Habig v McCrae

In Habig v McCrae, the dispute involved the plaintiff, Habig, seeking recovery of costs against the third defendant, McCrae, following litigation. The case was heard in the Supreme Court of New South Wales. The plaintiff contested the reasonableness of the third defendant’s Calderbank offer, arguing it was unreasonable to accept the offer after the expiration of a reasonable period for making enquiries about prospects of success. The plaintiff also sought indemnity costs and argued for costs to be awarded on the Supreme Court scale, rather than the District Court scale, and requested that costs be set off against the judgment sum.

The court examined whether the plaintiff’s decision not to accept the Calderbank offer was reasonable, considering the time elapsed and the plaintiff’s ability to assess its chances of success. Additionally, the court assessed the appropriateness of awarding indemnity costs and the correct scale of costs, as well as the setting off of costs against the judgment sum. The court held that the plaintiff’s refusal to accept the Calderbank offer was unreasonable, and that indemnity costs were not warranted. The court also decided that costs should be assessed on the Supreme Court scale and ordered that costs be set off against the judgment sum.

The orders made by the court mandated that the third defendant pay the plaintiff’s costs on the Supreme Court scale up until 31 December 2010. Conversely, the plaintiff was to pay the third defendant’s costs from 1 January 2011, including costs related to applications made throughout the proceedings. The assessed costs were to be set off against the judgment sum, with any costs owed by the plaintiff to be deducted before the third defendant made further payments to the plaintiff. Finally, the third defendant was granted liberty to apply for expedition, provided they gave three days' written notice.