Lormine Pty Ltd & Anor v Xuereb (No 2)

THE COURT: In the District Court the plaintiff obtained a verdict for $171,548. Since this was substantially greater than a settlement offer made by the plaintiff under the District Court Rules during proceedings at first instance (viz, to accept $75,000 plus costs), the plaintiff recovered costs as between solicitor and client for the whole of the proceedings in the District Court (see the former Part 39A r25 of the District Court Rules and Lormine Pty Ltd & Anor v Xuereb [2006] NSWCA 200 at [10]).

On appeal, the defendants had the plaintiff’s verdict reduced to $64,720. Accordingly, in the exercise of liberty to apply reserved by this Court when pronouncing final orders in the appeal, the appellants now seek to vary the costs order at trial so that it reverts to costs on the ordinary (or party and party) basis. The appellants point out that, having regard to the amount recovered, the costs will be subject to s198D of the Legal Profession Act 1987 .

The submissions and affidavit filed by the appellants have elicited no response from the respondent within the time directed by the Registrar.

We accept the appellants’ submission. This Court’s decision shows that it was not unreasonable for the defendants to have rejected the plaintiff’s settlement offer.

Accordingly, it is ordered that (in lieu of the previous order for the trial costs) the defendants are to pay the plaintiff’s costs in the District Court on a party and party basis. The appellants’ costs of this application are to be paid by the respondent (whose solicitors were asked to agree to the amended order, but did not do so).