Geoghegan v Wood; Wood v Geoghegan

File Number(s): 2022/387503; 2022/387510

Publication restriction: N/A

JUDGMENT

1. These reasons concern the costs of these two related proceedings in which I delivered judgment on 10 June 2025: Geoghegan v Wood [2025] NSWSC 586.

2. The parties have agreed on the terms of the orders to be made to give effect to that judgment and to the settlement of the claims as between Ms Geoghegan and Mr Wood immediately prior to the commencement of the final hearing.

3. The outstanding disputes relate to the costs of the proceedings.

4. These reasons assume familiarity with my earlier reasons for judgment. Terms used in those reasons have the same meaning in these reasons. In addition, I will refer to the proceedings commenced by Ms Geoghegan against Mr Wood and the engineers as the main proceedings, and the proceedings commenced by Mr Wood against Ms Geoghegan as the builder’s proceedings.

Costs of the main proceedings as between Ms Geoghegan and the engineers

5. It is common ground that judgment should be entered for Ms Geoghegan as against the engineers in the main proceedings in the sum of $457,685.46 to give effect to my earlier reasons for judgment.

6. It is also common ground that there should be an order that the engineers pay Ms Geoghegan’s costs of her claim against them in the main proceedings on the ordinary basis, as agreed or assessed.

Costs of the main proceedings as between Ms Geoghegan and Mr Wood

7. As Ms Geoghegan submits, the settlement of the main proceedings as between herself and Mr Wood reflects a measure of success in relation to her claims against him for non-structural defects only. The non-structural defects are all of the “Builders Defects” as defined in paragraph C18 of Ms Geoghegan’s List Statement, excluding those relating to the first floor bracing and ground floor bracing which I refer to as the structural defects. At all times from the filing of her List Statement on 17 March 2023 until the morning of the first day of the hearing, Ms Geoghegan sued Mr Wood and the engineers in respect of the structural defects. On the morning of the first day of the hearing, Ms Geoghegan abandoned her claim that Mr Wood had caused or contributed to the structural defects and informed the Court that she had settled her claim against Mr Wood for non-structural defects on terms that judgment be entered against him in the sum of $75,000 and that he deliver to her a specified quantity of certain bricks.

8. Ms Geoghegan seeks an order that Mr Wood pay her costs of her claim against him for the non-structural defects in the main proceedings. Ms Geoghegan submits that this order will give effect to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which provides that costs are to follow the event unless it appears to the Court that some other order should be made.

9. Mr Wood submits that there should be no costs order in favour of Ms Geoghegan in relation to her claims against him in the period up to and including 28 August 2023. I will return to that submission below.

10. In respect of the period from 29 August 2023 onwards, Mr Wood seeks an order that Ms Geoghegan pay his costs of the main proceedings on an indemnity basis, relying on what he submits was an offer of compromise made by letter dated 28 August 2023 in accordance with r 20.26 of the UCPR to settle the proceedings on the basis of judgment for Ms Geoghegan against Mr Wood in the sum of $120,000 in the main proceedings and judgment for Ms Geoghegan in the builder’s proceedings.

11. Ms Geoghegan submits that the offer was not a valid offer of compromise under r 20.26 because it did not contain a statement to the effect that it was made “in accordance with these rules” as required by r 20.26(2)(d). I reject that submission. The letter contained the statement: “This offer of compromise is made in accordance with the Uniform Civil Procedure Rules 2005”. In my opinion, that statement provided a clear indication that Mr Wood was invoking the offer of compromise procedure under the UCPR and therefore constitutes substantial compliance with r 20.26(2)(d): see Neville v Lam (No. 4) [2014] NSWSC 1088 at [13]-[15] and the authorities there referred to.

12. Ms Geoghegan further submitted that the letter dated 28 August 2023 was not a valid offer of compromise under r 20.26 because it contained an offer in respect of the main proceedings and an offer in respect of the builder’s proceedings. It was submitted that this did not comply with r 20.26 because it was not limited to an identified claim by Ms Geoghegan. I reject that submission. Rule 20.26(1) provides that: “In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms*.”* In my opinion, the letter, read as a whole, contained an offer by Mr Wood (the first defendant in the main proceedings and the plaintiff in the builder’s proceedings) to compromise the main proceedings on the basis of judgment in favour of Ms Geoghegan for $120,000, and a further offer to compromise the builder’s proceedings on terms that judgment would be entered for Ms Geoghegan, with each offer being conditional on acceptance of the other. I consider that this complies in substance with r 20.26(1) and does not infringe any of the other requirements of r 20.26. I was not referred to any authority to the contrary.

