Loumbos v Gray as a named partner of ClarkeKann (ABN 92 990 809 254) (No 2)
[2021] NSWSC 1603
•09 December 2021
Supreme Court
New South Wales
Medium Neutral Citation: Loumbos v Gray as a named partner of ClarkeKann (ABN 92 990 809 254) (No 2) [2021] NSWSC 1603 Hearing dates: 9 December 2021 Decision date: 09 December 2021 Jurisdiction: Common Law Before: Adamson J Decision: (1) The plaintiff is to pay the defendants’ costs of the proceedings on the ordinary basis until 9 October 2018 as agreed or assessed and thereafter on an indemnity basis as agreed or assessed.
Catchwords: COSTS — offers of compromise — necessary to set aside considerations of whether plaintiff has the ability to pay any costs order — application of Uniform Civil Procedure Rules 2005 (NSW), r 42.15A — order made in the terms sought by the defendants
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A
Cases Cited: Loumbos v Gray as a named partner of ClarkeKann (ABN 92 990 809 254) [2021] NSWSC 1579
Category: Costs Parties: John Valentine Loumbos (Plaintiff)
John James Montgomery Gray as a named partner of ClarkeKann (ABN 92 990 809 254) (First Defendant)
Miles Robert Anderson as a named partner of ClarkeKann (ABN 92 990 809 254) (Second Defendant)
Richard Michael Burr as a named partner of ClarkeKann (ABN 92 990 809 254) (Third Defendant)
Steven Mark Cardell as a named partner of ClarkeKann (ABN 92 990 809 254) (Fourth Defendant)
Dale Francis Cliff as a named partner of ClarkeKann (ABN 92 990 809 254) (Fifth Defendant)
Timothy John Crumpton as a named partner of ClarkeKann (ABN 92 990 809 254) (Sixth Defendant)
Timothy David Ferrier as a named partner of ClarkeKann (ABN 92 990 809 254) (Seventh Defendant)
John Richard Paul Hunt as a named partner of ClarkeKann (ABN 92 990 809 254) (Eighth Defendant)
Peter Lorrimer Karcher as a named partner of ClarkeKann (ABN 92 990 809 254) (Ninth Defendant)
Paul Michael O’Dea as a named partner of ClarkeKann (ABN 92 990 809 254) (Tenth Defendant)
Bernard Francis Tan as a named partner of ClarkeKann (ABN 92 990 809 254) (Eleventh Defendant)
John Dominic Toigo as a named partner of ClarkeKann (ABN 92 990 809 254) (Twelfth Defendant)
Belinda Eliza Hapgood (nee Weir) as a named partner of ClarkeKann (ABN 92 990 809 254) (Thirteenth Defendant)
Shane Russell Williamson as a named partner of ClarkeKann (ABN 92 990 809 254) (Fourteenth Defendant)Representation: Counsel:
Solicitors:
In person (Plaintiff)
A Horvath SC (Defendants)
Not applicable (Plaintiff)
Gilchrist Connell (Defendants)
File Number(s): 2017/208822
Judgment (ex tempore)
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On 6 December 2021, I made orders and delivered reasons in this matter: Loumbos v Gray as a named partner of ClarkeKann (ABN 92 990 809 254) [2021] NSWSC 1579 (the principal judgment).
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The orders I made were:
Judgment for the defendants.
Reserve costs.
List the matter for argument on costs at 9.00am on Tuesday 7 December 2021.
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That date was subsequently changed to 9 December 2021 to accommodate the availability of Ms Horvath SC, who appeared for the defendants.
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The defendants notified the plaintiff and my Associate that they sought an order that the plaintiff pay the defendants’ costs of the proceedings on the ordinary basis until 9 October 2018 and thereafter on an indemnity basis.
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Ms Horvath relied principally on the offer of compromise which was made in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) on 9 October 2018 in which the defendants offered to resolve the proceedings on the basis of a judgment in their favour with no order as to costs.
