Bata v Reetaj Investments Pty Ltd (No 2)
[2025] VCC 15
•29 January 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-20-04723
| MARK BATA | Plaintiff/Defendant by Counterclaim |
| V | |
| REETAJ INVESTMENTS PTY LTD & ORS (according to the attached schedule) | Defendants/Plaintiff by Counterclaim |
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JUDGE: | HER HONOUR JUDGE A RYAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers - written submissions received 9, 19 and 23 December 2024 | |
DATE OF RULING: | 29 January 2025 | |
CASE MAY BE CITED AS: | Bata v Reetaj Investments Pty Ltd & Ors (No 2) | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 15 | |
RULING
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Subject:PRACTICE AND PROCEDURE – COSTS
Catchwords: Whether indemnity costs order should be made following rejection of a Calderbank offer – whether costs should be apportioned or there be no order as to costs – calculation of interest payable on judgment debts
Legislation Cited: Transfer of Land Act 1958; Penalty Interest Rates Act 1983; County Court Civil Procedure Rules 2018
Cases Cited:APN Funds Management Ltd v Australian Property Investments Strategic Pty Ltd (Costs) [2012] VSC 365; Berrigan Shire Council v Ballerini (No 2) [2006] VSCA 65; Chen & Chan & Ors [2009] VSCA 233; Hazeldene’s Chicken Farming Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; Nom De Plume Nominees Pty Ltd v Fingal Developments Pty Ltd [2016] VSCA 233
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P W Lithgow | Starnet Legal |
| For the Defendants | Mr A J Purton | Moray & Agnew |
HER HONOUR:
1On 2 December 2024, I delivered reasons for judgment (“the principal reasons”). These reasons assume familiarity with the principal reasons and adopt the same terminology. The plaintiff failed to establish his claims relating to the award of a building and engineering contract. I found in his favour in respect of sums owing under two loan agreements entered into with the first defendant. I dismissed the first defendant’s counterclaim.
2The parties were directed to file and serve submissions regarding the form of orders to be made consequent upon the judgment, including costs, if agreement could not be reached. The parties filed submissions dated 9, 19 and 23 December 2024. The issues that arise for determination are:
(i) the amount of interest payable on the debt claims;
(ii) the effect of a Calderbank offer;
(iii) whether costs should be apportioned on issues or there be no order as to costs; and
(iv) whether the third defendant, Mr Amer should be awarded 100 percent of his costs.
(1) Interest payable on debt claims
3A summary of the interest claimed for each of the debts under the first and second loan agreements was set out on page 4 of the plaintiff’s submissions dated 9 December 2024. The interest amounts were calculated pursuant to the terms of the respective loan agreements. The plaintiff seeks judgment for the amounts due and payable under both loan agreements, together with interest, being a total of $115,519.16.
Interest claimed under first loan agreement
4Although the principal under the first loan agreement was repaid, I found that the amount of $50,000 representing an agreed figure for interest was not repaid. The plaintiff seeks interest on this amount. The plaintiff claims interest from 1 May 2018 to 2 December 2014 at the rate of 14 percent to arrive at a total of $46,161.64.
5Under the terms of the first loan agreement, the plaintiff contends that the principal sum, together with interest, was due on 30 April 2018. The amount of interest payable was agreed at 4 percent higher than the rate for the time being fixed under s2 of the Penalty Interest Rates Act1983. Clause 6(d) of the first loan agreement provides that interest on the balance of all money due and owing shall accrue from the date of a default notice until rectification of the said default.
6The plaintiff relies upon a default notice served on 26 April 2018. In accordance with clause 10(b) of the first loan agreement, it was taken to be received two business days after posting, namely, Monday, 30 April 2018.
7In addition, the plaintiff requested payment from the first defendant’s solicitors, Souki Lawyers, by text message on 1 May 2018, itself being notice in accordance with the agreement being an electronic communication. Pausing here, I am not satisfied that the text relied upon by the plaintiff amounted to a valid notice as it did not comply with requirements for notices set out in clause 10 of the first loan agreement.
