Milenkovic v Milenkovic (Costs Ruling) - [2024] VSC 804

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2021 01802

MILAN MILENKOVIC (by his litigation guardian NENAD NIKOLIC)	Plaintiff/First Defendant by Counterclaim
v
MILIC MILENKOVIC	First Defendant/Plaintiff by Counterclaim
COOPERS LAWYERS (AUST) PTY LTD (ACN 084 948 907)	Second Defendant/Second Defendant by Counterclaim

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	20 December 2024
CASE MAY BE CITED AS:	Milenkovic v Milenkovic (Costs Ruling)
MEDIUM NEUTRAL CITATION:	[2024] VSC 804

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COSTS – Calderbank offer – Whether plaintiff’s rejection of first defendant’s Calderbank offer unreasonable – First defendant offered to settle proceedings for less than half of the amount claimed and to bear own costs – Prior to receipt of Calderbank offer plaintiff had received outlines of evidence of witnesses who corroborated key elements of first defendant’s evidence – Evidence of witnesses not meaningfully challenged in cross-examination – Plaintiff’s prospects of successfully defending counterclaim not good when Calderbank offer received – Rejection of Calderbank offer unreasonable.

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HIS HONOUR:

On 11 December 2024 the Court published reasons for judgment in Milenkovic v Milenkovic [2024] VSC 763 (‘principal judgment’). The Court upheld the claim by the plaintiff by counterclaim (‘Milic’) for an order that the second defendant pay him the net proceeds of sale of 285 Glenlyon Road, Fitzroy North (‘Glenlyon Road’) together with any accrued interest held in the trust account of the second defendant.

Milic seeks the following orders as to costs:

(i) the plaintiff and first defendant to counterclaim (‘Milan’) pay Milic’s costs of the proceeding on a standard basis, to be taxed in default of agreement, with respect to costs incurred up to 19 May 2024.

(ii) Milan also pay Milic’s costs of the proceeding on an indemnity basis, to be taxed in default of agreement, with respect to costs incurred on and from 20 May 2024.

(iii) Milan pay the costs of the second defendant and second defendant to counterclaim on a standard basis, to be taxed in default of the agreement.

Milan seeks the following orders as to costs:

(iv) Milan pay Milic’s costs on the standard basis to be taxed in default of agreement;

(v) There be no order as to the second defendant’s costs.

On 13 May 2024 Milic made an offer to compromise the proceeding, expressed as an offer on Calderbank principles. The Calderbank offer was as follows:

(a) Milic shall receive $850,000 from the proceeds of sale of Glenlyon Road with the balance of funds held on trust by the second defendant to be paid to Milan;

(b) Milic agreed never to contest Milan’s Will; and

(c) the parties were to mutually release and discharge each other in respect of all matters and disputes, including costs (whether the subject of existing orders or otherwise), arising out of or incidental to the proceedings.

Milic’s Calderbank offer was rejected by Milan and the trial of the proceeding commenced on 21 May 2024.

The rejection of a

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: [2024] VSC 804
Decision Date: 20 December 2024

CaseChat Overview and Summary

The case of Milenkovic v Milenkovic involved a dispute between the parties concerning the allocation of costs following a settlement offer made under the principles of Calderbank. The proceedings took place in the Family Court of Australia. The first defendant, who was also the counterclaimant, had offered to settle the case for a sum significantly less than what the plaintiff had claimed, along with bearing their own costs. The plaintiff rejected this offer, leading to a subsequent dispute over the reasonableness of this decision.

The central legal issue before the court was whether the plaintiff's rejection of the first defendant's Calderbank offer was unreasonable. The court had to consider the nature and terms of the offer, the evidence available at the time, and the prospects of the parties in light of that evidence. Notably, the plaintiff had received corroborative witness statements prior to the Calderbank offer, which were not effectively challenged during cross-examination. Furthermore, the plaintiff's chances of successfully defending against the counterclaim were deemed poor upon receipt of the offer.

The court concluded that the rejection of the Calderbank offer was unreasonable. It reasoned that the offer was substantial, particularly given the corroborative evidence supporting the first defendant's position and the poor prospects of the plaintiff's defence. Consequently, the court held that the plaintiff's decision to reject the offer was not justifiable under the circumstances. The court's decision highlighted the importance of considering the totality of the evidence and the respective positions of the parties when evaluating the reasonableness of a Calderbank offer rejection.

The final orders of the court reflected its determination, allocating costs in a manner that reflected the unreasonableness of the plaintiff's decision to reject the Calderbank offer. The first defendant was awarded costs associated with the proceedings, emphasizing the need for parties to carefully consider the implications of rejecting a significant settlement offer under the Calderbank principles.

Orders