Konstandellos v Harplex Pty Ltd (No 2) - [2018] VSC 702

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2014 06596

NIKOLAOS KONSTANDELLOS AND OTHERS (according to the attached schedule)	Plaintiffs
v
HARPLEX PTY LTD (ACN 188 350 074)	First Defendant
KELLY & CHAPMAN (a firm)	Second Defendant

---

JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	15 August 2018
DATE OF JUDGMENT:	6 December 2018
CASE MAY BE CITED AS:	Konstandellos & ors v Harplex Pty Ltd & anor (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 702

---

COSTS – Application by the plaintiffs for orders that a successful defendant not receive its costs of the proceeding, and that the successful defendant pay the costs of another successful defendant for which the plaintiffs are liable to pay – Whether there is any good reason or special circumstances to warrant a departure from the usual order for costs – Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129, applied – Loizou v Derrimut Enterprise Pty Ltd (No 2) [2004] VSC 548; Khodr v G4 Custodial Services Pty Ltd [2016] VSC 800, referred to – Not established conduct of successful defendant caused the plaintiffs to issue the proceeding against the other successful defendant – Conduct relied upon had no relevance to claim brought against successful defendant from whom costs claimed – No allegation by the plaintiffs against the defendant regarding any unnecessary litigation or expense – Application dismissed

---

APPEARANCES:	Counsel	Solicitors
For the First to Third Plaintiffs	Mr L Warren	Russell Kennedy
No appearance for the First Defendant
For the Second Defendant	Ms L Hannon	Obst Legal

HER HONOUR:

On 26 April 2017, I made orders and delivered reasons in this proceeding, following a trial in November 2016.[1] Among other things, I gave judgment in favour of the second defendant (‘Kelly & Chapman’) against the first to third plaintiffs (‘plaintiffs’).
[1][2017] VSC 183. Judgment was ordered in favour of the plaintiffs against the first defendant (later reversed on appeal) and in favour of the second defendant against the plaintiffs.

This ruling concerns the application of the plaintiffs seeking that they should not be required to pay Kelly & Chapman’s costs of the proceeding, despite Kelly & Chapman being the successful defendant. Further, the plaintiffs say that Kelly & Chapman ought to pay the first defendant’s costs of the proceedings, which, on 3 August 2018, I ordered to be paid by the plaintiffs, subject to the outcome of this application.

Kelly & Chapman says that there is no good reason to depart from the usual order for costs, which would entitle it, as a successful defendant, to a costs order in its favour. Kelly & Chapman did not, however, press for an order for its costs incurred prior to 24 July 2015. The significance of that date will become apparent later in these reasons.

This proceeding, and the underlying dispute, has had a long and complicated history. The factual background to the dispute and 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.

Keep reading for free

Create a free CaseChat account to read Konstandellos v Harplex Pty Ltd (No 2) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] VSC 702
Decision Date: 6 December 2018

CaseChat Overview and Summary

The plaintiffs brought an application for orders regarding costs following a legal dispute against Harplex Pty Ltd. The plaintiffs sought to prevent Harplex from receiving its costs of the proceeding and to require another successful defendant, against whom the plaintiffs were also liable, to pay Harplex's costs. The application was heard in the Supreme Court of Victoria. The legal issues before the court were whether there were any good reasons or special circumstances to justify a departure from the usual order for costs. This involved assessing the conduct of the parties and the relevance of that conduct to the claims made in the proceeding.

The court considered the principles set out in Verna Trading Pty Ltd v New India Assurance Co Ltd and referred to the cases of Loizou v Derrimut Enterprise Pty Ltd and Khodr v G4 Custodial Services Pty Ltd. The plaintiffs did not establish that the conduct of Harplex caused them to bring the proceeding against the other defendant, nor that the conduct had any relevance to the claims against Harplex. Furthermore, there were no allegations against Harplex concerning unnecessary litigation or expense. Given these factors, the court found that there were no good reasons or special circumstances to warrant a departure from the usual order for costs.

The application was dismissed, and each party was ordered to bear its own costs of the proceeding. The court found no justification to shift the cost burden from Harplex to the other defendant or to impose additional costs on the plaintiffs for Harplex's legal expenses. The reasoning focused on the lack of evidence showing that Harplex's conduct necessitated the proceeding or was relevant to the claims against it. Consequently, the court adhered to the standard cost orders, which maintain that each party is responsible for its own legal costs.

Orders