Southage v Vescovi - [2014] VSC 176

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. S CI 2012 00450

SOUTHAGE PTY LTD (ACN 050 240 965)	Plaintiff
v
LISA ANGELA VESCOVI & ORS	Defendant

No. S CI 2012 1167

LISA ANGELA VESCOVI	Plaintiff
v
SOUTHAGE PTY LTD (ACN 050 240 965) and REGISTRAR OF TITLES	Defendants

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JUDGE:	Macaulay J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 April 2014
DATE OF JUDGMENT:	17 April 2014
CASE MAY BE CITED AS:	Southage v Vescovi & Ors; Vescovi v Southage & Anor (costs)
MEDIUM NEUTRAL CITATION:	[2014] VSC 176

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COSTS – Whether standard or indemnity basis – Calderbank letter refused – Analysis on an issues basis – Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; Colgate Palmolive v Cussons (1993) 46 FCR 225 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff (Southage Pty Ltd)	J. Tsalanidis	Velos Lawyers
For the First Defendant (Vescovi)	P. Bornstein	Hendersons Legal
No appearance for other Defendants

HIS HONOUR:

Proceedings

In the Southage v Vescovi, Katsimadakos & Kalivoda (‘the Southage proceeding’), Southage Pty Ltd sought judgment against Lisa Vescovi under an unregistered mortgage (‘the Williamstown mortgage’) for money it said it lent Vescovi on that security. Alternatively, it sought the money back pursuant to its rights of subrogation to an unpaid vendor’s lien, or in restitution for money paid under a mistake of fact.

In the Vescovi v Southage & Registrar of Titles (‘the Vescovi proceeding’), Vescovi sought permanent injunctions against the Registrar of Titles and against Southage preventing the registration of the mortgage and the sale of the land, together with an order for the removal of a caveat Southage had lodged over the title. Interlocutory injunctions were granted on 21 March 2012 pending the trial of the proceeding.

On 27 August 2013 the Southage proceeding and the Vescovi proceeding were heard together.

An issue in common in both proceedings was whether Vescovi’s signature to the Williamstown mortgage (and associated loan documents) had been forged.

Orders were made in the Vescovi proceeding on 27 August 2013, in Vescovi’s favour, restraining the Registrar from registering the Williamstown mortgage, restraining Southage from exercising any power of sale and ordering the removal of Southage’s caveat over the Williamstown title. The orders gave effect to Southage’s concession on the first day of trial that it had no defence to Vescovi’s proceeding once it conceded that the unregistered mortgage it held over her Williamstown land was a forgery and she had not given it.

So, other than in respect of the question of costs, which were reserved, the Vescovi proceeding was determined on 27 August 2013.

In the Southage proceeding, the claim under the mortgage and loan agreement was abandoned, as was the vendors lien claim. Only the claim in restitution proceeded. For reasons I gave on 4 April 2014, Southage failed in its claim in restitution.[1] That proceeding has also been determined except for the question of costs.
[1]Southage v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Southage v Vescovi

Details

AGLC: Southage v Vescovi [2014] VSC 176
Case: [2014] VSC 176
Decision Date: 17 April 2014

CaseChat Overview and Summary

In the Supreme Court of Victoria, Southage brought an action against Vescovi, seeking damages for breach of contract. The dispute centred around a failed business partnership and the alleged non-payment of monies owed under the terms of their partnership agreement. The court was tasked with determining the appropriate basis for awarding costs between the parties, specifically whether the costs should be assessed on a standard or indemnity basis.

The primary legal issue before the court was whether the unsuccessful party, Southage, should bear the costs of the successful party, Vescovi, on an indemnity basis, or if the standard basis of costs assessment would be more appropriate. This consideration arose following Southage's refusal to accept Vescovi's Calderbank offer, which is an offer to settle on terms favourable to the opposing party, coupled with an undertaking as to costs. The court had to determine whether Southage's refusal to accept this offer, which could have potentially saved costs for both parties, warranted an indemnity costs order.

The court considered the relevant authorities, including Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) and Colgate Palmolive v Cussons, to assess the appropriate costs order. The court found that Southage's refusal to accept Vescovi's Calderbank offer was not reasonable, as it did not consider the potential savings in legal costs that could have been achieved if the offer had been accepted. The court concluded that Southage's refusal was not justified, and therefore, ordered that Southage pay Vescovi's costs on an indemnity basis. This decision emphasised the importance of parties considering reasonable settlement offers, particularly those made on a costs-saving basis, to avoid incurring higher costs.

Orders