Plaintiff v Defendant

2 My reasons for decision concluded on the basis that I would hear the parties further in relation to appropriate orders and in relation to the question of costs.

3 As set out in my previous reasons for decision, the plaintiff commenced proceedings against the defendant seeking, amongst other things, a declaration that the defendant, as landlord, was not entitled to exercise the right of re-entry for non-payment of rent conferred by clause 12.01 of the Lease the subject of these proceedings without first serving a notice on the plaintiff tenant as required by clause 12.05 of that Lease. This position was accepted by Byrne J in proceeding number 3740 of 2008. The Court of Appeal subsequently reversed this decision in Natwest Markets Australia Pty Ltd v Tenth Vandy Pty Ltd.[2] In relation to costs, the Court of Appeal ordered that:[3]

"The costs of the appeal and the costs of the preliminary issue before the judge below be reserved to the judge who hears and determines the trial of the proceeding."

4 The present aspect of these proceedings arises as a result of costs applications. The first is an application by the defendant that the plaintiff pay the defendant's costs of and incidental to the trial of the preliminary question before Byrne J and the subsequent appeal. The second is an application that the plaintiff and Leslie James Thomas, jointly and severally with the plaintiff, pay the plaintiff's costs of the proceeding, including reserved costs, on a party and party basis up to and including 22 March 2001 and after that date on an indemnity basis.

5 For the costs of the trial of the preliminary question and the subsequent appeal, it was accepted that the only issue was whether the ordinary costs rule, that costs follow the event, should be applied. For the costs of the remainder of the proceeding, two additional issues arise beyond the application of the usual costs rule. The first is whether costs should be awarded to the defendant other than on the usual party and party basis, as a result of the failure by the plaintiff to accept one or more of the defendant's offers of compromise. The second is whether Mr Thomas should be the subject of a costs order in the proceedings as sought by the defendant. Mr Thomas is not a party to the proceedings.

6 The jurisdiction of the Court as to costs is conferred by sub-s 24(1) of the Supreme Court Act 1986 (Vic), in the following terms:

"24(1) Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid."

7 This statutory provision, and the history of the jurisdiction to award costs, confirms that costs fall within the Court's general discretionary jurisdiction subject to the operation of other legislation or the rules of court.[4]

8 The usual order as to costs is an award of costs to the successful party on a party and party basis. This usual practice, and the basis for it, is set out and explained by McHugh J in Oshlack v Richmond River Council:[5]

"[67] The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party.[6] The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

[68] As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.

[69] The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd[7], Devlin J formulated the relevant principle as follows:

'No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.'

'Misconduct' in this context means misconduct relating to the litigation[8], or the circumstances leading up to the litigation.[9] Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation;[10] unnecessarily protracts the proceedings;[11] succeeds on a point not argued before a lower court[12]; prosecutes the matter solely for the purpose of increasing the costs recoverable;[13] or obtains relief which the unsuccessful party had already offered in settlement of the dispute.[14]"

9 It is against this background that the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("the Rules") operate.

10 For present purposes, the critical provisions of the Rules are contained in the more general costs provisions of Order 63, and in the more particular provisions of Order 26, which regulate the making and consequences of an offer of compromise.

11 The relevant provisions of Order 63 are as follows:

"63.02 General powers of Court

The power and discretion of the Court as to costs under s 24 of the Act shall be exercised subject to and in accordance with this Order.

...

63.28 Bases of taxation

Subject to this Part, costs in a proceeding which are to be taxed shall be taxed on -

(a) a party and party basis;

(b) a solicitor and client basis;

(c) an indemnity basis; or

(d) such other basis as the Court may direct.

63.29 Party and party basis

On a taxation on a party and party basis all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed shall be allowed.

63.30 Solicitor and client basis

On a taxation on a solicitor and client basis all costs reasonably incurred and of reasonable amount shall be allowed.

63.30.1 Indemnity basis

(1) Subject to paragraph (2), on a taxation on an indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.

(2) Any doubt which the Costs Court may have as to whether the costs were unreasonably incurred or were unreasonable in amount shall be resolved in favour of the party to whom the costs are payable.

63.31 General basis

Except as provided by these Rules or any order of the Court, including the Costs Court, costs shall be taxed on a party and party basis.

63.32 Where solicitor and client basis applicable

(1) The Court may order that costs be taxed on a solicitor and client basis."

12 Order 26 governs offers of compromise. Order 26.03(1) provides that an offer of compromise may be served at any time before verdict or judgment in respect of the claim to which it relates. Under Order 26.04, an offer of compromise "shall be taken to be ... made without prejudice, unless the offer otherwise provides". Order 26.08 makes provision for the consequences of a failure to accept an offer of compromise at the time of verdict or judgment. However, Order 26 only regulates the consequences of an offer of compromise made by a defendant which is not accepted in terms of the provisions of Order 26.08(3), as follows:

"26.08 Costs consequences of failure to accept

(3) Where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim to which the offer relates not more favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders -

(a) the plaintiff shall be entitled to an order against the defendant for the plaintiff's costs in respect of the claim up to and including the day the offer was served taxed on a party and party basis; and

(b) the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter taxed on a party and party basis."

13 Order 26 provides a formal procedure for the making and service of an offer of compromise. Although Order 26 makes specific provision for the consequences flowing from the making and non-acceptance of an offer of compromise in certain circumstances, the underlying approach and effect of Order 26 is substantially the same as an offer of settlement contained in an ordinary letter expressed to be "without prejudice" or "without prejudice save as to costs", known as a Calderbank offer, flowing from the decision in Calderbank v Calderbank.[15] Although there may have been some initial doubt as to whether an offer of settlement contained in a Calderbank offer, rather than as a formal offer of compromise under Order 26, would give the offeror any special advantage in relation to costs, the balance of the authorities now favours the treatment of a Calderbank offer in a similar manner to a formal offer of compromise under Order 26, but subject to the specific provisions as to consequences to the extent that they are provided for in Order 26.[16] Further, the authorities indicate that the device of a Calderbank offer may be called in aid by a party where there is a failure to satisfy the formal requirements of Order 26 or in circumstances where the provisions of Order 26 do not provide for or specify the consequences of the making of a formal offer of compromise under its provisions in particular circumstances. This includes the present case, where the plaintiff fails altogether and judgment is given for the defendant.

