Kurzyp v Kurzyp (No 2) [2021] NSWSC 1373

Supreme Court New South Wales

Medium Neutral Citation: Kurzyp v Kurzyp (No 2) [2021] NSWSC 1373 Hearing dates: On the papers, last submissions 6 September 2021 Date of orders: 28 October 2021 Decision date: 28 October 2021 Jurisdiction: Equity Before: Rees J Decision: Order indemnity costs. Catchwords: COSTS – Calderbank offer – no question of principle. Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Cases Cited: In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) (No 2) [2021] NSWSC 1161 Kurzyp v Kurzyp [2021] NSWSC 851 Category: Costs Parties: Beata Kurzyp (Plaintiff) Peter Douglas Kurzyp (Defendant) Representation: Solicitors: StevensVuaran Lawyers (Plaintiff) Watts McCray Lawyers (Defendant) File Number(s): 2019/51555

Judgment 1. HER HONOUR: This is an application for indemnity costs, following non-acceptance of a Calderbank letter. This judgment assumes familiarity with my principal judgment: Kurzyp v Kurzyp [2021] NSWSC 851.

Facts 1. These proceedings commenced on 15 February 2019. The defendant had caused a lapsing notice to issue in respect of a caveat lodged by his ex-wife over a Liverpool townhouse. They had purchased the townhouse in 1987 but title was registered in the defendant's name only. By summons and an affidavit in support, the plaintiff wife sought an extension of caveat and declaratory relief in respect of her interest in the townhouse. 2. In May 2019, the husband filed an affidavit. In June 2019, the wife swore a further affidavit. In October 2019, the wife amended the summons, claiming inter alia a declaration that the defendant held the legal estate in the Liverpool townhouse on trust for the wife in proportion to her contributions to the purchase price or, alternatively, a one-half interest. In addition, the wife sought an order that the husband account for the rent earned on the townhouse in proportion to her contribution to the acquisition of the property or, alternatively, a one-half interest. The wife also served further affidavits in support of her claim, being a further affidavit by herself, an affidavit from the couple's real estate agent and an affidavit by the couple's son. In December 2019, the husband swore a second affidavit, responding to the wife's evidence. 3. On 31 January 2020, the wife's solicitors sent a letter to the husband's solicitors marked "without prejudice save as to costs", noting that the wife was seeking one-half of the value of the Liverpool town house together with one-half of the net rent received on the property. The wife's solicitors pointed to contemporaneous documents accompanying the affidavits filed in support of the wife's case as pointing to a conclusion that the wife was entitled to the relief sought and attached some of those documents. The letter stated: The estimated value of the unit is $520,000. With an estimated average rental of $250 per week, our client's claim for one half of the rental from 2005 to 2020 totals $97,500. On this basis, our client is entitled to $357,500 for one half of the value of the Unit and lost rent. Our client offers to settle these proceedings for the sum of $330,000. Given the matters outlined above, it would be unreasonable for your client to refuse this offer. This offer is made in accordance with the principles of Calderbank v Calderbank (1975) 3 All ER 333 and is open for acceptance until 5 PM on 18 February 2020. 1. Self-evidently, if the wife's offer was accepted, then the wife forewent any claim for her costs of the proceedings. As to the reasonableness of the figures in the letter, the wife relied on a valuation by Century 21 Combined Liverpool, which assessed the value of the townhouse as at January 2020 in the vicinity of $520,000, including by reference to two comparable sales shortly before and after the date of the Calderbank letter. 2. The offer was made at a time in the proceedings when the parties' evidence was on and the defendant was well-placed to assess the strengths and weaknesses of each side's case. Indeed, given the underlying subject matter of the proceedings, he was well-placed to know what had happened in any event. 3. The offer was open for a little over two weeks. Whilst it may have been open for the defendant to contend that the time available to consider the offer was insufficient, he clearly had enough time to do so as, on 6 February 2020, the husband's solicitors replied, rejecting the wife's offer and noting, "Our client agrees to your client's discontinuance of the proceedings … on the condition that your client pays our client's legal costs of those proceedings on an indemnity basis." This, of course, was no offer at all as, even if the wife had discontinued the proceedings, the husband was most unlikely to be entitled to his costs of the proceedings on an indemnity basis. 4. On 7 February 2020, the wife's solicitor wrote again "without prejudice save as to costs" noting, "[Y]our client's invitation to capitulate is rejected. If your client wishes to make a commercial proposal within seven days to settle the matter, we will obtain instructions." No response was received. 5. The wife was successful at trial. I made orders declaring that the husband held the legal estate in the Liverpool townhouse on trust for the wife as to a one-half share, and gave judgment in favour of the wife in the sum or $154,860, being her half-share the rental income. The wife has achieved a better result than what she was prepared to accept in her Calderbank offer.