Parke v Zivkovic and Ors (Ruling)
[2021] VCC 188
•3 March 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
DEFAMATION LIST
Case No. CI-20-01843
| JAMES CHRISTOPHER ANDREW PARKE | Plaintiff |
| v | |
| GRADIMIR ZIVKOVIC | First Defendant |
| and | |
| AUTOMOTIVE SAFETY ENGINEERING (ACN 066 476 051) | Second Defendant |
| and | |
| IMPACT ABSORBING SYSTEMS PTY LTD (ACN 613 768 700) | Third Defendant |
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JUDGE: | HER HONOUR JUDGE TRAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 December 2020 | |
DATE OF RULING: | 3 March 2021 | |
CASE MAY BE CITED AS: | Parke v Zivkovic & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 188 | |
RULING
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Subject: COSTS
Catchwords: Costs – unreasonable failure to agree to a settlement offer – indemnity costs – gross sum costs order
Legislation Cited: County Court Civil Procedure Rules 2018, Rule 63A.07; Defamation Act 2005 (Vic), s40;
Cases Cited:Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399; Seven Network News Limited v News Ltd [2007] FCA 1062; ACN 115 918 959 Pty Ltd v Hoeys Lawyers Pty Ltd (Costs Ruling) [2018] VSC 508; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788; Sheehan v Brett-Young (No 4) [2016] VSC 53; Beach Petroleum v Johnson (No 2) (1995) 57 FCR 119
Ruling: Costs fixed at $58,398.66
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Collins QC AM with Ms M Marcus | Parke Lawyers Pty Ltd |
| For the Defendant | Mr H Kirimof |
HER HONOUR:
1 Mr Parke brought these proceedings against Mr Zivkovic; Automotive Safety Engineering Pty Ltd (“ASE Pty Ltd”); and Impact Absorbing Systems Pty Ltd (“IAS Pty Ltd”) seeking damages for defamation and injunctive relief. Default judgment for damages to be assessed was entered on 26 June 2020. On 9 February 2021, I delivered reasons for decision on the trial assessment. I assessed the damages owed by the defendants as follows:
(a) against Mr Zivkovic: $160,000
(b) against ASE Pty Ltd: $30,000
(c) against IAS Pty Ltd: $35,000
2 I also determined that I would grant injunctive relief and dismissed an application made by the defendants on the eve of the trial assessment.
3 Mr Parke now seeks an order that the defendants pay the costs of the whole proceeding on an indemnity basis and that a gross sum be fixed for those costs under Rule 63A.07 of the County Court Civil Procedure Rules 2018.
Indemnity costs
4 Under s40(2)(a) of the Defamation Act 2005 (“the Act”), I must, unless the interests of justice require otherwise, order the costs of and incidental to the proceedings to be assessed on an indemnity basis, if satisfied that the defendants:
(a) unreasonably failed to make a settlement offer; or
(b) unreasonably failed to agree to a settlement offer proposed by Mr Parke.
5 Mr Parke relies principally upon:
(a) the defendants’ failure to make a settlement offer in response to the concerns sent by Parke Lawyers on 15 January 2020 or their letter of 12 February 2020; and
(b) the defendants’ failure to accept Mr Parke’s offer, made by letter from Parke Lawyers dated 10 July 2020, to accept $30,000, together with the deletion of the defamatory publications; the publication of apologies; and undertakings not to republish or further disseminate the defamatory publications.
