Moss v Contracoin Pty Ltd

Introduction 1 The applicants seek to enforce the terms of a settlement of the substantive proceedings which they contend was agreed on or around 31 March 2023 pursuant to which payment of the settlement sum was required by 29 June 2023. 2 The applicants, Stephen James Moss, Daniel Murray Harden, Christopher John Dutton, Christopher Ashman and Julio De Laffitte e Freitas, acquired certain cryptocurrency tokens known as CTCN Tokens from the first respondent, Contracoin Pty Ltd. The second respondent, Mr Lipscombe, is a director of Contracoin. The aggregate purchase price paid by the applicants for the CTCN Tokens is alleged to have been $183,191.50. In the substantive proceedings, the applicants seek relief in relation to alleged misleading and deceptive conduct by the respondents which is alleged to have induced them to acquire CTCN Tokens. The applicants contend, inter alia, that the respondents have contravened various provisions of Sch 2 to the Competition and Consumer Act 2010 (Cth). 3 Before the present dispute arose, the proceeding was discontinued against the third respondent, Angus McClure. 4 The claims made in the proceeding are described in greater detail in an earlier interlocutory decision in the proceeding: Moss v Contracoin Pty Ltd [2023] FCA 125. Familiarity with that decision is assumed for the purpose of these reasons. 5 Kyle Kutasi from Solve Legal Pty Ltd acts for the applicants. Anthony Delaney and Danielle Harris from Delaneys Lawyers acted for the respondents until immediately prior to the hearing of this application. On 16 August 2023, the day before the interlocutory hearing, Delaneys Lawyers informed the Court that their retainer had been terminated by the respondents. They have filed a notice of termination in accordance with r 4.04(2) of the Federal Court Rules 2011 (Cth) and sought to be excused from appearing at the interlocutory hearing. I excused Delaneys Lawyers from appearing at the interlocutory hearing and directed Delaneys Lawyers to provide the respondents via email with all of the materials filed by the applicants in respect of this interlocutory application and to inform the respondents of the details of the interlocutory hearing and that if they did not appear, that orders may be made in their absence. Delaneys Lawyers confirmed that they did so. Where I refer to Mr Delaney, Ms Harris or Delaney Lawyers hereafter, I refer to them in respect of their former role as solicitors for the respondents. 6 When the application was called for hearing, including by the Court officer outside the Court room, there was no appearance for the respondents.

Evidence 7 In this application the applicants rely on two affidavits of Mr Kutasi, the first affirmed on 30 June 2023 accompanied by exhibit KK2 and the second affirmed on 15 August 2023 (Kutasi 2) and on written submissions lodged in support of the application. A consent timetable was entered which provided for the respondents to file evidence and or submissions in opposition to this application. The time for the respondents to put on any material has come and gone without any material being filed or served.

Procedural History 8 On 9 February 2023, I made orders, inter alia, that the parties and their legal representatives participate in an informal settlement conference by no later than 15 March 2023. The informal settlement conference took place on 8 March 2023. On 14 March 2023, the parties informed the Court that the informal settlement conference did not resolve the proceedings but that they remained in discussion and sought to have the next case management hearing moved to enable further settlement discussion. Accordingly, the case management hearing due to have been on 16 March 2023 was listed for 6 April 2023. 9 During the period leading up to 6 April 2023, settlement discussions between the parties continued. The communications were via the solicitors then acting for the parties. The relevant communications do not attract settlement negotiation privilege under s 131(1) of the Evidence Act 1995 (Cth) because in the present circumstances the exclusion in s 131(2)(f) is engaged. 