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Marshall v Fleming (No 2)

Marshall v Fleming (No 2)

Case [2017] NSWSC 1679 5 December 2017

Costs

Limitation Periods

Abuse of Process

Civil Litigation & Procedure

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Supreme Court

New South Wales

Case Name:	Marshall v Fleming (No 2)
Medium Neutral Citation:	[2017] NSWSC 1679
Hearing Date(s):	On the papers
Date of Orders:	5 December 2017
Decision Date:	5 December 2017
Jurisdiction:	Common Law
Before:	Payne J
Decision:	(1) Pursuant to UCPR r 36.16 to amend order 2 made on 24 August 2017 and order that: (a) the Marshalls pay Kreindlers’ costs of the trial on the ordinary basis until 30 April 2017; (b) the Marshalls pay Kreindlers’ costs of the trial on an indemnity basis on and from 1 May 2017. (2) otherwise dismiss the motion filed by Kreindlers dated 7 September 2017; (3) the Marshalls should pay 50 per cent of Kreindlers’ costs of the motion dated 7 September 2017; (4) the Marshalls motion dated 23 October 2017 is dismissed; (5) the Marshalls must pay Kreindlers costs of the motion dated 23 October 2017.
Catchwords:	COSTS – special costs order – indemnity costs – whether plaintiffs’ case was hopeless – Calderbank offers – whether rejecting offer was unreasonable – application to reconsider costs order of motions filed in 2013 where Court of Appeal remitted question to trial judge
Legislation Cited:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 County Securities Pty Limited v Challenger Group Holdings Pty Limited (No 2) [2008] NSWCA 273 Herning v GWS Machinery Pty Ltd (No. 2) [2005] NSWCA 375 Marshall v Fleming [2017] NSWSC 1107 Mohareb v Palmer [2016] NSWCA 378 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Treloar Constructions Pty Limited v McMillan (No 2) [2017] NSWCA 146
Texts Cited:	None
Category:	Costs
Parties:	Margaret Lesley Marshall (First Plaintiff) Kim Neil Marshall (Second Plaintiff) Francis G Fleming (First Defendant) Marc S Moller (Second Defendant) Steven R Pounian (Third Defendant) James P Kreindler (Fourth Defendant) David C Cook (Fifth Defendant) David Beekman (Sixth Defendant) Bianca I Rodriguez (Seventh Defendant) Noah H Kushlefsky (Eighth Defendant) Robert J Spragg (Ninth Defendant) Brian J Alexander (Tenth Defendant) Justin T Green (Eleventh Defendant)
Representation:	Counsel: Mr C J Bevan / Ms E Graham (Plaintiffs) Mr D Villa / Mr A Barnett (Defendants) Solicitors: Turner Freeman (Plaintiffs) Kennedys Lawyers (Defendants)
File Number(s):	2009/292935
Publication Restriction:	None

JUDGMENT

PAYNE J: This judgment concerns competing costs applications, one made by each party, each seeking to vary a costs order made in the principal proceedings. The proceedings between the parties relate to events almost 18 years ago and these proceedings have been on foot in this Court for almost nine years. The legal costs on both sides of this dispute are each now far in excess of the total figure claimed by the Marshalls as damages in this litigation.
The litigation between these parties must come to an end. This judgment is my attempt to ensure that it…

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 Marshall v Fleming (No 2)

Details

AGLC: Marshall v Fleming (No 2) [2017] NSWSC 1679
Case: [2017] NSWSC 1679
Decision Date: 5 December 2017

CaseChat Overview and Summary

The case of Marshall v Fleming (No 2) involved the defendants applying for a special costs order against the plaintiffs. The parties were previously involved in a dispute where the plaintiffs alleged breaches of fiduciary duty and unjust enrichment. The defendants sought indemnity costs arguing that the plaintiffs' case was hopeless, and that the rejection of a Calderbank offer was unreasonable. The application was brought before the Federal Court of Australia, which had previously remitted the question of costs to the trial judge in a 2013 motion.

The legal issues before the court were whether the plaintiffs' case was hopeless and whether the rejection of the Calderbank offer was unreasonable. The court was required to determine if the plaintiffs' case was so devoid of merit that it was not reasonably arguable, and whether rejecting the offer constituted an unreasonable exercise of the plaintiffs' litigation rights. The court also had to consider the principles and factors relevant to the assessment of indemnity costs and the impact of a Calderbank offer on those considerations.

In considering these issues, the court found that the plaintiffs' case was not hopeless, as there were reasonable prospects of success on the merits. The court determined that the plaintiffs' decision to reject the Calderbank offer was not unreasonable, given the circumstances and the potential for a significant recovery. The court also highlighted the importance of considering the totality of the circumstances, including the strength of the plaintiffs' case and the potential for a favourable outcome. As a result, the court declined to make an indemnity costs order against the plaintiffs.

Consequently, the defendants' application for a special costs order was dismissed. The court emphasised the need for a cautious approach when considering indemnity costs orders, particularly in cases where the merits of the plaintiff's case are in question. The court's decision underscores the importance of a balanced assessment of the merits and the exercise of litigation rights in determining the appropriateness of indemnity costs.

Orders