Lollis v Loulatzis (No 2)
[2008] VSC 35
•20 February 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8583 of 2003
| STELLA LOLLIS | Plaintiff |
| V | |
| ANTHONY KASI LOULATZIS | First Defendant |
| and | |
| IRENE PETRUCCELLI | Second Defendant |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 February 2008 | |
DATE OF JUDGMENT: | 20 February 2008 | |
CASE MAY BE CITED AS: | Lollis v Loulatzis & Anor (No 2) | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 35 | |
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COSTS – Calderbank offers – Whether unreasonable for defendants not to have accepted three offers – Reduction of costs awarded to successful plaintiff – Conduct of plaintiff unnecessarily protracting trial – Apportionment of costs between claim and counterclaim – Reserved costs.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms C.H. Sparke | Middletons |
| For the First Defendant | Mr R. Kendall Q.C. and Mr J.D. Mattin | N.A. Young & Co |
| For the Second Defendant | Mr R. Kendall Q.C. and Mr J.D. Mattin | Beaumont Lawyers |
HIS HONOUR:
In this matter I delivered judgment on 18 December 2007. As a consequence of that judgment, the following orders will be made:
(1)There will be an order in favour of the plaintiff against both defendants for possession of the property at 25 Green Street, Camberwell.
(2)The claim by the plaintiff for damages against both defendants will be dismissed.
(3)The counterclaim by the first defendant will be dismissed.
After delivering judgment, I stood the matter over in order to give counsel the opportunity to read my reasons, and to make submissions in relation to the appropriate orders, and as to costs. When the matter came back before me, the first issue related to the period for which the order for possession would be stayed. After hearing argument I concluded that the order should be stayed until 15 March 2008, and I gave my reasons ex tempore for doing so. The parties also raised four issues relating to the question of costs. They were:
1.The effect of three “Calderbank” offers of compromise made by the solicitors for the plaintiff to the solicitors for the defendants.
2.The question whether the plaintiff should be entitled to the whole, or only a proportion, of her costs of the trial.
3.The apportionment of the costs of the plaintiff between the claim (to which both defendants were parties) and the counterclaim (to which only the first defendant was a party).
4.Whether either the plaintiff or the defendants should be entitled to the costs which were reserved before Williams J on 15 March 2006, when her Honour adjourned the proceeding to the Listing Master.
The Calderbank offers
In the course of the proceeding, the solicitors for the plaintiff served three letters, respectively dated 18 August 2005, 15 November 2007, and 22 November 2007, on the solicitors for the defendant. In each letter, the plaintiff made an offer to settle the claim and the counterclaim. Each letter was expressed to be “without prejudice save as to costs”. Such offers are commonly described as “Calderbank” offers.[1] The plaintiff maintains that, in light of the service of those offers, which were not accepted by the defendants, the defendants ought to pay the plaintiff’s costs either on a solicitor/client basis, or (in the case of the second and third letters) on an indemnity basis.
[1]Calderbank v Calderbank [1976] Fam 93.
The principles which apply to such an application are not in dispute. They were largely settled by the Court of Appeal in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2).[2] Before that decision, there was a difference of opinion, in various judgments of the Trial Division, whether the service of a Calderbank offer gives rise to a presumption that the party rejecting the offer should pay the offeror’s costs on an indemnity basis, if the offeree receives a less favourable result by way of judgment. In the Hazeldene’s Chicken Farm case, the Court of Appeal rejected the view that there is any such presumption. The Court stated the principle in simple terms, namely:
“The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as ‘manifestly’ or ‘plainly’ unreasonable.”[3]
[2](2005) 13 VR 435.
[3]Ibid, [23].
The Court of Appeal further stated that the Court, considering a submission that the rejection of a Calderbank offer was unreasonable, should ordinarily have regard “at least” to the following matters:
“(a) The stage of the proceeding at which the offer was received;
(b) The time allowed to the offeree to consider the offer;
(c) The extent of the compromise offered;
(d)The offeree’s prospects of success, assessed as at the date of the offer;
(e) The clarity with which the terms of the offer were expressed;
(f)Whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.”[4]
[4]Ibid, [25].
With those principles in mind I turn to each of the three Calderbank offers. The first letter was dated 18 August 2005. By it, the plaintiff offered to settle her claim on the following terms:
1.The defendants and their family vacate the property by 12 noon on 31 December 2005.
2.The defendants withdrew their counterclaim.
