Re Wattie; Wattie v Wattie
[2019] VSC 701
•22 October 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2018 00302
IN THE MATTER of the will and estate of ANNE THERESE WATTIE, deceased
BETWEEN:
| ELISE KATHLEEN WATTIE | Plaintiff |
| -and- | |
| PHILLIP MARK WATTIE | First Defendant |
| -and- | |
| SHARYN MAREE ARNOLD | Second Defendant |
---
JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 22 October 2019 |
CASE MAY BE CITED AS: | Re Wattie; Wattie v Wattie |
MEDIUM NEUTRAL CITATION: | [2019] VSC 701 |
---
PRACTICE AND PROCEDURE — Costs — Non-party costs order — Where defendants seek costs against solicitors for plaintiff for discontinued proceeding — Where plaintiff residuary beneficiary under will — Where plaintiff issued proceeding against defendants seeking transfer of estate property to her — Whether overarching obligation contravened — Discretion as to appropriate order — Civil Procedure Act 2010 (Vic) ss 8, 9, 18, 20, 29, 30 — Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.23 — Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) (2014) 48 VR 1.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No appearance | Flitner & Company Pty Ltd |
| For the Defendants | Mr J Rizzi | Woodhams O’Keeffe & Co |
| For Flitner & Company Pty Ltd and Thomas Flitner | Ms GSJ Berlic | Lander & Rogers |
HER HONOUR:
Introduction
Anne Therese Wattie died on 13 August 2002. Probate of the deceased’s will dated 19 March 2002 was granted to the defendants on 7 February 2003. The defendants are two of the deceased’s siblings.
Pursuant to the deceased’s will, the residuary estate is held on trust for the benefit of the plaintiff. The only significant asset of the estate is a property in Wantirna valued at approximately $800,000.
By originating motion and summons filed 29 January 2018, the plaintiff sought orders that the defendants, inter alia, transfer of the Wantirna property to her. The proceeding lasted some eight months, having gone through several procedural steps including mediation, before it was discontinued by the plaintiff, pursuant to r 25.03 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’).
Factual background
The plaintiff is the only child of the deceased and was born on 5 January 1994. Early in her childhood, the plaintiff was diagnosed with mild autism.
Clause 3 of the deceased’s will provides, among other things, that the defendants hold the residuary estate, including the Wantirna property, on trust for the plaintiff. The will provides for the defendants, in their discretion, to pay or apply all or part of the income or capital of the estate for the plaintiff’s benefit and sets out the deceased’s ‘wishes’ with respect to how the defendants are to administer the trusts and include:
(a) that the capital and income of the trust are primarily for the maintenance, education, benefit, advancement in life or wellbeing of the plaintiff in such ways as the defendants think fit so as to support and assist the plaintiff to participate in society;
(b) that the plaintiff’s views and wishes, so far as they can be ascertained, should receive paramount consideration;
(c) that the decisions made about the plaintiff should be, as nearly as possible, the decisions that she would have made if not affected by her autism;
(d) that the plaintiff’s welfare and interests should be appropriately protected;
(e) that the plaintiff’s life should not be interfered with except to the least extent necessary;
(f) that the plaintiff should be encouraged to look after herself; and
(g) that, as far as possible, the plaintiff should live in the general community and join in community activities.
Procedural history
The plaintiff sought the following relief against the defendants:
1.That the Defendants transfer to the Plaintiff the property situated at 18 Helsal Drive, Wantirna being the whole of land being described in Certificate of Title: Volume: 9280 Folio: 535.
2.That the Defendants otherwise account for the administration of the Estate of the Deceased.
3.That the Defendants pay the Plaintiff’s costs.
The heading of the originating motion did not specify whether the proceeding was made under a particular provision of a statute, however, it did contain the words ‘In the matter of Part IV of the Administration and Probate Act 1958’, which were struck through by pen.
The plaintiff also filed an overarching obligations certification, pursuant to s 41 of the Civil Procedure Act 2010 (‘the CPA’), and the plaintiff’s solicitor, Mr Thomas Flitner, filed a proper basis certification, pursuant to s 42 of the CPA.
