Supreme Court New South Wales Medium Neutral Citation: Perpetual Trustee Company Limited v Stojcevski (No 2) [2014] NSWSC 1827 Hearing dates: 18 December 2014 Decision date: 18 December 2014 Jurisdiction: Common Law Before: Adamson J Decision: 1.The cross-claimant to pay the cross-defendant's costs of the proceedings on an indemnity basis. 2.Order that costs be assessed on the basis of a gross costs sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 but that the assessment of those costs stand over to 3 February 2015 at 9.15 before me. Catchwords: COSTS - indemnity costs appropriate - cross-claim doomed to fail - statute-barred based on the cross-claimant's own admissions and undisputed facts - delinquent conduct in the course of the proceedings, including giving false evidence and false instructions to his legal representatives Legislation Cited: Consumer Credit (New South Wales) Code 1995 (NSW), s 80 Civil Procedure Act 2005 (NSW), s 98 Real Property Act 1900 (NSW), s 57 Cases Cited: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Perpetual Trustee Company Limited v Stojcevski [2014] NSWSC 1718 Seller v Jones [2014] NSWCA 19 Category: Costs Parties: Perpetual Trustee Company Limited (Plaintiff) Branko Stojcevski (First Defendant/ Cross Claimant) Lesley Alexandra Stojcevski (Second Defendant) Frank Mathey (Cross Defendant) Representation: Counsel: J Wilson (Cross Claimant) M Cameron, solicitor (Cross Defendant) Solicitors: RMB Lawyers (Cross Claimant) Sparke Helmore (Cross Defendant) File Number(s): 2013/60807 Publication restriction: Nil Judgment Introduction 1I published reasons for judgment in this matter on 3 December 2014: Perpetual Trustee Company Limited v Stojcevski [2014] NSWSC 1718 (the Principal Judgment). These reasons should be read together with the principal judgment. After publication of the reasons, the cross-defendant, Mr Mathey, applied for an order for indemnity costs of the proceedings or from 14 November 2014 and also a gross costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Mr Mathey relied on an affidavit of Malcolm Cameron, the cross-defendant's solicitor, and an affidavit of Mr Matters, annexing a report in which he addressed the issue of the time and cost associated with an assessment and the likely recovery of such costs. 2Mr Wilson, who appeared for the cross-claimant, Mr Stojcevski, relied on an affidavit of Ms Khan, his instructing solicitor, in which she deposed to the settlement between Mr Stojcevski and Perpetual Trustee Company Limited (Perpetual) and the expected progress of sale of the mortgaged property. Mr Wilson applied for the assessment of gross costs, were I minded to make an order that costs be assessed on that basis, to be adjourned on the basis that Ms Khan had not had sufficient time to obtain a response to Mr Matters' report, which was served on 17 December 2014. I acceded to the adjournment of this aspect of Mr Mathey's application and proceeded to determine the balance of the application. 3After hearing argument, I made the following orders and indicated that I would publish reasons subsequently: (1)The cross-claimant to pay the cross-defendant's costs of the proceedings on an indemnity basis. (2)Order that costs be assessed on the basis of a gross costs sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 but that the assessment of those costs stand over to 3 February 2015 at 9.15 before me. Application for indemnity costs 4Mr Cameron, who appeared on behalf of Mr Mathey, submitted that costs should be awarded on an indemnity basis, either for the whole of the proceedings or from the time of the offer made by Mr Mathey on 14 November 2014 to pay Mr Stojcevski $60,000 to settle the proceedings. 5Mr Wilson submitted that Mr Mathey had not made out a case for indemnity costs because the matter was decided on the basis of my credit findings and that it was, accordingly, reasonable for Mr Stojcevski to bring the cross-claim. He contended that it would not be fair to Mr Stojcevski to judge the matter retrospectively by reference to these findings. He also submitted that it was not unreasonable for Mr Stojcevski not to accept the offer of $60,000 (which he accepted amounted to a Calderbank offer and was understood at the time to be such an offer), having regard to the fact that the proceedings with Perpetual had not yet been resolved, and indeed did not resolve until shortly before the hearing. 6The award of costs is discretionary: s 98 of the Civil Procedure Act 2005 (NSW). The grounds for an award of indemnity costs were summarised by McColl JA (Ward JA agreeing) in Seller v Jones [2014] NSWCA 19 at [58]. 7There are several reasons, in my view, why it is appropriate that Mr Mathey have his costs paid on an indemnity basis. Although the outcome of litigation is uncertain and may indeed, as Mr Wilson submitted, depend on the assessment of credibility by the primary judge, these observations are of no particular relevance in the present case where the cross-claim was untenable by reason of Mr Stojcevski's own knowledge and admissions when taken together with facts not in dispute. 8First, Mr Stojcevski admitted in cross-examination that he knew, on 22 October 2003, that he was signing a mortgage. This admission was contrary to the case he had pleaded and substantially undermined the cross-claim. 9Secondly, Mr Stojcevski gave evidence by affidavit that he was served with documents which he identified were a Default Notice under s 80 of the Consumer Credit Code and a notice under s 57(2)(b) of the Real Property Act 1900 (NSW). Although he estimated that he was served in 2009, the unchallenged evidence of the process-server was that he was actually served on 14 February 2008. Mr Stojcevski did not give evidence of having been served with any other documents in the relevant time and accepted that he did not suggest that he had been served with any other documents during the relevant period. Further, Mr Stojcevski gave evidence by affidavit that when he was served with the documents, he opened the envelope and realised what they related to and rang his wife and threatened to kill her. The threat was presumably made because she had not kept up with the mortgage repayments (since he knew that there was a mortgage, having appreciated that that was the document he had signed in October 2003). 10When I granted leave to Mr Stojcevski to file the cross-claim to join Mr Mathey to the proceedings, Mr Stojcevski must be taken to have known these matters, although he may not have recalled the precise date on which he was served. At all events his "loss" accrued in 2002 when the mortgage transaction was settled or, at the latest, on 14 February 2008 when he was served with the demands and appreciated that the mortgage he had executed was in default. Therefore, Mr Stojcevski's cause of action, if any, against Mr Mathey in tort was statute-barred by the time he filed the cross-claim: see [78]-[79] of the Principal Judgment. These matters did not depend on any assessment of credibility of witnesses in the proceedings and were based on admissions by Mr Stojcevski (that he knew he was signing a mortgage and that he knew he had been served with documents relating to default under the mortgage) and incontrovertible facts (that he was in fact served on 14 February 2008). 11In these circumstances the cross-claim could not succeed, even had I found negligence on the part of Mr Mathey, which I did not. 12The matters to which I have referred above are, in my view, sufficient to make it appropriate that Mr Mathey have his costs on an indemnity basis. However, there are further matters which can properly be described as "delinquency" (to borrow the language of the Gaudron and Gummow JJ in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [44]) which militate in favour of an award of indemnity costs. They are: (1)Mr Stojcevski's preparedness to do and say anything to retain possession of the Property ([49] of the Principal Judgment); (2)The collaboration between Mr and Mrs Stojcevski to give dishonest evidence to retain the Property ([11], [31], [32], [53], [56], [61] and [63] of the Principal Judgment); (3)False instructions given by Mr Stojcevski to his solicitors to delay the proceedings or bring about their resolution: [58]-[59] of the Principal Judgment). 13In these circumstances, it is not necessary for me to consider the alternative basis for indemnity costs for a limited period from 14 November 2014 based on the offer made on that day following a mediation. ********** 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: 18 December 2014