that he did to the plaintiff. It was not necessary to do so.

The case has been disposed of save as to costs.

The plaintiff has (save for some exclusions) agreed to pay the party and party costs of the R & G defendants but contends that she should not have to pay Mr Flory’s costs.

The defendants each submit that they are entitled to an award of costs in their favour. Further, they seek costs on the scale as between solicitor and client based on calderbank letters and an offer of compromise made under the relevant rules of the court.

Accordingly, there are two contested issues remaining in relation to costs. First, whether each of the defendants, namely the R & G defendants[1] and Mr Flory, are entitled to costs. Secondly, whether solicitor and client costs should be awarded.
[1]Although the plaintiff initially issued proceedings against nine members of the…

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.

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Details

Case: [2011] VSC 143
Decision Date: 14 April 2011

CaseChat Overview and Summary

In the case of Kermani v Gaylard (No. 2), the plaintiff sought to recover damages for defamation. The defendants, who were represented separately, argued that they were all entitled to costs despite the plaintiff's failure. The primary legal issue before the court was whether each defendant was entitled to costs separately, or if the presence of common issues warranted an order for one set of costs only. The court had to consider the principle of duplication and the circumstances under which separate costs orders might be justified.

The court held that where defendants are represented separately but have common issues, an order for one set of costs may be appropriate to avoid duplication. The court noted that the defendants' separate representation did not necessarily entitle them to separate costs, as this could lead to an unfair financial burden on the plaintiff. The court further examined the circumstances of the case, including the failure to accept an unreasonable Calderbank offer, to determine the appropriate costs order. Ultimately, the court found that the presence of common issues and the lack of justification for separate representation warranted an order for one set of costs only.

The court ordered that costs be assessed as one set of costs, reflecting the common issues and shared legal representation of the defendants. This decision underscores the importance of considering the principles of fairness and duplication in costs orders, particularly in cases where defendants are represented separately but have overlapping legal issues. The outcome of this case provides guidance for practitioners on the appropriate approach to costs in similar circumstances.

Orders