3.Each party bear its own legal costs to date.
The letter stated that the offer was open for acceptance until 4.00 pm two weeks from the date of the letter.
Ms Sparke, who appears for the plaintiff, submitted that it was unreasonable in the circumstances for the defendants to have rejected the offer contained in that letter. She submitted that, by the date of that letter, all the interlocutory steps had been carried out, and an unsuccessful mediation had taken place. The plaintiff had served a notice for trial dated 12 August 2005. She further submitted that the offer was not a “barren” offer on behalf of the plaintiff. First, the plaintiff had a claim against the defendants for damages arising out of their alleged trespass on the property, which she was offering to forego if the offer was accepted. Secondly, by the time of the offer, the plaintiff had incurred substantial costs on the interlocutory steps, so that the offer to bear her own costs had substance. Ms Sparke further submitted that the defendants had achieved a less favourable result by judgment, than if they had accepted the offer, since they are now exposed to the plaintiff for an order for costs.
Mr Kendall made a number of responses which are applicable to each of the three letters. However, it is sufficient for me to refer briefly to two of those responses, for the purpose of determining the plaintiff’s application for solicitor/client costs arising out of the letter of 18 August 2005. The first matter related to the claim which the plaintiff’s daughter, Christina James, had commenced against the plaintiff seeking revocation of the order for probate of her late father’s will. If that proceeding were successful, then the plaintiff would not have had title to the property, and would therefore have failed in her claim against the defendants for possession of the property. That proceeding was not resolved until late 2006. Thus, at the time at which the offer was made, the plaintiff’s right to possession of the property had not been resolved. The second matter relied on by Mr Kendall was that it was difficult to assess whether the counterclaim would succeed. The fate of the counterclaim very much depended on issues of credit and discretion. At the time of the letter of 18 August 2005, it was difficult for the defendants to properly assess the fate of the first defendant’s counterclaim, since at that stage the case was still some distance from trial.
In my view, there is substance in both of Mr Kendall’s arguments in relation to the first letter of 18 August 2005. As at that date, the plaintiff had title to the property, but that title was subject to challenge by the proceeding brought against her by Christina James. The defendants were not parties to the probate proceedings issued by Christina James. It is true, as Ms Sparke observes, that the defendants had been prepared for this case to be set down for trial, notwithstanding that the proceedings issued by Christina James had not been resolved. Whether or not that circumstance affected the approach of the defendants to the letter of offer, nonetheless, at least objectively speaking, it would not have been unreasonable for the defendants to have not accepted the offer of the plaintiff, pending resolution of the question of the plaintiff’s title to the property.
Secondly, there is some force in Mr Kendall’s submission that the case was one in which would have been particularly difficult for the defendants and their advisers to make a realistic estimate of their prospects of success, at least until after the opening of the case, and some evidence was given by the plaintiff. Ordinarily, I would not consider such a consideration to be relevant in determining an application such as this. However, this case has its own singular peculiarity. It arose out of an unusual and bitter relationship between the plaintiff and her son, the first defendant, and between the plaintiff and the second defendant, who is the partner of the first defendant. The issues in the case were mired in the complex background arising out of that relationship, including allegations and counter-allegations in respect of various incidents which had occurred between the parties. At trial I was at pains to ensure that evidence of those incidents remained excluded, unless they were relevant to the issues in the case. However, in the most unusual circumstances of this case it is, I consider, appropriate to take into account that, it would have been more than ordinarily difficult for the defendants to have properly assessed their prospects of success on the counterclaim, at least before the commencement of the evidence in the case.
In addition, it is relevant that the substantive offer of the plaintiff, namely, that the defendants vacate the premises, did in large measure amount to an offer that the defendants capitulate in respect of the main issue which was in dispute.[5] While the plaintiff did make a claim for damages, that claim was subsidiary to the claim for possession, and it failed at trial. The offer by the plaintiff to bear her own costs did have some substance, but, as I have observed, when considered in its totality, the offer made by the plaintiff on 18 August 2005 was, substantially, tantamount to an offer to capitulate.
[5]Compare Berrigan Shire Council v Ballerini & Anor(No 2) [2006] VSCA 65, [17] (Callaway JA), [20] (Chernov JA).
For those three reasons I do not consider that the rejection by the defendants of the plaintiff’s offer of 18 August 2005 was unreasonable in the circumstances. Therefore, I reject the submission made on behalf of the plaintiff that the defendants should pay the plaintiff’s solicitor/client costs as from the date of that letter.
