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[2026] NSWSC 763
Supreme Court of NSW
2026-07-01
Elkaim AJ
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Parramatta Co-Operative Housing Society t/as Co-Operative Housing Society v Yabbyland Pty Ltd t/as Yabbyland Unit Trust (No 2) [2026] NSWSC 763
Hearing dates: On the Papers
Date of orders: 1 July 2026
Decision date: 01 July 2026
Jurisdiction: Common Law
Before: Elkaim AJ
Decision: I make the following orders in lieu of Order (2) made on 10 June 2026:
2(a) Subject to Order 2(c) below, each party is to pay its own costs up to and including 15 May 2026.
2(b) Subject to Order 2(c) below, the defendant is to pay the plaintiff’s costs of the proceedings after 15 May 2026.
2(c) The plaintiff is to pay the defendant’s costs incurred by reason of the amendment to the statement of claim but limited to the costs of meeting the new pleading and the vacation of the hearing on 14 May 2026.
Noted the above orders do not affect any costs orders made in the proceedings prior to 10 June 2026.
Catchwords: COSTS — Party/Party — application to vary costs ordered at first instance — whether costs should be awarded on an issue-by-issue basis — where pleadings amended at late stage of proceedings — where plaintiff only successful on restitutionary claim — whether Calderbank offer was unreasonably rejected — where offer did not specify date or schedule of repayment
Cases Cited: Parramatta Co-Operative Housing Society t/as Co-Operative Housing Society v Yabbyland Pty Ltd t/as Yabbyland Unit Trust [2026] NSWSC 656 Calderbank v Calderbank [1975] 3 All ER 333 Singapore Airlines Cargo Pte Ltd v Principle International Pty Ltd (No 2) [2017] NSWCA 340
Category: Costs
Parties: Parramatta Co-Operative Housing Society t/as Co-Operative Housing Society (Plaintiff)
Yabbyland Pty Ltd t/as Yabbyland Unit Trust (Defendant)
Representation: Counsel:
D Eardley (Plaintiff)
D Robertson (Defendant)
Solicitors:
Stacks Collins Thompson (Plaintiff)
Carroll & O'Dea Lawyers (Sydney) (Defendant)
File Number(s): 2025/118560
Publication restriction: No
These reasons arise from my principal judgment delivered on 10 June 2026 (Parramatta Co-Operative Housing Society t/as Co-Operative Housing Society v Yabbyland Pty Ltd t/as Yabbyland Unit Trust [2026] NSWSC 656).
I gave judgment for the plaintiff in the sum of $364,275. I ordered the defendant to pay the plaintiff’s costs of the proceedings but gave leave to the parties to make submissions in aid of a different costs order, the decision to be made on the papers.
The defendant has asked for a variation of the costs order. The plaintiff says the costs order should remain the same.
The variation requested by defendant is as follows:
The plaintiff is to pay the defendant’s costs of the proceedings, on an indemnity basis, from 7 May 2026.
There otherwise be no order as to the costs of the proceedings, such that each party bears its own costs.
Noting that the court has a wide discretion on costs, the defendant submitted four principal reasons to make its suggested orders:
There should be an effective separation of issues, in particular distinguishing between the whole of the plaintiff’s claim and the only issue upon which the plaintiff succeeded, namely the restitution claim.
The restitution claim only came into the proceedings at a very late stage, namely after the first day of hearing, with the filing of an amended statement of claim on 15 May 2026.
The amendment to the statement of claim to include the restitution and ratification claims, led to the defendant incurring extra costs which would not otherwise have been incurred but for the amendment.
On 1 May 2026, the defendant made a Calderbank offer to the plaintiff on terms which were “at least as favourable to the plaintiff as the final judgment”. (The term ‘Calderbank offer’ is derived from Calderbank v Calderbank [1975] 3 All ER 333).
I set out the background to the running of the case from [1]-[13] of the principal judgment. It can be seen that when the hearing resumed on 28 May 2026, the basis for recovery had extended from the loan agreement secured by a registered mortgage to include ratification and restitution.
The defendant acknowledged the plaintiff’s right to restitution (moneys had and received), but raised a defence derived from a change in its position. The defence failed.
