PM Sulcs & Associates Pty Ltd v Oliveri (No 2)

[2009] NSWSC 485

CITATION:	PM Sulcs & Associates Pty Ltd v Oliveri (No 2) [2009] NSWSC 485
HEARING DATE(S):	2 June 2009
JUDGMENT DATE :	2 June 2009
JURISDICTION:	Equity
JUDGMENT OF:	Debelle AJ
EX TEMPORE JUDGMENT DATE:	2 June 2009
CATCHWORDS:	PROCEDURE – Costs – Departing from the general rule – Calderbank offer by defendants – defendant has obtained orders better than offer – Order for costs on party and party basis to date of offer and on indemnity basis thereafter
LEGISLATION CITED:	Legal Profession Act 1987
CATEGORY:	Principal judgment
PARTIES:	PM Sulcs & Associate Pty Limited (Plaintiff) Dominic Oliveri (Defendant)
FILE NUMBER(S):	SC SC 3548/2004
COUNSEL:	R Aldridge (Plaintiff) GC LindsaySC/GPF Rundle (Defendant)
SOLICITORS:	Connah, Steed & Co (PLaintiff) Penelope Purcell Solicitors (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ACTING JUSTICE DEBELLE

TUESDAY, 2 JUNE 2009

DOMINIC OLIVERI – Costs

JUDGMENT (Ex tempore)

1 The defendant applies for an order that he be paid the costs of these proceedings on an indemnity basis. That claim is founded on an exchange of correspondence between the solicitors for the parties in 2005. By letter dated 3 June 2005 the then solicitors for the defendant offered to compromise the proceedings in a so-called Calderbank letter. The essence of the offer was that the plaintiff pay 95 percent of the costs and disbursements of the defendant as assessed on a quantum meruit. The letter goes on to state that the defendant would settle for an order that he have a verdict on either the claim or on the cross-claim.

2 The solicitors for the plaintiff replied on 17 June seeking clarification of the terms of the offer. That letter was answered by letter dated 1 July 2005 that said that the offer was as follows:

“Our client is prepared to accept from your client 95 percent of costs assessed on a quantum meruit basis as determined by either a judicial officer or costs assessor."

That exchange of correspondence must be considered in the context of the claim which had been made by the defendant. The claim for costs was a claim in the sum of $1,879,974. The bill of costs which was delivered to the plaintiff was, as I have said in my reasons for judgment, amended so that the bill as amended claimed costs in that sum less the sum of $220,045 that had been paid by the plaintiff to the defendant on 1 November 2001.

3 Mr Aldridge for the plaintiff contends that the terms of the offer as expressed in the letters from the defendant's then solicitor dated 3 June and 1 July 2005 are ambiguous in that they do not make any reference to the claim by the defendant in paragraphs 10 and 11 for a supplementary fees agreement that he be paid $220,045 in consideration for him deferring his claim for professional costs.

4 Whilst the letters from the defendant's solicitors of 3 June and 1 July 2005 do not expressly deal with that aspect of the cross-claim, it is readily apparent from the fact that the bill of costs the subject of the defendant's claim expressly deducted the sum of $220,045 that the defendant was not claiming this sum of $220,045. A claim based on a supplementary fees agreement is quite inconsistent with the amount claimed in the bill of costs. When tested in that way, the contentions of Mr Aldridge must fail.

5 The defendant has obtained orders that better the offer contained in the Calderbank letter and is, therefore, entitled to an order that the plaintiff pay his costs on an indemnity basis.

There will be orders as follows:

1. Declare that the defendant is entitled as against the plaintiff to payment of professional fees and disbursements referable to the work undertaken by him as the solicitor for the plaintiff in or in connection with proceedings SC 11489 of 1993 between PM Sulcs and Associates Pty Ltd and Daihatsu Australia Pty Ltd ("the proceedings").

2. Declare that the defendant is entitled to a lien upon files and documents relating to the proceedings until the payment of the defendant's professional fees or until the plaintiff provides security in the sum of $1,656,629 for the costs payable to the defendant.

3. Order that the plaintiff pay the defendant's costs for acting in the proceedings as assessed on a quantum meruit basis by Leonard S Hattersley pursuant to the Legal Profession Act 1987 or such other person as is appointed pursuant to the Legal Profession Act 1987.

4. Order that, subject to further order, the files and documents of the plaintiff relating to the proceedings presently in the custody of the court on subpoena/notice to produce in these proceedings, be held by the court for the purpose of and pending the conduct of the assessment of the defendant's costs.

5. Order that, subject to Order 4 hereof, if the plaintiff provide security to the defendant for the defendant's costs in terms agreed between the parties or in default of agreement as ordered by the Registrar of the Court, the defendant shall, within seven days after such security has been provided, deliver to the plaintiff all files and documents held by him relating to the proceedings.

6. Order that the plaintiff's claim and the defendant's claim be otherwise dismissed.

7. Order that the plaintiff pay the defendant's costs of these proceedings until 1 July 2005 on a party and party basis and thereafter on an indemnity basis.

8. Liberty to apply for orders relating to the implementation of these orders or ancillary relief relating to assessment of defendant's costs.

9. I direct that the order be entered forthwith.
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