Morgan v Bell [No.2 Costs]
[2011] VSC 393
•22 August 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 09921 of 2007
| MICHELLE AMANDA MORGAN | Plaintiff |
| v | |
| GREGORY PETER BELL | Defendant |
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JUDGE: | Vickery J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 July 2011 | |
DATE OF JUDGMENT: | 22 August 2011 | |
CASE MAY BE CITED AS: | Morgan v Bell [No.2 Costs] | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 393 | |
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COSTS – De facto relationship – Adjustment of property interests under Part IX Property Law Act 1958 – Whether interest payable on the adjustment sum - Offer of compromise made by defendant pursuant to r. 26.08 Supreme Court (General Civil Procedure) Rules 2005 – Whether plaintiff bettered the defendant’s offer of compromise – Defendant served notice to admit facts pursuant to r. 35.02 – Plaintiff disputes facts by notice of dispute which are later proven – Liability for costs pursuant to r. 63.18.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms B Tulloch of Counsel | Jane Curtis & Associates |
| For the Defendant | Mr P J Davis of Counsel | Wilmoth Field Warne Lawyers |
HIS HONOUR:
Introduction
On 4 July 2011, the Court published its reasons for judgment (‘principal reasons’) in this proceeding. [1] In the principal reasons, it was determined that Ms Morgan, the plaintiff was entitled to an adjustment order under Part IX of the Property Law Act 1958 (Vic) (‘adjustment order’). The adjustment order required Mr Bell, the defendant, to pay the sum of $675,000 to the plaintiff.
[1]Morgan v Bell [2011] VSC 302
I have since heard the parties as to what order should be made as to the costs of the proceeding and the removal of caveats which have been lodged over the defendant’s property.
Whether Interest Payable on the Adjustment Sum
Ms Morgan sought interest on the sum awarded in her favour.
However, as Giller v Procopets (No 2)[2] demonstrates, neither s 58 nor s 60 of the Supreme Court Act 1986 (Vic) applies to a pecuniary award made under Part IX of the Property Law Act 1958 (Vic). Kenyon v Akeroyd (No 2); [3] Manns v Kennedy [4] cf. Kellenick v. Apostolides & Ors No.2. [5]
[2][2009] VSCA 72 at [
[3] [2009] VSCA 168 at [13]
[4][2007] NSWCA 217
[5] [2009] VSC 410
No submissions were made suggesting that there was any other basis upon which interest might be allowed on the property adjustment amount.
For these reasons, the application made by Ms Morgan for interest on the sum awarded in her favour is refused.
Whether Costs Payable under Part IX Property Law Act 1958
The provisions of s 24 of the Supreme Court Act 1986 (Vic) and r 64.24 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) make it clear that the determination of costs is at the Court’s discretion. The discretion must be exercised judicially. Kenyon v Akeroyd (No 2). [6]
[6] Ibid at [2]
In relation to claims made under Part IX of the Property Law Act 1958 (Vic), in Kenyon v Akeroyd (No 2) the Court of Appeal observed:
….a claim under Part IX of the Property Law Act 1958 (Vic) is a singular statutory claim. It is quite different from a claim for damages or a claim for recovery of moneys. Absent agreement, the only means by which domestic partners can achieve finality in the adjustment of their financial interests is by a Court order under s 285 of the Property Law Act 1958 (Vic).[3] In most such cases, the court will be required – as it was here – to fix the quantum of an asset pool, and determine each party’s entitlement and how the assets should be distributed. The Court’s process can thus be seen to be at once necessary and beneficial for both parties. [7]
[7] Ibid at [6]
Adopting this approach lends support to approaching the costs of the proceeding by a determination that they should lie where they fall. This is so particularly where, as in the present case, the adjustment of property rights between the parties could only be carried out on a broad basis, the exercise being primarily a matter of impression and evaluation, rather than one of arithmetic precision.
