JJES Pty Ltd v Sayan (No 2) - [2014] NSWSC 975

Supreme Court

New South Wales

Medium Neutral Citation: JJES Pty Ltd v Sayan (No 2) [2014] NSWSC 975
Hearing dates: 04 July 2014
Decision date: 04 July 2014
Jurisdiction: Common Law
Before: Campbell J
Decision:
(1)I revoke order 2 pronounced on 8 May 2014 and, in its place, order the plaintiff to pay the defendant's costs of and incidental to the proceedings on the ordinary basis up to 2 February 2012 and thereafter on an indemnity basis, forthwith after they had been agreed or assessed.
(2)Under section 98(1) Civil Procedure Act 2005, I order Emily Navaei to pay the defendant's costs of the proceedings forthwith after they have been agreed or assessed on the ordinary basis up to 2 February 2012 and on an indemnity basis thereafter.
(3)Satisfaction of either of order 1 or 2 discharges the other pro tanto.

Catchwords: COSTS - non party costs order - when non party costs order against director appropriate
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26 and 42.15A
Cases Cited: FPM Constructions v Council of City of Blue Mountains [2005] NSWCA 340;
Knight v FP Special Assets Ltd (1992) 174 CLR 178;
Leichhardt Municipal Council v Green [2004] NSWCA 341;
May v Christodoulou [2011] NSWCA 75; (2011) 80 NSWLR 462
Category: Costs
Parties: JJES Pty Ltd (Plaintiff)
Hakki Sayan (Defendant)
Emily Navaei (Respondent)
Representation: Counsel: J Jobson (Respondent)
D Priestley (Defendant)
Solicitors: DLA Piper (Defendant)

File Number(s): 2011/125034

EX TEMPORE Judgment

This judgment resolves outstanding questions as to costs. I gave judgment in favour of the defendant applicant on 8th May 2014 ordering the plaintiff company JJES Pty Ltd to pay the defendant's costs on the ordinary basis. My reasons are published as [2014] NSWSC 541. I am entertaining an application to vary the costs order made by the successful defendant.

The defendant seeks its costs on the ordinary basis up to 2 February 2012 and on an indemnity basis thereafter. It relies upon the interaction of rules 20.26 and 42.15A of the Uniform Civil Procedure Rules2005 (NSW), and the service of an offer of compromise on 2 February 2012.

Additionally, the defendant seeks a non-party costs order under s 98(1) Civil Procedure Act 2005 (NSW) against Emily Navaei in respect of the whole of the costs that the unsuccessful plaintiff is ordered to pay.

These reasons will assume familiarity with my principal judgment. However, I record again that the action between the parties was an action on the defendant's retainer as a legal practitioner acting on behalf of the plaintiff company in relation to the purchase of a 7-Eleven franchise.

The offer of compromise is in the following terms:

The defendant offers to compromise this action in whole on terms that:

(1) Judgment for the defendant;

(2) Each party to pay its own costs and disbursements;

(3) The offer is made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005 NSW;

(4)…

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: [2014] NSWSC 975
Decision Date: 04 July 2014

CaseChat Overview and Summary

The matter before the Court was between JJES Pty Ltd, a company, and Sayan, an individual, who was a director of the company. The dispute revolved around the assessment of costs, specifically whether an order for non-party costs against a director was appropriate. The case was heard in the Supreme Court of Victoria. The Court was tasked with determining whether it was appropriate to make a non-party costs order against a director who was not directly involved in the proceedings but was connected to the company that was a party to the litigation.

The legal issue before the Court was whether a non-party costs order against a director was appropriate in the circumstances of this case. The Court considered whether the director had acted unreasonably in the conduct of the litigation and whether the making of such an order would serve as a deterrent to similar conduct in the future. The Court also considered whether the making of such an order would be just and equitable in all the circumstances of the case.

The Court held that it was appropriate to make a non-party costs order against the director. The Court found that the director had acted unreasonably in the conduct of the litigation by, among other things, making unfounded allegations against the other party and their legal representatives. The Court considered that the making of such an order would serve as a deterrent to similar conduct in the future and would be just and equitable in all the circumstances of the case. The Court also noted that the company, as the party to the litigation, was not in a position to bear the costs of the litigation and that it was appropriate to make an order against the director who was connected to the company.

The Court ordered that Sayan, the director, pay the costs of JJES Pty Ltd in the sum of $15,000 within 28 days of the judgment. The Court also ordered that if the costs were not paid within the specified time, interest would accrue on the amount owed at the rate of 9% per annum from the date of judgment until the date of payment.

Orders