Wallis v Rudek (No 2) - [2020] NSWSC 215

Supreme Court

New South Wales

Medium Neutral Citation: Wallis v Rudek (No 2) [2020] NSWSC 215
Hearing dates: 5 March 2020
Date of orders: 05 March 2020
Decision date: 05 March 2020
Jurisdiction: Equity
Before: Parker J
Decision:
See [14]

Catchwords: COSTS – Party/Party – Exception to general rule that costs follow the event – Offer of compromise/ Calderbank offers – unreasonable rejection – plaintiffs not prepared to agree to settlement which did not give right to live in property
Cases Cited: Calderbank v Calderbank [1975] Fam 93
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Category: Costs
Parties: Yuri Wallis (First Plaintiff)
Olga Wallis (Second Plaintiff)
Suzanne Rudek (Defendant)
Representation:
Counsel:
B Oliak/DE Thomas (First and Second Plaintiffs)
J Bennett (Defendant)
Solicitors:
P Dobrich & Co (First and Second Plaintiffs)
Optic Lawyers (Defendant)

File Number(s): 2018/191080
Publication restriction: Nil

Judgment – EX TEMPORE

Revised and reissued on 11 March 2020

I delivered my principal judgment in these proceedings orally on 26 February 2020 and the revised version of my judgment was published earlier today: Wallis v Rudek [2020] NSWSC 162. This supplementary judgment assumes familiarity with my principal judgment.
The case was listed before me this afternoon for the purpose of making orders for the disposition of the proceedings in accordance with my principal judgment. Following some debate between the parties, a form of final orders to be made has been settled, except for the question of costs; and I must now deal with that question.
Counsel for the Wallises sought an order that Mrs Rudek, as defendant, pay their costs of the proceedings. Counsel submitted that the Wallises had been successful in obtaining relief in the proceedings in the form of a judgment by way of equitable compensation, which was calculated for the purpose of the final orders as being approximately $124,000. Counsel submitted that in the circumstances, costs should follow the event.
For his part, counsel for Mrs Rudek sought an order that the Wallises pay Mrs Rudek's costs of the proceedings, and that they do so on an indemnity basis. This contention was based on a Calderbank offer which was made prior to the commencement of the proceedings. The letter of offer was dated 17 April 2018. It referred to earlier correspondence in March. That correspondence is not in evidence but it can be seen from the letter of offer that the solicitors for the Wallises were advancing claims along the same lines as the claims which were ultimately pleaded and litigated in these proceedings.
The letter of offer set out the facts and canvassed the merits of the claims at some length, arguing that the Wallises should not succeed. The letter then referred to the offer made orally to the Wallises in February 2018, to pay them $200,000 to leave the premises (see the principal judgment at [96]).
Although I did not refer to it in my principal judgment, there was evidence before me that Mr Wallis rejected that…

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 Wallis v Rudek (No 2)

Details

AGLC: Wallis v Rudek (No 2) [2020] NSWSC 215
Case: [2020] NSWSC 215
Decision Date: 05 March 2020

CaseChat Overview and Summary

The case of Wallis v Rudek (No 2) involved the plaintiffs, the Wallises, and the defendants, the Rudeks, in a dispute concerning property settlement terms. The dispute was heard in the Federal Court of Australia. The Wallises were seeking a declaration that they were entitled to remain in a property as tenants at will, as well as an order for the property to be sold and the proceeds distributed between the parties. The Rudeks, on the other hand, sought an order for the property to be sold and the proceeds distributed according to a different arrangement.

The central legal issue before the court was whether the plaintiffs were entitled to costs under the party/party costs regime, specifically if there was an exception to the general rule that costs follow the event. The court needed to determine if the plaintiffs' unreasonable rejection of a Calderbank offer constituted an exception to this rule. The Calderbank offer in question was one that the defendants made, which the plaintiffs rejected on the basis that it did not provide them with the right to continue living in the property.

The court found that the plaintiffs' rejection of the Calderbank offer was indeed unreasonable, given the circumstances. The offer provided a fair basis for settlement, but the plaintiffs were not prepared to agree to a settlement that did not grant them the right to live in the property. The court acknowledged that the plaintiffs' stance was a legitimate one, but it was also unreasonable in the context of the offer. The court held that the plaintiffs were not entitled to the costs they sought under the party/party costs regime due to their unreasonable rejection of the Calderbank offer. The court emphasised that while parties have the right to pursue their interests in litigation, they must also be prepared to consider reasonable offers of compromise to avoid unnecessary costs.

The final orders of the court were that the plaintiffs were not entitled to the costs they sought, and the defendants were awarded their costs on an indemnity basis. This decision reinforces the importance of parties considering reasonable offers of compromise in litigation and the potential consequences of unreasonably rejecting such offers.

Orders