Before the Court for determination are two matters:
1. A dispute as to the terms of certain final orders, and
2. A Notice of Motion filed on 29 June 2023 by the defendant seeking a stay of costs orders.
The background to the proceedings may be found in:
1. The primary judgment handed down by me on 21 February 2023, McCabe v Riechelmann [2023] NSWDC 44; and
2. The judgment relating to costs issues handed down by me on 8 June 2023: McCabe v Riechelmann (No 2) [2023] NSWDC 201 ("the costs judgment").
I assume that a person reviewing these reasons has a familiarity with both judgments. It is unnecessary for me to set out in any detail the background facts: see the summary in the costs judgment at paragraphs 1 to 2.
In essence, the plaintiff succeeded in recovering relatively modest damages for the torts of assault and battery. The defendant failed in her Cross-Claim seeking substantial damages for battery. In paragraph 84 of the costs judgment, I proposed certain orders to dispose of the matter. I ordered that the parties were to bring in agreed short minutes of order consistent with the reasons within seven days. The parties have been unable to agree on the orders and have each proposed alternative orders.
In relation to the costs relating to the Court hearing fees, there does not appear to be a substantial disagreement between the parties.
Today, Mr Morris of senior counsel, in substance, accepted the proposed order of the plaintiff. I accept that it is useful to refer to the source of the power exercised in the terms of the order. I therefore will order:
"3) Pursuant to the Civil Procedure Regulation 2017, Regulation 10(2)(a), the defendant/cross‑claimant is to pay the Court hearing fees in respect of the hearing of the proceedings."
This order properly reflects:
1. The plaintiff's substantial success in the proceedings;
2. The intertwining of the issues in the Statement of Claim proceedings and in the Cross-Claim proceedings; and,
3. My reasoning in paragraph 82 of the costs judgment.
McCabe v Riechelmann [2023] NSWDC 280 | Case summary | Zoe
In relation to the Cross-Claim proceedings, there also appears to be substantial agreement between the parties as to the proposed orders. The plaintiff's orders seek to add the words "and disbursements" after the word "costs", but that is not the usual order. The issue of disbursements is usually included in the concept of "costs", and if not agreed, will be considered by a costs assessor in due course. I see no reason to specifically refer to disbursements for the purposes of this order.
There is a further issue in relation to the period of the indemnity costs order. The defendant seeks it from 10 January 2022 to 21 February 2023. The plaintiff seeks it from 10 January 2023 to date. In further argument in the course of the morning, it was accepted by senior counsel for the defendant that it should date to the costs judgment, which in my view is the correct period. I therefore propose to order:
"2) The defendant/cross‑claimant is to pay to the plaintiff/cross‑defendant the plaintiff/cross‑defendant's costs of the Cross-Claim proceedings as agreed or assessed on the ordinary basis up to and including 9 January 2022 and on an indemnity basis from 10 January 2022 to 8 June 2023."
In relation to the Statement of Claim proceedings, there is a difference in the proposed orders as to costs. The defendant's proposed order is a simple order, and is as follows:
"The defendant pay the plaintiff's costs for the Statement of Claim proceedings as agreed or assessed to the maximum cap of $10,000."
The plaintiff's proposed order is more detailed and is as follows:
"The defendant is ordered to pay the plaintiff's costs of the Statement of Claim proceedings on an ordinary basis of $10,000 plus GST for legal services as defined by paragraph 5 of schedule 1 of the Legal Profession Uniform Law Application Act 2014 plus disbursements."
My proposed order was set out in paragraph 84 of the costs judgment.
In relation to the issue of GST, this is not referred to in the Legal Profession Uniform Law Application Act. Accordingly, in my view I should not refer to it in the order. GST is imposed by a Commonwealth Act: A New Tax System (Good and Services Tax) Act 1999. A solicitor/solicitor corporation must impose and pay this tax upon receipt. In the absence of appellate authority to the contrary, none of which was brought to my attention, in my view GST on services provided is a separate matter to the charge for the services as it is imposed by the Commonwealth and cannot be avoided. Therefore, it should be recoverable in addition to the $10,000 capped fees. Otherwise, if the GST rate was altered to 20%, for example, only $8,000 could be recovered for legal services. The cap in my opinion is on the amount to be charged for services, not the tax obliged to be paid on the services charged.
