Michael Kuehn and Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd - Costs

[2020] NSWSC 1130

Supreme Court

New South Wales

Medium Neutral Citation:

Michael Kuehn & Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd - Costs [2020] NSWSC 1130

Hearing dates:

On the papers

Decision date:

25 August 2020

Jurisdiction:

Equity - Technology and Construction List

Before:

Hammerschlag J

Decision:

(1) The proceedings against the second defendant, third defendant and fourth defendant are dismissed.

(2) The first defendant is to pay the plaintiffs’ costs of the first defendant’s motion filed 15 May 2020.

(3) The plaintiffs are to pay the costs of the second defendant, third defendant and fourth defendant of the proceedings, excluding the costs of the first defendant’s motion filed 15 May 2020 and the fourth defendant’s motion filed 21 July 2020, to the intent that as against each other, each of these parties will bear their own.

(4) Nothing in these orders affects the costs order made by the Court on 27 July 2020.

(5) The proceedings transferred to the NSW Civil and Administrative Tribunal.

Catchwords:

COSTS – Multi-party contest – No issue of principle.

PROCEDURE – Damages case transferred to the Court from the NSW Civil and Administrative Tribunal (NCAT) because the first defendant argued that the proceedings had been compromised and that question was beyond NCAT’s jurisdiction – After transfer, the plaintiffs joined their lawyers claiming damages – The Court determined that the proceedings had not been compromised and dismissed the claim against the lawyers – Proceedings remitted to NCAT.

Cases Cited:

Michael Kuehn & Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd [2020] NSWSC 1049

Category:

Costs

Parties:

Michael Kuehn – First Plaintiff
Jennifer Kuehn – Second Plaintiff
Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd – First Defendant
MTV Legal Pty Ltd t/as MGV Lawyers – Second Defendant
Michael Gerard Vitagliani – Third Defendant
Erin Glover – Fourth Defendant

Representation:

Counsel:
D Eardley – Plaintiffs
A Horvath – First Defendant
J Steele – Second & Third Defendants
A Zahra – Fourth Defendant

Solicitors:
Theodore Solomon & Partners – Plaintiffs
Kennedys – First Defendant
K&L Gates – Second & Third Defendants
Sparke Helmore Lawyers – Fourth Defendant

File Number(s):

2019/378761

JUDGMENT

1. HIS HONOUR: On 11 August 2020, I determined, under the power conferred by s 73 of the Civil Procedure Act 2005 (NSW), the question whether the plaintiffs (the Kuehns) had compromised their claim against the first defendant (Masterton): Michael Kuehn & Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd [2020] NSWSC 1049 (First Judgment). Definitions used in the First Judgment are used here.

2. Masterton moved for the determination by motion filed 15 May 2020. The Kuehns prevailed and Masterton’s motion failed. The consequences of this are that the Kuehns can continue their claim for damages against Masterton and the Kuehns’ claim against counsel and their solicitor who acted for them before NCAT have been dismissed.

3. Questions of costs and the forum to which the proceedings should go, remain.

4. The Court received written submissions from the parties.

5. Masterton correctly does not oppose an order that it pay the Kuehns’ costs of the 15 May 2020 motion and I will so order. This order does not affect the order which I made on 27 July 2020 that the Kuehns are to pay Masterton’s costs, on the indemnity basis, thrown away by an adjournment of the hearing for which they applied.

6. The fourth defendant, Ms Glover, brought her own motion, filed on 21 July 2020, seeking determination of various separate questions concerning whether there had been a settlement and whether Masterton was on notice of any restriction on the implied and ostensible authority of its lawyers to compromise the NCAT proceedings and, if so, whether that prevented a binding agreement from being entered into. The motion was otiose and it was dismissed. Ms Glover, nevertheless, seeks an order that Masterton pay her costs of that motion. There is no basis so to order.

7. The Kuehns, for their part, seek an order that Ms Glover pay their costs of her motion. Having regard to the fact that the Kuehns sued Ms Glover and have failed against her, such an order is not justified. The true contest was between the Kuehns and Masterton. Their erstwhile counsel and solicitor were well entitled to be, and were present, at the hearing but were correctly agnostic as to its outcome and did not participate in the contest. The lawyers should bear their own costs of the motions. Otherwise, however, the Kuehns’ principal proceedings against them have failed and there is no reason why they should not have their costs. Ms Glover submitted that she should have her costs on the indemnity basis because, on 17 June 2020, she offered to bear her own costs if the Kuehns agreed to discontinue against her. This did not involve any genuine element of compromise. Indemnity costs are not warranted.

8. So far as forum is concerned, the Kuehns suggest that the proceedings should be transferred to the District Court on the footing that their claim exceeds the jurisdiction of NCAT, even though it apparently did not do so originally. The proceedings were transferred to this Court for reason only that Masterton asserted a binding compromise. The lawyers are no longer party to the proceedings. In my view, the matter should be remitted back to NCAT. It is for that body properly to decide if these proceedings should be transferred to the District Court.

9. Masterton submitted that the Court should fix a hearing date for the principal proceedings. This is a matter for the forum where they will be heard.

10. The orders of the Court are:

1. the proceedings against the second defendant, third defendant and fourth defendant are dismissed.

2. the first defendant is to pay the plaintiffs’ costs of the first defendant’s motion filed 15 May 2020.

3. the plaintiffs are to pay the costs of the second defendant, third defendant and fourth defendant of the proceedings, excluding the costs of the first defendant’s motion filed 15 May 2020 and the fourth defendant’s motion filed 21 July 2020, to the intent that as against each other, each of these parties will bear their own.

4. nothing in these orders affects the costs order made by the Court on 27 July 2020.

5. the proceedings are transferred to the NSW Civil and Administrative Tribunal.

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Decision last updated: 25 August 2020