El Assaad v Al Haje

Court of Appeal (NSW)|2025-02-20|Before: Ward P, Ball JA, Elkaim AJ

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

JUDGMENT

THE COURT: On 20 December 2024, this Court allowed in part an appeal by the appellant (Mr El Assaad) from orders made by the primary judge (see Al Haje v Elassaad [2024] NSWSC 689 (the primary judgment) at [133]) in favour of the respondent (Mr Al Haje). This Court set aside the award made at first instance for future economic loss (in the amount of $175,000) and in lieu thereof ordered an award of damages in Mr Al Haje's favour for future economic loss in the sum of $20,000 (see El Assaad v Al Haje [2024] NSWCA 306 (El Assaad v Al Haje) at [124]).
The Court's provisional view was that as there had been mixed success on the appeal there should be an order that Mr Al Haje pay 50% of Mr El Assaad's costs of the appeal. However, as Mr Al Haje had indicated in submissions that he wished separately to address the question of costs if the appeal were to be dismissed or only partially successful, directions were made for brief submissions on costs, with that issue to be dealt with on the papers.

Background

The background to the matter is set out in El Assaad v Al Haje and will not here be repeated. However, in light of the submissions made as to interest on the now reduced judgment amount, it is necessary to set out some of the history of the matter following the primary judgment.
The primary judgment was delivered on 6 June 2024. Costs orders were made, following submissions, on the papers on 28 June 2024 (Al Haje v Elassaad (No 2) [2024] NSWSC 794 (the No 2 Judgment)). The primary judge there declined to make ancillary orders that Mr Al Haje had sought in his submissions (relating to the sale of a property owned by or in which Mr El Assaad had an interest) but instead gave leave for the filing of a notice of motion by Mr Al Haje seeking orders in respect of the continuation of freezing orders previously made and in respect of Mr El Assaad's dealings with the relevant property. As explained in due course, there had been a number of freezing orders made in the course of the proceedings at first instance but none was subsisting as at the date of the No 2 Judgment.
On 2 July 2024, Mr El Assaad filed a Notice of Intention to Appeal.
On 29 July 2024, orders were made by consent by Harrison CJ at CL to permit the establishment of a joint trust account on behalf of the respective parties and to require certain amounts to be paid into that trust account. The consent orders also included an order requiring Mr El Assaad to file and serve any notice of motion seeking, inter alia, a stay of the orders entered by Elkaim AJ by 19 August 2024. Mr El Assaad duly filed such a motion on 19 August 2024 and it, together with a notice of motion by Mr Al Haje seeking payment of funds from the joint trust account, was heard by Elkaim AJ on 19 September 2024. On 20 September 2024, Elkaim AJ ordered a stay of the judgment on terms that Mr El Assaad pay the sum of $225,000 (Al Haje v Elassaad (No 3) [2024] NSWSC 1191 (the No 3 Judgment) at [25]). Mr Al Haje accepts that payment of that amount was made on 25 September 2024.

Costs

Turning first to the issue of costs, in summary, the position of the respective parties as to costs is as follows.
Mr Al Haje, relying on the non-acceptance of a Calderbank offer dated 1 October 2024 made by him prior to the appeal (Calderbank Offer) seeks an order in his favour for indemnity costs of the appeal from 2 October 2024. As to the period before that date, Mr Al Haje accepts that an order that Mr El Assaad have 50% of his costs of the appeal (as foreshadowed in El Assaad v Al Haje at [9], [123]) would be appropriate.
Mr El Assaad, on the other hand, submits that the appropriate costs order is that Mr Al Haje pay 50% of his costs of the appeal.