14 In relation to the failure to comply with formal requirements, Byrne J said in Foster v Galea (No 2):[17]

"There is abundant authority for the proposition that when an offer of compromise fails to satisfy the formal requirements of O 26, it may, nevertheless, be brought to account in the exercise of the court's general discretion as to costs.[18] For this purpose there is no requirement that the offer satisfy the formal requirements of a Calderbank offer that it be expressed to be without prejudice save as to costs. The significance of this expression is not that it confers upon the offer some special effect at the end of the trial[19] but, rather, that the usual privilege attaching to without prejudice offers at trial falls away when questions as to costs are to be determined. If an offer falls outside the O 26 regime, it is available for use by the parties unless it was made in terms or in circumstances which confer upon it the common law privilege, either generally or of the Calderbank type. Moreover, with respect to its effect upon the incidence of costs, it leaves the fairly mechanical regime of Rule 26.08 and enters the more flexible one of discretion as to costs."

15 In relation to circumstances not provided for in Order 26, Hollingworth J said in Stipanov v Mier (No 2):[20]

"Rule 26.08(3) refers only to the situation where the plaintiff recovers a judgment that is not more favourable to the plaintiff than the terms of the offer. The rule is silent on the question of costs where the plaintiff fails altogether and judgment is given for the defendant. However, it is well-established that in such an event the Court may, in the exercise of its general discretion, award costs to the defendant on a more generous basis than party and party from the time the offer was served.

The principle in Calderbank v Calderbank[21] exposes a litigant to the risk of a costs order if, taking into account all relevant considerations including the facts known to the offeree at the time of the offer, the offeree unreasonably ignores a reasonable offer of settlement, whether made by letter or formal offer of compromise.

As Byrne J observed in Mutual Community Ltd v Lorden Pty Ltd[22]:

'The policy of the Court is to encourage litigating parties to undertake genuine settlement negotiations and, for the purpose, to face up to serious offers of settlement... The response of a litigant in receipt of an offer of settlement will always be affected by the prospect that the sum which the Court might order including party and party costs may be less advantageous than the terms of the offer. Experience, however, shows that this prospect alone is not always sufficient to compel a litigant to face up to the offer. The further prospect of a super-added costs penalty if a reasonable offer be not accepted is a salutary inducement to an offeree to undertake this often painful task...'

In Richfield Investments Pty Ltd v Oversea-Chinese Banking Corporation Ltd[23], Redlich J carried out a comprehensive review of the authorities in relation to the award of costs on a higher than usual basis. In particular, he considered whether, once an offer of compromise was made, there was a prima facie presumption that indemnity costs should be ordered, unless the party rejecting the offer could show that it was reasonable not to accept the offer.[24] After a detailed examination of cases in the Federal Court, the Courts of Appeal in New South Wales and Queensland, and of single judges in this Court, his Honour concluded that:

'...the preponderance of authority, and the weight of the recent decisions is to the effect that there is no rule, predisposition, presumption or guideline to the effect that a failure to obtain a judgment more favourable than a rejected Calderbank offer will, in the absence of persuasion to the contrary, lead to a special costs order.'[25]

I respectfully agree with and adopt Redlich J's analysis and conclusion. In any event, the outcome in this particular case would be the same, even if (contrary to the above) there were such a prima facie presumption.

The final general observation which I wish to make is that courts have warned of the dangers of judging the reasonableness of a settlement offer through the prism of hindsight. As Redlich J observed in Richfield Investments, there is a real risk that a court, upon making findings concerning contested questions of fact, may too readily embrace a submission that it was always inevitable that the proceeding would fail.[26] As Hamilton J said in Grynberg v Muller:

'...These submissions focus the bright light of hindsight. Hindsight sings a siren song of which Judges must be cautious...'[27]"

16 The authorities indicate that the discretion of the Court with respect to the award of indemnity costs following the making of an offer of settlement is greater than where the provisions of Order 26 are applicable, and the circumstances attract provisions of Order 26 which specify the consequences of the failure to accept an offer of compromise.[28] In the present circumstances, Order 26 does not specify the consequences of the failure to accept an offer of compromise because the plaintiff has failed altogether in the proceeding and judgment has been given for the defendant.

17 Nonetheless, neither an offer of compromise under Order 26 nor a Calderbank offer will have any costs consequences unless the rejection of the offer was unreasonable in all the circumstances. Thus, the Court of Appeal in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) said:[29]

"The test of unreasonable rejection

[23] In our view, these competing considerations can be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as "manifestly" or "plainly" unreasonable.

[24] Of course, deciding whether conduct is "reasonable" or "unreasonable" will always involve matters of judgment and impression. These are questions about which different judges might properly arrive at different conclusions. As Gleeson CJ said recently, "unreasonableness is a protean concept". But a test of reasonableness is, we think, entirely appropriate to the exercise of a discretion such as this.

Factors relevant to assessing reasonableness

[25] The discretion with respect to costs must, like every other discretion, be exercised taking into account all relevant considerations and ignoring all irrelevant considerations. It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(c) the extent of the compromise offered;

(d) the offeree's prospects of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed;

(f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree's rejecting it.

[26] It has been argued on occasion that the maker of a Calderbank offer should not be entitled to costs unless the offer sets out, with some reasonable specificity, the basis for the offeror's contention that the offeree should accept the compromise - for example, because the offeree's case was hopeless or because the offeree had no reasonable prospects of doing better in the proceeding than was being offered in advance.

