Cohen v Zanzoul trading as Uniq Building Group

Supreme Court of NSW|2020-08-19|Before: Stevenson J, Mr J

Solicitors: Colin Biggers & Paisley (Plaintiffs/Cross-Defendants) Gavel & Page (Defendant/Cross-Claimant) File Number(s): 2017/393016

Judgment

I have given two judgments in this matter. [1]
These reasons assume familiarity with those judgments. I shall use the same abbreviations.
On 6 August 2020 I was informed that it was agreed between the parties that the total amount payable on: 1. Mr and Mrs Cohen's claim is $342,457.78 (subject to the question of cleaning costs which I refer below); and 2. Mr Zanzoul's cross claim is $142,668.16.
The following issues remain for determination: 1. whether Mr and Mrs Cohen are entitled to payment for cleaning costs of $20,457.52; 2. the parties' entitlements to interest; 3. whether the parties' claims should be set off; and 4. costs.
It was agreed that I should deal with these matters on the papers.

Set off

On behalf of Mr Zanzoul, it was submitted that the amounts due between the parties should now be set off and that there should be judgment for Mr and Mr Cohen net of the amount of the unpaid invoices.
Mr and Mrs Cohen did not oppose this course but, on their behalf, it was pointed out that such a set off would have an effect on the manner in which an award for interest would be made.
In my opinion, the preferable course is first to determine the extent to which interest should be awarded to Mr and Mrs Cohen and to Mr Zanzoul in relation to their claims and to then enter judgment in favour of those parties in the resulting amounts.

Interest

There is no reason why interest should not be awarded at Court rates in Mr Zanzoul's favour in relation to the judgment to be entered for him against Mr and Mrs Cohen. Mr Zanzoul's claim is for unpaid work and is, in effect, a liquidated claim. I accept the submission made on behalf of Mr Zanzoul that interest should run from 2 December 2015, being 21 days after the issue of Progress Claim 23.
In relation to Mr and Mrs Cohen's claim, although I found that Mr and Mrs Cohen repudiated the Contract, I also found that they had an accrued right for damages for defective work. The judgment to be entered in their favour is by way of enforcement of that accrued right.
On behalf of Mr Zanzoul, a number of reasons were put forward as to why interest should not be awarded in favour of Mr and Mrs Cohen.
The first was that Mr and Mrs Cohen did not make demand for payment in relation to the works performed by NRB. [2] I do not see this as being a relevant matter. I have now found that Mr and Mrs Cohen have an entitlement to payment.
Reference was also made to the evidence that Mr Cohen gave about paying cash to Mr Zanzoul. As I recorded at [100] of my 19 May 2020 judgment, had that claim not been abandoned, I would have found the evidence to be untrue. That is a reason not to allow Mr and Mrs Cohen their costs in relation to that issue. However, I do not see it as a reason to not allow them interest on the amounts that I have found to be due to them. An award of interest is compensatory and is not to be withheld to punish a party for evidence which does not have a direct connection to the relief ultimately awarded.
Reference was also made to an offer made by Mr Zanzoul on 20 June 2019 to settle the proceedings for an amount less than Mr and Mrs Cohen have ultimately achieved. I do not see that as being a matter relevant to interest.
I do propose to award that interest be paid on the judgment to be entered in favour of Mr and Mrs Cohen.
Interest should be paid from 1 September 2018, when the works were substantially completed.

Costs

Mr and Mrs Cohen and Mr Zanzoul have been largely successful in relation to their respective claims.
On the face of it, Mr and Mrs Cohen should have the costs of their claim against Mr Zanzoul and Mr Zanzoul should have the costs of his cross-claim against Mr and Mrs Cohen.
On behalf of Mr Zanzoul it was contended that Mr and Mrs Cohen should not have their costs for a number of reasons.
The first was that they have obtained judgment for less than $500,000. By reason of Uniform Civil Procedure Rules 2005 (NSW) r 42.34, they are not entitled to their costs unless they can affirmatively satisfy the Court that the bringing of proceedings in this Court was warranted.
On behalf of Mr Zanzoul it was submitted that the amount ultimately to be awarded to Mr and Mrs Cohen "could have been claimed in the New South Wales Consumer and Tenancy Tribunal [sic] ('NCAT')".
In fact, these proceedings were commenced in the New South Wales Civil and Administrative Tribunal and were transferred to this Court in December 2017.
I am not aware of any suggestion made by Mr Zanzoul that the proceedings should have been returned to NCAT. In my opinion the issues raised in these proceedings were sufficiently complex to warrant them remaining in this Court.
Reference was also made to offers made by Mr Zanzoul.
The first offer was dated 12 September 2016. However, that was not an offer to make any payment but rather an offer to cause work to be rectified provided Mr Zanzoul received confirmation of the amount owing to him.
The second offer was the offer of 20 June 2019 to which I have referred . That offer was in the form of a Calderbank [3] offer but for an amount less than the amount of judgment to be entered in favour of Mr and Mrs Cohen.
Mr Zanzoul also relied upon the evidence given by Mr Cohen concerning cash allegedly paid to Mr Zanzoul. I do not see this evidence as a reason to deprive Mr and Mrs Cohen of an overall costs order. However, Mr and Mrs Cohen should not have their costs associated with Mr Cohen's assertion of having made cash payments to Mr Zanzoul. Indeed, Mr Zanzoul should have his costs of that issue.
Further, I have found that Mr and Mrs Cohen repudiated the Contract, albeit in circumstances where they had an accrued right to recover damages from Mr Zanzoul.
Although, as I recorded at [102] of my 19 May 2020 judgment, the question of repudiation was at the end of the day barely contested, it was a central focus during much of the hearing.
I think that a fair response of the matters in [30] to [32] is to discount the amount of costs to be awarded to Mr and Mrs Cohen, rather than make orders directed to discrete issues in the case; which orders would likely unduly complicate any assessment process.
This involves an evaluative process, not susceptible to precise reasoning. Overall, I think the fair order to make is that Mr and Mrs Cohen have 60 per cent of the costs of their claim.

Conclusion

For those reasons, I propose to make orders to the effect that: 1. Judgment be entered in favour of Mr and Mrs Cohen against Mr Zanzoul and in favour of Mr Zanzoul against Mr and Mrs Cohen in the amounts set out at [3] above; 2. Mr and Mrs Cohen have interest at Court rates on that judgment from 1 September 2018; 3. Mr Zanzoul have interest at Court rates on that judgment from 2 December 2015; 4. Mr Zanzoul pay Mr and Mrs Cohen an amount equal to 60 per cent of their costs on their claim against Mr Zanzoul; and 5. Mr and Mrs Cohen pay Mr Zanzoul's costs of his cross claim.
The parties should confer and agree on the precise orders to be made.

Endnotes

Cohen v Zanzoul [2020] NSWSC 592; Cohen v Zanzoul (No 2) [2020] NSWSC 838.
See [21]ff in my first judgment.
Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586. 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: 28 August 2020

At a glance

Court

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Judgment (8 paragraphs)

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Legislation Cited (1)

Cases Cited (2)