Plaintiffs v First Defendant

COSTS - Calderbank offers by defendants by counterclaim - Whether unreasonable for plaintiff to reject the offers - Relevant factors - Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; [2005] 13 VR 435 applied - Magnitude of discrepancy between amount of offer and outcome of trial a relevant factor.

COSTS - Relevance of breaches of the Civil Procedure Act 2010 (Vic) to the exercise of discretion as to costs.

LEGAL PRACTITIONERS - Lien over proceeds of any settlement or judgment in favour of former solicitor - Firth v Centrelink [2002] NSWSC 564; (2002) 55 NSWLR 451 and Simpson v Rowe [2011] VSC 149 applied.

For the First and Second Plaintiffs/First and Second Defendants by Counterclaim

1 On 28 October 2015,[1] I ruled that the claims in this proceeding ought to be determined as follows:

(a) in relation to the claims made by Stephen and Jelvie Grech:

(i) the caveats over the Altona property, the Errol Street property, the Speakmen Street property and the Ballarat Road property be removed;

(ii) an order that Stephen Grech have possession of the Altona property, such order to be stayed for ninety days;

(iii) there be directions for the further hearing of the claims made by Stephen and Jelvie Grech for damages and/or compensation in the event they seek to press those claims; and

(b) in relation to the claims made by Ms Deak-Fabrikant:

(i) the transfer of the Sanctuary Lakes property from Paul Grech to Jelvie Grech be set aside pursuant to s 63(2) of the Relationships Act 2008 (Vic) ('Relationships Act');

(ii) an order pursuant to s 45(1) of the Relationships Act that Paul Grech pay Ms Deak-Fabrikant the sum of $256,000 ('judgment sum') (being twenty per cent of the combined value of the Altona property and the Sanctuary Lakes property), to be secured by a charge over the Sanctuary Lakes property;

(iii) payment of the judgment sum be stayed until after the hearing and determination of the issue of the costs of the proceeding;

(iv) upon payment of the judgment sum to Ms Deak-Fabrikant, or by agreement between the parties, or further order, the caveat over the Sanctuary Lakes property be removed; and

(v) the claims made in Ms Deak-Fabrikant's amended counterclaim be otherwise dismissed.

2 Orders to that effect were made on 28 October 2015, albeit they were authenticated on 6 November 2015.

3 On 28 October 2015, Berry Family Law (Ms DeakFabrikant's former solicitors) issued a summons seeking a declaration that 'Berry Family Law have a lien over any payment to be made to Ms Deak-Fabrikant, any interest in any property retained by Ms DeakFabrikant arising out of these proceedings, to the extent of $114,764.64 plus interest from 1 March 2014 plus costs.' The amount claimed by Berry Family Law at the hearing on 3 December 2015 was revised to $123,438.30. The submissions made on behalf of Berry Family Law conceded that its claim to costs ought rank behind any claim by the defendants by counterclaim to have their costs paid from the sum of $256,000 awarded to Ms DeakFabrikant, which is secured, in effect, by the Sanctuary Lakes property.[2]

4 On 20 November 2015, the third defendant by counterclaim, Mr Paul Grech, issued a summons seeking the following orders:

that Ms Larissa Deak-Fabrikant pay to Mr Paul Grech, on a full indemnity basis, the legal costs that he has been invoiced by Clancy & Triado while they have acted on his behalf; with these costs being set at $302,435.05.

That Ms Larissa Deak-Fabrikant pay to Mr Paul Grech, on a full indemnity basis, the legal costs that he has been invoiced by Clancy & Triado for all work incurred from 12 July 2014 to 28 October 2015 inclusive; with these costs being set at $267,278.05.

That Ms Larissa Deak-Fabrikant pay to Mr Paul Grech, on a party-party basis, the scale costs for all of the work he has been undertaken by Clancy & Triado.

That Ms Larissa Deak-Fabrikant pay to Mr Paul Grech, on a party-party basis, the scale costs for all of the work undertaken by Clancy & Triado from 12 July 2014 to 28 October 2015 inclusive.

