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[2002] VSC 292
Supreme Court of Victoria
2002-07-26
SMITH J.
Original judgment source is linked above.
[2002] VSC 292
(a) that the defendant pay the plaintiff's costs (including reserved costs) on a party/party basis up to 20 April 2001 and thereafter on an indemnity basis, or (b) for an increase of 30% on solicitor's charges in respect generally to the proceeding.
"1. The defendant pay the plaintiff's costs of the proceeding (including reserved costs) and excluding the following costs:
(a) The plaintiff's costs of and associated with pursuing his Schedule C claims;
(b) Mr Selimi's costs of reading in to the case;
(c) costs reserved by the Court during the period November 1999 to March 2000;
(d) Any reserved costs associated with the McKenzie friend application made for and on behalf of the plaintiff;
2. The defendant pay the plaintiff's costs as ordered, on a party/party basis up until 20 April 2001 and thereafter pay the plaintiff's costs on the basis that such costs are to include all costs except in so far as they are of unreasonable amount or were unreasonably incurred so that, subject to such exception, the plaintiff will be completely indemnified for his costs (as defined in 1 above) as and from 21 April 2001 to the handing down of judgment on 16 April 2002. 3. The plaintiff pay the defendant's costs of and associated with its defence of the plaintiff's Schedule C claims; and
(a) such costs as were reserved by the Court during the period November 1999 to March 2000;
(b) any reserved costs associated with the McKenzie friend application made for and on behalf of the plaintiff,
such costs to be paid on a party/party basis."
"It seems to me that the presumption which prevails in favour of party and party costs requires the Court to accept the underlying or background facts of the case as `a given' and to consider how the parties have conducted themselves subsequently as litigants, while taking into account their knowledge of past events which they carry into that role".
If his Honour was attempting to limit the costs discretion there may be difficulties in the quoted statement. Further, there are judicial statements to the effect that the conduct giving rise to the litigation can justify departure from the ordinary rule[7].
Counsel referred to the issue of illegality raised in relation the Telstra transaction referring to the fact that the issue was raised although the defendant had no independent evidence to support the conclusion of illegality and had itself, through Martin, promoted as acceptable the course now said to be unlawful.
This defence was not raised in the original defence. It was raised in subsequent pleadings. The plaintiff submitted that the defendant prolonged the proceedings unreasonably by falsely denying knowledge that Rahmat Ali was the client. Counsel submitted that this was a very serious allegation because it involved the proposition that the plaintiff and his son were attempting to deceive the Court as to the identity of the real plaintiff. Counsel referred also to the fact that the position taken by the defendant was contradicted by the letter sent to Martin on 17 September 1997 and drew attention to the fact that the file note of Barba (CB 130) recording a conversation with Martin about the true identity of the principal was not cross-examined upon despite the fact that counsel cross-examined on many other file notes. I note also that despite counsel being reminded of Browne v Dunn obligations, it was not challenged and Martin gave no evidence to contradict it.
Counsel for the plaintiff submitted that the defence for the Telstra claim that the shares were sold on instructions was contradicted by documents in the defendant's possession, in particular, the correspondence to and from Martin and the existence of a No 2 Account statement and should not have been run. Counsel also pointed to disparities between O'Halloran's oral evidence and witness statement, arguing that they supported the argument that the defence was not bona fide. Counsel also referred to the failure to give discovery of the No 2 Account statement and the evidence that Martin had been unable to give a satisfactory explanation to his superior, Karlson, for opening the No 2 Account.
Counsel submitted that the defendant unreasonably prolonged the proceedings by contesting the allegation of negligent trading and negligent supervision when it had no defence and in fact called no evidence that fairly addressed the issue.
The plaintiff's counsel submitted that the defendant unreasonably prolonged the proceedings by attempting to deny that Martin had received and ignored the Schedule C instructions. The plaintiff relied upon the extensive written admissions from Martin acknowledging his receipt of the instructions and his refusal to follow them. As to Martin's explanation of alleged threats, counsel for the plaintiff relied upon the points made in my reasons for judgment as to the lack of credit in that explanation which, it was argued, were readily apparent and should have been apparent to the defendant.
The plaintiff's counsel submitted that the defendant denied the reality, that it must have known would be established, that Martin controlled the account not Lyiakat Ali. Again reference was made to the documents, including those emanating from Martin.
The plaintiff argued that the defendant, to prolong the proceedings and add to costs, unreasonably challenged the diary and file notes arguing that they had been fabricated.