In her affidavit sworn 29 January 2018,[1] the plaintiff deposed that, over time, the defendants had made distributions to the plaintiff under the deceased’s will. Sometime in 2014, the plaintiff moved into the Wantirna property and stayed there with her domestic partner, Mr Campbell, until August 2017. In August 2017, the defendants applied to the Victorian Civil and Administrative Tribunal (‘the VCAT’) for an order to evict the plaintiff and Mr Campbell from the Wantirna property. The plaintiff and Mr Campbell have since vacated the Wantirna property.
[1]The first page of the affidavit bears the date of 25 November 2017, more than two months before it was filed with the Court.
On 6 February 2018, the defendants’ solicitors, Woodhams O’Keeffe & Co (‘Woodhams O’Keeffe’), wrote to Mr Flitner stating that the defendants had never received a letter of demand seeking the relief sought by the plaintiff in the proceeding. The letter also stated that the originating motion and summons failed to establish any ground on which the plaintiff could apply for the relief sought. Woodhams O’Keeffe also put the plaintiff on notice that the defendants would seek costs if the proceeding was struck out.
On 21 March 2018, the parties were ordered to exchange affidavits and attend mediation. The mediation took place on 11 May 2018 but did not settle.
In her affidavit filed 12 April 2018, the second defendant deposed that she had concerns about Mr Campbell and the way in which he behaved towards the plaintiff and her family. The second defendant communicated these concerns to the plaintiff and other family members. On the whole, the second defendant and Mr Campbell had a strained relationship that involved verbal abuse and violent threats. According to the second defendant, Mr Campbell had allowed the Wantirna property to fall into disrepair. The defendants filed the VCAT proceeding in order to evict Mr Campbell from the Wantirna property.
On 7 June 2018, orders were made for the plaintiff to disclose the name of her employer and to make herself available for various medical and psychological examinations as requested by the defendants.
On 3 August 2018, pre-trial orders were made and the proceeding was adjourned to 21 September 2018.
On 12 September 2018, Woodhams O’Keeffe wrote to Mr Flitner ‘about the future conduct of these proceedings and the proposed costs order which may be made against [his] firm’ stating:
We have previously submitted to you that there is no proper basis of [sic] your client’s action against the Executors. Your client’s claim seeks a transfer of trust property to her, that is despite a perfectly valid Will which was not challenged by your client and is being properly administered by the Executors. There is no basis in fact or law for any order being made on your client’s behalf.
The letter also alleged that the proceeding was issued in breach of Mr Flitner’s overarching obligations and stated that, should the plaintiff continue with the proceeding, ‘an application for indemnity costs will be made’.
Before the directions hearing on 21 September 2018, the defendants filed written submissions in which they submitted that the proceeding was misconceived insofar as it sought that the defendants exercise their discretion and transfer the Wantirna property to the plaintiff. They also submitted that the Court could not compel a trustee to exercise its discretion in a particular way and that the Court’s role in this situation was to ensure that the trustees properly exercised their discretion and power.
At the hearing, orders were made granting leave to the plaintiff to discontinue her proceeding. As the parties could not agree on the issue of costs, no orders were made in respect of the costs of the proceeding.
Defendants’ application for costs
By summons filed 19 October 2018, pursuant to s 29(1) of the CPA, s 23(1) of the Supreme Court Act 1986 and r 63.23 of the Rules, the defendants seek orders for some or all of their legal costs or other costs or expenses against Mr Flitner and/or his firm, Flitner & Company Pty Ltd (‘Flitner’).
In an affidavit by Garry Robert Woodhams of Woodhams O’Keeffe sworn 16 July 2019, Mr Woodhams deposes that his firm had invited Flitner to explain the basis on which the plaintiff brought the proceeding. Flitner did not respond to these requests. Mr Woodhams referred to the letters sent by his firm to Flitner on 6 February 2018 and 12 September 2018 and deposes that the estate has incurred costs ‘in excess of $27,000.00 to date’.
Mr Woodhams also deposes that he does not believe that the plaintiff has the means and ability to pay the costs of the proceeding. In this respect, he adduced a copy of the plaintiff’s file with the Australian Financial Security Authority, which shows that the plaintiff has declared that she is insolvent and that she has assets worth $11,005 and weekly income of $767.25 and debts totalling $42,258.43. The file also shows that, on 21 December 2017, the plaintiff entered into a debt agreement with her creditors under the Bankruptcy Act 1966 (Cth).