10 By letter dated 16 March 2023 the respondents made a Calderbank offer to the applicants to resolve the proceedings in the following terms: (1) The respondents pay to the applicants the sum of $183,191.50 (being the aggregate purchase price for the CTCN Tokens) by way of three equal monthly instalments as follows: (a) $61,063.83 on the day thirty (30) days from the date of acceptance of this offer; (b) $61,063.83 on the day thirty (60) days from the date of acceptance of this offer; and (c) $61,063.84 on the day thirty (90) days from the date of acceptance of this offer; (2) the CTCN Tokens purchased by the applicants be held in escrow pending full payment of the settlement monies (method to be discussed and agreed); (3) upon full and final payment of the settlement monies the applicants authorise the transfer the CTCN Tokens to the respondents and the parties file consent orders to discontinue the proceedings; (4) the parties enter into a suitably worded Deed of Settlement, which includes, inter alia, confidentiality and non-disparagement provisions; and (5) each party bear their own legal costs. 11 On 17 March 2023, the applicants made a counter-offer to the respondents. 12 By email on 29 March 2023, the respondents rejected the applicant's counter-offer and re-opened the respondents' offer of 16 March 2023 on the basis that it would be open for acceptance until 4pm on 31 March 2023. 13 By email on 31 March 2023, the applicants informed the respondents that they accepted the "in-principle terms of settlement as set out in [the respondents'] letter of 16 March 2023". The applicants proposed that they would prepare a "draft Deed of Settlement" in accordance with those terms for the respondents' review and approval. 14 By email on 3 April 2023, the respondents confirmed that the applicants' solicitor should proceed to draft a Deed of Settlement for the respondents' approval. 15 On 4 April 2023, the applicants' solicitor wrote to the Court with the consent of the respondents informing the Court that "the parties have agreed in principle on terms of settlement of the proceedings and are in the process of formalising the settlement". The respondents' solicitor by way of reply email informed the Court that the respondents joined with the applicants in seeking for the case management hearing to be stood over to "enable the terms of the settlement to be concluded". 16 The case management that was to occur on 6 April 2023 was moved to 3 May 2023. 17 On 12 April 2023, the applicants emailed draft Settlement Deed to the respondents for consideration. 18 On 1 May 2023, the applicants emailed the respondents to chase up a response on the draft Settlement Deed ahead of the impending case management hearing on 3 May 2023. In that email the applicant said they considered the matter settled and therefore they would be seeking any costs unnecessarily incurred by them from the respondents. 19 On 2 May 2023, the applicant emailed a draft joint communication to the Court to the respondents. 20 Later that same day, the respondents emailed agreeing to the proposed communication save for one amendment which was marked up as follows changing the reference to the "Deed of Settlement" to "terms of settlement": Dear Associate We write with the consent of the other parties. The parties have agreed a Deed of Settlement to terms of settlement that resolves the dispute. The settlement agreement requires the parties to take certain actions on or before 29 June 2023. The parties therefore respectfully request that the Court make orders in chambers by consent as follows: 1. The Court notes that the parties have agreed terms of settlement of the proceedings. … 21 In the same email, the respondents' solicitor noted that he was currently taking instructions with respect to "minor amendments" to the draft Deed and would revert shortly. On 2 May 2023, the joint communication was received by the Court in the terms agreed by the parties. 22 On 3 May 2023, I made orders by consent which included a note in the following terms: THE COURT NOTES: 3. The parties have informed the Court that they have agreed terms to settle the proceedings pursuant to which the parties are required to take certain actions on or before 29 June 2023. 23 By letter dated 26 May 2023, the applicants agitated for the respondents to execute the Settlement Deed and enclosed an executed copy of the deed. The applicants noted that they had not received the "minor amendments" flagged in Mr Delaney's email of 2 May 2023. The applicants alleged that the respondents were in default of the agreed payment terms and that they were entitled to undertake enforcement action. 