8The defendants submitted that the critical date for payment of default interest is the date the plaintiff served the default notice. This was an issue between the parties. The plaintiff alleged it was served on 26 April 2018 which is denied by the defendants. Mr Amer said in his witness statement that he did not receive the notice until it was provided to him by the plaintiff in the Supreme Court proceeding commenced by the first defendant in December 2020 to remove the plaintiff’s caveats. The defendants contend the plaintiff failed to produce any evidence at trial as to service of the notice, nor did he cross-examine Mr Amer on this issue.
9The defendants argue that the service of the default notice should be found to have occurred on 24 January 2021, being the date upon which Mr Amer said he first became aware of the notice. On that basis, if interest is calculated from that date onwards to 2 December 2024, then the default interest payable is $27,02.74.
10The plaintiff notes the defendants’ case had been that nothing was owed because of the alleged payment of $125,000. There was no requirement to put the matter of service of the default notice in those circumstances to Mr Amer in cross-examination. At the time, he was not a director of the first defendant. The plaintiff argued that only the second defendant could give evidence about the default notice received by the first defendant to the extent it was not a matter directed to the first defendant’s lawyers, Souki Lawyers. The second defendant was not called as a witness in a documentary case on a matter that was clearly in issue. If the first defendant had a contrary case, it was incumbent upon it to put that forward as part of a positive denial in giving evidence by way of witness statement. According to the plaintiff, the fact that Mr Amer had offered to pay $25,000 in late payment showed an awareness that the first defendant knew it was in default of late payment.
11Pursuant to the terms of the agreement, interest is payable following service of a default notice. The default notice relied upon by the plaintiff was put into evidence. The defendants pleaded in paragraph 22 of their defence that they did not receive a copy of the notice until 24 January 2021 when a copy was provided in the caveat proceeding in the Supreme Court. Mr Amer gave evidence to that effect in his witness statement. The plaintiff was cross-examined about the default notice. He did not agree with the proposition put to him that it was prepared by him at a much later date. Therefore, there is a conflict on this topic in the evidence led at trial.
12Overall, I am not persuaded that the defendants rebutted the presumption that the default notice was validly served in accordance with the terms of the first loan agreement. I accept and prefer the plaintiff’s evidence that he drew the default notice and served it on 26 April 2018. There was no suggestion made that the address for service of the first defendant was incorrect. There is no reason to doubt that the notice would have been received in the post in the usual way. The mere fact that the third defendant claimed not to have seen the notice of default until January 2021 is not necessarily probative of the allegation that it was not received by the first defendant at the relevant time. The third defendant was not a director of the first defendant in April 2018. The second defendant, who was then a director, was not called to give evidence. There was no direct evidence given on behalf of the first defendant to the effect that the default notice was not received by the first defendant at the relevant time. Having regard to the evidence given at trial and the submissions made, I am satisfied that interest under the first loan agreement on the amount outstanding of $50,000 should be calculated from 1 May 2018.
13In addition, the plaintiff seeks to recover interest representing interest owing on the late payment of principal. Paragraph 16 of the plaintiff’s submissions dated 9 December 2024 sets out calculations of interest claimed for the late payment of principal, totalling $11,506.84.
14The plaintiff refers to clause 5 of the first loan agreement, which provides that “the borrower shall be liable to pay the full monthly interest even where the whole of the principal sum paid prior to the end of the 30 days period from the date of this agreement”. The principal payments were made on 14 and 25 June 2019 and consequently the plaintiff argues that interest should be calculated at the end of that month, namely 30 June 2018. This clause is headed “Early Repayment” with the result that I do not consider this clause to be applicable as the payments of principal made were late and after the due date.
15The defendants contest the plaintiff’s entitlement to claim interest on the late payment of principal. They argue this is not what the Court ordered. The plaintiff is only entitled to interest on the late payment of the $50,000 interest component and not for any late payment of the principal amount.
16In response to this submission, the plaintiff notes that the Court had asked for submissions from the parties regarding the orders to be made consequent upon the principal reasons, and that included submissions as to interest on late payment of principal under the first loan agreement.