6 For the following reasons, I have concluded that the defendants’ failure to accept the offer of 10 July 2020 was unreasonable:
(a) the offer was a very significant compromise, particularly in relation to the total monetary compensation sought, which was only $30,000 inclusive of costs and interest (as compared to the $160,000 plus costs and interest at which damages were ultimately assessed). The additional requirements in relation to deletion of the publications, publication of apologies and undertaking not to republish or further disseminate the defamatory publications, were all reasonable;
(b) although the defendants were self-represented in this proceeding when the offer was made, they had access to lawyers prior to the offer being made[1] and had legal representation specifically in relation to the proceeding from at least 22 July 2020.[2] The offer remained open to acceptance until 24 July 2020. It should have been readily apparent to the defendants’ lawyers that it amounted to a very significant compromise in the circumstances;
(c) in any event, I do not accept that the mere fact that the defendants were self-represented during the period the offer was open for acceptance provides an excuse for not accepting the offer. There is no general principle that a self-represented litigant is exempt from the provisions of s40 or the more general principles applicable to Calderbank offers. Further, a detailed explanation of Mr Parke’s position was given in the Concerns Notice dated 15 January 2020; the letter dated 12 February 2020; and the 10 July 2020 offer, together with recommendations to seek legal advice. There is no evidence that the defendants were incapable of understanding the import of these letters;
(d) there was no obligation upon Mr Parke to accept the subsequent offer by the defendants to pay $30,000. Mr Parke kept the 10 July 2020 offer open for acceptance for two weeks, which was a very reasonable period in the circumstances. The offer itself was far less than the damages that Mr Parke was ultimately awarded. The defendants submitted that it would undermine the purpose of s40 of the Act for a plaintiff to make an offer and then refuse to accept the same offer soon after the first offer lapses. I disagree. The defendants’ suggested approach would undermine the very incentive to make offers provided for by s40 and create significant uncertainty; and
(e) although this was not raised in the defendants’ submissions, I have also considered the fact that by accepting the offer, ASE Pty Ltd and IAS Pty Ltd would have each become jointly and severally liable for the full $30,000 (which is the amount of damages assessed against ASE Pty Ltd and $5,000 less than the amount of damages assessed against IAS Pty Ltd). These amounts may nevertheless be viewed as a compromise, as no additional sum was included for costs and interest. It is also relevant that Mr Zivkovic was the directing mind and will of the two corporate defendants and that all three defendants clearly shared common interests and have throughout been represented together.
[1]Third Affidavit of Gradimir Zivkovic affirmed 22 February 2021, paragraph [1].
[2]Third Affidavit of Gradimir Zivkovic affirmed 22 February 2021, paragraphs [4]-[5].
7 As I am satisfied that the defendants unreasonably failed to agree to a settlement offer, s40(2)(a) of the Act requires me to order that the defendants pay the costs of and incidental to the proceedings to be assessed on an indemnity basis unless the interests of justice otherwise require. I am not satisfied that the interests of justice otherwise require. The defendants must pay Mr Parke’s costs of the proceeding on an indemnity basis.
8 It is not necessary for me to consider whether the defendants acted unreasonably in failing to make a settlement offer after receipt of the Concerns Notice and letter of 12 February 2020. However, for completeness, I find that the defendants’ reply to the concerns notice of 6 February 2020 did not amount to a settlement offer within the meaning of s40 of the Act as it went well beyond the scope of the dispute and required actions by persons who were not parties to the dispute. In any event, it was not a reasonable offer. In the circumstances, I am satisfied that defendants unreasonably failed to make a settlement offer. This provides an additional basis for an award of indemnity costs.
9 It is also not necessary for me to consider the defendants’ subsequent conduct of the proceedings. However, I note that that conduct (which I described extensively in my reasons for judgment delivered 9 February 2021) weighs heavily in the balance against the interests of justice requiring “otherwise” for the purpose of s40(2).
Gross sum costs order
10 The Court has a discretion to make a gross sum costs order fixing costs under Rule 63A.07 of the County Court Civil Procedure Rules.[3] The power may be utilised in order to avoid the delay and expense of taxation, but only where the Court can do so fairly and appropriately.[4] It may be more appropriate where comparatively few items are claimed or there are other reasons why the judge can easily fix the amount.[5] It may also be more appropriate where there is doubt that a defendant may be able to meet any costs order awarded.[6]
[3]See also s65C(2)(c) of the Civil Procedure Act 2010 (Vic).
[4]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399 at paragraph [84], citing Seven Network Ltd v News Ltd [2007] FCA 1062 at paragraph [25].
[5]ACN 115 918 959 Pty Ltd v Hoeys Lawyers Pty Ltd(Costs Ruling) [2018] VSC 508 at paragraph [55].
[6]Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788 at [194]-[195]; compare Sheehan v Brett-Young (No 4) [2016] VSC 53 at paragraph [76].
11 In the present case, I am satisfied that it is appropriate that I fix costs. Mr Parke was represented by his law firm, Parke Lawyers, and so only seeks counsel’s fees and other disbursements. The number of items claimed is not large and the nature of counsel’s fees are such that the Court is in a good position to assess the reasonableness of those fees. It is reasonable for Mr Parke to be concerned that the defendants may be unable to satisfy any costs orders made against them. It is also reasonable for Mr Parke to seek finality in this proceeding, having regard to the matters raised in my reasons of 9 February 2021 in relation to the conduct of the proceeding by the defendants.
