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Vagg v Mcphee (No 2)

Vagg v Mcphee (No 2)

Case [2012] NSWSC 187 7 March 2012

Costs

Abuse of Process

Specific Performance

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Vagg v McPhee (No 2) [2012] NSWSC 187
Hearing dates: In chambers
Decision date: 07 March 2012
Jurisdiction: Common Law
Before: Schmidt J
Decision:
1. The plaintiffs pay the defendants costs of the proceedings on an ordinary basis from 1 March 2009 to 10 October 2011.
2. The plaintiffs pay the defendants costs of the proceedings on an indemnity basis after 11 October 2011.
3. The plaintiffs pay the defendants costs associated with this motion.

Catchwords: COSTS - departing from the general rule - order for costs on indemnity basis - walk-away offer of compromise - Calderbank letters - Rule 42.15A of the Uniform Civil Procedure Rules 2005 - orders made
Legislation Cited: Family Provision Act 1982
Legal Profession Act 2004
Uniform Civil Procedure Rules 2005
Cases Cited: Commonwealth v Gretton [2008] NSWCA 117
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
Hillier v Sheather (1995) 36 NSWLR 414
GIO General Ltd v ABB Installation and Service Pty Ltd [2000] NSWCA 118
Jones v Bradley (No 2) [2003] NSWCA 258; Evans Shire Council v Richardson (No 2) [2006] NSWCA 61
Leichhardt Municipal Council v Green [2004] NSWCA 341
Melchior v Sydney Adventist Hospital Ltd (No 2) [2009] NSWSC 65
Miller v Cooney [2004] NSWCA 380
Miwa Pty Ltd v Siantam Properties Pty Ltd (No 2) [2011] NSWCA 344
South Eastern Sydney Area Health Service v King [2006] NSWCA 2
Vagg v McPhee [2011] NSWSC 1584
Category: Costs
Parties: Margaret Doreen Vagg (First Plaintiff)
Benjamin John Vagg (Second Plaintiff)
Julia Lillian Vagg (Third Plaintiff)
Cecilia Anne Vagg (Fourth Plaintiff)
James Gregory Vagg (Fifth Plaintiff)
Paul McPhee (First Defendant)
Trevor Cork (Second Defendant)
David Dunkley (Third Defendant)
Steven Nicholson (Fourth Defendant)
Representation: Counsel:
Mr P Blackett SC with Mr E Young (Plaintiffs)
Mr JC Kelly SC (Defendants)
Solicitors:
Turner Freeman (Plaintiffs)
Colin Biggers & Paisley (Defendants

File Number(s): 2009/29739
Publication restriction: None

Judgment

In this matter judgment was given in favour of the defendants (see Vagg v McPhee [2011] NSWSC 1584 ). The defendants had acted for the plaintiffs' mother in preparing a will. The plaintiffs claimed that the defendants had breached the duty of care which they owed them, as the beneficiaries under the will.

The proceedings were commenced by statement of claim filed in February 2009 and were defended by a defence filed on 4 May 2009. The usual rule is that costs follow the event (see r 42.1 of the Uniform Civil Procedure Rules 2005). By motion filed in February 2012 the defendants sought the following orders as to costs:

"1. An order that the plaintiffs pay the defendants costs of the proceedings on an ordinary basis from 1 March 2009 to 10 October 2011; and

2. An order that the plaintiffs pay the defendants costs of the proceedings on an indemnity basis after 11 October 2011;

3. An order that the plaintiffs pay the defendants costs associated with this motion.

4. An order that final orders…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Vagg v Mcphee (No 2)

Details

AGLC: Vagg v Mcphee (No 2) [2012] NSWSC 187
Case: [2012] NSWSC 187
Decision Date: 07 March 2012

CaseChat Overview and Summary

The case of Vagg v McPhee (No 2) involved the parties seeking costs in the context of a walk-away offer of compromise. The dispute was heard in the Supreme Court of New South Wales. The plaintiff, Vagg, sought costs on an indemnity basis, arguing that the defendant, McPhee, had made an unreasonable refusal of a compromise offer. The defendant, McPhee, resisted this application, contending that the offer was unreasonable and that the plaintiff's application should be dismissed.

The central legal issue before the court was whether the plaintiff's offer of compromise was reasonable, and if so, whether the defendant's refusal to accept it was unreasonable, justifying an order for costs on an indemnity basis. The court needed to consider the principles established by the case of Calderbank v Calderbank, which set out the criteria for determining the reasonableness of a compromise offer and the consequences of a refusal. The court also needed to apply Rule 42.15A of the Uniform Civil Procedure Rules 2005, which provides a statutory framework for making orders for costs based on unreasonable refusals of compromise.

The court found that the plaintiff's offer of compromise was reasonable, as it was made in good faith and provided a realistic prospect of resolving the dispute. The court also found that the defendant's refusal to accept the offer was unreasonable, as it did not provide any justification for rejecting the offer. The court concluded that the defendant's conduct in refusing the offer amounted to an abuse of process, justifying an order for costs on an indemnity basis. The court ordered the defendant to pay the plaintiff's costs of the proceedings on an indemnity basis, reflecting the unreasonableness of the defendant's conduct.

This decision highlights the importance of considering compromise offers in litigation and the consequences of unreasonably refusing such offers. It also underscores the court's discretion to depart from the general rule of costs following the usual course of the proceedings and to make orders for costs on an indemnity basis where appropriate. The decision provides guidance for parties involved in litigation, encouraging them to consider compromise offers seriously and to avoid unreasonable refusals that may result in adverse cost consequences.

Orders