Hughes v Geraldine Daley trading as Colin Daley Quinn, Solicitors and Barristers (No. 2)
[2013] NSWSC 1213
•30 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: Hughes v Geraldine Daley trading as Colin Daley Quinn, Solicitors And Barristers (No. 2) [2013] NSWSC 1213 Hearing dates: 30 August 2013 Decision date: 30 August 2013 Jurisdiction: Common Law Before: Davies J Decision: 1. Appeal allowed with costs, cross-summons dismissed with costs.
2. Set aside the decision of the Costs Assessor that costs incurred after 14 July 2005 be assessed and allowed on the basis set out in the costs agreement dated 14 July 2005 and in updated disclosure documents.
3. Remit the matter to the Costs Assessor for determination in accordance with the judgment of the Court.
4. Order that the Defendants pay the Plaintiff interest on such amount as is determined by the Costs Assessor to be repayable by the Defendants to the Plaintiff from 2 February 2012 until date of payment at the rates prescribed for the relevant period for the purposes of s 101 of the Civil Procedure Act 2005, (For avoidance of doubt, if the Defendants make part payment, such interest continues to run only on the amount unpaid by them from time to time.)
5. Order that the Defendants / Cross-Plaintiffs pay the costs of the Plaintiff / First Cross-Defendant referred to in order 1
a. on an indemnity basis as from the beginning of 27 April 2013 and
b. on the ordinary basis before 27 April 2013.
6.Costs of the present application payable by the Defendant on the ordinary basis.
Catchwords: COSTS - indemnity costs - offer of compromise - alternative offers - whether one alternative was ambiguous - no point of principle Legislation Cited: Civil Procedure Act 2005
Motor Accidents Compensation Regulation 2005Cases Cited: Hughes v Geraldine Daley trading as Colin Daley Quinn, Solicitors And Barristers [2013] NSWSC 806. Category: Costs Parties: Amanda Hughes (Plaintiff/First Cross-Defendant)
Geraldine Anne Daley (First Defendant/First Cross Claimant)
Timothy William Daley (Second Defendant/Second Cross-Claimant)
John Hope Gibson (Second Cross-Defendant)Representation: Counsel:
M Brabazon SC (Plaintiff/ First Cross-Defendant)
M Castle (First and Second Defendants/First and Second Cross-Claimants)
Submitting appearance (John Hope Gibson - Second Cross-Defendant)
Solicitors:
Diamond Conway Lawyers (Plaintiff/ First Cross-Defendant)
DGT Costs Lawyers (First and Second Defendants/First and Second Cross-Claimants)
Crown Solicitor's Office (John Hope Gibson - Second Cross-Defendant)
File Number(s): 2013/84085
Judgment
I gave judgment in this matter on 25 July 2013: Hughes v Geraldine Daley trading as Colin Daley Quinn, Solicitors And Barristers [2013] NSWSC 806. In substance I held that the costs incurred after 14 July 2005 were subject to the Motor Accidents Compensation Regulation 2005. I did not make any orders at the time, because the parties wanted to see if they could reach some agreement on one or two small outstanding matters, including fees that were payable to Furzer Crestani. Such agreement was not able to be reached.
The parties have put forward short minutes this morning, paragraphs 1 to 4 of which are agreed between them. Paragraph 5 involves an order for payment of indemnity costs from 27 April 2013 that the Plaintiff seeks. She does so on the basis of an Offer of Compromise that was sent on 26 April 2013.
The offer put two alternatives to the Defendant. The first was the payment by the Defendant to the Plaintiff of $175,000, in full satisfaction of the Plaintiff's claim in the costs assessment. This payment concerned costs that needed to be repaid by reason of my judgment since they were costs which had been deducted by the Defendant on the settlement.
The alternative was put in these terms:
2.1 Orders in accordance with prayers 1, 2 and 6 of the summons.
2.2 In consideration of the Defendant's acceptance of the Plaintiff's present offer, the Plaintiff shall allow the Defendant credit in reduction of any amount otherwise repayable by the Defendant to the Plaintiff in respect of the costs which are the subject of the assessment, to the extent of $25,000, or the amount so repayable, whichever is less.
I shall first consider Alternative 2.
Prayers 1, 2 and 6 in the summons read as follows:
1. Appeal allowed.
2. Set aside the decision of the costs assessor, that costs incurred after 14 July 2005 be assessed and allowed on the basis set out in the costs agreement dated 14 July 2005 and in updated disclosure documents.
