Stockingham Pty Ltd v Brisbane Angels Nominees Pty Ltd

Stockingham Pty Ltd brought an action against Brisbane Angels Nominees Pty Ltd. The dispute centred on the propriety of costs claimed by the respondents. The case was heard in the Queensland Court of Appeal. The Court of Appeal was tasked with determining whether the costs claimed by the respondents were necessary and proper, particularly in relation to the fees claimed by a barrister who held a 95% share in the respondent company and was also its sole director. The Court was also required to decide whether it should intervene in the costs assessment made by the cost assessor, who had ruled that the barrister’s professional costs could not be claimed.

The Court of Appeal held that the cost assessor’s decision should stand, and that the costs claimed by the respondents, including the barrister’s professional fees, were not necessary and proper. The Court found that the barrister’s dual role as a shareholder, director, and legal representative created a conflict of interest that warranted the disallowance of the professional fees. The Court also noted that the principle of indemnity in legal costs, which aims to ensure that the losing party does not bear more than their fair share of the litigation costs, supported the disallowance of the fees. The Court of Appeal was of the view that it should not interfere with the cost assessor’s decision unless there was a clear error of law or a manifest injustice.

The Court dismissed the application by the respondents and ordered that the parties would be heard on the issue of costs. This outcome reinforced the importance of transparency and conflict-free practices in the claiming of legal costs in litigation.