[27] Once again, we think it neither necessary nor desirable to lay down any general rule in this regard. We agree with what Redlich J said in Aljade, as follows:

'Any attempt to prescribe the reasoning which must accompany [a Calderbank] offer should be resisted. Whether there is a need for the offeror to descend to specificity as to why the offer should be accepted must depend upon a consideration of all of the circumstances existing at the time of the offer. The extent to which the weakness of a party's position is exposed through the pleadings, affidavits and the various communications between the parties during the course of the litigation may bear upon the significance of the absence of specificity in the informal offer.'

[28] As we said at the outset, the unreasonable refusal of an offer of compromise is, by itself, a proper ground for the award of indemnity costs or - in the present case - the award of solicitor-client costs. It follows that it is not necessary for the applicant for such an order to establish matters which might be relevant to other, well-recognised, grounds for indemnity costs. Once again we would adopt what Redlich J said in Aljade, as follows:

'It is not necessary to establish misconduct by the offeree before the rejection of the offer can be viewed as unreasonable. Lack of merit in the way a party has conducted its case is not a pre-requisite for the making of an indemnity costs order [on this ground].'

[29] Nor is it necessary for the applicant offeror to show that the offeree acted with "wilful disregard of known facts or clearly established law", or that it acted with "high-handed presumption". We agree with Redlich J that such conduct is not a prerequisite for a finding that the rejection of a Calderbank offer was unreasonable."

18 Commenting on these six circumstances enunciated by the Court of Appeal, Byrne J said in Foster v Galea (No 2):[30]

"[9] ... I remind myself that the Judges of Appeal were not there engaging in a kind of judicial legislative process; they were simply giving a direction that these are matters which the trial judge should ordinarily have regard to, in addition to such other matters as the judge might consider relevant. And, having had regard to these matters, it is for the judge to give to each such weight, if any, as seems appropriate. The fact remains that the discretion as to costs conferred by statute is an unqualified one and must, therefore, be exercised judicially having regard to the circumstances which the trial judge considers to be relevant to the particular case before him or her. I am mindful of the warning of Fullagar J in 1991 against any judicial attempt to fetter such a discretion.[31]"

19 It is clear from the authorities that the Court, in exercising its discretion, must judge the conduct of the offeree at the time the offer was made and not do so with the benefit of hindsight.[32]

20 The question whether rejection of a Calderbank offer was reasonable in all the circumstances was also discussed by Byrne J in Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13).[33] As indicated by Byrne J in the Premier Building & Consulting case, the decision to accept or not accept an offer can only be characterised as reasonable or unreasonable on the basis of a consideration of the particular circumstances affecting the litigation, and with the aid of considered legal advice at the relevant time.[34]

"What, then, is meant by "unreasonable" in this context? A decision to accept or not an offer of this kind will ordinarily be based upon the offeree's perception of its ultimate chances of success, that is, it involves a prediction as to the likely outcome of the trial. At the time the debate about costs occurs the trial will normally be over; the event will have demonstrated that the prediction which underlay the decision was not fulfilled, that it was erroneous or even imprudent.[35] I put to one side the case where the decision was one based on factors other than the prospect of success. A decision to commence or to press on with litigation which is based on the desire to grind a less resourced opponent into capitulation or to put it out of competitive business could hardly be countenanced by the court. If an offeree sought to justify its decision to refuse an offer by reference to some consideration other than the prospect of success, this would be a matter for it to raise, leaving always the ultimate onus on the issue upon the offeror. In the same way that the failure to achieve a more advantageous result will not automatically put the offeree at risk, so too it is not sufficient for it to avoid the consequence of its erroneous prediction that it says only that the outcome was uncertain. The outcome of almost all litigation is uncertain. The erroneous prediction may not, however, be an unreasonable one if the predictor was not, at the time, for good reason in possession of sufficient information to make an assessment or if the circumstances upon which it was based later changed. It must be acknowledged that it is part of the ordinary function of a lawyer to make predictions of this kind. The lawyer must make them at the outset and during the litigation in order to enable the client to make responsible and informed decisions to commence the litigation, to pursue it and to make the various decisions in the course of the proceeding's progress to trial and judgment."

21 On 22 March 2001, the defendant served an offer of compromise on the plaintiff. The offer was dated 22 March 2001. In it, the defendant offered to pay the sum of $50,000 to the plaintiff in full settlement of its claim. The offer was open for acceptance for a period of 14 days after the date of service, which was also 22 March 2001. The offer of compromise was served under cover of a letter dated 22 March 2001 from the defendant's solicitors, Mallesons Stephen Jaques, to the plaintiff's then solicitors, Taylor Splatt & Partners. The covering letter was not a bare offer. In it, the defendant's solicitors made four points regarding the strength of the plaintiff's case, from the defendant's perspective. The relevant parts of the letter were as follows:

"We point out that:

1. The plaintiff's:

(a) gross profit (that is, the value of sales less the cost of goods sold) declined by approximately 17.5% between 30 June 1989 and 30 June 1991; and

(b) sales declined by approximately 15.5% between 30 June 1990 and 30 June 1991 (and the handwritten summary of figures provided to the landlord by the plaintiff in June 1991 - see the attachment to our discovered document 114 - indicates that monthly sales figures were down by an average of approximately 20% when compared to the corresponding month the previous year, from January 1991).

2. The plaintiff's statement of claim and the further and better particulars of that statement claim allege no wrongful action by the defendant that could be claimed to have led to the decline in the plaintiff's gross profit and sales referred to in paragraph 1, above.

3. A letter dated 15 May 1991 sent by Mr Thomas on behalf of the plaintiff refers to, among other things, "changing fortunes of the Centre due to economic and other factors", claims that "Trading figures for the past twelve months reflect the serious nature of the recession, particularly in our Centre, which characteristically has a very large number of welfare recipients in our catchment area" and requests a 25% reduction in rental.

4. In light of the matters set out above, and especially given that contemporaneous statements made on behalf of the plaintiff attribute the plaintiff's business difficulties to the recession, we repeat our observations at mediation to the effect that we consider that the plaintiff has no reasonable prospect of obtaining judgment against the defendant for any significant sum in respect of the "loss of business" and related claims in the particulars under paragraph 15 of the statement of claim."

