Mako'ochieng v Kirk (No 2) - [2017] VSC 747

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S CI 2016 03852

BERNARD OTIENO MAKO'OCHIENG	Applicant
v
SUSAN ELIZABETH KIRK	Respondent

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	12 December 2017
CASE MAY BE CITED AS:	Mako'ochieng v Kirk (No 2)
MEDIUM NEUTRAL CITATION:	[2017] VSC 747

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COSTS — Whether special circumstances exist justifying an order for indemnity costs — Costs order made in favour of the Respondent in related proceedings to be set off against costs to be paid by the Applicant.

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HIS HONOUR:

On 14 August 2017 the Court dismissed the Applicant’s application pursuant to s 109 of the Magistrates’ Court Act 1989 for leave to appeal from an order of the Magistrates’ Court of Victoria. This judgment deals with a question of costs. The finalisation of costs arising out of the proceedings heard on 25 and 26 July 2017 has been delayed by a related application brought by the Respondent against Thexton Lawyers (‘Thexton’), who were the Applicant’s solicitors during the period 14 October 2016 to 4 July 2017. Thexton ceased to act for the Applicant on 4 July 2017, shortly prior to the hearing of the application for leave to appeal on 25 and 26 July 2017.

On 4 September 2017 the Respondent filed a summons seeking the following orders:

1. Thexton Lawyers (Law Practice) pay such of the Respondent’s costs of the appeal, including reserved costs, that were incurred by the Respondent while the Law Practice were solicitors on the record (14 October 2016 – 4 July 2017) and were wasted by reason of the Law Practice’s conduct in the proceeding, in the amount of $78,552.19, or such amount as the Court determines.

2. The Law Practice pays the Respondent’s costs of this application including all costs relating to preparation of the Respondent’s submissions relating to the wasted costs.

The Respondent’s application for costs orders against Thexton was made pursuant to rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 and s 29 of the Civil Procedure Act 2010. On 14 November 2017 the Court was informed that the Respondent’s claim against Thexton had been settled and a deed of settlement signed by both parties. Under the terms of settlement, Thexton will pay the Respondent $50,000 in respect of the claim for $78,552 in wasted costs. On 15 November 2017 the Court made orders by consent dismissing the Respondent’s summons of 4 September 2017 with no order as to costs.

On 14 November 2017 the Respondent’s solicitor, Mr Morrow, informed the Court that the Respondent accepts that any costs order made against the Applicant should take account of the $50,000 which will be recovered by the Respondent from Thexton.

The application for leave to appeal has been dismissed. The Respondent, subject to making due allowance for the costs recovered from Thexton, is entitled to recover the costs which she incurred in resisting…

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: [2017] VSC 747
Decision Date: 12 December 2017

CaseChat Overview and Summary

In the case of Mako'ochieng v Kirk (No 2), the parties involved were Mako'ochieng, the Applicant, and Kirk, the Respondent. The dispute revolved around the determination of costs incurred during litigation, specifically whether special circumstances existed that would warrant an order for indemnity costs. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue before the court was whether there were exceptional circumstances justifying an order for indemnity costs. This involved a review of the conduct of the Applicant and the Respondent throughout the proceedings, including the related matters where a costs order was already made in favour of the Respondent. The court had to assess whether setting off these costs against those to be paid by the Applicant was appropriate.

In delivering the judgment, the court held that there were indeed special circumstances that justified an order for indemnity costs. The Applicant's conduct during the litigation was found to be unreasonable, and as such, the costs order made in the related proceedings in favour of the Respondent were set off against the costs the Applicant was required to pay. This decision was based on the principle that the conduct of the parties during litigation should be such that it does not unduly disadvantage the other party and that costs should reflect the outcome of the proceedings.

The final orders of the court mandated that the costs previously awarded to the Respondent in the related proceedings be set off against the costs to be paid by the Applicant. This outcome ensured that the financial burden on the Respondent was mitigated while holding the Applicant accountable for their unreasonable conduct during the litigation.

Orders