Stankovic v Hockey - [2016] NSWSC 31

Supreme Court

New South Wales

Medium Neutral Citation: Stankovic v Hockey [2016] NSWSC 31
Hearing dates: 2 and 3 February 2016
Date of orders: 08 February 2016
Decision date: 08 February 2016
Jurisdiction: Common Law
Before: Harrison J
Decision:
1. Order that the proceedings be dismissed.
2. Order the plaintiff to pay the defendant’s costs.

Catchwords: PROFESSIONAL NEGLIGENCE – solicitor’s negligence – bankruptcy – where plaintiff’s estate sequestrated in bankruptcy – where plaintiff’s annulment application dismissed by consent – whether solicitor acted with instructions – whether plaintiff sustained loss in any event – whether solicitor also negligent for failing to advise plaintiff concerning an order dismissing proceedings in Land & Environment Court in which solicitor not retained – where question of legal effect of dismissal of proceedings otherwise decided
Legislation Cited: Bankruptcy Act 1966
Civil Liability Act 2002
Land and Environment Court Rules 1996
Cases Cited: Gould v Day [2002] FCA 66
Milovan Stankovic v The Hills Shire Council [2013] FCA 652
Sresbodan & Sresbodan and Ors [2015] FamCA 515
Category: Principal judgment
Parties: Michael Stankovic (Plaintiff)
Charles Hockey (Defendant)
Representation:
Counsel:
D Lloyd (Defendant)
Solicitors:
Kennedys (Defendant)

File Number(s): 2014/58832
Publication restriction: NIL

Judgment

HIS HONOUR: Michael Stankovic sues Charles Hockey for professional negligence. Mr Hockey is Mr Stankovic’s former solicitor. He alleges that Mr Hockey was negligent and breached his retainer in several specified respects when acting for him in proceedings in the Federal Magistrates Court following sequestration of Mr Stankovic’s estate. Mr Stankovic alleges that Mr Hockey’s defaults caused him loss and damage said to amount to $35M.
For the reasons that follow, I consider that Mr Stankovic’s claims are entirely without foundation and should be dismissed with costs.

Background

Prior to the sequestration of his estate in bankruptcy, Mr Stankovic was together with his former wife the registered proprietor of land in Kellyville in the Hills Shire. The Baulkham Hills Shire Council commenced proceedings against Mr Stankovic and his former wife in the Land and Environment Court seeking orders that the property be cleaned up and that they cease keeping pigs. Several judgments in those proceedings were published between 2005 and 2010. Although he contests the validity of the order that was made against him and the circumstances in which it was made, Mr Stankovic became indebted to the Council in respect of legal costs incurred in those proceedings. This is necessarily referred to below in more detail.
On 26 May 2008, the Council filed a creditor’s petition in the Federal Magistrates Court, presumably based upon a failure by Mr Stankovic to comply with a bankruptcy notice demanding payment of the costs in question. On 28 April 2008, Kent Attorneys filed a notice of appearance as a supporting creditor in those proceedings. Kent Attorneys claimed approximately $240,000 in professional costs for acting for Mr Stankovic in the Land and Environment Court in his long running dispute with the Council. A sequestration order was made against Mr Stankovic on 12 May 2009, but despite the terms…

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.

Continue reading Stankovic v Hockey

Details

AGLC: Stankovic v Hockey [2016] NSWSC 31
Case: [2016] NSWSC 31
Decision Date: 08 February 2016

CaseChat Overview and Summary

Stankovic v Hockey is a case in which the plaintiff, Stankovic, sued the defendant, Hockey, for professional negligence related to the solicitor's conduct during a bankruptcy proceeding. The plaintiff's estate was sequestrated in bankruptcy, and the plaintiff had applied for an annulment of the sequestration, which was dismissed by consent. The central issue was whether the solicitor acted with the plaintiff's instructions and whether the plaintiff sustained a loss despite the annulment application being dismissed. Additionally, the court had to determine if the solicitor was negligent for failing to advise the plaintiff about an order dismissing proceedings in the Land & Environment Court in which the solicitor was no longer retained.

The court examined whether the solicitor's actions constituted negligence and if the plaintiff suffered a loss as a result. It also evaluated whether the solicitor had a duty to advise the plaintiff on matters outside the scope of his engagement. The court concluded that the solicitor's actions did not amount to professional negligence. The court found that the plaintiff did not sustain any loss because the annulment application was dismissed by consent, and thus, there was no adverse outcome that could be attributed to the solicitor's conduct. Furthermore, the court determined that the solicitor had no duty to advise the plaintiff about matters outside the scope of his engagement, particularly since the plaintiff had not been actively involved in the proceedings in the Land & Environment Court.

The court held that the defendant was not liable for professional negligence. The court's reasoning was based on the absence of any adverse outcome that could be attributed to the solicitor's conduct and the lack of a duty to advise on matters outside the scope of the engagement. The plaintiff's claim was dismissed, and the defendant was absolved of liability for professional negligence.

Orders