Bell v Hartnett Lawyers (No 2)

Bell v Hartnett Lawyers (No 2) involved the estate of a deceased mortgagor, the mortgagee who had commenced possession proceedings in 2014, and the mortgagee’s solicitors, Hartnett Lawyers. The mortgagor's son, who was evicted from the mortgaged property, questioned the reasonableness of the solicitors’ fees incurred by the mortgagee, which consumed the bulk of the proceeds from the sale of the mortgaged property. The mortgagor had died without appointing a legal representative, and the mortgage debt was $33,000, but the sale of the property resulted in over $352,137.02, leaving a balance of $33,792.46 for the mortgagor’s estate.

The central legal issues were whether the solicitors' fees should be referred for a costs assessment, whether such a referral should occur under Queensland law or New South Wales law, and whether Civil Procedure Act, s 98 orders were permissible after one failed costs assessment and before another. The court also had to determine whether the service of the originating process in the equity proceedings was defective and what costs orders should be made in relation to this. The matter of whether the estate of the deceased mortgagor or the mortgagee’s solicitor had priority in the net proceeds of the sale was also considered, although it was not explicitly raised in the pleadings.

The court concluded that the solicitors' fees should indeed be referred for a costs assessment. It held that the assessment should occur under New South Wales law, as the mortgagee’s solicitors were based in New South Wales. The court also ruled that Civil Procedure Act, s 98 orders were possible after one failed costs assessment and before another. Regarding the service of the originating process, the court granted leave to serve the process, but directed that costs orders should be made to reflect the defective service. Additionally, the court made directions for the issue of priority between the mortgagor’s estate and the solicitor’s equitable lien to be pleaded.

The final orders included a referral for costs assessment under New South Wales law, directions for the priority issue to be pleaded, and costs orders reflecting the defective service of the originating process.