Calokerinos, Executor of the Estate of the late George Sclavos v Aantcorp Pty Ltd (No 2)

The Court published its primary judgment in respect of the issues that remained for determination by the Court on 27 February 2023: Calokerinos, Executor of the Estate of the late George Sclavos v Aantcorp Pty Ltd [2023] NSWSC 148 (“J”).

The Court's orders for costs made in the primary judgment left open a question concerning what I described in order 3 as "the relevant proportion" of the fourth defendant, Gokan Yesilhat’s, costs. Relevantly, orders 3 and 4 were as follows:

The reasons for the reference to "the relevant portion" in orders 3 and 4 will be found in J [90]-[92], which I will now repeat for convenience:

The structure of order 3 made in the primary judgment is that it requires Ms Calokerinos to pay to Gokan Yesilhat the relevant proportion of his costs. As no order for costs was made for the period up to 22 May 2019, the relevant portion will have no operation for that period. It will only operate for the period referred to in sub-orders (b) and (c), in respect of which Ms Calokerinos was ordered to pay Gokan Yesilhat's costs on the ordinary and indemnity bases respectively.

I formulated order 3 in terms of "the relevant proportion of his costs” on the basis that Gokan Yesilhat was jointly liable with Okan Yesilhat and Australia’s Best Tyre & Auto Pty Ltd (“ABT”) for the whole of the costs incurred by the three defendants, who were at times jointly represented. The object of order 4 was to determine the fair proportion of the whole of the cost that Ms Calokerinos should be ordered to pay Gokan Yesilhat. I had accepted that the approach adopted by Slattery J in the order set out in J [90] was in principle fair and appropriate in the circumstances. That was particularly so because Gokan Yesilhat was not the primary defendant of the three defendants.

In Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos (No. 4) [2020] NSWSC 1044 (“Judgement (No 4)”), from which order 3 above was extracted, Slattery J said at [61]:

It did not necessarily follow that the appropriate proportion in these proceedings would be the same as that which Slattery J decided was the case in the proceedings that were before him.

Consequently, what I envisaged was that Ms Calokerinos and Gokan Yesilhat would each propose a single proportion, and then provide submissions to justify that proportion.

Ms Calokerinos delivered written submissions in response to the Court's invitation that were dated 6 March 2023. Ms Calokerinos' submissions proposed that she would be ordered to pay Gokan Yesilhat 7.5% of the common costs incurred by all three defendants for the period for which she was ordered to pay his costs on the ordinary basis, being from 22 May 2019 to 11 August 2020. Ms Calokerinos did not propose a single proportion for the subsequent period for which she would be required to pay Gokan Yesilhat's costs on the indemnity basis. Instead, she proposed that his costs be paid as to 7.5% of the common costs between 12 August 2020 and 21 July 2021 and 15% of the common costs for the period 22 July 2021 to 27 February 2023, which was the date that the primary judgment was delivered.

It appears from par 9 of Ms Calokerinos’ written submissions that the date 21 July 2021 for the change from 7.5% to 15% was chosen on the basis that most of the court time and written submissions after 21 July 2021 related to the contempt application. That does not appear to me to be an appropriate date to change the relevant proportion in relation to the costs of the proceedings generally, because order 5 made on 27 February 2023 was an entirely separate costs order for the costs of the notice of motion filed on 5 August 2021 in which Ms Calokerinos alleged contempt of court against Gokan Yesilhat.

Ms Calokerinos' submission did not provide a clear basis for her proposed proportions of 7.5% and 15%. Ms Calokerinos made a series of assertions that were based upon Ms Calokerinos' view of the merits of Gokan Yesilhat's involvement in the events the subject of Slattery J's judgments and his conduct of the present proceedings. Ms Calokerinos' adoption of the proportion of 7.5% for the first period is evidently taken from order 3 made by Slattery J in Judgment (No 4) that has been referred to above. However, Ms Calokerinos has not provided any explanation as to why the proportionate involvement of Gokan Yesilhat that seemed appropriate to Slattery J in the proceedings determined by his Honour should be translated to Gokan Yesilhat's involvement in the present proceedings.

Gokan Yesilhat provided written submissions dated 13 March 2023. He started from the proposition that, in the absence of a rational evidentiary basis for distinguishing the position of three defendants who were jointly liable for the whole of their common legal costs, the appropriate approach was for the Court to treat the three defendants as being equally liable. Accordingly, Gokan Yesilhat proposed that the relevant proportion should be one third for the period 22 May 2019 to 11 August 2020. That was the period for which all three defendants were active in defence of the proceedings.

As ABT was placed into liquidation on 29 September 2020, and accordingly the proceedings against it were stayed from that date, there were two active defendants rather than three. Gokan Yesilhat proposed that the relevant proportion should be one half for the period between 30 September 2020 and 7 June 2021 during which there were two active defendants.

As the proceedings were stayed against Okan Yesilhat on 7 June 2021, by reason of the sequestration of his estate in bankruptcy, Gokan Yesilhat was left as the sole active defendant from that time. Consequently, Gokan Yesilhat proposes that Ms Calokerinos be ordered to pay 100% of his costs from 9 June 2021.

I accept Gokan Yesilhat's submission that, in these proceedings – whatever the position may have been in the related proceedings decided by Slattery J – there is nothing in the pleadings nor in the conduct of the case to distinguish between the conduct of the three defendants for the purpose of determining the appropriate relevant proportion.

In the circumstances, the proper course is for the Court to make the orders proposed by Gokan Yesilhat.

As already noted, order 3 made on 27 February 2023 contemplated that there would be only one relevant proportion. However, I have now accepted a submission that will have the effect that there will be different relevant proportions for three separate periods. It will therefore be necessary for the Court to vary the orders made on 27 February 2023.

The orders of the Court are: