Brott & Ors v Maher & Ors [2004] VSCA 186

Court of Appeal (Vic)|2004-10-11|Before: EAMES, NETTLE and PHILLIPS, JJ.A.

PRACTICE AND PROCEDURE - Costs - Solicitor and client costs - Notice of discontinuance of cross-appeal filed by cross-appellant after service by cross-respondent of offer of compromise - Whether cross-respondent to be awarded solicitor and client costs - Supreme Court (General Civil Procedure) Rules 1996, RR.26.12 and 64.14.

I will ask Nettle, J.A. to deliver the first judgment.

Counsel for the first, second and third cross-respondents applies ore tenus for an order for costs pursuant to R.64.14(4) over and above the party-party costs which would otherwise be payable consequent upon the filing by the cross-appellants of a notice of discontinuance on 4 October 2004. The cross-respondents rely upon an affidavit of Donovan De-Wet sworn 7 October 2004 in which it is deposed that the cross-respondents did on 8 July 2004 serve a considered offer of compromise but that, despite correspondence calculated to invoking a response, effectively none was forthcoming until the filing by the cross-appellants of the notice of discontinuance on or about 4 October 2004.

Counsel for the cross-appellant relies upon an affidavit of Justice John Maher sworn this day in which is deposed, amongst other things, that upon the receipt of the offer of compromise advice was taken from senior counsel which was in terms that the prospects of success of the cross-appeal were problematic, if not minimal.

Ordinarily the costs payable consequent upon the filing of an offer of compromise are governed by R.26.12 of the Rules of Court, but because the operation of that rule is conditioned upon a hearing and determination of the appeal, and because plainly there has been none in this case, strictly it does not apply.

But although R.26.12 does not apply in terms, it appears to me that it serves as a useful guide for the exercise of the discretion for which R.64.14(4) provides. Inasmuch, therefore, as R.26.12(4) permits this Court to make an order for costs on a solicitor and client basis, either from the commencement of the appeal or from the date of service of a notice of offer of compromise, it seems to me that the same might be done in this case.

6 On the basis of the material which is before this Court, it has not been established that there is any reason for the filing of the notice of discontinuance other than the terms of the offer of compromise and the opinion formed as a result about the likelihood of the appeal; succeeding, albeit after a considerable time had elapsed.

In those circumstances, I consider that an appropriate exercise of discretion for which R.64.14(4) provides is that the cross-respondents should have their costs of the cross-appeal up to the date of the filing and service of the offer of compromise to be taxed on a party and party basis, and thereafter from the date of the filing and service of the notice of offer of compromise until the service of notice of discontinuance on a solicitor and client basis.

There will be orders in the terms pronounced by Nettle, J.A.

The Court is of opinion that the cross-appellant should pay the costs of this application of the first, second and third cross-respondents on a solicitor and client basis also.

Out of an abundance of caution, we will make a further order that the order contained in paragraph 1 of the order of the Court of Appeal made 25 June 2004 be vacated.

Supreme Court (General Civil Procedure) Rules 1996

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