Oswin v Kozjak [No 2] [2009] NSWSC 1232

New South Wales Supreme Court

CITATION : Oswin v Kozjak [No 2] [2009] NSWSC 1232

HEARING DATE(S) : 5 August 2009

JUDGMENT DATE : 16 November 2009

JUDGMENT OF : McLaughlin AsJ

DECISION : Orders as in Short Minutes of Order attached to these reasons.

CATCHWORDS : FAMILY LAW - de facto relationship - COSTS - offer of compromise - whether Court should otherwise order - terms of short minutes

LEGISLATION CITED : Uniform Civil Procedure Rules

CATEGORY : Procedural and other rulings

PARTIES : Kerin Jayne Oswin (Plaintiff) Richard Charles Kozjak (Defendant)

FILE NUMBER(S) : SC 3604 of 2007

COUNSEL : Ms E. Cohen (Plaintiff) Mr D. Dura (Defendant)

SOLICITORS : Broun Abrahams Burreket (Plaintiff) Gayle Meredith & Associates (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Monday, 16 November 2009

3604 of 2007 KERIN JAYNE OSWIN –v- RICHARD CHARLES KOZJAK JUDGMENT 1 HIS HONOUR: On 22 May 2009 I published my reasons for judgment herein. 2 I stood the matter over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes to reflect my conclusions expressed in those reasons, and, if desired, to hear arguments as to costs. 3 The matter was listed for such purposes on 5 August 2009. 4 The parties were not able to agree upon the appropriate form of short minutes which would reflect my conclusions in my reasons for judgment. 5 Further, the Plaintiff sought an order that the Defendant should pay her costs of the proceedings, whilst the Defendant was content with the preliminary view concerning costs which I had expressed in my reasons for judgment, being that there should be no order as to costs, to the intent that each party should bear her or his own costs of the proceedings. 6 I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties, together with the form of the orders which each party sought should be made, to reflect the conclusions set forth in my reasons for judgment. Those documents will be retained in the Court file. 7 I will deal first with the matter of costs. 8 In support of her submission that the Defendant should pay her costs, the Plaintiff relied upon an offer of compromise, pursuant to Part 20, rule 20.26 of the Uniform Civil Procedure Rules 2005, made by the Plaintiff by way of letter from her solicitors, dated 1 August 2008, addressed to the solicitors for the Defendant. 9 That offer of compromise provided that within a specified period: the Defendant pay to the Plaintiff the sum of $500,000; the Defendant pay the Plaintiff's costs of and incidental to the proceedings; the Plaintiff transfer to the Defendant her interest in the Keith Street property; both parties (a) effect an assignment to the Defendant of any debt owed by the Plaintiff to Virtual Developments, and (b) effect an assignment to the Defendant of any sum due to the Plaintiff from Virtual Developments; the Defendant indemnify the Plaintiff in relation to any debt owed by her to Virtual Developments; and a declaration that the parties be otherwise declared sole legal and beneficial owner of all other items of property in their respective possession and control. 10 It was submitted on behalf of the Plaintiff that, the Defendant not having accepted the foregoing offer of compromise within the period specified there in for such acceptance, the consequence provided by Part 42 rule 42.14 should take effect. 11 That consequence is that, unless the Court otherwise orders, the Defendant pay the costs of the Plaintiff on the party and party basis up to an including the date of the offer of compromise, and after that date the Defendant pay the costs of the Plaintiff on the indemnity basis. 12 It will be appreciated that the foregoing offer of compromise was not a matter of which the Court could be made aware until after the determination of the substantive claims of the respective parties. Accordingly, at the time when I expressed the preliminary view in paragraph 75 of my reasons for judgment that there should be no order as to costs, I was unaware of the offer of compromise. 13 As a consequence of my conclusions in the substantive claims of the respective parties, the Plaintiff has effectively received a monetary sum in the vicinity of $800,000, and, further, there has been a finding that the Plaintiff has no liability in relation to an alleged loan to her from Virtual Developments. By her statement of claim the Plaintiff sought that the entirety of the Keith Street property be transferred to her and the rental of that property paid to her. On the other hand, the Defendant sought that the Keith Street property be transferred to him, and that the Plaintiff pay one half of the amount of $1,242,552 allegedly owed by the parties to Virtual Developments. 