Newell; Muriniti v De Costi

This matter concerned appeals from orders of the District Court of New South Wales, brought by Mr Newell and Mr Muriniti (the applicants) against De Costi Seafoods Pty Ltd and others (the respondents). The dispute arose from proceedings in the District Court where the applicants sought to indemnify the respondents for costs incurred due to the applicants' conduct. The Court of Appeal of New South Wales was required to determine whether the primary judge had erred in their approach to quantifying the indemnity costs and whether the applicants' conduct constituted "serious neglect, serious incompetence or serious misconduct" under the relevant legislation.

The Court of Appeal considered the meaning of "costs payable" in the context of legal practitioner indemnification under section 348 of the *Legal Profession Act 2004* (NSW) and section 99 of the *Civil Procedure Act 2005* (NSW). It also examined whether the primary judge had erred in applying the rule in *Jones v Dunkel* (1959) 101 CLR 298, particularly in light of the applicants' potential constraints on giving evidence due to legal professional privilege, and whether they could rely on observations made in *Medcalf v Mardell* [2003] 1 AC 120.

The Court of Appeal allowed the appeals in part, finding that the applicants were liable to indemnify the respondents for specific categories of costs. These included costs arising from the joinder of a fifth respondent, the filing of multiple versions of a cross-claim, the failure to consolidate affidavits, the handling of an illegal tape recording, the non-discovery of correspondence, the affidavit of Mr Ng, and allegations of impropriety against Mr Thorpe and Mr Shnider. The Court also found Mr Muriniti liable for costs related to instructions given to Mr Dent, a false account in an affidavit, and the non-production of a diary. The proceedings were remitted to the District Court for further hearing and determination.