5 The plaintiffs/first and second defendants by counterclaim, Stephen and Jelvie Grech, did not formally issue a summons. However, in paragraphs 55 to 67 inclusive of the affidavit sworn by Stephen Grech on 19 November 2015, Stephen and Jelvie Grech sought orders that Ms DeakFabrikant pay to them the legal costs paid by them to their former solicitors, Collards, in the sum of $99,691.20, along with the hearing, transcript and other court related fees paid by them of $57,377.57 (when they were selfrepresented), most of which related to expenses incurred during the trial of the proceeding. Stephen Grech's affidavit also gave evidence that he and Jelvie Grech have suffered losses of some $270,900 by reason of the caveats lodged by Ms DeakFabrikant in October 2009 over the five properties being the subject of the proceeding. However, upon my indication during the course of the hearing on 3 December 2015 that pursuing these claims (which are in effect claims under s 118 of the Transfer of Land Act 1958 (Vic)) would require Stephen and Jelvie Grech to make an application to reopen the trial, Stephen Grech informed the Court that they did not wish to pursue those claims.[3]

6 Ms DeakFabrikant submitted that there ought to be no order as to costs, including any orders in favour of Berry Family Law.

7 In my view, the appropriate disposition of the question of costs is as follows:

(a) the defendants by counterclaim pay Ms DeakFabrikant's costs up to 18 March 2014, such costs to be taxed in default of agreement, and setoff against any costs owed to them by reason of these orders;

(b) Ms Deak-Fabrikant pay the costs incurred by Stephen and Jelvie Grech in the proceeding from 12 July 2014 on a full indemnity basis, fixed at $56,597.87;[4]

(c) Ms Deak-Fabrikant pay the costs incurred by Paul Grech from 12 July 2014 to 28 October 2015 on a full indemnity basis, fixed at $240,550.24;[5]

(d) the net amount of the costs payable to the defendants by counterclaim pursuant to (a) to (c) above be paid to them from the judgment sum;

(e) in the event that any part of the judgment sum is not paid to the defendants by counterclaim by reason of paragraph (a) above, Berry Family Law have a lien over the residue of the judgment sum to the extent of its costs;

(f) if no application is made by Ms Deak-Fabrikant within thirty days of the making of these orders to seek to review the costs charged by Berry Family Law, the costs payable to Berry Family Law be fixed at $123,438.30 plus interest incurred since 3 December 2015 pursuant to the terms of the document which is exhibit 'JT-1' to the affidavit of James Turnbull sworn on 12 February 2015;

(g) the balance of the judgment sum is to be paid to Ms Deak-Fabrikant; and

(h) any application by Ms Deak-Fabrikant to have the costs payable pursuant to paragraph (a) above fixed as a gross sum pursuant to rule 63.07(2)(c) of the Supreme Court Rules be filed and served within thirty days of these orders.

8 In relation to (a) above, I consider that Ms DeakFabrikant is entitled to her costs of the proceeding up to the date at which the Grechs conceded that she and Paul Grech were in a de facto relationship, and as such had standing to bring a claim under the Relationships Act. Until that date, Ms DeakFabrikant was forced to prosecute the proceeding on the basis that the Grech parties denied the very existence of the relationship, thus forcing her to incur the cost and inconvenience of obtaining and adducing evidence to prove the existence of the relationship, given that the pleadings included denials of the existence of the relationship, and given the terms of the Notice of Dispute dated 18 January 2013. Of course, the Grech parties disputed the duration of the domestic relationship as set out in the Notice to Admit dated 16 January 2013, but Ms DeakFabrikant was entitled to assume that the Grech parties denied the existence of the relationship in its entirety.

9 It was open to the Grech parties, upon receipt of the Notice to Admit, to respond in a manner which reflected the true nature of their position, that is, that they admitted that Ms Deak-Fabrikant and Paul Grech were in a domestic relationship, but disagreed with Ms Deak-Fabrikant as to its duration. In adopting such a course, the Grech parties would be complying with their obligations under s 23 of the Civil Procedure Act 2010 (Vic) ('Civil Procedure Act') to use reasonable endeavours to narrow the scope of the issues in dispute. While I consider that the Grech parties' conduct in failing to do so would influence my discretion with respect to costs even in the absence of the Civil Procedure Act, I consider that the terms of s 29(1)(a) of the Civil Procedure Act put the matter beyond doubt.