22 The response to the defendant's offer of 22 March 2001 was a letter dated 25 May 2001 from the plaintiff's then solicitors, to Mallesons Stephen Jaques, putting an offer by the plaintiff to settle the proceeding by the defendant paying the plaintiff $1.15 million plus interest from the date of issue of the proceedings and costs. Omitting formal parts, the contents of this letter were as follows:

"We have been specifically instructed to make the following Offer of settlement in respect of this matter on behalf of the Applicant.

Loss of business inclusive of fixtures and fittings $ 350,000.00

Loss of profit, opportunity costs and other associated

costs and punitive damages 900,000.00

Total $1,150,000.00

together with interest from date of issue of proceedings and costs.

In accordance with the Rules this offer is opened for acceptance of fourteen (14) days from the date hereof."

The defendant did not accept this offer by the plaintiff and there was no other response, by way of acceptance or otherwise, to the defendant's offer of 22 March 2001.

23 On 18 June 2001, the Court gave judgment for the defendant against the plaintiff on all statute-barred claims made by the plaintiff in its statement of claim endorsed on its writ which was filed on 14 January 2000. Subsequently, on 18 July 2001, the Court also gave judgment for the defendant against the plaintiff on all statute-barred claims made by the plaintiff in its amended statement of claim dated 29 June 2001. As a result, claims with respect to the recovery of the alleged "management fee" by the plaintiff from the defendant were not an issue in proceedings at the trial commencing 20 November 2009.[36] Consequently, the principal claim the subject of the trial in these proceedings was the plaintiff's claim with respect to the alleged unconscientious exercise, by the defendant, of the legal right of re-entry for non-payment of rent.

24 By letter dated 10 August 2001 from Mr Thomas to Mallesons Stephen Jaques, Mr Thomas said that the plaintiff was "... willing to cease all action in return for a settlement of $1.4 million". This offer was expressly open for acceptance until 4.00pm on 20 August 2001.

25 The defendant made a further offer, this time in Calderbank form, by letter dated 20 October 2006 from Mallesons Stephen Jaques to Radebe & Associates, the plaintiff's solicitors. Omitting formal parts, this letter was in the following terms:

"We consider that our client has good prospects of successfully defending Tenth Vandy's appeal ("the appeal"). Even if the Appeal is successful and a trial of the Proceeding occurs, we consider that Tenth Vandy has no reasonable prospect of obtaining judgment against our client for any significant sum.

Nevertheless, we are also conscious that both parties will incur considerable costs during the Appeal and, in the event the Appeal is successful, in preparing for trial.

Accordingly, we are instructed to make the following offer:

1. 1. Our client will pay your client $50,000 in full and final settlement of your client's claims in the Proceeding (including the Appeal).
2. 2. Your client and its directors release and forever discharge our client from all claims and demands of whatever nature arising out of or related to the Proceeding and/or any matter pleaded (at any time since the Proceeding was commenced) on behalf of your client, and/or the Appeal;
3. 3. The Proceeding (including the Appeal) is dismissed with no orders as to costs.

This offer will remain open for acceptance until 4pm, Friday 3 November 2006, being 14 days from the date of this letter.

This offer is made without prejudice except as to costs in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333. If this offer is not accepted, and the Proceeding continues to hearing with your client obtaining a judgment that is no more favourable than the terms of this offer, this letter will be relied upon in support of our client's application for indemnity costs from the date of this letter."

26 A further, verbal, offer was made on behalf of the defendant by Mr Tony Troiani and Mr Robert Williams of Mallesons Stephen Jaques, in a telephone conversation with the plaintiff's solicitor, Mr Mdu Radebe on 20 July 2007. The offer was that the defendant pay to the plaintiff $250,000 inclusive of costs. The response to this offer was a letter dated 3 July 2007 from Radebe & Associates, which attached a Settlement Proposal that the defendant pay the plaintiff $2.5 million plus costs, with some additional elements. In fact, the Settlement Proposal was couched in terms of "Option (A)" and "Option (B)". The other element in Option (A), apart from the payment of $2.5 million plus costs, was "Agreement to forego intended new career $300 million". From the introductory material attached to this settlement proposal, this appears to be a reference to the intended new writing career of Mr Thomas, rather than the plaintiff. Option (A) also indicated that the offer was open for seven days for acceptance, but that after seven days "... the offer will convert to English pounds and that offer will remain open for seven days, after which it will be withdrawn and he will proceed to trial". Again, the reference to "he" is apparently a reference to Mr Thomas. Option (B) was a demand for return of all the plaintiff's books and records and the provision of an affidavit of documents so the plaintiff may properly prepare particulars of loss and damage for an expeditious trial. The statements introducing this settlement proposal, which are contained in 14 paragraphs, are not necessary to repeat here, save to observe that very little relevant distinction appeared to be being made between the plaintiff company and Mr Thomas personally.

27 The preliminary question heard at first instance by Byrne J resulted in a judgment in favour of the defendant in relation to four of the five preliminary questions arising out of the plaintiff's further amended statement of claim. However, on 22 October 2008, the Court of Appeal allowed an appeal by the defendant from the question whether it was required to serve a notice under the Lease before entering into possession of the premises. As a result of this decision on appeal, the principal claim remaining for decision was the plaintiff's claim with respect to the alleged unconscientious exercise of a legal right of re-entry for non-payment of rent by the defendant.

28 On 16 April 2008, Mallesons Stephen Jaques, as solicitors for the defendant, received a letter dated 11 April 2008 from Mr Radebe, as solicitor for the plaintiff. This letter contained an offer to release the defendant from any further claims on payment of the sum of $60 million plus costs. The offer was to remain open for seven days. The letter also contained reference to the management fees issue which, as noted previously, had been rendered res judicata as a result of judgments which the Court gave for the defendant in June and July 2001. Some critical parts of the letter in this respect are as follows:

"Your admissions on 12 December 2007, at paragraph 7, and repeated on 7 April 2008, at paragraph 3, that your client 'has no further discovery to make in relation to this category of documents', having discovered none previously, casts grave doubt on the validity of the representations made by your client, to our client on 3 August 1993.

