Abbott v Klein (No 2)

Case [2015] NSWDC 83

District Court


New South Wales

Medium Neutral Citation: Abbott v Klein (No 2) [2015] NSWDC 83
Hearing dates:13 May 2015
Date of orders: 13 May 2015
Decision date: 13 May 2015
Jurisdiction:Civil
Before: P Taylor SC DCJ
Decision:

The defendant to pay the plaintiff’s costs of the proceedings assessed on an ordinary basis up to and including 2 August 2013 and thereafter assessed on an indemnity basis.

Catchwords: COSTS – offer of compromise – 5% discount – whether genuine element of compromise – without prejudice offer for payment by instalments – withdrawn before debt payable and before proceedings commenced – not in form of Calderbank offer – whether Rule 42.14 applied – whether alternative order should be made
Legislation Cited: Uniform Civil Procedure Rules 2005, Part 20, r 42.1, r 42.14
Cases Cited: Abbott v Klein [2015] NSWDC 45
Amaca Pty Ltd v Hicks (No 2) [2011] NSWCA 360
Commonwealth of Australia v Gretton [2008] NSWCA 117
Connor v Hatgis (No 2) [1995] NSWCA 92
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721
Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344
Nobrega v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (No. 2) [1999] NSWCA 133
Old v McInnes and Hodgkinson [2011] NSWCA 410
Prosperity Advisers Pty Ltd v Secure Enterprises Pty Ltd (t/as Strathearn Insurance Brokers) [2012] NSWCA 192
Whitney v Dream Developments Pty Ltd [2013] NSWCA 188
Category:Principal judgment
Parties: Adrian Howard Abbott (plaintiff)
Peter Klein (defendant)
Representation:

Counsel:
Mr S Goodman (plaintiff)
Mr B Zipser (defendant)

Solicitors:
Rankin Ellison Lawyers (plaintiff)
Reid & Vesely Solicitors (defendant)
File Number(s):2013/73638
Publication restriction:None

Judgment

  1. On 16 April 2015 I gave judgment in favour of the plaintiff, Adrian Abbott, for $115,610 and reserved the question of costs: see Abbott v Klein [2015] NSWDC 45. The claim was based upon a deed which provided for payment of $100,000 on or before 15 December 2012.

  2. Mr Abbott applied for an order for indemnity costs from 3 August 2013. He relies on an offer of compromise dated 2 August 2013, some five months approximately after proceedings were commenced. By it Mr Abbott offered to settle the proceedings by the defendant, Peter Klein, paying Mr Abbott $100,000. That offer was not accepted.

  3. The offer met the formal requirements of an offer of compromise under Part 20 of the Uniform Civil Procedure Rules 2005. Under Rule 42.14, unless the Court otherwise orders, Mr Abbott is entitled to the order he seeks because the judgment he obtained was no less favourable than the offer of compromise.

  4. Mr Klein resists Mr Abbott’s application on the basis that the offer of compromise does not represent a genuine compromise. Mr Klein seeks an order that each party pay his own costs, and in that regard relies upon a written offer he made. His offer to Mr Abbott, admitted without objection, was dated Friday, 9 November 2012 and was in the following terms:

“Without…

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AGLC
Abbott v Klein (No 2) [2015] NSWDC 83
Case
[2015] NSWDC 83
Decision Date

CaseChat Overview and Summary

In Abbott v Klein (No 2), the court was asked to consider the issue of costs in the context of an offer of compromise made by the defendant, Klein. The plaintiff, Abbott, sought costs on an indemnity basis, while Klein argued for a 5% discount from the ordinary basis. The crux of the dispute centred on whether the defendant's offer contained a genuine element of compromise, particularly given that it was not in the form of a Calderbank offer and was withdrawn before the debt was payable and before proceedings were initiated. The court was required to determine whether Rule 42.14 of the Federal Court Rules applied and whether an alternative order should be made.

The legal issues before the court included the interpretation and application of Rule 42.14, which deals with offers of compromise, and whether an offer that is not a Calderbank offer and is withdrawn under specific circumstances can still be considered a genuine offer of compromise. Additionally, the court had to consider the appropriate basis for assessing costs when an offer of compromise has been made, especially when that offer does not strictly adhere to the conditions set out in the rules.

The court found that the defendant's offer, while not a Calderbank offer, still constituted a genuine element of compromise due to its nature and timing. The fact that it was withdrawn before the debt became payable and before proceedings commenced did not negate its genuineness. However, the court concluded that Rule 42.14 did not apply in this instance because the offer did not meet the formal requirements. Instead, the court determined that an alternative order was appropriate. It awarded the plaintiff costs assessed on an ordinary basis up to and including 2 August 2013, and on an indemnity basis thereafter.

The final orders of the court were that the defendant, Klein, was to pay the plaintiff, Abbott's, costs of the proceedings, assessed on an ordinary basis up to and including 2 August 2013, and thereafter assessed on an indemnity basis. This decision highlights the nuanced considerations the court must undertake when evaluating offers of compromise and determining the appropriate costs order.

Orders

Orders of the court

The defendant to pay the plaintiff’s costs of the proceedings assessed on an ordinary basis up to and including 2 August 2013 and thereafter assessed on an indemnity basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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