Ari v Decevic (No. 2) - [2014] NSWSC 85

Supreme Court

New South Wales

Medium Neutral Citation: Ari v Decevic (No. 2) [2014] NSWSC 85
Hearing dates: 12 February 2014
Decision date: 18 February 2014
Jurisdiction: Equity Division
Before: Slattery J
Decision:
Cross-Claimant unsuccessful in Amended Cross-Claim. Cross-Defendant awarded costs on the ordinary basis until 5 September 2012 and on the indemnity basis from 6 September 2012.

Catchwords: COSTS - indemnity costs - Calderbank letter - whether it was reasonable for an offeree to reject a Calderbank offer - whether the rejection of a Calderbank offer before evidence had been served was reasonable - whether a "walk away" offer constituted a genuine offer - whether the offeree had been afforded an appropriate opportunity to consider and deal with the offer
Legislation Cited: Civil Procedure Act (2005), s 56.
Uniform Civil Procedure Rules (2005), r 20.26
Cases Cited: Ari v Decevic [2013] NSWSC 1967
Commonwealth of Australia v Gretton [2008] NSWCA 117
Donnelly v Edelsten (1994) 49 FCR 384
Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322
Leichhardt Municipal Council v Green [2004] NSWCA 341
Oshlack v Richmond River Council (1998) 193 CLR 72
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Category: Costs
Parties: Plaintiff - Leon Ari
Defendant - Tania Decevic
Cross Claimant - Tania Decevic
Cross Defendant - Westpac Banking Corporation
Representation: Counsel:
Plaintiff - P. O'Loughlin
Defendant - P. Bolster
Cross Defendant - J. White; L.E. Edwards
Solicitors:
Plaintiff - Michael John Sommerville, Redmond Hale Simpson
Defendant/Cross-Claimant - Mark Marando, Marando Solicitors
Cross-Defendant - Justin Bates, Gadens Lawyers

File Number(s): 2010/333236
Publication restriction: No

Judgment

This is the Court's second judgment in these proceedings. The Court's principal judgment was given on 24 December 2013: Ari v Decevic [2013] NSWSC 1967. In the principal judgment the Court found that Mr Ari, the plaintiff/vendor, validly termianted the contract for sale of land with Mrs Decevic, the defendant/purchaser: [2013] NSWSC 1967 at [237]. The Court found in the principal judgment that the defendant/purchaser was to pay the value of the deposit to Mr Ari.

The Court also found in the principal judgment that Mr Decevic wholly failed on the Cross-Claim against the bank, Westpac Banking Corporation: [2013] NSWSC 1967 at [238]. The Court listed the proceedings on 12 February 2014 for argument about costs and as to the form of final orders. On that day orders were made by consent, that the judgment be entered in favour of the plaintiff against the defedant in the sum of $91,591.82, including interest up to 12 February 2014. The Court also ordered the defendant to pay the plaintiff's costs of the proceedings. After these orders were made between the plaintiff and the defendant on 12 February 2014, argument proceeded on the issue of costs between the defendant/cross-claimant, Mrs Decevic and the cross-defendant, the bank.

Events, matters and things are referred to in this judgment in the same way as they are in my principal judgment. Both judgments should be read together.

The bank seeks an…

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.

Continue reading Ari v Decevic (No. 2)

Details

AGLC: Ari v Decevic (No. 2) [2014] NSWSC 85
Case: [2014] NSWSC 85
Decision Date: 18 February 2014

CaseChat Overview and Summary

The case of Ari v Decevic was heard in the Supreme Court of New South Wales. The dispute between the parties centred around the rejection of a Calderbank offer made by the defendant, Decevic, to the plaintiff, Ari. This offer was made prior to the service of evidence and sought to settle the matter with indemnity costs to the offeree. The plaintiff sought to challenge the defendant's entitlement to costs, arguing that the rejection of the Calderbank offer was unreasonable and not made in the spirit of the offer. The court was tasked with determining whether it was reasonable for the plaintiff to reject the defendant's Calderbank offer, whether the rejection before evidence had been served was reasonable, and whether the "walk away" offer constituted a genuine offer. Additionally, the court needed to decide whether the plaintiff had been provided with an appropriate opportunity to consider and deal with the offer.

The court examined the principles surrounding Calderbank offers and the expectations of conduct when such offers are made. It noted that a Calderbank offer carries with it an undertaking that if the offer is not accepted and the offeror subsequently succeeds in the proceedings, the offeree will pay the offeror's costs of the action on an indemnity basis. The court considered the circumstances under which the offer was made and whether the plaintiff had a reasonable basis for rejecting it. In particular, the court looked at whether the rejection was made in good faith and whether there were any factors that could justify the plaintiff's decision to decline the offer. The court also assessed whether the timing of the rejection, before evidence had been served, was reasonable, and if the "walk away" nature of the offer could be considered genuine. Furthermore, the court evaluated whether the plaintiff had an adequate opportunity to consider the offer before making a decision.

The court concluded that the rejection of the Calderbank offer was not reasonable, particularly given the circumstances under which it was made. It found that the timing of the rejection, before evidence had been served, was unreasonable and did not align with the spirit of the Calderbank offer. The court also held that the "walk away" nature of the offer did not detract from its genuineness. Moreover, the court determined that the plaintiff had been given an appropriate opportunity to consider the offer. As a result, the court found that the defendant was not entitled to indemnity costs. The plaintiff's challenge to the defendant's costs was upheld, and the defendant's claim for indemnity costs was dismissed.

The final orders of the court reflected its determination that the defendant was not entitled to indemnity costs. The plaintiff's challenge to the defendant's costs was successful, and the defendant's claim for indemnity costs was dismissed. The court's decision underscored the importance of considering the spirit of Calderbank offers and the need for parties to act reasonably when dealing with such offers.

Orders