The second Calderbank letter served by the solicitors for the plaintiff was dated 15 November 2007. In that letter the plaintiff offered to resolve the matter on the following terms:
1.The plaintiff would pay to the first defendant $100,000 within 30 days.
2.The defendants would relinquish any claims over the property at Green Street, Camberwell and remove themselves and all possessions from the house within 30 days.
3.Each of the parties would bear its own legal costs.
4.Mutual releases.
The offer was expressed to be open for acceptance until 5.00 pm Friday 16 November 2007. Ms Sparke told me, from the Bar table, that the letter was handed to the defendants’ advisers at Court in the course of the morning of 15 November 2007.
The trial of this proceeding commenced on 13 November. On that date there was some legal argument, and the plaintiff’s counsel opened the case. The plaintiff commenced her evidence. On the second day, 14 November, the matter was adjourned, because the first defendant, on the evening of 13 November, had located a number of documents which he had not discovered to the plaintiff. Thus 15 November was, in effect, the second day of the trial. The plaintiff was still in evidence. She completed her evidence-in-chief on 16 November, and her cross-examination proceeded on that day, and on 19 and 20 November. She was re-examined on 20 and 21 November.
The letter of offer set out in some detail how the sum of $100,000 to be paid by the plaintiff to the first defendant was calculated. Mr Kendall submitted to me that the case was an “all or nothing” case, in which either the plaintiff or the first defendant would succeed in their competing claims to ownership of the property. In my view, that proposition is not correct. The first defendant sought relief in equity, relying on an alleged estoppel. As an alternative to his claim to ownership of the property, he claimed to be entitled to an equitable charge over the property, the value of which was to be equivalent to the amount of expense incurred by the first defendant in improving the property. Thus, the issues on the counterclaim did not give rise to an “all or nothing” result.
Nonetheless, I have reached the conclusion that it was not unreasonable, in the circumstances, for the defendants not to have accepted the offer constituted by the letter of 15 November 2007 for the following reasons. First, the letter only permitted the first defendant a short time within which to consider and accept the offer. The letter was served at a time at which the case was actually proceeding. I have no doubt that on the evening of 15 November the first defendant and his counsel were focused on the evidence which had been given by the plaintiff, and in preparing cross-examination in respect of that evidence. It must be remembered that this was not a case involving a commercial dispute, or a claim for common law damages. Rather, as I have already stated, it is a case which had its foundations in the relationship between the plaintiff and the first defendant. The plaintiff was seeking possession of the house in which the first defendant and the second defendant had had their children, and had raised them. In my view, it was not reasonable for the solicitors for the plaintiff to have allowed the defendants such a short period of time within which to give consideration to an offer which was of such importance to their lives.
Secondly, I note that a term of the offer was that the defendants would vacate the premises within 30 days, that is, by 15 December 2007. In a, perhaps perverse, sense, the defendants may be said to have “done better” than that offer; they have a stay on the order for possession until 15 March 2008. However, and in any event, in the circumstances of the case, and particularly given the time at which the offer was made, it was unreasonable for the plaintiff to have insisted that the defendants leave the premises within 30 days. Given the time of the year, it would have been particularly difficult for the defendants to have found alternative accommodation, particularly in an area close to their eldest son’s school. The first defendant had a large amount of building equipment at the property, and it would have been most difficult for him to have arranged alternative storage for that equipment within the period. For those reasons, I do not consider that it was unreasonable for the defendants not to have accepted the offer made by the plaintiff. Accordingly, I reject the application by the plaintiff for solicitor/client costs, or alternatively indemnity costs, arising out of the failure of the defendants to accept their offer.
I turn then to the third Calderbank offer, contained in the plaintiff’s solicitors’ letter dated 22 November 2007. By that letter the plaintiff’s solicitors made the following offer:
1.The plaintiff would pay the first defendant $200,000 on 1 February 2008.
2.The defendants would relinquish any claims over the Camberwell property and remove themselves on all possessions from the house by 1 February 2008.
3.Each of the parties was to bear their own legal costs.
4.The claim and counterclaim would be dismissed with no admissions as to liability.
5.There would be mutual releases.
The offer was served by email on Thursday 22 November 2007 at 6.46 pm. It was expressed to be open for acceptance until 5.00 pm on Monday 26 November 2007.