On 20 December 2018, the defendants filed their particulars of claim in support of the summons. They alleged, among other things, that the relief sought by the plaintiff in the proceeding lacked a proper basis within the meaning of the CPA. On 19 February 2019, Flitner emailed to the Court a response to these particulars. It denied the defendants’ allegation as to a lack of a proper basis, and said:
(a)[Flitner] had a proper basis to execute a proper basis certification pursuant to section 42 of [the CPA], including on the basis that the alleged conduct of the defendants amounted to a breach of fiduciary duty; and
(b)[Flitner] is otherwise unable to further plead to [the allegation] at this time as its file in the proceeding is subject to client legal privilege and such privilege has not been waived by the plaintiff.
Defendants’ submissions
The defendants submit that the plaintiff’s claim was misconceived and did not have a proper basis under the CPA. Echoing their submissions at the directions hearing on 21 September 2018, the defendants contend that it is settled law that a court cannot compel a trustee to exercise its discretion in a certain way, the limited role of a court being to ensure that the trustee properly exercises any discretion and power granted to the trustee. As a result, the defendants submit, Flitner and Mr Flitner issued a proceeding seeking orders that the Court could not make.
The defendants further submit that the conduct of Flitner and Mr Flitner suggests that they acted in wilful disregard of the overarching obligations under the CPA, referring to the letters sent by Woodhams O’Keeffe to Flitner on 6 February 2018 and 12 September 2018, where the defendants point out that Flitner was put on notice that the plaintiff’s claim was misconceived.
Submissions of Flitner and Mr Flitner
Flitner and Mr Flitner submit that the proceeding brought into issue the defendants’ exercise of their discretion with respect to them seeking orders from the VCAT to evict the plaintiff from the Wantirna property and with respect to the plaintiff’s disability. In particular, the plaintiff’s affidavit filed 29 January 2018 provided a factual basis for impugning the exercise of the trustees’ discretion, especially in light of the deceased’s wishes in the will and evidence that the plaintiff had recovered from her disability.
Flitner and Mr Flitner further submit that, in any event, the defendants have not identified any specific conduct that amounts to a breach of Flitner’s duty to the Court, misconduct, default or gross negligence to justify a non-party costs order. They also say that the communications between Flitner and the plaintiff are subject to client legal privilege and that, in considering whether to make a non-party costs order, the Court should give Flitner the benefit of the doubt.
Flitner and Mr Flitner submit that, while the relief sought by the plaintiff in the proceeding ‘was not happily drafted and may have been inappropriate’, these circumstances do not indicate that the plaintiff’s claim lacked a proper basis. Flitner and Mr Flitner submit that the fact that the defendants did not apply for summary judgment or for the Court to strike out the proceeding suggests that the plaintiff’s claim had some basis. Further, the Court’s order that the plaintiff disclose the name of her employer and make herself available for medical and psychological examinations also relates to the key factual issue as to whether the plaintiff had recovered from her autism. In light of the relief sought in the originating motion, the costs incurred in relation to these steps were not improperly incurred.
Applicable principles
The defendants rely on three provisions in support of their application for a costs order against Flitner and Mr Flitner: r 63.23 of the Rules, s 29(1) of the CPA and s 24 of the Supreme Court Act 1986.
Section 24 of the Supreme Court Act 1986 gives the Court full power to determine by whom and to what extent the costs of and incidental to all matters in the Court are to be paid.
Rule 63.23 sets out the circumstances in which a lawyer may be liable to pay the costs of a party to a proceeding, often referred to as a ‘wasted costs’ order, as follows:
Costs liability of lawyer
(1)Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that—
(a)all or any of the costs between the solicitor and the client be disallowed or that the solicitor repay to the client the whole or part of any money paid on account of costs;
(b)the solicitor pay to the solicitor’s client all or any of the costs which the client has been ordered to pay to any party;
(c)the solicitor pay all or any of the costs payable by any party other than the client.
