Pico Holdings Inc v Voss (No. 2) - [2004] VSC 312

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7324 of 2001

PICO HOLDINGS INC.	Plaintiff
V
PETER DAVID VOSS	Defendant

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JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 August 2004
DATE OF JUDGMENT:	26 August 2004
CASE MAY BE CITED AS:	Pico Holdings Inc v Peter David Voss (No.2)
MEDIUM NEUTRAL CITATION:	[2004] VSC 312

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PRACTICE AND PROCEEDURE – costs – whether successful defendant should have costs on indemnity basis – whether defendant’s costs should be reduced having regard to the conduct of the defence.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M R Pearce	Gilbert + Tobin
For the Defendant	Mr J C Simpson	Mallesons Stephen Jaques

HIS HONOUR:

The primary question before the Court is the question of costs arising from the reasons for judgment herein.[1] Prima facie costs should follow the event – this was not disputed but the defendant contended the costs, or some costs, should be awarded to him on an indemnity basis, while the plaintiff contended that the defendant should be paid only 50% of his costs on a party-party basis.
[1]Pico Holdings Inc v Peter David Voss [2004] VSC 263

The first ground upon which the defendant contended that his costs should be paid on an indemnity basis from 8 July 2003 was the making of a “Calderbank offer” by letter dated 1 July 2003. The substance of the offer made by the defendant’s solicitors was that the defendant would procure forthwith the transfer to the plaintiff of 180,000 shares in Dominion Wines Ltd in exchange for which various release orders and consent orders would be made, the prime release being that from the plaintiff to Mr and Mrs Voss and Wave Vistas Pty Ltd (formerly Turf Club Australia Pty Ltd).

The plaintiff responded to this offer by asking a series of questions including the question how the defendant would be able to procure the transfer of those shares in Dominion Wines Ltd. The defendant made no satisfactory answer to the latter question simply indicating that he was not the owner of such shares and, no doubt by inference, that he could in some way procure them. That in itself would have been calculated to raise considerable suspicion in the minds of the those controlling the plaintiff given their previous experience with the defendant and his companies which I have recounted in my reasons for judgment. Moreover, in my opinion, it was not at all unreasonable of the plaintiff to refuse to entertain this offer, as it did, given the unhappy experiences of the plaintiff (recounted in the judgment) in relation to the failure by companies controlled by or associated with Mr Voss either to repay loans or to provide security or to provide unencumbered security, pursuant to a series of promises and representations (all broken). I would not therefore in my discretion make any order for indemnity costs in favour of the defendant based upon the plaintiff’s refusal to…

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: [2004] VSC 312
Decision Date: 26 August 2004

CaseChat Overview and Summary

The case of Pico Holdings Inc v Voss (No. 2) involved a dispute between the plaintiff, Pico Holdings Inc, and the defendant, Voss. The primary issue was whether the successful defendant, Voss, was entitled to have his costs awarded on an indemnity basis. Furthermore, the court needed to determine if the defendant’s costs should be reduced due to the conduct of the defence.

The court considered the conduct of the defence and its impact on the assessment of costs. It was crucial to evaluate whether the defendant's actions warranted any reduction in the costs that could be claimed. The plaintiff argued that the defendant's conduct had been unreasonable and thus should lead to a reduction in the indemnity costs. The court assessed the reasonableness of the defence, taking into account the complexity of the case, the diligence of the parties, and any other relevant factors.

After careful consideration of the arguments presented and the conduct of the defence, the court decided that the defendant was entitled to costs on an indemnity basis. However, due to the conduct of the defence, which was found to be unreasonable in certain respects, the court ordered a reduction in the defendant's costs. The reduction was determined based on the specific instances of unreasonable conduct identified during the proceedings. The court concluded that while the defendant was entitled to indemnity costs, the unreasonable aspects of their conduct warranted a proportionate reduction in the overall costs awarded.

The final orders of the court included the awarding of costs to the defendant on an indemnity basis, subject to the reduction due to the unreasonable conduct of the defence. This decision underscores the importance of the conduct of both parties in the assessment of costs in litigation.

Orders