Indemnity certificate – application for – relevant discretionary considerations

Gregg Lawyers Pty Ltd & Anor v Viki Maree Farrar (Formerly Sweeney) (No.2) [2016] QDC 57

In this matter, on 10 March 2016 the client was ordered to pay the costs of the lawyers of and incidental to the application filed by the solicitors to review the costs assessment. The client subsequently applied for an indemnity certificate under s 15(2) Appeal Costs Fund Act 1973.

Judge C.F. Wall QC accepted that the Court could grant an indemnity certificate in this type of matter: Paroz v Clifford Gouldson Lawyers [2014] QDC 125 at [45]- [65]. It was noted that the grant of an indemnity certificate is discretionary and is dependent on the application succeeding on a question of law. There were two relevant considerations (at [3]):

1. Whether the submissions or arguments on the review application were reasonably advanced or were

fairly arguable including the extent to which the respondent was unsuccessful on other issues raised

by her?

2. Whether there was any proper basis for the decision of the costs assessor or if not, did the

respondent lead the costs assessor into error or whether the respondent’s conduct and submissions

contributed to the error/s of law made by the costs assessor, including any failure to give adequate

reasons?

The issues of law included whether the barrister was required to disclose a change in the estimated legal fees (s 315 Legal Profession Act 2007), the consequences of failure to disclose as soon as practicable (s 340), directors fees (s 342) and the inadequacy of the costs assessor’s reasons. All other issues were questions of fact and the client failed on all but two of those issues. The client failed on the first three issues of law. It was the judge’s view that “the arguments and submissions advanced by the client on each of the issues of law contributed to the inadequate reasoning of the costs assessor. His reasons were inadequate because to a large extent they made no sense and that was in no small way contributed to by the arguments and contentions advanced by the client.” (at [4]).

The client disputed that the costs assessor’s reasons were inadequate at the review hearing which was not the judge’s view, and on appeal to the Court of Appeal the client unsuccessfully argued that the reasons were adequate.

The judge agreed that the client was “relevantly at fault” because she induced the costs assessor to make errors of law by the case she advanced to him (at [7]). It was found that a certificate could only be contemplated to cover all of the costs of the hearing, not part of the costs, and accordingly, the application for an indemnity certificate was refused.