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The offer was open for acceptance until 5.00pm on 6 November 2018. I do not understand there to be any dispute that the offer was made in accordance with UCPR, r 20.26.
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At the time the offer was made, the proceedings had been on foot since 10 July 2017. There had been a number of directions hearings both before the Registrar and before Harrison J, the List Judge for the Professional Negligence List. Those directions hearings took place on 13 October 2017, 3 November 2017, 9 March 2018, 3 May 2018, 5 July 2018, 23 July 2018, 27 July 2018, 21 August 2018 and 3 September 2018.
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At the time the offer was made the plaintiff was represented by solicitors, Fortis Law Group.
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The terms of the letter, under cover of which the offer of compromise was served, set out the basis of the defendants’ contention that the second further amended statement of claim had no reasonable prospects of success. In their letter, the defendants’ solicitors referred to three matters of which the following two are presently most relevant: first, that the plaintiff had given inconsistent evidence before Rein J and Lindsay J, including regarding whether he read the Deed Poll Gift; and, second, that there was evidence that Mr Greg Beattie was the plaintiff’s solicitor and had been for over 30 years.
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In those circumstances, the defendants alleged in the letter that it was unlikely that the plaintiff would be able to convince the Court that the defendants were acting on behalf of the plaintiff in respect of the Deed Poll Gift. I note that the references to Rein J and Lindsay J are references to previous proceedings involving the plaintiff and the Lilyfield property, which are referred to in the principal judgment.
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I consider that the offer of compromise complies with the UCPR and that UCPR, r 42.15A applies. The rule provides that unless the Court orders otherwise, the defendant is entitled to an order against the plaintiff for the defendants’ costs in respect of a claim assessed on an indemnity basis if the offer was made before the first day of trial as from the beginning of the day following the day on which the offer was made.
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I consider, having regard to what I infer to have been the substantial costs incurred by the defendants up to the date of the offer in connection with the directions hearings and the various iterations of the pleading, that the offer of compromise made by the defendants on 9 October 2018 contained a sufficient element of compromise for the purposes of the rule.
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Mr Loumbos, who continues to appear on his own behalf, as he did at the trial, has submitted that there is “no way” that he can pay any costs. He explained that he had to go ahead with the proceedings because he believed he was entitled to the sum of $27 million. He said that agreeing to a judgment for the defendants would have given him no particular comfort given that at that stage he owed his lawyers $250,000. He submitted that all he has now is a pension of $2,000 per month. He said that he has neither money, nor other assets and that he lives with his son who supports him. The plaintiff summarised his situation by explaining that he had everything to gain through the proceedings and, in effect, nothing to lose because of his own financial position.
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It is necessary in determining whether to make an order for costs to set aside considerations of whether the plaintiff has the ability to pay such an order for costs.
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Ultimately, if an order for costs is made, it will be a matter for the defendants whether they choose to enforce any order for costs. However, a court cannot refuse to make an order for costs merely because it is unlikely or impossible that the person against whom the order for costs is made will be able to comply with the order.
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Mr Loumbos has sufficiently explained the stance he took in the proceedings. One can well understand why a person in his position who felt aggrieved decided to commence and maintain litigation against the defendants. He was in a relatively secure position in that because he had no assets there was nothing more that could be taken from him. However, this is not a reason to order other than in accordance with UCPR, r 42.15A.
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I am persuaded by Ms Horvath’s argument that it is appropriate that an order be made in the terms sought by the defendants.
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In these circumstances it is not necessary for me to address the second offer made by the defendant, namely the one made on 22 June 2021 to pay the plaintiff an amount of $200,000 inclusive of interest and costs to settle the proceedings; or the further offer made on 15 November 2021 that there be judgment for the defendants and no order as to costs.
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For the reasons I have given, I make the following order:
The plaintiff is to pay the defendants’ costs of the proceedings on the ordinary basis until 9 October 2018 as agreed or assessed and thereafter on an indemnity basis as agreed or assessed.
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Decision last updated: 09 December 2021
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