Supreme Court New South Wales Medium Neutral Citation: Bruno Pisano -v- Georgia Dandris [No. 2] [2014] NSWSC 1240 Hearing dates: 15 August 2014 Decision date: 15 August 2014 Jurisdiction: Equity Division - Technology and Construction List Before: Hammerschlag J Decision: Judgment for the first plaintiff and the second plaintiff against the first defendant and the second defendant in the sum of $1,171,124. The first defendant and the second defendant are to pay the first plaintiff's and the second plaintiff's costs of the proceedings. The second defendant's liability for costs shall be in respect only of costs incurred on and from 11 November 2013. The costs payable by the first defendant will be on the indemnity basis from 22 December 2012 and otherwise on the ordinary basis. Catchwords: COSTS and final orders Cases Cited: Bruno Pisano v Georgia Dandris [2014] NSWSC 1070 Category: Procedural and other rulings Parties: Bruno Pisano - First Plaintiff Sia Pisano - Second Plaintiff Georgia Dandris - First Defendant Patrick Francis Williams - Second Defendant Representation: Counsel: D.S. Weinberger - Plaintiffs J.A. Jobson - First Defendant S. Jacobs - Second Defendant Solicitors: Gadens Lawyers - Plaintiffs Zelden Solicitors - First Defendant Alexanders Lawyers - Second Defendant File Number(s): 2012/283119 EX TEMPORE Judgment 1On 8 August 2014 I handed down judgment finding that the Pisanos are entitled to a verdict against both Dandris and Williams totalling $1,171,124 including GST: Bruno Pisano v Georgia Dandris [2014] NSWSC 1070. I invited submissions on costs. I have had written submissions from each of the Pisanos, Dandris, and Williams, and I have heard the parties orally. 2The Pisanos have succeeded. Unless it appears to the Court that some other order should be made as to the whole or any part of the costs, the Court is to order that costs follow the event: see Uniform Civil Procedure Rules (UCPR) Pt 42 r 42.1. The starting point is thus that the Pisanos are entitled to their costs. 3On 21 December 2012, the Pisanos, by notice in writing, made an offer to Dandris, under UCPR Pt 20 r 20.26, to compromise their claim for $250,000 plus costs as agreed or assessed. At the same time they made Calderbank offers to settle for $300,000 inclusive of costs. The Pisanos have obtained judgment on their claim no less favourable, indeed, far more favourable than the terms of the offer of comprise and that made pursuant to the Calderbank letters. 4UCPR Pt 42 r 42.14(2) provides that, unless the Court orders otherwise, the Pisanos are entitled to an order against Dandris for their costs in respect of the claim assessed on the ordinary basis up to the beginning of the day following the day on which the offer was made and on the indemnity basis thereafter. 5The Pisanos seek orders that Dandris and Williams pay their costs and that Dandris be ordered to pay indemnity costs from 21 December 2012. If UCPR Pt 42 r 42.1(2) is operative, that should be 22 December 2012. 6On 28 November 2012, Dandris made a written without-prejudice (save as to costs) offer, the central elements of which were that the Pisanos vacate the house within thirty days of acceptance; "[A]ll legitimate defects (under home warranty) in the property to be rectified"; the property be placed on the market as private treaty or auction with a minimum asking price/reserve of $3.35M, that such amount be paid upon completion to the Pisanos from the proceeds, except that if Dandris considered it necessary to sell for less the difference would be paid by her to the Pisanos on completion of the sale; if the property sold for more, any excess moneys after all expenses, including outgoings, legal fees and agent's commission, would be paid to the Pisanos up to the amount of the stamp duty paid by them on the original purchase and any excess thereafter to be paid to Dandris and; "Each party pay there [sic] own costs in the proceedings". 7The offer was stated to be open until 31 January 2013 and was stated to be an Offer of Compromise pursuant to the UCPR as well as being a Calderbank offer. The offer ended off by informing the Pisanos that the office of Dandris' solicitor would be closed for the Christmas break from 22 December 2012 and would reopen on Monday 21 January 2013 and that if the Pisanos chose to accept the offer during that time, the acceptance would be deemed to have been made on 21 January 2013. 8Dandris submits that the Pisanos'offer Offer of Compromise should not be given effect under the Rules because it expired at a time at which they had been informed that Dandris' solicitor's office was closed. Dandris submits that she should pay the Pisanos' costs on the ordinary basis up to and including 28 November 2012 and that the Pisanos pay her costs on the indemnity basis thereafter. In the alternative, she puts that costs should follow the event in the ordinary manner. 9The Pisanos' offer of compromise takes effect as provided under UCPR Pt 42 r. 42.14 unless the Court orders otherwise. There is no proper basis, in my view for the Court to order otherwise. In effect, Dandris puts as the basis for the Court to order otherwise, the making of her offer which she says was reasonable and which the Pisanos unreasonably declined to accept. As to the Pisanos' offer of compromise, there was no suggestion of any possibility that had the offer expired at a time when Dandris' solicitor was in his office, it would have been accepted. 10The conduct of Dandris in these proceedings leads to the inexorable conclusion that the offer would have been rejected anyway. So much can also be inferred from the terms of her own offer. Far from acting unreasonably in declining to accept Dandris' offer, in my view, the Pisanos acted eminently reasonably in declining to accept it. 11Firstly, they bought the house to live in and they still wish to live in it. Dandris' offer does not accommodate this. Secondly, Dandris' offer does not accommodate the possibility that the house would not sell at all. Thirdly, the offer refers to rectification of all legitimate defects. The ambit of this term was a recipe for dispute as these proceedings have clearly shown. Fourthly, the offer provided no assurance of the ability of Dandris to pay any shortfall if she determined to sell at less than the purchase price. Finally, the house was defectively constructed. The offer gives no assurance as to appropriate steps being taken to have the defects corrected satisfactorily and provides no assurance of the quality of the repair work. 12In the circumstances, in my opinion, Pt 42 r 14(2) should apply as against Dandris. 13Williams put submissions that costs against him should not be other than on the usual scale and that there should be an apportionment of costs so that there should be excluded from any costs order some proportion of the costs after the period he was joined being 11 November 2013 in respect of issues which were part of the proceedings, but in respect of which the Pisanos did not succeed. The Pisanos did not wish to be heard on the proposition that any order for costs against Williams be applicable to costs incurred from 11 November 2013 onwards, being the date upon Williams, who was not initially sued, was joined. 14The vast bulk of the proceedings were concerned with the nature and extent of the building defects. This was pertinent to the cases against both Dandris and Williams. The additional factual matrix relating to the claims made under the Australian Consumer Law was also equally pertinent to both. 15Some indeterminate but relatively modest time was spent in connection with issues pertinent only to Williams, such as whether he was an owner-builder and whether he owed a duty of care. The owner-builder issue was not pressed. 16Aspects relevant to the duty of care were in any event relevant to other issues in the proceedings. I see no warrant in the particular circumstances of this case to differentiate between the issues upon which the Pisanos succeeded and those upon which they did not. 17These are the orders: 1. Judgment for the first plaintiff and the second plaintiff against the first defendant and the second defendant in the sum of $1,171,124. 2. The first defendant and the second defendant are to pay the first plaintiff's and the second plaintiff's costs of the proceedings. The costs payable by the first defendant will be on the indemnity basis from 22 December 2012 and otherwise on the ordinary basis. 3. The second defendant's liability for costs shall be in respect only of costs incurred on and from 11 November 2013. ********** 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: 05 September 2014