Ultimately the plaintiff only succeeded on the restitution claim. Allied to this claim, the plaintiff did not succeed in establishing that the restitution claim gave rise to a debt triggering the plaintiff’s rights under the mortgage.
The defendant’s argument is simple; if the plaintiff only succeeded on one of a number of issues (and therefore failed on all but one issue), it should only be entitled to costs relating to that issue. Further, as the issue on which there was success only came into the litigation at the last moment, the plaintiff should not receive costs on the balance of the issues which existed up to the amendment because it failed on those issues.
The plaintiff’s response was that it had no choice but to sue because the defendant refused to pay any amount. This included the defendant deciding not to accept the Australian Financial Complaints Authority (AFCA) recommendation made on 7 March 2024.
While I would normally be reluctant to decide costs on an issues basis, I think there is merit in the defendant’s submissions. At the same time, the plaintiff’s point that the defendant could have accepted the AFCA recommendation is also relevant.
The wide discretion I have on costs is qualified by the need to ensure that any costs order is fair and just. Although the solution is not to apply a balancing act if each party has a good point, I think a fair and just approach here would be that each party pay its own costs up to 15 May 2026, the date the amended statement of claim was filed. The attribution of costs after 15 May 2026 will be dealt with below.
I think these two issues should be dealt with together.
Following the plaintiff’s opening, counsel for the defendant rose to make two points. One of the points was:
“Now that does not mean on one view the defendant's position is unpalatable because it has received these funds, it's used these funds to improve its property but because the loan agreement is invalid does not mean that the plaintiff is without any remedy. It of course has the guarantee with Mr Weir and there's no evidence as to what if anything the mortgagee is doing about pursuing Mr Weir. But secondly, it would also have a claim in restitution for money hadn't [sic] received on the basis of now that cause of action arises upon the failure of loan agreement. If there's a binding contract then there can't be a claim in restitution but if the contract is not binding then the plaintiff would have a claim in restitution.”
“EARDLEY: Now it's not eloquent but I do have an amended statement of claim, I haven't spoken to my friend about this but it seeks to--
HIS HONOUR: Put in a moneys had and received.
EARDLEY: Yes, it's a claim for restitution, it's a very minor amendment to make it clear that restitution is sought.
HIS HONOUR: And it hasn't been served?
EARDLEY: It hasn't been served, it was only done late last night.
HIS HONOUR: No that's okay, could it also be amended to include the ratification?
EARDLEY: Yes, it could be your Honour.”
The defendant did not oppose an amendment, provided it had time to meet the new statement of claim. This is what led to the second day of the hearing being put off to 28 May 2026.
Although the original time assessment for the case was two days, and the hearing did go for two days, I have no doubt that extra costs were incurred by the defendant by the matter not proceeding on 14 May 2026, and the need to meet the amended statement of claim.
I think the plaintiff must pay any costs thrown away by the amendment to the statement of claim including the vacation of the hearing on 14 May 2026.
Once the case was back on track, the balance of the hearing was completed within the second day and the plaintiff succeeded on the restitution claim. This I think gives rise to an entitlement, subject to what I have said about costs thrown away, for there to be a costs order in favour of the plaintiff after 15 May 2026. This is the date the amended statement of claim was filed.
“Calderbank offers are a well-established means of parties seeking to compromise proceedings in circumstances where, provided that the offer is a genuine offer of compromise and the opposing party unreasonably rejects the offer, the court may, in the exercise of its discretion, make a special costs order in favour of the offeror”.
“1. Our client pay to your client the sum of $364,275.00
- The mortgage registered against the title be immediately withdrawn and discharged.
- Each party pay their own costs.”
The offer was expressed to be open for acceptance until 5pm on 6 May 2026.
The first point to be noticed is that the amount to be paid is precisely the same amount as the judgment sum that I decided upon. No doubt the method of calculation was the same (amount advanced less repayments made).