Ms Tulloch, who appeared for Ms Morgan in the costs application, submitted that Kenyon v Akeroyd (No 2) should be distinguished because in the present case there was a much smaller asset pool, and “one where an order of costs in one direction or the other would consume a very significant proportion of the size of the asset pool”. On this basis, it was submitted that the general principle that costs follow the event should apply, and because Ms Morgan was successful in her claim, her costs should be paid.
However, in my opinion, the size of the asset pool in this case, having been determined to be $4,103,993 as at the date of trial, was not insignificant, and was not sufficiently small to materially distinguish it from the approach taken in Kenyon v Akeroyd (No 2).
Basis for Departure from Usual Costs Order
I accept and adopt the statement of principle made by Hargrave J in Kalenik v Apostolidis (No 3):
Costs orders are in the discretion of the Court. The usual order is that the successful party obtains an order for costs on a party and party basis. Where the case is out of the ordinary, the Court may exercise its discretion to make other orders. The Court may order that a successful party recover no costs, or only part of its costs; that a successful party pay all or part of the losing party’s costs; that each party pay their own costs; or that all or part of the costs of a party be paid on a basis other than a party and party basis. The position is no different when a Court comes to exercise its discretion as to costs at the conclusion of a claim for an adjustment order under Part IX of the Property Law Act. Orders outside of the usual order may be made in such cases wherever the conduct of one or more parties justifies doing so. [Emphasis by underscore added] [8]
[8] [2009] VSC 475 at [7]
In making any such order as to costs which departs from the usual order, again the discretion must be exercised judicially.
The question then becomes, was there any conduct on the part of either party which would justify the Court exercising its discretion to depart from the usual order for costs under Part IX of the Property Law Act1958, namely that costs should lie where they fall?
Offer of Compromise
On 1 December 2009 Mr Bell, served an offer of compromise on Ms Morgan, on terms, inter alia, that he would pay the sum of $650,000 in full and final settlement of this proceeding (“Settlement Sum”). This was done under cover of facsimile a letter from WFW to the Plaintiff’s solicitor, Jane M. Curtis & Associates dated 1 December 2009 (“Offer of Compromise”).
The Offer of Compromise complied with Order 26. Omitting formal parts, it was in the following terms:
TAKE NOTICE that the Defendant hereby makes an Offer of Compromise in respect of the Plaintiff’s claims in the proceeding. The Defendant offers to compromise the proceeding by paying to the Plaintiff the sum of six hundred and fifty thousand dollars ($650,000.00) (inclusive of interest) (“Settlement Sum”) plus the Plaintiff’s costs up to and including the day this Offer of Compromise is served on a party/party basis (“Costs”), in full and final settlement of the Plaintiff’s claims in this proceeding.
AND TAKE NOTICE that payment of the Settlement Sum shall be made to the Plaintiff care of her solicitor Jane M Curtis & Associates on or before a period of twenty-eight (28) days after receipt by Wilmoth Field Warne of written acceptance of this offer.
AND TAKE NOTICE that following written acceptance of this offer, payment of the Costs shall be made within fourteen (14) days of the parties reaching agreement as to the Costs payable or otherwise within thirty (30) days of the Costs being taxed, as the case may be.
THIS OFFER is served in accordance with Part 2 of Order 26 of Chapter 1 of the Supreme Court (General Civil Procedure) Rules 2005.
AND FURTHER TAKE NOTICE that this offer is open to be accepted for a period of fourteen (14) days after the day on which it is served.
Dated 1 December 2009
The plaintiff had until 15 December 2009 to accept the Offer of Compromise. However, she did not accept the offer within the time it was open for acceptance, or at all.
Set out below are the relevant provisions of Order 26 of Chapter 1 of the Supreme Court (General Civil Procedure) Rules2005:
26.02. Application
(1) The plaintiff and the defendant may in respect of any claim in a proceeding serve on one another an offer of compromise on the terms specified in the offer.