The plaintiff alleged that the defendant had no reasonable basis for advancing these defences, as was, it was said, demonstrated by the reasons for judgment.
The plaintiff submitted that the apprehended bias applications early in the trial and the allegedly serious discovery failures, pointed to a deliberate tactic of attempting to frustrate and delay the determination of the claim.
Costs reserved in relation to Statement of Claim Amendments
1. The defendant pay the plaintiff's costs of the proceeding (including reserved costs) but excluding the following costs:
(a) the plaintiff's costs incurred on 30 and 31 May 2001 and 1 June 2001 of an incidental to the adjournment of the proceedings on those days,
(b) the plaintiff's costs reserved on 11 February 2000 and 18 February 2000,
(c) the plaintiff's costs reserved on 5, 19 and 26 November 1999.
2. The defendant pay the plaintiff's costs as so ordered, on a party/party basis up until 20 April 2001 and thereafter on an indemnity basis. 3. The plaintiff pay the defendant's costs, if any, of and incidental to the adjournments on 5, 19 and 26 November 1999, 30, 31 May 2001 and costs reserved 1 June 2001 and 11 February 2000 and 18 February 2000, such costs to be paid on a party/party basis.
[1] MT Associates Pty Ltd v Aqua - Max Pty Ltd (3) 2000 VSC 163 para 28-41; Spencer v Dowling [1996] VSC 51; (1997) 2 VR 127; 147.
[2] [1993] FCA 536; 46 FCR 225. See cases referred to in fn.1. and, for example, CGU Workers' Compensation (Vic) Ltd v Carousel Bar Pty Ltd (No 2.) [1999] VSC 237, Harris v Bennet & anor. (No.2) [2002] VSC 163, Tuohey v Toohey (No.2) [2002] VSC 181, Ugly Tribe Co. Pty Ltd v Sikola & Ors. [2001] VSC 189, Banco Villa Pty Ltd v Montedeer Pty Ltd [2002] VSC 184, Czerwinski v Syrena Royal Pty Ltd (No.2) [2000] VSC 135.
[5] (11) [2001] FCA 480.
[7] Latoudis v Casey (1990) 173 CLR 534, at para 27 per Dawson J; Oschlack v Richmond River Council [1998] HCA 11 per Brennan CJ para 26, McHugh J para 8; NAB v Petit-Breuith (3) [2000] VSC 291 Singleton.
[8] AGC v Jager [1984] VicRp 40; [1984] VR 483.
[9] Westcoast Clothing Co Pty Ltd v Freehill, Hollingdale and Page [1999] VSC 309; FAI General Insurance Co v Burns & Anor (1997) 9 ANZ Insurance Cases; 61-384, 77, 220.
[10] Citing for example Hill J and John S Hayes v Kimberley-Clarke (1994) 52 FCR 201.
[11] For reasons set out below, I have concluded that the costs of the Schedule C claim should not be dealt with separately.
[12] [1998] 1331 FCA (22 October 1998)
[13] Hughes v Western Australian Cricket Association (Inc) (1986) 18 ATPR 40-748, 48,136; Queensland Wine Industries Pty Ltd v BHP Co Ltd (1987) 17 FCR 211, 222; Inn Leisure Industries Pty Ltd v DF McCloy Pty Ltd (2) (1991) 28 FCR 172 at 174; Commissioner of the Australian Federal Police v Razzi (2) [1991] FCA 267; (1991) 30 FCR 64, 67-68; Verna Trading Pty Ltd v New India Insurance Co Ltd [1991] VicRp 12; [1991] 1 VR 129, 151-4; Cretazzo v Lombardi (1975) 13 SASR 4, 16
[14] In Re Elgindata Ltd (2) [1993] 1 ALLR 232, 237; Westpac Banking Corporation v Tanzone Pty Ltd & Ors [2000] NSW CA 77 (5 April 2000); Permanent Trustee Australia Ltd v FAI General Insurance (unreported, NSW SC, 3 June 1998, Hodgson, C.J. in Eq.); Rolls Royce Industrial Power (Pacific)v James Hardy & Co Pty Ltd [2001] NSW CA 461; Hughes Bros v The Trustees of the Roman Catholic Church [1999] NSW SC 1051 (25 October ).
Ali
Hartley Poynton Pty Ltd
(1997) 2 VR 127
(1990) 173 CLR 534
(1994) 52 FCR 201
(1987) 17 FCR 211
(1991) 28 FCR 172
(1991) 30 FCR 64
(1975) 13 SASR 4