It would appear that if that is the case then the letter of 3 August 1993 from your client to our client was an entirely fraudulent representation aimed solely to induce our client to continue to make the prohibited payment of management fees for the sole financial benefit of your client.

...

Alternatively our client will accept your client's full and frank admission that the representations made in relation to Management Fees on 3 August 1993 was entirely fraudulent and will attempt to particularize damages in relation to this element of the claim on that basis."

29 The defendant made a further offer to the plaintiff to settle the proceeding by paying the plaintiff $250,000 inclusive of costs, by email to its solicitors on 16 March 2009. The offer remained open for 14 days from the date of the email. Subsequently, by letter dated 21 September 2009, Mr Thomas wrote to Mr Stephen Hester, Group Chief Executive, and to the board members of the Royal Bank of Scotland Group, offering to settle the matter for the sum of $60 million. The offer was expressed to remain open for 14 days.

30 None of the offers, whether the formal offer of compromise or the Calderbank offers by the defendant to the plaintiff, were accepted by the plaintiff at any time.

Was the plaintiff's refusal of offers reasonable?

31 The defendant submitted that the plaintiff ought reasonably to have accepted the offer of compromise which it made on 22 March 2001. It was submitted that it should have been clear to the plaintiff, properly advised, that its case was very weak both with respect to liability and quantum. The plaintiff, on the other hand, submitted that it would not have been reasonable for it to accept the sum of $50,000 by way of settlement of a damages claim which it then believed, based on its legal advice, to be a claim in excess of one million dollars.

32 Nevertheless, a view as to the quantum of a damages claim is but one aspect of the plaintiff's case. The plaintiff's submissions in relation to the costs issue did not give much, if any, weight to the reasonableness or otherwise of the plaintiff's views on liability, the first step in recovering any damages, much less damages of the quantum it was seeking. In my view, it is clear from the material presented at trial, both evidence and submissions, that the plaintiff, or more accurately Mr Thomas through the corporate structure of the plaintiff as the formal litigant, was pursuing a case with a grossly inflated view of losses suffered as a result of the defendant's re-entry and the consequent closure of the plaintiff's business. As indicated in my reasons for judgment, the evidence indicates that the plaintiff's business was quite a modest one which produced a relatively low annual net profit during the years it was operating.[37]

33 Additionally, the correspondence between Mr Thomas and the defendant and its associated companies, personnel or agents was liberally sprinkled with accusations of "fraudulent imposition of management fees",[38] "the surreptitious attempt to conceal the fraud",[39] and attempts "to fraudulently conceal matters by altering the management agreement"[40] and so on. Similar allegations were repeated in the affidavit of Mr Thomas dated 16 February 2010 which was relied upon by him in the hearing of the present application. I note that the use of this affidavit was objected to by the defendant on the basis of unsubstantiated allegations of fraud and impropriety more generally. In spite of my explaining to Mr Thomas at the hearing that allegations of this nature needed to be carefully particularised and supported by evidence other than his own assertions, Mr Thomas was not able to point to any evidence in support of these allegations. It should also be noted that a continuing thread through Mr Thomas' correspondence, oral evidence, the 16 February 2010 affidavit, and submissions was an allegation of fraudulent concealment of management fees on the part of the defendant. As noted previously, the recovery of management fees was not an issue at the trial as a result of the judgment of Master Kings (as her Honour then was) on 18 June 2001.[41]

34 In view of the fact that the preliminary questions raised before Byrne J were not finally resolved on appeal in favour of the defendant until 22 October 2008, I am of the opinion that it could not be said that the plaintiff's refusal of the offer of compromise on 22 March 2001 or the subsequent Calderbank offers was unreasonable. The defendant submitted that the plaintiff's refusal of the 22 March 2001 offer was unreasonable on the basis that the plaintiff, properly advised, would have appreciated the weakness of its case at that time. In my view, this is to overlook the fact that, at this stage, the plaintiff's claim at law that the defendant's re-entry was wrongful because it did not comply with the proviso for re-entry contained in clauses 12.04 and 12.05 of the Lease had not been resolved against it. Consequently, it could not be said that the plaintiff's case on liability was weak because it depended only upon arguments with respect to the unconscientious exercise of the legal right of re-entry by the defendant.

35 The defendant submitted that the weakness of the plaintiff's claim with respect to unconscientious conduct should have become abundantly clear following the decision of the High Court in Tanwar Enterprises Pty Ltd v Cauchi.[42] Nevertheless, the judgment in Tanwar Enterprises was not delivered until 7 October 2003 and, consequently, prior to that date the broader argument with respect to the extent of remedies available on the basis of unconscientious conduct, as put by the plaintiff at trial, might arguably have been open. As is clear from my judgment,[43] I have considerable doubts in this respect. However, in my view, it would be resorting to hindsight to say that the plaintiff was unreasonable in thinking that its unconscientious conduct claim was a claim which had some prospects prior to the delivery of the judgment by the High Court in Tanwar Enterprises.

36 A further Calderbank offer from the defendant to the plaintiff, of $50,000 inclusive of costs, was made on 20 October 2006. I am of the view that the plaintiff, properly advised, should have realised that its unconscientious conduct claim was quite weak. Further, I am of the view that it should then also have realised that its damages claim based on a modest business could not, objectively, be regarded as particularly strong. However, at this stage, the Court of Appeal had not finally resolved the preliminary questions and, consequently, the plaintiff's claim at law for possession against the defendant still remained open. Consequently, I am of the opinion that it was not unreasonable for the plaintiff to reject the offer of $50,000 at this time.

