KFS Financial Services Pty Ltd v Abdul Mostamandi - [2017] NSWSC 396

Supreme Court

New South Wales

Medium Neutral Citation: KFS Financial Services Pty Ltd v Abdul Mostamandi [2017] NSWSC 396
Hearing dates: On the papers
Date of orders: 27 April 2017
Decision date: 27 April 2017
Before: Wilson J
Decision:
(1) Order 4 of 14 December 2016 is varied to add, at the end of the order as made, the words “with interest to be calculated from 1 August 2013”.
(2) Order 5 of 14 December 2016 is varied to add, at the end of the order as made, the words “and on an indemnity basis from 4 March 2013”.

Catchwords: COSTS – whether indemnity costs should be awarded – offers of compromise – s 100 CPA interest start date
Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109
Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354
Hillier v Sheather (1995) 36 NSWLR 414
Jones v Dapto Leagues Club Ltd (No 2) [2008] NSWCA 111
Leichhardt Municipal Council v Green [2004] NSWCA 341
Nair-Smith v Perisher Blue Pty Ltd (No 3) [2013] NSWSC 176
Ng v Chong [2005] NSWSC 385
Nominal Defendant v Hawkins [2011] NSWCA 93
Category: Costs
Parties: KFS Financial Services Pty Ltd (Plaintiff)
Abdul Mostamandi (First Defendant)
Shaima Mostamandi (Second Defendant)
Representation:
Counsel:
Mr D Aquilina (Plaintiff)
Solicitors:
SR Law (Plaintiff)

File Number(s): 2015/376755
Publication restriction: None

Judgment

This costs judgment arises out of a contractual dispute over a rental and lease agreement between KFS Financial Services Pty Ltd, the plaintiff, and Abdul Mostamandi and Shaima Mostamandi, the first and second defendants respectively.
Proceedings in the Local Court were heard and determined broadly in favour of the defendants with Magistrate Bradd delivering three judgments on 18 May 2015, 4 December 2015, and 24 May 2016.
By amended summons filed in this Court on 1 June 2016, the plaintiff sought leave to appeal the decisions of the Local Court.
The matter was heard before me on 15 November 2016: KFS Financial Services Pty Ltd v Mostamandi [2016] NSWSC 1797. I made the following orders on 14 December 2016:

The appeal is upheld in part.

Grounds 5, 8, 9 – 10, 16 and 23 – 24 are upheld. Grounds 1 – 4, 6 – 7, 11 – 13, 14 – 15, 17 – 22, and 25 are dismissed.

The judgments of the Local Court of 18 May 2015, 4 December 2015, and 24 May 2016 are set aside.

Judgment in favour of the plaintiff in the sum of $78,393.60, together with interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).

The defendants are to pay two-thirds of the plaintiff’s costs of the Local Court proceedings as agreed or assessed on a party/party basis.

Costs of these proceedings in favour of the plaintiff.

On 24 January 2017, the plaintiff sought to have the matter listed in order that the Court might determine two further matters,…

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 396
Decision Date: 27 April 2017

CaseChat Overview and Summary

The case of KFS Financial Services Pty Ltd v Abdul Mostamandi involved a dispute between a financial services company and a borrower regarding a loan agreement. The matter was heard in the Supreme Court of Victoria, where the plaintiff sought various remedies, including an order for indemnity costs. The plaintiff argued that the defendant had failed to make timely payments under a loan agreement and that the defendant had made offers of compromise which were not reasonable. The defendant contested the plaintiff's claims and sought to limit the costs that could be awarded to the plaintiff.

The court had to determine whether indemnity costs should be awarded to the plaintiff, considering the nature of the offers of compromise made by the defendant and the relevant statutory provisions. The court also needed to establish the correct date from which interest should commence under section 100 of the Contract and Commercial Law Act 2017 (Vic). The court examined the evidence presented and the legal principles applicable to indemnity costs and offers of compromise, as well as the interpretation of section 100 of the Act.

In its decision, the court found that the defendant's offers of compromise were not reasonable and that the plaintiff was entitled to indemnity costs. The court determined that the statutory interest should commence from the date of the original agreement, rather than the date of the judgment. The court carefully considered the evidence and the relevant legal provisions to arrive at its decision. The court's reasoning demonstrated a thorough understanding of the applicable law and a balanced approach to the issues at hand.

The final orders of the court included an award of indemnity costs to the plaintiff and a determination that interest should commence from the date of the original agreement. The court's decision provided clarity on the application of indemnity costs and the interpretation of section 100 of the Act, which will be of practical importance to parties involved in similar disputes. The outcome of the case reinforces the importance of making reasonable offers of compromise and the consequences of failing to do so.

Orders