Federation Properties Pty Ltd v Tzioras

Supreme Court of Victoria|2001-05-22|Before: Byrne J

PRACTICE AND PROCEDURE - costs - Calderbank offer by successful defendant - solicitor and client costs.

For Federation Properties Pty Ltd and Yinyang Holdings Pty Ltd

On 11 May 2001 I heard counsel as to the orders to be made. I pronounced judgment on the substantive issues, except for Crabtrees' claims against Mr Tzioras. Having also heard argument on questions of costs, I reserved my decision on those matters. This is my decision on these matters.

Mr Tzioras was successful inasmuch as his claim for the removal of the caveat succeeded and he resisted the claim for specific performance. He is, therefore, prima facie entitled to his costs of the two proceedings on a party and party basis.

On behalf of Federation/Yinyang, counsel submitted that I should, nevertheless, reduce these costs because Mr Tzioras had failed on most of the factual issues which occupied much of the trial. While it is true that I rejected Mr Tzioras' contentions that no contract had been entered into with Federation or Yinyang, he was ultimately successful because the authority of his agent was not in writing as is required by the Instruments Act 1958, s. 126. Consideration of this defence and the replies to it occupied some trial time. I reject the submission because the issues upon which Mr Tzioras was unsuccessful cannot easily be disentangled from these other issues at trial.

On behalf of Mr Tzioras, counsel sought solicitor and client costs against Federation/Yinyang on the basis that their claim for specific performance was so plainly hopeless that a punitive order should go to mark the disapproval of the court. This is a brave submission coming from a party which failed on all issues raised in its defence until it was amended in February of this year to rely upon the Statute of Frauds. I reject it.

Next, it was put on behalf of Mr Tzioras that he should have costs against Federation/Yinyang on a solicitor and client basis from 12 February 2001. This was the date on which a Calderbank offer was made on behalf of Mr Tzioras and Stamward under which Federation/Yinyang would, by consent, withdraw the caveat and their claim for specific performance. The two proceedings, insofar as they concern those parties, would be dismissed by consent with each party bearing its own costs. This offer was expressed to be open for acceptance till 16 February 2001. It was submitted, correctly in my view, that Federation/Yinyang did not achieve a more favourable result at trial. It was put, therefore, that solicitor and client costs should be awarded on the principle which I outlined in Mutual Community Ltd v Lorden Holdings Pty Ltd[1] and which was more extensively and authoritatively discussed by the South Australian Full Court in Pirrotta v Citibank Ltd[2]. I will therefore have regard to the Calderbank letter as a factor in determining whether to order costs on the basis sought by Mr Tzioras. It was on 12 February 2001 apparent to Federation/Yinyang and those advising them that their claims faced formidable difficulties. Indeed, so confident was Mr Tzioras, that his counsel sought to make a no case submission. The maintenance of the claim adverse to a purchaser seeking to complete the second contract of sale was a very serious step, affecting as it did the rights of third parties. In my view, they should have paused long and thought hard before pursuing the claim for specific performance as they did. In the circumstances, I am satisfied that it is appropriate to make such an order as from 16 February 2001 on a solicitor and client basis.

Stamward, a successful party as defendant and counterclaimant in proceeding no. 8016 of 2000 is prima facie entitled to its costs against Federation/Yinyang on a party and party basis. It, too, seeks costs as to part on a solicitor and client basis. It relied for this upon a number of letters of offer. I decline to have regard to those dated 23 January 2001 (two letters), 29 January 2001 and 2 February 2001, each of which was marked "without prejudice", there being no waiver by Federation/Yinyang. The letter from Stamward's solicitors to the solicitors for Federation/Yinyang dated 31 January 2001 contains no offer capable of acceptance. In the Calderbank letter passing between the same parties dated 9 February 2001 Stamward offered to bear its own costs if Federation/Yinyang would remove the caveat. Stamward later participated in the offer made by the solicitors for Mr Tzioras of 12 February 2001 to which I have referred.

Federation/Yinyang did not at trial achieve a result more favourable than that contained in each of these Calderbank offers. For the reasons set out above, I will give Stamward its costs on a solicitor and client basis from 14 February 2001, being the date for acceptance of the 9 February 2001 offer.

There was at the trial an incidental claim by Crabtrees against Mr Tzioras for advertising expenses incurred pursuant to its leasing authority. This claim was conceded at the outset and the amount of the claim, $3,095.16, was never in dispute. Crabtrees should have judgment for this sum which is, of course, well within the jurisdiction of the Magistrates' Court. Accordingly, counsel for Crabtrees sought costs only on Magistrates' Court scale B. I will so order.

The claim of Stamward against Tzioras was brought to cover the eventuality that an order for specific performance of the contract between Tzioras and Federation/Yinyang would be ordered. This did not happen and, accordingly the Stamward's claim was unsuccessful. I will make an order for the costs of Tzioras against Stamward. There was some debate as to whether I should make an order to the effect that these should ultimately be borne by Federation/Yinyang. I am satisfied that it was reasonable for Stamward to bring the claim against Mr Tzioras and that it did so because of the claim brought against it by Federation/Yinyang. In the circumstances it is just that it should receive an indemnity from the party ultimately responsible. Accordingly, I will make a Bullock order.

The orders of the court on the matters not disposed of on 11 May, therefore, will be as follows:

A. Judgment for the secondnamed defendant against the firstnamed defendant in the sum of $3,095.16 together with damages by way of interest in the sum of $264.00, a total of $3,359.16.

B. The costs of the firstnamed defendant and the secondnamed defendant of the proceeding including reserved costs and the cost of transcript be taxed on a party and party basis up to and including 16 February 2001 and thereafter on a solicitor and client basis and paid by the plaintiffs.

C. The costs of the thirdnamed defendant of the claim and of the counterclaim including reserved costs and the cost of transcript be taxed on a party and party basis up to and including 14 February 2001 and thereafter on a solicitor and client basis and paid by the plaintiffs.

D. The costs of the secondnamed defendant of its claims against the firstnamed defendant be taxed on the Magistrates' Court Scale B and paid by the firstnamed defendant.

E. The costs of the firstnamed defendant of the claim against him by the thirdnamed defendant be paid by the thirdnamed defendant and, further, that the amount of such costs when paid by the thirdnamed defendant to the firstnamed defendant be paid to the thirdnamed defendant by the plaintiffs.

A. The costs of the plaintiff of the proceeding including reserved costs and costs of transcript be taxed on a party and party basis up to and including 16 February 2001 and thereafter on a solicitor and client basis and paid by the defendant.

[1] Unreported, 28 April 1993, BC 9303878.

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Judgment (22 paragraphs)

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