37 The first offer subsequent to the resolution of the preliminary questions by the Court of Appeal occurred on 16 March 2009 when the defendant made an offer to the plaintiff to settle the proceeding on payment to the plaintiff of $250,000 inclusive of costs. At this stage, the plaintiff's claim at law was no longer open and the only basis it could establish liability against the defendant was on the basis of its claim with respect to the unconscientious exercise of the legal right to re-entry for non-payment of rent. In my opinion, this should have been seen to be a very weak claim following the High Court judgment in Tanwar Enterprises in 2003. In terms of any likely damages, the same position existed with respect to the plaintiff's advice on quantum. Consequently, in my view, the plaintiff, properly advised, would have sensibly assessed the weakness of its case on liability together with the risks associated with establishing the quantum of its claim and, as a result, accepted the offer of $250,000 inclusive of costs. It follows that the plaintiff's refusal of, or failure to accept, the offer of 16 March 2009 was, in all the circumstances, unreasonable.

38 This position should, in my view, also be viewed in the context of the continuing correspondence of Mr Thomas containing repeated accusations of fraud and impropriety more generally, together with the quite ridiculous offers to settle with the defendant on payment of sums in the millions of dollars, millions of pounds and, finally, up to $60 million. The plaintiff, in its submissions at the hearing of this application, said that it was clear that some of these offers were not serious offers and, I assume, merely to be taken as rejection of the defendant's offers with a view to indicating that they were derisorily low. Nevertheless, the plaintiff's correspondence does not indicate this and, when couched with other material, tends to indicate that the plaintiff was not behaving reasonably.

39 For these reasons, I am of the opinion that a proper exercise of the discretion with respect to costs is to apply the usual costs rule to the proceedings at first instance before Byrne J and to those proceedings on appeal with respect to the preliminary questions. Consequently the plaintiff must pay the defendant's costs with respect to these proceedings, at first instance and on appeal, on a party and party basis. Also for these reasons, I am of the opinion that with respect to the remaining proceedings the plaintiff must pay the defendant's costs on a party and party basis until the expiration of 14 days from the settlement offer made on 16 March 2009; in other words, until and including 1 April 2009. From and including 2 April 2009, the plaintiff must, for these reasons, pay the defendant's costs on an indemnity basis. In my view, it is clear from the way in which previous offers were put that the defendant was seeking indemnity costs in the event that the offer of 16 March 2009 was not accepted. The defendant's reasoning underlying its assessment of the weakness of the plaintiff's case had been expressed clearly in earlier offers and would, in my view, go to assist the plaintiff in the assessment of its position with respect to the 16 March 2009 offer and the terms in which it was expressed. In view of the ongoing nature of the proceedings and the series of offers on both sides, I am also of the view that there was sufficient time in all the circumstances for the plaintiff to consider its position with respect to the 2009 offer within the time specified in that offer.

40 Mr Thomas is a director and shareholder of the "LJ & L Thomas Family Trust" which was established for the benefit of Mr Thomas, his former wife Lena Thomas and their two daughters, Leah Thomas and Tamara Thomas. At all material times he and Lena Thomas were the directors of the plaintiff.

41 The defendant submitted that Mr Thomas was and remains the dominant figure behind the plaintiff. This is clearly the position in relation to the present proceedings and, as appeared from the evidence and the submissions of Mr Thomas, was also true in the sense that he was the "active and directing will of the plaintiff with respect to the lease and the conduct of the business on the leased premises at the Waverley Gardens Shopping Centre". This was also clear from prolific correspondence from Mr Thomas to Centre Management in 1991 and 1992 and to the defendant in 1993. Much of this correspondence was in Mr Thomas' handwriting. It was also clear from other written and oral evidence at the trial and also from Mr Thomas' affidavit at the hearing of the present application and his submissions at that hearing that he treated the plaintiff company as his alter-ego.

42 Additionally, it was submitted by the defendant that the evidence disclosed that Mr Thomas continued to direct the conduct of and made decisions for the plaintiff in the proceeding, including making complaints against the plaintiff's previous solicitors and counsel as a result of the proceeding being stayed. This position was put by reference to paragraph 42 of the affidavit sworn by Mr Thomas on 22 December 2005 which states the position as follows:

1. Subsequent to the stay of the proceeding ordered on 27 February 2002 I unsuccessfully endeavoured to raise funds in order to discharge the orders for costs made in favour of the Defendant. Further, on 15 April 2002, I filed complaints against the plaintiff's previous solicitors and counsel with the appropriate authorities with the view of recovering pecuniary losses suffered as a result of their negligent representation of the plaintiff which caused this proceeding to be stayed. I did so in the hope that I would then be able to use such compensation funds in order to discharge the costs orders made against the plaintiff and thereby permit the plaintiff to continue with this proceeding.

43 It also appears to be clear that plaintiff company was itself impecunious, as is indicated in paragraph 5 of the final version of witness statement of Mr Thomas dated 24 November 2009, as follows:

1. The plaintiff does not operate any other business. My wife and I are directors of the plaintiff company and my daughters are beneficiaries of the Family Trust. Apart from the plaintiff's right to claim compensation from the defendant, the plaintiff has no assets.

44 In the course of the hearing with respect to this application Mr Thomas made submissions with respect to costs but in doing so, addressed issues with respect to the costs liability of the plaintiff company rather than matters going to the question of his own personal liability for costs. These submissions were made in the course of a hearing in which the plaintiff company was represented by Mr Selimi of Counsel and Mr Thomas appeared on his own behalf to resist an application for an order for costs against him personally.

45 At the conclusion of Mr Thomas' submissions, Mr Selimi made submissions in support of Mr Thomas' personal position as a friend of the Court. In the course of these submissions Mr Selimi said that this was not some litigation that Mr Thomas was simply conducting for his own personal or private benefit. Rather, it was submitted that the litigation was conducted for the benefit of his family through the Family Trust and that this was a relevant matter for the Court to take into account. Additionally, it was submitted that the Court should have regard to the failure on the part of the defendant, as it was put, to make an application for security for costs, where the plaintiff was allegedly insolvent. Reference was made to the judgment of Mason CJ and Deane J in Knight v FP Special Assets Ltd[44] where their Honours said in their joint judgment:

"The availability of an order for security for costs at an early stage would, in many situations, be a strong argument for refusing to exercise discretion to order costs against the non-party, but discretion must be distinguished from jurisdiction."

