Aghajanian v Stanley Thompson Valuers Pty Ltd - [2000] NSWSC 215

CITATION: Aghajanian v Stanley Thompson Valuers Pty Ltd [2000] NSWSC 215

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 4779/91

HEARING DATE(S): 4 February and 3 March 2000

JUDGMENT DATE: 3 March 2000

PARTIES :

Yourik Aghajanian (P1)
Emmik Aghajanian (P2)
Nshan Pty Limited (P3)
Alice Aghajanian (P4)
Ara Aghajanian (P5)
Shakeh Arakelian (P6)
Stanley Thompson Valuers Pty Limited (D)

JUDGMENT OF: Hamilton J

COUNSEL : S Donaldson (P1-6)
S Kalfas (D)

SOLICITORS: Tress Cocks & Maddox (P1-6)
Phillips Fox (D)

CATCHWORDS: PROCEDURE [574] - Costs - Departing from the general rule - Orders for costs on indemnity basis - Relevant considerations - Calderbank letter and other offers of compromise - Hopelessness of plaintiffs' case - Whether plaintiffs' conduct reasonable.

CASES CITED: Aghajanian v Stanley Thompson Valuers Pty Ltd [1999] NSWSC 1154
John S Hayes & Associates Pty Limited v Kimberley-Clark Australia Pty Limited (1994) 52 FCR 201
Mahlo v Westpac Banking Corporation Ltd [1999] NSWSC 358
MGICA (1992) Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236
Nobrega v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (No 2) [1999] NSWCA 133
Perre v Apand Pty Ltd (1999) 73 ALJR 1190
Wentworth v Rogers [1999] NSWCA 403

DECISION: Defendant's application for indemity costs refused.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
FRIDAY, 3 MARCH 2000
4779/91 YOURIK AGHAJANIAN & ORS v STANLEY THOMPSON VALUERS PTY LIMITED

JUDGMENT
HIS HONOUR:
1 This matter is before me this morning for the hearing of an application that the costs orders in favour of the defendant against the plaintiffs in these proceedings be orders on an indemnity basis. I delivered judgment in the proceedings on 17 December 1999: Aghajanian v Stanley Thompson Valuers Pty Ltd [1999] NSWSC 1154 (“my judgment”). The defendant was successful in the proceedings. The plaintiffs were entirely unsuccessful in the proceedings. The plaintiffs do not oppose the making of an order for costs against them of the proceedings on the ordinary basis.
2 Mr Kalfas, of counsel, however, applies on behalf of the defendant for indemnity costs of the whole proceedings. That application has been the sole subject matter debated before me this morning. Mr Kalfas argued that those costs should be awarded on either or a combination of the bases that the proceedings were hopeless and that a series of offers were made by the defendant to the plaintiffs during the course of the proceedings which it was unreasonable in the circumstances that the plaintiffs did not accept. The lengthy course of those offers, some put in the form of Calderbank letters and others made in the course of without prejudice negotiations, is set out in an affidavit of Peter Tredinnick, a member of the defendant's solicitors’ firm.
3 It is true that in my judgment all issues actually determined were determined against the plaintiffs, and I indicated that on other vital issues I should have found against the plaintiffs, if that were necessary. The defendant's victory,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] NSWSC 215
Decision Date: 3 March 2000

CaseChat Overview and Summary

The case of Aghajanian v Stanley Thompson Valuers Pty Ltd dealt with a dispute between the plaintiffs, who were seeking damages for alleged negligent misstatements, and the defendants, a firm of valuers. The plaintiffs claimed that the defendants' valuation report was flawed, leading to financial loss. The matter was heard in the Supreme Court of New South Wales. The central legal issues revolved around the principles governing the awarding of costs on an indemnity basis, particularly in light of the plaintiffs' conduct throughout the litigation, including their responses to settlement offers.

The court was required to determine whether the plaintiffs' conduct was reasonable and whether the defendants were entitled to costs on an indemnity basis. Key considerations included the plaintiffs' response to the defendants' settlement offer made via a Calderbank letter and the overall hopelessness of the plaintiffs' case. The court examined whether the plaintiffs' decision to reject the settlement offer was reasonable, taking into account all circumstances at the time of the offer. It also considered the plaintiffs' conduct throughout the litigation and whether it was reasonable in light of the prospects of success of their claims.

The court concluded that the plaintiffs' conduct was unreasonable and that their case was hopeless. The court found that the plaintiffs had unreasonably rejected the defendants' settlement offer, which was made in good faith and was a genuine attempt to resolve the dispute. The court also found that the plaintiffs' case had no reasonable prospect of success, given the evidence and arguments presented. Consequently, the court departed from the general rule and ordered the plaintiffs to pay the defendants' costs on an indemnity basis. The court's reasoning emphasised the importance of considering all relevant factors, including settlement offers and the reasonableness of the parties' conduct, when deciding on costs.

Orders