Supreme Court New South Wales Medium Neutral Citation: George Pegios v Simon Rez – [Costs] [2022] NSWSC 915 Hearing dates: On the papers Decision date: 08 July 2022 Jurisdiction: Equity Before: Hammerschlag CJ in Eq Decision: Plaintiff to pay defendants' costs on the ordinary basis. Catchwords: COSTS – Calderbank letter – no real compromise offered – indemnity costs not warranted. Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333 George Pegios v Simon Rez [2022] NSWSC 837 O'Connor v O'Connor (No 2) [2021] NSWSC 1173 Category: Costs Parties: George Pegios - Plaintiff Simon Rez - First Defendant Reka Consultants Pty Limited - Second Defendant Representation: Counsel: P Doyle Gray - Plaintiff J Young, A Lim - Defendants Solicitors: First Choice Legal - Plaintiff Swaab - Defendants File Number(s): 2020/173791 1. HIS HONOUR: On 23 June 2022 I gave judgment in the principal proceedings: George Pegios v Simon Rez [2022] NSWSC 837. 2. Defined terms in the principal judgment are used here. 3. Simon succeeded. In par 61 I made the following order with respect to costs: I provisionally order that George is to pay both Simon's and Reka's costs of the proceedings. This order will solidify seven days after the delivery of this judgment, unless either side notifies the other and my Associate, in writing, that some other costs order is sought and specifying it and the basis for it, in which case I will make directions for the determination of costs. 1. On 23 June 2022, Simon, via his solicitors, gave notice that he seeks indemnity costs based on a Calderbank letter [1] dated 16 March 2022 in which he offered George to settle the proceedings a total of $1,000 inclusive of costs, coupled with consent orders providing for a verdict for Simon and Reka with no order as to costs. No notification as contemplated by par 61 was received on behalf of George. 2. On 6 July 2022, my Associate informed the parties that I proposed to determine the question of costs on the papers and would assume, unless George notified her in writing by close of business on 7 July 2022 that he sought some other order, that he does not oppose the provisional ruling in par 61 but does oppose the order sought by Simon. No communication was received on behalf of George. Simon consented to the determination of costs on the papers. 3. I observed in O'Connor v O'Connor (No 2) [2021] NSWSC 1173 at par 5: It is often a matter for conjecture why a party does not take advantage of the formal offer of compromise procedure provided by the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) pt 20, read with UCPR pt 42, which creates a presumption in favour of an order for indemnity costs in favour of a plaintiff, where a plaintiff makes an offer which the defendant does not accept and the plaintiff does better than it offered, and for an order for indemnity costs in favour of the defendant where the defendant makes an offer and the plaintiff does not do better than the defendant offered, but relies rather on the practice of making a Calderbank offer which justifies similar outcomes but only if, relevantly, rejection of the offer is unreasonable. 1. In my opinion, the Calderbank offer here does not support an order for indemnity for costs. It did not offer a true compromise but a paltry amount, acceptance of which would have been tantamount to a capitulation by George. By the time it was made, George's own costs no doubt significantly exceeded $1,000. It was not unreasonable for George not to accept it. 2. The conclusion is that George is to pay Simon's and Reka's costs of the proceedings on the ordinary basis. ************ Endnote 1. Calderbank v Calderbank [1975] 3 All ER 333. 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: 08 July 2022