Law v Hofstede and Ors (No 2)

[2001] VSC 452

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4918 of 2000

PETER JOHN LAW	Plaintiff
V
JOHN JOSEPH JOHANNES HOFSTEDE and Ors	Defendants

---

JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 November 2001
DATE OF JUDGMENT:	29 November 2001
CASE MAY BE CITED AS:	Law v Hofstede (No. 2)
MEDIUM NEUTRAL CITATION:	[2001] VSC 452

---

Practice and Procedure – costs of party successful at trial – whether on solicitor and client basis.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G. Gidley	Logie-Smith Lanyon
For the First and Thirdnamed Defendants	Mr Marcus Clarke	Slater & Gordon
For the Secondnamed Defendant	Mr M. Annells	Minter Ellison

HIS HONOUR:

1. Following the trial of this proceeding, judgment was entered for the defendants on 9 November 2001.  They now seek costs on a solicitor and client basis on the grounds that the plaintiff’s claims were brought and maintained in wilful disregard of known facts and clearly established law, that the allegations made by the plaintiff ought never to have been made and that the plaintiff’s case was unduly prolonged by groundless contentions put on his behalf.

1. It is true that, early in the trial, the plaintiff abandoned substantial parts of his claim and indicated that no relief was sought against the thirdnamed defendant.  Likewise no relief was sought against the secondnamed defendant, a company in administration. 

1. The trial then proceeded on the remaining contentions which were ultimately unsuccessful notwithstanding that no evidence was called by any defendant.  I have, in my judgment, expressed my views upon these contentions. 

1. The fact remains that, having heard the plaintiff’s evidence, I cannot be satisfied that the allegations of fact which he made were groundless in the sense that they were made in wilful disregard of known facts.  For the most part, Mr Law’s evidence was either not challenged or was accepted. 

1. A tragic feature of this case was that insufficient attention appears to have been directed to the legal implications and consequences of the facts which Mr Law asserted.  This meant that the ultimate relief which he sought, namely, a one-half share in the proceeds of the sale of the All-Waste business, was always beyond his reach, given the way his case was pleaded. 

1. Acknowledging this fact, I am nonetheless not satisfied that this is such a case as warrants the making of the costs order sought by the defendants.  It is difficult for me from my perspective to condemn the decision of Mr Law to proceed with his case or the advice upon which this decision was based, especially as I do not know what he expected to elicit from the defendants’ witnesses in cross-examination.  There were hints from matters said at the trial that a good deal was expected to be made from the evidence of Mr Hofstede and of Mr Tattersall, his accountant, each of whom, it may have been supposed at the outset, would be called to give evidence.  It was the brave and, as it turned out, tactically astute decision of counsel for the first and thirdnamed defendant which put this possibility beyond the reach of the plaintiff.

1. Counsel for the first and thirdnamed defendant then argued that time had been lost during the trial on 18 and 21 October debating the deficiencies of the plaintiff’s pleading or standing the matter down to enable the pleading to be rectified.  There was a further delay on 24 October 2001 when the hearing had to be adjourned due to the lack of preparedness of counsel then appearing for the plaintiff to commence his final address.  The cost of this should be borne by the plaintiff on a solicitor and client basis.

1. Against this, counsel presently acting for the plaintiff contended that delays had been incurred by the first and thirdnamed defendants arising out of their change of solicitors which led to adjournments on 9 and 15 October 2001.

1. I do not propose to descend into any minute dissection of these rival contentions.  Each of them is essentially correct.  In the circumstances I am of opinion that the justice of the case would be served by refusing to order in favour of either of their parties any costs on a solicitor and client basis for time lost. 

1. It was contended also on behalf of the secondnamed defendant that it should, for similar reasons, have its costs on a solicitor and client basis up to 15 October 2001, being the first working day after the appointment of the administrator.  The administrator took no part in the trial other than to appear by counsel on 15 October to announce that it proposed to follow this course.  For the reasons which I have set out above I equally reject this claim for solicitor and client costs. 

1. The order of the court as to costs will therefore be in accordance with the following minutes:

1.The plaintiff pay the costs of the defendants of the proceeding including reserved costs and the costs of transcript but not including their costs of 9 and 15 October 2001.

2.The first and thirdnamed defendants pay the costs of the plaintiff of 9 and 15 October 2001, the amount of such costs to be set off against the amount of costs to be paid by the plaintiff to the first and thirdnamed defendants pursuant to the preceding order.

---