Source & Resources Pty Ltd v Porada (No 2) [2007] NSWSC 986

New South Wales Supreme Court

CITATION : Source & Resources Pty Ltd v Porada (No 2) [2007] NSWSC 986

HEARING DATE(S) : 20/08/07 JUDGMENT OF : Gzell J

EX TEMPORE JUDGMENT DATE : 20 August 2007

DECISION : No order as to costs.

CATCHWORDS : PROCEDURE - Costs - Plaintiff obtained declaration that it validly rescinded a contract for sale of land but failed in a claim for damages for maintenance of the caveat on unreasonable grounds - Defendants rejected offer of compromise that included payment of costs fixed at $11,500 - Whether defendants unreasonable in rejecting offer - Whether plaintiff entitled to some costs

Source & Resources Pty Ltd - Plaintiff PARTIES : Hans Joachim Porada - First Defendant Rhonda Christine Porada - Second Defendant

FILE NUMBER(S) : SC 1524/07

COUNSEL : Mr E Cox - Plaintiff Mr I Faulkner SC - Defendant

SOLICITORS : Walker Hedges & Co Solicitors - Plaintiff Warren McKeon Dickson Lawyers - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

MONDAY 20 AUGUST 2007

1524/07 SOURCE & RESOURCES PTY LTD v HANS JOACHIM PORADA & ANOR (N0 2) EX TEMPORE JUDGMENT 1 There is a contested application before me as to the costs of these proceedings. The parties are in agreement that the only substantive relief the court should make is a declaration that the plaintiff validly rescinded the contract for sale, the subject of the proceedings. 2 A without prejudice offer was made by the solicitors for Source & Resources Pty Ltd, the plaintiff, on 23 March 2007. It ought not to be termed an offer because it stated that unless and until Source & Resources settled proceedings against a Mr and Mrs Hall, the proceedings against Mr and Mrs Porada, the defendants, could not be regarded as representative, and Source & Resources would not compromise the proceedings. 3 The dispute with the Halls having been settled, an offer was made on 18 April 2007 that Mr and Mrs Porada acknowledge that the contract for sale had been validly rescinded, that Mr and Mrs Porada bank and retain the deposit cheque, that they withdraw a caveat over the land, that Source & Resources withdraw its claim for damages and Mr and Mrs Porada pay Source & Resources' costs of the proceedings in an amount of $11,500.00. 4 That offer was rejected and a counter offer was made that Mr and Mrs Porada withdraw the caveat, that the parties accept that the contract was rescinded, that Mr and Mrs Porada bank the refund of deposit cheque, that the proceedings be dismissed and that each party bear its own costs. 5 The proceedings had two elements. One was withdrawal of the caveat and, indeed, the caveat was withdrawn to enable refinancing to take place. The other aspect of the matter was Source & Resources' claim for damages with respect to the maintenance of the caveat, alleged to have been on unreasonable grounds. 6 With respect to the latter aspect of the matter, Source & Resources failed and if a substantial part of the costs sought by it of $11,500.00 were devoted to the preparation of the case with respect to damages, it was appropriate for Mr and Mrs Porada to reject the offer of 18 April 2007. 7 This is not a matter in which the issues should be divided and Source & Resources should be allowed some costs. I am of the view that the more appropriate course in this case, because of the nature of the claim for damages that Source & Resources lost, is that there should be no order as to costs.