De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor (No 4) [2014] NSWDC 70

De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor (No 4) [2014] NSWDC 70

The Court dismissed the application to set aside the prior costs order because the Official Trustee had notice and declined participation, there was no procedural or substantive injustice, and the making of the order did not breach s 58(3) of the Bankruptcy Act 1966 (Cth) as it was not a fresh step by a creditor in respect of a provable debt. On the application under Legal Profession Act 2004 s 349, the Court found that, with the exception of the claim against Androulla Costi, the evidence at trial did not preclude a reasonable belief in the reasonable prospects of success—the claims generally failed due to adverse credit but were arguable. In respect of Androulla Costi, the Court found...

Parties
First Plaintiff/first Cross Defendant/applicant on Notice of Motion Filed 5 August 2013: De Costi Seafoods (Franchises) Pty Limited; Second Plaintiff/fifth Cross Defendant/applicant on Notice of Motion Filed 5 August 2013: De Costi Seafoods (Holdings) Pty Limited; First Defendant/first Cross Claimant/first Respondent to Ms Thomson's Notice of Motion: Serge Wachtenheim; Second Defendant/second Cross Claimant/second Respondent to Ms Thomson's Notice of Motion: Deist Safety Equipment Australia Pty Ltd; Second Cross Defendant: Frank Theodore; Fourth Cross Defendant/applicant on Notice of Motion Filed 5 August 2013: George Costi; Seventh Cross Defendant/applicant on Notice of Motion Filed 5 August 2013: Androulla Costi; Respondent to De Costi's Notice of Motion/third Respondent to Ms Thomson's Notice of Motion: Leonardo Muriniti; Respondent to De Costi's Notice of Motion/fourth Respondent to Ms Thomson's Notice of Motion: Robert Newell; Applicant on Notice of Motion Filed 14 October 2013: Louise Thomson, Trustee of the Bankrupt Estate of Barry David Shnider, the Sixth Cross Defendant
Jurisdiction
Australia
Judgment Date
13 June 2014
Procedural Posture
Civil / Post Trial Applications for Indemnity Costs and Related Orders Following Dismissal of Cross Claims; Determination of Preliminary Questions Under Legal Profession Act 2004 S 349
Outcome
Application for orders in paragraphs 1 to 3 of Ms Thomson's notice of motion dismissed. No finding under s 349(1) LPA that claims by Wachtenheim and Deist against Frank Theodore, De Costi companies or George Costi lacked reasonable prospects; finding made that there was no reasonable prospect as to Androulla Costi;...
Legal Topics
Costs Orders, Indemnity Costs, Court's Inherent Powers, Fresh Step After Bankruptcy, Reasonable Prospects of Success, Setting Aside Orders, Practitioner Costs Liability
Civil Procedure Bankruptcy Legal Profession Costs Orders Indemnity Costs Court's Inherent Powers Fresh Step After Bankruptcy Reasonable Prospects of Success +2 more

Case Brief

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Parties

De Costi Seafoods (Franchises) Pty Limited

First Plaintiff/first Cross Defendant/applicant on Notice of Motion Filed 5 August 2013

De Costi Seafoods (Holdings) Pty Limited

Second Plaintiff/fifth Cross Defendant/applicant on Notice of Motion Filed 5 August 2013

Serge Wachtenheim

First Defendant/first Cross Claimant/first Respondent to Ms Thomson's Notice of Motion

Deist Safety Equipment Australia Pty Ltd

Second Defendant/second Cross Claimant/second Respondent to Ms Thomson's Notice of Motion

Frank Theodore

Second Cross Defendant

George Costi

Fourth Cross Defendant/applicant on Notice of Motion Filed 5 August 2013

Androulla Costi

Seventh Cross Defendant/applicant on Notice of Motion Filed 5 August 2013

Leonardo Muriniti

Respondent to De Costi's Notice of Motion/third Respondent to Ms Thomson's Notice of Motion

Robert Newell

Respondent to De Costi's Notice of Motion/fourth Respondent to Ms Thomson's Notice of Motion

Louise Thomson, Trustee of the Bankrupt Estate of Barry David Shnider, the Sixth Cross Defendant

Applicant on Notice of Motion Filed 14 October 2013

Procedural Posture

Civil / Post Trial Applications for Indemnity Costs and Related Orders Following Dismissal of Cross Claims; Determination of Preliminary Questions Under Legal Profession Act 2004 S 349

Legal Issues

  1. 1 Whether orders made in absence of a party should be set aside for lack of notice or statutory non-compliance
  2. 2 Whether claims against certain parties had reasonable prospects of success within the meaning of Legal Profession Act 2004 s 349
  3. 3 Whether further or indemnity costs should be awarded, including orders against legal practitioners

Ratio Decidendi

The Court dismissed the application to set aside the prior costs order because the Official Trustee had notice and declined participation, there was no procedural or substantive injustice, and the making of the order did not breach s 58(3) of the Bankruptcy Act 1966 (Cth) as it was not a fresh step by a creditor in respect of a provable debt. On the application under Legal Profession Act 2004 s 349, the Court found that, with the exception of the claim against Androulla Costi, the evidence at trial did not preclude a reasonable belief in the reasonable prospects of success—the claims generally failed due to adverse credit but were arguable. In respect of Androulla Costi, the Court found...

Court Disposition

Application for orders in paragraphs 1 to 3 of Ms Thomson's notice of motion dismissed. No finding under s 349(1) LPA that claims by Wachtenheim and Deist against Frank Theodore, De Costi companies or George Costi lacked reasonable prospects; finding made that there was no reasonable prospect as to Androulla Costi;...

Orders

  • Dismiss the application for the orders sought in paragraphs 1 to 3 of Ms Thomson's notice of motion.
  • Note that I do not find under s 349(1) of the Legal Profession Act 2004 that the facts established by the evidence at trial do not form a basis for a reasonable belief that the claim by Serge Wachtenheim and Deist Safety Equipment Australia Pty Ltd against Frank Theodore, De Costi Seafoods (Franchises) Pty Limited,...