K Muc Trading as G H Healey and Co Sydney v Descaretes Pty Ltd

The case of K Muc Trading as G H Healey and Co Sydney v Descaretes Pty Ltd concerned an application for leave to appeal against a costs order made by Garling DCJ. The original costs order had required "the plaintiff's solicitor" to pay the costs of Descaretes Pty Ltd in an action brought by Ms Lincoln against it. The appeal was heard by Mason P and Ipp JA.

The primary legal issue before the Court of Appeal was whether the plaintiff's solicitor, Ms Muc, should be held personally liable for the costs of the defendant, Descaretes Pty Ltd, under section 198M(1) of the *Legal Profession Act 1987* (NSW). This provision allows for costs orders to be made against a solicitor where proceedings are found to have been instituted or continued without reasonable prospects of success. A related issue was the effect of a solicitor signing a certificate under section 198L(2) of the Act, which relates to the reasonable prospects of success of proceedings.

The Court of Appeal applied the principles established in *Lemoto v Able Technical Pty Ltd* (2005) 63 NSWLR 300. Their Honours found that the default judgment dismissing the application for leave to appeal should be set aside. The appeal against the costs order was upheld, and the original costs order was set aside. Ms Muc was ordered to pay the costs thrown away as a consequence of the default judgment.