Mr Al Haje's submissions

In support of his submissions, Mr Al Haje served an affidavit sworn by his solicitor, Gregory Alexander Walsh, on 7 January 2025, deposing (among other things) to the non-acceptance by Mr El Assaad of the Calderbank Offer, a copy of which was annexed to the affidavit (Annexure "A"). That affidavit will be taken as read.
The Calderbank Offer, expressly invoking the principles in Calderbank v Calderbank [1975] 3 All ER 333, was an offer "to settle this case for $300,000 plus costs". The letter containing that offer stated that those costs included interlocutory costs ordered by Fagan J, the costs of the substantive proceedings before Elkaim AJ and the costs of the appeal proceedings. (In his written submissions, Mr Al Haje refers to the offer as being an offer to resolve "the whole of the Appeal proceedings" but it is not clear that there is any intended distinction in the use of that terminology as compared with that in the offer itself.)
The Calderbank Offer was expressed to remain open until 4pm on 28 October 2024, after which it would expire.
It will be recalled that the primary judge awarded Mr Al Haje damages under various heads of damage, totalling the sum of $454,340.95, which was the amount of the judgment entered against Mr El Assaad (primary judgment at [133]). By his appeal, Mr El Assaad challenged only some components of that award (general damages, past economic loss and future economic loss), totalling $400,000, although in submissions he accepted that an award for general damages of $50,000 would be appropriate. Thus, in effect, some $350,000 of the overall damages award was put in issue on the appeal. The effect of the appeal judgment was to reduce the overall amount of damages awarded in Mr Al Haje's favour by $155,000 to $299,340.95, although Order (2) as made on 20 December 2004 did not expressly provide as such.
Mr Al Haje submits that he has obtained a result in the litigation better than the terms of the Calderbank Offer, noting that, pursuant to s 3 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act), "judgment debt" includes "any interest after judgment that is payable on that amount under section 101" of that Act. Mr Al Haje refers to what was said in Lambourne v Baker (No 5) [2024] NSWCA 241 (Lambourne) at [78] per Ward P as to interest commencing to run (in the ordinary course) from the date on which the judgment takes effect on so much of the judgment (exclusive of any order for costs) as from time to time is unpaid if the judgment is not paid in full within 28 days after the judgment takes effect. Reference is also made by Mr Al Haje to what I said in Lambourne at [78] and [81] (as to the effect of the imposition of a stay of payment of the judgment debt on a claim for post-judgment interest and as to the import of moneys having been paid into Court).
Mr Al Haje says that he is entitled to interest on the (now reduced) judgment sum (i.e., $299,340.95) from 6 June 2024 (the date of the primary judgment), in circumstances where part of the judgment sum ($225,000) was not paid until more than three months from entry of judgment (25 September 2024). Mr Al Haje has calculated interest on the now reduced judgment sum for the period between 6 June 2024 and 25 September 2024 at $9,480.74. Hence, Mr Al Haje says that the total amount owing as at 25 September 2024 (when the $225,000 was paid) was $308,820.74 (leaving a sum of $83,820.74 outstanding).
Mr Al Haje argues that, as at the time of the Calderbank Offer, Mr El Assaad ought to have known that any judgment sum obtained by Mr Al Haje included an entitlement to post-judgment interest.
Mr Al Haje accepts that he must show that Mr El Assaad's rejection of the Calderbank Offer was unreasonable (referring to Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [20]; Leichhardt Municipal Council v Green [2004] NSWCA 341 at [46]-[47]). In that regard, Mr Al Haje maintains that unreasonableness on Mr El Assaad's part in rejecting the offer is established by the following: that the offer involved a greater than one-third reduction of the amount awarded by the primary judge; that the appeal was limited to damages; and that Mr El Assaad must have known that the appeal had mixed prospects of success when most of the grounds of appeal related to the question of the diagnosis of post-traumatic stress disorder (and its consequences) which was the subject of affirmative medical evidence for both parties at first instance.
Mr Al Haje also refers to a Calderbank offer made by him at first instance (noting that pursuant to r 51.49 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) this Court may have regard to any offer of compromise made in the proceedings at first instance). On 29 April 2024, (as recorded in the No 2 Judgment at [15]-[16]) Mr Al Haje made an offer to settle the case for $250,000 plus costs. Mr Al Haje says that even following Mr El Assaad's partial success in this Court, he (Mr Al Haje) has obtained an outcome that is more favourable to him than the terms of that earlier Calderbank offer, which the primary judge accepted represented a significant compromise (No 2 Judgment at [17]). Mr Al Haje points out (as is self-evident) that had Mr El Assaad accepted that earlier Calderbank offer then the significant legal costs of both the hearing before the primary judge and the appeal would have been avoided.