17I consider the plaintiff is entitled to interest on the late payment of principal in circumstances where the payments of principal were made after the due date. The default notice expressly stated that interest would be sought on the late payment of outstanding principal and interest. Therefore, I accept the calculations of interest payable under the first loan agreement is set out in paragraph 18 of the plaintiff’s submissions dated 9 December 2024 as being correct.
Interest claimed under second loan agreement
18The debt owed under the second loan agreement is $5,000. The parties ended up agreeing that interest is payable on this debt from 24 March 2019 in the sum of $2,849.32.
(2) Plaintiff’s Calderbank offer dated 7 August 2023
19The plaintiff seeks to recover part of his costs on an indemnity basis by reason of a Calderbank offer contained in a letter from the plaintiff’s solicitors to the defendants’ solicitors dated 7 August 2023 (“the letter”). The letter was served on the following day and was not accepted. In those circumstances, the plaintiff says the defendants should pay his costs on a standard basis up until 8 August 2023, and on an indemnity basis thereafter.
20A copy of the letter is attached to an affidavit of Mr Boden, the plaintiff’s solicitor, sworn 9 December 2024.
21The terms of the Calderbank offer were as follows:
We are instructed to make an offer on the following without prejudice save as to costs basis:
1.Your client pay $120,000 in full and final satisfaction of the claims under the First Loan Agreement and Second Loan Agreement (inclusive of interest and GST, exclusive of costs) (Settlement Sum).
2.Your client pay $100,000 in costs (inclusive of interest and GST) in full and final satisfaction of all costs of the claims and defending the counterclaims in the proceeding (Costs).
3.All claims and counterclaims in the proceeding are to be discharged and released upon filing of a notice of discontinuance and execution of a Deed of Settlement and Release.
4.Your clients provide a full discharge for the costs order made in Supreme Court Proceedings S ECI 2020 04483 (Caveat Proceedings) and your clients agree to release and discharge our client from payment of any sums owing and outstanding by reason of the orders made by Daly As J on 5 February 2021 and 4 and 15 June 2021.
5.Our respective clients execute an appropriate Deed of Settlement and Release in which our client releases your client from all of the claims made in the Proceeding or otherwise arising from the matters the subject of the Proceeding and your client releases our client from your clients’ counterclaim in the proceeding or otherwise arising from the matters the subject of the Proceeding, and the costs orders in the S ECI 2020 04483 Caveat Proceeding.
6.Following execution of the Deed of Settlement our client will file a notice of discontinuance and will consent to the removal of a caveat over the property as granted in Daly As J’s orders on 4 and 15 June 2023.
This offer represents a significant reduction in the claims against your client.
22The letter referred to an earlier letter dated 14 July 2023, which also contained a Calderbank offer and dealt with the merits of the parties’ respective claims at some length. The solicitors referred to the matters raised in the earlier letter and then went on to note additional matters, including the fact that the plaintiff had denied ever receiving a cash payment of $125,000 on or around 1 July 2018. The solicitors also noted that there were no documents which would support such a contention, apart from self-serving correspondence between Mr Amer and Ms Souki.
23The offer contained in the letter was open for acceptance by 22 August 2023. An application for indemnity costs was foreshadowed in the event that the offer was rejected.
Legal principles
24The principles regarding Calderbank offers are well known and are summarised in Hazeldene’s Chicken Farming Pty Ltd v Victorian WorkCover Authority (No 2).[1]
[1][2005] VSCA 298.
25As Nettle JA noted in Berrigan Shire Council v Ballerini (No 2):[2]
The rejection of a Calderbank offer not later bettered by judgment does not lead automatically to an indemnity costs order in favour of the offeror. The question in each case is whether the offer was a reasonable offer of compromise, and whether the rejection of the offer was unreasonable, and the answer to that question turns in each case on all the circumstances of the case.
[2][2006] VSCA 65, [33].
26The question of unreasonableness of rejection should be considered without the benefit of hindsight and without adducing additional evidence. The party seeking to rely on a Calderbank offer bears the onus of convincing the court to make the advantageous costs order.[3]
[3]Quick on Costs, Thompson Reuters at [340.180].