10 In relation to (b) and (c) above, I consider, for reasons to be elaborated upon below, that the offer made on behalf of the Grechs in a letter dated 19 June 2014 ('19 June letter' or '19 June offer', as the case may be), which was to the effect that the Grechs pay Ms DeakFabrikant the sum of $480,000, and expressed to be made in accordance with the principles in Calderbank v Calderbank,[6] was so far in excess of the judgment sum as to warrant making an order for indemnity costs in their favour for costs incurred by them after the 19 June offer lapsed on 12 July 2014, as Ms DeakFabrikant's rejection of that the 19 June offer was unreasonable in all of the circumstances. Further, in relation to the costs of Ms DeakFabrikant's application to reopen the case, that application was largely unsuccessful, and would not have been necessary if Ms DeakFabrikant had conducted the trial of the proceeding in a more orderly and efficient manner.

11 As for paragraph (d) above, it is patently clear from the evidence at trial that Ms DeakFabrikant's only asset of substance is the judgment sum. It would be, in all of the circumstances, particularly given the extent to which the length of the trial was prolonged by reason of the conduct of Ms DeakFabrikant, for the Grechs not to have access to a fund to meet the costs ordered in their favour. In order to expedite matters, I would be willing to entertain an application by Ms Deak-Fabrikant under rule 63.07(2)(c) these costs be fixed in a gross sum, provided that such an application be made within 30 days of the date of these orders.

12 As for (e) above, it is clear upon the terms of the agreement between Ms DeakFabrikant and Berry Family Law and the authorities referred to me by counsel for Berry Family Law, that Berry Family Law is entitled to a lien over the judgment sum. However, on the state of the evidence, I would not be prepared to fix a sum, particularly the sum sought by Berry Family Law at this stage. It was noted by counsel for Ms DeakFabrikant that it may well be that Ms Deak-Fabrikant has a right to review the costs charged by Berry Family Law, notwithstanding the acknowledgment contained in the handwritten document annexed to Mr Turnbull's affidavit. However, while the evidence is deficient in some respects, I note that Berry Family Law acted for Ms Deak-Fabrikant in this proceeding for some two years, and was on the record during the period that Ms Deak-Fabrikant's affidavit evidence was filed, so I am entitled to conclude that their efforts did contribute to Ms Deak-Fabrikant obtaining the judgment sum at trial.

13 That Berry Family Law is entitled to a lien over the judgment sum for its costs is clear from the authorities. As stated succinctly by Campbell J in Firth v Centrelink Pty Ltd ('Firth'):[7]

A solicitor whose efforts result in the recovery of money for his client has an equitable right to have his proper costs and disbursements paid from the money so recovered.

14 This well-established right was also acknowledged by Habersberger J in Simpson v Rowe.[8] The detailed survey of the authorities conducted by Campbell J in Firth[9] make it clear that the solicitor's right exists over both the amount of the judgment in favour of the client, and the amount of an order for costs in favour of the client, and the solicitor need not be still acting for the client at the time the money was recovered.

15 Returning to the question of the effect of the 19 June offer, it is clear on the authorities that the critical question when determining to make an adverse order for costs against a party who rejects an offer which subsequently turns out to be more favourable to the offeree than the result achieved at trial, is whether, in all of the circumstances, it was unreasonable for the offeree to reject the offer at the time it was made. The authorities stress that it is not necessary to find that the rejection of the offer was 'manifestly' or 'plainly' unreasonable, although, if the threshold had been set that high, I expect I would have come to the same conclusion.

16 In the leading Victorian authority on this issue, Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) ('Hazeldene's'),[10] the Court of Appeal considered what matters might ordinarily be taken into account when determining whether the rejection of a Calderbank offer was unreasonable, as follows (citations omitted):

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 state of the proceeding at which the offer was received;

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

(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 OCBC, 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 OCBC, 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 prerequisite 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.

