Kayteal Pty Limited v John Joseph Dignan (Costs)

[2011] NSWSC 398

Supreme Court

New South Wales

Medium Neutral Citation:	Kayteal Pty Limited v John Joseph Dignan & ors (Costs) [2011] NSWSC 398
Hearing dates:	24 March 2011
Decision date:	24 March 2011
Jurisdiction:	Common Law
Before:	Brereton J
Decision:	Plaintiff to pay defendant's costs from time of offer of settlement.
Catchwords:	COSTS - defendants offer of compromise prior to hearing - offer not accepted - plaintiff obtains judgment less favourable than offer - plaintiff to pay defendant's costs from time of offer.
Legislation Cited:	Uniform Civil Procedure Rules 2005, r 20.62, r 41.15
Cases Cited:	Kayteal v Dignan [2011] NSWSC 197
Category:	Consequential orders
Parties:	Kayteal Pty Ltd (plaintiff) John Joseph Dignan (1st defendant) John Dignan Real Estate Pty Ltd (2nd defendant) Home Wilkinson Lowry Solicitors (3rd defendant)
Representation:	Counsel: Mr GF Grinter (plaintiff) Mr Dimento (solicitor) (third defendant) Solicitors: O'Brien Lawyers (plaintiffs) Curwood Lawyers (third defendant)
File Number(s):	2007/265171

Judgment ( ex tempore )

1. HIS HONOUR: On 23 June 2010, a little more than a month before the commencement of the trial on 26 July 2010, the third defendants by their solicitors made an offer of compromise to the plaintiff pursuant to Uniform Civil Procedure Rules 2005, r 20.26, offering to pay - in respect of the plaintiff's claim against them - $200,000 plus costs as agreed or assessed. The offer was expressed to be open for acceptance for a period of 21 days. It was not accepted. It was made under cover of a letter of the same date, which summarised the major difficulties in the defendant's case, and specifically drew attention to the proportionate liability defence.

1. Given the range within which liability has been apportioned to negligent solicitors in the context of mortgage and similar transactions where there has been a fraudulent concurrent wrongdoer, as summarised in the principal judgment [ Kayteal v Dignan [2011] NSWSC 197, [71]], the apportionment of 12.5% which I reached ought not have been a surprising one. The offer of $200,000 implies an apportionment of almost 20%, which would have been significantly above that range.

1. UCPR r 42.15 provides as follows:

(1) This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim concerned as favourable to the plaintiff, or less favourable to the plaintiff, than the terms of the offer.

(2) Unless the court orders otherwise:

(a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and

(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis:

(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii) if the offer was made on or after the first day of the trail, as from 11 am on the day following the day on which the offer was made.

1. It seems to me that, having made the offer, there was nothing further the defendants could reasonably have done to avoid the costs of a trial. It was manifestly one significantly more favourable to the plaintiff than the result ultimately obtained. To my mind, there is no reason for making an "otherwise order" for the purposes of r 42.15(2).

1. Accordingly, I order that the third defendant pay the plaintiff's costs, assessed on the ordinary basis up to and including 23 June 2010. I order that the plaintiff pay the third defendant's costs, assessed on the indemnity basis, from 24 June 2010.

1. I direct that the exhibits be returned at the expiration of 28 days, unless by then a notice of intention to appeal or notice of appeal has been filed.

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