Furlong v Wise & Young Pty Ltd - [2016] NSWSC 647

Supreme Court

New South Wales

Medium Neutral Citation: Furlong v Wise & Young Pty Ltd [2016] NSWSC 647
Hearing dates: 6 and 13 May 2016
Decision date: 19 May 2016
Jurisdiction: Equity - Expedition List
Before: Stevenson J
Decision:
Defendants and proposed cross-claimants to pay costs thrown away by proposed cross-claim; solicitor for those parties to pay those costs if unpaid in time specified

Catchwords: COSTS – allegations of dishonesty and serious misconduct made in proposed cross-claim without proper basis – whether solicitor should pay the costs thrown away
Legislation Cited: Civil Procedure Act 2005 (NSW)
Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW)
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW)
Practice Note SC Gen 5
Cases Cited: Re Bauhaus Pyrmont Pty Ltd (in Liq) [2006] NSWSC 879
Karwala v Skrzypczak Re Estate of Ratajcak [2007] NSWSC 931
Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178
Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19
Category: Procedural and other rulings
Parties: Kathleen Jeanne Furlong (First Plaintiff)
Mark Andrew Furlong (Second Plaintiff)
Wise & Young Pty Limited (First Defendant)
Defined Properties Investment Pty Limited (Second Defendant)
Wyse & Young International Pty Limited (Third Defendant)
Representation:
Counsel:
M Auld (Plaintiffs)
Solicitors:
Gardner Ekes Lawyers (Plaintiffs)
Foleys (Defendants)

File Number(s): SC 2015/326698

Judgment

Six parties have incurred costs considering two iterations of a form of cross-claim proposed to be brought against them by the three defendant companies Wise & Young Pty Limited, Defined Properties Investment Pty Limited and Wyse & Young International Pty Limited (“the Companies”).
Those six parties include the first plaintiff, Ms Kathleen Furlong, her former parents in law, Mr Gilbert and Mrs Kim Leishman, and two corporate trustees. The other proposed cross-defendant is Ms Furlong’s solicitor in these proceedings, Mr Hector Ekes.
The solicitor acting for the Companies, Mr Michael Foley, drafted the proposed cross-claims.
The cross-claims include allegations of dishonesty and other serious misconduct against each of the proposed cross-defendants (other than Mrs Leishman). It also makes allegations of dishonesty against the second plaintiff, Mr Mark Leishman (who is a bankrupt). Mr Leishman is not named as a cross-defendant.
Those allegations are made in the course of an allegation of “civil conspiracy” against each of the proposed cross-defendants (apart from Mrs Leishman).
My attention was drawn to the proposed cross-claim in the course of case managing these proceedings in the Expedition List.
I was gravely concerned about the nature of, and the basis for the allegations to which I have referred and as to whether my discretion to make an order against Mr Foley under s 99 of the Civil Procedure Act 2005 (NSW) (“the Act”), or under the Court’s supervisory jurisdiction was enlivened.
I adopted the “show cause” process required by s 99(2) of the Act and by Practice Note SC Gen 5 (“Costs orders against legal practitioners”).
Having now heard from Mr Foley, I have come to the conclusion that:

the material…

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.

Continue reading Furlong v Wise & Young Pty Ltd

Details

AGLC: Furlong v Wise & Young Pty Ltd [2016] NSWSC 647
Case: [2016] NSWSC 647
Decision Date: 19 May 2016

CaseChat Overview and Summary

The parties involved in this case are Furlong, the plaintiff, and Wise & Young Pty Ltd, the defendant. The nature of the dispute is a legal battle over the costs incurred during the proceedings. The case was heard in the Supreme Court of Victoria. The plaintiff, Furlong, sought to recover costs thrown away after the defendant, Wise & Young Pty Ltd, made allegations of dishonesty and serious misconduct in a proposed cross-claim. The court was required to decide whether the solicitor representing Furlong should bear the costs that were not recovered.

The legal issues at hand were primarily concerned with the appropriateness of the allegations made in the proposed cross-claim and the responsibility of the solicitor for the costs incurred. The court had to determine whether the allegations were substantiated and if the solicitor acted within their professional obligations when making the cross-claim. Furthermore, the court needed to assess the balance of justice in relation to the costs and whether it was fair to hold the solicitor accountable for the costs that were not recovered.

The court found that the allegations of dishonesty and serious misconduct were not supported by any proper basis and were therefore unreasonable. As a result, the court held that the solicitor should bear the costs thrown away. The reasoning behind this decision was that the solicitor had a duty to act in the best interests of their client and to avoid making unfounded allegations that could lead to unnecessary costs. The court also emphasised the importance of maintaining the integrity of the legal process and ensuring that costs are not incurred frivolously. Ultimately, the court ruled in favour of Wise & Young Pty Ltd and held the solicitor responsible for the costs that were not recovered.

Orders