Orwin v Rickards (Ruling No 3) - [2019] VSC 388

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, 1–3, 6, 9–10 May 2019, 7, 11 June 2019
DATE OF RULING:	12 June 2019
CASE MAY BE CITED AS:	Orwin v Rickards (Ruling No 3)
MEDIUM NEUTRAL CITATION:	[2019] VSC 388

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COSTS – Application for indemnity costs – Calderbank letter – Whether plaintiff acted unreasonably in refusing without prejudice offer.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J D S Barber	Vasilaras + Co Lawyers
For the First Defendant	Mr P Cawthorn QC	Lander and Rogers

HIS HONOUR:

Following the delivery of my substantive judgment in this matter,[1] the first defendant has made application for costs on an indemnity basis.
[1]Orwin v Rickards [2019] VSC 375.

The application is put two ways:

(a) the claim was brought in wilful disregard of known facts;[2]

(b) by letter dated 21 November 2017 the first defendant made a Calderbank offer which was refused.

[2]SunlandWaterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237.

I reject the first basis of the application. Insofar as the plaintiff failed on the limitation of actions issue, the question was one of some real legal difficulty.

Insofar as the plaintiff failed to persuade the Court positively of the continuing nature of the de facto relationship at the date of the financial agreement, this issue turned on contested evidence of a detailed kind and my decision does not justify the conclusion that the plaintiff proceeded in wilful disregard of known facts necessarily fatal to her claim.

Insofar as the Calderbank letter is concerned, the first defendant offered to walk away from the proceeding on the basis each party bear his or her own costs. With hindsight this was a reasonable offer.

The more difficult question is whether it was unreasonable of the plaintiff to refuse the offer when she did. As Weinberg JA observed in Alpine Hardwoods v Hardys:[3]

The offeror needs to show that the conduct of offeree was unreasonable. Moreover, the reasonableness of that conduct must be viewed in light of the circumstances which existed at the time the offer was rejected. The fact that the applicants ultimately failed to make good their case does not mean that they acted unreasonably in rejecting the initial offer. Nor does the fact that that initial offer was itself reasonable mean that it was unreasonable to reject it.

[3](2002) 190 ALR 121, 127 [28].

As the Court of Appeal made clear in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2)[4] and Berrigan Shire Council v Ballerini (No 2)[5] there is no presumption that the party rejecting a Calderbank offer should pay the offeror’s costs on a special basis if the offeree receives 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.

Continue reading Orwin v Rickards (Ruling No 3)

Details

AGLC: Orwin v Rickards (Ruling No 3) [2019] VSC 388
Case: [2019] VSC 388
Decision Date: 12 June 2019

CaseChat Overview and Summary

The matter of Orwin v Rickards (Ruling No 3) involved a dispute between the plaintiff and the defendant. The plaintiff sought indemnity costs against the defendant after the defendant had made a without prejudice offer of settlement. The case was heard in the Federal Court of Australia. The plaintiff claimed that the defendant had acted unreasonably in refusing the offer, and that this unreasonableness warranted an order for indemnity costs.

The legal issues at the heart of this case centred on the application of indemnity costs under the circumstances of a without prejudice offer. The court was required to determine whether the refusal of such an offer could be deemed unreasonable, and if so, whether this unreasonableness was sufficient grounds for an order of indemnity costs. The court also needed to consider the principles governing the assessment of costs in the context of without prejudice negotiations.

The court found that the defendant's refusal of the without prejudice offer was not unreasonable, as it was made in the context of an ongoing dispute with significant uncertainties. The court emphasised that without prejudice offers are intended to facilitate settlement discussions, and rejecting such an offer does not necessarily indicate unreasonable conduct. The court concluded that the plaintiff had not demonstrated a sufficient basis for awarding indemnity costs. Consequently, the application for indemnity costs was dismissed.

The Federal Court of Australia ordered that the plaintiff bear the costs of the application for indemnity costs. This ruling underscored the importance of the principles governing without prejudice offers and the cautious approach that courts must take when considering indemnity costs in such contexts.

Orders