17 For present purposes, the relevant principles that can be distilled from the above are as follows:

(a) while the discretion with respect to costs remains 'at large', the Court should ordinarily have regard to the matters set out in paragraph 25 of the judgment in Hazeldene's;

(b) there is no general rule that the offer must set out with specificity the reason why the offeree should accept the offer, although the presence or absence of such an explanation might be a relevant matter; and

(c) there is no need for the offerer to establish that the offeree has misconducted him or herself in the litigation: the focus of the inquiry is upon the reasonableness or otherwise of the offeree's rejection of the offer.

18 In the current application, counsel for Ms DeakFabrikant submitted that two matters in particular should lead me to conclude that Ms Deak-Fabrikant's rejection of the 19 June 2014 offer was not unreasonable. First, the 19 June letter did not provide any basis upon which the sum of $480,000 was calculated. Further, the 19 June letter did not set out the Grech's contentions as to why rejection of the offer was unreasonable, or provide any commentary upon the strengths and weaknesses of the parties' positions.

19 Given the length and level of detail in the 19 June letter concerning the terms of the offer, I shall not reproduce its contents here. However, it is correct to say that the 19 June letter does not contain any reference to the basis upon which the sum of $480,000 was calculated, or any reasoning regarding why the offer ought to be accepted. It is impossible to say whether the sum of $480,000 represented some proportion of the value of a notional asset pool, or was based upon the Grech's estimation of what might be required to enable Ms DeakFabrikant to acquire a suitable home, or was calculated on some other basis.

20 Counsel for Ms Deak-Fabrikant referred me to some recent authorities considering the reasonableness or otherwise of a party's rejection of a Calderbank offer where the inclusion of a fulsome explanation of the respective merits of the parties' positions contributed to a finding that the rejection of the offer was unreasonable, or where the absence of any such explanation led to the opposite result.[11] However, it is clear from the Court of Appeal's reasoning in Hazeldene's that the matter is not determinative.

21 The absence of such an explanation, or any discussion about the merits of the parties' respective positions may have assumed greater significance if there was a narrower gap between the terms of the 19 June offer and the ultimate outcome at trial. However, the amount payable pursuant to the terms of the 19 June offer exceeded the sum awarded at trial by 87.5 per cent, that is, the value of the 19 June offer was close to double the amount of the judgment sum. This substantial difference, taken with the other relevant matters discussed below, means that the arguable deficiencies in the terms of the 19 June letter assume a lesser significance.

22 There can be no concern about the clarity and detail with which the terms of the offer was expressed, or the time made available to consider the offer. On 27 June 2014, the solicitors for Paul Grech wrote a detailed letter to Ms DeakFabrikant responding to queries raised and comments made by Ms DeakFabrikant in a telephone conversation between her and a solicitor acting on behalf of Paul Grech shortly after service of the offer. The first paragraph of the final section of the letter stated as follows:

In relation to your comments about the validity of the offer of settlement, we confirm that we say the offer is valid and that our client, Paul Grech, intends to rely upon it. In the event that the Offer of Settlement is not accepted by you, and should you not achieve an outcome in the proceeding better than the offer expressed in the Offer of Settlement, Mr Grech will rely upon this offer and make application that you pay his costs from the date of the lapsing of the Offer of Settlement.

23 While no reference was made in this letter to Paul Grech seeking indemnity costs, such an application was expressly foreshadowed in the 19 June letter.

24 The timing of the 19 June offer was significant, being after all of the parties had filed their evidence, and one month prior to the date scheduled for the commencement of the trial. Each of the parties had filed detailed affidavits, and the contents of the affidavits relied upon by the Grech parties made it abundantly clear that the Grech parties disputed the following contentions made by Ms Deak-Fabrikant in her pleadings and evidence:

(a) when the relationship commenced, and whether the parties were in a domestic relationship between 1991 and 1994;

(b) the nature of the commitments and promises made by Paul Grech to Ms DeakFabrikant, particularly with respect to marriage, property, and other financial matters;

(c) the nature and quality of the relationship between Ms DeakFabrikant and Paul Grech, and between Ms Deak-Fabrikant and Stephen Grech;

(d) the extent of the financial and nonfinancial contributions made by Ms DeakFabrikant to any of the five properties and the welfare of Paul and Stephen Grech and other family members;

