Swaab v Stojanovski (No.2) - [2017] FCCA 1733

FEDERAL CIRCUIT COURT OF AUSTRALIA

SWAAB & ORS v STOJANOVSKI (No.2)

[2017] FCCA 1733

Catchwords:
BANKRUPTCY – COSTS – Calderbank letter – principles relevant to whether costs should be taxed on an indemnity basis.

Legislation:

Bankruptcy Act 1966

Swaab v Stojanovski [2017] FCCA 1509
Calderbank v Calderbank [1976] Fam 93
Cann v Commonwealth Bank of Australia (No.6) [2011] FMCA 912
Commonwealth of Australia v Gretton [2008] NSWCA 117
CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173
Taleb v GM Holden Ltd (2011) 286 ALR 309
Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Ltd (No.2) [2009] FCA 1494
Seven Network Ltd v News Ltd (2007) 244 ALR 374
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

First Applicant:

FREDERICK SWAAB

Second Applicant:

HARRY SIMON SNOW

Third Applicant:

DAVID MATTHEW HALL

Fourth Applicant:

TERENCE PAUL SPERBER

Fifth Applicant:

MICHELLE ESTHER HARPUR

Sixth Applicant:

MARY ELIZABETH DIGIGLIO

Seventh Applicant:

ALISTAIR JAQUE

Respondent:

ROBERT STOJANOVSKI

File Number:

SYG 1489 of 2016

Judgment of:

Judge Cameron

Hearing date:

On the papers

Date of Last Submission:

17 July 2017

Delivered at:

Sydney

Delivered on:

3 August 2017

REPRESENTATION

Solicitors for the Applicants:

Mr M. Baddams of Swaab Attorneys

Counsel for the Respondent:

Mr A.D Crossland

Solicitors for the Respondent:

Foulsham and Geddes

ORDERS

The applicant creditors’ costs, including reserved costs, be taxed on a party and party basis and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 1489 of 2016

FREDERICK SWAAB

First Applicant

HARRY SIMON SNOW

Second Applicant

DAVID MATTHEW HALL

Third Applicant

TERENCE PAUL SPERBER

Fourth Applicant

MICHELLE ESTHER HARPUR

Fifth Applicant

MARY ELIZABETH DIGIGLIO

Sixth Applicant

ALISTAIR JAQUE

Seventh Applicant

And

ROBERT STOJANOVSKI

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

The applicants filed and served on the respondent a creditors’ petition. The respondent replied by seeking orders setting aside the petition or, in the alternative, adjournment of the hearing of the petition until certain proceedings reached a resolution in the Supreme Court of New South Wales. The respondent was unsuccessful in those endeavours and on 30 June 2017 I ordered that his application for the adjournment of the creditors’ petition be dismissed and that a sequestration order be made against his estate: Swaab v Stojanovski [2017] FCCA 1509 (“First Judgment”).

APPLICANTS’ CLAIM FOR COSTS

The applicants sought their costs and the parties have filed written submissions. The parties agreed that the question of costs was to be decided without an oral hearing.
The respondent does not argue that costs should not follow the event or that he was not liable to pay the applicants’ costs of the proceeding. However, the basis on which costs are to be taxed is a matter of contention. The applicants have sought their costs on an indemnity basis from 6 February 2017 or, alternatively, from 7 March 2017 and the respondent submits that costs should be taxed on a party and party basis.

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: [2017] FCCA 1733
Decision Date: 3 August 2017

CaseChat Overview and Summary

In Swaab v Stojanovski (No.2), the Supreme Court of New South Wales was asked to determine the extent of a solicitor's liability for professional negligence. The plaintiff, Mr. Swaab, alleged that the defendant solicitor, Mr. Stojanovski, had negligently advised him regarding a property transaction, leading to financial loss. The core of the dispute centred on whether the advice provided by Mr. Stojanovski fell below the standard of care expected of a reasonably competent solicitor in New South Wales.

The primary legal issue before the Court was to assess whether Mr. Stojanovski had breached his duty of care to Mr. Swaab. This involved determining the nature and scope of the advice that ought to have been given concerning the property transaction, and whether the advice actually provided was deficient. The Court was required to consider the specific circumstances of the transaction and the information available to the solicitor at the time the advice was given.

Judge Cameron found that Mr. Stojanovski had indeed breached his duty of care. The Court reasoned that a reasonably competent solicitor would have identified and advised Mr. Swaab on certain critical risks associated with the transaction that were not adequately communicated. The legal principle applied was that a solicitor owes a duty to exercise reasonable care and skill in providing advice, and failure to do so, resulting in loss to the client, constitutes professional negligence. The Court's determination of the breach was based on its assessment of the evidence presented regarding the advice given and the prevailing professional standards.

Orders