By the time at which the offer was served, the plaintiff and Con Lollis had both given evidence and been cross-examined, and Anthony Loulatzis, the brother of the first defendant, had commenced his evidence. On the following day, 23 November, Anthony Loulatzis continued his evidence and was cross-examined. His re-examination took place on Monday 26 November. On the same day Mr Takakis gave evidence. The valuer, Mr Condall, also gave some evidence.
By the time of service of the letter, and at least by the end of Friday 23 November, I consider that the evidence called on behalf of the plaintiff had reached such a stage that the factual issues in dispute were relatively clear. By the close of proceedings on Friday 23 November, three of the four principal witnesses for the plaintiff had given their evidence and had been cross-examined. The defendants had had the opportunity to observe enough of the plaintiff’s case to make a reasonable assessment of it. To some extent Mr Kendall is correct in submitting that, in cases such as these, it is not always simple predicting how issues of credit will be determined. Nonetheless, that is not, ordinarily, a valid reason why a Court should not otherwise act on a Calderbank offer. Indeed, in the course of the submissions before me, Mr Kendall tendered two Calderbank offers made on behalf of his client, one dated 7 November 2007, and another dated 26 November 2007. Mr Kendall tendered those letters in order to demonstrate that the defendants had been endeavouring to settle the proceeding. However, the service of those letters does demonstrate that the defendants were in a position to make some assessment of the merits of their case at that time. Certainly, they did not feel precluded from entering into serious negotiations in an endeavour to resolve the case.
Further, and unlike the offer of 18 August 2005, the offer contained in the plaintiff’s solicitors’ letter of 22 November 2007 was significantly more favourable to the defendants, than their position as a result of the judgment which has been given against them. In addition, the defendants were given sufficient time within which to assess and accept the offer. In particular, there was the intervening weekend of 24 November and 25 November. If the defendants had accepted the offer, they would have had more than nine weeks within which to vacate the premises. I do not consider that such a period of time was unreasonable. In those circumstances, I consider that it was unreasonable for the defendants not to have accepted the offer of the plaintiff.
The letter dated 22 November 2007 placed the defendants on notice that if the defendants failed to accept the offer, and judgment was awarded against them which was less favourable than the offer, the letter would be used to support an application for indemnity costs. As I have already stated in the course of argument, I am not of the view that the rejection of the offer should entitle the plaintiff to indemnity (solicitor/own-client) costs. Rather, I consider that it should entitle the plaintiff to an award of solicitor/client costs from 27 November 2007. While it was unreasonable for the defendants to have not accepted the offer, nonetheless I do not consider that their conduct was such as to justify an award of costs against them on the most “generous” basis, namely indemnity (solicitor/own-client) costs.
For those reasons, I consider that there should be an award of costs against the defendants on the claim for solicitor/client costs as from 27 November 2007, and against the first defendant on the counterclaim as from 27 November 2007.
Whether the plaintiff is entitled to all the costs of the proceeding
When I delivered judgment on 18 December 2007, I gave a preliminary indication that, in my view, the plaintiff ought not to be entitled to the whole of her costs of the trial. I indicated my reasons for that view. I have now heard argument in relation to that matter. For the reasons I shall set out below, I remain of the same view.
The ordinary rule is that the costs of a case should follow the event so that, where the plaintiff has substantially succeeded at trial, the plaintiff should be entitled to the whole of her costs of the trial. However, that rule does not apply universally and inflexibly. Ultimately, costs are in the discretion of the Court. In an appropriate case, costs may be awarded or determined in a manner other than on the basis that the party who succeeds at trial be awarded the whole of his or her costs. See Ritter v Godfrey[6]; Verna Trading Pty Ltd v New India Assurance Co Ltd[7].
[6][1920] 2 KB 47, 60 – 61.
[7][1991] 1 VR 129, 154 to 155.
There are two matters which have persuaded me that the plaintiff should not be entitled to the whole of her costs of the trial. First, the plaintiff failed in her claim for damages. In my view, it is appropriate that the plaintiff not be awarded costs in relation to that issue. Compare Byrnes v Davie[8]. Secondly, the trial of the proceeding took an inordinate time to complete. In my view, part of the responsibility for the excessive time spent at the trial was attributable to the plaintiff’s side. There is a respectable body of authority which supports the proposition that where a party has by its conduct caused a case to take longer than it ought, it is appropriate that that party, upon succeeding at trial, should not be awarded the whole of its costs of the trial. See Foster v Samuel[9]; Keddie v Foxall[10]; Parkinson v College of Ambulance Ltd[11]; Capolingua v Phylum Pty Ltd[12]; Oshlack v Richmond River Council[13].
