Sekhon & Anor v Chandyoke and Ors [2018] VSC 327 (19 June 2018) T Forrest J.
The plaintiffs were a married couple. The first defendant was the wife’s mother who caveated over a property owned by the couple. The first defendant’s solicitor was separately represented on an application that he personally bear costs. The judge had previously ordered removal of the caveat. The first defendant had been advised by previous counsel that she had no caveatable interest and by her solicitor that there were issues with the caveat, including that there was significant doubt about the caveatable interest and her right to impugned funds. The defendant conceded that there was no proper basis on which she could have defended the application for removal of the caveat but blamed her solicitor.
His Honour held –
1. The defendant was made aware on numerous occasions, by both counsel and her solicitor, that she probably had no caveatable interest over the property, but refused to instruct her solicitor to remove the caveat. Her conduct in the litigation was obstructive and sharp – she demonstrated contemptuous disregard for the litigation. She persisted with a near hopeless case for the collateral purpose of recovering funds she believed to have been stolen from her but which she knew or ought to have known were unrelated to the property. There were special or unusual circumstances sufficient to warrant an order that she pay the plaintiff’s costs of the litigation on an indemnity basis. [39]-[40], [42]
2. To justify an order that the solicitor bear the costs it was unnecessary to establish dishonesty, obliquy or similar – misconduct, default or serious or gross negligence sufficed. Although the solicitor was at times dilatory he acted for a very difficult client, who directly or indirectly obstructed the fair hearing of the caveat withdrawal application. The solicitor on several occasions advised the client in effect that it was very likely she would lose and warning of the consequences. It was also doubtful that the defendant would have taken advice no matter how forceful. The principles applying to the application, whether under r 63.23 of the Supreme Court Rules or s 29 of the Civil Procedure Act showed that a non-party costs order was prima facie unjust, required caution and should only be made in a clear case. This was not such a case. [41]
Sekhon & Anor v Chandyoke and Ors [2018] VSC 435 (7 August 2018) T Forrest J
This case was related to the previous application by the plaintiffs and the first defendant that the first defendant’s solicitor pay costs, which failed in the case referred to above. The solicitor sought indemnity costs based on two offers before the costs hearing:
(a) An offer to the plaintiffs on 23 March 2018 open for five days that the solicitor pay the plaintiffs’ costs of the proceeding fixed in the sum of $7500 within two business days;
(b) An offer to the plaintiffs and the defendant on 14 May 2018 open for five days that the application for costs against the solicitor be dismissed and the plaintiffs and defendant pay his costs of the application fixed in the sum of $6000 with a stay of 30 days.
1. The general rule that costs followed the event applied and so the plaintiffs and the first defendant were liable to pay the solicitor’s costs on a standard basis. These costs would be awarded against the plaintiffs alone from 28 March, being from when it was reasonable for the solicitor to commence preparations for his defence, to 5 April, and against the plaintiffs as to half and the first defendant as to half from 6 April, being the date the first defendant filed a notice of waiver and intention to participate in the costs proceedings. Notwithstanding that the solicitor was dilatory at times this did not justify application of any exceptions to the normal costs rule. His Honour noted – “Solicitors cannot pick and choose their clients and ought not be judged too harshly when the sins of their clients are sought to be visited upon them”. [9]-[11], [16]-[18]
2. Indemnity costs would not be awarded because rejection of the:
(a) first offer was not unreasonable because it preceded any affidavit from the solicitor explaining his conduct; [13]
(b) second offer was not unreasonable because, being an offer to undertake joint liability, neither party could accept the offer alone: they were an unlikely coalition and it would be unfair to penalise one for the unreasonableness of the other. [14]
