De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor (No 6) [2016] NSWDC 378

Mr Newell and Mr Muriniti failed to displace the statutory presumption under s 349 Legal Profession Act 2004 that services in the action against Mrs Costi lacked reasonable prospects of success, and there was evidence of serious misconduct, serious neglect, and incompetence under s 99 Civil Procedure Act 2005, causing a significant proportion of the applicants' costs; therefore, they must indemnify the applicants for 50% of their costs payable up to the conclusion of trial.

Parties: First Plaintiff/first Cross Defendant/applicant: De Costi Seafoods (Franchises) Pty Limited; Second Plaintiff/fifth Cross Defendant/applicant: De Costi Seafoods (Holdings) Pty Limited; First Defendant/first Cross Claimant: Serge Wachtenheim; Second Defendant/second Cross Claimant: Deist Safety Equipment Australia Pty Ltd; Second Cross Defendant/applicant: Frank Theodore; Fourth Cross Defendant/applicant: George Costi; Seventh Cross Defendant/applicant: Androulla (Andrea) Costi; First Respondent to Amended Notice of Motion: Robert Newell; Second Respondent to Amended Notice of Motion: Leonardo Muriniti
Jurisdiction: Australia
Judgment Date: 16 December 2016
Procedural Posture: Civil / Costs Application After Trial
Outcome: Practitioners ordered to indemnify applicants for 50% of their costs up to close of trial; costs of application and interest reserved.
Legal Topics: Costs Orders Against Practitioners, Reasonable Prospects of Success, Serious Neglect/incompetence/misconduct, Liability of Practitioners for Costs

Civil Procedure Legal Profession Costs Orders Against Practitioners Reasonable Prospects of Success Serious Neglect/incompetence/misconduct Liability of Practitioners for Costs

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Parties

De Costi Seafoods (Franchises) Pty Limited

First Plaintiff/first Cross Defendant/applicant

De Costi Seafoods (Holdings) Pty Limited

Second Plaintiff/fifth Cross Defendant/applicant

Serge Wachtenheim

First Defendant/first Cross Claimant

Deist Safety Equipment Australia Pty Ltd

Second Defendant/second Cross Claimant

Frank Theodore

Second Cross Defendant/applicant

George Costi

Fourth Cross Defendant/applicant

Androulla (Andrea) Costi

Seventh Cross Defendant/applicant

Robert Newell

First Respondent to Amended Notice of Motion

Leonardo Muriniti

Second Respondent to Amended Notice of Motion

Procedural Posture

Civil / Costs Application After Trial

Legal Issues

1 Whether legal services were provided without reasonable prospects of success (re Mrs Costi)
2 Whether serious neglect, serious incompetence, or serious misconduct by practitioners caused wasted costs
3 Whether the form and scope of costs orders sought are appropriate

Ratio Decidendi

Court Disposition

Practitioners ordered to indemnify applicants for 50% of their costs up to close of trial; costs of application and interest reserved.

Orders

Order Robert Newell and Leonardo Muriniti to indemnify the applicants against 50% of their costs payable in the proceedings up to the conclusion of the trial on 11 October 2012.
Reserve the questions of costs of the application and interest for further submissions on a date to be fixed.