Kweifio-Okai v SPG Corporation Pty Ltd (No 2)

[2020] VSC 545

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2019 01534

GEORGE KWEIFIO-OKAI	Applicant
v
SPG CORPORATION PTY LTD (ACN 098 946 635)	First Respondent
STUART MILLER	Second Respondent
ANTHONY BREARLEY	Third Respondent

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	28 August 2020
CASE MAY BE CITED AS:	Kweifio-Okai v SPG Corporation Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 545

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COSTS – Self-represented applicant refused leave to appeal VCAT orders – Calderbank offer on costs – Whether unreasonable refusal of offer – Standard costs awarded.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	On the papers	Self-represented
For the First and Second Respondents	On the papers	Tony Hargreaves & Partners
For the Third Respondent	On the papers	Mills Oakley

HIS HONOUR:

1. On 26 June 2020, I dismissed the applicant’s application for leave to appeal from orders of the Victorian Civil and Administrative Tribunal (‘Tribunal’).[1] By written submissions, the first and second respondents sought costs of the proceeding on a standard basis up to and including 8 July 2019 and on an indemnity basis from 9 July 2019.[2]

   [1]Kweifio-Okai v SPG Corporation Pty Ltd [2020] VSC 386.

   [2]The third respondent did not seek costs.

1. On 28 June 2019, the first and second respondents’ solicitors wrote to the applicant shortly prior to a mediation held at the Court. The letter stated:

We advise our clients position remains unchanged from the position taken in VCAT. Our clients maintain the current proceeding before the Supreme Court of Victoria is frivolous, vexatious and lacking in substance and ought to be struck out.

Significant additional costs will be incurred in relation to the upcoming mediation. In addition to the fee for mediation payable by you, our client will incur the costs of Counsel and solicitor attending the mediation. We are instructed to pursue recovery of our client’s incurred in this proceeding in addition to the outstanding costs ordered in favour of our clients by VCAT on 30 January 2019.

In the circumstances, we are instructed to invite you to discontinue the current proceeding before the Supreme Court of Victoria. Provided you do so strictly within 7 days of the date of this letter, the defendants will agree to bear their own costs of the Supreme Court proceeding incurred to date subject to and conditional upon you agreeing to enter into a Deed of Release providing our clients with a full release in relation to all claims arising directly or indirectly out of the subject matter of Supreme Court Proceeding No E SCI 2019 01534. For the avoidance of doubt, this offer only relates to the costs incurred in relation to the current Supreme Court proceedings, not the costs of the VCAT proceeding in which a costs order has already been made in favour of our clients.

Should you fail to discontinue the Supreme Court proceeding on this basis, a copy of this letter will be produced to the Court on the question of costs in accordance with the principles enunciated in Calderbank v Calderbank, Cutts v Head and applied by the Victorian Court of Appeal in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2).[3]

[3](citations omitted).

1. The applicant did not accept the offer.

1. The first and second respondents contend that the applicant’s rejection of the offer was unreasonable and that he should be ordered to pay their costs on an indemnity basis from 9 July 2019. They contend that the offer was made at an early stage of the proceeding and before the mediation, the applicant was provided with sufficient time to consider the offer, the offer had at least some level of compromise, the applicant’s prospects of success were low, the terms of the offer were clear and while it did not foreshadow an application for indemnity costs, reference was made to relevant cases about the award of indemnity costs. These are all matters relevant to the exercise of the Court’s discretion about costs.

1. The second respondent, who is a solicitor, accepts that, if costs were awarded in his favour, the Costs Court would be unable to make an award of costs in his favour for work that he undertook on his own behalf.[4]

   [4]Bell Lawyers Pty Ltdv Pentelow [2019] HCA 29; (2019) 93 ALJR 1007; (2019) 372 ALR 555.

1. The applicant submits that the second respondent could not disentangle his costs from the first respondent’s costs, but I consider that a matter for the Costs Court to determine if the parties cannot reach an agreement. He was critical of the behaviour of the first and second respondents and towards his offers to negotiate about costs and said they were unresponsive and uncooperative, and that he had been threatened with costs to dissuade him from pursuing his case. He referred to the three year gap between the payment of the deposit for the apartment purchased by his son and settlement date, by which time lending criteria had altered, and to the ‘unlawful dispossession’ of the deposit. He also made other claims that I do not consider could affect the question of costs.

Consideration of submissions

1. I found that the applicant had no argument that justified leave to appeal being granted. The Tribunal had summarily dismissed his application because the appropriate parties had not been sued and its lack of jurisdiction to determine some of his claims.

1. The intention of the Victorian Civil and Administrative Tribunal Act 1998 and the scheme of s 148 is that proceedings commenced in the Tribunal are to end there unless there is a question of law that has affected the Tribunal’s decision and it is sufficient to justify the grant of leave by this Court. The normal rule in this Court is that costs follow the event with the unsuccessful party being ordered to pay the successful parties’ costs on a standard basis. Subject to consideration of the first and second respondents’ offer, the usual order for costs should apply. I note that the applicant was ordered to pay costs associated with the Tribunal hearing, but that was a standard costs order on a particular scale.

1. I do not consider that the discretion as to costs should be exercised so as to award the first and second respondents indemnity costs. Their letter of offer did not mention indemnity costs or explain what that term meant. It referred to legal authority which would alert a legal practitioner that indemnity costs were likely to be sought against their client. But, citing authorities was unlikely to alert a self-represented litigant, in this case Dr Kweifio-Okai. When a party makes a Calderbank offer of settlement, a statement of their intention as to costs, if the offer is not accepted, gives the other party notice of the possible consequence of not accepting it. When the party receiving the offer is legally represented, notification of an intention about costs may often be made by referring to the usual authorities, as the first and second respondents’ letter did. But even then, the Court of Appeal in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2)[5] considered that the giving of notice in the offer of an intention to seek indemnity costs if the offer was rejected was relevant to deciding whether to award indemnity costs.

   [5](2005) 13 VR 435.

1. I have considered the factors relied on by the first and second respondents, all of which are relevant. On the other hand, their offer gave the applicant a short period to accept it and he appears to have wanted to negotiate with them in or in connection with the court ordered mediation. While I found that his challenge to the Tribunal decision could not succeed, his contentions in part concerned the Tribunal procedures at the directions hearings which he appears not to have fully understood.

1. It was therefore all the more important for the first and second respondents to make very clear the costs consequences that they would seek if the applicant rejected their offer. As the applicant was self-represented, the first and second respondents should have done this by using the term ‘indemnity costs’, accompanied by a simple explanation of its meaning and the possible consequences of his non-acceptance of the offer. The reference to legal authority was insufficient.[6] In those circumstances, the first and second respondents have not established that it was unreasonable for the applicant to refuse their offer and therefore have not established that the Court should exercise its costs discretion by awarding indemnity costs.

   [6]See, the similar approach in Slaveski v Victoria [2010] 569 [68]-[70] (Kyrou J).

1. But, as I have said, the applicant must pay the first and second respondents’ costs of the proceeding on a standard basis to be fixed by the Costs Court in default of agreement. This costs order does not include any costs incurred by the second respondent, a solicitor, when performing legal work for himself.