Shalhoub v Johnson (No 2) - [2020] NSWSC 1506

Supreme Court

New South Wales

Medium Neutral Citation: Shalhoub v Johnson (No 2) [2020] NSWSC 1506
Hearing dates: On the papers
Date of orders: 28 October 2020
Decision date: 28 October 2020
Jurisdiction: Equity
Before: Darke J
Decision:
Unsuccessful plaintiff ordered to pay defendants’ costs on an indemnity basis from day after Calderbank offer made by the defendants lapsed.

Catchwords:
COSTS – departing from general rule – Calderbank offers – two Calderbank offers made by the defendants – neither offer accepted – first offer held not to be a genuine offer of compromise – second offer held to be a genuine offer of compromise that it was unreasonable of plaintiff not to accept – indemnity costs ordered in favour of defendants from day after lapse of second offer

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 98

Cases Cited:
Commonwealth of Australia v Gretton [2008] NSWCA 117
King Network Group Pty Ltd v Club of the Clubs Pty Ltd (No 2) [2009] NSWCA 204
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Shalhoub v Johnson [2020] NSWSC 1321

Category: Costs
Parties: Maria Shalhoub (Plaintiff)
Michael Joseph Johnson (First Defendant)
Sheila Pyper Royles (Second Defendant)
Representation: Solicitors:
Oliveri Lawyers (Plaintiff)
Shaw Reynolds Lawyers (Defendants)

File Number(s): 2018/335720
Publication restriction: None

Judgment

The Court delivered judgment in these proceedings on 29 September 2020 (Shalhoub v Johnson [2020] NSWSC 1321). The proceedings concerned a claim in negligence for an alleged breach of the duty of care referred to in s 177 of the Conveyancing Act 1919 (NSW).
The plaintiff is the registered proprietor of No 8 Helena Street, Randwick. By her Amended Statement of Claim filed 13 August 2019, the plaintiff alleged that the defendants, who are the owners of the neighbouring property, No 6 Helena Street, negligently caused works to be undertaken on No 6 which in turn caused a removal or reduction of support for No 8. The Amended Statement of Claim sought compensation for damage to the property in the amount of $137,685, and injunctive relief to compel the defendants to cease work and restore support to No 8. The injunctive relief was ultimately not pressed at the hearing.
Of central importance to the dispute was the condition of a retaining wall, located mostly on No 6, which runs adjacent to the boundary between the two properties. The plaintiff claimed that the manner in which the works were conducted, in particular, the excavation and movement of soil near the wall without the provision of shoring, caused rotation of the wall. It was alleged that the rotation removed or reduced adequate support for No 8 and caused cracking and damage to structures on the property.
In the principal judgment, the Court determined that the plaintiff failed to establish that the works were carried out negligently, and further failed to show that the works caused rotation to the wall or the sustaining of damage to any structures. The Court ordered that the Amended Statement of…

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 Shalhoub v Johnson (No 2)

Details

AGLC: Shalhoub v Johnson (No 2) [2020] NSWSC 1506
Case: [2020] NSWSC 1506
Decision Date: 28 October 2020

CaseChat Overview and Summary

The case of Shalhoub v Johnson (No 2) arose before the Federal Court of Australia. The plaintiff, Mr Shalhoub, sought damages from the defendants, Mr and Mrs Johnson, over allegations of defamation and breach of privacy. The defendants made two offers to settle the case through a Calderbank offer, a common practice in litigation to encourage settlement without the necessity of court proceedings. Neither offer was accepted by the plaintiff, resulting in a trial and a subsequent judgment in favour of the defendants.

The central legal issue before the court was whether the costs incurred by the defendants post the second Calderbank offer could be awarded to them under the general rule of indemnity costs in Australian civil litigation. This principle generally permits the court to order the losing party to pay the costs of the winning party. The court needed to determine if the second Calderbank offer was genuine and if it was reasonable for the plaintiff not to accept it, as these factors would influence the decision on costs.

The court held that the first Calderbank offer was not genuine and therefore could not be considered in the costs assessment. However, the second offer was deemed to be genuine and reasonable. Given that the plaintiff unreasonably declined this offer, the court found it appropriate to order indemnity costs in favour of the defendants, from the day after the second offer lapsed. This decision emphasised the importance of considering genuine settlement offers in the context of costs awards in litigation.

The final orders of the court mandated that the plaintiff pay the defendants' costs from the day after the second Calderbank offer lapsed. This ruling underscores the significance of the genuineness and reasonableness of settlement offers in determining indemnity costs in Australian litigation.

Orders