Vitek v Estate Homes Pty Ltd

[2010] NSWSC 459

CITATION:	Vitek v Estate Homes Pty Ltd [2010] NSWSC 459
HEARING DATE(S):	27/04/09, 28/04/09, 29/04/09, 30/04/09, 01/05/09, 14/09/09, 15/09/09, 16/02/10, 17/02/10, 18/02/10, 19/02/10 Written submissions: 26/02/10, 02/03/10, 05/03/10 Written submissions on costs: 07/04/10, 15/04/10
JUDGMENT DATE :	14 May 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	As between the plaintiffs/first and second cross-defendants (Viteks) and the first defendant/first cross-claimant (Estate) and the second defendant/second cross-claimant (Siamac Taheri): 1 A declaration that the service by Estate upon the Viteks on 21 October 2004 of a document entitled “Notice of Rescission of Contract for Sale of Land” and bearing date 21 October 2004 constituted a repudiation by Estate of the contract for sale entered into between the Viteks and Estate bearing date 15 September 2003 in respect of the property known as 591 Elizabeth Street, Redfern. 2 A declaration that, by notice dated 22 October 2004, the Viteks accepted the notice dated 21 October 2004 as a repudiation of that contract for sale. 3 A declaration that that contract for sale is at an end. 4 A declaration that the Viteks are entitled to forfeit the deposit paid under that contract for sale. 5 Judgment against Estate and Siamac Taheri in the amount of $570,710 together with interest on that sum at the rate of 10% per annum from 22 October 2004 to the date of judgment and being $310,372. 6 Order that the cross-claim by Estate and Siamac Taheri against the Viteks be dismissed. 7 Order that Estate and Siamac Taheri pay the costs of the Viteks to be assessed on the indemnity basis. As between Estate and Siamac Taheri on the one hand and the third cross-defendant (Bernard O’Donnell) on the other hand: 8. Order that the cross-claim by Estate and Siamac Taheri against Bernard O’Donnell be dismissed. 9. Order that Estate and Siamac Taheri pay the costs of Bernard O’Donnell: (a) to be assessed on the ordinary basis to 29 February 2008; and (b) to be assessed on the indemnity basis on and from 1 March 2008.
CATCHWORDS:	PROCEDURE - costs - indemnity costs - no question of principle
CATEGORY:	Consequential orders
CASES CITED:	Vitek v Estate Homes Pty Ltd [2010] NSWSC 237
PARTIES:	Peter Vitek - First Plaintiff/First Cross-Defendant Shoshana Vitek - Second Plaintiff/Second Cross Defendant Estate Homes Pty Limited - First Defendant/First Cross-Claimant Siamac Taheri - Second Defendant/Second Cross-Claimant Veeda Taheri - Third Defendant - Third Cross-Claimant Bernard O'Donnell - Third Cross-Defendant
FILE NUMBER(S):	SC 2005/258339
COUNSEL:	Mr S D Robb QC - Plaintiffs Mr J S Van Aalst - Defendants Mr G P Craddock SC - Third Cross-Defendant
SOLICITORS:	Charles G Roth - Plaintiffs John Hertz & Associates - Defendants HWL Ebsworth Lawyers - Third Cross-Defendant

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

FRIDAY, 14 MAY 2010

2005/258339 PETER VITEK & ANOR v ESTATE HOMES PTY LTD & 2 ORS

JUDGMENT

1 Following delivery of reasons on 31 March 2010 (Vitek v Estate Homes Pty Ltd [2010] NSWSC 237), I made directions for written submissions on costs.

2 Submissions have been received from counsel for Mr and Mrs Vitek and counsel for Mr O’Donnell. No submissions have been received from Estate Homes and Mr Taheri. My Associate sent several follow up messages to the solicitors and counsel for those parties but they produced no result beyond a statement by counsel that he assumed his clients did not wish him to put any submissions to the court.

