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[2021] NSWSC 271

Stuart Klees v M101 Holdings Pty Ltd

Plaintiff to pay the costs of the third and fourth defendants on an ordinary basis

Catchwords

COSTS – settlement offers – whether non-acceptance of settlement offers made by the fourth defendant warrants ordering indemnity costs against the unsuccessful plaintiff HELD – indemnity costs not warranted because it was not unreasonable for the plaintiff not to accept the offers – no issue of principle

Cases cited

  • Calderbank v Calderbank [1975] 3 All ER 333
  • Stuart Klees v M101 Holdings Pty Ltd[2021] NSWSC 182

Legislation cited

  • Uniform Civil Procedure Rules 2005 (NSW)

Judgment

  1. [1]

    HIS HONOUR: I gave judgment in this matter on 5 March 2021; Stuart Klees v M101 Holdings Pty Ltd [2021] NSWSC 182. The plaintiff failed.

  2. [2]

    With respects to costs I made the following order:

  3. [3]

    On 9 March 2021, the plaintiff removed his solicitor.

  4. [4]

    The third defendant did not give notice that any other order was sought. There is no reason why costs should not follow the event. The plaintiff is to pay the third defendant’s costs.

  5. [5]

    On behalf of the fourth defendant I received written submissions and he relies upon the affidavit of his solicitor Gordon Thomas Grieve sworn 10 March 2021.

  6. [6]

    I have received written communication from the plaintiff and some documentary material relied on by him.

  7. [7]

    I will deal with costs on the papers.

  8. [8]

    The fourth defendant moves for indemnity costs, either from 24 August 2020 when he made a Calderbank offer [1] that the proceedings be discontinued with no order as to costs, each party bear their own costs of the proceedings and the parties enter into a deed of release, or from 23 December 2020 when he made a second Calderbank offer that he pay the plaintiff $60,000, the proceedings be discontinued, each party bear their own costs and the parties enter into a deed of settlement and release incorporating these terms.

  9. [9]

    The fourth defendant did not make any formal offer of compromise under the Uniform Civil Procedure Rules 2005 (NSW) and accordingly does not get the benefit of the presumption in rule 42.15. [2]

  10. [10]

    The first offer does not warrant the ordering of indemnity costs because it involved no real element of compromise but rather called, in effect, for the plaintiff to capitulate and it was not unreasonable for the plaintiff to decline to accept it.

  11. [11]

    The second offer reflected an improvement of $60,000. By letter from the fourth defendant’s solicitors to the plaintiff’s solicitors dated 5 January 2021 the second offer remained open to 27 January 2021.

  12. [12]

    In my view, it also cannot be said that the plaintiff’s failure to accept this offer was unreasonable. Compared to the amount the plaintiff had invested (albeit that he never established the quantum of his damage), the amount offered was very modest and the offer came very close to the hearing. The plaintiff would no doubt have incurred significant legal costs between the dates of the two offers, to the point where I would suspect that the amount is unlikely to have covered even his costs. The offer, in effect, also required his capitulation.

  13. [13]

    In the circumstances, the fourth defendant should have his costs on the ordinary basis.

  14. [14]

    The orders of the Court are:

    1. (1)

      The plaintiff is to pay the costs of

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.