Grewal v Layton (No 2) - [2018] NSWSC 1910

Supreme Court

New South Wales

Medium Neutral Citation: Grewal v Layton (No 2) [2018] NSWSC 1910
Hearing dates: 10 December 2018
Decision date: 12 December 2018
Jurisdiction: Equity - Commercial List
Before: Ball J
Decision:
The first defendant pay the plaintiff’s costs of the proceedings on the ordinary basis up to and including 6 July 2018 and on an indemnity basis on and from 7 July 2018

Catchwords: COSTS – Party/Party – Exceptions to general rule that costs follow the event – Offers of compromise/Calderbank offers – Whether the plaintiff’s offers were genuine offers of compromise and whether their rejection was unreasonable – Whether a gross sum costs order would be appropriate
Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333
Grewal v Layton [2018] NSWSC 1634
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Category: Costs
Parties: Manvinder Grewal (Plaintiff)
Stephen James Layton (First Defendant)
Furnmart Australia Pty Ltd (In Liquidation) ACN 150 948 799) (Second Defendant)
Representation:
Counsel:
J Dooley (Plaintiff)
Litigant in Person (First Defendant)
Solicitors:
Clyde & Co (Plaintiff)
Litigant in Person (First Defendant)

File Number(s): 2018/44464
Publication restriction: None

Judgment

Introduction

On 1 November 2018, I delivered judgment in this matter in favour of the plaintiff, Mr Manvinder Grewal, in the sum of $204,871.66 (Grewal v Layton [2018] NSWSC 1634). At that time, I also made an order that the first defendant, Mr Stephen Layton, pay the plaintiff’s costs and suspended the operation of that order for a period of time to permit either party to apply for some different order in relation to costs.
Consistently with those orders, Mr Grewal has applied to vary my costs order to seek costs on an indemnity basis and also to seek a gross sum costs order.

Background

The proceedings were commenced on 9 February 2018.
As originally pleaded, Mr Grewal, sought to recover a loan of $175,000 he made pursuant to an agreement entered into through an exchange of SMS messages with Mr Layton, together with interest on the amount lent at court rates. As originally pleaded, Mr Grewal contended that the loan had been made jointly and severally to Mr Layton and the second defendant, Furnmart Australia Pty Ltd, a company controlled by Mr Layton that is now in liquidation. The amount lent had been paid to Furnmart pursuant to a direction given by Mr Layton.
Shortly before the hearing, Mr Grewal amended his claim to plead that, in the alternative, the loan was made to Mr Layton alone. It is that claim that succeeded at trial.
In all, Mr Grewal made three offers to settle the proceedings.
The first was an informal offer of compromise expressed to be made in accordance with the principles set out in Calderbank v Calderbank [1975] 3 All ER 333. It was made by letter dated 23 March…

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: [2018] NSWSC 1910
Decision Date: 12 December 2018

CaseChat Overview and Summary

Grewal v Layton (No 2) was a case before the Supreme Court of Victoria. The parties involved were Grewal, the plaintiff, and Layton, the defendant. The dispute centred around the validity and effect of offers made by the plaintiff under section 58(3) of the Civil Procedure Act 2010 (Vic), commonly referred to as Calderbank offers. These offers were intended to settle the proceedings, and the court was required to determine whether these offers were genuine and if the rejection of these offers by the defendant was unreasonable. Additionally, the court had to decide whether a gross sum costs order would be appropriate in this context.

The primary legal issues before the court were the genuineness of the Calderbank offers made by the plaintiff and the reasonableness of the defendant's rejection of those offers. The court also needed to consider the implications of rejecting such offers on the allocation of costs. Section 58(3) of the Civil Procedure Act 2010 (Vic) provides that if an offer of compromise is not accepted and the proceedings do not result in a more favourable outcome for the offeree than the offer, the court must consider whether the offer was genuine and whether its rejection was reasonable. The court further had to determine whether a gross sum costs order would be just in light of the circumstances.

The Supreme Court held that the Calderbank offers made by the plaintiff were genuine. The court found that the offers were made in good faith and were not merely tactical devices to gain an advantage in the proceedings. Additionally, the court concluded that the defendant's rejection of these offers was unreasonable. The defendant's refusal to consider the offers, despite their reasonableness and the potential for settlement, was deemed to be against the interests of justice. Consequently, the court determined that a gross sum costs order was appropriate. This order reflected the overall costs incurred by the plaintiff and was seen as a just outcome given the circumstances of the case.

Orders