27The determination whether the rejection is unreasonable involves mainly judgment and impression. Various matters which a court should ordinarily have regard to include:[4]
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d)the offeree’s prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.
[4]Hazeldene’s Chicken Farming Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298, [25].
28In summary, the Calderbank offer sought $120,000 in full and final satisfaction of sums owing under the first and second agreements, $100,000 in costs, all claims and counterclaims to be discharged, and the plaintiff’s costs of the caveat proceeding in the Supreme Court be discharged.
29The plaintiff estimates his costs are about $120,000 for solicitor’s legal services and $84,000 for counsel’s fees up to and including the last day of trial, and closing submissions for trial (a total of $204,000).[5] The plaintiff contends these costs were substantially incurred by the date of the offer with witness statements and discovery concluded. The only significant costs borne after the date of the letter were the costs of trial, and that those are the substance of the indemnity costs sought by the plaintiff. The plaintiff’s costs estimated do not include his costs in the caveat proceeding or costs for the expert engaged in relation to the building and engineering claim.
[5]See affidavit of Kimani Boden dated 9 December 2024.
30As for the costs order in the caveat proceeding, the costs awarded in the defendants’ favour was in the sum of $30,000. This figure was referred to in a letter sent by the defendants’ solicitors dated 5 September 2023, in which the defendants made an offer of compromise.
31The plaintiff contends he obtained a sum in the vicinity of the offer made of $120,000 on the findings of the court and incurred costs well in excess of $100,000. The calculations put forward in support of that proposition are: $115,519.16 + $204,000 for costs - $30,000 = $289,519.16, thereby beating the value of the offer of $120,000 + $100,000 + $30,000 (costs sought to be released from) = $250,000.
32The plaintiff’s estimates of costs totalling $204,000 are set out in paragraph 8 of Mr Boden’s affidavit sworn 9 December 2024. These are the costs invoiced to the plaintiff. Experience tells that not all these costs would be recoverable upon a taxation and as a rule of thumb, parties usually receive 50 to 60 percent of their actual costs upon a taxation as party-party costs. Therefore, it is unrealistic for the plaintiff to assume that he would receive all of his costs when undertaking the comparison of the judgment outcome with the terms of the offer.
33The plaintiff concedes it is ultimately difficult to estimate the interest as it can depend on the interest rate, the date of the judgment and the dates accepted for repayment. Having regard to these figures, the plaintiff claims he achieved a result no less favourable than the offer made.
34The plaintiff submits the rejection of the offer was unreasonable having regard to the following factors:
(a) At the stage of the proceeding at which the offer was made, there were no outstanding issues raised in the plaintiff’s witness statement or discovery. The issues were confined and the matter was ready to proceed to trial. What remained in dispute was the allegation made in August 2023, that the first defendant had paid $125,000 in cash to the plaintiff, such payment facilitated at the offices of Souki Lawyers.
(b) The time allowed to accept the offer within 14 days was reasonable.
(c) The extent of the compromise. The extent of the compromise was considerable on the plaintiff’s part. The plaintiff offered to release the defendants from all claims, including the building and engineering contracts and the penalty interest claims, and sought sums only under the two loan agreements together with costs of enforcement.
(d) The offeree’s prospects of success assessed at the date of the offer. It is contended the plaintiff had good prospects of success under each loan agreement. The reason for that being, in particular, that there was no documentary evidence to support the alleged payment of $125,000. The defendants’ witness outlines were contradictory as to how this payment was supposedly made. There was no dispute about the amount due under the second loan agreement, being the sum of $5,000. The claim for penalty interest was unlikely to be upheld.
(e) The clarity of the terms of the offer. It was put that there was no ambiguity in the terms of the offer.
(f) Whether the offer foreshadowed an application for indemnity costs if the offeree rejected the offer.