(2)Without limiting paragraph (1), a solicitor fails to act with reasonable competence and expedition for the purpose of that paragraph where any application in or trial of a proceeding cannot conveniently be heard or proceed, or fails or is adjourned without any useful progress being made, by reason of the failure of the solicitor to—
(a) attend in person or by a proper representative;
(b) file any document which ought to have been filed;
(c)lodge or deliver any document for the use of the Court which ought to have been lodged or delivered;
(d) be prepared with any proper evidence or account; or
(e) otherwise proceed.
(3)The Court shall not make an order under paragraph (1) without giving the solicitor a reasonable opportunity to be heard.
The jurisdiction to make a non-party costs order, especially against the solicitors for a party to a legal proceeding, is exceptional and should be exercised with caution.[2] Although its object is compensatory, a non-party costs order falls within the inherent jurisdiction of the Court to discipline those who come before it.[3] However, r 63.23 does not require a party seeking costs from a solicitor to establish dishonesty, criminal conduct or personal obliquity; misconduct, default or negligence will suffice.[4]
[2]Knight v FP Special Assets Ltd (1992) 174 CLR 178, 198 (Dawson J); Dura (Australia) Constructions Pty Ltd v Hue Boutique Living (No 5) (2014) 48 VR 1, 19 [48] (John Dixon J).
[3]See generally Myers v Elman [1940] AC 282.
[4]Etna v Arif [1999] 2 VR 353, 385 [82] (Batt JA, with whom Charles and Callaway JJA agreed). As to the latter, mere negligence will suffice. See Gabelich v Donaghey [2018] VSC 184, [76] (Daly AsJ).
In Dura (Australia) Constructions Pty Ltd v Hue Boutique Living (No 5), John Dixon J usefully summarised the principles that a court should take into account in the exercise of its wasted costs jurisdiction:
(a)The court’s jurisdiction to make a wasted costs order against a solicitor is founded on breach of the duty owed by the legal practitioner to the court to perform his duty as an officer of the court in promoting, within his own sphere, the cause of justice.
(b)‘Negligent’ should be understood in an untechnical way to denote failure to act in a way no reasonably well-informed and competent ordinary member of the profession would have done.
(c)The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised with care and discretion and only in clear cases.
(d)The wasted costs jurisdiction discloses a tension between two important public interests, one that the wasted costs orders should not become a back-door means of recovering costs not otherwise recoverable against a legally-aided or impoverished litigant, and that the remedy should not grow unchecked to become more damaging than the disease and, two, that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their or their opponents’ lawyers.
(e)A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence that is plainly doomed to fail.
(f)The legal practitioner is not the judge of the credibility of the witnesses or the validity of the argument.
(g)A judge considering making a wasted costs order arising out of an advocate’s conduct of court proceedings must make full allowance for the exigencies of acting in that environment; only when, with all allowances made, an advocate’s conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order.
(h)A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it, and a legal practitioner should not be called on to reply unless an apparently strong prima facie case has been made.
(i)Where a legal practitioner’s ability to rebut the complaint is hampered because the client maintains client legal privilege, full allowance must be given for the practitioner’s inability to tell the full story and he or she should be given the benefit of the doubt. In such circumstances, the court should not make an order against a practitioner without satisfying itself that it is in all the circumstances fair to do so, or, put the other way, it is only when, with all allowances made, a practitioner’s conduct of proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order.
(j)The procedure to be followed in determining applications for wasted costs must be fair and as simple and summary as fairness permits.[5]
[5](2014) 48 VR 1, 22–3 [57] (John Dixon J) (‘Dura’).
In deciding whether to make a wasted costs order, the Court should have regard to the framework created by the CPA for the conduct of civil proceedings. Section 28(2) of the CPA provides that, in exercising its discretion as to costs, a court may take into account any contravention of the overarching obligations under the CPA.
The defendants submit that Flitner and Mr Flitner contravened the overarching obligation in s 18(d) of the CPA. Section 18(d) relevantly provides that a person to whom the overarching obligations apply must not make any claim in a civil proceeding that does not, on the factual and legal material available to the person at the time of making the claim, have a proper basis.
Section 29(1) of the CPA gives this Court the power to make any order it considers appropriate in the interests of justice if it is satisfied, on the balance of probabilities, that a person has contravened any overarching obligations. In particular, s 29(1)(a) provides that the Court may order that such a person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of the overarching obligation. In the exercise of this power, as with the exercise of any power under the CPA,[6] the Court must seek to give effect to the CPA’s overarching purpose: ‘to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute’.[7]
[6]Civil Procedure Act 2010 (Vic) s 8(1).
