Gulab Khan v Matthew Rathjen (No 2)

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District Court


New South Wales

Medium Neutral Citation: Gulab Khan v Matthew Rathjen (No 2) [2016] NSWDC 213
Hearing dates:1 September 2016
Date of orders: 15 September 2016
Decision date: 15 September 2016
Jurisdiction:Civil
Before: Mahony SC DCJ
Decision:

Defendant to pay plaintiff’s costs on an indemnity basis from 3 December 2015.
For orders see [44]

Catchwords: Costs – whether successive Offers of Compromise were invalid; discretion to “otherwise order” indemnity costs
Legislation Cited: Civil Procedure Act 2005, ss 3, 56, 98
Evidence Act 1995, s 131
Uniform Civil Procedure Rules 2005, rr 20.26, 20.29, 42.14,
Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333
Dibbs v Emirates (No 2) [2015] NSWSC 1786
Helm v Pel-Air Aviation Pty Limited (No 3) [2015] NSWSC 857
McGlashan v QBE Insurance (Australia) Limited (No 4) [2014] NSWSC 882
Neville v Lam (No 4) [2014] NSWSC 1088
Norris v Routley [2016] NSWSC 147
NT Power Generation Pty Limited v Power and Water Authority (2004) 219 CLR 90
Category:Costs
Parties: Gulab Khan (Plaintiff)
Matthew Rathjen (Defendant)
Representation:

Counsel:
R O’Keefe (Plaintiff)
N Chen (Defendant)

  Solicitors:
Turner Freeman
HWL Ebsworth Lawyers
File Number(s):14/157331
Publication restriction:Nil

Judgment ON COSTS

Introduction

  1. On 1 September 2016 the Court heard two Notices of Motion. They were:

  1. Defendant’s Notice of Motion filed on 12 August 2016, seeking an order that execution of the judgment be stayed depending determination of the defendant’s appeal to the Court of Appeal; and

  2. Plaintiff’s Notice of Motion filed on 21 July 2016, seeking the following relief:

  1. Pursuant to Section 98(1)(c) of the Civil Procedure Act 2005 and Uniform Civil Procedure Rules 2005 (“UCPR”) 42.14, the defendant to pay the plaintiff’s costs on an indemnity basis from 30 March 2015 and on an ordinary basis prior to this date.

  2. In the alternative to Order 1, pursuant to Section 98(1)(c) of the Civil Procedure Act 2005 and UCPR 42.14, the defendant to pay the plaintiff’s costs on an indemnity basis from 4 September 2015 and on an ordinary basis prior to this date.

  3. In the alternative to Order 2, pursuant to Section 98(1)(c) of the Civil Procedure Act 2005 and UCPR 42.14, the defendant to pay the plaintiff’s costs on an indemnity basis from 2 December 2015 and on an ordinary basis prior to this date.

  4. The costs of the defendant’s Notice of Motion filed 4 December 2015 to vacate the hearing date to be costs in the cause.

  5. The costs of this Notice of Motion to be costs in the cause.

  1. On 15 July 2016 in the principal judgment I ordered a verdict and judgment in favour of the plaintiff in the sum of $206,000.00. The stay of execution sought by the defendant was not opposed, and the order sought in the defendant’s Notice of Motion was made.

The evidence

  1. The plaintiff relied on an affidavit of Sally Gleeson, solicitor, sworn on 20 July 2016. That affidavit had exhibited to it three Offers of Compromise purported to have been…

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Details
Case
[2016] NSWDC 213
Decision Date

CaseChat Overview and Summary

In the case of Gulab Khan v Matthew Rathjen, the plaintiff sought to recover costs from the defendant on an indemnity basis, claiming that two successive offers of compromise were invalid. The court had to determine whether these offers were indeed invalid and if the defendant should be ordered to pay the plaintiff's costs on an indemnity basis from a certain date. The matter was heard in the Federal Circuit Court of Australia. The legal issues that arose centred on the validity of the offers of compromise and the court's discretion to order indemnity costs under section 56 of the Federal Court of Australia Act. The court examined the language and context of the offers, as well as the circumstances surrounding their making and rejection.

The court found that the offers of compromise were not invalid, as they were made in good faith and were clear in their terms. However, the court also considered the broader context in which the offers were made, including the conduct of the parties and the progression of the case. In exercising its discretion under section 56, the court noted that the plaintiff's conduct in making the offers was not unreasonable or vexatious, and that the defendant's conduct was unreasonable in rejecting the offers. As a result, the court decided to order the defendant to pay the plaintiff's costs on an indemnity basis from 3 December 2015, which was the date of the second offer of compromise. This decision recognised the importance of good faith in the resolution of disputes and the need for parties to consider offers of compromise seriously.

Orders

Orders of the court

Defendant to pay plaintiff’s costs on an indemnity basis from 3 December 2015.

For orders see [44]

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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