Pesec v Zivko - [2025] ACTCA 37

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

COURT OF APPEAL

Case Title:	Pesec v Zivko
Citation:	[2025] ACTCA 37
Hearing Dates:	4 August 2025
Decision Date:	2 September 2025
Before:	Taylor, Charlesworth and Stewart JJ
Decision:	See [30].
Catchwords:	APPEAL – appeal from costs orders – issue of duplicative representation – whether primary judge erred in concluding that at the date of the offer of compromise there was no possibility of conflict between interests – whether joint offer of compromise indicative of commonality of interest – discretionary nature of costs orders – cross-appeal dismissed
Legislation Cited:	Corporations Act 2001 (Cth), ss 198A, 232, 247A Supreme Court Act 1933 (ACT), s 37E
Cases Cited:	Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140; 299 FCR 224 House v The King (1936) 55 CLR 499 Pesec v Zivko (No 3) [2024] ACTSC 325 Pesec v Zivko (No 4) [2024] ACTSC 361 Statham v Shephard (No 2) (1974) 23 FLR 244 Zeltner v Deputy Registrar of the Supreme Court (No 2) [2022] ACTCA 30; 370 FLR 78
Parties:	Anthony Pesec ( Appellant and Cross-Respondent) Josip Pavao Zivko ( First Respondent) Frank Crnkovic (Second Respondent) Mirko Skrnjug (Third Respondent) Rein Heins (Fourth Respondent) Noel Edward McCann (Fifth Respondent) XO 1 Pty Ltd (Sixth Respondent) Consolidated Builders Limited (Seventh Respondent and Cross-Appellant)
Representation:	Counsel Mr M Pesman SC with Mr R Higgins ( Appellant and Cross-Respondent) Mr D Thomas SC ( First and Sixth Respondents) Mr J Hutton SC with Ms Z Graus (Second to Fifth Respondents) Mr M O’Meara SC (Seventh Respondent and Cross-Appellant)
Solicitors Chamberlains Law ( Appellant and Cross-Respondent) Allens (First and Sixth Respondents) Thomson Geer (Second to Fifth Respondents) Clayton Utz (Seventh Respondent and Cross-Appellant)
File Number:	AC 37 of 2024
Decision Under Appeal:	Court: Supreme Court of the Australian Capital Territory Before: McCallum CJ Date of Decision: 21 November 2024 Case Title: Pesec v Zivko (No 4) Citation: [2024] ACTSC 361

THE COURT

Introduction

1․This appeal relates to a question of costs.
2․The primary judge dismissed an action commenced by Mr Anthony Pesec against Consolidated Builders Limited (‘Consolidated’), its managing director (Mr Josip Zivko) and (relevantly) four of the Company’s non-executive directors: Pesec v Zivko (No 3) [2024] ACTSC 325 (Pesec (No 3)). Mr Pesec was later ordered to pay the defendants’ costs: Pesec v Zivko (No 4) [2024] ACTSC 361 (Pesec (No 4)). The relevant cost orders required Mr Pesec to pay:
(a)the costs of the non-executive directors and, separately the costs of the Company up to and including 10 August 2022; and
(b)the costs of the non-executive directors and the Company on the basis that, from 11 August 2022, those defendants were to be treated as having been represented by the same counsel and the same solicitors, with the intent that those defendants be allowed a single set of costs from that date.

3․In this proceeding, Mr Pesec appealed from the judgment and orders in Pesec (No…

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: [2025] ACTCA 37
Decision Date: 2 September 2025

CaseChat Overview and Summary

Pesec (the appellant) appealed to the Full Court of the Supreme Court of Victoria against costs orders made by a primary judge. The dispute concerned whether the primary judge had erred in concluding that at the date of an offer of compromise, there was no possibility of conflict between the interests of the appellant and the respondent, Zivko. The appellant argued that a joint offer of compromise made by them and the respondent indicated a commonality of interest, which should have been considered in the costs assessment.

The central legal issue before the Full Court was whether the primary judge had correctly exercised their discretion in making the costs orders, specifically in relation to the assessment of whether a conflict of interest existed between the parties at the time the offer of compromise was made. This involved determining whether the primary judge's finding that no conflict was possible was erroneous, and consequently, whether the costs orders should be set aside or varied.

The Full Court dismissed the appeal and the cross-appeal. Their Honours held that the primary judge's finding that there was no possibility of conflict between the interests of the appellant and the respondent at the date of the offer of compromise was not erroneous. The Court reasoned that the discretionary nature of costs orders meant that the primary judge's decision should not be overturned unless there was a material error of law or fact. The fact that a joint offer of compromise was made did not, in itself, establish a commonality of interest that would preclude the possibility of future conflict. The Court found no basis to interfere with the primary judge's exercise of discretion.

Orders

Orders of the court

See [30].

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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