Khoury v JCS Technologies Pty Ltd [2016] NSWSC 1575

Khoury v JCS Technologies Pty Ltd [2016] NSWSC 1575

Clause 7 of the settlement offer, stating that the offer was exclusive of costs, did not create any term preventing a party from seeking costs; it meant the contract did not deal with costs. Although the settlement meant there was no capitulation and the starting point was that costs should lie where they fell, the plaintiff acted unreasonably by accepting after the final hearing an offer that had been available before the hearing, thereby forcing the second and third defendants to incur avoidable preparation and hearing costs. That unreasonable conduct justified indemnity costs from 18 August 2016, seven days before the final hearing.

Jurisdiction
Australia
Judgment Date
03 November 2016
Procedural Posture
Common Law Proceedings Seeking Winding Up of JCS Technologies Pty Ltd or Alternative Relief, Followed by Costs and Notice of Motion After Settlement / After Final Hearing and Reserved Judgment, Proceedings Settled; Determination of Plaintiff's Notice of Motion and Costs
Outcome
Plaintiff's notice of motion was dismissed; plaintiff ordered to pay the second and third defendants' costs from 18 August 2016 on an indemnity basis, with no order as to earlier costs.
Legal Topics
['costs After Settlement Before Judgment' 'indemnity Costs' 'construction of Settlement Agreement' 'offers Exclusive of Costs' 'unreasonable Conduct in Litigation']
['civil Procedure' 'costs' 'contract' 'corporations'] ['costs After Settlement Before Judgment' 'indemnity Costs' 'construction of Settlement Agreement' 'offers Exclusive of Costs' 'unreasonable Conduct in Litigation']

Case Brief

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Procedural Posture

Common Law Proceedings Seeking Winding Up of JCS Technologies Pty Ltd or Alternative Relief, Followed by Costs and Notice of Motion After Settlement / After Final Hearing and Reserved Judgment, Proceedings Settled; Determination of Plaintiff's Notice of Motion and Costs

Legal Issues

  1. 1 ['Whether the settlement agreement, constituted by acceptance of the 5 August 2016 offer, precluded either party from seeking a costs order.' 'Whether clause 7 stating that the offer was exclusive of costs meant each party was contractually obliged to bear its own costs.' 'Whether the plaintiff acted unreasonably by accepting the settlement offer only after the final hearing and reservation of judgment.' 'Whether the second and third defendants should receive indemnity costs and from what date.']

Ratio Decidendi

Clause 7 of the settlement offer, stating that the offer was exclusive of costs, did not create any term preventing a party from seeking costs; it meant the contract did not deal with costs. Although the settlement meant there was no capitulation and the starting point was that costs should lie where they fell, the plaintiff acted unreasonably by accepting after the final hearing an offer that had been available before the hearing, thereby forcing the second and third defendants to incur avoidable preparation and hearing costs. That unreasonable conduct justified indemnity costs from 18 August 2016, seven days before the final hearing.

Court Disposition

Plaintiff's notice of motion was dismissed; plaintiff ordered to pay the second and third defendants' costs from 18 August 2016 on an indemnity basis, with no order as to earlier costs.

Orders

  • ['Order that the plaintiff pay the costs of the second and third defendants referable to the period commencing on 18 August 2016, including costs of the notice of motion filed on 28 October 2016, such costs to be assessed on an indemnity basis.' "As to costs referable to the period before 18 August 2016, there be no...