14 The effect of the offer of compromise was that the Defendant should pay to the Plaintiff the sum of $500,000 plus costs, and in return therefor the Plaintiff would transfer to the Defendant her interest in the Keith Street property, and that the Plaintiff should be absolved from any liability in respect to an alleged indebtedness to Virtual Developments. It should also be borne in mind that, as I have recorded in my reasons for judgment, the Defendant did not file a cross-claim until the third day of the hearing, 28 August 2008, although, as I have also recorded, the Defendant somewhat curiously, had annexed to his defence the items of relief which he stated he was seeking in the proceedings. 15 The offer of compromise was made on 1 August 2008, before the commencement of the hearing and before the filing of the cross-claim. The period of 21 days specified in that offer of compromise during which it was open for acceptance, had already expired before the filing of the cross-claim. 16 In the circumstances of the instant case, the ultimate entitlement of the Plaintiff (that she receive about $800,000 and the Defendant receiving the Keith Street property) was no less favourable to her than the terms of the offer of compromise (by which she would have received $500,000 plus costs, and the Defendant receiving the Keith Street property). 17 It follows, then, that "unless the Court otherwise orders", the effect of rule 42.14 upon the circumstances of the instant case is as I have already set forth. 18 However, the Defendant submits that this is a case in which the Court should "otherwise order", and that since the Plaintiff is to receive considerably less than was originally sought by her, it is appropriate that the Court should otherwise order. 19 Whilst I recognise that the Plaintiff is to receive considerably less than she sought in her statement of claim, nevertheless, she is to receive considerably more than she sought in the offer of compromise. 20 In these circumstances I do not consider that it is appropriate for the Court to otherwise order. Therefore the provisions of rule 42.14 take effect, and I propose to order that the Defendant pay the costs of the Plaintiff of the proceedings, those costs to be on the party and party basis until 1 August 2008, and on the indemnity basis after that date. 21 I have already observed that the parties could not agree as to the appropriate form of short minutes of order which should be made in order to give effect to my conclusions in the substantive proceedings. 22 The orders originally proposed on behalf of the Plaintiff made provision for Virtual Developments to be joined as an additional defendant to the proceedings and for there to be judgment for the Plaintiff in a specified amount against Virtual Developments. However, at the hearing concerning costs and concerning the form of the orders to he made, the Plaintiff agreed to the deletion of those two orders from the short minutes, and to the substitution of two further orders (which did not require the joinder of Virtual Developments, but bound the Defendant, in his capacity as sole director of that company. Further, the Plaintiff sought a notation to be included in the short minutes, evidencing the agreement between the parties that the indebtedness of Virtual Developments to the Plaintiff as at 30 June 2009 was in the sum of $191,952. 23 I am in agreement that the substitutional orders 1 and 2 and the foregoing notation should be included in the short minutes. Certain consequential alterations will then be necessary to the short minutes, as recognised by the Counsel for the Plaintiff. 24 The other areas in dispute between the parties related to the question of whether the Keith Street property should be valued with the Development Approval attached, or whether it should be valued without that approval. It was submitted on behalf of the Defendant that, since it was the Defendant who had been responsible for obtaining the Development Approval, that Development Approval should be treated somehow as a personal asset of the Defendant, and should not be treated as pertaining to the Keith Street property. 25 I am of the view, however, that the land should be valued with the benefit of the Development Approval, which approval must be attached to and only be relevant to that property, irrespective of who obtained that approval. 26 To the extent that the short minutes propounded by the Plaintiff include orders that the Defendant indemnify the Plaintiff, I am not satisfied that the Plaintiff has entitled an establishment to such an indemnity. 27 The parties appeared not to be able to reach agreement concerning the amount of rental which the Plaintiff was liable to pay to the Defendant for the Plaintiff's occupation in the Keith Street property for a period of about one year after the termination of the de facto relationship. If the parties cannot agree as to the amount of that rental, it is proper that I should direct the taking of an account. It will be appreciated by the parties that such a taking of such an account will attract further costs and delay in the proceedings. 28 I make orders as in Short Minutes attached to these reasons. The exhibits may be returned.