Mr El Assaad's submissions

Mr El Assaad contends for an order that Mr Al Haje is not entitled to post-judgment interest for the period from 6 June 2024 to 25 September 2024. His position appears to be that, in the absence of an order that this Court's judgment take effect from 6 June 2024, post-judgment interest does not commence to run (if the judgment remains unpaid 28 days after the appeal judgment) from the date of the appeal judgment. In this regard, Mr El Assaad refers to the discussion in Kabic v AAI Limited t/as GIO (No 2) [2019] NSWCA 311 (Kabic) at [10], [16]-[17], where an application for an order that the appeal judgment take effect at an earlier date was made in circumstances where it was common ground that otherwise the order made by this Court in that case took effect on the day it was made; the relevant order being one varying a judgment entered a year earlier.
Mr El Assaad submits that any entitlement to post-judgment interest should not be included for the purposes of determining whether Mr Al Haje has obtained a more favourable outcome than his Calderbank Offer (noting that the letter conveying the offer was silent as to the inclusion of interest and that no authority has been cited by Mr Al Haje for the proposition that such interest should be included in considering the outcome). In response to this, in his reply submissions, Mr Al Haje contends that this submission conflates the amount of the "new" judgment following the decision of this Court and Mr Al Haje's capacity to rely upon the Calderbank Offer.
Mr El Assaad submits that as Mr Al Haje has asserted that he (Mr El Assaad) ought to have known that any judgment sum obtained by Mr Al Haje included an entitlement to post-judgment interest, the Calderbank Offer should be construed as requiring Mr El Assaad to pay post-judgment interest if the offer was accepted; and says that, if construed this way, then Mr Al Haje has not achieved an outcome that is more favourable than the terms of his offer (noting that the offer was for $300,000 and the judgment sum has been reduced to $299,340.95 and, on this hypothesis, each offer is plus interest). In response, Mr Al Haje says, and we agree, that there is no basis for the submission that the Calderbank Offer should have been regarded as being "plus interest". Mr Al Haje argues that the relevant question is whether, with interest included, a more favourable outcome has been achieved by him (than if the Calderbank Offer had been accepted).
As to the reasonableness of rejection of the Calderbank Offer (assuming the special costs discretion has been triggered), Mr El Assaad argues that his rejection of the Calderbank Offer was not unreasonable, referring to the principles applied in Hunter v Roberts (No 2) [2019] NSWCA 235 at [7] as to the determination of an unreasonable refusal of such an offer. In that regard, Mr El Assaad refers to the following matters.
First, that the Calderbank Offer was made at a time prior to the service of any submissions in this Court and expired prior to the filing and service of Mr Al Haje's submissions on 1 November 2024. (Mr Al Haje says that the suggestion that the offer was premature should be rejected, it having been made approximately seven weeks before the hearing of the appeal and four months after the primary judgment; and at a time when Mr El Assaad knew the strengths of both his and Mr Al Haje's case.)
Second, that the letter serving the Calderbank Offer was silent as to anything beyond the amount of the offer and the reference to costs, noting that it did not refer to an entitlement to post-judgment interest; did not refer to the issues to be determined on appeal or the evidence in the Court below; and did not quantify the amount of costs claimed if the offer were to be accepted. (Mr Al Haje says that there was no obligation to refer in the offer to interest because no interest was claimed in the offer; and that it is not a requirement of a Calderbank offer made in this Court that the offeror set out the strengths and weaknesses of the appeal; particularly in the context of long contested litigation.)
Third, Mr El Assaad says that the Calderbank Offer was ambiguous and incapable of acceptance. In that regard, Mr El Assaad notes that the letter confirmed that the costs (in the offer of $300,000 plus costs) included the interlocutory costs that Fagan J had ordered to be paid. Mr El Assaad says that those costs had already been paid - Elkaim AJ having ordered on 20 September 2024 that the sum of $98,069.16 be paid to Mr Al Haje out of the sum held in the joint account, representing the amount of the costs certificate arising from the orders of Fagan J made on 31 January 2024. (Mr Al Haje rejects the suggestion that there was ambiguity in the offer. He says that the reference to the earlier costs order was to make abundantly clear that the offer was to resolve the matter in total; and that the fact that an amount had been paid to discharge an earlier costs order simply meant that the amount could be set-off against the settlement if the Calderbank Offer were accepted.)
Fourth, Mr El Assaad says that his prospects of success as at the date of the offer were reasonable, again noting that the offer was made (and expired) prior to the filing and service of Mr Al Haje's submissions on the appeal. Mr El Assaad says that at that time he was unaware as to Mr Al Haje's position in relation to the issues raised on appeal.
Fifth, Mr El Assaad says that the Calderbank Offer did not foreshadow an application for indemnity costs in the event of rejection. (Pausing here, as noted above, the letter containing the Calderbank Offer expressly invoked the Calderbank principles. In those circumstances, the suggestion that a party represented by a solicitor would not understand that an application might be made for indemnity costs in the event of the rejection of the offer is untenable.)
As to Mr Al Haje's reliance on the earlier offer to which the primary judge had referred in the costs judgment (which, as Mr El Assaad notes, was not before this Court), Mr El Assaad relies on the statement in Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson (No 2) [2012] NSWCA 420 at [16] that "the usual position is that appeal costs should primarily be determined by the issues in and the outcome of the appeal proceedings themselves".
Mr El Assaad also submits that the exercise of the costs discretion should be informed by the substantial success he achieved in reducing the award of damages by some $155,000 (referring to the observation to that effect as to the success of the appeal at [123] of El Assaad v Al Haje).