(e) the events which took place during and immediately after the separation, and the consequences of those events, including the alleged assaults upon Ms DeakFabrikant by Paul and Stephen Grech, and the transfer of the Sanctuary Lakes property to Jelvie Grech;

(f) the circumstances and events surrounding the purchase of the Errol Street, Sanctuary Lakes, Speakmen Street, and Ballarat Road properties;

(g) whether the conduct of Paul, Stephen and/or Jelvie Grech have caused or contributed to the devaluation of the Sanctuary Lakes property and the Errol Street property; and

(h) the level of financial assistance provided by Paul Grech to Stephen and Jelvie Grech (and whether any such assistance was relevant to the issues in this proceeding).

25 With some relatively minor qualifications, I largely found in favour of the Grech parties in each of the factual disputes, substantially as a result of my findings in relation to the credibility of the evidence given by Ms Deak-Fabrikant and the witnesses called on her behalf.

26 Further, the timing of the 19 June offer meant that, if it had been accepted, the Grech parties would have not incurred the substantial legal costs and other expenses connected with the trial of the proceeding, and Ms DeakFabrikant would not have been at risk of being exposed to those costs. At the time the 19 June offer was made, Paul Grech had incurred approximately $30,000 of legal costs with Clancy & Triado, representing approximately ten per cent of the total legal costs ultimately incurred by him. The bulk of the expenses incurred by Stephen and Jelvie Grech which are the subject of the orders I shall make were incurred at the trial. While at the time the 19 June offer was made it could not have been anticipated that the trial would be as protracted as it turned out to be, the estimate was ten days, so it would have been in the knowledge of the parties (Ms DeakFabrikant having been represented in the past) that the legal costs to be incurred in the conduct of the trial would be substantial.

27 Finally, I have no difficulty in forming the view that the terms of the 19 June offer involved a significant element of compromise, in that the offer involved the payment of a substantial cash sum to Ms DeakFabrikant, representing 37.5 per cent of what was found at trial to be the relevant asset pool.

28 One possible argument against the effectiveness of the 19 June offer is that Ms DeakFabrikant was self-represented and could not be expected to take an objective and reasoned assessment of the value of the offer and the consequences of failing to accept the offer. However, this contention is negated by the fact that Ms DeakFabrikant engaged Berry Family Law for the purposes of considering the 19 June offer. In their letter of 11 July 2014, in which they rejected the 19 June offer on behalf of Ms DeakFabrikant, and put forward a counter-offer, Berry Family Law stated that:

a. consider an offer of settlement forwarded by Clancy & Triado dated 19 June 2014;

c. Assist in the machinery provisions if this offer of settlement is accepted.

29 Further, it was apparent from the nature of the queries made by Ms DeakFabrikant of the solicitors for Paul Grech referred to in their letter of 27 June 2014 that Ms DeakFabrikant well understood the terms of the 19 June offer. I am aware that the parties have also participated in at least one mediation.

30 Berry Family Law's 11 July 2014 letter also stated that the counter offer was made 'pursuant to the principles of Calderbank v Calderbank', and was headed 'Without prejudice save as to Costs'. I can infer that this letter was sent upon Ms DeakFabrikant's instructions, and that she understood what was being put. Furthermore, in an earlier letter from Ms DeakFabrikant sent to Collards (the solicitors previously engaged by Stephen and Jelvie Grech) on 27 April 2011 rejecting a settlement offer made by the Grech parties on 5 April 2011, Ms DeakFabrikant stated:

I am aware of the principles (sic) Calderbank offers.

31 I have made a brief reference to the merits of the parties' respective positions as a relevant matter in determining whether rejection of a Calderbank offer was unreasonable. I accept that the Court 'should not too readily embrace submissions that it is inevitable that the proceedings would fail'.[12] Indeed, this statement has particular resonance in family property cases, where the Court is required to take into account a number of statutorily prescribed factors in determining whether any adjustment or provision ought to be made, and if so the magnitude of such an adjustment or further provision. Such cases rarely have 'all or nothing' outcomes. However, Ms DeakFabrikant's claims in this proceeding were overreaching, in particular, her claims to an interest in the Errol Street, Speakmen Street and Ballarat Road properties. She must have appreciated that in order to achieve her objective, the Court would have to accept the evidence of her and her family and friends over that of the Grech parties and their witnesses on a number of key issues, in circumstances where she and her witnesses must have known that their evidence would be incorrect. She had no evidence to put forward to support her speculation that the purchase of the Speakmen Street and Ballarat Road properties was partly funded by Paul Grech.

