Re The Black Stump Enterprises Pty Ltd and Associated Companies (No 2)

The proceeding concerned an application for costs against solicitors in relation to an appeal that was found to have no reasonable prospects of success. The clients involved were sophisticated parties. The court was tasked with determining whether the solicitors should be held personally liable for the costs of the appeal, particularly given the nature of the clients and the lack of clear evidence as to whether the decision to appeal was driven by the clients or their solicitors.

The central legal issue before the court was the application of the principles governing the personal liability of legal practitioners for costs incurred in litigation, specifically in circumstances where an appeal is deemed to be without reasonable prospects of success. The court had to consider the threshold for imposing such liability and the evidential burden required to establish it, taking into account the sophistication of the clients and the potential for their own instructions to have influenced the decision to appeal.

The court ultimately declined to order the solicitors to pay the costs of the appeal. While acknowledging that the appeal lacked reasonable prospects of success, the court found insufficient evidence to conclude that the solicitors were solely or primarily responsible for pursuing the appeal, especially in light of the sophisticated nature of the clients. The court did not make any order for costs against the solicitors.