6. In the alternative to prayers 3 to 1 make the following determination in relation to the Plaintiff's application for costs assessment:
a. Costs incurred after 14 July 2005 are to be assessed pursuant to the Motor Accidents Compensation Regulation 2005 (MACR 2005) on the basis that the maximum costs for legal services and related matters (other than unregulated costs referred to in MACR clause 7) are the costs set out in MACR Sch 1.
The result of my judgment, as I have said, was that the costs were to be assessed in accordance with the Regulation. The result was, therefore, that the appeal was allowed and the costs assessor's decision set aside that the costs after 14 July 2005 be assessed pursuant to the costs agreement. The Plaintiff, therefore, obtained the relief sought in prayers 1 and 2.
The Defendant says that it is prayer 6 in the Summons which results in what the Plaintiff has obtained being less favourable than the offer that was made in the offer of compromise. This is because, it is submitted, there is reference only to Schedule 1 of the Regulation.
It is accepted that the unregulated costs were expressly excluded from what was sought in prayer 6, and those unregulated costs concerned the Furzer Crestani fees. The Defendant says, however, that because there was reference only to Schedule 1, an acceptance of the offer of compromise would have left, or may have left, the Defendant in the position where there could have been no consideration by the costs assessor, or payment under the offer of compromise, of the costs that properly fall within Schedule 2 of the regulation. They are the costs of medical reports said to total $4,796. In that way the offer was said to be ambiguous. A Defendant, it was said should not be expected to have to respond to an ambiguous offer.
On the face of it what is sought in prayer 6, as incorporated into the offer of compromise, might be thought to be ambiguous. It may well have resulted, on a strict reading, in the Defendant only being entitled to the properly assessed Schedule 1 costs. However the matter does not rest there, because clause 2.2 of the offer of compromise provided that in consideration for the acceptance of the offer, being orders in accordance with prayers 1, 2 and 6, the Plaintiff would allow the Defendant a credit in reduction of what was repayable, in the amount either of $25,000 or the amount that was actually repayable where the costs were assessed under the Regulation. The only relevant consideration is $25,000, because that is the lesser of the two figures.
It was open to the Defendants to ascertain what the total of the schedule 2 costs would have been. On any view, they were well under the figure of $25,000.
Accordingly, even if there was ambiguity in relation to prayer 6 in the summons, as incorporated into the offer, the Defendant was well protected as a result of the foregoing by the Plaintiff of the figure of $25,000 in the circumstances. The result achieved by the Plaintiff is, therefore, not less favourable than was put in Alternative 2 in the offer of compromise.
The Plaintiff maintains that she also achieved a result not less favourable than Alternative 1. However, in the light of my conclusion on Alternative 2 it is not necessary to consider Alternative 1.
For those reasons the result obtained by the Plaintiff is not less favourable than the offer that was put in the offer of compromise of 26 April. In those circumstances the order for costs should be that the Defendant is to pay the Plaintiff's costs on the ordinary basis before 27 April, and on an indemnity basis from 27 April. The costs of today's application should form part of the costs payable on an ordinary basis.
I will otherwise make the orders contained in paragraphs 1 to 5 of the document entitled "Judgment agreed between the parties" in the following terms:
1. Appeal allowed with costs, cross-summons dismissed with costs.
2. Set aside the decision of the Costs Assessor that costs incurred after 14 July 2005 be assessed and allowed on the basis set out in the costs agreement dated 14 July 2005 and in updated disclosure documents.
3. Remit the matter to the Costs Assessor for determination in accordance with the judgment of the Court.
4. Order that the Defendants pay the Plaintiff interest on such amount as is determined by the Costs Assessor to be repayable by the Defendants to the Plaintiff from 2 February 2012 until date of payment at the rates prescribed for the relevant period for the purposes of s 101 of the Civil Procedure Act 2005, (For avoidance of doubt, if the Defendants make part payment, such interest continues to run only on the amount unpaid by them from time to time.)
5. Order that the Defendants / Cross-Plaintiffs pay the costs of the Plaintiff / First Cross-Defendant referred to in order 1
a. on an indemnity basis as from the beginning of 27 April 2013 and
b. on the ordinary basis before 27 April 2013.
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Decision last updated: 02 September 2013
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