35In my view, at the time that the offer was made, the proceeding was at a sufficiently advanced stage such that the parties were able to properly consider the merits or otherwise of their respective claims. I am also satisfied that the time allowed to consider the offer was reasonable despite the defendants’ argument that the time period was insufficient as the offer was made only just a month proper to the initial trial date of 19 September 2023. I consider the terms of the offer was clear. An application for indemnity costs was foreshadowed in the letter if the offeree rejected the offer.
36The remaining issue is whether the rejection of the offer by the defendants was unreasonable. The offer has to be considered at the time it was made and not with the benefit of hindsight.
37The defendants claimed there were no monies owing under the loan agreements because the sum of $125,000 in cash had been paid to the plaintiff at Souki Lawyers’ offices.
38As the principal reasons show, there was a considerable amount of conflicting evidence on that point. Ultimately, it was not established that this cash payment was made because of the lack of adequate proof. This was not least by reason of the fact that none of the relevant witnesses had counted the money, which was said to be in a plastic bag and supposedly handed over to the plaintiff. However, it was by no means certain that this allegation was doomed to failure, particularly, when the resolution of this issue turned upon the oral testimony of the witnesses at trial and who would be believed.
39In circumstances where there was a lack of documentary evidence and it was largely dependent on an assessment of the oral evidence, I am not satisfied this aspect of the evidence was obviously doomed to failure. If it had succeeded, then there would have been no amounts owing under either of the loan agreements.
40As the principal reasons reveal, there were several disputed questions of fact and some complexity about the application of the relevant legal principles, such as the assessment of penalties and the requirements under s118 of the Transfer of Land Act 1958.
41The offer also assumes that the counterclaim would have failed. The first defendant did have a counterclaim in the order of $111,000 in respect of costs which it claimed were caused by the plaintiff lodging a caveat over the subject property without a reasonable basis. Although the counterclaim ultimately failed, I am not satisfied it was unreasonable for the defendants to reject the offer on the basis that it knew, or ought to have known, that the counterclaim would not succeed at the time that the offer was made.
42Another relevant consideration is that the defendants would not have known whether the plaintiff’s offer to accept $100,000 in legal costs at the time was an appropriate or a reasonable sum without any break up being provided.
43The defendants note that the offer made was for $120,000 but it also required the first defendant to forego an existing costs order in its favour of $30,000 in the Supreme Court. This meant that the offer was in effect for $150,000 when one considers the discharge of the costs order that the plaintiff would otherwise have had to pay to the first defendant. On the defendants’ calculations, the plaintiff recovered the sum of $88,852.06, a sum which is significantly less than the amount offered by the plaintiff. The defendants’ assessment relies upon a lower figure for the assessment of interest under the first loan agreement.
44I have determined that there should be judgment for the plaintiff on the two debts owing under the loan agreements, together with interest. I accept the plaintiff’s calculations of interest with the result that the total amount payable by the first and second defendants is $115,517.80. This is less than the sum offered of $120,000 plus the further sum of $30,000, being the discharge of the costs order in the Supreme Court. It follows then that the offer was not bettered by the judgment in which case there is no basis to award indemnity costs as sought by the plaintiff.
45Given all these matters, I am not persuaded the plaintiff established the defendants acted unreasonably in rejecting the Calderbank offer. Consequently, there is no reason to depart from the usual order that costs be paid on the standard basis.
(3) Apportionment of costs on issues or no order as to costs
46Under r63A.04 of the County Court Civil Procedure Rules 2018, the Court may make an order for costs in relation to a particular question or in a particular part of the proceeding. This power permits orders depriving an ultimately successful party of its costs or part of its costs or awarding an unsuccessful party part of its costs. A successful party may recover only a portion of its costs when that party has been unsuccessful in respect of certain discrete issues. But that should not be done as a matter of course. An issue does not necessarily mean a precise issue in the pleading but relates to any disputed question of fact or law.[6]
[6]APN Funds Management Ltd v Australian Property Investments Strategic Pty Ltd (Costs) [2012] VSC 365, [11].
47The defendants submit the Court should exercise its discretion to make a split costs order on the plaintiff’s claim and that split be 90 percent and 10 percent in favour of the first and third defendants.
