Bakovski v Lenehan (No 2) - [2014] NSWSC 739

Supreme Court

New South Wales

Medium Neutral Citation: Bakovski v Lenehan (No 2) [2014] NSWSC 739
Hearing dates: On written submissions
Decision date: 02 June 2014
Jurisdiction: Common Law
Before: Hall J
Decision:
(1) Judgment entered in favour of the plaintiffs against the first and second defendants in the sum of $444,772.92.
(2) The first and second defendants are to pay the plaintiffs' costs of the proceedings as against the first and second defendants, such costs to be assessed:
(a) On the ordinary basis in respect of the period up to and including 21 February 2013; and
(b) On the indemnity basis in respect of the period from 22 February 2013 to the date of judgment.

Catchwords: COSTS - Calderbank offer - defendants unreasonably refused plaintiffs' offer - costs awarded on an indemnity basis from the date of offer
Cases Cited: Bakovski v Lenehan [2014] NSWSC 671
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298
Jones v Trad (No 3) [2013] NSWCA 463
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
SMEC Testing Services Pty Limited v Campbelltown City Council [2000] NSWCA 323
Category: Costs
Parties: George Bakovski (First Plaintiff)
Vera Bakovski (Second Plaintiff)
Norman Rutherford Lenehan t/as Lenehan & Co (First Defendant)
James Socrates Arkoudis (Second Defendant)
Representation: Counsel:
E Finnane (Plaintiffs)
G Curtin SC (Defendants)
Solicitors:
Uther Webster & Evans (Plaintiffs)
Gilchrist Connell (Defendants)

File Number(s): 2010/269931

Judgment (ex tempore)

In this matter I delivered judgment on 27 May 2014: Bakovski v Lenehan [2014] NSWSC 671.

I made provision in the judgment for further submissions to be made in relation to matters concerning interest calculations and costs.

I have had the benefit of written submissions on behalf of Mr Finnane of Counsel who appeared for the plaintiffs and Mr Curtin SC who appeared for the defendant.

The plaintiff's solicitor, Mr Maksisi, has sworn an affidavit in these proceedings on 30 May 2014. The affidavit was read on the application on the issues this morning, in particular, going to the question of costs. That affidavit was read without objection and Mr Maksisi was not required for cross-examination on his affidavit.

I can say at the outset that the affidavit, I think, has been acknowledged, certainly it is my assessment, as being a model affidavit in terms of endeavouring to provide the Court with detail and analysis of costs with full annexures which I have had the opportunity of considering. The affidavit material has assisted in crystallising the matters that need to be determined so far as costs are concerned.

There is no issue as to the calculation in respect of the judgment sum that is to be entered with interest calculations made up until today, that is, judgment in the amount of $444,772.92 as set out in paragraph [1] of the draft short minutes entitled "Judgment".

Accordingly, I propose to enter judgment in that amount in favour of the plaintiff against the first and second defendants, and…

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 Bakovski v Lenehan (No 2)

Details

AGLC: Bakovski v Lenehan (No 2) [2014] NSWSC 739
Case: [2014] NSWSC 739
Decision Date: 02 June 2014

CaseChat Overview and Summary

The appeal concerns a dispute between Bakovski, the plaintiff, and Lenehan, the defendant, regarding costs incurred in litigation. The case was heard in the Supreme Court of South Australia. The plaintiff, Bakovski, sought an order that the defendants pay his costs on an indemnity basis from the date of his Calderbank offer. The defendants, Lenehan, had unreasonably refused this offer, leading to the plaintiff's application for costs.

The central issue before the court was whether the defendants' refusal of the plaintiff's Calderbank offer was reasonable. A Calderbank offer is a settlement offer made without prejudice to the costs consequences, which can be used as a basis for an indemnity costs order if the offer is unreasonably refused and the offeror ultimately succeeds. The court had to determine whether the defendants' refusal was unreasonable and, if so, whether the plaintiff was entitled to indemnity costs from the date of the offer.

The court found that the defendants had unreasonably refused the plaintiff's Calderbank offer. The offer was reasonable in its terms, and the defendants had no valid reason to reject it. As a result, the plaintiff was entitled to an indemnity costs order from the date of the offer. The court emphasised that unreasonable refusal of a Calderbank offer could lead to significant financial consequences for the refusing party. The plaintiff's success in the litigation further justified the indemnity costs order.

In conclusion, the court awarded the plaintiff indemnity costs from the date of the Calderbank offer. The defendants' unreasonable refusal of the offer was the primary factor in this decision. The court's ruling underscores the importance of considering Calderbank offers carefully, as unreasonable refusals can have substantial cost implications.

Orders