Leahy v Javni (No 2) - [2020] VSC 778

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2018 00198

GAIL PATRICIA LEAHY	Plaintiff
v
PETER JAVNI	Defendant

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	23 November 2020
CASE MAY BE CITED AS:	Leahy v Javni (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 778

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COSTS – Plaintiff succeeding on argument raised during trial – Plaintiff unsuccessful on minor claim – Plaintiff’s offer of settlement not accepted – Standard costs order in favour of the plaintiff.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W F Gilles	SLM Law
For the Defendant	Mr B Carew	Whyte Just & Moore Lawyers

HIS HONOUR:

I delivered judgment in this proceeding on 15 October 2020 and have considered the submissions as to costs.[1]
[1]Leahy v Javni [2020] VSC 680.

The plaintiff claims judgment in the sum of $450,000 in accordance with my judgment, together with interest which at today’s date is $189,987.25.[2] These orders give effect to my judgment and I will make them.
[2]Being 1,285 days at a daily rate of $147.85.

There is then the question of costs. The plaintiff seeks indemnity costs. On 7 April 2020 she made an offer of settlement in the sum of $600,000. At that date the claim was for $605,833.90 plus costs.

The letter was a ‘without prejudice save as to costs’ and stated:

With a view to resolve this matter commercially and to avoid the need for this matter to proceed to trial, our client has instructed us to accept the sum of $600,000.00 (inclusive of costs in full and final settlement of this matter) (‘settlement sum’), on the following conditions:-
1.The settlement sum would be due to be paid by your client within 14 days of his acceptance of this offer;
2. This offer is open for acceptance until 4.00pm Tuesday, 14 April 2020;
3. This offer is subject to the parties entering into terms of settlement to be prepared by our firm reflecting the agreement. The terms of settlement would contain the usual releases.

You will appreciate that in taking into account legal costs and interest incurred to date, our client’s claim is already well over $600,000. We also note that if a settlement can be achieved on the basis contained in this letter then both parties will make significant savings and will minimise the costs involved in preparing for, and appearing at, the trial.

The plaintiff states that on the same day that the offer was made, the parties were advised that it was intended that the trial proceed remotely, requiring further preparation including electronic documents. She made the offer in difficult and developing circumstances to attempt to resolve the proceeding. Thus, she submits that the offer was to accept a significant discount of her claim. Legal costs from 15 February 2019 to 23 April 2020 were assessed by Andrews Costs Solicitors to be $40,590.70. The defendant did not accept 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: [2020] VSC 778
Decision Date: 23 November 2020

CaseChat Overview and Summary

In the matter of Leahy v Javni, the court was asked to address issues relating to costs in the context of a successful plaintiff who had not entirely prevailed on all of their claims. The dispute arose out of a contractual matter where the plaintiff, Leahy, sought to recover costs following a trial in which they were successful on a significant argument but unsuccessful on a minor claim. Notably, Leahy had made an offer of settlement during the proceedings which was not accepted by the defendant, Javni.

The primary legal issue before the court was whether Leahy was entitled to costs as the prevailing party, given that they were not successful on one of their claims. The court had to consider the circumstances under which costs are awarded in such scenarios, particularly given the unsuccessful minor claim and the rejected settlement offer. The court was required to balance the principles of the costs-follow-the-event doctrine against the unsuccessful claim and the procedural context of the rejected settlement offer.

The court concluded that despite Leahy's partial success, the significant argument on which they prevailed warranted an order for costs in their favour. The court emphasised that the costs-follow-the-event principle is not absolute and can be adjusted in light of the overall outcome and the conduct of the parties. The court found that the plaintiff's success on the major claim outweighed the unsuccessful minor claim and the procedural context of the rejected settlement offer did not preclude an award of costs. Accordingly, the court made a standard costs order in favour of Leahy.

The court's final orders included a determination that Leahy was entitled to costs, subject to the usual taxation and subject to any just adjustments that might be required.

Orders