The second issue relates to the additional words "plus disbursements". I have already made orders as to the Court hearing fees. The intention of Schedule 1 appears to be to impose a cap on legal services. However, assistance is provided in relation to this term in Regulation 2(5) of Schedule 1. This would, no doubt, be taken into account by a costs assessor. This morning, counsel for the plaintiff conceded that the concept of legal services would include legal services provided by a barrister and I will make a note to that effect to avoid any further issue for the costs assessor. In the light of Regulation 2(5) of Schedule 1, it is unnecessary to refer in my view to disbursements except to indicate who is to pay them subject to the legislation. I consider it useful to refer to the relevant legislation in the order.
I therefore propose to order:
"1) Pursuant to section 98 of the Civil Procedure Act 2005 and Regulation 2 of Schedule 1 of the Legal Profession Uniform Law Application Act 2014 ("the Act"), the defendant is to pay the plaintiff's costs of the Statement of Claim proceedings as agreed or assessed capped at $10,000 for legal services as defined by Regulation 2 of Schedule 1 of the Act. The defendant is also to pay the plaintiff's disbursements of the Statement of Claim proceedings as agreed or assessed except as limited by Regulation 2 of the Act.
In relation to the Notice of Motion, the defendant read and relied on the affidavit of Julie Riechelmann, sworn 29 June 2023. I note that
1. The defendant has appealed a number of the orders made by me on 21 February 2023 relating to the Cross-Claim proceedings. See the Notice of Appeal which is Annexure L to Ms Riechelmann's affidavit;
2. The appeal is as of right;
3. the appeal has been listed for hearing on 18 and 19 September 2023, only a relatively short time away;
4. Further costs and disbursements may be incurred and wasted if costs orders are enforced and the appeal is successful;
5. Ms Riechelmann gives evidence of owning a unit at Cronulla and having no intention of selling or otherwise disposing of it;
6. Ms Riechelmann is willing to give an undertaking to the Court in terms of paragraph 22 of her affidavit.
Essentially, this matter did not appear to be in dispute this morning. In any case, all these matters would lead me to a conclusion that a stay of the costs orders is appropriate pending the outcome of the appeal. Ms Riechelmann is also willing to give an undertaking to the Court to prosecute the appeal with all due dispatch, which I think is appropriate. In relation to the costs of the Notice of Motion, in my view they should be costs in the cause of the appeal. The Notice of Motion is the result of the appeal. The parties are agreed as to that costs order. In relation to the costs of this argument, essentially it will only be relevant to the costs of the Cross-Claim proceedings and there was no dispute about the order in relation to that so, accordingly, I see no need to vary the costs orders. As sought, I will grant liberty to apply on three business days' notice.
The orders I make are accordingly:
In relation to the proceedings:
1. Pursuant to section 98 of the Civil Procedure Act 2005 and Regulation 2 of Schedule 1 of the Legal Profession Uniform Law Application Act 2014 ("the Act") the defendant is to pay the plaintiff's costs of the Statement of Claim proceedings as agreed or assessed capped at $10,000 for legal services as defined by Regulation 2 of Schedule 1 of the Act. The defendant is also to pay the plaintiff's disbursements for the Statement of Claim proceedings as agreed or assessed except as limited by Regulation 2 of Schedule 1 of the Act;
2. The defendant cross‑claimant is to pay to the plaintiff/cross‑defendant the plaintiff's/cross‑defendant's costs of the Cross-Claim proceedings as agreed or assessed on the ordinary basis up to and including 9 January 2022 and on an indemnity basis from 10 January 2022 to 8 June 2023;
3. Pursuant to the Civil Procedure Regulation 2017, Regulation 10(2)(a), the defendant/cross‑claimant is to pay the Court hearing fees in respect of the hearing of the proceedings;
4. Liberty to apply on three days' notice.
Note: the plaintiff concedes in relation to order (1) that the capped fees include barristers fees.
In relation to the Notice of Motion filed 29 June 2023:
(1) Upon the defendant through her counsel giving undertakings to the Court, first, not to sell or otherwise dispose of her interest in the property known as Unit [XXX] The Esplanade, Cronulla in the State of New South Wales without giving 14 days' notice to the solicitor for the plaintiff and, secondly, to prosecute the appeal brought by Notice of Appeal filed 19 May 2023 with all due dispatch, stay until the determination of the appeal or until further order, any orders as to costs and disbursements and hearing fees made by the Court on 20 July 2023 in the proceedings.
(2) The costs of the Notice of Motion are to be costs in the cause of the appeal filed on 19 May 2023.
Note: the undertakings referred to in order (1) above were made to the Court.
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Decision last updated: 27 July 2023
Parties
Applicant/Plaintiff:
McCabe
Respondent/Defendant:
Riechelmann
Legislation Cited (1)
A New Tax System (Good and Services Tax) Act 1999(Cth)