46 It was submitted that as it was common ground that the defendant never made any application for security of costs against the plaintiff this factor also militated against the grant of any costs order against Mr Thomas personally. The basis of this submission was that if the defendant had made such an application the plaintiff's director, Mr Thomas, may well have taken advice as to whether he ought to provide security to the satisfaction of the defendant in response to an application for security for costs. If Mr Thomas as a director had not been prepared to provide security, for example by some director's guarantee of the costs of the plaintiff, then the proceeding might have been stayed from the outset. Mr Selimi submitted that now, the director, Mr Thomas is "facing a perilous application for costs against him personally, without ever previously being warned that such an application would be made against him in any personal capacity".

47 The defendant responded to the submission with respect to security for costs on the basis that the offer of compromise and the Calderbank letters clearly put the plaintiff on notice that it was in danger of an application for indemnity costs in the proceedings. Further, it was said that no application for costs had been made because of the nature of the allegations put by the plaintiff, namely that its impecuniousity was due to the acts of the defendant in circumstances where no court would have acceded to such an application.

48 Finally, Mr Selimi, on behalf of Mr Thomas, submitted that if a costs order were to be made against Mr Thomas personally it should be on the basis that his liability should only arise to the extent that the plaintiff company was unable to satisfy any costs order.

49 I did not understand the submissions made by Mr Thomas personally or on his behalf by Mr Selimi to suggest that there was no jurisdiction or power to award costs against Mr Thomas personally. In any event, this is clear, in my view, from the provisions of sub-s (24)(1) of the Supreme Court Act 1986.[45] Additionally, it is clear that any discretion in this respect is to be exercised in accordance with Order 63 of the Rules, as indicated in sub-s (24)(1) of the Supreme Court Act.[46]

50 In terms of the exercise of the jurisdiction the defendant submitted that it was "just and equitable" in the circumstances of this case that Mr Thomas be jointly and severally responsible with the plaintiff for the payment of the defendant's costs of the proceeding even though this would involve a departure from the prima facie position that only parties to a proceeding may be subject to costs orders and from the general rule that finds expression in Order 63.31 that costs should be paid on a party and party basis.[47]

51 The jurisdiction to award costs against a non-party is not enlivened unless the non-party has a sufficient connection to the proceeding.[48] Elaborating on this requirement, and by reference to Burns Philp & Co v Bhagat, Bischof v Adams[49] and also Guss v Geelong Building Society (in liq), Ashley J said:[50]

"The Court's power to award costs under s 24(1) of the Supreme Court Act is wide enough to order that costs be paid by a non-party. Focussing upon the general situation - that is, putting the circumstances raised by r.6323 to one side - it may be said that such an order is always exceptional. In the vast majority of cases it would be unjust to make an award of costs against a non-party. It may also be said that whilst certain categories of persons have been identified as persons against whom such orders may be made, the Court's discretion is not confined to those categories of persons. A further proposition may be put, that is, that a non-party against whom an order is made must have a connection with the proceeding in question. Gobbo J dealt with the matter of connection in Bischof. His Honour concluded that in the exercise of the discretion it would be pertinent to take into account the extent of the connection between the non-party and the proceeding and the causal connection between the third party and the costs. His Honour pointed out, correctly in my respectful opinion, that in some cases the connection between the non-party and the proceeding may be slender, but there may be a close relationship between the non-party and costs (or increased costs) incurred. At the other extreme it may be that the non-party stands to benefit greatly from a proceeding, but may not have had any real part in supporting the proceeding, and so any real part in the incidence of costs."

(Footnotes omitted)

52 Additionally, authorities indicate that there is no impediment against making a costs order against a director of a company which is a party to proceedings.[51]

53 In relation to the connection between Mr Thomas and the plaintiff, the defendant relied particularly on matters set out in an affidavit by Patricia Anne Matthews dated 10 February 2010 which was relied upon at the hearing of this application. In particular reliance was placed on paragraphs 11 to 13, as follows:

"... this is a case about one man's [Mr Thomas'] unrelenting and passionate pursuit of justice for himself and his family albeit through his corporate vehicle. Mr Thomas is a director and shareholder of the corporate trustee and he is the chief protagonist who has been prosecuting his claims for more than 15 years.

...

Mr Thomas is a family man, a typical Aussie battler, who simply was trying to provide for his family in very pressing and challenging times. The plaintiff was the vehicle through which he sought to provide for his family in difficult times. The plaintiff when I refer to the plaintiff I should say really it's Mr Thomas Your Honour. He's the real plaintiff here, albeit through the corporate hat. The plaintiff Your Honour has - - -

...

In his corroboration to the Royal Bank of Scotland Group, the ultimate parent of the defendant, Thomas has often referred to himself in terms to suggest that he is the real protagonist. For example, Thomas:

(a) refers to the 'destruction of my business' (letter dated 18 May 2008);

(b) describes his motivations in pursuing the litigation and the amount of time he has spent on it (letter dated 21 September 2009);

(c) conveys an offer to settle 'all matters' in the first person (letter dated 21 September 2009); and

(d) refers to the proceeding as 'my own case' (letter dated 4 January 2010).

..."

54 I accept that these matters indicate a relevant connection between Mr Thomas and the plaintiff. These are convenient examples of this relevant connection which was, in any event, in my view clearly indicated in the evidence and submissions at trial.

55 In conclusion, the defendant relied on four matters in support of its submission in support of Mr Thomas' liability for costs:

"First, Mr Thomas caused the proceeding to be commenced. The evidence is abundant and clear that Mr Thomas held, and continues to hold, the reins of the plaintiff's case, and the prosecution of that case. He was the principal lay witness for the plaintiff and had the principal management, control and conduct of the plaintiff', case, including making offers to the defendant (and its owner) to settle the proceeding and determining whether to accept offers made by the defendant from time to time, as set out in the First Affidavit. There is, in all the circumstances, a real and direct connection between Mr Thomas and the proceeding.