24 By open letter dated 7 June 2023, the respondents responded by asserting that the draft Deed of Settlement provided by the applicants on 12 March 2023 contained several terms which were not contained or contemplated in the offer which was accepted. The respondents noted the following discrepancies (as written): a. The Deed includes Angus Mclure as a party and provides that Mr McLure is to release your client from all claims. As you are aware Mr McLure is no longer a party to these proceedings. b. The Deed provides that all existing costs orders be vacated upon payment of the settlement monies. As stated above, Mr McLure is no longer a party to these proceedings, and is the beneficiary of a positive costs order against your clients. c. The Deed includes a form of "Guillotine" provision at clause 2.1(c)(ii)(C) on similar terms as proposed in your client's offer - and such term was rejected by our client. d. The Deed includes the application of an interest component on any Unpaid Amount, and at the rate of 15% per annum, capitalised monthly. No interest component was proposed nor agreed by our client. 25 The respondents further asserted that: 8. As it stands, the terms of settlement are solely contained within our correspondence dated 16 March 2023, until such time as the terms of a formal Deed of Settlement have been agreed and the Deed executed by all parties. 9. Despite the above, we note that within your correspondence dated 26 May 2023 your clients purport to rely upon the interest and guillotine provisions contained within your draft Deed (such terms not being included in the accepted offer). The simple and irrefutable truth is that your client is not entitled to rely upon those provisions, and therefore not entitled seek judgement and interest as you have asserted. 26 In a separate letter also dated 7 June 2023 but marked "without prejudice", the respondents referred to their open correspondence and said that: We advise that our clients wish to honour the settlement agreement made with your clients, however the truth is that they have been unable to abide by the payment dates as contained within the offer. Our clients have re-assessed their financial capabilities and have advised that they can attend to the three tranches of payments as follows: 1. On Monday, 3 July 2023, the sum of $61,063.83; 2. On Friday, 4 August 2023, the sum of $61,063.83; and 3. On Monday, 4 September 2023, the sum of $61,063.84. We have taken the liberty to attend to amend the dates contained within the Deed, and further attended to some other minor amendments (marked-up for your reference). 27 On 14 June 2023, the applicants responded by making an offer in the following terms in reply to Mr Delaney's letters of 7 June 2023 which was expressed to be open for acceptance until close of business 19 June 2023: a. The agreed payment schedule be amended to reflect the schedule set out in your "without prejudice" letter (i.e. with payment in equal tranches on 3 July, 4 August and 4 September 2023). b. The other changes you have proposed to the deed of settlement be accepted, other than the proposed addition of sub-clauses (D) and (E) to clause 2.1(c)(ii) which are not, and never will be, acceptable to our clients. c. Your clients (Contracoin and Mr Lipscombe) agree to pay, within seven days, the further sum of $10,000 into our trust account in mitigation of, and partial compensation for, our clients' wasted costs and expenses, and increased risk, because of your clients' failure to abide by the agreed payment terms. 28 On 28 June 2023, the applicants emailed the respondents and said that if they did not receive payment of the settlement sum of $183,191.50 by 29 June 2023, they would bring an application seeking to enforce the settlement.

The present application 29 As they had foreshadowed the applicants, on 2 July 2023, filed the present interlocutory application, seeking payment of the settlement sum and ancillary orders. 30 On 5 July 2023, I made orders by consent that the respondents file and serve any: (1) evidence in reply to the interlocutory application by 13 July 2023; and (2) written submissions in opposition to the interlocutory application by 27 July 2023. 31 As mentioned, the respondents did not file any evidence or written submissions in accordance with the 5 July 2023 orders. 32 On 31 July 2023, in reply to a query posed by the Court, the respondents' solicitor informed the Court that he had been unable to obtain instructions but that he had been in contact with his client that afternoon and had obtained instructions to prepare submissions. Accordingly, he would liaise with the applicants seeking to agree consent orders to extend the date for compliance with the 5 July 2023 orders and would revert to my associate the next day. No further communication was received from the respondents' solicitors until the recent communications concerning the termination of their retainer. Accordingly, on 4 August 2023, I listed the application for hearing on 17 August 2023.