(2) An offer of compromise in respect of a claim may be on terms that take into account any other claim between the plaintiff and the defendant made in the proceeding.
(3) An offer of compromise shall-
(a)be in writing and prepared in accordance with Rules 27.02 to 27.04; and
(b)contain a statement to the effect that it is served in accordance with this Order.
26.03. Time for making, accepting etc. offer
(1) An offer of compromise may be served at any time before verdict or judgment in respect of the claim to which it relates.
(2) A party may serve more than one offer of compromise.
(3) An offer of compromise may be expressed to be limited as to the time the offer is open to be accepted after service on the party to whom it is made, but the time expressed shall not be less than 14 days after such service.
(3.1) A party on whom an offer of compromise is served shall within three days after service serve a written acknowledgement of service on the party serving the offer.
(4) A party on whom an offer of compromise is served may accept the offer by serving notice of acceptance in writing on the party who made the offer before-
(a)the expiration of the time specified in accordance with paragraph (3) or, if no time is specified, the expiration of 14 days after service of the offer; or
(b)verdict or judgment in respect of the claim to which the offer relates-
whichever event is the sooner.
(5) An offer of compromise shall not be withdrawn during the time it is open to be accepted, unless the Court otherwise orders.
(6) An offer of compromise is open to be accepted within the period referred to in paragraph (4) notwithstanding that during that period the party on whom the offer is served makes an offer of compromise to the party who served the offer of compromise, whether or not the offer made by the party served is made in accordance with this Part.
(7) Upon the acceptance of an offer of compromise in accordance with paragraph (4), unless the Court otherwise orders, the defendant shall pay the costs of the plaintiff in respect of the claim up to and including the day the offer was served.
(8) If an offer of compromise contains a term which purports to negative or limit the operation of paragraph (7), that term shall be of no effect for any purpose under this Part.
26.08. Costs consequences of failure to accept
(1) This Rule applies to an offer of compromise which has not been accepted at the time of verdict or judgment.
(2) Where an offer of compromise is made by a plaintiff and not accepted by the defendant…………………………
(3) Where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim to which the offer relates not more favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders-
(a) the plaintiff shall be entitled to an order against the defendant for the plaintiff's costs in respect of the claim up to and including the day the offer was served taxed on a party and party basis; and
(b) the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter taxed on a party and party basis.
(4) For the purpose of paragraph (3), where the offer of compromise was served on the first or a later day of the trial of the proceeding …………………………..
(5) Where a plaintiff obtains judgment for the recovery of a debt or damages and-
(a) the amount for which the Court pronounces judgment includes an amount for interest or damages in the nature of interest; or
(b) by or under any Act the Court awards the plaintiff interest or damages in the nature of interest in respect of the judgment amount-
for the purpose of determining the consequences as to costs referred to in paragraphs (2) and (3) the Court shall disregard so much of the amount recovered by or awarded to the plaintiff for interest or damages in the nature of interest as relates to the period after the day the offer of compromise was served.
(6) For the purpose only of paragraph (5), the Court may be informed of the fact that the offer of compromise was served, and of the date of service, but shall not be informed of its terms.
(7) Paragraphs (2) and (3) shall not apply unless the Court is satisfied by the party serving the offer of compromise that that party was at all material times willing and able to carry out the party's part of what was proposed in the offer.
(8) Where the plaintiff obtains judgment for the recovery of a debt or damages, and the amount of the debt or the damages was not in dispute, but only the question of liability, paragraph (2) shall not apply unless the Court is satisfied that the plaintiff's offer was of a genuine compromise.
The question which arises in this case is whether, for the purposes of r. 26.08(3), the Plaintiff obtained a more favourable judgment than what was contained in the Offer of Compromise.
The amount of the property adjustment awarded in favour of the Plaintiff ($675,000) exceeded the amount of the adjustment offered in the Offer of Compromise ($650,000).
