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Talacko v Talacko (Costs Ruling)

Talacko v Talacko (Costs Ruling)

Case [2018] VSC 807 20 December 2018

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2009 7819

JAN TALACKO (as Executor of the Estate of Helena Marie Talacko) & ORS (according to the Schedule attached)	Plaintiffs
v
JAN EMIL TALACKO & ORS (according to the Schedule attached)	Defendants

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 December 2018
DATE OF JUDGMENT:	20 December 2018
CASE MAY BE CITED AS:	Talacko v Talacko (Costs Ruling)
MEDIUM NEUTRAL CITATION:	[2018] VSC 807

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COSTS – Special and unusual circumstances – Defendants engaged in conduct constituting an equitable fraud which compelled plaintiffs to commence proceeding – Plaintiffs’ legitimate aspirations to enforce equitable compensation judgment frustrated by defendants’ conduct – Defendants engaged in misconduct in litigation – Defendants’ conduct warranting indemnity costs order – Gross sum costs order – Bankruptcy Act 1966 (Cth) s 77(1)(e) – Foreign Judgments Act 1991 (Cth) s 15 - Civil Procedure Act 2010 s 20 – Supreme Court Act 1986 s 24(1) –Supreme Court (General Civil Procedure) Rules 2015 rr 26.03(3), 63.07(2)(d), 63.31, 63.34, 77.05.

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APPEARANCES:	Counsel	Solicitors
For the first plaintiff	Mr M J Hooper	Patrick & Associates
For the second to fifth plaintiffs	Mr O M Ciolek	Brand Partners
For the fourth defendant	Mr J B Masters	Strongman & Crouch

HIS HONOUR:

On 7 December 2018, the Court delivered judgment assessing the liability of the second to fourth defendants to pay damages and interest to the first to fifth plaintiffs (‘quantum judgment’).[1] This judgment deals with the question of costs of:
[1]Talacko v Talacko [2018] VSC 751.

(a) the proceeding in March 2015, which preceded the liability judgment[2] (‘liability proceeding’);

(b) reserved costs in the liability proceeding; and

(c) the quantum proceeding, which preceded the quantum judgment (‘quantum proceeding’).

[2]Talacko v Talacko [2015] VSC 287.

The principal issue between the parties is whether costs should be awarded on a standard basis or on an indemnity basis. The first to fifth plaintiffs submit that costs should be on an indemnity basis. Second to fifth plaintiffs submit that indemnity costs should not be in accordance with scale pursuant to r 63.34 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). Rather, the second to fifth plaintiffs submit that their entitlement to indemnity costs should be based on a gross sum costs order calculated by reference to costs agreements between the second to fifth plaintiffs and their legal advisers and expert witnesses.

The principles governing the award of indemnity costs are well established. Pursuant to s 24(1) of the Supreme Court Act 1986, the Court ‘has full power to determine by whom and to what extent the costs are to be paid.’ The usual order as to costs is an award to the successful party on a standard basis.[3] In order for there to be a departure from the usual practice of costs on a standard basis, there must some special or unusual feature of the case…

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 Talacko v Talacko (Costs Ruling)

Details

AGLC: Talacko v Talacko (Costs Ruling) [2018] VSC 807
Case: [2018] VSC 807
Decision Date: 20 December 2018

CaseChat Overview and Summary

In Talacko v Talacko, the court was asked to consider the issue of costs in a case where the defendants engaged in conduct that constituted equitable fraud, leading the plaintiffs to commence legal proceedings. The plaintiffs had obtained a judgment for equitable compensation, but the defendants' actions frustrated the plaintiffs' legitimate aspirations to enforce the judgment. The defendants were also found to have engaged in misconduct during the litigation, prompting the plaintiffs to seek an indemnity costs order. The court was required to determine whether the circumstances were special and unusual enough to warrant such an order.

The court found that the defendants' conduct did indeed constitute equitable fraud and that their actions in litigation amounted to misconduct. The court considered that the defendants' conduct had frustrated the plaintiffs' legitimate aspirations to enforce the equitable compensation judgment and that the circumstances were special and unusual. Consequently, the court concluded that the defendants' conduct warranted an indemnity costs order. The court also considered the relevant provisions of the Bankruptcy Act 1966 (Cth), the Foreign Judgments Act 1991 (Cth), the Civil Procedure Act 2010, the Supreme Court Act 1986, and the Supreme Court (General Civil Procedure) Rules 2015 in determining the appropriate order.

In light of the findings, the court ordered the defendants to pay the plaintiffs' costs on a gross sum basis. The court emphasised that the defendants' conduct in both the underlying case and the litigation had been egregious, and that the order was necessary to ensure that the plaintiffs were adequately compensated for the defendants' actions. The court also noted that the order was consistent with the principles of equity and justice, as it sought to hold the defendants accountable for their conduct and to deter similar conduct in the future.

The final orders of the court included a direction that the defendants pay the plaintiffs' costs on a gross sum basis, as well as any other costs that may be awarded in the proceedings. The court also made orders for the defendants to pay interest on the costs awarded, and for the defendants to provide security for the costs. These orders reflect the seriousness of the defendants' conduct and the need to ensure that the plaintiffs are adequately compensated for the defendants' actions.

Orders