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:

1. 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.

1. 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.

1. 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.

1. 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.

1. 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 offer.

1. The plaintiff submits that indemnity costs should be awarded, as the defendant acted in a high handed manner and continued the proceedings in circumstances where he must have known he had no chance of success and refused the settlement offer unreasonably. The defendant continued to maintain that the two contracts were substantially similar, then said the second offer was withdrawn prior to communication of acceptance of the offer and thus there never was any contract. The plaintiff had difficulty serving the defendant. The defendant’s case relied on him being believed, but the inconsistencies in his evidence were apparent. The only matter on which the plaintiff did not succeed was on the minor claim of $10,000.

1. The defendant submitted that he should only have to pay 50 per cent of the plaintiff’s costs of the proceeding on a standard basis. The plaintiff had failed on the first cause of action. In respect of the second contract, the plaintiff failed on all her pleaded contentions as to communication of acceptance, only succeeding on the contention made in her amended reply.

1. The plaintiff herself had made hopeless contentions, namely that she was not required to communicate acceptance of the defendant’s offer. The defendant did not unreasonably refuse the offer of settlement.

1. I accept the defendant’s submission that he did not unreasonably refuse the offer. The offer did not state that an application for indemnity costs would be made if it was not accepted. The offer was made close to the trial and did not address the merits of the claim. While these are not decisive matters, they are relevant in the exercise of the costs discretion.[3]

   [3]Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435, [19].

1. However, I do not consider that the plaintiff’s costs should be reduced because of her failure on the first claim. That was a minor issue that took up little time in the trial.

1. I do not consider that the defendant’s argument that the plaintiff only succeeded on grounds pleaded in her amended reply delivered during the trial, requires departure from the usual rule as to costs. The evidence to make good the new argument was substantially the same as was led in any event. No, or little additional, evidence and submissions were required to deal with that new argument.

1. The defendant should pay the plaintiff’s costs of the proceeding on a standard basis.