Menka Tasevska v Vlado (Larry) Tasevski

[2011] NSWSC 411

Supreme Court

New South Wales

Medium Neutral Citation:	Menka Tasevska v Vlado (Larry) Tasevski & Anor [2011] NSWSC 411
Hearing dates:	29 March 2011
Decision date:	01 April 2011
Jurisdiction:	Equity Division - Commercial List
Before:	Einstein J
Decision:	Order that each party is to pay their/its costs of the proceedings
Catchwords:	Costs
Legislation Cited:	Civil Procedure Act Uniform Civil Procedure Rules
Cases Cited:	Hillier v Sheather (1995) 36 NSWLR 414 Jones v Bradley (No 2)[2003] NSWCA 258 Jovanovski v Billbergia Pty Ltd (No 2) [2010] NSWSC 617 Leichhardt Municipal Council v Green [2004] NSWCA 341 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 South Eastern Sydney Area Health Service v King [2006] NSWCA 2
Category:	Consequential orders
Parties:	Menka Tasevska (Plaintiff) Vlado (Larry) Tasevski (First Defendant) Susan Tasevski (Second Defendant)
Representation:	Ms M Tibbey (Plaintiff) Mr GM McGrath (Defendants) Creswick McCarthy (Plaintiff) Leo & Morrison (Defendants)
File Number(s):	2009/00291312

Judgment

Costs

1. The reserved judgment delivered on 17 March 2011 reserved the question of costs.

1. The final paragraph of the reserved judgement read as follows :

It is important to also make clear that it was indeed unfortunate that the plaintiff and her husband were not given the courtesy of being taken to an entirely independent solicitor. That circumstance should not be forgotten notwithstanding that the defendants had not been shown to have misled their parents. To my mind much of the conflicts and misunderstandings had their genesis because of the lack of courtesy and this will become one of the areas where the parties may address on costs

1. The plaintiff contends and I accept that albeit that offers of compromise were relevant for the purposes of Rule 42.15, costs should follow the event, because it was not unreasonable for the plaintiff to reject the final Offer of Compromise. The litigation was finely balanced. The complexity and variety of factors to be considered in the exercise of the judicial discretion meant that the application of the judicial discretion was difficult to predict. The plaintiff should not be "punished" for that, in terms of costs.

1. Section 98 of the Civil Procedure Act provides as follows:

Courts powers as to costs

(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

1. The Uniform Civil Procedure Rules amplify this section of the Civil Procedure Act . As stated in UCPR Rule 42.1

"General rule that costs follow the event".

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

The offers of compromise

1. The plaintiff served two offers of compromise that exceeded the amount awarded in favour of the plaintiff.

1. The defendants served two offers of compromise, one in the sum of $55,000 plus costs as agreed or assessed, served on 4 February 2011, expressed to remain open until 5pm on 21 February 2011. This was not accepted by the plaintiff.

1. The plaintiff then served a copy of the last will of Dusan Tasevski, naming the plaintiff, his wife as executor and sole beneficiary. A second Offer of Compromise was served on 28 February 2011, in the sum of $110,000, expressed to remain open until 12 noon on Friday 4 March 2011, the Friday before the hearing commenced on 7 March 2011.

1. In this case, the plaintiff was awarded an amount that was higher than the first Offer of Compromise served on behalf of the defendants and lower than that contained in the second Offer of Compromise.

1. The Court of Appeal has held that the discretion must be exercised in light of all the circumstances of the case.

1. As Davies J stated recently in Jovanovski v Billbergia Pty Ltd (No 2) [2010] NSWSC 617 (11 June 2010):

Although earlier cases had suggested that a court could only deviate from the general rule provided in that Rule and associated Rules 42.14 and 42.15 ( South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [83]; Hillier v Sheather (1995) 36 NSWLR 414 at 422-423) the Court of Appeal more recently in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 have said that the position is otherwise. The joint judgment of Spigelman CJ, Beazley and McColl JJA said at [15]:

... Part 39A, r 25(6) [District Court Rules] expressly provided that the adverse costs consequences following a failure to accept an offer of settlement applied "[u]nless the Court in an exceptional case and for the avoidance of substantial justice otherwise [ordered]". Rules 42.14, 42.15 and 42.15A are in different terms. They provide that, when the relevant costs rule is engaged, a party is entitled to indemnity costs from a specified time (usually one day after an offer of compromise is made), "unless the court orders otherwise " (emphasis added). The relevant provisions of these rules do not specify that exceptional circumstances or the avoidance of substantial injustice must be established before the court will make a different order to the prima facie order for which the rules provide and, in our opinion, the rule should not be so construed. Rather, the discretion is one that has to be exercised having regard to all the circumstances of the case.

I accept that an offer which is in substance an invitation to surrender (as this offer of compromise was) can nevertheless successfully trigger the indemnity costs mechanisms under the Rules: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [36]-[37] and [40]; Regency Media at [31] noting what the Court of Appeal there said about the earlier decision in Robb Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170. Such an offer is not of itself for ordering otherwise.

1. In Jones v Bradley (No 2) [2003] NSWCA 258, the Court of Appeal cites with approval a statement by Giles J:

This principle has also been enunciated in this Court. In SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 Giles JA stated at para 37:

"The making of an offer of compromise in the form of a Calderbank Letter ... where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure."

1. The Court is satisfied that the circumstances warrant the Court "otherwise ordering".

1. As the plaintiff has submitted the proceedings involved some complexities in terms of contributions and the valuing of those contributions including the evaluation of work done by the plaintiff for the household such as cooking, cleaning, child care and gardening; the assessment of the monetary contributions to food for the household; the lifespans of the plaintiff and her husband; and the circumstances leading to the plaintiff leaving the premises.

1. Returning to the offers of compromise it is trite that such offers are required to be timely. In this instance the defendants' final offer of compromise was only put very close to the hearing date and I do not accept that the plaintiff acted unreasonably in rejecting that offer.

1. The principled exercise of the relevant discretion is to order that each party is to pay their/its costs of the proceedings. The plaintiff is to bring in short minutes of order which are to include the agreed interest amount.

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Decision last updated: 12 May 2011