Sekhon v Chandyoke
[2018] VSC 435
•7 August 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2018 00717
| AMRITAA SEKHON | First Plaintiff |
| AMAN SEKHON | Second Plaintiff |
| v | |
| VEENA CHANDYOKE | First Defendant |
| REGISTRAR OF TITLES | Second Defendant |
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JUDGE: | T FORREST J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | Nil (on the papers) |
DATE OF JUDGMENT: | 7 August 2018 |
CASE MAY BE CITED AS: | Sekhon & Anor v Chandyoke & Anor |
MEDIUM NEUTRAL CITATION: | [2018] VSC 435 |
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COSTS – Property law – Application for removal of caveat – Caveat removed – Application for costs against non-party – Application dismissed – Non-party application for indemnity costs on costs application – Plaintiffs and defendant pay non-party’s standard costs on costs application – Sekhon & Anor v Chandyoke & Anor [2018] VSC 327.
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APPEARANCES: |
| Nil (on the papers) |
HIS HONOUR:
On 27 February 2018, the plaintiffs filed an originating motion seeking removal of Caveat No. AH648818Y (‘the caveat’) from land contained in Certificates of Title Volume 11205 Folio 468 and Volume 11199 Folio 942 (‘the property’). On 2 March, I ordered that the caveat be removed.
The plaintiffs subsequently sought indemnity costs against Ms Chandyoke and further argued that any costs awarded against her ought be borne by her solicitor, Mr Peter Gauld. As Mr Gauld was a non-party, I adjourned the costs hearing to 8 June 2018. By this date, the unsuccessful Ms Chandyoke joined the plaintiffs, arguing Mr Gauld ought pay her costs and indemnify her against her liability to the plaintiffs for costs that she had incurred in defending the plaintiffs’ originating motion.
On 19 June, I ordered that Ms Chandyoke pay the plaintiffs’ costs of the originating motion on an indemnity basis.[1] I declined to make any orders against Mr Gauld.
[1]Sekhon & Anor v Chandyoke & Anor [2018] VSC 327.
It follows from the above that the plaintiffs’ and Ms Chandyoke’s applications against Mr Gauld have occasioned him reasonably significant expense. In defence of those applications, he filed a comprehensive affidavit, written submissions, and engaged an experienced barrister to act on his behalf. These reasons concern Mr Gauld’s entitlement to costs from the plaintiffs and Ms Chandyoke.
In my judgment of 19 June 2018, I set out the factual background to the originating motion and the legal principles that relate to non-party costs and indemnity costs.[2] These reasons should be read in conjunction with my reasons for the 19 June judgment.
[2]Ibid [41].
Mr Gauld made the following two offers (‘the offers’) prior to the oral hearing on 8 June 2018:
(a) An offer to the plaintiffs on 23 March 2018 open for five days that Mr Gauld pay the plaintiffs’ costs of the proceeding fixed in the sum of $7500 within two business days (‘the first offer’);
(b) An offer to the plaintiffs and the defendant on 14 May 2018 open for five days that the application for costs against Mr Gauld be dismissed and the plaintiffs and defendant pay Mr Gauld’s costs of the application fixed in the sum of $6000 with a stay of 30 days (‘the second offer’).
The plaintiffs argued:
· the application for costs should have proceeded on the papers and, therefore, the costs of the oral hearing were unnecessarily incurred;
· the first offer could not be reasonably assessed as the defendant did not file affidavit material until 11 May 2018;
· the second offer required a joint acceptance by the plaintiffs and the defendant. The plaintiffs therefore could not accept the offer alone;
· costs should not follow the event because Mr Gauld’s conduct was found to be dilatory;[3]
· the defendant’s application that Mr Gauld indemnify her for her costs liability frustrated reaching an agreement with Mr Gauld.
[3]Sekhon & Anor v Chandyoke & Anor [2018] VSC 327 [41].
Ms Chandyoke ultimately conceded that Mr Gauld’s costs of and incidental to the summons ought be paid by her on a standard basis. She also contended that a corresponding order ought be made in respect of the plaintiffs and that standard costs ought be apportioned equally between her and the plaintiffs.
