Polimeni v Villacam Pty Ltd

[2003] VSC 147

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4262 of 2002

DONNA POLIMENI	Plaintiff
v
VILLACAM PTY LTD, SANTINO BELMUDA, RITA BELMUDA, ROBERT MORETTI AND ELVIRA MORETTI	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 APRIL 2003
DATE OF RULING:	13 MAY 2003
CASE MAY BE CITED AS:	POLIMENI v VILLACAM PTY LTD & ORS
MEDIUM NEUTRAL CITATION:	[2003] VSC 147

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COSTS – Party/party or solicitor/client basis.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Langmead SC with Mr Baker	KCI Lawyers
For the 1st to 3rd Defendants	Mr Jones	Holding Redlich
For the 4th and 5th Defendants	Mr Northrop	Goldsmiths

HIS HONOUR:

1. In this matter the plaintiff has sought an order for costs of the proceeding to date against the first, second and third named defendants (save for costs occasioned by the joinder of the fourth and fifth named defendants which are the subject of a separate order).

1. I have ruled that the plaintiff is entitled to such costs save for costs incurred with respect to the examination by Mr Found, an independent handwriting expert, of the signatures upon share transfers relied on by the defendants.  I so ruled in summary because:

(a)The plaintiff's case was not put on a consistent basis from its inception in this Court;

(b)The plaintiff's case progressed from one based on denial of signature of the relevant documents to one of mistaken signature only after the independent examination of the documents by Mr Found;

(c)An allegation or imputation of forgery is a very serious allegation or imputation.  There is long-standing authority that a plaintiff may succeed on other issues yet still be made liable for a defendant's costs in a case in which unsuccessful allegations of forgery or fraud are made.  In the present case such allegations and imputations were dropped only after the independent examination of the documents. 

(d)Mr Found's costs relate to an issue which was resolved in favour of the defendants. 

1. The outstanding issue with respect to the plaintiff's costs is whether the plaintiff should receive its costs against the first, second and third named defendants (subject to the two exceptions I have mentioned) on a party party basis or on a higher basis.  Mr Baker seeks such costs on an indemnity basis and submits:

(a)       that the Court has a discretion to so award;  and

(b)that discretion should be exercised in favour of the plaintiff because the defendants have engaged in unmeritorious and improper conduct such as to constitute special circumstances.

1. In my opinion there is no sufficient basis for awarding costs on other than a party party basis in this case.

(a)This is not the case of an unmeritorious plaintiff instituting a claim which should never have been made (cf Australian Guarantee Corporation Ltd v De Jager[1];  Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd[2]).

(b)It is not a case involving rejection of a offer of compromise (cf Maitland Hospital v Fisher[3];  Development Ventures Pty Ltd v Bayside Health & Anor[4]).

(c)The transaction upon which the plaintiff relies and which has formed the basis of her successful claim was itself founded in an intended fraud upon a third party. 

(d)The material put forward on behalf of the plaintiff in support of her claim has changed and the basis of her claim has been materially refined in the course of the proceedings.

(e)The oral evidence called on behalf of the plaintiff was the subject of a number of specific criticisms by me in the judgment I have given as to the substance of the plaintiff's claim to an interest in the company. 

(f)The findings I have made which are adverse to the defendants both as to their conduct and as to their failure to maintain company records in accordance with the relevant legislation are not sufficient to outweigh the above considerations. 

(g)The rationale for party party costs is founded upon a compromise and necessarily envisages that a successful plaintiff will not normally be indemnified for his or her full costs of the action;  as Winneke P stated in Spencer v Dowling[5]. 

[1][1984] VR 483 at 502

[2](1998) 81 ALR 397 at 401

[3](1992) 27 NSWLR 721

[4][2003] VSC 111

[5](1997) 2 VR 127 at 147

1. For the above reasons I will order that the first, second and third named defendants pay the plaintiff's costs of the proceeding to date on a party/party basis, save for additional costs occasioned by the joinder of the fourth and fifth named defendants and for costs incurred with respect to the examination by an independent handwriting expert of the signatures upon relevant documents.

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