Keddie v Stacks/Goudkamp Pty Ltd

Case [2012] NSWCA 254


Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Keddie & Ors v Stacks/Goudkamp Pty Ltd [2012] NSWCA 254
Hearing dates:10 February and 12 April 2012
Decision date: 17 August 2012
Before: Beazley JA at [1];
Barrett JA at [197];
Sackville AJA at [198]
Decision:

1. Appeal dismissed;

2. Cross-appeal allowed;

3. Set aside order (2) made by the trial judge;

4. Order that the appellants pay the respondent's costs of the notice of motion, those costs to be on an indemnity basis as and from 4 August 2010;

5. Order that the appellants pay the respondent's costs of the appeal and the cross-appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

COSTS - Costs order against law practice - Whether professional negligence claim had reasonable prospects of success - Whether solicitor entitled to rely on expert opinion and counsel advice - Solicitor must turn an independent mind to the matter - Legal Profession Act 2004, ss 345 and 348

COSTS - Costs order against legal practitioner - Unnecessary costs - Costs incurred without reasonable cause in circumstances where legal practitioner responsible for costs unnecessarily incurred - Civil Procedure Act 2005, s 99

LEGAL PRACTITIONERS - Provision of legal services - Requirement to have reasonable belief in reasonable prospects of success - Reliance on counsel's advices - Reliance on expert's reports - Expert's reports wrong

TORTS - Negligence - Solicitor's duty of care - Solicitor retained to advise on nervous shock claim - Whether solicitor under obligation to take additional or positive step - Whether solicitor owed duty to obtain psychiatric evidence - Solicitor settled claim pursuant to client's instructions - Solicitor entitled to follow instructions of client - No evidence of client's mental or emotional incapacity to give instructions

WORDS AND PHRASES - "without reasonable prospects of success"
Legislation Cited: Civil Liability Act 2002
Civil Procedure Act 2005
Legal Profession Act 2004
Motor Accidents Compensation Act 1999
Revised Professional Conduct and Practice Rules 1995
Uniform Civil Procedure Rules 2005
Cases Cited: Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1
Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586
Curnuck v Nitschke [2001] NSWCA 176
David v David [2009] NSWCA 8
Degiorgio v Dunn (No 2) [2005] NSWSC 3; 62 NSWLR 284
Dominic v Riz [2009] NSWCA 216
Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322
Fowler v Toro Constructions Pty Ltd [2008] NSWCA 178
Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145
Heydon v NRMA [2000] NSWCA 374; 51 NSWLR 1
House v…

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Details
AGLC
Keddie v Stacks/Goudkamp Pty Ltd [2012] NSWCA 254
Case
[2012] NSWCA 254
Decision Date

CaseChat Overview and Summary

The appeal concerned a costs order made against a law practice, Stacks/Goudkamp Pty Ltd, in favour of its former client, Ms Keddie. Ms Keddie had brought proceedings against Stacks/Goudkamp alleging professional negligence in their handling of a nervous shock claim. The primary legal issue was whether the claim had reasonable prospects of success, which was relevant to the application of ss 345 and 348 of the *Legal Profession Act 2004* (NSW) and s 99 of the *Civil Procedure Act 2005* (NSW).

The court was required to determine whether Stacks/Goudkamp had acted negligently in advising Ms Keddie and settling her nervous shock claim. Specifically, the court had to consider whether the law practice was obliged to take additional steps, such as obtaining psychiatric evidence, beyond relying on the advice of counsel and expert reports, and whether the expert reports were demonstrably wrong. The court also considered whether Ms Keddie was mentally or emotionally incapacitated at the time she gave instructions to settle her claim.

The court reasoned that a solicitor is entitled to rely on the advice of counsel and expert reports, provided they have applied their independent mind to the matter. In this instance, the expert reports were not shown to be wrong, and there was no evidence that Ms Keddie lacked the capacity to give instructions. Therefore, Stacks/Goudkamp was entitled to follow its client's instructions to settle the claim. The court found that the claim did not lack reasonable prospects of success, and thus the costs order against the law practice was set aside.

The appeal was dismissed, and the cross-appeal was allowed. The order made by the trial judge for the appellants to pay the respondent's costs of the notice of motion on an indemnity basis was set aside. However, the appellants were ordered to pay the respondent's costs of the appeal and the cross-appeal.

Orders

Orders of the court

1. Appeal dismissed;

2. Cross-appeal allowed;

3. Set aside order (2) made by the trial judge;

4. Order that the appellants pay the respondent's costs of the notice of motion, those costs to be on an indemnity basis as and from 4 August 2010;

5. Order that the appellants pay the respondent's costs of the appeal and the cross-appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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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