Determination

There is no dispute as to the applicable principles when considering the exercise of the broad costs discretion conferred by s 98 of the Civil Procedure Act in the context of an application for a special costs order nor as to the rationale underlying the making of indemnity costs orders (see Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 (Miwa) per Basten JA at [6]-[7], reference there being made to Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724). Nor was it suggested that the Calderbank Offer in this case did not involve a genuine element of compromise.
Rather, two issues emerge from the parties' submissions: first, as to whether the Calderbank Offer was more favourable to Mr Al Haje than the ultimate outcome (and, in that context, whether one may take into account the incidence of post-judgment interest); and, second, whether it was unreasonable for Mr El Assaad to reject the offer (as to which, Mr Al Haje accepts he bears the onus).
Turning to the first of those issues, neither party identified any authority as to whether, when considering whether the judgment obtained is no more favourable than a Calderbank offer, the statutory entitlement to post-judgment interest may be taken into account.
That issue was the subject of consideration in Channel Seven Sydney Pty Ltd v Mahommed (No 2) (2011) 80 NSWLR 210; [2011] NSWCA 6 (Mahommed) in the context of the costs of an appeal from a decision in defamation proceedings. There, an offer of compromise had been made three months after the filing of the notice of appeal. The respondent (the successful plaintiff at first instance) offered to compromise his claim on terms including the entry of verdict and judgment for the respondent in the sum of $270,000 (having obtained a judgment at first instance in the sum of $240,000 plus interest and costs). This Court allowed the appellant's appeal in part, setting aside the verdict insofar as it related to one of the three matters complained of and substituting (for the $140,000 allowed in respect of that matter) a verdict of $125,000 (see Mahommed at [4]). The parties were directed to calculate interest on the revised damages in accordance with the Court's reasons and to file short minutes of order setting out the substituted judgment within 7 days (see as noted at [4]). Judgment in the revised amount as at the date of the primary judge's decision was filed in the Registry. Submissions were then made on the outstanding costs issues and part of the dispute as to costs was as to the respondent's application for indemnity costs relying upon the offer of compromise that had been served (as was the case here) after the notice of appeal was filed.
In Mahommed, the respondent submitted that post-judgment interest on the (reduced amount of the judgment) sum of $258,953 from 9 July 2009 (when the primary judgment was delivered) to 7 December 2010 (when the appeal judgment was delivered) amounted to $44,630, and that, accordingly, $303,583 was payable to him as at 7 December 2010. This was $33,583 more than the amount of the offer of compromise that had been made on 24 November 2009 and hence the respondent contended that this entitled him to indemnity costs on and from the making of that offer.
The appellant, however, submitted that the correct approach was to calculate interest accruing on the substituted verdict from 9 July 2009 to the date of the making of the offer (24 November 2009), an amount of $8,875.35 which, when added to the reduced judgment sum, amounted to a judgment at that date of $267,828.35 (less than the $270,000 offered).
McColl JA, with whom Spigelman CJ and Beazley JA (as Her Excellency then was) agreed, accepted the appellant's submissions, namely that the effect of r 42.16 of the UCPR was that the respondent was not entitled to include interest after the date the offer of compromise was made (that rule prohibiting, for the purpose of determining the consequences of costs, the taking into account of interest relating to the period after the day on which the offer was made).
Rule 42.16 of the UCPR provides that: Costs with respect to interest (cf SCR Part 52A, rule 22; DCR Part 39A, rule 25; LCR Part 31A, rule 20) (1) If a plaintiff obtains an order or judgment for the payment of a debt or damages and - (a) the amount payable under the order or for which judgment is given includes interest or damages in the nature of interest, or (b) the court, by a separate order, awards the plaintiff interest or damages in the nature of interest in respect of the amount, then, for the purpose of determining the consequences as to costs referred to in rule 42.14, 42.15 or 42.15A, the court must disregard so much of the interest, or damages in the nature of interest, as relates to the period after the day on which the offer was made. (2) For the purpose only of this rule, the court may be informed of the fact that the offer was made, and of the date on which it was made, but must not be informed of its terms.
In the present case (unlike the position of the respondent in Mahommed), Mr Al Haje does not contend that post-judgment interest after the date of the Calderbank Offer should be taken into account when making the relevant comparison; rather, he contends that interest from the date of the primary judgment up to the date of the Calderbank Offer should be included in the comparison. That must be accepted in light of the decision in Mahommed.
