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Cost dispute rises 10 years later

Charles Galayini | Tuesday, September 11, 2018
Cost dispute rises 10 years later

The recent decision in the Sydney District Court of Bennie v Grace (2018) NSWDC 229 highlights the financial strain created by cost disputes.

The Defendant solicitor, Grace, provided legal services to the Plaintiff, Bennie, from 1999 to 2009 when he represented Bennie in a dispute with the State of NSW. The Plaintiff was a Police Officer who informed on another police officer who was engaged in criminal activities. In the 2009 proceedings the Plaintiff, after 10 long years, a 3-week trial and significant trauma, was awarded $2,236,408.00 plus costs from Hulme J.

The Plaintiff, Bennie, sought to have the costs assessed and the victory by Mr Grace began to be eroded. On 19th December 2015, more than 6 years later, a costs assessor reduced the total bill to $1,534,234.59 and Mr Grace was required to repay $186,141.00. The matter continued and Mr Grace brought proceedings in the Supreme Court of two main issues:

  1. Whether a stay of proceedings was warranted; and
  2. Whether security for costs was necessary.(See Grace v Bennie (2017) NSWSC 172 & Grace v Bennie (2018) NSWSC 813)

In each of the above proceedings, Grace was unsuccessful and ordered to pay costs.

Additionally, the District Court of NSW ordered judgement for the Plaintiff, Bennie, in the amount of $187,452.34 plus interest since 2009 plus costs. The true financial extent of this judgement is as follows:

  1. $187,452.34;
  2. Interest from 2009 to date at Supreme Court rates;
  3. Costs of two Supreme Court matters;
  4. Costs of a full District Court matter;

Even a conservative total estimate of the above could potentially reach $500,000.00

The Defendant solicitor, who had retired from practice as of 2018, sought to raise a defence in the District Court that the Plaintiff, Bennie, was out of time pursuant to s63 Limitation Act NSW 1969. As can be seen from previous costs matters, Mr Grace faced two significant hurdles:

  1. He represented himself; and
  2. He tried to allege the client was out of time which rarely, if ever, succeeds where solicitors’ costs disputes are concerned.

Mr Grace clearly worked extremely hard in this case without remuneration for a period of 10 years, and successfully represented his client in difficult and arduous circumstances. The Defendant’s solicitors in the 2009 proceedings was the Crown Solicitors Office, commonly referred to as the ‘model litigant’ with limitless resources of the State of NSW to take every point, subpoena every possible document and spare no expense in defending the proceedings.

Had the Costs Cover product been available to Mr Grace prior to 2009 then there is the real possibility that some, if not all, of the above adverse results could have been significantly mitigated with independent specialist legal representation and a commercial conclusion in a timely manner.




Costs Cover