New South Wales
Court of Appeal
CITATION: FOWLER, CORBETT and JESSOP trading as HAYDON FOWLER CORBETT JESSOP v TORO CONSTRUCTIONS PTY LTD [2008] NSWCA 178 HEARING DATE(S): 11 April 2008
JUDGMENT DATE:
5 August 2008JUDGMENT OF: McColl JA at 1; Basten JA at 2; Young CJ in Eq at 90 DECISION: (1) Grant leave to appeal, direct the applicant to file its draft notice of appeal and, conditional on that step being taken, allow the appeal.
(2) Set aside orders 1, 2, 3 and 5 made in the District Court in matter no. 1466 of 2005 on 24 April 2007.
(3) In lieu thereof, dismiss the motion of Toro Constructions Pty Ltd for costs payable by the former solicitors for Brian Fox.
(4) Order Toro Constructions Pty Ltd to pay the costs of:
(a) its motion in the District Court with respect to the orders set aside, and
(b) the application and appeal in this Court.
(5) Grant Toro Constructions Pty Ltd a certificate under the Suitors’ Fund Act 1951 (NSW) if not disqualified under s 6(7).CATCHWORDS: COSTS – legal practitioner personally liable for costs – costs on indemnity basis – joinder of party – whether reasonable prospects of success – whether material available for making claim against party – uncertainty about involvement of a party – investigations to ascertain party’s involvement – purpose of costs order against legal practitioner – risks involved in litigation relating to costs orders against legal practitioners – Legal Profession Act 2004 (NSW) ss 345, 347, 348 - LAWYERS – costs of litigation – costs payable by lawyers for unsuccessful party – Legal Profession Act 2004 (NSW) s 348 - STATUTORY INTERPRETATION – without reasonable prospects of success – provable fact – purposive interpretation – Legal Profession Act 2004 (NSW) ss 345, 348 - WORDS & PHRASES – “provable fact” – “without reasonable prospects of success” LEGISLATION CITED: Law Society’s Solicitors’ Rules, r 23.A.6
Legal Profession Act 2004 (NSW), ss 345, 347, 348, 349, Part 3.2, Div 10
NSW Barristers’ Rules, r 36CATEGORY: Principal judgment CASES CITED: Fox v Leighton Contractors Pty Ltd [2008] NSWCA 23; (2008) Aust Torts Rep 81-937
Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; 63 NSWLR 300
Ridehalgh v Horsefield [1994] Ch 205PARTIES: Peter Gregory Fowler, Michael John Corbett and Paul Anthony Jessop t/as Haydon Fowler Corbett Jessop (Appellant)
Toro Constructions Pty Limited (Respondent)FILE NUMBER(S): CA 40319/07 COUNSEL: D L Williams SC/P A Horvath (Appellant)
CS Leahy SC (Respondent)SOLICITORS: Yeldham Lloyd Associates (Appellant)
Ebsworth & Ebsworth (Respondent)LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 1466/05 LOWER COURT JUDICIAL OFFICER: S J Gibb DCJ LOWER COURT DATE OF DECISION: 24 April 2007
CA 40319/07
DC 1466/055 August 2008McCOLL JA
BASTEN JA
YOUNG CJ in EQ
Peter Gregory FOWLER, Michael John CORBETT and Paul Anthony JESSOP T/as HAYDON FOWLER CORBETT JESSOP v TORO CONSTRUCTIONS PTY LTD
Headnote
On 7 March 2003, Mr Fox was injured whilst working on…
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Details
- AGLC
- Fowler v Toro Constructions Pty Ltd [2008] NSWCA 178
- Case
- [2008] NSWCA 178
- Decision Date
CaseChat Overview and Summary
The appeal concerned an application by Toro Constructions Pty Ltd (Toro) in the District Court for an order that the former solicitors for Brian Fox pay Toro's costs of certain proceedings on an indemnity basis. The primary dispute revolved around whether the solicitors had acted without reasonable prospects of success in joining Toro as a party to the original proceedings.
The Court of Appeal was required to determine whether the District Court had erred in ordering the solicitors to pay Toro's costs on an indemnity basis. This involved considering the proper interpretation of sections 345 and 348 of the *Legal Profession Act 2004* (NSW), specifically the meaning of "without reasonable prospects of success" and whether the material available at the time supported the joinder of Toro as a party. The court also had to assess whether the solicitors' conduct in investigating Toro's involvement was reasonable in the circumstances.
The Court of Appeal found that the District Court had erred in its assessment. It reasoned that the solicitors had acted reasonably in investigating Toro's potential involvement, given the uncertainty surrounding the party's role in the litigation. The court emphasised that the threshold for ordering costs against a legal practitioner personally, particularly on an indemnity basis, is high and requires a clear demonstration that the proceedings were brought or continued without reasonable prospects of success. The investigations undertaken by the solicitors were considered a necessary step to ascertain Toro's involvement, rather than an action taken without a proper basis.
Consequently, the Court of Appeal granted leave to appeal, set aside the District Court's orders requiring the solicitors to pay Toro's costs, and dismissed Toro's motion for those costs. The court ordered Toro to pay the costs of its unsuccessful motion in the District Court and the costs of the application and appeal in the Court of Appeal.
The Court of Appeal was required to determine whether the District Court had erred in ordering the solicitors to pay Toro's costs on an indemnity basis. This involved considering the proper interpretation of sections 345 and 348 of the *Legal Profession Act 2004* (NSW), specifically the meaning of "without reasonable prospects of success" and whether the material available at the time supported the joinder of Toro as a party. The court also had to assess whether the solicitors' conduct in investigating Toro's involvement was reasonable in the circumstances.
The Court of Appeal found that the District Court had erred in its assessment. It reasoned that the solicitors had acted reasonably in investigating Toro's potential involvement, given the uncertainty surrounding the party's role in the litigation. The court emphasised that the threshold for ordering costs against a legal practitioner personally, particularly on an indemnity basis, is high and requires a clear demonstration that the proceedings were brought or continued without reasonable prospects of success. The investigations undertaken by the solicitors were considered a necessary step to ascertain Toro's involvement, rather than an action taken without a proper basis.
Consequently, the Court of Appeal granted leave to appeal, set aside the District Court's orders requiring the solicitors to pay Toro's costs, and dismissed Toro's motion for those costs. The court ordered Toro to pay the costs of its unsuccessful motion in the District Court and the costs of the application and appeal in the Court of Appeal.
Orders
Orders of the court
(1) Grant leave to appeal, direct the applicant to file its draft notice of appeal and, conditional on that step being taken, allow the appeal. (2) Set aside orders 1, 2, 3 and 5 made in the District Court in matter no. 1466 of 2005 on 24 April 2007. (3) In lieu thereof, dismiss the motion of Toro Constructions Pty Ltd for costs payable by the former solicitors for Brian Fox. (4) Order Toro Constructions Pty Ltd to pay the costs of: (a) its motion in the District Court with respect to the orders set aside, and (b) the application and appeal in this Court. (5) Grant Toro Constructions Pty Ltd a certificate under the Suitors' Fund Act 1951 (NSW) if not disqualified under s 6(7).
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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