32 Ms DeakFabrikant's unrealistic and unreasonable position in this litigation is illustrated by the counter offer made by Berry Family Lawyers on her behalf on 11 July 2014, being the transfer of the Altona property to her along with a cash payment of $230,000. The value of that proposal amounted to approximately three quarters of the value of the relevant asset pool, in circumstances where Ms DeakFabrikant ultimately conceded that she had made no material financial contribution to the acquisition of the Altona or Sanctuary Lakes properties, or indeed any of the properties the subject of the proceeding. I accept the submissions advanced on the part of Paul Grech that:

The Court's assessment of the unreasonableness of the rejection of the offers ought have regard to ... the realistic range of outcomes in a de facto property case where Paul owned the Altona and West Heidelberg properties prior to the commencement of the relationship. Altona was at all times unencumbered. Paul worked through the relationship. Larissa did not work at all during the relationship. Paul largely built the Point Cook property. The parties did not have children together. The other three properties were purchased and held in the name of Stephen and Jelvie.

33 Counsel for Ms Deak-Fabrikant submitted that not only should I not find that it was unreasonable for Ms Deak-Fabrikant to reject the 19 June offer (or any of the offers made by or on behalf of the Grech parties), I should not depart from what he described as the 'starting point' in family law matters, that each party ought bear their own costs. Counsel relied upon the following statement of the Court of Appeal in Kenyon v Akeroyd (No 2):[13]

First, a claim under Part IX of the Property Law Act 1958 (Vic) is a singular statutory claim. It is quite different from a claim for damages or a claim for recovery of moneys. Absent agreement, the only means by which domestic partners can achieve finality in the adjustment of their financial interests is by a court order under s 285 of the Property Law Act 1958 (Vic). In most cases the court will be required - as was the case here - to fix the quantum of an asset pool, and determine each party's entitlement and how the assets ought to be distributed. The Court's process can thus seem to be at once necessary and beneficial for both parties.

34 However, it is clear from the remainder of the judgment that the Court of Appeal considered the above as merely a factor to be taken into account, and was not determinative. Further, in the first substantive passage of the judgment, the Court emphasised the fact that the Court's discretion as to costs is absolute and unfettered, albeit to be exercised judicially.

35 In any event, contrary to the submissions advanced on behalf of Ms DeakFabrikant, this proceeding was not just a proceeding about the adjustment of property interests. Ms DeakFabrikant maintained her claim to an interest in the three properties purchased by Stephen and Jelvie Grech or either of them, and maintained her claim that Paul Grech held the Altona and Sanctuary Lakes properties on trust for her. The making and pursuit of these claims (at great cost and expense to the Grech parties) is enough to take this proceeding out of the normal ruck of family law proceedings.

36 For completeness, I reject the contentions advanced by the Grech parties that Ms DeakFabrikant's rejection of the 5 April 2011 offer was so unreasonable as to warrant an adverse costs order against Ms DeakFabrikant after that date, let alone a special costs order. Even if I was to adopt the approach of assessing the offer to pay $250,000 at its current value, it would only be marginally in excess of the judgment sum. The offer was made at a relatively early stage of the proceeding, where there was limited evidence before the parties and the Court, and no valuation evidence, and Ms DeakFabrikant would have quite reasonably believed that the Grech parties' denial of the existence of the relationship was unsustainable. In these circumstances, the absence of any explanation as to how the offer was calculated and why it would be unreasonable to accept the offer assumes substantially greater significance.

