| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2008 05515
BETWEEN:
| ROBERT DEUTSCH & ORS | Plaintiffs |
| - and - | |
| ERWIN DEUTSCH & ORS | Defendants |
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JUDGE: | HARGRAVE J | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 8 February 2013 | |
DATE OF JUDGMENT: | 8 February 2013 | |
CASE MAY BE CITED AS: | Robert Deutsch & Ors v Erwin Deutsch & Ors (No 2) | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 15 | |
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COSTS – Successful plaintiffs lost on substantial issue – Both parties at fault for litigating the issue – Issue had been compromised by terms of settlement – Justice requires all parties pay their own costs of and incidental to the issue – Plaintiffs awarded 75 per cent of their costs.
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APPEARANCES: | Counsel | Solicitors |
| For Plaintiffs | Mr S Anderson SC with Mr J Slattery | Holding Redlich |
| For the First Defendant | Mr N Jones | Gleeson & Co Solicitors |
HIS HONOUR:
These reasons concern the costs of the proceeding. They assume familiarity with my principal reasons.[1] I will use the same terminology in these reasons.
[1]Robert Deutsch & Ors v Erwin Deutsch & Ors [2012] VSC 227 (‘Principal Reasons’).
In order to consider the rival arguments concerning costs, it is necessary to refer to some procedural history.
The issues as finally litigated were described in paragraphs [12] to [30] of the principal reasons.
In paragraph [42] of the principal reasons, I noted that this dispute could have been wholly or substantially avoided by the parties appointing a new trustee or one of them seeking a Court order to that effect. On this issue, Erwin informed the Court that he received advice to this effect but chose not to accept it.[2] By the time the parties joined in an application for that course to be adopted, the proceeding had been fixed for trial, and another judge of the Court determined that the trial should take place prior to the appointment of any new trustee.[3]
[2]Principal Reasons, [173].
After settlement of the proceeding in 2008, Robert and the potential beneficiaries applied to the Court to enforce the terms of settlement. The Court fixed a two day hearing for that purpose in November 2008. At that time, Erwin’s contentions: that he had not breached or repudiated the terms of settlement, that time was not of the essence of the terms of settlement and that the terms of settlement had in any event been frustrated could have been dealt with by the Court. If a trial had then taken place concerning the issues not released by the terms of settlement, the proceeding could have been brought to an end within a short time.[4]
[4]Ibid, [88]-[102].
That application to enforce the terms of settlement was abandoned by the parties. Robert and the potential beneficiaries then filed a statement of claim and this proceeding eventually reached trial. In summary, the Court decided:
(1) The terms of settlement constituted an ‘accord and conditional satisfaction’.[5]
[5]Ibid, [86].
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CaseChat Overview and Summary
The legal question before the court was whether the plaintiffs were entitled to recover costs in relation to a particular matter, even though they did not succeed on a substantial issue. The court also had to consider whether both parties were at fault for litigating the issue and whether the issue had been compromised by the terms of the settlement agreement. The court had to determine whether justice required both parties to bear their own costs and if so, what proportion of those costs should be awarded to the plaintiffs.
The court found that both parties were at fault for litigating the issue and that the issue had been compromised by the terms of the settlement agreement. The court held that justice required both parties to pay their own costs of and incidental to the issue. However, given the circumstances, the court awarded the plaintiffs 75 per cent of their costs. The reasoning behind this decision was that while both parties were at fault, the plaintiffs had been more successful overall, and the court deemed it just to award them a majority of their costs. The court did not award costs for the unsuccessful issue, as both parties were found to be at fault for litigating it.
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