Cohen v Zanzoul trading as Uniq Building Group (No 3)

[2020] NSWSC 1156

Supreme Court

New South Wales

Medium Neutral Citation:

Cohen v Zanzoul trading as Uniq Building Group (No 3) [2020] NSWSC 1156

Hearing dates:

On the papers; submissions received 14 and 19 August 2020

Date of orders:

28 August 2020

Decision date:

28 August 2020

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Judgments and orders for interest and costs to be made to the effect set out at [35]

Catchwords:

JUDGMENTS AND ORDERS – form of orders to give effect to primary judgment

JUDGMENTS AND ORDERS – interest on judgments

JUDGMENTS AND ORDERS – costs

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586

Cohen v Zanzoul [2020] NSWSC 592

Cohen v Zanzoul (No 2) [2020] NSWSC 838

Category:

Costs

Parties:

Paul Cohen (First Plaintiff/Cross-Defendant)
Phylicia Cohen (Second Plaintiff/Cross-Defendant)
Danny Zanzoul t/as Uniq Building Group (Defendant/Cross-Claimant)

Representation:

Counsel:
Mr T T Bors (Plaintiffs/Cross-Defendants)
Mr J Young (Defendant/Cross-Claimant)

Solicitors:
Colin Biggers & Paisley (Plaintiffs/Cross-Defendants)
Gavel & Page (Defendant/Cross-Claimant)

File Number(s):

2017/393016

Judgment

1. I have given two judgments in this matter. [1]

   1. Cohen v Zanzoul [2020] NSWSC 592; Cohen v Zanzoul (No 2) [2020] NSWSC 838.

2. These reasons assume familiarity with those judgments. I shall use the same abbreviations.

3. On 6 August 2020 I was informed that it was agreed between the parties that the total amount payable on:

1. Mr and Mrs Cohen’s claim is $342,457.78 (subject to the question of cleaning costs which I refer below); and

2. Mr Zanzoul’s cross claim is $142,668.16.

4. The following issues remain for determination:

1. whether Mr and Mrs Cohen are entitled to payment for cleaning costs of $20,457.52;

2. the parties’ entitlements to interest;

3. whether the parties’ claims should be set off; and

4. costs.

5. It was agreed that I should deal with these matters on the papers.

Cleaning costs

6. As I set out in my judgment of 30 June 2020, the parties prepared a Scott Schedule identifying a total of 164 defects the subject of Mr and Mrs Cohen’s claim against Mr Zanzoul, the parties’ competing contentions in relation to those claims and the experts’ assessment of the value of the defects. I dealt with the amounts claimed for those defects on the basis of that Scott Schedule.

7. The claim by Mr and Mrs Cohen for cleaning costs was not included in the Scott Schedule. It was only raised in correspondence in an email from Mr and Mrs Cohen’s solicitor to Mr Zanzoul’s solicitor on 4 August 2020. No explanation is offered for its belated appearance.

8. In my opinion, it is too late for Mr and Mrs Cohen to raise this issue and I do not propose to entertain it.

Set off

9. On behalf of Mr Zanzoul, it was submitted that the amounts due between the parties should now be set off and that there should be judgment for Mr and Mr Cohen net of the amount of the unpaid invoices.

10. Mr and Mrs Cohen did not oppose this course but, on their behalf, it was pointed out that such a set off would have an effect on the manner in which an award for interest would be made.

11. In my opinion, the preferable course is first to determine the extent to which interest should be awarded to Mr and Mrs Cohen and to Mr Zanzoul in relation to their claims and to then enter judgment in favour of those parties in the resulting amounts.

Interest

12. There is no reason why interest should not be awarded at Court rates in Mr Zanzoul’s favour in relation to the judgment to be entered for him against Mr and Mrs Cohen. Mr Zanzoul’s claim is for unpaid work and is, in effect, a liquidated claim. I accept the submission made on behalf of Mr Zanzoul that interest should run from 2 December 2015, being 21 days after the issue of Progress Claim 23.

13. In relation to Mr and Mrs Cohen’s claim, although I found that Mr and Mrs Cohen repudiated the Contract, I also found that they had an accrued right for damages for defective work. The judgment to be entered in their favour is by way of enforcement of that accrued right.

14. On behalf of Mr Zanzoul, a number of reasons were put forward as to why interest should not be awarded in favour of Mr and Mrs Cohen.

15. The first was that Mr and Mrs Cohen did not make demand for payment in relation to the works performed by NRB. [2] I do not see this as being a relevant matter. I have now found that Mr and Mrs Cohen have an entitlement to payment.

