Australia, July 28 -- New South Wales Land and Environment Court issued text of the following judgement on June 27:

1. This is a case about costs. The plaintiffs, Mr Ben Sweeten and Ms Varvara Sellies, seek leave to appeal to this Court out of time and in respect of a dispute about an amount of assessed costs which has not been shown to be greater than $100,000. The application for leave to appeal is brought under s 89(1) of the Legal Profession Uniform Law Application Act 2014 (NSW) ("LPULA Act") from a decision of a Review Panel conducting a costs assessment review under s 85 of the LPULA Act.

2. The defendants are the trustees of a testamentary trust, established by the will of the late Catherine Brown ("Clare's Trust"). The sole beneficiary of Clare's Trust is Catherine's daughter, Clare Brown. Clare's father was Christopher Brown, also now deceased. The first plaintiff, Mr Sweeten, is Clare's cousin and the first defendant's nephew. The second plaintiff is Mr Sweeten's partner. Catherine's will granted Christopher a right of residence to a property owned by Catherine in Darling Point, New South Wales. Under the terms of the will the Darling Point property became an asset of Clare's Trust (the "Trust Property"). Whilst Christopher was alive, he allowed Mr Sweeten and Ms Sellies to live in the Darling Point property. After Christopher's death, Mr Sweeten and Ms Sellies refused to vacate the premises, despite demands to do so by the trustees of Clare's Trust.

3. On 29 March 2022, the trustees of Clare's Trust commenced proceedings in the Supreme Court against Mr Sweeten and Ms Sellies ("possession proceedings"). In the possession proceedings, the trustees sought possession of the Trust Property. On 9 June 2022, Mr Sweeten and Ms Sellies filed a cross claim asserting rights to occupy the Darling Point property based on an alleged promissory estoppel and the existence of a lease. They also sought damages. Mr Sweeten and Ms Sellies alleged they had made considerable improvements to the Trust Property, and had paid for works and renovations.

4. Both matters (the possession proceedings and the myriad claims made by cross-claim) were fixed for a four day hearing to commence on 7 March 2023. Mr Sweeten and Ms Sellies capitulated on the morning of the hearing and sought to discontinue the cross-claim but did not accept they were liable to pay costs. On 20 July 2023, Rothman J made an order that Mr Sweeten and Ms Sellies pay the trustees of Clare's trust the costs of the cross-claim: Haggerty v Sweeten [2023] NSWSC 850. Those orders were:

(1) The cross-claimants shall pay the cross-defendants their costs of the Cross-Claim on the ordinary basis;

(2) All other claims for costs are dismissed with no further order;

(3) Proceedings dismissed.

5. Shortly thereafter, on 29 August 2023 the trustees of Clare's Trust made an offer to settle the costs which provided relevantly:

We refer to the above matter and the Costs Orders made on 20 July 2023.

We enclose under separate cover the Cross Defendants' application for Costs Assessment and supporting material. The total costs claimed by the Cross Defendant is $181,519.70 GST inc.

However, to settle the matter we are instructed to accept payment of $120,000.00 in full and final settlement.

This offer is open for acceptance till 18 September 2023. Failing acceptance, we shall proceed with the costs assessment.

6. On 29 August 2023, Mr Sweeten replied. He rejected the settlement offer and confirmed that he and Ms Sellies wanted the costs to be assessed:

Subject: Re: Haggerty v Sweeten (2022/00090030) - Costs

Hi Mr Fahey

I think you've made a mistake.

The judgment from His Honour Justice Rothman stated that costs were for the cross claim only. You must have accidentally put the costs for your claim in there too,

We would like to formally oppose the costs order and have them assessed.

Thank you

Benjamin Sweeten and Varvara Sellies

7. I have set out the terms of this offer and its rejection because the case before me turns, almost entirely, upon inferences I am invited by Mr Sweeten and Ms Sellies to draw based on a privileged document mistakenly disclosed to Mr Sweeten which on no view bears the meaning he ascribes to it. As I will explain, the document is inadmissible in these proceedings. Even if it were admissible, it is an entirely commonplace communication between solicitor and client setting out some rough and tentative calculations about costs for the purposes of obtaining the instructions of the trustees about making an offer to settle the cross-claim costs issue. Such an offer was made a few days later. The email does not evidence the "true" amount of the trustees' costs of defending the cross-claim and is not inconsistent with the evidence acted upon by the Costs Assessor or the Review Panel. To the contrary, the email on its face is incomplete and inchoate. Acting properly, solicitors for the trustees were making a rough estimate of costs properly recoverable under Rothman J's order for the purpose of getting instructions to make what was, on the face of what has transpired, a very reasonable offer of settlement. As I will explain, Mr Sweeten's attempt to deploy the document has been unsuccessful.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197a5ba7685583e1329a1cf0)

Disclaimer: Curated by HT Syndication.