Ferella v Stomo (No 2)

Case [2017] NSWDC 61

District Court


New South Wales

Medium Neutral Citation: Ferella v Stomo (No. 2) [2017] NSWDC 61
Hearing dates: 7 March 2017
Date of orders: 07 March 2017
Decision date: 07 March 2017
Jurisdiction:Civil
Before: Gibson DCJ
Decision:

(1) Pursuant to s 98 Civil Procedure Act 2005 (NSW), the plaintiffs are to pay the defendant’s costs on an indemnity basis and by way of a gross sum of $17,000.
(2) The plaintiffs are to pay the defendant’s counsel’s costs of this application, in the gross sum of $1,000.

Catchwords: COSTS – indemnity costs – successful party served Offer of Compromise and Calderbank offer and made repeated ‘without prejudice’ offers of settlement – order for indemnity costs made – appropriateness of gross sum costs orders in costs appeals – gross sum costs order made
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), rr 20.25, 20.26 and 42.15A
Cases Cited: GE Dal Pont, Law of Costs, 3rd e.d. (LexisNexis, 2013)
Texts Cited: Bobb v Wombat Securities Pty Ltd (No 2) [2013] NSWSC 863
Calderbank v Calderbank [1975] 3 All ER 333
Ferella v Key Nominees Pty Ltd [2016] NSWDC 44
Ferella v Stomo [2017] NSWDC 34
Harrison v Schipp (2002) 54 NSWLR 738
Lambert v Jackson [2011] FAMCA 275
Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300
O’Rourke v P & B Corporation Pty Ltd [2008] WASC 36
Re Palladium Consulting Pty Ltd [2013] NSWSC 92
Riva NSW Pty Ltd v Fraser & Clancy t/as Fraser Clancy Lawyers [2014] NSWCA 454
Riva NSW Pty Ltd v Fraser (t/as Fraser Clancy Lawyers) [2014] NSWCA 455
Starr-Diamond v Diamond (No 4) [2013] NSWSC 811
Wilkie v Brown [2016] NSWCA 128
Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99
Zepinic v Chateau Constructions (Aust) Ltd; Zepinic v Chateau Constructions (Aust) Ltd [2016] NSWCA 361
Category:Principal judgment
Parties: First Plaintiff: Angelo Ferella
Second Plaintiff: Gustavo Ferella
Third Plaintiff: Riva NSW Pty Ltd
Defendant: Chris Stomo
Representation:

Counsel:
Plaintiff: Mr R K Newton
Defendant: Mr T Buterin

  Solicitors:
Plaintiff: Zali Burrows Lawyers
Defendant: Moray & Agnew
File Number(s): 2016/187005
Publication restriction: None

Judgment

  1. HER HONOUR: The plaintiffs in these proceedings, by amended summons commencing an appeal, sought a series of orders appealing from the determinations of the review panel in assessment number 2015/247108 and 2015/247117. I heard those appeals on 3 March 2017 (Ferella v Stomo [2017] NSWDC 34) and made the following orders this morning:

  1. Summons dismissed.

  2. Costs reserved.

  3. Liberty to apply in relation to costs.

  1. The defendant brings an application pursuant to orders 2 and 3 for the costs of the appeal to be paid on an indemnity basis and for a gross sum costs orders pursuant to s 98 Civil Procedure Act 2005 (NSW). Both those orders were opposed by the plaintiffs.

  2. By way of background, the summons commencing this appeal filed on 20 June 2016 sought to set aside two Costs Review Panel determinations, the first of which…

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Details
AGLC
Ferella v Stomo (No. 2) [2017] NSWDC 61
Case
[2017] NSWDC 61
Decision Date

CaseChat Overview and Summary

The case before the court involved a dispute between Ferella and Stomo, with the primary issue being the appropriateness of the costs order made in the proceedings. Ferella, the successful party, had served an offer of compromise and a Calderbank offer, along with repeated 'without prejudice' offers of settlement. Despite these efforts, the court made an order for indemnity costs against Ferella, a decision which is now under review. The court was required to decide whether the gross sum costs order made by the lower court was appropriate, especially in light of the successful party's settlement offers.

The court examined the principles guiding indemnity costs orders and the specific context of the case, including the settlement offers made by Ferella. The court noted that indemnity costs are typically awarded when a party has acted unreasonably or in bad faith, or when there is a significant difference between the damages claimed and those awarded. The court also considered the nature of the 'without prejudice' offers and whether they should influence the costs decision. The court held that despite Ferella's settlement efforts, the defendant's conduct warranted an indemnity costs order due to the unreasonable refusal to settle.

In its reasoning, the court found that the lower court's decision to award indemnity costs and the specific gross sum of $17,000 was appropriate. The court noted that the defendant's refusal to consider Ferella's settlement offers, despite the potential for a more favourable outcome for Ferella, demonstrated unreasonable conduct. The court also upheld the lower court's decision to award gross sum costs, noting that such orders are permissible in costs appeals where the quantum of costs is reasonably within the range of what the parties might have agreed upon. The court made an order that Ferella was to pay Stomo's costs on an indemnity basis, amounting to a gross sum of $17,000, along with an additional $1,000 for the defendant's counsel's costs of the application.

Orders

Orders of the court

(1) Pursuant to s 98 Civil Procedure Act 2005 (NSW), the plaintiffs are to pay the defendant’s costs on an indemnity basis and by way of a gross sum of $17,000.

(2) The plaintiffs are to pay the defendant’s counsel’s costs of this application, in the gross sum of $1,000.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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