Applicable Principles 33 The applicable principles are well established. In Archer Capital 4A Ltd as Trustee for the Archer Capital Trust 4A v Sage Group PLC [2015] FCA 960; 108 ACSR 218, Farrell J provided the following summary: 126. It is uncontroversial that in determining whether the parties have reached a binding agreement, the Court must ascertain the "objective intention" of the parties. It is not enough that the parties reached a consensus; they must have intended that the consensus arrived at will be legally binding, enforceable by a court: Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 326 per Mahoney JA If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction: [Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 ] at 634 per McHugh JA (with whom Kirby P and Glass JA agreed). In that case, the use of the words "legally binding agreement in principle" demonstrated an intention to be bound immediately even though there was an expectation that a further contract would be substituted for it. 127. Determining objective intention is a fact based inquiry. Although judges are wont to formulate guiding "principles" or "propositions", those "principles" and "propositions" are subservient to the fact-specific objective finding of the parties' intention: Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 ("Sagacious") at [66] per Giles JA (with whom Hodgson and Campbell JJA agreed). See also Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248 at [26] per Glass JA (McColl JA and Young CJ in Eq agreeing). 128. Intention may be found in a series of communications or a single document. It is the intention that a reasonable person would discern that the parties had concerning the subject-matter of the alleged contract if that reasonable person had the parties' knowledge of the words and actions communicated to each other and of the surrounding circumstances: Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at 655 per Campbell JA (with whom Mason P and Tobias JA agreed). 129 I do not accept that there is any presumption in favour of an intention to create legal relations in a context such as this. It is a factual inquiry. I endorse the comments of Tadgell J in Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 177 that: No intention to make a promise can be imputed to a person whose words and conduct, objectively considered, do not lead to the inference that he intended to make one. Negotiations, no matter how heavily commercial in character, are no substitute for such an intention ... when the question is whether the legal effect of the transaction is promissory, there is no presumption that it is ... 130 It is uncontroversial that labelling a document "subject to contract" is not determinative of whether the parties intended to be bound before the execution of a formal agreement. However, the use of the phrase usually creates a presumption that the parties did not intend that document to be binding, but rather the basis for a future contract. The applicants rely on Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 at [73] per Young CJ in Eq (as he then was) for the proposition that the presumption may be weaker outside the context of contracts for the sale of land. However, Young CJ in Eq made no finding to that effect and the issue is always one of intention determined objectively. 131. The conduct of the parties after the time the alleged contract arose may be relevant for the purpose of casting light on the meaning of communications and whether the parties intended to be legally bound: Sagacious at [69]; see also [105]-[106] in relation to the probative value of subsequent inter partes and internal communications. 34 In Masters v Cameron [1954] HCA 72; 91 CLR 353, the High Court said at [360]: 9. Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. 10. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v. Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: " . . . as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed" (1878) 3 App Cas, at p 1151: see also Sinclair, Scott & Co. Ltd. v. Naughton [1929] HCA 34; (1929) 43 CLR 310, at p 317 . A case of the second class came before this Court in Niesmann v. Collingridge [1921] HCA 19; (1921) 29 CLR 177 where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made "on the signing of the contract". Rich and Starke JJ. observed (1921) 29 CLR, at pp 184, 185 that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of agreement. Their Honours, agreeing with Knox C.J., held that there was no difficulty in decreeing specific performance of the agreement, "and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion" (1921) 29 CLR, at p 185: see also O'Brien v. Dawson [1942] HCA 8; (1942) 66 CLR 18, at p 31. 11. Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own: Governor & c. of the Poor of Kingston-upon-Hull v. Petch [1854] EngR 995; (1854) 10 Exch 610 (156 ER 583). The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, as in Summergreene v. Parker [1950] HCA 13; (1950) 80 CLR 304 or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed. These possibilities were both referred to in Rossiter v. Miller (1878) 3 App Cas 1124. Lord O'Hagan said: "Undoubtedly, if any prospective contract, involving the possibility of new terms, or the modification of those already discussed, remains to be adopted, matters must be taken to be still in a train of negotiation, and a dissatisfied party may refuse to proceed. But when an agreement embracing all the particulars essential for finality and completeness, even though it may be desired to reduce it to shape by a solicitor, is such that those particulars must remain unchanged, it is not, in my mind, less coercive because of the technical formality which remains to be made" (1878) 3 App Cas, at p 1149. And Lord Blackburn said: "parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement" (1878) 3 App Cas, at p 1152. So, as Parker J. said in Von Hatzfeldt-Wildenburg v. Alexander (1912) 1 Ch 284, at p 289 in such a case there is no enforceable contract, either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. 35 The authorities have subsequently recognised an additional category of agreements to contract which is where the parties intend to be bound immediately and exclusively by the terms which they had agreed upon while expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms: Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628. For convenience, I will refer to this as the fourth category.

