Michaud v Stefanovski
[2016] WASCA 85 (S)
•16 SEPTEMBER 2016
MICHAUD -v- STEFANOVSKI [2016] WASCA 85 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASCA 85 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:3/2015 | ON THE PAPERS | |
| Coram: | MARTIN CJ BUSS JA MURPHY JA | 16/09/16 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Appellant to pay respondent's costs up to and including 29 April 2015 Appellant to pay respondent's costs on and from 30 April 2015, on indemnity basis | ||
| B | |||
| PDF Version |
| Parties: | ROGER MARCEL MICHAUD DANNY DRAGI STEFANOVSKI |
Catchwords: | Practice and procedure Costs Calderbank offer by respondent in appeal Respondent's offer, in effect, to forego costs at first instance Critical factor being weakness of appeal Turns on its own facts |
Legislation: | Nil |
Case References: | Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MICHAUD -v- STEFANOVSKI [2016] WASCA 85 (S) CORAM : MARTIN CJ
- BUSS JA
MURPHY JA
- Appellant
AND
DANNY DRAGI STEFANOVSKI
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : MCCANN DCJ
Citation : STEFANOVSKI -v- MICHAUD [2014] WADC 141
File No : CIV 3850 of 2011
Catchwords:
Practice and procedure - Costs - Calderbank offer by respondent in appeal - Respondent's offer, in effect, to forego costs at first instance - Critical factor being weakness of appeal - Turns on its own facts
Legislation:
Nil
Result:
Appellant to pay respondent's costs up to and including 29 April 2015
Appellant to pay respondent's costs on and from 30 April 2015, on indemnity basis
Category: B
Representation:
Counsel:
Appellant : Mr R W Bower
Respondent : Mr C McIntosh
Solicitors:
Appellant : Corser & Corser
Respondent : Swan River Law
Case(s) referred to in judgment(s):
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76 (S)
1 REASONS OF THE COURT: These reasons concern the costs of the appeal. The appeal in this matter was an appeal against a decision of McCann DCJ in which his Honour ordered that the appellant pay the respondent the sum of $74,200, plus costs.
2 On 27 May 2016, the court delivered its decision dismissing the appeal.
3 At the delivery of reasons on 27 May 2016, the parties, by their respective counsel, requested that the decision on costs be reserved so that they could confer with a view to filing a minute of consent orders. The parties indicated that there was some prospect of an agreement as to costs. Counsel, on behalf of the appellant, said words to the effect that:
there was a Calderbank offer in this matter, which could well have influenced my friend's client's costs rights or at least the possible orders that he might apply for so that we thought we should talk about it and sort that out and file a minute. It could well be that … the costs order that's made should take account of the effect of a Calderbank offer that was made at one stage.
4 The court, on 27 May 2016, consequently reserved the question of costs.
5 On 30 June 2016, the respondent filed a document entitled 'Respondent's Bill of Costs for Taxation'.
6 By 20 July 2016, no minute of consent orders had been filed. The court informed the parties on 20 July 2016 that unless they provided to the court an agreed minute of orders, or competing minutes if not agreed, by 4.00 pm on 29 July 2016, the court may thereafter order that there be no order as to costs.
7 On 29 July 2016, the respondent filed a minute of proposed orders and an affidavit sworn by his solicitor, David Johanssen. The respondent sought orders that:
1. The appellant do pay the respondent's costs to be taxed if not agreed up to and including 29 April 2015.
2. The appellant do pay the respondent's costs to be taxed if not agreed from 30 April 2015 on an indemnity basis.
Alternatively
3. The appellant do pay the respondent's costs to be taxed if not agreed up to and including 22 May 2015.
[4.] The appellant do pay the respondent's costs to be taxed if not agreed from 23 May 2015 on an indemnity basis.
8 Mr Johanssen's affidavit included evidence to the following effect. On 28 April 2015, on behalf of the respondent, he had sent to the appellant's solicitors a Calderbank offer, open for acceptance until 1 May 2015. It was effectively on terms that the appeal be dismissed, with each party to bear their own costs of the appeal, on the basis that the appellant pay the respondent the judgment sum of $74,200, and that the respondent forego his order for costs in the primary court, estimated at over $30,000. On 28 April 2015, the appellant's solicitors acknowledged receipt of the Calderbank offer by email. On 29 April 2015, the appellant's solicitors rejected the Calderbank offer. On 29 April 2015, Mr Johanssen forwarded an offer of compromise in accordance with O 24A of the Rules of the Supreme Court 1971 (WA) (RSC) on behalf of the respondent, open for acceptance for 28 days, on similar terms to the earlier Calderbank offer. The appellant's solicitors acknowledged receipt of the O 24A offer of compromise on 5 May 2015, and effectively rejected it on 22 May 2015.
9 By 15 August 2016, the appellant had not filed a minute. The court informed the appellant's solicitors that any affidavit or submissions in response to the respondent's minute should be filed by 4.00 pm, 19 August 2016, and informed the parties that the matter would be dealt with on the papers. Despite the appellant being given a further extension, no material has been filed by the appellant.
10 The principles governing an award of indemnity costs on the basis of a Calderbank offer are well known: Ford Motor Company of Australia Ltd v Lo Presti;1Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd.2 Those cases reflect the principle that a Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable, and the mere fact that the recipient of the Calderbankoffer is ultimately worse off than he or she would have been had the offer been accepted does not mean that rejection of the offer was unreasonable.
11 In this case the terms of the Calderbank offer made by the respondent were clear and reasonable. By that offer, the respondent offered to forego its entitlement to the costs of the proceedings at first instance which were estimated to lie in the vicinity of $32,000. The amount which the respondent offered to forego in this respect has to be viewed in the context of the amount awarded at trial, namely $74,200. In effect, the respondent was offering to forego approximately 30% of the fruits of his judgment in an attempt to resolve the appeal by agreement. The offer was made early in the appeal proceedings, and if accepted, would have avoided the need for the parties to incur substantial legal costs in relation to the appeal.
12 These matters would not, of themselves, ordinarily support the conclusion that the appellant's rejection of the offer was unreasonable. In this case, the critical factor which sustains that conclusion, in the context to which we have referred, is the weakness of the appeal. As the court observed, the first ground of appeal was not a proper ground, the second ground was misconceived and the third ground doomed to fail for want of evidence. So, in this case, the appellant's rejection of a clear and reasonable offer by the respondent to forego a not inconsiderable proportion of the fruits of his judgment and instead pursue an extremely weak appeal was unreasonable, and the appellant should be ordered to pay the respondent's costs on an indemnity basis from the date upon which the appellant rejected the Calderbank offer – namely, 29 April 2015. As that date precedes the making of an offer of compromise in accordance with O 24A of the RSC, it is unnecessary to deal with the respondent's application for an award of indemnity costs on that basis.
13 Accordingly, it is appropriate to make the following orders:
1. The appellant do pay the respondent's costs, up to and including 29 April 2015, to be assessed if not agreed.
2. The appellant do pay the respondent's costs to be assessed if not agreed on and from 30 April 2015, on an indemnity basis so that the respondent is fully indemnified for his costs, except insofar as the costs may have been unreasonably incurred or unreasonable in amount.
1Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 [16] - [32].
2Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76 (S) [9].
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