Slaveska v Elenchevski

[2012] VCC 615

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-08-04828

STOJANKA SLAVESKA	Plaintiff
v.
DRAGAN ELENCHEVSKI	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	9 May 2012
DATE OF JUDGMENT:	9 May 2012 (revised 9 May 2012)
CASE MAY BE CITED AS:	Slaveska v. Elenchevski
MEDIUM NEUTRAL CITATION:	[2012] VCC 615

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Costs – Proceeding summarily dismissed – Application for indemnity costs – “Calderbank” offer – Whether offer unreasonably refused.    

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mrs S. Slaveska (in person)
For the Defendant	Mr A. Sandbach	Flitner & Co.

HIS HONOUR:

1.    On 28 March 2012, I determined the defendant’s summary judgment application by summons filed 18 January 2012, by dismissing the proceeding. It was not possible to determine the question of costs on that day or on the subsequent hearing date of 30 April 2012.

2.    The defendant seeks the payment of his costs on an indemnity basis. Firstly, relying upon the letter from his solicitors to the plaintiff’s solicitors, dated 22 June 2009, which is relied upon as a Calderbank offer and, secondly, on the basis that the plaintiff’s conduct throughout the proceeding resulted in the unnecessary loss of time and expense to the defendant which should be compensated by an order for indemnity costs.

3.    The plaintiff submitted that no order for costs should be made in favour of the defendant and that he should be ordered to pay her costs because he had prolonged the case.

4.    The letter dated 22 June 2009 indicated that the defendant was prepared to pay to the plaintiff the sum of $3,000 within 30 days of receipt from the plaintiff of an executed release of all her claims in the proceeding and all other claims relating in any way to the subject matter of the proceeding. The sum of $3,000 was said to be inclusive of costs or interest in full and final satisfaction of the plaintiff’s claims in the proceeding. The letter is dated 22 June 2009. It is not clear at what time it was sent or received by the plaintiff, although the plaintiff’s solicitors responded to the letter on 23 June 2009, according to the fax header, at 2:26pm.

5.    The letter of offer was to remain open for acceptance until 4:00pm on 26 June 2009 and the letter foreshadowed that if the offer were not accepted and the plaintiff failed to obtain a more favourable outcome, an application would be made for indemnity costs.

6. In my view, it cannot be said that the plaintiff acted unreasonably in rejecting the offer or that as a consequence of rejection of the offer she should be required to pay costs to the defendant on an indemnity basis. I have had regard to the principles set out by the Court of Appeal in the decision of Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (no. 2) [2005] VSCA 218 and particularly the “factors necessary to assessing reasonableness” discussed by the Court at paragraph 25 and following.

7.    I consider, in the circumstances, that:

a.    The time allowed to the plaintiff to consider the offer was not reasonable. Although the matter was set down for trial on 29 July 2009, there was no reason, either expressed in the letter or which was suggested in submissions, as to why about four days was allowed for the plaintiff to consider the offer. The offer of compromise procedure in the Rules requires 14 days. Although Mr Sandbach submitted that the plaintiff’s solicitors were able to respond by the following day, the effect of the short time frame perhaps encouraged a speedy rather than a considered response;

b.    The offer was not as clear as it might have been. By the stage the offer was made, the parties had completed the exchange of pleadings and other interlocutory steps. The letter of offer does not attempt to set out the basis for the calculation of the sum of $3,000. There is a suggestion that the sum converts to less than the value of the land in dispute, as revealed from court papers from Macedonia. There is, however, no evidence of the conversion rate, particularly as to how the value of the land in Macedonian currency in 2005 relates to the offer made in the Australian proceeding in 2009. The $3,000 is said to be inclusive of costs and interest. It seems clear, however, that as at the date of the offer, the plaintiff’s costs would have been substantially in excess of $3,000. If, instead of making a Calderbank offer, the defendant had made an offer pursuant to the Rules, an all inclusive offer would not have been permitted and the consequence of making an offer permitted by the Rules would have been that, if the offer had been accepted, the plaintiff would have been able to tax her costs on an appropriate scale to the date of the offer. The requirement that the plaintiff execute a release, not only in respect of “all her claims in the proceeding”, but also “all other claims relating in any way to the subject matter of the proceeding” is not clear as to its scope. In view of the matters that had been raised in the Macedonian proceedings, a release in these broad terms would ordinarily have also required a reasonable time for consideration;

c. The plaintiff’s prospects of success at the date of the offer were not clear. Although the letter of offer referred to a number of issues including the Limitation of Actions Act defence and the decision of the courts in Macedonia, these matters, from the plaintiff’s perspective were to be balanced against the written document apparently executed by the defendant in 1986 and the plaintiff’s asserted belief that, until shortly before the Court proceedings in Macedonia, she had been in possession of the whole of the land she thought she had purchased in 1986.

8.    I do not consider that the plaintiff’s conduct of the proceeding was such to justify the award of indemnity costs. The plaintiff was severely hampered by the lack of legal representation for much of the proceeding while resulted in lengthy delays. She should not, however, be penalised for that fact by an award of indemnity costs against her.

9.    The defendant foreshadowed an application to strike out the plaintiff’s claim on a number of occasions in hearings before me but, until the present application was made, failed to take that step. Further, the defendant by his defence required that the signature on the alleged sale contract needed to be strictly proved. It is likely that this latter step by the defendant unnecessarily resulted in expense being incurred, as the only expert report subsequently filed in relation to the issue suggested that the disputed signature was, in fact, the defendant’s. Although it has been submitted by the plaintiff that the defendant has prolonged the case and should have made a summary dismissal application at a much earlier time, the history of the matter, which I recited in my judgment on 28 March 2012, indicates that matters were not straight forward. The defendant needed to take account of the costs incurred, particularly as the only order for costs made in his favour had not been paid by the plaintiff.

10.  I consider, in the circumstances, that the defendant should receive the whole of his costs of the proceeding, including the occasions on which costs were reserved, but that the costs should be taxed on a party/party basis and not an indemnity basis.

11.  The plaintiff filed a notice of appeal before the determination of the question of costs. She has sought a stay in respect of any order for costs until the Court of Appeal has determined her appeal. I consider, in the circumstances, that it is appropriate to stay the order for costs until a date by which the appellant can go before the Court of Appeal and seek a further stay. It would then be a matter for the Court of Appeal to determine the appropriateness of whether the costs order should be further stayed until the hearing of the appeal.

12.  There were certain fees of counsel I was asked to certify. It is unclear to me whether the Costs Court has the power to allow counsel’s fees at an amount in excess of scale which relate to dates prior to the change of the scale on 1 September 2011. I consider that the fees I have certified, in respect of a number of earlier hearings where costs were reserved, are reasonable and that it is better for me to make the decision in relation to that matter than to leave it to the Costs Court where there may be some doubt about the powers of the Costs Court in that regard.

13.  The plaintiff has previously sought access to the video recordings of the recent court appearances. There is a Practice Note which sets out the procedure for determining such applications, to ensure that the Court tapes remain in the control of the Court and are not released to the parties themselves but simply to court transcription services. The tapes sought for hearing during 2012 are available and will be released upon application and in accordance with the Practice Note. The tape for the hearing on 21 February 2011 is only available in part. The usual practice of the Court is to reuse tapes after 3 months, which is usually a sufficient time for the parties to make application for the proceeding to be transcribed for the purpose of an appeal. The tape of the hearing on 21 February 2011, so far as it is available, will be similarly made available in accordance with the Practice Note.

Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 9 May 2012 and revised that day.

Dated: 9 May 2012

Hannah Christensen    

Associate to His Honour Judge Anderson