Supreme Court New South Wales Medium Neutral Citation: Stuart Klees v M101 Holdings Pty Ltd [2021] NSWSC 271 Hearing dates: On the papers Decision date: 22 March 2021 Jurisdiction: Equity - Commercial List Before: Hammerschlag J Decision: Plaintiff to pay the costs of the third and fourth defendants on an ordinary basis Catchwords: COSTS – settlement offers – whether non-acceptance of settlement offers made by the fourth defendant warrants ordering indemnity costs against the unsuccessful plaintiff HELD – indemnity costs not warranted because it was not unreasonable for the plaintiff not to accept the offers – no issue of principle Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333 Stuart Klees v M101 Holdings Pty Ltd [2021] NSWSC 182 Category: Costs Parties: Stuart John Klees – Plaintiff M101 Holdings Pty Ltd – First Defendant Australian Income Solutions Pty Ltd trading as Mayfair Wealth Partners Pty Ltd – Second Defendant Quattro Capital Group Pty Ltd – Third Defendant Devin O'Keefe – Fourth Defendant Representation: Solicitors: Plaintiff – Self Represented KHQ Lawyers – First and Second Defendants Mills Oakley – Third Defendant Piper Alderman – Fourth Defendant File Number(s): 2020/181254 JUDGMENT 1. HIS HONOUR: I gave judgment in this matter on 5 March 2021; Stuart Klees v M101 Holdings Pty Ltd [2021] NSWSC 182. The plaintiff failed. 2. With respects to costs I made the following order: Provisionally, I order the plaintiff to pay the costs of the third defendant and the fourth defendant. This order will solidify 7 days after publication of this judgment, unless by then any party seeking some different costs order has notified the other parties and my associate in writing that some other order is sought, identifying such an order and providing a brief statement of the grounds why it is sought. If such notice is received, the provisional order will not take effect and arrangements will be made for the determination of costs. 1. On 9 March 2021, the plaintiff removed his solicitor. 2. The third defendant did not give notice that any other order was sought. There is no reason why costs should not follow the event. The plaintiff is to pay the third defendant's costs. 3. On behalf of the fourth defendant I received written submissions and he relies upon the affidavit of his solicitor Gordon Thomas Grieve sworn 10 March 2021. 4. I have received written communication from the plaintiff and some documentary material relied on by him. 5. I will deal with costs on the papers. 6. The fourth defendant moves for indemnity costs, either from 24 August 2020 when he made a Calderbank offer [1] that the proceedings be discontinued with no order as to costs, each party bear their own costs of the proceedings and the parties enter into a deed of release, or from 23 December 2020 when he made a second Calderbank offer that he pay the plaintiff $60,000, the proceedings be discontinued, each party bear their own costs and the parties enter into a deed of settlement and release incorporating these terms. 7. The fourth defendant did not make any formal offer of compromise under the Uniform Civil Procedure Rules 2005 (NSW) and accordingly does not get the benefit of the presumption in rule 42.15. [2] 8. The first offer does not warrant the ordering of indemnity costs because it involved no real element of compromise but rather called, in effect, for the plaintiff to capitulate and it was not unreasonable for the plaintiff to decline to accept it. 9. The second offer reflected an improvement of $60,000. By letter from the fourth defendant's solicitors to the plaintiff's solicitors dated 5 January 2021 the second offer remained open to 27 January 2021. 10. In my view, it also cannot be said that the plaintiff's failure to accept this offer was unreasonable. Compared to the amount the plaintiff had invested (albeit that he never established the quantum of his damage), the amount offered was very modest and the offer came very close to the hearing. The plaintiff would no doubt have incurred significant legal costs between the dates of the two offers, to the point where I would suspect that the amount is unlikely to have covered even his costs. The offer, in effect, also required his capitulation. 11. In the circumstances, the fourth defendant should have his costs on the ordinary basis. 12. The orders of the Court are: 1. The plaintiff is to pay the costs of 1. The third defendant; and 2. The fourth defendant. ************ Endnotes 1. Calderbank v Calderbank [1975] 3 All ER 333 (incorrectly cited in the fourth defendant's written submissions as [1975] 2 All ER. In his first Calderbank letter at [20] it is incorrectly cited as [1975] 2 All ER 33). 2. 42.15 Where offer not accepted and judgment no more favourable to plaintiff (1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer. (2) Unless the court orders otherwise— (a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis— (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 March 2021