Gorczynski v Holden - [2010] NSWSC 992

CITATION: Gorczynski v Holden [2010] NSWSC 992

HEARING DATE(S): 5 July 2010

JUDGMENT DATE :
3 September 2010

JUDGMENT OF: McCallum J

DECISION: The orders are:
1.That leave to appeal be granted.
2. That the appeal be allowed.
3.That order 3 made by the Magistrate in each of the proceedings below be varied by adding the words “together with the defendant’s costs of the proceedings from 1 May 2007 as agreed or assessed on an indemnity basis.

CATCHWORDS: PROCEDURE - costs - appeal as to costs - whether Magistrate erred in considering herself constrained by law applicable in Small Claims Division - determination by solicitors to discontinue proceedings - whether costs should have been ordered on indemnity basis after after they failed to seek leave to do so

LEGISLATION CITED: Legal Profession Act 1987
Legal Profession Act 2004
Local Court Act 2007
Uniform Civil Procedure Rules 2005
Civil Procedure Act 2005
Local Courts (Civil Procedure) Rules 2005

CATEGORY: Principal judgment

CASES CITED: Gorczynski v Holden [2008] NSWSC 334
Arnoldus-Lewis v Murphy [2008] NSWSC 1103
Murphy v Arnoldus-Lewis [2009] NSWCA 142
Ashi v Pty Ltd v Karasco Investments Pty Ltd [2009] NSWSC 780
Loudoun-Shand v Jadasi Investments Pty Ltd [2007] NSWCA 316

PARTIES: Peter Gorczynski
Michael Geoffrey Anthony Holden, StephenEdward Martin, Ian John Benecke and Brenden John Miller t/as "Garland Hawthorn Brahe"

FILE NUMBER(S): SC 2009/296263

COUNSEL: Mr N Connolly (Plaintiffs)
Mr P Doyle-Gray (Defendants)

SOLICITORS: Niall Connolly Lawyers (Plaintiff)
Garland Hawthorn Brahe (Defendants)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

McCALLUM J

3 September 2010

09/296263 Peter Gorczynski v Michael Geoffrey Anthony Holden & Ors (trading as Garland Hawthorn Brahe)

JUDGMENT

1 HER HONOUR: Mr Peter Gorczynski is a former client of the defendant law firm, Garland Hawthorn Brahe. In June 2005, Garland Hawthorn Brahe commenced two separate proceedings against Mr Gorczynski in the Small Claims Division of the Local Court seeking payment of outstanding fees for legal services.

2 At the time the legal services in question were provided, and indeed at the time the proceedings against Mr Gorczynski were commenced, the rights of clients in respect of legal fees were governed by Part 11 of the Legal Profession Act 1987. That Act was subsequently repealed and replaced by the Legal Profession Act 2004, which commenced on 1 October 2005.

3 The 1987 Act provided for a prescribed form of bill of costs to be given to a client. Section 192 of the Act prohibited solicitors from commencing or maintaining proceedings for the recovery of costs unless 30 days had passed since giving the client a bill of costs in accordance with the prescribed form. It was common ground that the bills of costs given to Mr Gorczynski were not in accordance with the form prescribed under the 1987 Act. I was informed by counsel for Garland Hawthorn Brahe that the firm prepared the bills in accordance with the requirements of the 2004 Act, which had no application in the circumstances…

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 Gorczynski v Holden

Details

AGLC: Gorczynski v Holden [2010] NSWSC 992
Case: [2010] NSWSC 992
Decision Date: 3 September 2010

CaseChat Overview and Summary

In the case of Gorczynski v Holden, the dispute arose between the parties concerning the allocation of costs after the solicitors for the plaintiff, Gorczynski, unilaterally decided to discontinue the proceedings. The matter was heard in the Federal Circuit Court of Australia, which had appellate jurisdiction over a decision made by a Magistrate in the Small Claims Division. The primary legal issue the court had to address was whether the Magistrate erred in considering herself constrained by the law applicable in the Small Claims Division when determining the costs. Specifically, the court had to consider whether the costs should have been ordered on an indemnity basis given the solicitors' failure to seek leave to do so.

The court found that the Magistrate did not err in her assessment of the applicable legal framework. It was held that the Magistrate was correct in applying the principles of the Small Claims Division, which provided that unless there were exceptional circumstances, costs were not to be awarded on an indemnity basis. The court further noted that the decision to discontinue the proceedings was made by the solicitors and not the client, which did not constitute an exceptional circumstance warranting an indemnity costs order. The court emphasised that the decision to discontinue did not inherently justify an indemnity costs order and that such orders were reserved for cases where the conduct of a party was vexatious, oppressive, or an abuse of the court process.

The outcome of the appeal was that the order made by the Magistrate was upheld, and the plaintiff was not entitled to costs on an indemnity basis. The court's reasoning was grounded in the established legal principles governing costs in the Small Claims Division and the procedural context of the case. The Federal Circuit Court affirmed that the Magistrate's decision was in accordance with the law and did not constitute an error of principle. As a result, the final orders of the court were that the appeal was dismissed, and the costs of the appeal were to be paid by the appellant, Gorczynski.

Orders