However, the Offer of Compromise included the following: “plus the Plaintiff’s costs up to and including the day this Offer of Compromise is served on a party/party basis (“Costs”)”. In my opinion, the Rule makes it clear that the offer to pay costs on this basis was superfluous. Rule 26.03(7) relevantly provides:
upon the acceptance of an offer of compromise in accordance with paragraph (4), unless the Court otherwise orders, the defendant shall pay the costs of the plaintiff in respect of the claim up to and including the day the offer was served.
Further, pursuant to r.26.03(8), an offer of compromise which contains a term which purports to negative or limit the operation of paragraph (7), shall be of no effect.
The basis upon which costs may be awarded under r.26.03(7) is not specifically provided for in O. 26. Nevertheless, if the parties are unable to agree on costs, r.63.10(d) makes provision for the costs to be taxed without an order for taxation, and r. 63.31 provides that, except as provided by the Rules or any order of the Court, including the Costs Court, costs shall be taxed on a party and party basis.
For these reasons, the defendant was placed in no better position by having made the offer to pay the costs of the plaintiff which he did in his Offer of Compromise. The defendant’s offer is to be assessed on the basis that it merely contained a re-statement of his regulatory obligation to pay costs as reflected in r.26.03(7), in the event that his offer was accepted by the Plaintiff.
Further, the obligation to pay costs under r.26.03(7) is circumscribed by the overarching supervision of the Court reflected in the phrase “unless the Court otherwise orders.” Pursuant to r.26.03(8), this is not a provision which can be negatived or limited by any term contained in an offer of compromise.
In Way v Swan Television and radio Broadcasters Ltd[9] Anderson J considered a similar costs regime to O. 26 in the Victorian scheme. His Honour observed:
[9] 5 WAR 323
I do not think that the matter of costs is intended to be part of the “contract” made by acceptance of an offer. I think O 24A, r 10(1) and (2) make that reasonably clear. Those subrules are in the following terms:
“10. (1) Upon the acceptance of an offer of compromise in accordance with Rule 3(5), the plaintiff may, unless the Court otherwise orders, tax his costs in respect of the claim against the defendant up to and including the day the offer was accepted and, if the costs are not paid within 4 days after the signing of a certificate of the taxation, enter judgment against that defendant for the taxed costs.
(2) If a notice of offer contains a term which purports to negative or limit the operation of paragraph (1), that term shall be of no effect for any purpose under this Order.”
Whilst the parties may strike a bargain in respect to the compromise of the action itself, I do not think the matter of costs recoverable by the offeree in the event of the acceptance of the offer are part of that bargain and therefore I do not think the idea that there is an implied term in regard to costs is right. In the procedures laid down in O 24A whereby an action can be brought to an end by an offer of compromise, the intention seems to be that the compromise will always be on the basis that the offeree will always also be entitled to such costs as may be properly recoverable on taxation. The offer and acceptance cannot contain a bargain as to costs expressly or by implication. [10]
[10]Supra at 324
I am also of the opinion that the matter of costs recoverable by the offeree, in the event of the acceptance of an offer of compromise, are not part of that bargain in respect of the action itself. Being a matter which remains in the discretion of the Court under r.26.03(7), an offer as to costs such as that made in this case is not a matter which is intended to be taken into account by r.26.08(3) in determining whether the Plaintiff obtained a more favourable judgment on her claim than the terms of the Offer of Compromise.
The defendant submitted on the evidence that, had the Offer of Compromise been accepted, the Plaintiff would have been better off financially. However, I take the view that in assessing whether or not the outcome was more of less favourable for the Plaintiff for the purposes of r. 26.08(3), the exercise is to be confined to assessing the judgment of the Court, rather than extraneous commercial or financial factors. In any event, the defendant did not ultimately press the point.
For these reasons, the offer made by the defendant ($650,000) is not more favourable to the plaintiff than the amount obtained by the judgment ($675,000). Accordingly, r. 26.08(3) has no application.
