Vagg v McPhee

In *Vagg v McPhee*, the appellants sought an order that the respondents pay their costs of a motion on an indemnity basis. The dispute arose from the respondents' agreement to consent orders on the morning of the hearing of the motion, which concerned the basis on which the plaintiffs were to pay the defendants' costs of the proceedings below. The court was the Court of Appeal of New South Wales.

The primary legal issue before the court was whether the costs of the motion should be borne by the respondents on an indemnity basis. This question arose because the respondents had agreed to the substantive orders sought by the appellants in the motion on the morning of the hearing, thereby rendering the motion largely unnecessary.

McColl JA reasoned that the respondents' conduct in agreeing to the orders sought by the appellants on the morning of the hearing, after the appellants had incurred costs in preparing and filing the motion, warranted an order for indemnity costs. The court applied the principle that indemnity costs may be awarded where a party's conduct has been unreasonable or has caused the other party to incur costs unnecessarily. In this instance, the respondents' delay in consenting to the orders, despite the apparent merits of the appellants' position, was considered to have led to the unnecessary expenditure of costs by the appellants.

The court ordered that the respondents pay the appellants' costs of the motion on an indemnity basis. The court also made orders staying execution on the judgment given by the court below and staying the costs assessment in respect of those orders until the appeal was heard and determined.