Orwin v Rickards (Ruling No 2) - [2019] VSC 374

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROFESSIONAL LIABILITY LIST

S CI 2017 02935

MIRIAM MARLIN ORWIN

Plaintiff

MICHAEL AIDAN RICKARDS

SUSAN ILIAS

PAUL CONNOR

First Defendant

Second Defendant

Third Defendant

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JUDGE:	OSBORN JA
WHERE HELD:	Melbourne
DATE OF HEARING:	30 April 2019, 1 May 2019, 2 May 2019, 3 May 2019, 6 May 2019, 9 May 2019, 10 May 2019
DATE OF RULING:	7 June 2019
CASE MAY BE CITED AS:	Orwin v Rickards (Ruling No 2)
MEDIUM NEUTRAL CITATION:	[2019] VSC 374

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PROCEDURE – Application for indemnity costs – Plaintiff discontinued claim against second defendant on second day of trial – Whether plaintiff acted ‘unreasonably’ in bringing claim against second defendant – Ferny Sky Pty Ltd v Capital Finance Australia [2006] VSC 366 applied – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Schlicht	Vasilaras + Co Lawyers
For the First Defendant	Mr P Cawthorn QC with Ms M Smallwood	Lander and Rogers
For the Second Defendant	Dr A Dinelli	Minter Ellison

HIS HONOUR:

The background to this matter is set out in my primary judgment.[1]
[1]Orwin v Rickards [2019] VSC 375.

Following the filing of a defence by the first defendant raising a defence of proportionate liability, the plaintiff raised a claim of breach of duty against the second defendant.

The defence relevantly stated:

Paul Beresford Connor and Susan Ilias are concurrent wrongdoers within the meaning of the terms in s 24AH of the Wrongs Act 1958 (Vic).
Particulars
…
Susan Ilias
1On 22 December 2009 the first defendant engaged Ilias to review and advise on a version of the domestic relationship agreement, and Ms Ilias provided her advice and proposed amendments to the agreement on or about 22 and 23 December 2009.
2On 22 December 2009 the first defendant said to Ilias that he was ‘not quite certain as to where the Agreement falls as regards relevant legislation.’
3Ilias failed to advise the first defendant that the agreement should be drawn up pursuant to the Family Law Act and/or failed to identify the alleged deficiencies to the domestic relationship agreement as pleaded at paragraphs 10 and 11 of the statement of claim.

The matters raised by the first defendant were not within the direct knowledge of the plaintiff.

Having regard to the drastic potential consequences of the defence of proportionate liability it was not unreasonable of the plaintiff to then make a claim against the second defendant.

On the second day of the trial in this matter, the plaintiff sought leave to discontinue its claim against the second defendant pursuant to r 25.02(2)(b) of the Supreme Court (General Civil Procedure) Rules (‘the Rules’). At this stage the plaintiff’s claim had been opened and the issues clarified to some extent.

The application was not opposed but the second defendant sought its costs of the proceeding on an indemnity basis.

There is no dispute that the second defendant is entitled to its costs pursuant…

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 Orwin v Rickards (Ruling No 2)

Details

AGLC: Orwin v Rickards (Ruling No 2) [2019] VSC 374
Case: [2019] VSC 374
Decision Date: 7 June 2019

CaseChat Overview and Summary

Orwin v Rickards (Ruling No 2) involved a claim for indemnity costs brought by the defendants against the plaintiff, Orwin. The defendants, Rickards and another party, had been sued by Orwin on various claims. Orwin discontinued the claim against the second defendant on the second day of the trial. The defendants sought indemnity costs on the basis that Orwin had acted unreasonably in bringing the claim against the second defendant. The case was heard in the Supreme Court of Victoria.

The legal issue before the court was whether Orwin's decision to discontinue the claim against the second defendant constituted unreasonable conduct for the purposes of an indemnity costs order. The defendants relied on the decision in Ferny Sky Pty Ltd v Capital Finance Australia [2006] VSC 366, which established a test for determining when a party's conduct is unreasonable in this context. The court had to assess whether Orwin's decision to discontinue the claim against the second defendant was unreasonable in light of the circumstances at the time the decision was made.

The court found that Orwin's decision to discontinue the claim against the second defendant was not unreasonable. The court applied the test from Ferny Sky and considered factors such as whether Orwin had a reasonable cause of action, whether there was a genuine possibility of success, and whether the decision to discontinue was made in good faith. The court concluded that Orwin had acted reasonably in discontinuing the claim, as there was no evidence to suggest that the decision was made in bad faith or without a reasonable basis. Consequently, the application for indemnity costs was refused.

The court's decision in Orwin v Rickards (Ruling No 2) confirms that a party's decision to discontinue a claim against a defendant may not necessarily constitute unreasonable conduct for the purposes of an indemnity costs order. The court's application of the test from Ferny Sky highlights the importance of considering the circumstances at the time the decision was made and whether the decision was made in good faith and with a reasonable basis. The final orders of the court were that the application for indemnity costs was refused.

Orders