Bojanic v Tadic [2007] NSWSC 72

New South Wales Supreme Court

CITATION : Bojanic v Tadic [2007] NSWSC 72

HEARING DATE(S) : 8/2/07 JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

EX TEMPORE JUDGMENT DATE : 8 February 2007

DECISION : Terms of compromise between parties to litigation construed.

CATCHWORDS : PROCEDURE [558]- Costs- Co-defendants- Where deed of settlement provided for second defendant to pay "costs of proceedings"- Whether that includes costs of plaintiff's action against first defendant.

CASES CITED : Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (Young J, 15 July 1996, unreported)

Desanka Bojanic (P) PARTIES : Dejan Tadic (D1) Mario Marando (D2)

FILE NUMBER(S) : SC 2065/05

COUNSEL : J Bartos (P) B Shields (D2)

SOLICITORS : Milena Mijatovich (P) Ebsworth & Ebsworth (D2)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Thursday 8 February 2007

2065/05 – BOJANIC v TADIC JUDGMENT 1 HIS HONOUR: This is an application for specific performance of an agreement to settle. Unfortunately, the negotiations were not carried out with due focus on the difficulties of the case and it would seem to me, looking through the correspondence, that in law there was no settlement of the proceedings at all. There is little prospect of agreement on the form of the deed of release, a key factor in the settlement. However, both counsel tell me that I am rather stupid to take that view and that both parties agree that the matter has been settled. Accordingly, I am left to construe a piece of writing, which is quite ambiguous, issued by the solicitors for the second defendant, where both solicitors seem to have different views as to what it means and where neither solicitor really seemed to direct her mind to the problem. 2 The offer of compromise is so expressed that "the second defendant pay to the plaintiff the sum of $X plus costs to be agreed or assessed". 3 The proceedings were in this Division. They are rather odd proceedings, oddly pleaded. The basal allegation is that the first defendant, the plaintiff's son, defrauded the plaintiff, his mother, and that the second defendant was a solicitor who acted for both the mother and the son. He was in breach of his retainer and in breach of his duty "as aforesaid" (para 24) in preparing the documentation and requesting the plaintiff to sign it. The son was alleged to hold the property in trust for his mother because of his obtaining title through fraud. There was also an alternative claim for damages. 4 The son was sued for breach of fiduciary duty, as well as for the tort of deceit. It is a little unclear as to whether the solicitor was sued in tort or contract, but it would seem to me that the better interpretation of the rather odd para 24 is that he was sued in contract. 5 Accordingly, we have the troublesome situation where people combine in the same claim, because the facts arise out of the one event, a claim in tort, contract and breach of fiduciary duty, which under the pure system that existed in the 19th century would have been anathema. Unfortunately, the costs rules were worked out in the 19th century and have not caught up with the modern freer use of pleadings. 6 The difference between the two solicitors is that the plaintiff reckons that the words "costs of the proceedings" mean the costs of her proceedings against both the son and the solicitor. She says that there is one claim and she is entitled to have the whole of her costs, and it is quite artificial to segregate out those properly payable on the issue against the son and those properly payable on the issue against the solicitor. 7 On the other hand, the second defendant says that "costs" means the costs of the claim against the solicitor and only the claim against the solicitor, and they are not prepared to negotiate on the matter. 8 As I have said, I would have thought that both for that reason, the reason that the parties could never agree on the exact form of the deed of release, and for the reason that the second defendant's solicitor never seems to have turned her mind to the fact that as the case against the first defendant was proceeding there might need to be some assignment of the rights of the plaintiff against the first defendant to the second defendant, that there was probably no settlement at all, but as I said, neither party wants me to deal with the matter in that way. 9 What will happen, on the basis that there is a settlement, is that the court will make the orders in accordance with the offer of compromise and its acceptance. The matter will then go to a costs assessor, the costs assessor will doubtless be given a bill by the plaintiff showing the whole of the costs and the second defendant will then argue before the costs assessor the position that he puts up before me. Ordinarily the costs assessor will make his or her determination, and then there will be a review by an Associate Justice and then a judge. That is the way I think I have to leave it. I will make, however, a couple of observations which may assist the costs assessor in his or her determination. 10 As I have said in cases like Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd, 15 July 1996, where you have an action against joint tortfeasors, or you have an allegation that there is a joint contractual liability, then each of the defendants, if found liable, is liable for the whole costs of the suit, even though one of them might play a minor role. If the present proceedings were a proceedings for joint tort then it would be quite clear that the words "costs of the proceedings" meant the whole of the plaintiff's costs. 11 However, the present case is not such a claim. It seems to me that when one looks at the statement of claim there are two distinct claims arising out of the same facts: (a) a claim in deceit and/or breach of fiduciary duty against the first defendant alone; and (b) a claim for contractual negligence against the second defendant alone. In that situation ordinarily where there is a settlement against one party, and an order for costs, the costs only against that party would be obtainable, but the matter is not that simple because in order to sue the solicitor in the present case the plaintiff will have had to carry out investigations. She will have to have obtained evidence of the facts, and the probabilities will be that even though some part of the investigation will be primarily directed towards the case of the first defendant, it was also necessary in order to mount the case against the second defendant. Accordingly, they will be properly payable by the second defendant. I would strongly suspect that the costs assessor will allow the greater part of the whole of the plaintiff's costs against the second defendant, but, as I say, that is a matter for the costs assessor. 12 Both of the motions that have been put here appear to be not ones that I can accede to. The problem appears to be inattention by the lawyers to matters of detail when settling the matter. So I will merely make these observations and dismiss both notices of motion without any order as to costs.