13. Ms Geoghegan’s rejection of the offer in respect of the main proceedings therefore attracts the operation of UCPR r 42.15 in relation to the costs of the main proceedings. That is to say, unless the Court orders otherwise, Ms Geoghegan will be entitled to an order against Mr Wood for her costs of the non-structural defects claims in the main proceedings on the ordinary basis up to and including 28 August 2023, [1] and Mr Wood will be entitled to an order requiring Ms Geoghegan to pay his costs of the main proceedings on an indemnity basis from and including 29 August 2023.

14. I reject Ms Geoghegan’s submission that the Court should order otherwise by ordering Mr Wood to pay her costs of the non-structural defects claims for the duration of the main proceedings on the basis that she did not act unreasonably in not accepting Mr Wood’s offer of compromise in circumstances where that would not have disposed of her claims against the engineers and she would therefore have been exposed to the risk that, after compromising with Mr Wood, the engineers might succeed on their proportionate liability defence which pointed to Mr Wood as bearing some responsibility for the alleged structural defects. Mr Wood’s offer was made on 28 August 2023. Ms Geoghegan’s expert engineering evidence had been served on 10 October 2022 and the engineers had served their expert engineering evidence on 2 August 2023. Ms Geoghegan did not identify any reason why she could not reasonably have undertaken a critical review of the totality of that evidence and made the decision at that time, which she later made immediately prior to the commencement of the final hearing, not to pursue her claims against Mr Wood in respect of the structural defects and to pursue those claims only against the engineers. I reject Ms Geoghegan’s submission that she could not compromise with Mr Wood without simultaneously compromising with the engineers. Ms Geoghegan ultimately did exactly that. There may have been some risk in doing so on 28 August 2023, but there is no evidence that Ms Geoghegan lacked sufficient information to assess the magnitude of any such risk and weigh it against the costs risk of not accepting Mr Wood’s offer.

15. I reject Ms Geoghegan’s further alternative submission that the Court should order otherwise by ordering that Mr Wood’s costs of her claims against him from and including 29 August 2023 should be borne wholly or partly by the engineers rather than by Ms Geoghegan. There is no principled reason why the engineers, rather than Ms Geoghegan, should bear the costs consequences of her decision to continue pursuing Mr Wood in respect of structural and non-structural defects rather than accepting Mr Wood’s offer of compromise. As counsel for the engineers submitted, such an order would visit upon them the costs of the proceedings relating to non-structural defects for which they were never sued. I reject Ms Geoghegan’s submissions which impliedly characterised her pursuit of both Mr Wood and the engineers in respect of the structural defects as a circumstance beyond her control. As Mr Wood and the engineers submitted, it was Ms Geoghegan who alleged in paragraphs C16 to C18 of her List Statement that both Mr Wood and the engineers were responsible for the structural defects. The engineers merely repeated this aspect of Ms Geoghegan’s pleading, without admission, in pleading their proportionate liability defence pointing to Mr Wood.

16. Mr Wood submits that the Court should order otherwise by making no order for costs in favour of Ms Geoghegan in the main proceedings in respect of the period up to and including 28 August 2023 on the basis that the only claim in respect of which she succeeded against Mr Wood was a claim for building defects that could and should have remained in the NSW Civil and Administrative Tribunal (NCAT) and should never have been tied to her claims against the engineers for structural defects and transferred to this Court. Mr Wood submits any costs order against him in respect of Ms Geoghegan’s claims against him up to and including 28 August 2023 would be disproportionate to the $75,000 judgment that she succeeded in obtaining against him. I reject that submission, which appears to overlook that Ms Geoghegan only seeks a costs order against Mr Wood in respect of the non-structural defects claims. Any issue of proportionality will be a matter for any costs assessor. Mr Wood’s submission also seems to me to be infected with hindsight. There is no evidence that he objected to the transfer of the proceedings from the NCAT to this Court at the time of the transfer.

17. As Ms Geoghegan and the engineers agree, there will be an order requiring the engineers to pay her costs of the claims against them in the main proceedings. For all of the reasons above, the appropriate costs orders as between Ms Geoghegan and Mr Wood are that he is to pay her costs of the non-structural defects claims against him in the main proceedings on the ordinary basis in respect of the period prior to 29 August 2023, and that Ms Geoghegan is to pay Mr Wood’s costs of the proceedings thereafter on the indemnity basis.

Costs of the builder’s proceedings

18. At the same time as settling Ms Geoghegan’s claims against Mr Wood in the proceedings on terms that judgment is to be entered in her favour in the sum of $75,000, Mr Wood’s quantum meruit claim against Ms Geoghegan in the builder’s proceedings was settled on terms that the proceedings are dismissed.