[7]Ibid s 7(1). See also Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8) [2014] VSC 567, [257] (John Dixon J) (‘Hudspeth’).
Consideration
As a preliminary matter, the overarching obligations applied to Mr Flitner, a legal practitioner who acted for or on behalf of the plaintiff in the proceeding,[8] and to Flitner, a law practice that acted for or on behalf of the plaintiff in the proceeding.[9] It is uncontroversial that the proceeding was a civil proceeding within the meaning of the CPA,[10] and that the application under s 29 met the formal requirements of the CPA.[11]
[8]Civil Procedure Act 2010 (Vic) s 10(1)(b).
[9]Ibid s 10(1)(c).
[10]Ibid s 11.
[11]Ibid s 30.
The first issue to consider is whether the Court is satisfied, on the balance of probabilities, that Flitner and Mr Flitner have contravened any overarching obligation under the CPA, and, in particular, the overarching obligation under s 18(d) not to make a claim in a civil proceeding that, on the factual and legal material available to them at the time of making the claim, lacks a proper basis. This issue will inform the exercise of this Court’s discretion as to costs.
The plaintiff has not authorised Flitner or Mr Flitner to waive privilege that she holds over documents and information that might be relevant to their response to the summons. As such, the Court is not privy to the details and circumstances of the plaintiff’s instructions to Flitner with respect to the proceeding. These circumstances hamper the ability of Flitner and Mr Flitner to respond to the application before the Court.[12]
[12]Ozaltay v Atilla (No 2) [2018] VSC 764, [19] (McMillan J).
In determining whether Flitner and Mr Flitner breached the overarching obligation in s 18(d), the Court must assess whether the plaintiff’s claim in the proceeding had a proper basis by reference to the factual and legal material available to her at the time of making the claim. In this respect, the following observations are to be made.
First, neither in the originating motion nor in any subsequent document filed by the plaintiff in the proceeding did the plaintiff identify the basis for which she sought the transfer of the Wantirna property to her. For example, she did not state whether the relief was sought under a particular statute or at general law. She did not file any submissions explaining the grounds on which she sought the relief. Nor did her affidavit, which detailed her personal history and provided some information about the administration of the deceased’s estate, clarify these matters.
Secondly, in their response to the defendants’ particulars of claim, Flitner and Mr Flitner stated that Flitner ‘had a proper basis to execute a proper basis certification’ under the CPA, ‘including on the basis that the alleged conduct of the defendants amounted to a breach of fiduciary duty’. However, none of the documents filed by the plaintiff in the proceeding refers to a breach of fiduciary duty on the part of the defendants or suggests that such a cause of action grounded the relief sought in the proceeding.
Thirdly, in their written submissions, Flitner and Mr Flitner contend that the proceeding essentially involved a question about the defendants’ exercise of their discretion with respect to their seeking orders in the VCAT to evict the plaintiff from the Wantirna property and the extent and effect of the plaintiff’s disability. Apart from the fact that this submission does not address the earlier allegation of breach of fiduciary duty, there is nothing in the documents filed in the proceeding that suggests that the plaintiff sought to impugn the defendants’ exercise of their discretion or that the plaintiff had a proper basis to challenge the exercise of their discretion as trustees.
Fourthly, the fact that this Court ordered that the plaintiff disclose the name of her employer and make herself available for medical and psychological examinations does not give the proceeding a proper basis — nor does the fact that the defendants did not apply for summary judgment or apply to have the originating motion struck out. The terms of s 18(d) call for an inquiry into whether a claim has a proper basis ‘at the time of making the claim’. To take these matters into account in assessing whether the plaintiff’s claim had a proper basis would be to place undue weight on events that occurred after the making of the claim. The second of these matters, however, may bear on the quantum of the costs awarded to the defendants.