[8][1991] 2 VR 568, 569.
[9][1913] 3 KB 706, 739.
[10][1955] VR 320, 323 to 324.
[11][1925] 2 KB 1, 17 (Lush J).
[12](1991) 5 WAR 137, 140 - 141 (Ipp J).
[13](1998) 193 CLR 72, 98 (McHugh J dissenting).
Ms Sparke submitted that, as the ordinary rule is that costs should follow the event, the costs awarded to the plaintiff should only be reduced if there has been high-handed conduct on behalf of the plaintiff. In my view, the authorities, to which I have just referred, do not support such a proposition. Rather, the test stated in the authorities is whether the successful party has so conducted itself as to result in an unnecessarily protracted trial. The test was expressed in those terms by McHugh J in Oshlack’s case, and by Ipp J, in Capolingua, to which I have just referred. In Parkinson, one of the circumstances taken into account by Lush J, in depriving successful defendants of their costs, was the excessive cross‑examination of the plaintiff. The same principle was stated by the Full Court of Victoria in Keddy v Foxall,[14] where their Honours stated:
“The cases do show, we think, that in exercising his discretion on costs a Judge may have regard to conduct – not necessarily misconduct – of any party which is calculated to occasion unnecessary expense …”
[14][1955] VR 320, 323 - 324.
In my view, that principle is particularly applicable in light of the trend, in recent years, for the trial of cases to take an unduly long period of time to complete. As the consequential burden of costs to all parties is increasing exponentially, it behoves trial judges to be conscious of the principle that a losing litigant ought not to be required to bear that portion of the successful party’s costs which is attributable to conduct of the successful party which has unduly protracted the length of the trial.
Where costs are awarded on the basis of how the issues at trial have been decided, the Court of Appeal has recognised that it is appropriate and convenient that the order for costs be expressed as a proportion of the costs of the successful party. See McFadzean & Ors v Construction Forestry Mining & Energy Union & Ors[15].
[15][2007] VSCA 289, esp [153], [158].
I return to the two factors the effect of which, in my view, is that the plaintiff ought not to have the whole of her costs of the trial. First, the plaintiff failed in her claim for damages against the defendants. The evidence which was led in relation to that aspect of the plaintiff’s claim was quite limited in its scope. There was scarcely any time spent in final address in relation to that aspect of the case on its own. However, the claim for damages was quite substantial. If it had succeeded, the plaintiff would have been entitled to an order against the defendants for a sum of more than $200,000. The issues relating to the question of liability, and in particular those raised by the counterclaim, were primarily directed to the principal claim by the plaintiff for her relief, namely, possession of the premises at Green Street, Camberwell. However, those issues were also directed to the establishment by the plaintiff of her claim for damages. It is appropriate that that aspect be reflected in determining the proportion of the costs of the trial which should be awarded to the plaintiff. While the issue of damages was only relevant to the claim, the counterclaim was heard at the same time as the claim. That issue therefore affected the length of the trial of both the claim and the counterclaim.
The second matter which is relevant relates to the length of the trial. At the conclusion of final addresses I raised with counsel my concern as to the excessive time spent at trial. The case was set down for trial on an estimate of six to seven days. In fact it lasted for 19 days. One day of the trial was lost because the first defendant found some important documents, which he had not discovered to the plaintiff. Thus, in effect, the trial lasted for 18 days. In my view, it should only have lasted eleven to twelve days, at the most. In that light, the estimate given by the parties to the Listing Master was wholly inadequate. However, and more relevantly, the trial took at least 50 percent longer to complete than it ought to have taken. In my view, the responsibility for the excessive length of the trial may be fairly be laid at the feet of both the parties. Certainly, the defendants should bear the burden of some of the excessive length of the costs of the trial. In particular, I consider that there was excessive and unnecessary cross-examination of some of the plaintiff’s witnesses. Further, the first defendant, Con Loulatzis, contributed to the delay in the trial in his own evidence by often failing to answer questions, particularly in cross-examination.
