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Updated Case Notes

Charles Galayini | Wednesday, September 26, 2018
Updated Case Notes

We recently posted an article on 11 September 2018 titled “Costs Dispute rises 10 years later”. The lawyers who acted for Mr Bennie have provided some additional insights into the circumstances of the matter. We have shared these interesting insights exemplifying the financial strain created by Cost Disputes.

The Defendant solicitor, Grace, provided legal services to the Plaintiff, Mr 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. Prior to the party/party costs being resolved with State, Mr Grace was paid his costs in full from Mr Bennie’s judgment.

The Plaintiff, Bennie, sought to have the costs assessed. Mr Bennie filed an application for assessment of client/practitioner costs in March 2011 which was not finally determined until December 2015. On 19th December 2015, more than 6 years after the winning the case for Mr Bennie, a costs assessor reduced the total bill to $1,534,234.59. Mr Grace was required to repay the amount of some $186,000.00 following the issue of a certificate of determination of a costs assessor under section 208J(2) of the Legal Profession Act 1987, and interest from the date of the issue of the certificate of determination being 6 January 2016. During the District Court proceedings, the Defendant solicitor sought to raise a defence that the Plaintiff, Bennie, was out of time pursuant to section 63 of the 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.

The matter continued and Mr Grace brought proceedings in the Supreme Court, following the issue of the costs assessors certificates in January 2016, appealing to the Supreme Court from the determination of a costs assessor/review panel of client/practitioner costs. Mr Grace commenced numerous actions in relation to the costs assessment and on the third occasion, Mr Bennie successfully sought security for the costs of the Supreme Court appeal in March 2017 (Grace v Bennie [2017] NSWSC 172).

Unfortunately, Mr Bennie did not pay the $10,000 security and the matter was relisted by Harrison AJ. On 31 May 2018 Mr Grace’s appeal was dismissed and it was confirmed that his Practicing Certificate was ‘withdrawn’ by the Law Society following the judgment of Harrison AJ in March 2017 (Grace v Bennie (No 2) [2018] NSWSC 831). In each of the above proceedings, Grace was ordered to pay costs.

When considering that Mr Grace had the assistance of a costs consultant during the costs assessment process and instructed Counsel in some of the earlier appeals at his own expense, the financial burden of this costs dispute could conservatively reach $500,000.00 when totalling the judgement debt with interest, the Supreme Court appeals and the full District Court matter. Significant emotional distress also resulted from the proceedings, including the withdrawal of his practicing certificate, in addition to the financial burden.

Mr Grace worked hard in this case without remuneration for a period of 10 years and successfully represented his client in difficult 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, 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