Fifthly, it is difficult to see any basis for the transfer of the Wantirna property to the plaintiff. The deceased’s will provides that the defendants are to hold the residuary estate, which includes the Wantirna property, on trust for the plaintiff. It gives the defendants the discretion to pay or apply all or part of the income or the capital of the estate for the plaintiff’s benefit in accordance with the deceased’s wishes. The evidence establishes that the defendants had made distributions to the plaintiff over time, and no allegation had been made that the defendants had improperly exercised their discretion or otherwise engaged in conduct that might indicate a breach of duty.
Having regard to the information available to the plaintiff when the proceeding was issued, the Court is satisfied that the plaintiff’s claim did not have a proper basis within the meaning of s 18(d) of the CPA and the filing of the proceeding in these circumstances contravened this overarching obligation.
In addition, the plaintiff, Flitner and Mr Flitner each had an overarching obligation to cooperate with the defendants in connection with the conduct of the proceeding.[13] Due to the manner in which the proceeding was conducted, the defendants were not put on notice of the case that they had to meet. So much is apparent from the two letters from Woodhams O’Keeffe to Flitner and from the defendants’ written submissions in the lead up to the directions hearing on 21 September 2018. The plaintiff had ample opportunity to present her case, for example, by filing an affidavit or written submissions that explained the basis for the relief sought in the proceeding, but no such document was filed by her. [14]
[13]Civil Procedure Act 2010 (Vic) s 20.
[14]The plaintiff’s affidavit filed 29 January 2018 does not explain the basis for the relief sought in the proceeding.
At the very least, Flitner could have responded to the letters from Woodhams O’Keeffe to inform them of the basis for the relief sought in the proceeding and the issues that the plaintiff intended to raise for the determination by the Court. If the plaintiff had instructed or expressed a wish that Flitner not respond to those letters, or otherwise not provide the defendants with any further information about the claim, Flitner would not have been required to comply with that instruction or wish to the extent that it was inconsistent with an overarching obligation.[15] It is incumbent on a solicitor or a law practice in these circumstances to exercise independent judgment when assessing whether action or inaction on their part, even if at the direction or insistence of a client, may contravene an overarching obligation.
[15]See Dura (n 5) 39 [130].
In such circumstances, the Court is satisfied that the failure by the plaintiff, Flitner and Mr Flitner to respond to Woodhams O’Keeffe’s letters and to state the grounds on which the plaintiff sought relief in the proceeding also contravened the overarching obligation to cooperate with the defendants in connection with the conduct of the proceeding.
Conclusions
A finding on the balance of probabilities that a person has contravened an overarching obligation does not require the Court to make an order under s 29 of the CPA, with the power to make an order being discretionary.[16] However, the making of any order must give effect to the overarching purpose of the CPA.[17] In the circumstances, this is an appropriate case to make such an order.
[16]Hudspeth (n 7) [255] (John Dixon J).
[17]Ibid [257].
The plaintiff issued the proceeding on 29 January 2018. It was not until 21 September 2018 that she discontinued the proceeding. On 6 February 2018, Woodhams O’Keeffe, on behalf of the defendants, wrote to Flitner stating that the plaintiff’s claim did not establish a basis for relief and placed the plaintiff on notice that the defendants would seek costs if the proceeding was struck out.
Despite this, the defendants took no interlocutory steps in relation to the proceeding.[18] By the time Woodhams O’Keeffe sent its second letter on 12 September 2018, in which it maintained that there was ‘no basis in fact or law for any order being made’ in favour of the plaintiff, almost eight months had passed since the proceeding was issued.
[18]See Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 8.09, 22.16.
In seeking to give effect to the overarching purpose of the CPA, the Court may have regard to ‘the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding’.[19]
[19]Civil Procedure Act 2010 (Vic) s 9(2)(c).
The defendants had several opportunities to bring an application to dispose of the proceeding, such as an application for summary judgment or an application to set aside the originating motion or stay the proceeding. A week after the proceeding was issued, the defendants made clear in correspondence that the plaintiff’s claim lacked a proper basis. However, they took no further action to mitigate the costs incurred by the continuation of the proceeding. This necessarily affects the quantum of any costs awarded to the defendants. Having regard to these matters, it is just that there be a reduction of 30 per cent of the quantum of the costs.
Orders
Accordingly, the Court orders that Flitner and Mr Flitner pay 70 percent of the defendants’ costs of and incidental to the proceeding, to be assessed on the standard basis and taxed in default of agreement.
---
0
5
0