Loustas v Sier (costs ruling) - [2018] VSC 709

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROFESSIONAL LIABILITY LIST

S CI 2011 04822

ARTHUR LOUSTAS	Plaintiff
v
PETER JOHN SIER	First Defendant
VINCENT SIER	Second Defendant/Applicant
and
BRUCE WILKINSON & ORS	Respondents

---

JUDGE:	Macaulay J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 September 2018
DATE OF RULING:	21 November 2018
CASE MAY BE CITED AS:	Loustas v Sier & Ors (costs ruling)
MEDIUM NEUTRAL CITATION:	[2018] VSC 709

---

PRACTICE AND PROCEDURE – Costs – Application for personal costs orders against plaintiff’s legal advisors and expert accounting witnesses – Underlying proceeding concerned property development on land which remained ongoing throughout interlocutory phase of litigation – Plaintiff awarded nominal damages at trial only – Jurisdiction to award personal costs orders – Supreme Court Act1986, s 24 and Supreme Court (General Civil Procedure) Rules 2015, O 63 considered – Knight v FP Special Assets Limited [1992] 174 CLR 178, considered – Overarching obligations – Applicant contends plaintiff’s legal advisors and expert accounting witnesses contravened overarching obligations by continuing to act once it became reasonably clear the property development would return a substantial loss – Civil Procedure Act 2010, ss 17, 19, 21(b), 22, 23, 24 and 29, considered – Application dismissed.

---

APPEARANCES:	Counsel	Solicitors
For the Second Defendant/Applicant	Mr M McKenzie	Adams Maguire Sier
For the First, Second and Third Respondents	Mr J Tesarsch	Clyde & Co
For the Fourth, Fifth and Sixth Respondents	Mr D Luxton	Minter Ellison

HIS HONOUR:

Introduction and summary

On 31 January 2018 I published reasons[1] for awarding nominal damages of $1 on the claim by the plaintiff (Arthur Loustas) and more substantive sums of $217,652 and $101,734 (plus interest in each case) on the counterclaims of the first defendant (Peter Sier) and the second defendant (Vincent Sier) respectively. Formal orders were made on 14 February 2018, including an order that Mr Loustas pay the Siers’ costs of the proceeding.[2] By consent, the parties agreed to an order that the Siers have ‘liberty to apply by 9 March 2018’ for orders that ‘any other individual or company pay their costs of the proceeding’.
[1]Loustas v Sier & ors [2018] VSC 13 (31 January 2018) (‘Reasons’).
[2]On a standard basis until 28 July 2017 and on an indemnity basis thereafter.

Although there were some administrative problems attending the actual filing of the documents, on the afternoon of 9 March 2018 Vincent Sier, the sole applicant in this application, notified the Court that he wished to apply for personal costs orders against the legal practitioners who acted for Mr Loustas in the proceeding and the expert forensic accountants called by Mr Loustas to give evidence on his behalf (collectively, ‘the respondents’).[3] The legal practitioners are Gerald Parncutt, barrister, and Kiatos & Co and Con Kiatos, solicitors (‘the legal practitioners’); and the expert accountants are Munday Wilkinson Pty Ltd, Mr Bruce Wilkinson (director of Munday Wilkinson) and Ms Sanchia Veale (a forensic…

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.

Continue reading Loustas v Sier (costs ruling)

Details

AGLC: Loustas v Sier (costs ruling) [2018] VSC 709
Case: [2018] VSC 709
Decision Date: 21 November 2018

CaseChat Overview and Summary

The case of Loustas v Sier involved an application for personal costs orders against the plaintiff’s legal advisors and expert accounting witnesses. The underlying dispute was a property development matter that remained ongoing throughout the interlocutory phase of the litigation. The plaintiff was ultimately awarded only nominal damages at trial. The court was required to determine whether it had jurisdiction to award personal costs orders under the relevant statutes and rules, and whether the plaintiff's legal advisors and expert accounting witnesses contravened overarching obligations by continuing to act once it became reasonably clear the property development would return a substantial loss.

The court examined the relevant statutory and rule provisions, including sections 24 of the Supreme Court Act 1986 and Order 63 of the Supreme Court (General Civil Procedure) Rules 2015, and considered the principles set out in Knight v FP Special Assets Limited. It also reviewed the overarching obligations under the Civil Procedure Act 2010, including sections 17, 19, 21(b), 22, 23, 24, and 29. The applicant argued that the plaintiff’s legal advisors and expert accounting witnesses had contravened these obligations by continuing to act despite the property development becoming unviable. However, the court found that the overarching obligations did not apply in the circumstances of this case, as they were intended to address conduct that was wasteful or vexatious, rather than cases where parties continued to pursue a claim despite it becoming unviable.

The court dismissed the application for personal costs orders, holding that there was no basis to find that the plaintiff’s legal advisors and expert accounting witnesses had contravened the overarching obligations. The court also noted that the overarching obligations were not intended to address the conduct of parties in continuing to pursue a claim that had become unviable. Consequently, the application was dismissed, and no personal costs orders were made against the plaintiff’s legal advisors and expert accounting witnesses.

Orders