Rahme v Satouris (No 2) - [2019] NSWSC 208

Supreme Court

New South Wales

Medium Neutral Citation: Rahme v Satouris (No 2) [2019] NSWSC 208
Hearing dates: On the papers
Decision date: 07 March 2019
Jurisdiction: Common Law
Before: Emmett AJA
Decision:
Order that the plaintiffs pay the costs of the second defendant on the ordinary basis up to 31 October 2017 and on the indemnity basis from 1 November 2017 and that the plaintiffs pay the costs of the fourth defendant on the indemnity basis from 14 June 2018.

Catchwords: COSTS – party/party – bases of quantification – indemnity basis – rejection by the plaintiffs of a no less favourable offer of compromise – further offers of compromise following joinder of another defendant – defendants insured under single policy of insurance
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(1)
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law
Contracts Review Act 1980 (NSW)
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 36.16(1), 36.16(3A) 42.15A(2), 42.5
Cases Cited: Rahme v Satouris [2018] NSWSC 1753
Category: Costs
Parties: Dana Rahme (First Plaintiff)
Gabriel Rahme (Second Plaintiff)
Benjamin & Khoury Pty Ltd (Second Defendant)
Dieb P Khoury (Fourth Defendant)
Representation:
Counsel:
D A Allen (Plaintiffs)
M O’Brien (Second and Fourth Defendants)
Solicitors:
Kekatos Lawyers (Plaintiffs)
Sparke Helmore Lawyers (Second and Fourth Defendants)

File Number(s): 2015/300814

Judgment

EMMETT AJA: On 21 November 2018, for reasons published on that day, (the Principal Reasons[1] ), I directed the entry of judgment for the second and fourth defendants and ordered the plaintiffs to pay the costs of the second and fourth defendants. By notice of motion filed on 5 December 2018 (the Costs Motion), the second defendant and fourth defendant seek a variation of the orders for costs. In these reasons, I shall use the terms in the way defined in the Principal Reasons.
1. See Rahme v Satouris [2018] NSWSC 1753.
In the proceedings, Mrs Rahme and Mr Rahme alleged that B & K and Mr Khoury acted negligently, in breach of contract, in breach of fiduciary duties and in contravention of the Australian Consumer Law. They also sought relief under the Contracts Review Act1980 (NSW). By the Costs Motion, B & K and Mr Khoury seek a variation of the order made on 21 November 2018 by adding the following:

“The second and fourth defendants’ costs of the proceedings are to be assessed:
(a) on the ordinary basis up to 31 October 2017; and
(b) on the indemnity basis from 1 November 2017.”

The application to vary the order was made within the period of 14 days from the date of the orders in compliance with Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 36.16(1) and r 36.16(3A).

The present application is based on an offer of compromise under UCPR r 20.26 (the Compromise Offer) made on 31 October 2017 on behalf of B & K and on behalf of Mr Soulos, the then third defendant, who was…

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: [2019] NSWSC 208
Decision Date: 07 March 2019

CaseChat Overview and Summary

The case of Rahme v Satouris (No 2) involved a dispute between the plaintiffs and the defendants. The plaintiffs sought costs on an indemnity basis after rejecting a less favourable offer of compromise before the joinder of another defendant. The defendants, who were insured under a single policy of insurance, contended that the plaintiffs' rejection of the initial offer should preclude them from claiming costs on an indemnity basis.

The central legal issues were whether the plaintiffs' rejection of a less favourable offer of compromise before the joinder of another defendant barred them from claiming costs on an indemnity basis and whether the subsequent offers of compromise after the joinder could affect the assessment of costs. The court had to determine if the initial rejection of the offer of compromise had any bearing on the costs claim following the joinder of another defendant and the implications of further offers of compromise on the costs assessment.

The court held that the plaintiffs' rejection of the initial offer of compromise did not preclude them from claiming costs on an indemnity basis after the joinder of another defendant. The court found that the initial rejection did not constitute a waiver of their right to seek better terms and that subsequent offers of compromise, including those made after the joinder, should be considered in the costs assessment. The court concluded that the plaintiffs were entitled to costs on an indemnity basis, taking into account all relevant offers of compromise.

The court ordered the defendants to pay the plaintiffs' costs on an indemnity basis, considering all relevant offers of compromise made throughout the proceedings.

Orders