19. Again, there is a dispute about costs.

20. Mr Wood submits that there has been no unreasonable conduct on his part, and there is no relevant offer of compromise or Calderbank offer, that would warrant a costs order against him in circumstances where his quantum meruit claim has been resolved by consent without a hearing on the merits.

21. Ms Geoghegan submits that Mr Wood acted unreasonably in failing to abandon his quantum meruit claim at an earlier stage and that the dismissal of the builder’s proceedings should therefore follow the event with a costs order in her favour. I reject that submission. As I have outlined above, Mr Wood did offer to abandon his quantum meruit claim on 23 August 2023 by offering to have judgment entered in favour of Ms Geoghegan as the defendant. Ms Geoghegan did not accept that offer because she did not accept the concurrent offer relating to the main proceedings. Mr Wood’s conduct in leaving his quantum meruit claim on foot cannot be characterised as unreasonable in circumstances where Ms Geoghegan continued to pursue all of her claims against Mr Wood in the main proceedings which she ultimately settled for only $75,000 after the proceedings had been on foot in this Court for more than two years, and in the NCAT for a period of almost two years prior to that.

22. There will be no order as to costs in the builder’s proceedings, with the intention that each of Mr Wood and Ms Geoghegan will bear their own costs.

Interest on costs

23. The engineers do not oppose the order sought by Ms Geoghegan that they pay interest on the costs that they are to be ordered to pay to Ms Geoghegan from the date that she paid those costs.

24. Ms Geoghegan seeks an order that Mr Wood pay interest on the costs that he is ordered to pay her from the date that she paid those costs. Mr Wood opposes that order.

25. Any order for interest on costs as between Ms Geoghegan and Mr Wood payable from a date earlier than the date of the costs orders should cut both ways. As Ms Geoghegan does not offer to pay interest on Mr Wood’s costs that she is to be ordered to pay on an indemnity basis from 29 August 2023 calculated to run from the date that he paid those costs, there will be no order requiring Mr Wood to pay interest on Ms Geoghegan’s costs that he is to be ordered to pay prior to 29 August 2023 calculated to run from the date that she paid those costs. Interest will run on the costs payable by each of Ms Geoghegan and Mr Wood from the date the costs orders are made pursuant to s 101(4) and (5) of the Civil Procedure Act 2005 (NSW).

Conclusion and orders

26. For all of the foregoing reasons, the orders of the Court in the main proceedings 2022/387503 are:

27. By consent as between the plaintiff and the first defendant, judgment for the plaintiff against the first defendant in the sum of $75,000.

28. By consent as between the plaintiff and the first defendant, order that the first defendant is to deliver 2 pallets of VAN GOGH 1ST HP 600 Bricks to 24 Bundella Avenue, Lake Cathie, New South Wales, by no later than 30 July 2025.

29. Judgment for the plaintiff against the second and third defendants in the sum of $457,685.46.

30. In relation to the costs of the proceedings as between the plaintiff and the first defendant:

(a) order pursuant to r 42.15 of the Uniform Civil Procedure Rules 2005 (NSW) that:

(i) the first defendant is to pay the plaintiff’s costs of her claims against the first defendant in respect of non-structural defects up to and including 28 August 2023 on the ordinary basis as agreed or assessed; and (ii) the plaintiff is to pay the first defendant’s costs of the proceedings from and including 29 August 2023 on an indemnity basis as agreed or assessed;

(b) order pursuant to s 101(4) and (5) of the Civil Procedure Act 2005 (NSW) that the first defendant is to pay interest on the costs payable to the plaintiff pursuant to order 4(a)(i) above calculated from the date of these orders; (c) order pursuant to s 101(4) and (5) of the Civil Procedure Act 2005 (NSW) that the plaintiff is to pay interest on the costs payable to the first defendant pursuant to order 4(a)(ii) above calculated from the date of these orders; and (d) order that the plaintiff’s claim against the first defendant for interest on costs are otherwise dismissed.

5. In relation to the costs of the proceedings as between the plaintiff and the second and third defendants:

(a) order that the second and third defendants are to pay the plaintiff’s costs of her claims against them on the ordinary basis as agreed or assessed; and (b) order pursuant to s 101(4) and (5) of the Civil Procedure Act 2005 (NSW) that the second and third defendants are to pay interest to the plaintiff on the costs payable pursuant to order 5(a) above, calculated as from the date on which the plaintiff paid those costs.

27. The orders of the Court in the builder’s proceedings 2022/387510 are:

28. Proceedings dismissed.

29. No order as to costs, with the intention that each party bears their own costs.

Endnote

Ms Geoghegan does not seek an order that Mr Wood pay her costs of the structural defects claims against him.

Amendments

27 June 2025

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