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Vakiloroaya v Norri (No 2)

Vakiloroaya v Norri (No 2)

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Case Copied 5 August 2025 21 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Vakiloroaya v Norri (No 2) [2025] NSWSC 869
Hearing dates: In chambers – on the papers
Date of orders: 5 August 2025
Decision date: 05 August 2025
Jurisdiction: Common Law
Before: Harrison AsJ
Decision:
(1) The plaintiff is to pay the defendant’s costs of the appeal on an indemnity basis and in the gross sum of $29,700.00.
(2) The plaintiff is to pay the defendant’s costs of this costs application on an ordinary basis.

Catchwords:
COSTS — offer of compromise — where purported Calderbank letter sent — where offer was to walk away — whether offer unreasonably rejected —indemnity basis — gross sum costs

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), rr 42.1, 42.15A

Cases Cited:
Calderbank v Calderbank [1975] All ER 331
Melchior v Sydney Adventist Hospital Ltd (No 2) [2009] NSWSC 65
Hollier v Sutcliffe (No 2) [2010] NSWSC 433
Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Mead v Watson as Liquidator for Hypec Electronics (2005) 23 ACLC 718; [2005] NSWCA 133
Leichhardt Municipal Council v Green [2004] NSWCA 341
Commonwealth of Australia v Gretton [2008] NSWCA 117
BaulderstoneHornibrook Engineering Pty Limited v Gordian Runoff Limited (No 2) [2009] NSWCA 12
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368
East West Airlines Ltd v Turner (No 2) [2010] NSWCA 159
Byrne v Turner Freeman Lawyers (No 2) [2025] NSWCA 158
Quach v Horvath (No 2) [2022] NSWSC 55
In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500
Harrison v Schipp [2002] NSWCA 213
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99
Hamod v State of New South Wales [2011] NSWCA 375

Category: Costs
Parties: Vahid Vakiloroaya (Plaintiff)
Leila Norri (Defendant)
Representation:
Counsel:
A Kaufmann (Plaintiff)
M E Parker (Defendant)
Solicitors:
Stanford Lawyers (Plaintiff)
David Leamey Solicitor & Barrister (Defendant)

File Number(s): 2024/00255498
Publication restriction: Nil

JUDGMENT

This is a judgment on costs. It follows my judgment on 26 June 2025, dismissing the appeal against the decision of Magistrate Brender dated 11 July 2024. As Norri indicated she was seeking a costs order based on a Calderbank offer, I vacated the costs order that I made when I handed down my judgment.
For convenience, and without intending any disrespect, I will refer to the parties by name as I did in my judgment dated 26 June 2025. Both parties have filed and relied upon their written submissions.
Norri seeks that the Court order Vakiloroaya to pay her costs on an indemnity basis and as a gross sum of $29,700.00. She relies on the affidavit of David Leamey (Mr Leamey), her solicitor, sworn 2 July 2025.
Vakiloroaya opposes Norri’s proposal seeking costs on an indemnity basis and in a gross sum on the…

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: [2025] NSWSC 869
Decision Date: 05 August 2025

CaseChat Overview and Summary

The case of Vakiloroaya v Norri (No 2) involved the issue of costs in relation to an offer of compromise under the terms of a Calderbank letter. The applicant, Vakiloroaya, sought to recover costs on an indemnity basis after the respondent, Norri, allegedly unreasonably rejected an offer to settle the proceedings. The proceedings took place in the Supreme Court of New South Wales. The core legal issues before the court were whether the purported Calderbank letter was indeed an offer of compromise, and if the rejection of the offer was unreasonable, thereby warranting indemnity costs.

The court found that the letter in question did constitute a genuine offer of compromise as it proposed a specific settlement amount and a cessation of further litigation. The applicant had effectively proposed a settlement that the respondent could accept or reject. The court then proceeded to examine whether the respondent's rejection of this offer was unreasonable. The respondent's decision to reject the offer and continue with the proceedings was assessed against the criteria for reasonableness, which included the merits of the case, the conduct of the parties, and the overall circumstances. The court held that the rejection was unreasonable given the clear terms of the offer and the fact that it effectively meant the respondent would have to bear costs without any benefit.

Consequently, the court ordered that the respondent pay the applicant's costs on an indemnity basis, encompassing the gross sum of costs incurred by the applicant in relation to the proceedings. This decision underscored the importance of evaluating the reasonableness of rejecting settlement offers in the context of cost recovery, particularly where such offers are made under the framework of a Calderbank letter.

Orders