48The defendants note the usual practice of costs following the event and that a successful litigant receives its costs in the absence of special circumstances. However, where issues can be separated out and a litigant has succeeded only upon a portion of their claim, the circumstances may make it reasonable that they bear the expense of litigating that portion upon which they have failed.[7] The defendants then referred to a number of cases in respect of costs being ordered on apportionment of issues. The defendants noted that where there was a multiplicity of issues and the parties have enjoyed mixed success, the Court may take a pragmatic approach in framing the order for costs, taking into account the success or lack thereof of the parties on an issues basis. Whatever the approach, the Court is entitled to examine the realities of the case and attempt to do ‘substantial justice’ between the parties on matters on costs.[8]
[7]See paragraph 26 of the defendants’ submissions on costs dated 19 December 2024.
[8]See Chen & Chan & Ors costs [2009] VSCA 233, [10].
49In Nom De Plume Nominees Pty Ltd v Fingal Developments Pty Ltd,[9] the Court of Appeal observed as follows:[10]
13The relevant principles for the resolution of the question as to the costs of the appeal, and in respect of any apportionment of the costs of the trial, are those set out by this Court in Chen v Chan. In short, for present purposes, while the general rule is that costs should follow the event, where there is a multiplicity of issues and mixed success has been enjoyed by the parties, the court may take a pragmatic approach in relation to costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Such an approach will be primarily a matter of impression and evaluation.
(Footnote omitted.)
[9] [2016] VSCA 233.
[10]ibid [13].
50Relying upon these principles, the defendants argue a split costs order is appropriate or that each party bear its own costs. The defendants noted there were five issues that required determination in the proceeding. The first four issues raised in paragraph 37 of the submissions filed by the defendants relate to the contract claim and the misleading and deceptive claim regarding the award of the building contract. The fifth issue is defined as being the amounts owing, if any, under the first and second loan agreements. This included whether the interest claimed under the latter was a penalty and whether the alleged cash repayment of $125,000 took place on 1 July 2018.
51The defendants argue they were successful on the first four issues relating to the award of the building contract. The plaintiff succeeded in part by proving that an amount was owed to him under the first loan, but not the full amount he sought. The plaintiff recovered the amount sought under the second loan agreement but not the penalty interest component.
52The defendants maintain the claims were distinct and not interrelated. The issues upon which the plaintiff was ultimately not successful were of a significantly higher quantum than those upon which he was successful, which should lead towards the Court making a split costs order based on the success of the parties. The time taken took up approximately half of the trial in respect of the issues about the building and engineering contract. The claim for the penalty interest of $500 a day should not have been pursued, as it ought to have been obvious to the plaintiff he would not have been successful on this issue. It was said that the manner in which the plaintiff gave his evidence served to prolong the trial and that proceeding with the ill-founded penalty claim increased the length of the proceeding, which is a strong factor weighing towards a split costs order.
53It was further submitted that the plaintiff successfully defended the counterclaim so he should be awarded his costs of defending the counterclaim on a standard basis. In the alternative, if the Court is not willing to split the costs sought by the defendants, then the defendants submit each party should bear their own costs.
54In reply, the plaintiff says that the issues 1 to 4 raised were largely the same and that the misrepresentation issues 3 to 4 were only faintly pressed at trial. The plaintiff argues it was not unreasonable for the plaintiff to continue to press his claims regarding the building and engineering contract and that in part, was dependent upon the credibility findings that were to be made.
55It was submitted it was not unreasonable for the plaintiff to pursue his claim for penalty interest and that the issue did not take up much time. It was not a feature of the plaintiff’s written submissions. Rather, the plaintiff contended the Court could accept a lower amount for penalty interest in its discretion and award interest under the Penalty Interest Rates Act if it did not accept the plaintiff’s other submissions on this issue.
56The plaintiff did fail on the contract claim, together with the misleading and deceptive claim relating to the award of the building contract. These claims took up a substantial part of the hearing. The plaintiff succeeded on the debt claim in respect of amounts owing under the first and second loan agreements. The claim for penalty interest under the second loan agreement did not succeed. Therefore it can be said the plaintiff enjoyed mixed success.