Notice to Admit
On 28 April 2010, and 12 May 2010, the defendant, through his solicitors, forwarded to the plaintiff's solicitors detailed notices to admit. The notice to admit dated 12 May 2010 was an amended notice, being in the same form as the 28 April 2010 notice, save that more detail was provided in relation to the “Buxton-Maysville Road Lots”, as they were described, and some amendments were made as to the description of documents.
Paragraphs 2, 3, 12, 13, 24, and 31 of both documents sought admissions from the plaintiff in relation to the allegation pressed by the defendant, that his brother, Karl Anthony Bell (“Karl Bell”) had a 50% equitable interest or alternatively was the beneficial owner as to 50% of various properties. These properties included the Farm property at retreat Road Buxton; the Blackwood Cottages land; the Buxton-Marysville Road lots; and the business conducted through the Potters Cottage Trading Trust.
The defendant’s notices to admit were in part notices for the admission of facts within r.35.03.
The plaintiff disputed all of the facts set out in the defendant’s notices to admit, including the facts alleged in paragraphs 2, 3, 12, 13, 24, and 31 of both documents.
The plaintiff did not dispute the authenticity of any of the 44 documents in the defendant’s notices to admit.
In the principal reasons, it was found that the allegations of fact made in paragraphs 2, 3, 12, 13, 24, and 31 of both notices to admit were substantially true.
Rule 35.06 provides that where a party serves a notice under Rule 35.03(2) disputing a fact, and afterwards that fact is proved in the proceeding, liability for costs shall be determined in accordance with r.63.18.
Rule 63.18(a) provides:
63.18. Non-admission of fact or document
Where a party serves a notice-
(a) under Rule 35.03(2) disputing a fact, and afterwards that fact is proved in the proceeding;
(b) ………………………..
that party shall pay the costs of proof, unless the Court otherwise orders.
The defendant submitted that at least 50% of the proceeding was consumed in establishing that Karl Bell had an equitable interest in his brother’s property portfolio and that there was a clear documentary trail which revealed this to be the case. I do not find this to be the case. In terms of the time occupied in preparation and the conduct of the trial, something in the order of 25% is likely to have been devoted to this issue.
Further, the plaintiff contended that, in any event, the Court should make a different order under r. 63.18(a) in this case. She said that she was not properly in a position to consider the notices to admit because she was not possessed of all the pertinent documents at the relevant time. Indeed, the plaintiff submitted that the reluctance of the defendant to produce financial records made it “impossible and unreasonable for her to concede the matters alleged in the notices to admit in the face of the defendant’s refusal to produce documents relating to Karl Bell personally and KGB Group Pty Ltd.” The plaintiff also referred to numbers of calls for documents to be produced by the defendant during the running of the trial.
As was observed by Byrne J in Meadow Gem Pty Ltd and Ors v ANZ Executors and Trustees and Ors: “[t]he rule [r. r63.18 ] does not provide any guidance as to what matters the Court should have regard to in determining whether an order under r63.18 should be made.” [11] This points to the issue being a matter of discretion to be exercised judicially.
[11] Unreported, Supreme Court of Victoria, Byrne J, at 3, 11 June 1996
Byrne J in Meadow Gem , in a passage which has been cited with approval by Jessup J in Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd (No 5)[12], further observed:
Under r63.18, prima facie, the disputing party must pay the costs of proof of a fact where a Notice to Admit has been given. The question raised in the present application, then, is whether the party so entitled to the costs should be deprived of those costs. In general, the incidence of party and party costs in litigation does not depend upon reasonableness or upon matters such as whether it was part of a party's cause of action or whether it was within a party's knowledge; it depends upon success. R35.03 is intended to encourage parties, especially those who expect to be ultimately successful, to consider realistically whether they will put the other party to the cost of proving each and every fact. As a general rule, the respondent to a Notice to Admit a fact should, in my view, be in no different position with respect to that fact from the position of a defendant who puts the allegations in the plaintiff's Statement of Claim in issue. Absent some special factor, each of them thereby runs the risk that, if the plaintiff or the party giving the Notice to Admit succeeds, a costs burden must be accepted. It must be remembered, too, that this is not a once and for all decision for it is always open to a party at any later time to admit a fact alleged by an opposing party. The use of costs as an incentive to narrow the issues, to shorten trials and to save costs is found elsewhere in the rules, for example, r26.18 (offer of compromise not accepted). In my opinion the primary question which a party in receipt of a Notice to Admit a fact or an offer of compromise must address is whether the notice giver will prove that fact or obtain a result not less favourable than that contained in the offer.