On the basis of the approach endorsed by McColl JA in the Mahommed case, when determining whether the final judgment was no more favourable to Mr Al Haje than the Calderbank Offer (so as to enliven the special costs discretion), the relevant question is therefore not whether post-judgment interest can be taken into account; rather, it is when the appeal judgment (revising the amount of the award of damages at first instance) takes effect. That is the issue that was faced in the Kabic decision to which reference has been made above.
In the absence of an order providing otherwise, the appeal judgment would take effect from the date it was entered (r 36.4 of the UCPR; s 101(2) of the Civil Procedure Act); i.e., the substitution of the component for future economic loss in the primary judge's award of damages would take effect from 20 December 2024. Although that was only one component of the overall judgment sum, the effect of the substitution of that component in practical terms is that the overall judgment was reduced by $155,000. It is only if post-judgment interest is calculated on the revised judgment amount from the date of the primary judgment that the Calderbank Offer becomes more favourable to Mr Al Haje (albeit by a very small amount) than the final judgment. It was not suggested in submissions that the orders made in December last year operated to leave extant as from the date of the primary judgment the remaining components of the overall damages award (such that post-judgment interest commenced to run on those separate components as from the date of the primary judgment but only commences to run on the future economic loss component as from the date of the appeal judgment). Rather, Mr Al Haje's submissions appear to be predicated on an understanding that the effect of the appeal judgment was to revise the overall judgment amount and the question was as to the date when post judgment interest would run on the whole of that revised amount. On that basis, in the absence of an order that the appeal judgment take effect from 6 June 2024 the answer to that question would be that interest runs in the ordinary course from the date of the appeal judgment.
This raises the issue as to whether there should now be an order that the appeal judgment take effect from 6 June 2024 (as contemplated by the orders proposed by Mr Al Haje in his submissions). There is, as was recognised to be the case in Kabic, much force in the proposition that, on the basis of the appeal decision, the judgment that should have been entered on 6 June 2024 in Mr Al Haje's favour would be judgment in the sum of $299,340.95, on which judgment sum interest would have commenced to run from that date if (as was the case) the judgment or any part of it remained unpaid for 28 days thereafter (leaving aside the import of the stay subsequently granted). That question is addressed below (see [52]). On balance, we consider that an order under r 36.4(3) of the UCPR should be made, providing that the revised judgment take effect from 6 June 2024 (and the order previously made by this Court in December last year should be amended to reflect that position).
That said, for present purposes (i.e., costs) nothing turns on this issue in light of the conclusion we have reached in relation to the second issue, to which we now turn, namely whether it was unreasonable for Mr El Assaad to reject the Calderbank Offer. That is because, even accepting that the final judgment was more favourable to Mr Al Haje than his position had the Calderbank Offer been accepted (taking account the incidence of post-judgment interest up to the date of the Calderbank Offer on the revised judgment amount), we are not persuaded that it was unreasonable for Mr El Assaad to reject the offer.
Turning then to that second issue, the assessment as to unreasonableness is to be made as at the date the offer was made; it is not to be determined with hindsight (see Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [33]).
The relevant factors to take into account include: the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree's prospects of success assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it (see Commissioner of State Revenue v Challenger Listed Investments Ltd (atf Challenger Diversified Property Trust 1) (No 2) [2011] VSCA 398 at [8]; Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25]; Miwa at [12]). Each of those factors was addressed in Mr El Assaad's submissions, as noted earlier. We address those in turn.
As to the stage of the appeal proceedings at which the Calderbank Offer was received, while this was before submissions had been filed in relation to the appeal it must be expected that Mr El Assaad would have been well familiar with the basis on which Mr Al Haje had conducted the case at first instance and the issues that had been there raised. Mr El Assaad must have been well aware (and surely had received advice) as to the strengths and weaknesses of the respective cases on appeal. It was not suggested that anything was raised in the submissions that were subsequently filed which would have altered or affected an assessment of the prospects of the respective parties' cases on appeal. We do not regard this factor as of much weight in the present case.
As to the time allowed to consider the offer, it was open for acceptance until 28 October 2024, i.e., 28 days after it was made. That is a reasonable period for consideration of the offer, particularly bearing in mind that the appeal was listed for hearing on 22 November 2024, not long thereafter. One would expect the parties to have been well in the throes of preparation for the appeal within that time frame.