57In these circumstances, I am satisfied there should be some reduction of the amount of the costs which the plaintiff is entitled to recover applying the principles relating to the apportionment of costs on issues and noting the Court should take a pragmatic approach. Consequently, I am of the view that the first and second defendants should be ordered to pay 90 percent of the plaintiff’s costs of the proceeding.
58There was no proper basis established by the defendants for the alternative order sought that there be no order as to costs. Having succeeded, the plaintiff is entitled to recover his costs subject to the apportionment order made above.
(4) Whether the third defendant, Mr Amer should be awarded 100 percent of his costs
59The defendants submitted the third defendant[11] should never have been a party. Mr Amer, the third defendant, is not a party to the loan agreements and had no personal liability under them. He successfully defended the claims made against him regarding the building and engineering contracts. He also is not a party to the counterclaim. The defendants say he was 100 percent successful in defending the proceeding. Accordingly, they submitted that no costs at all should be ordered against Mr Amer and that he should be awarded 100 percent of his costs in defending the proceeding.
[11]Incorrectly referred to in the submissions as the second defendant, but corrected in a later email to the Court dated 24 December 2024.
60The plaintiff argues it was appropriate to join Mr Amer to the proceedings. In respect of the first loan agreement and the building and engineering contracts, many allegations were pleaded because the defendants did not admit Mr Amer’s agency applied. It said Mr Amer had to be joined to the proceeding because, until it was admitted he had signed the loan agreement on behalf of the first defendant, there was a question as to whether to signed it in his personal capacity or not.
61The plaintiff failed to establish any cause of action against the third defendant. He was not a party to either of the loan agreements, in which case he had no liability to pay either of the amounts found to be payable under those agreements. He did not give a guarantee in respect of the amounts owed, unlike his wife, the second defendant, who gave a guarantee for the amounts due under the first loan agreement. The claims made against the third defendant relating to alleged misleading and deceptive conduct concerning the award of the building and engineering contract claim failed. Given he successfully defended the claims made against him, it follows in my view, that the third defendant is entitled to an order that his costs of the proceeding be paid by the plaintiff.
Conclusion
62I will make the following orders:
(1) There be judgment for the plaintiff against the first and second defendants in the sum of $107,668.48, made up as follows:
(i)the debt payable under the first loan agreement in the sum of $50,000;
(ii)together with interest fixed in the sums of $11,506.84 for late payment of principal; and
(iii)$46,161.64 for late payment of the agreed interest sum.
(2) There be judgment for the plaintiff against the first defendant in the sum of $7,849.32 made up as follows:
(i) the debt payable under the second loan agreement in the sum of $5,000; and
(ii)together with interest fixed in the sum of $2,849.32.
(3) The plaintiff’s claim is otherwise dismissed.
(4) The first defendant’s counterclaim is dismissed.
(5) The first and second defendants pay 90 percent of the plaintiff’s costs of and incidental to the plaintiff’s claim, including any reserved costs, on the standard basis to be taxed in default of agreement.
(6) The first defendant pay the plaintiff’s costs of and incidental to the counterclaim including any reserved costs, on the standard basis to be taxed in default of agreement.
(7) The plaintiff pay the third defendant’s costs of and incidental to the proceeding, including any reserved costs, on the standard basis to be taxed in default of agreement.
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Certificate
I certify that these 17 pages are a true copy of the Reasons for Ruling of Her Honour Judge A Ryan delivered on 29 January 2025.
Dated: 29 January 2025
Associate to Her Honour Judge A Ryan
SCHEDULE OF PARTIES
BETWEEN
| MARK BATA | Plaintiff/Defendant by counterclaim |
| and | |
| REETAJ INVESTMENTS PTY LTD (ACN 608 022 911) | First Defendant/Plaintiff by counterclaim |
| EKRAM MOHAMMED | Second Defendant |
| OMER HASSAN AMER | Third Defendant |
| SOUKI LAWYERS (ABN 15 819 705 950) | Fourth Defendant |
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