Spiliotopoulos v National Australia Bank Limited [2017] NSWSC 1069

Supreme Court New South Wales

Medium Neutral Citation: Spiliotopoulos v National Australia Bank Limited [2017] NSWSC 1069 Hearing dates: On the papers Date of orders: 27 September 2017 Decision date: 27 September 2017 Jurisdiction: Common Law Before: Harrison J Decision: (1) Order the plaintiff to pay the third defendant's costs on an ordinary basis up to and including 20 August 2016 and thereafter on an indemnity basis. (2) Order the plaintiff to pay the third defendant's costs of this application on an ordinary basis. Catchwords: COSTS – offer of compromise – UCPR 20.26 – offer not accepted – application for indemnity costs Legislation Cited: Uniform Civil Procedure Rules 2005 Category: Procedural and other rulings Parties: Arthur Spiliotopoulos (Plaintiff) National Australia Bank Limited (First Defendant) Lorraine Jackson (Third Defendant) Sofia Spiliotopoulos (Fourth Defendant) Representation: Counsel: A Norrie (Plaintiff) V Brigden (First Defendant) H Altan (Third Defendant) Mr D Nagle (Fourth Defendant)

Solicitors: HAL Lawyers (Plaintiff) Dentons (First Defendant) Willis & Bowring (Third Defendant) WG McNally Jones Staff Lawyers (Fourth Defendant) File Number(s): 2015/00082205 Publication restriction: Nil