Consideration 36 There are a number of factors that lead me to the conclusion that the objective intention of the parties was that upon acceptance of the Calderbank offer dated 16 March 2023, the parties were contractually bound to the terms of that offer. I am satisfied in the present circumstances, the agreement reached falls within the first category identified by the High Court in Masters v Cameron - the parties have reached finality in arranging the terms of their bargain and intend immediately to be bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise, but not different in effect. Alternatively, it may be that the agreement falls into the fourth category. In either case, the parties are bound by the agreement embodied in the acceptance on 31 March 2023 of the offer of 16 March 2023, there being no subsequent Deed of Settlement agreed between them whether by way of restatement or in substitution for the agreement struck. 37 The essential elements of the agreement included the payment obligation and the escrow and transfer of the CTCN Tokens from the applicants to the respondents upon discharge of the payment obligation. 38 The respondents' agreement to pay the settlement sum in full by three equal monthly instalments at 30-day intervals from the date of acceptance of the offer was immediately legally binding and enforceable on acceptance of the offer. In reaching this conclusion, I have taken into account the following matters. 39 First, the plain language of the 16 March 2023 offer indicates an intention on the part of the respondents to be immediately bound upon acceptance by the applicants. 40 Secondly, the terms setting out the payment obligations were clear, definite, unambiguous and capable of being given immediate effect. The timetable for the payment obligations is calculated by reference to the date of acceptance of the offer, and not by reference to the date on which "a suitably worded Deed of Settlement" might be executed. This feature supports an inference that the parties intended to be immediately bound: Mermaids Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271 at [16]. Similarly, the trigger for the CTCN Tokens to be released from escrow and transferred to the respondents is clear. It is defined by reference to the discharge of the payment obligation. It is not expressed to be conditional on entry in a deed of settlement. 41 Thirdly, read in context, the reference to the parties entering a "suitably worded Deed of Settlement" is to formally record the method of effecting the escrow of the CTCN Tokens (which escrow was agreed to be put in place) and the wording of the confidentiality and non-disparagement provisions (which were also agreed to be put in place). None of these matters detract from the objective intention of the offerors to be bound upon acceptance. Similarly, the offerees' acceptance of that offer is not expressed to be conditional on the deed, rather the offerees acknowledge that the deed is to be prepared "in accordance with those terms" - that is, the terms in the offer itself. The fact that the fourth term of the 16 March 2023 settlement offer requires the parties to enter into a suitably worded Deed of Settlement containing inter alia confidentiality and non-disparagement provisions does not alter the conclusion that the payment obligation set out in the first term of the offer was immediately binding upon acceptance. The obligation to agree and enter into a Deed of Settlement was a distinct term, separate to the respondents' payment obligation. The respondents' obligation to make payment was in no way expressed to be conditional upon entry into a deed. 42 Fourthly, the 16 March 2023 offer was expressly made in accordance with the principles in Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333, which supports the inference that the objective intention of the parties, who were legally represented, was that the offer if accepted would be binding on the parties upon acceptance and have the effect of stating terms for the full and final resolution of the proceedings and the dispute between the parties. 43 Fifthly, proceedings were on foot and a further case management hearing was imminent at the time the offer was accepted by the applicants on 31 March 2023. If settlement was not reached, the likely next step in the proceedings would have been for orders to be made for the filing and service of the parties' evidence. The fact that the offer was made and accepted in the midst of active case management supports the inference that the parties intended to be immediately bound to an agreement that settled the proceedings on a final basis. 44 Sixthly, the parties' subsequent conduct and communications support the inference that the parties intended upon acceptance of the offer for the payment obligation set out in the 16 March 2023 settlement offer to be immediately binding. The parties confirmed as much in their communications with the Court, including in proposing consent short minutes with an agreed notation as to the settlement. 45 I note that the respondents submit that the applicants would be entitled to enforce the respondents' payment obligations not only on contractual grounds but also on the basis of equitable estoppel. The applicants submit that they have acted to their detriment in reliance on the respondents' representations and assertions regarding the respondents' assumption of an obligation to pay the settlement sum in full by no later than 29 June 2023. The applicants point to the fact that the proceedings would have continued in the usual course since March 2023. Instead, the proceedings have been in abeyance. The applicants submit that this is to their detriment because they are exposed to legal costs and also to the respondents' credit risk as the proceedings are drawn out. Being satisfied that the payment obligation is enforceable as a matter of contract, it is not necessary to determine the estoppel claim. 46 For these reasons I am satisfied that the facts of this matter place it in the first category of Masters v Cameron, or at worst, the fourth category. It follows that it is appropriate to make orders substantially in the form sought by the applicants in prayer 1 of the interlocutory application.