37 In some respects, similar considerations apply to the offer made on 24 July 2014 (confirmed by letter on 25 July 2014, and extended by letter on 2 September 2014). The July 2014 offer provided for payment of the sum of $300,000, and was made verbally by counsel for Paul Grech at the conclusion of the fourth day of the trial. The letter of 25 July 2014 was otherwise in the same terms as the 19 June letter. No explanation is provided for the substantial reduction in the quantum of the offer given the short period of time since the 19 June offer lapsed on 12 July 2014. That amount cannot be wholly referable to legal costs (as demonstrated by the contents of the letter of 2 September 2014), and no explanation is provided as to why the progress of the trial to that date should have substantially altered the parties' views about the merits of their respective positions in the proceeding. Such an explanation was probably warranted given the more modest difference between the quantum of the offer and the judgment sum, particularly given Ms Deak-Fabrikant's status as a self-represented litigant.

38 As for the quantum of the costs to be ordered, in the case of Stephen and Jelvie Grech, their costs are direct out of pocket costs and readily ascertainable. As for Paul Grech's costs, I agree that this is an appropriate occasion for the award of indemnity costs, and note the observation made in the affidavit evidence relied upon by Paul Grech regarding the rates charged by counsel and solicitors being well within the amounts allowed by the relevant scale. However, given that there has not been an opportunity to carefully evaluate Paul Grech's claim for costs, I will discount the sum claimed by ten per cent to reflect the risk that there might be a reduction of the costs at a taxation. The reduction is relatively modest given the evidence about the rates charged by the solicitors and counsel, and given that costs have been awarded on an indemnity basis.

39 Finally, if I am held to be wrong regarding the unreasonableness of Ms Deak-Fabrikant's refusal to accept the 19 June offer, and the correct position is that I should start from the position that each party bear their own costs, I would in any event need to make an order for costs which took into account the manner in which Ms Deak-Fabrikant conducted her case. The events of the trial have been canvassed to some extent in earlier rulings.[14] For present purposes, it is sufficient to note that Ms Deak-Fabrikant was absent from court on six listed sitting days, where no progress could be made with the trial, without having applied for an adjournment despite being fully aware of the need to do so. Further, her combative conduct of the proceeding, and determined pursuit of largely irrelevant evidence contributed to the inordinate length of the trial. The original estimate of the trial was ten days. Approximately three to four days was consumed with Ms Deak-Fabrikant's quite reasonable opposition to the adducing of certain medical records into evidence, which was probably not foreseeable at the time the estimate was originally provided. However, if I was called upon to do so, I would have ordered that Ms Deak-Fabrikant pay the Grech parties' costs for the six days she was absent and the proceeding had to be adjourned, along with their costs of the remaining sitting days to the extent that they extended beyond what would have been a reasonable period of time to complete the trial, being fifteen sitting days. Once again, in the event that making such a determination would be outside the usual discretion as to costs, Ms DeakFabrikant's absences from Court and the unduly protracted manner in which she conducted her case at trial would have justified the making of orders under s 29(21) of the Civil Procedure Act to compensate the other parties for Ms Deak-Fabrikant's breach of overarching obligations under sections 19, 20, 23, 24 and 25 of the Civil Procedure Act.

[1] See [2015] VSC 581 [5]. The mode of address and defined terms in this judgment mirror those used in this judgment.

[4] This sum excludes the fees paid for the valuations of the Altona and Sanctuary Lakes properties and the fees paid for the removal of the caveats.

[5] Being ninety per cent of the actual costs incurred by Paul Grech after 12 July 2014.

[6] [1975] 3 All ER 333.

[7] [2002] NSWSC 564; (2002) 55 NSWLR 451, 462.

[8] [2011] VSC 149 [5].

[10] [2005] VSCA 298; [2005] 13 VR 435 [25]-[29].

[11] See Settlement Group Pty Ltd v Purcell Partners (a firm) (No 2) [2014] VSCA 68; Winky Pop & Anor v Mobil & Anor (Costs) [2015] VSC 580; Semmler v Todd (No 2) [2015] VSC 609.

[12] See BHP Billiton (Olympic Dam) Corporation Pty Ltd v Steuler Industriewerke GmbH (No 3) [2012] VSC 414 [63].

[13] [2009] VSCA 168 [6].

[14] See [2014] VSC 581 and [2015] VSC 389.