However, by the same token, I do consider that some of the responsibility for the excessive length of the trial must be borne by the plaintiff, for two reasons. First, two of the plaintiff’s witnesses – the plaintiff and Con Lollis – contributed to the excessive length of the trial by the manner in which they gave their evidence, and in particular by the manner in which they conducted themselves in cross-examination. Both witnesses, on a number of occasions, failed to answer questions put to them, and failed to keep to the point, particularly in cross-examination. Some of the problem was due to the fact that each witness had some language difficulties. It was also exacerbated by the manner in which they were cross-examined. However, there were many occasions when they failed to direct their answers to relatively simple propositions put to them in cross-examination, despite my admonitions that they do so. That part of their evidence did unnecessarily protract the trial.
Secondly, the undue length of the trial was contributed to by the excessive time it took to cross-examine the first defendant Con Loulatzis. In my view, he should have been cross-examined for no more than one day, but cross-examination of him lasted for a total of two days. It may fairly be said that the first defendant was in part to blame for the excessive period which it took for his cross-examination. On a number of occasions I had to direct him to answer the question put to him in cross-examination. However, on the other hand, a number of issues were canvassed with him in cross-examination which were of marginal or no relevance at all. That part of the cross-examination had the effect of lengthening the trial of the case. I mention, by way of example, passages from the cross-examination of Con Loulatzis which may be found at transcript pages 1516, 1518, 1526, 1585 to 1586, 1593, 1642 to 1643, 1649 to 1650, 1694, and 1755 to 1756.
In my view, in the exercise of my discretion, I do not consider that it would be fair or reasonable that the defendants bear the whole of the costs occasioned by the excessive duration of the trial, particularly in a case in which the trial exceeded its initial estimate by a multiple of almost three, and where the trial lasted for at least 50 percent longer than what I would have regarded as a realistic estimate of the duration of the trial. There was conduct on the plaintiff’s side which unnecessarily contributed to the excessive length of the trial. Accordingly, it is appropriate that the plaintiff should only be awarded a proportion of the costs of the trial of the proceeding.
In those circumstances I consider it appropriate that the defendants pay to the plaintiff the whole of the costs of the claim to the commencement of the trial, and that the first defendant pay to the plaintiff the whole of the costs of the counterclaim to the commencement of the trial, but that the defendants should only bear 80 percent of the plaintiff’s costs of the trial of the claim against them, and that the first defendant should only bear 80 percent of the costs of the trial of his counterclaim.
Apportionment of costs between claim and counterclaim
The third question relates to the apportionment of the costs between the claim (to which both defendants were parties) and the counterclaim (to which only the first defendant was a party). In the course of discussion with counsel, some common ground was reached. In my view, the appropriate orders should be as follows:
(1)An order against both defendants in respect of the costs of the claim.
(2)An order against the first defendant in respect of the costs of the counterclaim.
Further, and for the assistance of the Taxing Master, I make the following observation. There was one central and common issue involved in the defence of the claim, and the counterclaim. That issue concerned the question of the ownership of the property at 25 Green Street, Camberwell. Essentially the issue was whether the plaintiff, on her claim, had a right to possession of the property or, whether, as asserted by the first defendant in his counterclaim, the plaintiff was estopped from relying on her legal interest in the property. The only issue of substance, which was not common to both the claim and the counterclaim, comprised the plaintiff’s claim for damages. However, as I have already observed, that part of the claim occupied very little time at the trial.
The costs reserved by Williams J on 15 March 2006
The final question concerns the costs which were reserved by Williams J on 15 March 2006.
As I have stated, on 12 August 2005, the plaintiff served a notice for trial. Ultimately, the case was listed for trial on 15 March 2006. When the matter came on for hearing before Williams J, Mr Kendall called a subpoena which had been served on Barry Kenna, Solicitors, to produce files relating to claims by Christina James against the plaintiff. In the course of discussion, her Honour formed the view that it would be premature to proceed with the trial, until the Christina James proceedings had been concluded. Her Honour took the view that, until those proceedings had been disposed of, there remained an unresolved issue as to the title of the plaintiff to claim possession to the property at Camberwell against the defendants. While counsel for the plaintiff and for the defendants both submitted that the trial should proceed, nonetheless her Honour adjourned the matter to the Listing Master, and reserved costs.
Ms Sparke has now submitted that the plaintiff ought to be entitled to those reserved costs. Mr Kendall initially submitted that the defendants should be entitled to the reserved costs. However, in the course of argument, he changed that position, and submitted that neither party should be entitled to the costs reserved by Williams J on 15 March 2006.