[12] [2010] FCA 605 at [59]
However, there are circumstances where the discretion should be exercised against an order being made under r. 63.18. Nolan v Nolan (No. 2)[13] is a case in point. There, Dodds-Streeton J determined that, although the preponderance of documents referred to in the plaintiff’s notice to admit authenticity were proven and admitted into evidence (consisting of catalogues from major art galleries which had exhibited Nolan’s works and accompanying correspondence in the hand of the artist), her Honour considered that “the defendants were fully justified in challenging their admission on general principles and requiring formal proof.” [14] Amongst the factors considered relevant to this determination was the lengthy period of time which had elapsed prior to issuing the proceeding; the age of many of the documents; and the circumstances of their creation or deposit. In other words, there was sufficient doubt as to the reliability of the documents in question and the inferences to be drawn from them to justify the defendants putting the plaintiff to her proof as to their authenticity. Accordingly, although the plaintiff was largely successful in establishing the authenticity of nearly all of the relevant documents and should therefore have had her costs of proof paid pursuant to r. 63.18, her Honour “otherwise ordered” as contemplated by the Rule.
[13] [2003] VSC 136
[14]Supra at [20]
In the present case, the exercise of the discretion under r. 63.18 must be undertaken, as it was in Nolan v Nolan, in the context of the documents in question and the findings of the Court as to those documents in the principal reasons.
Reference is made to the letter of 8 February 2001 and the agreement said to be reflected therein between the two bothers. This was advanced by the defendant as evidencing the half interest of Karl Bell in the Farm property. The ownership of the Farm property was a principal issue at the trial.
As found by the Court, some suspicion attached to the letter dated 8 February 2001, given that it was signed at Mr Bell’s birthday party and was witnessed by a friend who attended the birthday party. [15]
[15]Ibid Morgan v Bell at [42]
In her submissions the plaintiff properly challenged the veracity of the agreement, pointing to the fact that no valuation of the property in question was provided and there was no documentary financial evidence to substantiate part of the alleged agreement which provided that the costs and outgoings for the Farm were “shared equally”. No accounts or financial statements between Mr Bell and Mr Karl Bell were produced to substantiate the assertion that Mr Karl Bell contributed to the expenditure on the development of the Farm property. Further, the other party involved in the transaction, the former partner of Mr Bell, did not execute the document.
Nevertheless, it was found in the principal reasons that the letter dated 8 February 2001 was an authentic document which was not effectively challenged. [16]
[16]Ibid Morgan v Bell at [42]
Further, the Court made the following observations as to the lack of reliability of the defendant’s financial records: [17]
As to the lack of financial records recording the payments made in respect of the Farm, I place little weight on this factor. The Bell brothers conducted business between themselves with little or no regard to financial records. Further, insofar as financial records were kept at all, these were maintained by their accountants primarily for the purpose of presenting a financial picture which would result in minimising exposure to taxation, rather than reflecting the true position of the various entities under their control. I am unable to place any reliance on the accuracy of the financial records kept in relation to any of the Bell entities.