As to the extent of the compromise offered, as already noted what was put in issue on the appeal was some $400,000 (though ultimately, given the acceptance of an appropriate award for general damages, a lesser sum of $350,000) in respect of a first instance judgment of some $454,000. The offer was in essence to accept payment of $300,000 in settlement of the case (a one-third reduction in the amount of the primary judgment award). The compromise offered thus represented a genuine compromise (and, as it turned out, very close to the final outcome on the appeal).
As to the prospects of success on the appeal, we accept that those would reasonably have been assessed as mixed as at the time of the offer, bearing in mind that the challenge to the award of general damages (which, after the award for future economic loss, represented the second largest component of the damages put in issue on the appeal) would surely have been recognised as one in respect of which appellate caution would ordinarily be exercised whereas the award of future economic loss (the largest component of the claim) was not commensurate with the evidence (see Dr Sherman's report of December 2023) and hence on this aspect the appeal had far better prospects of success.
As to the clarity of the terms of the offer, the fact that the Calderbank Offer did not quantify or estimate the costs in question does not make it ambiguous or incapable of acceptance. The fact that it expressly included costs that had already been paid (as noted above) may well have given rise to doubt as to what was encompassed. The suggestion that a set-off could have been anticipated in respect of costs already paid seems optimistic. The problem would arise insofar as acceptance of the offer might be said to bind Mr El Assaad to pay an amount of costs twice. Hence, we accept that there was a degree of ambiguity (though we think it unlikely that, properly construed, the Calderbank Offer would have been seen as including double costs). That said, it would have been open to Mr El Assaad to seek clarification of the costs included in the offer had he wished to do so; or to raise the apparent inconsistency in relation to the interlocutory costs that had already been paid. Otherwise, the "plus costs" component would surely need to have been understood as being costs as assessed or agreed. Hence, the offer being said to be "plus costs" would not of itself be expected to cause any real lack of understanding as to what was comprised by the offer. However, as noted above, there was an element of ambiguity about the offer.
As to whether the offer foreshadowed an application for indemnity costs in the event of its rejection, as already indicated we consider that this should have been appreciated from the express reliance on the Calderbank principles.
When one looks at the accepted rationale underlying the making of special costs orders (which includes, among other things, the encouragement of saving of costs and the avoidance of the inherent risks, delays and uncertainties of litigation), there is no reason in principle why a party's entitlement to post-judgment interest on a judgment sum in its favour up to the time of the making of a settlement offer should not be included in the comparison between the offer made and the final judgment (and, as noted above, that was the approach in Mahommed). At the time of the Calderbank Offer in this case, Mr El Assaad was required to make a realistic assessment of his appeal prospects as against the settlement offer; and his entitlement to post-judgment interest on the first instance judgment would be a relevant matter to take into account in assessing the relative value of the offer of settlement in that he was effectively being asked to weigh the settlement offer against the prospect that he would be required to pay some or all of the settlement sum (depending on the extent to which the appeal succeeded) and could expect to pay post-judgment interest, in the ordinary course, on that amount.
We do not place weight on the fact that an earlier Calderbank offer had been made in relation to settlement of the case at first instance because we do not see the relevance of this in determining the reasonableness or otherwise of the rejection of the offer now in issue. True it is that, had the earlier offer been accepted, the occasion for appeal costs would never have arisen but it is the non-acceptance of the Calderbank Offer made during the appeal that is now for consideration.
Weighing all the factors referred to above, on balance we have concluded that it was not unreasonable for Mr El Assaad to reject the Calderbank Offer at the time it was made. What he was being asked to give up was the reasonable prospect of success in respect of a large component of the damages award (the future economic loss component) with the less certain prospect of overturning the general damages award (which, though high, was not ultimately found to be inordinately high). In those circumstances, though the offer represented a genuine offer of compromise, we are not persuaded that it was unreasonable for it to be rejected.
Accordingly, we remain of the view initially held that the appropriate costs order is for Mr Al Haje to pay 50% of Mr El Assaad's costs of the appeal.