3 I proceed to decide the question of costs by reference to the submissions of Mr and Mrs Vitek and Mr O’Donnell. I consider this to be the proper course since more than adequate opportunity given to Estate Homes and Mr Taheri has not been taken up by them.

4 Mr and Mrs Vitek are clearly entitled to costs as against Estate Homes and Mr Taheri on the footing that costs follow the event. Mr and Mrs Vitek say that their costs should be assessed on the indemnity basis after 7 February 2005 which includes all costs incurred by them in the proceedings.

5 This submission is based on a settlement offer made as long ago as 31 January 2005. The proposal was that Estate Homes and Mr Taheri (also Mrs Taheri, who was then a party) pay Mr and Mrs Vitek $210,000 plus the costs of and incidental to the contract and its termination. The offer was stated to be open for seven days. It was not accepted.

6 In light of the result – which was judgment against Estate Homes and Mr Taheri for $570,710 plus interest of $310,372 – non-acceptance of the offer must be viewed as unreasonable in the sense relevant to the award of indemnity costs.

7 Mr O’Donnell successfully resisted the cross-claim pressed by Estate Homes and Mr Taheri. He is accordingly entitled to a costs order.

8 Mr O’Donnell submits that the costs awarded to him should be assessed on the indemnity basis. Mr O’Donnell relies on an offer of compromise served on 29 February 2008. Mr O’Donnell offered to settle on the basis of a verdict for him on the cross-claim but with him bearing his own costs to that date.

9 It is submitted on behalf of Mr O’Donnell that this offer involved a substantial compromise by him. Moreover, the offer was made after a complete exchange of evidence and at a time when Mr Taheri, for himself and Estate Homes, was able to appreciate the coherence and documentary corroboration of Mr O’Donnell’s position and to contrast it with his own case.

10 I accept those submissions. It was, in the relevant sense, unreasonable for Estate Homes and Mr Taheri not to accept the offer of compromise.

11 Costs will be awarded to Mr and Mrs Vitek against Estate Homes and Mr Taheri and to Mr O’Donnell against Estate Homes and Mr Taheri. It will also be ordered that the costs awarded to Mr and Mrs Vitek be assessed on the indemnity basis in their entirety and that the costs awarded to Mr O’Donnell be assessed on the ordinary basis up to 29 February 2008 and on the indemnity basis from 1 March 2008.

12 The orders I now make are:

As between the plaintiffs/first and second cross-defendants ( Viteks ) and the first defendant/first cross-claimant ( Estate) and the second defendant/second cross-claimant ( Siamac Taheri ) :
1. A declaration that the service by Estate upon the Viteks on 21 October 2004 of a document entitled “Notice of Rescission of Contract for Sale of Land” and bearing date 21 October 2004 constituted a repudiation by Estate of the contract for sale entered into between the Viteks and Estate bearing date 15 September 2003 in respect of the property known as 591 Elizabeth Street, Redfern.

2. A declaration that, by notice dated 22 October 2004, the Viteks accepted the notice dated 21 October 2004 as a repudiation of that contract for sale.

3. A declaration that that contract for sale is at an end.

4. A declaration that the Viteks are entitled to forfeit the deposit paid under that contract for sale.

5. Judgment against Estate and Siamac Taheri in the amount of $570,710 together with interest on that sum at the rate of 10% per annum from 22 October 2004 to the date of judgment and being $310,372.

6. Order that the cross-claim by Estate and Siamac Taheri against the Viteks be dismissed.

7. Order that Estate and Siamac Taheri pay the costs of the Viteks to be assessed on the indemnity basis.

As between Estate and Siamac Taheri on the one hand and the third cross-defendant (Bernard O’Donnell) on the other hand:

8. Order that the cross-claim by Estate and Siamac Taheri against Bernard O’Donnell be dismissed.

9. Order that Estate and Siamac Taheri pay the costs of Bernard O’Donnell:

(a) to be assessed on the ordinary basis to 29 February 2008; a nd

(b) to be assessed on the indemnity basis on and from 1 March 2008.

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