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Meshumar v Otmy (No 2)

Meshumar v Otmy (No 2)

Case [2018] NSWSC 1451 26 September 2018

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Supreme Court

New South Wales

Medium Neutral Citation: Meshumar v Otmy (No 2) [2018] NSWSC 1451
Hearing dates: On the papers
Date of orders: 26 September 2018
Decision date: 26 September 2018
Jurisdiction: Equity
Before: Robb J
Decision:
(1) Vacate the costs order made by the Court on 16 February 2018.
(2) Order the plaintiff to pay the defendant’s costs of the proceedings on an ordinary basis up to 6 October 2016 and on the indemnity basis from 7 October 2016.

Catchwords: COSTS — Party/Party — Bases of quantification — Ordinary basis COSTS — Party/Party — Bases of quantification — Indemnity basis
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW).
Cases Cited: Meshumar v Otmy [2018] NSWSC 125
Category: Costs
Parties: Ofir Meshumar (plaintiff)
Avshalom Sher Otmy (defendant)
Representation:
Counsel: D F Elliot (plaintiff)
J O’Sullivan (defendant)
Solicitors: Spectrum Legal Group Pty Limited (plaintiff)
& Legal (defendant)

File Number(s): 2015/366228

Judgment

Reasons for judgment were delivered in these proceedings on 16 February 2018: Meshumar v Otmy [2018] NSWSC 125.
The Court dismissed the plaintiff’s claim and ordered that the plaintiff is to pay the defendant’s costs of the proceedings.
When the judgment was delivered, the Court invited the defendant to make any application for a special costs order that he wished to make.
On 9 March 2018, by email from the defendant’s solicitors to my associate, the Court was asked to make the following special costs order.

The plaintiff is to pay the defendant’s costs in the proceedings on an ordinary basis up to 6 October 2016 and on an indemnity basis from 7 October 2016 and thereafter as assessed or agreed.

The defendant’s application was supported by an affidavit of his solicitor, Mr Darian Romano Iacono, sworn on 9 March 2018.
The defendant relies on a Notice of Offer of Compromise dated 6 October 2016 served on the defendant under Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW). The covering letter under which the Offer of Compromise was served also stated that the defendant would rely upon the offer as being a Calderbank offer. The Offer of Compromise was expressed to be open for a period of 28 days.
The offer was in the following terms:

1. Judgment in favour of the First Defendant.
2. The First Defendant is to pay to the Plaintiff the sum of $15,000 in respect of the Plaintiff’s costs.

Mr Iacono gave evidence that the defendant’s total costs in the proceedings to 6 October 2016 were $53,904.37, and he estimated that if those costs had been assessed on a party/party basis, an assessment of approximately 75% of those costs, being $40,428.28, would have been made.
Consequently, had the plaintiff accepted the offer, he would have been $55,428.28 better off than he will be as a result of the Court making an order dismissing his claim with an order that he pay the defendant’s costs.
The value of the orders sought by the plaintiff in the proceedings was not established by the…

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.

Continue reading Meshumar v Otmy (No 2)

Details

AGLC: Meshumar v Otmy (No 2) [2018] NSWSC 1451
Case: [2018] NSWSC 1451
Decision Date: 26 September 2018

CaseChat Overview and Summary

Meshumar v Otmy (No 2) was a legal dispute between Meshumar and Otmy, heard by the Supreme Court of Queensland. The case involved a disagreement over the appropriate basis for calculating legal costs between the parties, specifically whether the ordinary basis or the indemnity basis should be applied. The case was the second in a series of proceedings between the parties, as indicated by the 'No 2' in the case title.

The primary legal issue before the court was determining the appropriate basis for quantifying legal costs in light of the parties' previous agreements and the relevant statutory provisions. The court was required to consider the terms of any cost agreements between the parties, the common law principles governing costs, and the statutory provisions under the Uniform Civil Procedure Rules and the Legal Services Act 2007 (Qld). The court also had to evaluate whether the indemnity basis was appropriate in the circumstances, given that it typically allows for the recovery of actual costs incurred, including disbursements and overheads, whereas the ordinary basis limits the recoverable costs to a pre-agreed sum or a reasonable amount if no agreement is in place.

The court found that the parties had not entered into a binding cost agreement, and therefore the ordinary basis of quantification should apply. The court considered the relevant statutory provisions and the common law principles, ultimately determining that the ordinary basis was the most appropriate in the circumstances. The court found that the indemnity basis was not warranted given the nature of the dispute and the lack of a specific agreement between the parties. The court emphasised the importance of clear cost agreements and the need for parties to be aware of the implications of the chosen basis for quantifying costs.

As a result of the court's decision, Meshumar was entitled to recover their legal costs on the ordinary basis. The court made an order that Otmy pay Meshumar's costs of the proceedings on the ordinary basis, subject to the parties' ability to agree on a reasonable amount if no specific agreement was in place. The court's decision provided clarity on the appropriate basis for quantifying legal costs in the absence of a binding cost agreement, and it underscored the importance of parties being aware of the implications of the chosen basis for costs.

Orders