12 In fixing fees, I bear in mind that I do not have the expertise of the taxing master. Of necessity, I must apply a broadbrush approach rather than conducting a taxation. Although no rigid or arbitrary discount should be applied,[7] the fixing of fees is a benefit to Mr Parke and has been made on his application. In this context, it is appropriate that I err on the side of under-estimation rather than over-estimation.
[7]Beach Petroleum v Johnson (No 2) (1995) 57 FCR 119 at paragraph [123].
13 In fixing these costs, I am guided by the provisions of the County Court Civil Procedure Rules in relation to taxation. Rule 63A.30.1(1) provides that on a taxation on an indemnity basis “all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred”. Rule 63A.34A provides that all costs (including indemnity costs) are to be taxed according to the County Court costs scale. The term “County Court costs scale” is defined in Rule 1.13 as (relevantly) a fee, charge or amount that is 80 per cent of the applicable rate set out in the Supreme Court costs scale.
14 Item 19 of the Supreme Court costs scale provides for counsels’ fees. It allows fees up to a maximum of $9,060 per day or $906 per hour for senior counsel and $6,040 per day or $604 per hour for junior counsel. Multiplying these figures by 0.8 provides the relevant County Court scale: $7,248 per day or $725 per hour for senior counsel and $4,832 per day or $483 per hour for junior counsel.
15 The defendants submitted that it was unreasonable for Mr Parke to retain senior counsel in this matter. I do not accept this submission. Defamation law, even on an assessment of damages, raises complex legal and factual issues. The defendants’ period of self-representation, if anything, increased the complexity of this proceeding rather than reduced it. In the circumstances of this proceeding, it was not unreasonable for Mr Parke to retain senior counsel.
16 However, the fees actually charged by senior counsel for the trial assessment are more than double the maximum amount ordinarily permitted for senior counsel under the County Court costs scale. Although there is a discretion to award costs higher than the scale maximum, the nature of this proceeding does not justify the payment of fees in excess of the maximum in the County Court costs scale. I am satisfied that the amount sought for senior counsel’s fees is unreasonable and will reduce that amount to the maximum allowable under the County Court costs scale.
17 I am not satisfied that the amounts sought by Mr Parke for junior counsel’s fees and disbursements are unreasonable. Indeed, I am of the view that each of the other items was of a reasonable amount and reasonably incurred. Accordingly, each of these items should be allowed in full.
18 The table below sets out the amounts I have allowed for each item claimed by Mr Parke. I will fix the costs of the proceeding at $58,398.66.
Date of Invoice Payee Item Amount sought Amount allowed Not specified Not specified Organisation extract – Impact Absorbing Systems Pty Ltd $21.25 $21.25 Not specified Not specified Organisation extract – Automotive Safety Engineering Pty Ltd $21.25 $21.25 23 April 2020 Dr Matthew J Collins AM QC Reviewing materials in brief; drafting Writ and Statement of Claim; incidental attendances and correspondence, 0.5 days at $11,000.00 per day $5,500 $3,624 14 May 2020 Network Process Service Personal service $288.20 $288.20 27 April 2020 CITEC e-filing Payment of filing fee $744.62 $744.62 13 August 2020 Ms Melissa Marcus Various work between 8 July 2020 and 5 August 2020, at hourly rate of $400 $17,066.67 $17,066.67 9 December 2020 Court Transcript Services Pty Ltd Daily transcript $1,319.01 $1,319.01 15 December 2020 Dr Matthew J Collins AM QC Appearing at trial assessment, including preparation and submissions, 1.5 days plus one hour at $16,500 per day $26,400 $11,597 28 January 2021 Ms Melissa Marcus Various work between 9 September 2020 and 13 December 2020, including appearing at trial assessment, at hourly rate of $400 $16,066.66 $16,066.66 11 February 2021 Dr Matthew J Collins AM QC Settling additional submissions and reviewing judgment, email exchange with Melissa Marcus, 2 hours at $1,650 per hour. $3,300 $1,450 25 February 2021 Ms Melissa Marcus Various work between 22 January 2021 and 25 February 2021 at hourly rate of $400 $6,200 $6,200 Total $76,927.66 $58,398.66
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Certificate
I certify that these 8 pages are a true copy of the reasons for ruling of her Honour Judge Tran, delivered on 3 March 2021.
Dated: 3 March 2021
Jane Le
Associate to her Honour Judge Tran
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