Second, there is and was by that connection, a causal connection between Mr Thomas (by examination of the role played by him) and the costs incurred by the defendant.

Third, and further to the second matter, as a matter of practical experience and judgment, given the control exerted by Mr Thomas over the plaintiff, he plainly stood to benefit from the litigation, or had a financial interest in its outcome.

...

...

...

Fourth, Mr Thomas has played an active part in the conduct of the litigation in circumstances where the plaintiff is and has been impecunious at all relevant times. In Knight v FP Special Assets Ltd, Mason CJ and Deane J recognised a general category of case in which an order for costs should be made against a non-party:

'... where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.'

Their Honours said that such a category, on the facts in the case, would 'encompass' a receiver of a company who was not a party to the litigation. The generality of the category envisaged by their Honours plainly includes circumstances where, as here, the plaintiff is impecunious and where its controlling director has played an active part in the litigation."

In my view, the evidence supports the applicability of these four matters with respect to the liability of Mr Thomas for costs.

56 For these reasons I am of the opinion that it is appropriate that I exercise my discretion to order that Mr Thomas bear personal liability for the costs in the proceeding. Further, and on the basis of these reasons, the liability of Mr Thomas should be joint and several with the plaintiff, and on the same basis and to the same extent as the plaintiff's liability to pay the defendant's costs of the proceeding. Nevertheless, I am of the opinion that this should be subject to the proviso that the liability of Mr Thomas in this respect is not to arise unless and until the plaintiff fails to meet its obligations to pay the defendant's costs.

[1] [2010] VSC 2.

[2] [2008] VSCA 207; (2008) 21 VR 68.

[3] Order of the Court of Appeal dated 31 October 2008 (authenticated 6 November 2008).

[4] See Knight v F.P. Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178.

[5] [1998] HCA 11; (1998) 193 CLR 72 at 97-8.

[6] Latoudis [1990] HCA 59; (1990) 170 CLR 534 at 543 per Mason CJ, at 562-563 per Toohey J, at 566-567 per McHugh J; Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 at 410 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ.

[7] [1951] 1 All ER 873 at 874.

[8] King & Co v Gillard & Co [1905] 2 Ch 7; Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 812.

[9] Bostock v Ramsey Urban District Council [1900] 2 QB 616.

[10] Jones v McKie [1964] 1 WLR 960; [1964] 2 All ER 842; Bostock [1900] 2 QB 616 at 622, 625, 627.

[11] Forbes v Samuel [1913] 3 KB 706.

[12] Armstrong v Boulton [1990] VicRp 20; [1990] VR 215 at 223.

[13] Hobbs v Marlowe [1978] AC 16.

[14] Jenkins v Hope [1896] 1 Ch 278.

[15] [1976] Fan 93; [1975] 3 All ER 333.

[16] See Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 (CA); and see Foster v Galea (No 2) [2008] VSC 331 (Byrne J), particularly at [7].

[17] [2008] VSC 331 at [7].

[18] Mideco Manufacturing Pty Ltd v Tate [1989] VicRp 6; [1989] VR 50 at 57, per Gobbo J and the cases there referred to.

[19] Compare an offer of compromise which is given special effect by Rule 26.08.

[20] [2006] VSC 424 at [8]- [12]; and see Foster v Galea (No 2) [2008] VSC 331 (Byrne J) at [8].

[21] [1976] Fam 93; [1975] 3 All ER 333.

[22] Unreported Supreme Court of Victoria, Byrne J, 28 April 1993, 12-13.

[23] [2004] VSC 351.

[24] Apparently first put forward by Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425.

[25] Richfield Investments Pty Ltd v Oversea-Chinese Banking Corporation Ltd [2004] VSC 351, [72].

[27] [2002] NSWSC 350, [48].

[28] Hazeldene's Chicken Farm v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435; Stipanov v Mier [2006] VSC 424; and Foster v Galea (No 2) [2008] VSC 331.

[29] (2005) 13 VR 436 at [23]-[25] (Warren CJ, Maxwell P and Harper AJA).

[30] [2008] VSC 331 at [9].

[31] Leighton Contractors Pty Ltd v Kilpatrick Green Pty Ltd [1992] VicRp 83; [1992] 2 VR 505 at 512-3 (discretion to grant or refuse leave to appeal against an arbitrator's award not to be fettered by the "Nema Guidelines").

[32] See Aljade and Mkic v Oversea-Chinese Banking Corp [2004] VSC 351 (also referred to as Oversea-Chinese Banking Corporation v Richfield Investments Pty Ltd; and see Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 (CA).

[33] [2007] VSC 516.

[34] Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 13) [2007] VSC 516 at [13].

[35] Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 228, per Sheppard J.

[36] See Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2010] VSC 2 at [32], particularly footnote 23.

[37] See Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2010] VSC 2, particularly the concluding comments at [127].

[41] See Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2010] VSC 2, at [32], particularly footnote 23.

[42] [2003] HCA 57; (2003) 217 CLR 315.

[43] Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2010] VSC 2.

[44] [1992] HCA 28; (1992) 174 CLR 178 at 191.

[45] See Byrnes Philp & Co v Bhagat [1993] VicRp 13; [1993] 1 VR 203 App Division at 223 (Brooking J).

[46] And see McKenna v McKenna [1984] VicRp 58; [1984] VR 665 at 674 (McGarvie J).

[47] See Vestris v Cashman (1998) 72 SASR 449 (FC) at 468 (Lander J).

[48] See Burns Philp & Co Ltd v Bhagat [1993] VicRp 13; [1993] 1 VR 203 (Appeal Division) at 219 (Brooking J).

[49] [1992] VR 198.

[50] [2001] VSC 288, 21 August 2001.

[51] See Re Talk Finance and Insurance Services Pty Ltd [1994] 1 Qd 558 and Yeates Property Corporation v Boland (No. 2) [1997] FCA 760; (1997) 147 ALR 685 (Branson J).