Rodny v Stricke (No 2) - [2020] NSWSC 950

Supreme Court

New South Wales

Medium Neutral Citation: Rodny v Stricke (No 2) [2020] NSWSC 950
Hearing dates: On the papers
Decision date: 24 July 2020
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Note that the defendants have applied in writing to my Associate for an order different from the one proposed in order (3) made on 25 June 2020.
(2) Order the plaintiffs to pay the defendants’ costs of the proceedings on the ordinary basis up to and including 11 November 2019 and on an indemnity basis thereafter.

Catchwords:
COSTS — Party/Party — Exceptions to general rule that costs follow the event — Offers of compromise and Calderbank offers — whether plaintiffs’ rejection of defendants’ offer unreasonable — order for costs on indemnity basis

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A

Cases Cited:
Calderbank v Calderbank [1975] 3 All ER 333
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Morgan v Johnson (1998) 44 NSWLR 578
Rodny v Stricke [2020] NSWSC 800

Category: Costs
Parties: Laurence Rodny (First Plaintiff)
Communications Power Incorporated (Aust) Pty Ltd (ACN 001 521 160) (Second Plaintiff)
Angela Stricke (First Defendant)
Helen Meddings (Second Defendant)
Natalie Stoianoff (Third Defendant)
Vlad Sofreski (Fourth Defendant)
The Owners – Strata Plan No 56911 (Fifth Defendant)
Representation:
Counsel:
C Birch SC (Plaintiffs)
J Knackstredt (Defendants)
Solicitors:
Strata Specialist Lawyers (Plaintiffs)
Clyde & Co (Defendants)

File Number(s): 2019/226633

Judgment

Introduction

On 25 June 2020 I delivered judgment and made orders in this matter: Rodny v Stricke [2020] NSWSC 800, refusing leave to appeal, dismissing the summons and ordering the plaintiffs to pay the defendants’ costs of the proceedings unless an application was made for a different order. My judgment in the principal matter is to be read with this judgment.
By written notice dated 26 June 2020, in accordance with the order made, the defendants applied for an order that the plaintiff should pay their costs on the ordinary basis up to and including 11 November 2019 and on an indemnity basis thereafter.

The facts

On 11 November 2019, the defendants made two offers to resolve the proceedings: an offer under r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) (the Rules Offer) and an offer which purported to be made in accordance with Calderbank v Calderbank [1975] 3 All ER 333 (the Calderbank offer). Each of the offers was open for 28 days and was in the same terms, namely that the defendants offered to settle the proceedings on the basis of the following orders:

Proceedings dismissed;

The plaintiffs to pay $10,000 to the defendants on account of the costs order made by Deputy President Westgarth (order (3)) in dismissing the application for leave to appeal to the Appeal Panel from the adjournment decision; and

There be no order as to the costs of the proceedings in the Supreme Court.

The order made by the Appeal Panel referred to in order (2) was that the appellant…

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: [2020] NSWSC 950
Decision Date: 24 July 2020

CaseChat Overview and Summary

The case of Rodny v Stricke (No 2) dealt with a dispute between the plaintiffs, Rodny, and the defendants, Stricke, concerning costs in a legal proceeding. The case came before the Federal Court of Australia, which had to determine whether the plaintiffs' refusal to accept a compromise offer made by the defendants was reasonable and, if not, whether the defendants were entitled to costs on an indemnity basis.

The primary legal issue before the court was whether the plaintiffs' rejection of the defendants' offer to settle the case was unreasonable. The defendants argued that their offer, which was made pursuant to a Calderbank offer, was reasonable and that the plaintiffs' refusal was unjustified. The court had to assess the reasonableness of the offer and the plaintiffs' response, considering the principles governing offers of compromise and Calderbank offers.

In delivering the judgment, the court found that the defendants' offer was indeed reasonable and that the plaintiffs' rejection was unreasonable. The court relied on the principles established in previous case law, which dictate that a party is generally entitled to recover costs on an indemnity basis if the other party unreasonably refuses a reasonable offer to settle. Given the findings, the court ordered that the plaintiffs pay the defendants' costs on an indemnity basis, reflecting the unreasonableness of the plaintiffs' actions in rejecting the offer.

The final orders of the court included an order for the plaintiffs to pay the defendants' costs on an indemnity basis, reflecting the court's determination that the rejection of the defendants' offer was unreasonable. This decision reinforces the principle that parties should seriously consider reasonable offers to settle, as unreasonable refusals can lead to significant financial consequences.

Orders