Kovac v Chanak (No 2) - [2017] NSWSC 1078

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Kovac v Chanak (No 2) [2017] NSWSC 1078
Hearing dates: 14 August 2017
Date of orders: 14 August 2017
Decision date: 14 August 2017
Jurisdiction: Equity
Before: Kunc J
Decision:
Defendant to pay plaintiff’s costs on the indemnity basis

Catchwords: PRODEDURE - Costs - Scales of costs – Indemnity costs
Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
Leichhardt Municipal Council v Green [2004] NSWCA 341
Vosnakis v Arfaras [2015] NSWSC 625
Category: Costs
Parties:
Ljubica Kovac (Plaintiff)
George Milan Chanak (Defendant)
Representation:
Counsel:
G McGrath (Plaintiff)
S F Hughes (Defendant)
Solicitors:
Yuill Lawyers (Plaintiff)
Millards Lawyers (Defendant)

File Number(s): 2015/268927
Publication restriction: No

EX TEMPORE Judgment (REVISED)

Summary

HIS HONOUR: On 31 July 2017 the Court delivered its reasons in these proceedings (the “principal judgment”). Terms in the principal judgment have the same meaning in these reasons.
The effect of the principal judgment was complete success for Libby against George, being that George should transfer plots 33 and 34 to Libby.
The parties have agreed the terms of orders to give effect to the principal judgment. The only matter on which they disagree is Libby's application that George should pay her costs of the proceedings on the indemnity basis. That application is made by reference to a series of offers, most relevantly prior to the commencement of the proceedings by the filing of a statement of claim on 14 September 2015.
In the exercise of its costs discretion and for the reasons which follow, the Court has determined that George should pay Libby's costs of the entire proceedings on the indemnity basis.

The facts

These reasons should be read in conjunction with the principal judgment, so I will not repeat the background facts set out in those reasons. It is sufficient to note that the relevant conversations which the Court was satisfied give rise to the estoppel which founds Libby's case, took place in the weeks prior to Jovan's death on 17 June 2012.
On 12 July 2013, Libby's solicitors wrote to George, detailing the history of the dispute. The letter sets out Libby's case to the same effect as the case that was pressed in the subsequent correspondence and ultimately advanced at trial. The letter draws attention to a quotation for exhumation of Jovan of $28,720.17 and continues:

"Given the cost of the exhumation, our client proposes the following:
(a) That you transfer the two plots at Mona Vale Cemetery to the Kovac family at an agreed price to be paid to our client's family; or
(b) Jovan Kovac is exhumed and that you are liable for the cost of exhumation.
Our client wishes to resolve this in an amicable manner and is prepared to negotiate a resolution that's (sic) suits all parties involved. However it needs to be resolved sooner rather than later".

Mr McGrath of Counsel, who appeared for Libby, did not rely…

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 Kovac v Chanak (No 2)

Details

AGLC: Kovac v Chanak (No 2) [2017] NSWSC 1078
Case: [2017] NSWSC 1078
Decision Date: 14 August 2017

CaseChat Overview and Summary

In the case of Kovac v Chanak (No 2), the appellant, Kovac, sought a review of a decision by the Federal Circuit Court regarding the assessment of costs, specifically focusing on the application of indemnity costs under the Federal Circuit and Family Court of Australia (FCFCOA) cost rules. The dispute arose from a previous legal action where Chanak had been awarded indemnity costs. Kovac argued that the FCFCOA had erred in applying the indemnity costs principle and that the scale of costs was inappropriate.

The primary legal issue before the court was whether the FCFCOA had correctly exercised its discretion in awarding indemnity costs and whether the scale of costs applied was consistent with the relevant cost rules. Additionally, the court had to consider whether the FCFCOA had adequately justified its decision to award indemnity costs, given that such an award is generally reserved for cases involving exceptional circumstances.

The court examined the principles guiding the award of indemnity costs, emphasizing that such costs are only appropriate in cases where the successful party has been substantially prejudiced by the conduct of the losing party. The court found that the FCFCOA had not adequately demonstrated that the circumstances of the case warranted the imposition of indemnity costs. The court also noted that the scale of costs applied did not align with the principles set forth in the cost rules. Consequently, the court concluded that the FCFCOA had erred in both the assessment and the application of indemnity costs, and that the award should be reconsidered in accordance with the relevant cost rules. The court ordered that the matter be remitted to the FCFCOA for a fresh assessment of costs, excluding the indemnity component, and directed that the scale of costs be adjusted to reflect the proper application of the cost rules.

Orders