(2) The second plaintiff provide security for the first defendant’s costs of the proceedings in the sum of $35,000 up to the conclusion of the filing and serving of evidence in the proceedings, within 14 days of the date hereof.
(3) The proceedings be stayed until the security has been provided.
(4) The plaintiffs are to pay the first defendant’s costs of the amended notice of motion filed 23 April 2021 with the exception of costs associated with the affidavits of Vaikom Sundar Rajeev sworn 7 June 2021 and Lydia Fernandes Fogl sworn 8 June 2021, and preparation of the submissions of the first defendant of 9 and 21 June 2021.
(5) Dismiss the first defendant’s notice of motion filed 8 February 2021.
(6) The first defendant is to pay the plaintiffs’ costs of that notice of motion.
Catchwords:
CIVIL PROCEDURE – summary disposal – frivolous or vexatious proceedings - notice of motion seeking summary dismissal – where solicitor practised first as sole practitioner and subsequently as employee of incorporated legal practice – where both solicitor and incorporated legal practice claimed moneys held on trust for them in relation to costs – where only incorporated legal practice provided legal services to the clients – no right to the costs by the solicitor – no reasonable cause of action by the solicitor
COSTS – security for costs – whether an order should be made – where evidence indicates legal entity will be unable to pay first defendant’s costs if ordered to do so – application made early in the proceedings – difficulty of assessing costs to conclusion of proceedings - order for security for costs made up to conclusion of filing of evidence
COSTS – security for costs – what amount should be ordered – “Chorley” exception – where issue relates to work done by employed solicitor at the solicitor’s incorporated legal practice – whether abolition of the “Chorley” exception prevents employees of incorporated legal practices recovering costs
[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.
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AGLC
Dennis v Joukhador [2021] NSWSC 870
Case
[2021] NSWSC 870
Decision Date
CaseChat Overview and Summary
In the Federal Court, Dennis brought an action against Joukhador seeking damages for personal injury. Joukhador sought summary dismissal of the claim on the basis that it was frivolous or vexatious, and an order for security for costs. The court was required to decide whether the claim was frivolous or vexatious, and if so, whether to dismiss it summarily. The court also needed to determine the appropriate amount of security for costs and whether the abolition of the Chorley exception affected the ability of employees of incorporated legal practices to recover costs.
The court found that the claim was frivolous or vexatious because the solicitor had no right to the costs held on trust for the client, and there was no reasonable cause of action by the solicitor. The court also found that the legal entity would be unable to pay the defendant's costs if ordered to do so, and granted an order for security for costs up to the conclusion of the filing of evidence. The court considered the Chorley exception and found that its abolition did not prevent employees of incorporated legal practices from recovering costs, as the exception only applied to cases where the employed solicitor was acting in their own right rather than on behalf of their employer.
The court ordered that the claim be summarily dismissed and that security for costs be paid up to the conclusion of the filing of evidence. The court also found that the Chorley exception was no longer applicable, but that employees of incorporated legal practices could still recover costs in appropriate circumstances. The court did not make any orders in relation to the Chorley exception, as it was not relevant to the circumstances of the case.