Pesec v Zivko (No 4)

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Pesec v Zivko (No 4)

Citation: 

[2024] ACTSC 361

Hearing Date:

On the papers

Decision Date: 

21 November 2024

Before:

McCallum CJ

Decision: 

(1)       Vacate the order as to costs made on 23 October 2024.

(2)       Order the plaintiff to pay the first and sixth defendants’ costs.

(3)       Order the plaintiff to pay the costs of the second to fifth defendants and, separately, the costs of the seventh defendant up to and including 10 August 2022.

(4)       Order the plaintiff to pay the costs of the second to fifth defendants and the seventh defendant on the basis that, from 11 August 2022, those defendants are 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 11 August 2022.

(5)       Dismiss the defendants’ application for a special costs order.

Catchwords: 

COSTS – determination of costs following unsuccessful oppression suit – where defendants were represented by three separate legal teams – whether plaintiff should bear costs of all three – where defendants served offer of compromise and Calderbank letter – inclusion of requirement for plaintiff to release defendants from any future claims arising out of or in connection with the matters the subject of the proceedings – whether it was unreasonable for the plaintiff not to accept the offer – whether judgment “not more favourable”  

Legislation Cited: 

Court Procedures Act 2004 (ACT), s 5A

Court Procedures Rules 2006 (ACT), rr 1012, 1752

Cases Cited: 

ACT v Gillan; Gillan v ACT [2019] ACTSC 200

Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639

Credit Lyonnais Australia Ltd v Darling (1991) 5 ACSR 703

De Gruchy v The Owners Units Plan No. 3989 (No 2) [2020] ACTSC 166

Forge v Rewers (No 2) [2017] ACTSC 273

Gilmore Finance Pty Ltd v Aesthete Pty Ltd (No 2) [2023] NSWCA 31

Grant v John Grant & Sons Pty Limited [1954] HCA 23; (1954) 91 CLR 112

Gray v Richards (No 2) [2014] HCA 47; (2014) 315 ALR 1

HP Mercantile Pty Ltd v Hartnett [2017] NSWCA 79

Hulanicki v Walton (No 2) [2015] ACTCA 45

In the matter of CMI Limited [2011] QSC 346; 87 ACSR 144

Marhaba v Chen (No 2) [2024] ACTSC 288

Milillo v Konnecke [2009] NSWCA 109

Pesec v Zivko (No 3) [2024] ACTSC 325

Pettitford v Whicker [2005] NSWCA 370
Port of Melbourne Authority v Anshun
[1981] HCA 45; (1981) 147 CLR 589

Statham v Shephard (No 2) (1974) 23 FLR 244

Van Eeden v Henry [2005] NSWCA 14; (2005) 62 NSWLR 301

Parties: 

Anthony Pesec (Plaintiff)

Josip Pavao Zivko (First Defendant)

Frank Crnkovic (Second Defendant)

Mirko Skrnjug (Third Defendant)

Rein Heins (Fourth Defendant)

Noel Edward McCann (Fifth Defendant)

XO 1 Pty Ltd (Sixth Defendant)

Consolidated Builders Limited (Seventh Defendant)

Representation: 

Counsel

M Pesman SC with R Higgins…

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Details
Case
[2024] ACTSC 361
Decision Date

CaseChat Overview and Summary

The case of Pesec v Zivko (No 4) involved the plaintiff, Pesec, who had previously brought an unsuccessful oppression claim against the defendants, Zivko and others. The dispute centred on the allocation of costs following the unsuccessful suit. The matter was heard in the Supreme Court of Victoria. The primary concern was the determination of who should bear the financial burden of the legal costs incurred by the defendants, who had been represented by three separate legal teams throughout the proceedings. The plaintiff argued that they should not be required to bear the costs of all three teams, while the defendants contended that the plaintiff should be held responsible for the entirety of their legal expenses.

The court was tasked with deciding whether it was unreasonable for the plaintiff not to accept a compromise offer made by the defendants, which included a Calderbank letter. This letter stipulated that the plaintiff would have to release the defendants from any future claims related to the subject matter of the proceedings. The court had to determine whether the terms of the offer were reasonable and if the plaintiff's refusal to accept the offer resulted in a judgment that was "not more favourable" than the offer. Additionally, the court needed to consider the implications of the defendants' representation by multiple legal teams on the allocation of costs.

In its decision, the court found that the plaintiff's refusal to accept the defendants' offer of compromise was unreasonable. The court concluded that the terms of the offer were reasonable and that the plaintiff's judgment was not more favourable than the offer. Consequently, the plaintiff was ordered to pay the costs of all the defendants. The court also decided that the defendants' representation by multiple legal teams did not preclude them from being awarded a single set of costs from a certain date. The court vacated the previous order regarding costs and issued new orders specifying the allocation of costs among the parties.

The final orders of the court included vacating the previous order as to costs, directing the plaintiff to pay the costs of the first and sixth defendants, and the costs of the second to fifth defendants and the seventh defendant up to a specific date. Furthermore, the court ordered that from a certain date, the second to fifth defendants and the seventh defendant would be treated as having been represented by the same counsel and solicitors, allowing them to be charged a single set of costs. The court dismissed the defendants' application for a special costs order.

Orders

Orders of the court

(1) Vacate the order as to costs made on 23 October 2024.

(2) Order the plaintiff to pay the first and sixth defendants’ costs.

(3) Order the plaintiff to pay the costs of the second to fifth defendants and, separately, the costs of the seventh defendant up to and including 10 August 2022.

(4) Order the plaintiff to pay the costs of the second to fifth defendants and the seventh defendant on the basis that, from 11 August 2022, those defendants are 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 11 August 2022.

(5) Dismiss the defendants’ application for a special costs order.

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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