NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838

NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838

The Respondents' (solicitors) failure to disclose that Mr Corry was secretly monitoring the Applicants' review of their confidential documents via system alerts amounted to serious incompetence within s 99 of the Civil Procedure Act 2005 (NSW), as it was a significant failure to meet their professional obligations as legal practitioners and officers of the court. This failure caused the Applicants to incur wasted costs in investigating the source of the disruption, warranting an order that Respondents indemnify the Applicants for those wasted costs. Other conduct did not meet the requisite threshold.

Parties
First Applicant: NHB Enterprises Pty Ltd; Second Applicant: Finn Pharmaceuticals Pty Ltd; First Respondent: George Gerges; Second Respondent: Christopher Athanassios
Jurisdiction
Australia
Judgment Date
17 December 2020
Procedural Posture
Application for Wasted Costs Order Against Solicitors Under S 99 Civil Procedure Act 2005 (nsw) / Post Settlement, Costs Application Following Finalisation of Main Proceedings
Outcome
Application granted in part. Respondents ordered to indemnify Applicants for wasted costs in the fixed sum of $70,000, payable forthwith. Directions made for further written submissions on costs.
Legal Topics
Wasted Costs Orders Against Solicitors, Professional and Ethical Obligations, Discovery Abuse, Solicitor Duties to the Court, Serious Incompetence, Interpretation of Court Orders
Legal Profession Civil Procedure Costs Wasted Costs Orders Against Solicitors Professional and Ethical Obligations Discovery Abuse Solicitor Duties to the Court Serious Incompetence +1 more

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Parties

NHB Enterprises Pty Ltd

First Applicant

Finn Pharmaceuticals Pty Ltd

Second Applicant

George Gerges

First Respondent

Christopher Athanassios

Second Respondent

Procedural Posture

Application for Wasted Costs Order Against Solicitors Under S 99 Civil Procedure Act 2005 (nsw) / Post Settlement, Costs Application Following Finalisation of Main Proceedings

Legal Issues

  1. 1 Whether the conduct of the Respondents (solicitors) amounted to serious incompetence or serious neglect within the meaning of s 99 Civil Procedure Act 2005 (NSW) so as to warrant a personal costs order;
  2. 2 Whether Respondents failed in their professional or ethical obligations by not disclosing certain conduct, including monitoring of Applicants' document review;
  3. 3 Whether Applicants incurred wasted costs due to Respondents' failure.

Ratio Decidendi

The Respondents' (solicitors) failure to disclose that Mr Corry was secretly monitoring the Applicants' review of their confidential documents via system alerts amounted to serious incompetence within s 99 of the Civil Procedure Act 2005 (NSW), as it was a significant failure to meet their professional obligations as legal practitioners and officers of the court. This failure caused the Applicants to incur wasted costs in investigating the source of the disruption, warranting an order that Respondents indemnify the Applicants for those wasted costs. Other conduct did not meet the requisite threshold.

Court Disposition

Application granted in part. Respondents ordered to indemnify Applicants for wasted costs in the fixed sum of $70,000, payable forthwith. Directions made for further written submissions on costs.

Orders

  • Pursuant to s 99 and s 98(4)(c) of the Civil Procedure Act 2005 (NSW), Respondents to indemnify Applicants for wasted costs in the fixed sum of $70,000, payable forthwith.
  • Parties to file brief written submissions within 7 days on the question of costs, with a view to dealing with costs on the papers if possible.