NEWCASTLE CITY COUNCIL v McSHANE (No 2) [2005] NSWCA 250

New South Wales Court of Appeal

CITATION: NEWCASTLE CITY COUNCIL v McSHANE (No 2) [2005] NSWCA 250

HEARING DATE(S): 20 July 2005

JUDGMENT DATE: 25 July 2005

JUDGMENT OF: Mason P at 1; Giles JA at 1

DECISION: List for Directions

CATCHWORDS: Costs - Calderbank offer - whether s198D of the Legal Profession Act extends to costs in the Court of Appeal (D)

NEWCASTLE CITY COUNCIL PARTIES: Travis McSHANE

FILE NUMBER(S): CA 40009/04

Appellant/Claimant: G Beauchamp COUNSEL: Respondent/Opponent: M E Down (Solicitor)

Appellant/Claimant: Phillips Fox SOLICITORS: Respondent/Opponent: Carroll & O'Dea

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 4527/02

LOWER COURT JUDICIAL OFFICER: Robison DCJ

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40009/04

MASON P GILES JA

Monday 25 July 2005

NEWCASTLE CITY COUNCIL v Travis McSHANE (No 2) JUDGMENT 1 THE COURT: Earlier proceedings in this Court (constituted by Mason P, Sheller JA and Giles JA) culminated in orders granting leave to appeal; dismissing the appeal; refusing leave to cross-appeal; and requiring the appellant/cross-opponent to pay 85% of the respondent's/cross-claimant's costs of the application for leave to appeal and appeal and the application for leave to cross-appeal (see Newcastle City Council v McShane [2004] NSWCA 425). 2 Two additional matters have arisen for decision that the parties have agreed may be resolved on the papers. The parties have also consented to these matters being dealt with by Mason P and Giles JA, Sheller JA having retired from the Court. 3 The first matter relates to a Calderbank offer of settlement made by the respondent and rejected by the appellant. The respondent has applied for a variation to the costs order whereby it has the costs of the appeal on an indemnity basis. The offer was without prejudice except as to costs and it indicated the respondent's preparedness to accept the judgment sum of $62,300 plus costs. The offer was made on 11 October 2004, some 11 days prior to the hearing fixed in this Court. It was open for acceptance until 15 October 2004 and was not accepted. 4 The offer contained no element of compromise. In our view, the case for indemnity costs is not made out. 5 The second matter raises an issue of general significance. If it is appropriate for resolution at this stage it ought to be heard and determined by a bench of 3 judges, ideally with the assistance of oral submissions to supplement the written submissions already filed on the matter. 6 The substantive point relates to the scope of s198D of the Legal Profession Act 1987, which provides: 198D Maximum costs fixed for claims up to $100,000 (1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows: (a) in the case of legal services provided to a plaintiff maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater, (b) in the case of legal services provided to a defendant maximum costs are fixed at 20% of the amount sought to be recovered by the plaintiff or $10,000, whichever is greater. (2) The regulations may prescribe an amount to replace the amount of $100,000 or $10,000 in subsection (1) and may prescribe a percentage to replace the percentage of 20% in subsection (1). When such a replacement amount or percentage is prescribed, it applies for the purposes of subsection (1) in place of the amount or percentage that it replaces. (3) The regulations may contain provisions of a savings or transitional nature consequent on the making of regulations under this section. (4) When the maximum costs for legal services provided to a party are fixed by this Division the following provisions apply (subject to sections 198E–198G): (a) a solicitor or barrister is not entitled to be paid or recover for those legal services an amount that exceeds those maximum costs, (b) a court or tribunal cannot order the payment by another party to the claim of costs in respect of those legal services in an amount that exceeds that maximum, (c) in assessing the amount of those costs that is a fair and reasonable amount, a costs assessor cannot determine an amount that exceeds the maximum set by this section. (5) A reference in this Division to legal services provided to a party is a reference to legal services provided to the party by a solicitor or barrister (including by an agent or employee of the solicitor or barrister). Costs for legal services do not include costs charged as disbursements for services provided by any other person or other disbursements. (6) If proceedings are commenced on a claim, the amount sought to be recovered by the plaintiff is taken to be the amount sought to be proved by the plaintiff at the hearing of the claim. (7) Maximum costs fixed by this section apply despite regulations under section 196 (1) (a2) fixing those costs.