Drummond v Gordian Runoff Ltd (No 2) - [2023] NSWSC 731

Supreme Court

New South Wales

Medium Neutral Citation: Drummond v Gordian Runoff Ltd (No 2) [2023] NSWSC 731
Hearing dates: On the papers
Date of orders: 3 July 2023
Decision date: 03 July 2023
Jurisdiction: Equity - Technology and Construction List
Before: Rees J
Decision:
Order indemnity costs from offer of compromise.

Catchwords:
PRECEDENT — whether NCAT decisions binding on tribunal — whether District Court judgments binding on NCAT — principles at [21] — neither binding but legally persuasive.
COSTS – plaintiffs sue insurer for $215,000 in NCAT – case turns on legal issue already determined by NCAT and District Court in insurer’s favour – insurer makes Calderbank offer when serving defence – $10,000 inclusive – insurer does not refer to NCAT and District Court decisions – no evidence plaintiffs aware of these decisions — rejection of offer not unreasonable in circumstances.
COSTS — offer of compromise — ‘walk away’ — proceedings on foot for a year — legal issues fully ventilated — application of Regency Media considered at [28]-[31].

Legislation Cited:
Uniform Civil Procedure Rules rr 20.26, 42.14

Cases Cited:
Botany Bay City Council v Latham (No 2) [2013] NSWCA 450
Calderbank v Calderbank [1975] 3 All ER 333
CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd [2008] FCAFC 173
Director of Liquor Licensing v Kordister Pty Ltd [2011] VSC 207
Foy v Calliden Insurance Ltd [2017] NSWDC 33
Gold & Copper Resources Pty Ltd v Hon Chris Hartcher, Minister For Resources & Energy, Special Minister (No 2) [2015] NSWCA 163
Hungry Jack’s Pty Ltd v Fourtounas (No 2) [2011] NSWCA 26
Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (No 2) [2002] NSWSC 72
Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) [2019] NSWSC 601
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Owners Corporation Strata Plan 61288 v Brookfield Multiplex Ltd [2012] NSWSC 1586
Prospect Resources Ltd v Molyneux [2015] NSWCA 171
Puckeridge v Calliden Insurance Ltd (Home Building) [2013] NSWCTTT 450
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368
Taheri v Vitek (No 2) [2014] NSWCA 344
Valentine v Eid (1992) 27 NSWLR 615, 621-622

Category: Costs
Parties: John Stephen Drummond (First Plaintiff)
Colleen Anne Drummond (Second Plaintiff)
Gordian Runoff Ltd (Defendant)
Representation:
Counsel:
Mr J Hutton SC (Plaintiffs)
Mr PJ Bambagiotti (Defendant)
Solicitors:
Michael Atkinson & Associates (Plaintiffs)
Mills Oakley Lawyers (Defendant)

File Number(s): 2022/163350

Judgment

HER HONOUR: I gave judgment in this matter on 9 June 2023, dismissing the plaintiffs’ claim with costs: Drummond v Gordian Runoff Ltd [2023] NSWSC 607. The defendant now seeks an indemnity costs order on the basis of a Calderbank letter and an offer of compromise, together with interest on costs. The plaintiffs opposed all such orders. This judgment assumes familiarity with my primary judgment; the same terms are used.

The claim

The issues considered in my primary…

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: [2023] NSWSC 731
Decision Date: 03 July 2023

CaseChat Overview and Summary

The case of Drummond v Gordian Runoff Ltd (No 2) involved the plaintiffs, Drummond, suing their insurer for $215,000 in the New South Wales Civil and Administrative Tribunal (NCAT). The dispute centred on the binding nature of NCAT and District Court decisions on tribunals, as well as the issue of costs related to the plaintiffs' rejection of a compromise offer made by the insurer. The matter was heard in the Supreme Court of New South Wales.

The primary legal issues the court had to determine were whether NCAT decisions were binding on tribunals, and whether District Court judgments were binding on the NCAT. The court also had to consider the plaintiffs' decision to reject a compromise offer made by the insurer, which included an offer of $10,000 inclusive of costs, in light of previously determined legal issues. The insurer had made this offer under Calderbank principles, but did not refer to the NCAT and District Court decisions in their defence, nor was there evidence that the plaintiffs were aware of these decisions.

The court held that neither NCAT decisions nor District Court judgments were binding on tribunals, but they were legally persuasive. In assessing the plaintiffs' rejection of the compromise offer, the court considered the proceedings had been ongoing for a year, the legal issues had been fully ventilated, and the application of Regency Media principles. The court found that the rejection of the compromise offer was not unreasonable given the circumstances.

The court made orders dismissing the plaintiffs' claim and awarding costs to the defendant, subject to certain conditions.

Orders