Down to Earth Spring Water and Ors v Mitrofanis Demetrius Nikolaidis and Leon Nikolaidis trading as Md Mikolaidis and Co [no. 2 ] [2002] NSWSC 551

1 On 3 May 2002 I delivered reasons determining certain questions the subject of a separate trial pursuant to Pt 31 r 2 of the Supreme Court Rules 1970 (“the SCR”). The issues were (i) was the defendant retained by the plaintiffs and, if “yes”, (ii) did the defendant breach that retainer and (iii) was the defendant in breach of the common law duty of care owed to the plaintiffs. I answered each of those questions “yes”. 2 The matter was listed before me on 19 June 2002. On that occasion the parties were agreed upon a timetable for the future conduct of the proceedings and I made directions accordingly. The only issue between them was as to the costs of the separate trial. 3 The plaintiffs seek an order that the defendant pay their costs of the proceedings to date, on an indemnity basis from 16 November 2001, and that such costs be assessed and paid forthwith pursuant to Pt 52A r 9(1).4 In support of the application, Mr Alexis relies on a letter sent on behalf of the plaintiffs to the defendant’s solicitor and dated 16 November 2001 (“the offer”). The offer is in these terms: “We refer to the call-up of these proceedings and note that these proceedings have been specially fixed for hearing for ten days commencing 28 January 2002. The plaintiff’s legal costs to date would well exceed $50,000. However, in an endeavour to resolve this part of the proceedings, the plaintiffs are prepared to accept the following:
  1. An order for judgment in the plaintiff’s favour with damages to be assessed before the Master;2. Each party pay their own costs of the proceedings to the date of this offer.
The plaintiffs consider this to be a generous offer because:
  1. The written memorandum dated 8 June 1992 does not give rise to an instruction for the defendants to discontinue the plaintiffs’ case against the State Bank of NSW on 9 June 1992. Indeed, the memorandum contains an express written instruction by the plaintiffs for the defendants to proceed with the hearing.
  2. The affidavit evidence filed on behalf of the defendants does not refer to any verbal instruction given by any of the plaintiffs for their case against the State Bank of NSW to be discontinued on 9 June 1992.
  3. The particulars provided by you are that the instruction to discontinue the case against the State Bank of NSW on 9 June 1992 is somehow to be inferred from the conduct of the parties.In circumstances where express written instructions were sought as to the conduct of the proceedings it is inconceivable, that the defendants could proceed to discontinue the case based on implied instructions. We commend this offer as a sensible way of avoiding the expensive costs of a ten day trial on the issue of liability. No doubt, the respective positions of the parties, on the assessment of damages can be protected by an exchange of offers of compromise in respect of damages so that it will not necessarily follow that the plaintiffs will recover the costs of the damages hearing if this offer is accepted. This offer remains open for a period of 28 days. At the expiration of 28 days from the date of this letter, this offer lapses. A copy of this letter may be tendered for an application for indemnity costs, in the event that the offer is not accepted and the plaintiffs are successful at the liability hearing.”
5 In support of his submission that any order for costs be made payable forthwith, Mr Alexis referred me to the commentary to Pt 52A r 9 in Ritchie’s Supreme Court Procedure NSW. Reference is made therein to Charlie Brown Pty Ltd v Green 3 July 1995, (unreported) NSWSC BC9505032. In that case McLelland CJ in Eq observed: Read about this case: Court Website Austlii Jade

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