Analysis
Costs ordinarily follow the event. In my view, there is no reason to depart from this general rule. Both the plaintiffs and the defendant failed in their separate applications against Mr Gauld. Whilst I found that Mr Gauld’s conduct was dilatory at times, I do not consider that this justifies an exception to this general rule. McHugh J in Oshlack v Richmond River Council[4] concluded that a successful party may be deprived of his or her costs if ‘guilty of some misconduct.’[5] A court may depart from the usual order if a successful party:
… effectively invites the litigation; unnecessarily protracts the proceedings; … prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.[6]
[4](1998) 193 CLR 72.
[5]Ibid 97-98 [69].
[6]Ibid (citations omitted).
I consider that Mr Gauld’s conduct falls well short of the sorts of conduct countenanced by McHugh J. As I said in my reasons of 19 June 2018, Mr Gauld was acting for a difficult, obstructive client, aided and abetted (in my view) by her equally obstructive son. Solicitors cannot pick and choose their clients and ought not be judged too harshly when the sins of their clients are sought to be visited upon them.
It follows that I shall order that the plaintiffs and the defendant pay Mr Gauld’s costs of the applications against him.
Indemnity costs
Mr Gauld seeks indemnity costs. He argues that the plaintiffs’ rejection of the first offer was unreasonable in the circumstances[7] as were both losing parties’ rejections of the second offer. In my view, the rejections of these offers by both losing parties were not unreasonable.
[7]See Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435.
The first offer was made before the plaintiffs had received any affidavit material. Whilst the plaintiffs may have been in a position to give some consideration to the first offer with the substantive judgment and the evidence available to them, it was not unreasonable for them to reject it without first receiving an affidavit from Mr Gauld. I consider that the full evidentiary picture of Mr Gauld’s conduct was not available to them until this affidavit was served.
Further, the rejection of the second offer by both the plaintiffs and the defendant was, in my view, not unreasonable. The second offer required that the plaintiffs and the defendant be jointly liable for Mr Gauld’s costs. Neither party could accept the offer alone. Whilst the plaintiffs and the defendant were united in their applications for costs against Mr Gauld, this was an unlikely coalition and it would be unfair to penalise one party for the unreasonableness of the other.
I shall order costs on a standard basis .
From what date
I shall order that the plaintiffs pay Mr Gauld’s costs of and incidental to this application from 28 March 2018. Whilst the plaintiffs’ solicitors put Mr Gauld on notice of the application against him as early as 1 March 2018, and foreshadowed it further in an email of 22 March, I made orders on 28 March that the question of costs against the defendant and Mr Gauld be reserved, I consider it was reasonable for Mr Gauld to commence preparations for his defence to the plaintiffs’ application from at least this date.
On 6 April the defendant filed a notice of waiver and intention to participate in the proceedings. From that date, Mr Gauld was fighting on two fronts.
Apportionment
I shall order that the plaintiffs shall pay Mr Gauld’s costs of and incidental to the application for costs from 28 March 2018 until 5 April 2018 on a standard basis. From 6 April 2018, the apportionment of Mr Gauld’s costs will be that 50 per cent shall be payable by the plaintiffs and 50 per cent by the defendant. In the circumstances, I cannot discern a reason to suggest that the liability for costs ought not be shared equally from 6 April onwards. To my observation, both parties pursued the plaintiff with roughly equal enthusiasm once the defendant joined the fray.
Miscellaneous
I reject the plaintiffs’ submission that Mr Gauld’s costs ought exclude the costs associated with the preparation of his affidavit sworn 11 May 2018. The affidavit, setting out the full evidentiary context of his activities on Ms Chandyoke’s behalf, was an essential part of his defence to both actions against him. I also reject the plaintiffs’ submissions that the costs of and incidental to the hearing on 8 June 2018 ought be excluded from the costs order, as should the associated costs of the courtbook preparation for that hearing. Contrary to the plaintiffs’ assertion that the oral hearing was held at the request of Mr Gauld, it was the defendant, in an email to the Court on 21 May 2018, who requested the oral hearing. Relevantly, it reads, ‘Pursuant to Paragraph 6 of the orders I advise the Defendant requires an oral hearing.’
I shall make the following orders:
1. The plaintiffs shall pay Mr Gauld’s costs of and incidental to the application for costs from 28 March 2018 until 5 April 2018 on a standard basis.
2. The plaintiffs and the defendant shall each pay 50 per cent of Mr Gauld’s costs of and incidental to the application for costs from 6 April 2018 on a standard basis.
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