Masterton Homes v Grabic - [2016] NSWSC 924

Supreme Court

New South Wales

Case Name:	Masterton Homes v Grabic & Anor
Medium Neutral Citation:	[2016] NSWSC 924
Hearing Date(s):	25 May 2016
Decision Date:	25 May 2016
Jurisdiction:	Equity
Before:	White J
Decision:	1. Application dismissed. 2. Order that the plaintiff pay the respondents’ costs of the notice of motion of 26 February 2016 in the agreed sum of $6,500 inclusive of GST.
Catchwords:	PRACTICE AND PROCEDURE — Costs — Civil Procedure Act s 99 — Application for costs against solicitor — Whether conduct of solicitor was serious neglect, serious incompetence or serious misconduct — Allegation of serious misconduct not made out
Legislation Cited:	Civil Procedure Act 2005 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Defamation Act 2005 (NSW)
Cases Cited:	The Owners Strata Plan 56963 v Australand [2011] NSWSC 710 Ridehalgh v Horsefield [1994] Ch 205 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 Clarkson v Mandarin Club Ltd (1998) 90 FCR 354 Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; (2001) 208 CLR 388 Provident Capital Limited v Anderson (No 3) [2013] NSWSC 705
Category:	Costs
Parties:	Masterton Homes Pty Ltd (Plaintiff) Zoran Grabic (1st Defendant) Louise Grabic (2nd Defendant)
Representation:	Counsel: A Hourigan (Plaintiff) K Josifoski (Defendants) Solicitors: Masterton Homes (Plaintiff) Keystone Lawyers (Defendants)
File Number(s):	2015/370147

JUDGMENT

HIS HONOUR: This is an application by the plaintiff, Masterton Homes Pty Limited, for orders under s 99 of the Civil Procedure Act 2005 (NSW) against the first respondent, Mr Lou Stojanovski and the second respondent, Keystone Lawyers Pty Ltd that they be ordered to pay the costs and disbursements incurred by Masterton Homes in these proceedings.
Gross sum costs orders were also sought and I have been told that the parties have agreed upon an appropriate quantum of costs if Masterton Homes succeeds in its application against Mr Stojanovski and Keystone Lawyers Pty Ltd. Mr Stojanovski is the sole director of Keystone Lawyers Pty Ltd and he carries on his profession under the name "Keystone Lawyers".
The defendants to the proceedings are a Mr and Mrs Grabic.
The proceedings against them have been discontinued by leave, on their giving certain undertakings to Masterton Homes. The proceedings were discontinued on the basis that there be no order as to costs as between Masterton Homes and Mr and Mrs Grabic.
The application arises from an e-mail written by a solicitor employed by Keystone Lawyers, a Mr Tony Burke, on 9 December 2015. It was the writing of that e-mail that prompted Masterton Homes to commence the proceedings against Mr and Mrs Grabic.
Section 99 of the Civil Procedure Act provides:
“99 Liability of legal practitioner for unnecessary costs
(cf Act No 52 1970, section 76C; SCR Part 52A, rules 43 and 43A)
(1)   This section applies if it appears to the court that costs have been incurred:
(a)    by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or
(b)    improperly, or without reasonable cause, in 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.

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Details

Case: [2016] NSWSC 924
Decision Date: 25 May 2016

CaseChat Overview and Summary

In the case of Masterton Homes v Grabic, the primary dispute involved the allocation of costs under the Civil Procedure Act, specifically in relation to an application for costs against a solicitor. The matter was heard in the Supreme Court of Victoria. Masterton Homes sought an order for costs against the solicitor of Grabic, alleging that the solicitor had engaged in serious misconduct, serious neglect, or serious incompetence. The court was required to determine whether the conduct of the solicitor warranted an order for costs against the solicitor and, if so, to what extent.

The central legal issue before the court was whether the solicitor's conduct constituted serious misconduct, serious neglect, or serious incompetence. This required a detailed examination of the solicitor's actions and decisions throughout the proceedings, and whether they fell below the standard expected of a professional. The court needed to balance the importance of holding solicitors to high professional standards against the potential for such orders to unduly burden the legal profession.

The court concluded that the allegations of serious misconduct were not substantiated. While some aspects of the solicitor's conduct were found to be negligent or incompetent, these did not reach the threshold of serious misconduct. The court found that the solicitor's actions, while regrettable, did not warrant an order for costs under the Civil Procedure Act. The court emphasised the need for a high threshold to be met before such orders are made, ensuring that the process is not used lightly. Consequently, the application for costs against the solicitor was dismissed.

Orders