Donohue v Volanne Pty Ltd (No 3) - [2021] ACTCA 20

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:	Donohue v Volanne Pty Ltd (No 3)
Citation:	[2021] ACTCA 20
Hearing Date:	On the papers
DecisionDate:	19 August 2021
Before:	Murrell CJ
Decision:	The applicant is to pay the respondents’ costs of the leave application on a party and party basis
Catchwords:	PRACTICE AND PROCEDURE – COSTS – Application for special costs order – where alleged case had no chance of success – where respondents wrote to applicant inviting them to withdraw
Legislation Cited:	Court Procedures Rules 2006 (ACT) rr 1152, 1721, 1751, 1752
Cases Cited:	Arrow International Australia Ltd v Group Konstrukt Pty Ltd [2012] ACTCA 37; 7 ACTLR 48 Bott v Carter [2012] NSWCA 89 Donnellan v Woodland [2012] NSWCA 433 Donohue v Volanne Pty Ltd [2021] ACTCA 7 Donohue v Volanne Pty Ltd (No 2) [2021] ACTCA 11 Fountain Select Meats (Sales) Pty Ltd v International Produced Merchants Pty Ltd (1988) 81 ALR 397 Gray v Richards (No 2) [2014] HCA 47; 89 ALJR 113 House v The King (1936) 55 CLR 483 Hulanicki v Walton (No 2) [2015] ACTCA 45 Ingot Capital Investment v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199; 65 ACSR 324 International Consulting and Business Management Pty Ltd v Volanne Pty Ltd [2014] ACTSC 175 Lewis v Australian Capital Territory (No 2) [2015] ACTSC 343 Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Volanne Pty Ltd v Donohue [2021] ACTSC 48
Parties:	Christopher John Donohue trading as Donohue & Co (Applicant) Volanne Pty Ltd (First Respondent) John Fragopoulos (Second Respondent) Anthoula Fragopoulos (Third Respondent)
Representation:	Counsel I Griscti (Applicant) K Pattenden (Respondents)
Solicitors Gilchrist Connell (Applicant) Aulich Civil Law (Respondents)
File Number(s):	ACTCA 17 of 2021

MURRELL CJ

Introduction

On 12 May 2021, I dismissed an application by the applicant seeking leave to appeal from an interlocutory decision of McWilliam AsJ: Donohue v Volanne Pty Ltd (No 2) [2021] ACTCA 11 (the Leave Decision).

The respondents seek an order that the applicant pay the respondents’ costs on an ordinary basis to 12 April 2021 and:

(a)On an indemnity basis from 13 April 2021; or, in the alternative,
(b)On a solicitor and own client basis from 13 April 2021.

Background

In the substantive proceedings, the respondents make a claim in relation to professional negligence and breach of contract by the applicant as their solicitor in litigation where judgment was entered against them: International Consulting and Business Management Pty Ltd v Volanne Pty Ltd [2014] ACTSC 175

On 12 February 2021, the applicant filed an application for summary judgment in its favour. On 19 February 2021, the application was heard by McWilliam AsJ.

On 31 March 2021, her Honour dismissed the application: Volanne Pty Ltd & Ors v Donohue [2021] ACTSC 48.

As I observed in the Leave Decision at [22]:

The crux of her Honour’s reasoning was that…

Grounds of appeal

[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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Details

Case: [2021] ACTCA 20
Decision Date

CaseChat Overview and Summary

The applicant, Christopher John Donohue, sought leave to appeal an interlocutory decision of McWilliam AsJ in proceedings against the respondents, Volanne Pty Ltd, John Fragopoulos, and Anthoula Fragopoulos. The substantive proceedings concerned a claim of professional negligence and breach of contract against the applicant as a solicitor. The applicant had applied for summary judgment, which was dismissed by McWilliam AsJ on the basis that the pleaded facts did not clearly establish advocates' immunity as a complete defence. The applicant subsequently sought leave to appeal this dismissal.

The legal issues before the court were whether the applicant should pay the respondents' costs of the leave application on an ordinary basis, or alternatively, on an indemnity or solicitor and own client basis from 13 April 2021. This request for a special costs order stemmed from the respondents' contention that the applicant's appeal application was without merit and that they had notified the applicant of this view and the potential for a special costs order in a letter dated 13 April 2021. The respondents argued that the applicant's continued pursuit of the appeal after this notification constituted a "relevant delinquency" or that the case was "hopeless" or had "no chance of success," thereby justifying a departure from the usual party and party costs assessment.

The court determined that the applicant's conduct did not amount to a relevant delinquency warranting a special costs order, nor was the case hopeless or without any chance of success. While the application faced difficulties, it was not so devoid of merit as to justify a special costs order. The applicant had advanced arguable, albeit ultimately unsuccessful, submissions based on relevant authorities, seeking to demonstrate errors in the primary judge's reasoning regarding advocates' immunity. The court noted that the applicant had cited authority supporting the desirability of early determination of advocates' immunity defences in clear-cut cases.

Ultimately, the court ordered that the applicant pay the respondents' costs of the leave application on a party and party basis. The court found that the applicant's actions in filing and pursuing the application, even after receiving the respondents' letter outlining their position and the potential for a special costs order, did not meet the threshold for a special costs order. The application, while unsuccessful, was considered to have raised arguable points, distinguishing it from a "hopeless" or "no chance of success" scenario.

Orders