The defendant submitted that had the offer been accepted, the plaintiff would have been better off, or at least not worse off than following its rejection of the offer. It was submitted that the failure to accept the offer was unreasonable because:
(a) When the offer was made the plaintiff’s case had limited prospects. The restitution claim did not then exist, and this was the only basis upon which the plaintiff ultimately succeeded. (b) The amount offered by the defendant was precisely the amount awarded in the judgment. Considering the restitution claim had not yet been made, the offer constituted a substantial compromise. (c) The rejection of the offer led to the incurring of significant costs arising from the amendment to the statement of claim, as discussed above. (d) The offer contemplated a submission for the awarding of costs on an indemnity basis, which should have put the plaintiff on notice that it faced a large cost penalty if the offer was not accepted.
It was also pointed out that, as referred to in the AFCA recommendation, the defendant had offered to pay the plaintiff $375,000.
The plaintiff responded that it was not unreasonable to reject the offer because at the time the offer was made a good deal of costs had already been incurred which was not recognised in the offer. The offer included each party paying its own costs.
The plaintiff submitted that the offer was only made eight business days before the hearing and allowed only five business days for acceptance. The plaintiff submitted:
“Had the plaintiff accepted the Offer it would be entitled to no costs and consequently would achieve a worse outcome than it ultimately reached following the hearing.”
The plaintiff submitted that following the amendment to the statement of claim there was an amendment to the defence which asserted “a positive defence” referring to the change of position defence adopted by the defendant, and which ultimately failed.
I think there is a further point that needs mention. The offer made by the defendant (including the letter in which it is contained) does not include any indication of when the amount offered would be paid. It does not say, for example, payable within ‘X’ days of settlement, or perhaps by way of instalments.
A lack of specification of the payment date is I think an important factor in contemplation of the offer. This is perhaps highlighted by an affidavit put on by Mr Lavater-Williams following the amendment to the statement of claim. In his affidavit of 21 May 2026, he states:
“32. In the event that Yabbyland is now required to repay to the Plaintiff the sum of $430,000, or any part of that balance, Yabbyland and Yabby Farms does not have the requisite cash on hand to do so.
- Yabby Farms does not have any assets (other than equipment used in the business operations).
- Therefore, in order to repay to the plaintiff the sum of $430,000 (or any lesser amount), Yabbyland would be required to sell the Property which will bring the business operations to an end.”
The Calderbank offer was made on 1 May 2026. On the basis of Mr Lavater-Williams’ affidavit it would seem that over the next 20 days his financial position markedly changed. I do not go so far as to doubt the credit of Mr Lavater-Williams, but rather to illustrate the importance of the absence of a payment date within the offer.
A related but perhaps less important point is that the terms of the offer arguably suggest that the mortgage is to be withdrawn “immediately” and therefore before receipt of the offered amount. This would be significantly disadvantageous to the plaintiff.
I do not think I can find that it was unreasonable of the plaintiff to reject the offer. Accordingly, my views on the Calderbank offer do not affect the opinion expressed above that the defendant should pay the plaintiff’s costs following the amendment of the statement of claim.
A final factor to be brought into the costs resolution is a notice of motion filed by the defendant on 6 October 2025. The defendant sought leave to file a cross-claim to join the firm of solicitors that had acted for the plaintiff in respect of the loan agreement.
The motion came before Coleman J on 6 February 2026, but was withdrawn during the hearing. A costs order was made against the defendant. The orders now sought by the defendant do not cater for this costs order. The plaintiff suggested that the defendant’s proposed costs orders sought to expunge the costs order made by Coleman J. However, in submissions in reply, the defendant accepted the costs order will not be disturbed. I will note this acknowledgement in my final orders.
2(a) Subject to Order 2(c) below, each party is to pay its own costs up to and including 15 May 2026.
2(b) Subject to Order 2(c) below, the defendant is to pay the plaintiff’s costs of the proceedings after 15 May 2026.
2(c) The plaintiff is to pay the defendant’s costs incurred by reason of the amendment to the statement of claim but limited to the costs of meeting the new pleading and the vacation of the hearing on 14 May 2026.
Noted the above orders do not affect any costs orders made in the proceedings prior to 10 June 2026.
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Parramatta Co-Operative Housing Society t/as Co-Operative Housing Society
Yabbyland Pty Ltd t/as Yabbyland Unit Trust (No 2)
[2026] NSWSC 656