Cong Xu v Austino Property Development Pty Ltd (No 2) - [2013] NSWSC 1559

Supreme Court

New South Wales

Medium Neutral Citation: Cong Xu v Austino Property Development Pty Ltd (No 2) [2013] NSWSC 1559
Hearing dates: On the papers
Decision date: 25 October 2013
Jurisdiction: Equity Division
Before: Darke J
Decision:
1. The plaintiff's application for indemnity costs is refused.
2. Order the plaintiff to pay the defendant's costs of the application.

Catchwords: PROCEDURE - costs - departing from the general rule - order for costs on indemnity basis - offers of compromise - Calderbank offer - whether genuine offer of compromise - whether unreasonable for defendant not to accept offer of compromise - where offer required entry of consent orders in similar terms to Statement of Claim in exchange for payment of $10,000 - offer contained minimal element of compromise - not unreasonable for defendant not to accept offer
Legislation Cited: Civil Procedure Act 2005 ss 14, 100
Uniform Civil Procedure Rules 2005 rr 20.26, 36.16
Cases Cited: AT v Commissioner of Police (No 2) [2010] NSWCA 337
Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333
Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Cong Xu v Austino Development Pty Ltd [2013] NSWSC 1177
Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19
Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298; 13 VR 435
Leichhardt Municipal Council v Green [2004] NSWCA 341
Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 344
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368
Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd [2009] NSWCA 336
Short v Crawley (No 45) [2013] NSWSC 1541
Singh v Singh (No 2) [2004] NSWSC 225
Vieira v O'Shea (No 2) [2012] NSWCA 121
Category: Principal judgment
Parties: Cong Xu (Plaintiff/Cross-Defendant)
Austino Property Development Pty Ltd (Defendant/Cross-Claimant)
Representation: Counsel:
J Darams (Plaintiff/Cross-Defendant)
E White (Defendant/Cross-Claimant)
Solicitors:
James Tuite & Associates Lawyers (Plaintiff/Cross-Defendant)
Legal Point Lawyers (Defendant/Cross-Claimant)

File Number(s): 2013/80287
Publication restriction: None

Judgment

The principal judgment in these proceedings, heard on 19 August 2013, was handed down on 27 August 2013: Cong Xu v Austino Development Pty Ltd [2013] NSWSC 1177. The key issue in the proceedings was whether the plaintiff purchaser had validly rescinded a contract for sale with the defendant vendor and, accordingly, was entitled to a refund of the deposit paid thereunder. The Court upheld the plaintiff's claim and ordered that the defendant pay the plaintiff's costs of the proceedings.

On 29 August 2013 the solicitors for the plaintiff, by email sent to my Chambers, and copied to the solicitors for the defendant, stated that the plaintiff wished to vary the existing costs order. I gave leave to the parties to provide written submissions as to costs.

The plaintiff submitted that an order for indemnity costs should be made in respect of the period from 17 July 2013 on the basis that the defendant unreasonably failed to accept an offer of compromise which was…

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: [2013] NSWSC 1559
Decision Date: 25 October 2013

CaseChat Overview and Summary

The case involved Cong Xu as the plaintiff and Austino Property Development Pty Ltd as the defendant. The dispute centred around a claim for costs on an indemnity basis, following an unsuccessful attempt to settle the matter through a Calderbank offer. The matter was heard in the Supreme Court of New South Wales. The plaintiff sought costs on the basis that the defendant had unreasonably rejected a genuine offer of compromise, as outlined in the Calderbank letter, which required the entry of consent orders in exchange for payment of $10,000.

The court was required to determine whether the offer was genuinely a compromise and whether it was unreasonable for the defendant not to accept it. The primary consideration was whether the offer contained a meaningful element of compromise and whether it was reasonable for the defendant to decline such an offer. The court examined the terms of the offer, its nature, and the context in which it was made. The plaintiff argued that the offer was genuine and contained a significant element of compromise, while the defendant contended that the offer had minimal elements of compromise and was therefore not unreasonable to reject.

The court found that the offer did not contain a substantial element of compromise and therefore was not unreasonable for the defendant to reject. The offer primarily required the entry of consent orders that were similar to the plaintiff's Statement of Claim in exchange for a payment of $10,000, which did not significantly depart from the plaintiff's original claim. The court held that the offer lacked a meaningful compromise and thus it was not unreasonable for the defendant to decline the offer. Consequently, the court dismissed the plaintiff's application for costs on an indemnity basis.

The court's decision effectively clarified the threshold for a genuine Calderbank offer, emphasising that for such an offer to be deemed reasonable, it must contain a substantial element of compromise. The court's ruling underscored the importance of the nature of the offer and its departure from the original claim in determining whether it was unreasonable to reject it.

Orders