I posted a few days ago about the differences between the Victorian and NSW regimes for ordering costs against solicitors personally.
In Deputy Commissioner of Taxation v Rollason  NSWSC 1032, the defendant consented to judgment with costs at trial having advised the Commissioner’s solicitors more than a month beforehand, confirmed 3 days beforehand, that the matter was unlikely to be defended. There was accordingly non-compliance with the pre-trial directions. The Court was in the dark about what was going on. Justice Gzell said the proper course in the circumstances would have been to apply to vary the pre-trial directions or seek the stay of the proceedings. The Court was inconvenienced in arranging its business. Justice Gzell required the defendant’s barrister and solicitor to show cause why they should not pay the costs thrown away by virtue of their non-compliance with the orders personally.
The defendant waived legal professional privilege to allow the barrister and solicitor to depose to the circumstances of the non-compliance, which included that the defendant and the Commissioner were occupied in concurrent litigation in another tribunal. They apologised to the Court. The defendant deposed that the solicitor’s and barrister’s defaults had not increased the costs payable to the plaintiff.
The judge acknowledged that great caution is called for in these kinds of cases:
“10 The provision has been considered, recently, by the Court of Appeal. In Re The Black Stump Enterprises Pty Ltd and Associated Companies (No 2)  NSWCA 60, Young CJ in Eq, who gave the judgment of the court, referred to Ridehalgh v Horsefield  Ch 205 at 229 and Lemoto v Able Technical Pty Ltd  NSWCA 153 at  where it was said that the jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised with care and discretion and only in clear cases.
11 Reference was also made to similar propositions stated in White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR at 169 and at 239 and in Steindl Nominees Pty Ltd v Laghaifar  2 Qd R 683 at 689″
This case was decided by reference to Civil Procedure Act 2005, s 99 which says:
“99 Liability of legal practitioner for unnecessary costs
(1) This section applies if it appears to the court that costs have been incurred:
(a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or
(b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible.
(2) After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following:
(a) it may, by order, disallow the whole or any part of the costs in the proceedings:
(i) in the case of a barrister, as between the barrister and the instructing solicitor, or as between the barrister and the client, as the case requires, or
(ii) in the case of a solicitor, as between the solicitor and the client,
(b) it may, by order, direct the legal practitioner:
(i) in the case of a barrister, to pay to the instructing solicitor or client, or both, the whole or any part of any costs that the instructing solicitor or client, or both, have been ordered to pay to any other person, whether or not the solicitor or client has paid those costs, or
(ii) in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs,
(c) it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party.
(3) Before making such an order, the court may refer the matter to a costs assessor (within the meaning of Part 3.2 of the Legal Profession Act 2004 ) for inquiry and report.
(4) The court may direct that notice of any proceedings or order under this section with respect to a legal practitioner be given:
(a) in the case of a barrister, to the instructing solicitor or client, or both, as the court may direct, or
(b) in the case of a solicitor, to the client.
(5) The court may give ancillary directions to give full effect to an order under this section, including directions to a legal practitioner to provide a bill of costs in assessable form:
(a) to the court, or
(b) to a party to the proceedings, or
(c) in the case of a barrister, to the instructing solicitor or client, or both, or
(d) in the case of a solicitor, to the client.
(6) A party’s legal practitioner is not entitled to demand, recover or accept:
(a) in the case of a barrister, from the instructing solicitor or client, or
(b) in the case of a solicitor, from the client,
any part of the amount for which the legal practitioner is directed by the court to indemnify any party pursuant to an order referred to in subsection (2) (c).
(7) In this section, “client” includes former client.”