Other issues raised by the respective submissions

We turn then to the other issues raised in the respective submissions (strictly going beyond the submissions as to costs which were the subject of the Court's directions).

Variation of December orders and orders for interest

First, as to the orders sought by Mr Al Haje (presumably pursuant to r 36.4(3), though no formal application to that effect was made) that the "new judgment" be entered to take effect from 6 June 2024 and for orders as to interest. Mr Al Haje seeks both an order for interest accruing at post-judgment court rates from 6 June 2024 until 25 September 2024 and an order for interest on the amount of $83,820.74 at post-judgment interest rates from 25 September 2024 to date. That latter amount is calculated as the sum of $308,820.74 (the reduced judgment sum with interest from 6 June 2024 to 25 September 2024, the interest being calculated as $9,480.74) less the amount of $225,000 paid on 25 September 2024.
As already noted, Mr Al Haje refers to the definition of "judgment debt" in s 3 of the Civil Procedure Act as including any interest after judgment that is payable on that amount under s 101 of the Act.
Mr El Assaad, on the other hand, refers to the Kabic decision (see above) and submits that the Court should order that Mr Al Haje is not entitled to post-judgment interest for the period from 6 June 2024 to 25 September 2024.
We have some difficulty with the proposed orders sought by Mr Al Haje as to the effective date of the appeal judgment and the claim for interest because this was not raised as a matter to be considered during the course of the appeal and there was no application by Mr Al Haje made in the appropriate way for his proposed order (1) (which is required in order for the interest calculations to be as Mr Al Haje has proposed) or the interest calculations. Rather, this was raised in submissions directed to costs and to be dealt with on the papers. Mr Al Haje cannot have been unaware of the risk that an ancillary application would not be dealt with simply on submissions without an appropriate application since the primary judge had earlier refused to make ancillary orders in the absence of a proper application and in circumstances where they went beyond the question of costs that had been reserved (as made clear in the No 2 Judgment at [24]).
That said, there is force to the proposition that interest should be paid on the unpaid component of the now reduced judgment sum from the date of the primary judgment (other than while the judgment was stayed), given that had the primary judge not fallen into error the judgment would have been entered on 6 June 2024 for the revised amount.
While it might well be said that Mr Al Haje should be held to the conduct of his case (see University of Wollongong v Metwally (1985) 60 ALR 68 at 71; [1985] HCA 28), and it is certainly not appropriate to leave such issues to be dealt with in submissions after the event, it is not clear that Mr El Assaad was prejudiced in his ability to argue against such an order (and he indeed did so in his submissions). The spectre of costs has clearly loomed large throughout the hearing both at first instance and on appeal (as evidenced by the numerous freezing orders and like applications). However, when considering the interests of justice, we consider that an order should be made in terms of the proposed order (1). That said, we do not consider it necessary to go on to make the orders as to interest that have been sought by Mr Al Haje. It is not clear whether the calculations are disputed. We simply note that post-judgment interest would, on the material put before this Court, run on the revised judgment sum from 6 June 2024 (taking into account the payment made on 25 September 2024) but not during any period in which payment of the judgment was the subject of a stay.
As to interest from the date of the appeal judgment, this will accrue (if the judgment sum or any part of it remains unpaid for 28 days) in the ordinary course pursuant to the statutory provisions and does not require an order to that effect.