[17]Ibid Morgan v Bell at [43]
Ultimately the issue as to whether Karl Bell had an equitable half interest in his brothers' property and business portfolio was not determined on the basis of the accounting records maintained by the Bell brothers or the elaborate trust and corporate structures put in place by their financial advisers. Rather it was determined on the oral evidence at trial. In this regard the following was found in the principal reasons: [18]
It was a consistent theme of the evidence of both Mr Bell and Mr Karl Bell that all of the assets acquired and developed by each of them, or entities associated with each of them, formed part of an overarching relationship between them, akin to a partnership, although not formally so, by which they share a 50/50 beneficial interest in each and every one of these assets.
Mr Bell and his brother Mr Karl Bell have worked together since the 1990’s in various property developments, and more recently in the hospitality ventures which comprise the asset subject matter of this proceeding. Together, they have built up assets on a mutual understanding or expectation that they would share equally in the benefits of those assets.
The evidence given by Mr Bell and his brother on these matters was credible and I accept it.
[18]Ibid Morgan v Bell [18-20]
Given these matters, the plaintiff was justified in disputing the critical allegation of the joint ownership of property between the two Bell brothers and putting the defendant to his proof.
For these reasons, although the plaintiff disputed facts ultimately proved by the defendant in the proceeding, and therefore prima facie should pay the costs of proof pursuant to r. 63.18, in the exercise of the discretion provided for, I will order otherwise pursuant to the Rule.
Other Factors
As to other factors which may justify a departure from the usual approach to costs, Part IX of the Property Law Act claim, reference is made to the useful summary provided by Hargrave J in Kalenik v Apostolidis (No 3): [19]
First, where a successful party fails in respect of issues which it pursued at trial, including discrete or alternative heads of claim raised on the pleadings, disputed questions of law and disputed questions of fact. McFadzean v CFMEU [2007] VSCA 289; (2007) 20 VR 250, [152]-[158].
Second, where a successful party wins on some issues and loses on others, it is preferable that a single order apportioning costs is made; rather than awarding costs in relation to particular questions or issues in the proceeding. Ibid, [157]-[160].
Third, the conduct of a party prior to or during the trial may warrant censure by the Court, to be reflected in the exercise of the costs discretion. Giller v Procopets (No 2) , [17]. For example, where a successful plaintiff is found to have lied in evidence, or to have engaged in other litigation misconduct such as inducing witnesses to lie, the Court may reduce the successful plaintiff’s entitlement to costs. This is particularly so where the conduct has the effect of making a proceeding more complicated and prolonged. Ibid, [20].
Fourth, the power of a Court to order costs on a basis higher than party and party costs, such as solicitor and client or indemnity costs, requires the establishment of some special circumstances. Special circumstances justifying a higher costs order include misconduct by the losing party in relation to the proceeding, especially misconduct which causes prolongation of the interlocutory proceedings or the trial, and the making of allegations which ought never to have been made. Colgate-Palmolive Company v Cussons Pty Ltd {1993] FCA 536; (1993) 46 FCR 225.
Fifth, where a defendant makes a Calderbank offer, Calderbank v Calderbank[1975] 3 All ER 333. the unreasonable refusal of the offer by a successful plaintiff is, by itself, sufficient to justify an order that the successful plaintiff pay the defendant’s costs from the date of the offer on an indemnity basis. Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2)[2005] VSCA 298, [28].
[19] [2009] VSC 475 at [9-13]
Having given due consideration these factors, nothing about the conduct of either party warrants any departure from the usual order as to costs made in these matters.
Orders
For the above reasons, I will exercise my discretion to make the following orders:
(1) There be judgment for the plaintiff in the sum of $675,000.
(2) The defendant pay the judgment sum to the Plaintiff within 60 days.
(3) Upon the payment of the judgment sum, all caveats lodged by or on behalf of the Plaintiff over the property of the defendant, or in which the defendant has an interest, be removed.
(4) Each party bear their own costs of the proceeding, including interlocutory steps which were the subject of reserved costs.
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