In my view, the proper order is that neither party should be entitled to the costs which were reserved by Williams J. The plaintiff took it upon herself to file the notice for trial. She knew the nature and status of the claim by Christina James. It is true that the defendants did not resist the setting down of the trial. However, it was the plaintiff who took the initiative to set the matter down, in circumstances where the trial judge held that it was premature for the case to be heard until the Christina James claims had been disposed of. For those reasons I do not consider that the plaintiff is entitled to the reserved costs. On the other hand, the defendants knew of the existence of the Christina James claims, and it is clear, from the transcript of the proceeding before Williams J, that they knew that those claims had not been resolved. Mr Kendall pointed out that the defendants had previously failed in an application for discovery of the files in relation to those proceedings, such application having been resisted by the plaintiff. Further, apparently the Court file in relation to the probate proceedings could not be located. To that extent, Mr Kendall was correct in asserting that the plaintiff was in a better position to assess the status of the Christina James proceedings than the defendants. Nonetheless, the defendants did know that the proceedings were on foot. At no time did they request the plaintiff to give them any information (apart from by way of discovery) as to the status of those proceedings. The defendants acquiesced in the matter being set down for trial, and coming on for hearing on 15 March 2006. In those circumstances, I do not consider that the defendants ought to be entitled to the costs which were reserved on that day, and, indeed, Mr Kendall correctly conceded that that was so.
For those reasons, there will be no order in relation to the costs which were reserved by Williams J on 15 March 2006. Each party should bear their own costs.
Summary of conclusions
I therefore summarise the conclusions which I have reached in these reasons as follows:
1.In respect of the three Calderbank offers served by the plaintiff:
(a)I reject the claim by the plaintiff to solicitor-client costs, or indemnity costs, based on the letters of offer of 18 August 2005 and 15 November 2007.
(b)The plaintiff is entitled to solicitor-client costs, from and including 27 November 2007, based on the letter of offer of 22 November 2007. I reject the claim by the plaintiff for indemnity (solicitor/own-client) costs based on that letter.
2.On the question of the apportionment of costs between the claim and the counterclaim:
(a)There will be an order against both defendants in respect of the costs of the claim.
(b)There will be an order against the first defendant in respect of the costs of the counterclaim.
For the assistance of the Taxing Master, I refer to the observations made in paragraph 38 of these reasons.
3.On the question whether the plaintiff is entitled to all of the costs of the proceeding:
I consider that the length of the trial was unnecessarily protracted by the conduct of both the plaintiff and the defendants. It is appropriate that I reduce the costs ordered in favour of the plaintiff, to allow for the extent to which the length of the trial was protracted unnecessarily by the conduct of the plaintiff, and also to take into account that the plaintiff failed in her claim for damages against both defendants. Accordingly the plaintiff will be entitled to 80% of her costs of the trial of the claim and of the counterclaim.
4.There will be no order in respect of the costs reserved by the order of the Honourable Justice Williams dated 15 March 2006.
Proposed orders
Accordingly, and subject to any submissions of counsel as to the precise wording of the orders, I propose making the following orders in the proceeding:
1.The plaintiff have possession of the land situate at and known as 25 Green Street, Camberwell in the State of Victoria, being the land contained in Certificate of Title Volume 5603 Folio 033 (“the property”).
2.The defendants each vacate and deliver up possession of the property no later than 4.00 pm on 15 March 2008.
3.The claim by the plaintiff for damages against both defendants is dismissed.
4.The further further amended counterclaim by the first defendant is dismissed.
5.The defendants pay the plaintiff’s costs of the claim up to and including 12 November 2007 on a party/party basis, including any reserved costs, but excluding the costs reserved by order of the Honourable Justice Williams dated 15 March 2006.
6.The defendants pay 80 percent of the costs of the plaintiff’s claim from and including 13 November 2007, such costs to be assessed on a party/party basis up to and including 26 November 2007, and thereafter on a solicitor/client basis from and including 27 November 2007.
7.The first defendant pay the plaintiff’s costs of the counterclaim up to and including 12 November 2007, including reserved costs, but excluding the costs reserved by the order of the Honourable Justice Williams dated 15 March 2006.
8.The first defendant pay 80 percent of the costs of the counterclaim from and including 13 November 2007, such costs to be assessed on a party/party basis up to and including 26 November 2007, and thereafter on a solicitor/client basis from and including 27 November 2007.
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