Daftar v Al-Khamisy (No 3)

[2014] NSWDC 345

District Court

New South Wales

Medium Neutral Citation:	Daftar v Al-Khamisy (No 3) [2014] NSWDC 345
Hearing dates:	8 August 2014
Date of orders:	08 August 2014
Decision date:	08 August 2014
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)   The defendant’s costs of the claim and the cross-claim in the period from 17 May 2014 until 31 July 2014, both dates inclusive, be assessed on an indemnity basis but otherwise costs be assessed on an ordinary basis. (2)   By consent, the plaintiff to pay to the defendant or his solicitors the sum of $3,074.50 within 14 days, in respect of the plaintiff’s share of the costs of the interpreter at the trial.
Catchwords:	COSTS – application for indemnity costs – based on offer of compromise – open for acceptance for 11 days – unreasonable for offer to be rejected – all of offeror’s evidence had been served – offeree had all the material to assess the offer
Legislation Cited:	Uniform Civil Procedure Rules 2005, r 42.8
Cases Cited:	Calderbank v Calderbank [1975] 3 All ER 333 Daftar v Al-Khamisy (No 2) [2014] NSWDC 343
Texts Cited:	Ritchie’s Uniform Civil Procedure NSW
Category:	Costs
Parties:	Khalid Daftar (plaintiff/cross-defendant) Firaass Sabah Ati Al-Khamisy (defendant/cross-claimant)
Representation:	Counsel: Mr R M Young (plaintiff/cross-defendant) Mr M Southwick (defendant/cross-claimant)   Solicitors: Consolidated Lawyers Pty Limited t/as Madison Marcus Law Firm (plaintiff/cross-defendant) Stojanovic Solicitors (defendant/cross-claimant)
File Number(s):	2012/395458
Publication restriction:	None

Judgment

1. The defendant, Firaass Al-Khamisy, relies upon an offer of compromise to seek indemnity costs from the date of the offer. The offer is in the form of a Calderbank offer in that it is marked “Without Prejudice Save as to Costs” and it refers to the principles in Calderbank v Calderbank [1975] 3 All ER 333. The offer contained a term that the defendant would accept a sum which is approximately one third of the sum that the defendant was awarded in the proceedings on 4 August 2014 (see Daftar v Al-Khamisy (No 2) [2014] NSWDC 343 at [101]). The offer also sought an order for costs which is effectively the same order that has been made in the proceedings but which, subject to the orders I make today, might become more favourable to the defendant than the final orders. The offer also sought that the proceedings be dismissed, which is again a more favourable result to the plaintiff than that which resulted from the conclusion of the proceedings, where the plaintiff’s proceedings were dismissed and judgment was given to the defendant/cross-claimant on the cross-claim.

2. The offer also requires that there be a confidential deed of release. The terms of the deed are not set out in detail in the offer. Yet the offer does not propose that the proceedings be the subject of a judgment. Thus, it seems reasonable to infer that by a deed the proceedings would be brought to an end, as they would be if there was a judgment. Accordingly, the difference between a judgment and a deed does not seem to be a point in favour of the plaintiff.

3. The offer was open for 11 days. Ritchie’s Uniform Civil Procedure NSW at [42.13.27] gives examples of situations where the rejection of an offer has not been characterised as unreasonable even though the offer was only open for a relatively short period of time. One concerned an offer open for five days, another for seven days, and the third was that the offer was:

“significantly shorter than the acceptance period applicable to formal offers of compromise and expired before the offeree had the necessary evidence to assess the reasonableness of the offer”.

4. This quotation has some application to the present proceedings. Yet, the 11 day period comprised the bulk of the business days in two weeks and it was made at a time when the defendant’s evidence had been served. So the plaintiff had all the necessary material to assess the offer. Also, the offer involves a substantial discount on the judgment and thus constitutes a significant compromise. That is a matter that should weigh in favour of the defendant.

5. The plaintiff concedes that there was a rejection of the offer and takes no particular point about whether the rejection of the offer was unreasonable. There was also a suggestion, not traversed by the plaintiff, that the settlement conference, which occurred about a week after the expiration of the offer, was followed by a formal rejection of the offer. That indicates that the offer may have been, in practical terms, open for a slightly longer period. However, that is not crucial to my decision in the matter.

6. In my view, in all the circumstances and notwithstanding the concern I have with the period of slightly less than two weeks, it was unreasonable for the plaintiff not to accept the offer. It follows that the defendant should have the benefit of an indemnity costs order in respect of some of the period.

7. The plaintiff raises an issue about the period of an indemnity costs order. As I excused counsel from attending delivery of judgment on Monday, 4 August 2014, I am not inclined to extend the indemnity costs order to that Monday. I think the indemnity costs order should extend until the end of the hearing on Thursday, 31 July 2014. Also, given the reference to the informal settlement conference in the letter of offer of 16 May 2014, I think that the indemnity costs order should commence after that day.

8. Accordingly, I propose to make the additional order that the defendant’s costs of the claim and the cross-claim in the period from 17 May 2014 until 31 July 2014 be assessed on an indemnity basis but otherwise the costs be assessed on the ordinary basis.

9. The plaintiff also makes an application for indemnity costs in respect of a dispute by the plaintiff in respect of a fact set out in an amended notice to admit facts and authenticity of documents.

10. Rule 42.8 of the Uniform Civil Procedure Rules 2005 deals with the situation where the fact is subsequently proved or subsequently admitted. In those circumstances, the requesting party is entitled to an order for costs on an indemnity basis unless the Court otherwise orders. But it has not been determined whether that particular fact was proved or admitted. I note that the particular document was typed and hand‑written by or at the direction of the plaintiff.

11. Accordingly, I do not propose to make any order, or any reference in an order to r 42.8. I make the additional order that I have proposed in respect of indemnity costs for the period from 17 May 2014 to 31 July 2014 inclusive.

12. Accordingly, the orders of the Court are:

1. The defendant’s costs of the claim and the cross-claim in the period from 17 May 2014 until 31 July 2014, both dates inclusive, be assessed on an indemnity basis but otherwise costs be assessed on an ordinary basis.

2. By consent, the plaintiff to pay to the defendant or his solicitors the sum of $3,074.50 within 14 days, in respect of the plaintiff’s share of the costs of the interpreter at the trial.

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Decision last updated: 11 August 2015