    2. See [21]ff in my first judgment.

16. Reference was also made to the evidence that Mr Cohen gave about paying cash to Mr Zanzoul. As I recorded at [100] of my 19 May 2020 judgment, had that claim not been abandoned, I would have found the evidence to be untrue. That is a reason not to allow Mr and Mrs Cohen their costs in relation to that issue. However, I do not see it as a reason to not allow them interest on the amounts that I have found to be due to them. An award of interest is compensatory and is not to be withheld to punish a party for evidence which does not have a direct connection to the relief ultimately awarded.

17. Reference was also made to an offer made by Mr Zanzoul on 20 June 2019 to settle the proceedings for an amount less than Mr and Mrs Cohen have ultimately achieved. I do not see that as being a matter relevant to interest.

18. I do propose to award that interest be paid on the judgment to be entered in favour of Mr and Mrs Cohen.

19. Interest should be paid from 1 September 2018, when the works were substantially completed.

Costs

20. Mr and Mrs Cohen and Mr Zanzoul have been largely successful in relation to their respective claims.

21. On the face of it, Mr and Mrs Cohen should have the costs of their claim against Mr Zanzoul and Mr Zanzoul should have the costs of his cross-claim against Mr and Mrs Cohen.

22. On behalf of Mr Zanzoul it was contended that Mr and Mrs Cohen should not have their costs for a number of reasons.

23. The first was that they have obtained judgment for less than $500,000. By reason of Uniform Civil Procedure Rules 2005 (NSW) r 42.34, they are not entitled to their costs unless they can affirmatively satisfy the Court that the bringing of proceedings in this Court was warranted.

24. On behalf of Mr Zanzoul it was submitted that the amount ultimately to be awarded to Mr and Mrs Cohen “could have been claimed in the New South Wales Consumer and Tenancy Tribunal [sic] (‘NCAT’)”.

25. In fact, these proceedings were commenced in the New South Wales Civil and Administrative Tribunal and were transferred to this Court in December 2017.

26. I am not aware of any suggestion made by Mr Zanzoul that the proceedings should have been returned to NCAT. In my opinion the issues raised in these proceedings were sufficiently complex to warrant them remaining in this Court.

27. Reference was also made to offers made by Mr Zanzoul.

28. The first offer was dated 12 September 2016. However, that was not an offer to make any payment but rather an offer to cause work to be rectified provided Mr Zanzoul received confirmation of the amount owing to him.

29. The second offer was the offer of 20 June 2019 to which I have referred . That offer was in the form of a Calderbank[3] offer but for an amount less than the amount of judgment to be entered in favour of Mr and Mrs Cohen.

    3. Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586.

30. Mr Zanzoul also relied upon the evidence given by Mr Cohen concerning cash allegedly paid to Mr Zanzoul. I do not see this evidence as a reason to deprive Mr and Mrs Cohen of an overall costs order. However, Mr and Mrs Cohen should not have their costs associated with Mr Cohen’s assertion of having made cash payments to Mr Zanzoul. Indeed, Mr Zanzoul should have his costs of that issue.

31. Further, I have found that Mr and Mrs Cohen repudiated the Contract, albeit in circumstances where they had an accrued right to recover damages from Mr Zanzoul.

32. Although, as I recorded at [102] of my 19 May 2020 judgment, the question of repudiation was at the end of the day barely contested, it was a central focus during much of the hearing.

33. I think that a fair response of the matters in [30] to [32] is to discount the amount of costs to be awarded to Mr and Mrs Cohen, rather than make orders directed to discrete issues in the case; which orders would likely unduly complicate any assessment process.

34. This involves an evaluative process, not susceptible to precise reasoning. Overall, I think the fair order to make is that Mr and Mrs Cohen have 60 per cent of the costs of their claim.

Conclusion

35. For those reasons, I propose to make orders to the effect that:

1. Judgment be entered in favour of Mr and Mrs Cohen against Mr Zanzoul and in favour of Mr Zanzoul against Mr and Mrs Cohen in the amounts set out at [3] above;

2. Mr and Mrs Cohen have interest at Court rates on that judgment from 1 September 2018;

3. Mr Zanzoul have interest at Court rates on that judgment from 2 December 2015;

4. Mr Zanzoul pay Mr and Mrs Cohen an amount equal to 60 per cent of their costs on their claim against Mr Zanzoul; and

5. Mr and Mrs Cohen pay Mr Zanzoul’s costs of his cross claim.

36. The parties should confer and agree on the precise orders to be made.

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Endnotes

Decision last updated: 28 August 2020