Judgment 1. HIS HONOUR: On 21 July 2017, I published my reasons for judgment in an application by two of the defendants to dismiss part of Mr Spiliotopoulos' claim: see Spiliotopoulos v National Australia Bank Ltd [2017] NSWSC 971. I made the following orders: 1. Dismiss the proceedings against the first defendant and the third defendant with costs. 2. Dismiss the plaintiff's application to replead. 1. By her notice of motion filed on 4 August 2017, Ms Jackson seeks an order that her costs after 20 August 2016 be paid on an indemnity basis. That application proceeds in accordance with UCPR 20.26 and is based upon an offer of compromise made by her solicitor Lisa Boler on 19 August 2016. That offer is relevantly in the following terms: "Our client makes the following Offer of Compromise pursuant to Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) in relation to the entirety of your client's claim against her: 1. That the proceedings against the Third Defendant be dismissed. This offer is open for a period of 28 days after the date of this letter." 1. Mr Spiliotopoulos' solicitor Robert Haralovic replied on 25 August 2016 in these terms: "Thank you for your letter of 19 August 2016. We acknowledge it. We have no instructions at this time for reasons as will be evidence [sic] shortly." 1. The offer was not accepted and it lapsed. 2. Ms Jackson made the following submissions: 1. The offer complied with UCPR 20.26(2)(a)(i): it refers to the "entirety of your client's claim." 2. The offer proposes an order that the "proceedings against the Third Defendant be dismissed," in compliance with UCPR 20.26(2)(a)(ii). 3. The offer does not include an amount for costs and is not expressed to be inclusive of costs, in compliance with UCPR 20.26(2)(c). 4. The offer bears a statement that it is made in accordance with the rules, in compliance with UCPR 20.26(2)(d). 5. The offer specifies that it is open for acceptance for a period of 28 days, in compliance with UCPR 20.26(2)(f). 1. Pursuant to UCPR 42.15A, subject to any matters that Mr Spiliotopoulos might raise in opposition, Ms Jackson is entitled to costs on an indemnity basis from the day following the day on which the offer was made, because the orders made in her favour by me on 21 July 2017 dismissing the claim against her "with costs" is a result that is "no less favourable to [her] than the terms of the offer" made by Ms Jackson on 19 August 2016. 2. Mr Haralovic agreed that the matter should be dealt with on the papers. He provided me with the following written submissions: "Summary: In answer to the whole of the application for a special costs order and the position of the Third Defendant as to costs generally, it is put that the offer that the Plaintiff put before trial was a better offer than the offer that the Third Defendant then relies upon, in that had it been accepted the Third Defendant could have avoided joinder altogether, and would never have been a party under any amended pleading. The court would never have had to have dealt with her application. Parties are also under a duty to seek to avoid litigation. The words of the Third Defendant's solicitors were, in their letter of 27 August 2015, that the only position open to the plaintiff was to commence fresh proceedings. That position was as the only position only arose from the Third Defendant's non-cooperation and lack of very basic assistance in a circumstance of obvious wrong doing. The Court is asked to have regard to these matters as to costs and in respect of which the Plaintiff, giving regard to his note of 03 August 2017, the Third Defendant's Submissions of 10 Aug 2017 and this reply note, has now been properly heard as to all matters concerning the Third Defendant's costs." 1. These submissions were later supplemented with what is described as a short note as to costs. That document is in the following relevant terms: "What …flows from the 19 August 2016 offer? It is submitted that the proceedings were determined in accordance with the terms of the 'offer'. However, the 'offer' is not so much in the terms of an offer, in that it is an 'offer' to capitulate a case. The authorities address in substance whether such an offer is indeed an offer. The offer does not even indicate what may be the position in respect of costs. To the extent that the offer is an offer, then the plaintiff makes reference to paragraphs 13 to 22 of his affidavit sworn 13 September 2015, and from which it is established that the only reason the plaintiff proceeded against the third defendant in fresh proceedings with a new statement of claim, was on account of a refusal on the part of the third defendant to have assisted the plaintiff. All that the plaintiff requested that the third defendant do was simply that she agree to provide to him an affidavit in which she gave sworn evidence as to the very matters that she has now verified in her defence – that is, her version as to how the mortgage came into existence. She refused to do so. Any such reasons are mystifying. They are inconsistent with the third defendant's civic obligations having incorrectly witnessed a mortgage. They show an unpreparedness to have assisted by cleaning up any of the mess that her actions have left behind. She appears to remain completely unrepentant. In these circumstances, it is submitted that the third defendant should pay her own costs. The refusal to have assisted was also completely inconsistent with the provisions of s 56 of the Civil Procedure Act." 1. Mr Spiliotopoulos has referred to his affidavit sworn on 13 September 2015. I have had specific regard to that affidavit and the parts of it to which Mr Haralovic has directed particular attention. That affidavit was prepared for a different purpose. It says nothing about costs. It could obviously have nothing directly to say about an offer of compromise made a year after it was sworn. 2. The burden of Mr Spiliotopoulos' response to the present application appears to be that a level of co-operation by Ms Jackson with him some time earlier may well have avoided the commencement of the proceedings against Ms Jackson altogether. In other words, he asserts that Ms Jackson was in effect the author of her own position as a defendant in the ill-fated proceedings. Unfortunately, that contention is simply wrong. Nothing in the pre-trial correspondence between Mr Haralovic or Mr Spiliotopoulos and Ms Jackson or her solicitor could give rise to any such suggestion. Mr Spiliotopoulos commenced proceedings against Ms Jackson that were destined to fail and he did not accept an offer to discontinue them against her when the opportunity presented itself. 3. I accept that an offer that amounts to an ultimatum to capitulate may in some circumstances not qualify as an offer to compromise in any real or meaningful sense. In my view that cannot apply to this case where Ms Jackson had nothing to fear, and therefore nothing with respect to which she ought to feel the need to bargain, from the outcome of the proceedings against her. If it were otherwise Ms Jackson would have been the victim of an opportunistic suit to which her only response could have been to offer something to avoid the litigation that Mr Spiliotopoulos was never going to recover if the case proceeded to trial. Ms Jackson's success on her strike out application is an obvious vindication of the reasonableness of the offer of compromise that she made. 4. I have no perception of what else Mr Spiliotopoulos may want to say in opposition to the present application. The offer of compromise was valid. It did not amount to a demand that Mr Spiliotopoulos discontinue proceedings in which there may have resided some remnant of possible success. The proceedings were always unmeritorious. Ms Jackson's offer of compromise reflected that fact.