Supreme Court New South Wales Medium Neutral Citation: Nicholas Georgouras v Bombardier Investments No. 2 Pty Ltd [2011] NSWSC 803 Hearing dates: 21/07/2011 Decision date: 21 July 2011 Jurisdiction: Equity Division - Commercial List Before: Einstein J Decision: 1. That the defendant is to pay the plaintiff's nominal damages in the sum of $5.00 2. That each party is to pay its own costs up to and including 7 November 2010. 3. That from 8 November 2010, the plaintiff is to pay 50% of the defendant's costs assessed on an indemnity basis. Catchwords: Costs - Indemnity costs - Calderbank letter Cases Cited: Fowdh v Fowdh (unreported, Supreme Court of New South Wales Court of Appeal, Full Court, 4 November 1993, BC 9302200) Category: Costs Parties: Nicholas Georgouras (Plaintiff) Bombardier Investments No. 2 Pty Ltd (Defendant) Representation: Counsel F Salama (Defendant) Solicitors Wood Marshall Williams Lawyers (Defendant) File Number(s): 2010/146839 Judgment 1These proceedings are presently before the Court in relation to costs following the handing down of the principle judgment on 18 July 2011. 2The defendant relies upon a Caldberbank letter of 8 November 2010, which was open for a period of 14 days, expiring at 5pm on 23 November 2010. The offer was to settle the proceedings for $10,000. 3The defendant also handed up two English authorities. Those authorities are readily distinguishable from the unusual circumstances of the case. 4The letter in question was responded to a short time later, where the plaintiff made a counter offer to settle the proceedings for $64,900. Decision 5It is appropriate to recall the terms of paragraph 59 of the principle judgment which read "The proceedings are unusual in the extreme". "As already indicated, the defendant was clearly in the wrong in relation to its misrepresentation that the premises were council compliant. At the same time the plaintiff acted unreasonably in the fashion already outlined above. The case results in the Court having to balance the respective wrongs of the parties. For these reasons the principal exercise of the material discretion is to make no substantive damages order in favour or against either party." 6As pointed out by Mahoney JA in Fowdh v Fowdh (unreported, Supreme Court of New South Wales Court of Appeal, Full Court, 4 November 1993, BC 9302200) the discretion to award indemnity costs following a Calderbank letter must be considered having regards to all the circumstances of the case including the relevant strengths and weakness of each parties' case as may have been apparent to the parties at the time the offer was made. 7The fact that the offer proves to be more favourable than the judgment foes not of itself prove unreasonable conduct in rejecting the offer. 8Ultimately, the Court was tasked with balancing the interests of two parties, both who were found to have wronged each other. In these circumstances, I found neither party to be wholly successful in the principle judgment. 9Attaching weight to the defendant's Calderbank letter, the proceedings could have ended earlier with a more favourable result for the plaintiff than the judgment award. Accordingly, the principled exercise of the relevant discretion is to order that: (1)Each party bear its own costs up to 7 November 2010; (2)From 8 November 2010, the plaintiff is to pay 50% of the defendant's costs assessed on an indemnity basis. Declarations 10The Court makes the following declarations (1)The defendant was in breach of the lease dated 1 February 2009 at the time the lease was entered into, in that it misrepresented to the plaintiff that the leased premises were council compliant. (2)The lease dated 1 February 2009 is void from 12 February 2010, that date being the date on which Warringah Council served its first notice of intention to give an order . (3)The plaintiff had at all material times unreasonably refused and withheld consent to the defendant and or its servants and or its agents to attend the leased premises in accordance with the lease dated 1 February 2009 to inspect and rectify any defects in title such as to make the leased premises compliant with Development Consent 86/414 dated 8 October 1986. Orders 11The Court makes the following orders: (1)That the defendant is to pay the plaintiff's nominal damages in the sum of $5.00. (2)That each party is to pay its own costs up to and including 7 November 2011. (3)That from 8 November 2011, the plaintiff is to pay 50% of the defendant's costs assessed on an indemnity basis. ********** 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: 28 July 2011