Costs 47 The applicants also sought costs for enforcing the settlement agreement on an indemnity basis on the basis that the respondents have acted unreasonably in refusing to pay the settlement amount thereby putting the applicants to further costs in enforcing the settlement agreement relying on Hamod v New South Wales [2002] FCAFC 97; 188 ALR 659 at [20]. 48 The interlocutory application seeks for the indemnity costs to be granted from 4 May 2023. The significance of this date is not readily apparent, other than it being the date on which the case management hearing would have proceeded but for the acceptance of the Calderbank offer. This case management hearing was due to occur on the day after the parties informed the Court that settlement had been reached. I do not accept that this date is an appropriate date from which indemnity costs should flow. 49 The draft Settlement Deed provided to the respondents by email on 12 April 2023 and again as an enclosement to the 26 May 2023 letter from Mr Kutasi to Mr Delaney contains substantive terms which were not contemplated in the respondents' offer which was accepted by the applicants. By way of example this includes: (1) clause 2.1(c)(ii)(B) which provides that the applicants shall be entitled to interest on any "Unpaid Amount"; (2) clause 2.1(c)(ii)(C) which provides that the applicants shall be entitled to judgment against the respondents in respect of the "Unpaid Amount" and accompanying interest and that the respondents consenting to orders for judgment to that effect; (3) the respondents would indemnify the applicants for costs of recovering any "Unpaid Amount" following default of the payment of the Settlement Sum; (4) clause 2.4(b)(ii) for the vacation of all existing costs orders in circumstances where the applicants had discontinued proceedings against the third respondent and costs were ordered in favour of the third respondent; (5) provides that the third respondent against whom proceedings had been discontinued was also to be a party to the Settlement Deed. 50 I find that Mr Delaney's open letter dated 7 June 2023 pointing out the above features which were non-conformant with the actual terms offered and accepted was a not unreasonable position to take. 51 By letter dated 14 June 2023 to Mr Delaney, Mr Kutasi made an offer to the respondents agreeing to amendment of the timing of the intervals for the payment of the settlement amount, rejection of certain amendments proposed by the respondents and for the respondents to pay $10,000 into Mr Kutasi's trust account for their clients' costs arising from the non-payment of the settlement amount. This offer was not accepted by the deadline. 52 By email dated 28 June 2023, Mr Kutasi made it clear that his clients was seeking payment of the settlement sum by 29 June 2023 (the day by which the last of the three instalments of the settlement sum was due in accordance with the accepted offer), failing which proceedings would be brought. 53 Accordingly, I find that it was unreasonable for the respondents to have subjected the applicants to the costs incurred after 28 June 2023 in bringing the interlocutory application to enforce the settlement in the limited form in which the respondents had accepted was the extent of the parties' bargain. In Kutasi 2, Mr Kutasi deposes that the applicants' costs incurred in enforcing the settlement agreement. 54 I find that the applicants are entitled to party costs incurred on an ordinary basis from 2 May 2023 for steps taken to enforce the accepted offer up until and including 28 June 2023 and on an indemnity basis thereafter. For the avoidance of doubt, this does not include costs incurred for the preparation and negotiation of the draft Settlement Deed. 55 Noting the history of the settlement and not wanting to put the applicants to further costs I have applied a broad-brush approach in awarding costs by way of lump sum of $18,000 inclusive of GST. This amount includes an allowance for the costs of preparing for and appearing at the interlocutory hearing.

Conclusion 56 For these reasons, I made the orders at the conclusion of the hearing in the form recorded above. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.

SCHEDULE OF PARTIES NSD 676 of 2022 Applicants Fourth Applicant: CHRISTOPHER ASHMAN Fifth Applicant: JULIO DE LAFFITTE E FREITAS