Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors (No 3)

[2007] NSWSC 1499

CITATION:	Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors (No 3) [2007] NSWSC 1499
HEARING DATE(S):	29 November 2007
JURISDICTION:	Common Law Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	29 November 2007
DECISION:	Judgment given against solicitors. Solicitors to pay plaintiffs’ costs except insofar as increased by joinder of successful defendants. Interim stay granted.
CATCHWORDS:	COSTS – where plaintiff fails against one defendant on Contracts Review Act claim but succeeds against solicitor for professional negligence – whether solicitor should be liable for costs plaintiff must pay successful defendant
PARTIES:	Omar Riz (first plaintiff/first cross defendant) Amal Riz (second plaintiff/second cross defendant) Perpetual Trustee Australia Limited (first defendant/cross claimant) Direct Mortgage Solutions Pty Limited (second defendant) Manuelpillia Paul Dominic (third defendant) Suzy David (fourth defendant) Fred David (fifth defendant)
FILE NUMBER(S):	SC 20591/02
COUNSEL:	B M Zipser (plaintiffs/cross defendants) T M Mehigan (first defendant/cross claimant & second defendant) R J H Darke SC (third - fifth defendants)
SOLICITORS:	Legal Aid Commission of NSW (plaintiffs) Gadens Lawyers (first defendant/cross claimant & second defendant) Middletons Lawyers (third - fifth defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BRERETON J

Thursday, 29 November 2007

20591/02 Omar Riz & Anor v Perpetual Trustee Australia Ltd & Ors (No. 3)

JUDGMENT (ex tempore)

1 HIS HONOUR: On 13 November 2007 I dealt with a number of consequential issues and pronounced orders disposing of most aspects of the matter. I stood over for consideration today the quantification of the judgment to be given in favour of the plaintiffs against the third, fourth and fifth defendants, and questions as to how the judgment sum might be payable and as to stays.

2 So far as the judgment sum is concerned, the parties agree that the amount which is produced by the formula referred to in my substantive judgment is $220,960.68; that aspect therefore does not require further consideration.

3 The next issue is the extent to which the third to fifth defendants should be liable for the plaintiffs' costs. The plaintiffs seek an order that the third to fifth defendants pay their costs of the proceedings. The third to fifth defendants submit that the appropriate order, in light of the judgment, is that they pay the plaintiffs’ costs of the plaintiffs' claim against the third to fifth defendants only.

4 On 13 November I considered whether the solicitors should be required to indemnify the plaintiffs in respect of Perpetual's costs, which the plaintiffs were ordered to pay. Though this is not the same question, it is closely analogous. Fundamentally, the question is whether there is some reason why the third to fifth defendants, DDS, should be liable for the plaintiffs' costs of bringing unsuccessful proceedings against the first and second defendants, Perpetual and DMS.

5 The appropriate test to inform this decision is the same as that which informs whether a Bullock or Sanderson order should be made, to which I referred in my judgment of 13 November. In short, it is not enough to justify such an order that it was reasonable for the plaintiff to sue both defendants. More is required to demonstrate that as between the plaintiffs and the unsuccessful defendants, the costs of suing the successful defendants were reasonably and properly incurred.

6 The reasons advanced today in support of the order that the plaintiffs propose largely mirror those that were advanced on 13 November, and are rejected for substantially the same reasons. In my view, the appropriate order will be that the third to fifth defendants pay the plaintiffs' costs of the proceedings, except insofar as those costs have been increased by the joinder of the first and second defendants.

7 The next issue is whether the judgment against the plaintiffs for a monetary sum and for possession should be stayed. The plaintiffs seek a stay for a period of three months to enable them, having filed a holding appeal, to consider whether or not that appeal should be prosecuted. No grounds of appeal have yet been formulated on which the Court could form any impression as to whether an appeal is sufficiently arguable to ground a stay. Prima facie, three months is a lengthy period to permit that to be done, but with the intervention of the vacation, it is perhaps not so unreasonable.

8 The third to fifth defendants seek a stay of the judgment against them. Again, no grounds of appeal have, at this stage, been formulated, but I have little difficulty in concluding that an appeal by the third to fifth defendants would be sufficiently arguable and the risk that any such appeal might be rendered nugatory in the absence of a stay sufficiently great, as to justify a stay.

9 The circumstance that the plaintiffs have made out a case against the third to fifth defendants, but that their judgment will be stayed, is a significant consideration when it comes to considering their application for a stay of the judgment against them, since satisfaction of the judgment in their favour may ameliorate their position so far as obtaining possession of their home is concerned.

10 I would therefore accede to both applications for a stay, on an interim basis until the parties can put before me grounds of appeal and any other evidence on which a better impression can then be formed of the appropriateness of an extension of the stay. In the light of that conclusion – that a stay of the judgment against the third to fifth defendants is appropriate – it is not necessary to consider at this stage, though it may be on the next occasion, whether the judgment sum should be payable to the plaintiffs, or into the trust account of the plaintiffs' solicitor, or otherwise.

11 My orders are:

(1) Give judgment that the third to fifth defendants pay the plaintiffs the sum of $220,960.68.

(2) Order that the third to fifth defendants pay the plaintiffs’ costs of the proceedings except insofar as those costs have been increased by the joinder of the first and second defendants.

(3) Order that the judgment in paragraph 1 and the order in paragraph 2 hereof, and the judgment in paragraph 2 of the orders made on 13 November 2007, and the judgment in paragraph 3 of the orders of that date, be stayed until 18 February 2008.

(4) Adjourn the proceedings to Friday 15 February 2008, to follow the Expedition List on that day, on which occasion I will consider any application for a further continuation of the stay in the light of the status of and grounds for any appeal which has by then been lodged.

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