Joseph Taouk v Assure (NSW) Pty Ltd - [2017] NSWSC 778

Supreme Court

New South Wales

Medium Neutral Citation: Joseph Taouk v Assure (NSW) Pty Ltd [2017] NSWSC 778
Hearing dates: On the papers
Date of orders: 23 May 2017
Decision date: 16 June 2017
Jurisdiction: Equity
Before: Sackar J
Decision:
See para [25]

Legislation Cited: The Civil Procedure Act 2005 (NSW)
Cases Cited: Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45
Category: Costs
Parties: Joseph Taouk (plaintiff)
Assure (NSW) Pty Limited (defendant)
Representation:
Counsel:
D Pritchard SC (plaintiff)
J Stoljar SC, P D Reynolds (defendant)
Solicitors:
Gardner/Ekes Lawyers (plaintiff)
MLH Lawyers (defendant)

File Number(s): 2016/264640
Publication restriction: n/a

Judgment

Background

In this matter I gave judgment on 4 May 2017.
On 23 May 2017 I made orders but left open for further submission the question of costs.
The plaintiff was entirely unsuccessful in the proceedings as constituted. The defendant on the other hand was successful in relation to its cross claim although the precise amount owed by the plaintiff/cross defendant is yet to be quantified.
The defendant seeks an order the plaintiff pay the defendant’s costs of the proceedings including the costs of the cross claim up to and including the date of any order on an indemnity basis.
The plaintiff opposes such an order.

The Parties’ Submissions

The defendant draws the court’s attention to UCPR rule 42.1 which relevantly provides the court would usually make an order that costs follow the event unless it appeared that some other order should be made as to the whole or any part of those costs.
The defendant submits the relevant event here is the hearing of the various separate questions and that the plaintiff should pay the defendant’s costs in relation to the determination of those questions. The defendant submits there is no reason why the plaintiff should not be ordered to pay the defendant’s costs at this stage.
The defendant submits costs should be awarded on an indemnity basis having regard to the terms of the indemnity given under the Development Agreement. It submits agreements as to costs are valid and enforceable and relies upon Abigroup Limited v Sandtara Pty Limited [2002] NSWCA 45 (Abigroup) at [9] per Stein JA.
Clause 24(1) of the Development Agreement is in the following terms:

Clause 24.1 provides (underlining added):
The Guarantor and the Developer indemnify the Owner, and must pay the Owner on demand the actual amount of all losses, liabilities, costs and expenses (including, without limitation, legal expenses on a full indemnity basis) in connection with:
(a) the occurrence, cure and attempted cure of any Default Event;
(b) where the Developer is in default under this Agreement or any other Project Document, the administration, enforcement or attempted enforcement or preservation or attempted preservation of any rights under this Agreement or any other Project Document; and
(c) any amendment to, or any consent, approval, waiver, release or discharge of or under, this Agreement or any other Project Document

The defendant points out the court found that the developer…

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: [2017] NSWSC 778
Decision Date: 16 June 2017

CaseChat Overview and Summary

Joseph Taouk, the plaintiff, and Assure (NSW) Pty Ltd, the defendant, were involved in a dispute heard by the Supreme Court of New South Wales. The case revolved around the interpretation and enforcement of a Development Agreement and its associated Variation. The defendant sought an order for the plaintiff to pay the defendant's costs of the proceedings on an indemnity basis, arguing that such a clause existed within the Development Agreement. The plaintiff opposed this, contending that the court's discretion should not be overridden by the terms of a contract and that the majority of costs incurred were related to the plaintiff's claims rather than the defendant's cross-claim. The court was required to decide whether the defendant's costs, both in relation to the plaintiff's claim and the defendant's cross-claim, fell within the indemnity clause of the Development Agreement.

In addressing the matter, the court considered the principles established by the Court of Appeal in Abigroup Limited v Sandtara Pty Limited. The court noted that while it was not bound by any extra-curial contract when exercising its discretion to award costs, it should not exercise its discretion in a way that precludes enforcement of a contract made at arm's length between the parties. The court found that the defendant's costs in successfully meeting the plaintiff's claim and those incurred on its cross-claim properly fell within the indemnity clause of the Development Agreement. The court reasoned that the defendant's case centred on denying the existence of any oral contracts or representations and relied on the Development Agreement as properly construed. Thus, the court exercised its discretion by paying due regard to the contractual arrangement between the parties.

The court ordered that the plaintiff pay the defendant's costs of the proceedings, including those incurred on the determination of the separate questions and the cross-claim, on an indemnity basis. This decision recognises the contractual terms while also exercising judicial discretion in the context of the overall proceedings.

Orders