Vacation of freezing orders

Second, Mr El Assaad seeks an order in the following terms: Vacate all previous orders (including order 2 made on 1 September 2021 and order 1 made on 3 September 2021) restraining the Appellant in any way from disposing of, dealing with or diminishing the value of any of his assets (as defined in order 1 made on 3 September 2021 and in any other orders made by the Supreme Court of NSW).
Some of the history of the making of freezing orders in the proceedings at first instance is set out in the No 2 Judgment (at [21]-[26]) and it is set out in more detail in the affidavit affirmed by Mr El Assaad's solicitor, Mr George Elias, on 30 August 2024 in support of Mr El Assaad's 19 August 2024 notice of motion.
Relevantly, Bellew J initially made a freezing order "until further order" on 1 September 2021. That order was varied by Beech-Jones J on 3 September 2024, sitting in the Common Law Division as his Honour then was, including to replace the words "until further order" with "until 5.00pm on 24 September 2021". There followed a series of extensions of the freezing order, all operating until a named time (i.e., not until further order). There is no need to vacate orders that in their terms (or as varied in the case of the first of the freezing orders) have already expired.
The freezing order made by Beech-Jones (a copy of which is annexed to Mr Elias' affidavit) permitted the sale of a particular property owned by or in which Mr El Assaad had an interest subject to certain conditions (including that on completion the net proceeds of sale were to be paid into a trust account operated by his solicitors on the record at that time). It appears that the property was sold in February 2022 but the net proceeds of sale were not paid into any solicitor's trust account (see Al Haje v El Assaad [2024] NSWSC 13 per Fagan J at [7]).
Fagan J varied the freezing order on 20 October 2023 (see Mr Elias' affidavit at [13] and Annexure "B" thereto). That variation to the freezing order permitted the sale of another property in Greenacre (the second property) provided that the sum of $400,000 was paid into Court within 7 days of settlement of the sale pending the outcome of the substantive proceedings and for the grant of a mortgage over a third property in Greenacre in favour of Mr Al Haje to secure the sum of $200,000 pending the outcome of the substantive proceedings.
On 9 April 2024, as noted above, McNaughton J made orders that, among other things, provided for the execution by Mr El Assaad of a mortgage in favour of Mr Al Haje over the second property in the sum of $400,000.
Mr Elias has deposed to the sale of the second property (exchange of contracts for sale occurring on 27 April 2024 with settlement on 29 July 2024) and as to the disbursal of the net proceeds of sale, including payment of $490,926.56 into a joint trust account in the names of the parties' legal representatives.
On 28 June 2024, as already noted, the primary judge declined to make ancillary orders in relation to the sale of the relevant property but gave leave for a filing of a notice of motion by Mr Al Haje to seek "the continuation of freezing orders previously made" and orders in respect of Mr El Assaad's dealings with the property.
On 29 July 2024, orders were made by consent by Harrison CJ at CL, varying order (1) of the orders made by McNaughton J to permit the establishment of a joint account in the names of the respective parties' solicitors and for the payment of the sum referred to above into that trust account.
On 19 August 2024, Mr El Assaad filed the notice of motion referred to at [7] above, seeking a stay of the judgment, in support of which Mr Elias' affidavit was filed. This led to the No 3 Judgment.
The above chronology demonstrates that there are no freezing orders currently in place restraining Mr El Assaad from disposing of, dealing with or diminishing the value of his assets. While there might perhaps be an issue as to the status of the mortgage that Mr El Assaad agreed to give over the third property, there is nothing before this Court to identify what that is or what order should now be made. As noted, Mr Al Haje submits that there is no need for Mr El Assaad's proposed order (3). We agree.

Orders

For the above reasons, we make the following orders: 1. Vary order (2) made by this Court on 20 December 2024 and in lieu thereof order that order (1) made by Elkaim AJ on 6 June 2024 be set aside and judgment be entered for Mr Al Haje in the sum of $299,340.95, such judgment to take effect from 6 June 2024. 2. Order Mr Al Haje to pay 50% of Mr El Assaad's costs of the appeal.

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: 20 February 2025

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (21)

Cited By (1)