Amirbeaggi & 2 ors v Business in Focus

LEGISLATION CITED : (NSW) Legal Practitioners Act 1898, s 21 (NSW) Legal Profession Act 2004, ss 301, 302, 322(1), 322(2), 322(5), 326, 327, 355(b), 395A

Burbidge v Wolf [2008] NSWSC 60 Dodd v Gillis (1989) 16 NSWLR 623 CASES CITED : Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 Kamay v Miss X (1986) FLC 91-754 Koutsourais v Metledge & Associates [2004] NSWCA 313 Sharp v Dane (1903) 25 ALT 54; 9 ALR 155

Farshad Amirbeaggi (first plaintiff/first cross-defendant) Brenton Adrian Yates (second plaintiff/second cross-defendant) Yates Beaggi Lawyers Pty Ltd (third plaintiff/third cross-defendant) Business in Focus (Australia) Pty Ltd (first defendant/fourth cross-defendant) PARTIES : Welbon Building & Plumbing Pty Ltd (second defendant/first cross-claimant) Peter John Begley (third defendant/fifth cross-defendant) Paul Robert Wellard (fourth defendant/second cross-claimant) Hall Partners Pty Ltd (fifth defendant/sixth cross-defendant) Trevor Hall (sixth defendant/seventh cross-defendant)

COUNSEL : Mr B J Skinner (plaintiffs) Mr J A Raine (second, fourth defendants)

SOLICITORS : Yates Beaggi Lawyers (plaintiffs) Hall Partners (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

5882/07 Farshad Amirbeaggi & 2 ors v Business in Focus (Australia) Pty Ltd & 5 ors JUDGMENT (ex tempore) 1 HIS HONOUR: On or about 24 January 2006, the plaintiffs Farshad Amirbeaggi, Brenton Adrian Yates and Yates Beaggi Lawyers Pty Ltd, who together trade as the law firm Yates Beaggi, agreed to provide legal services to the defendants Business in Focus (Australia) Pty Ltd, Welbon Building and Plumbing Pty Limited, Peter John Begley and Paul Robert Wellard in connection with five matters. By about early November 2006, the plaintiffs, whom I shall call the solicitors, had rendered to the defendants, whom I shall call the clients, costs totalling $321,091 of which $120,587 had been paid, leaving a balance outstanding of $200,054. 2 On 16 November 2006, the solicitors and the clients executed a deed which recited the agreement to provide legal services in respect of the five matters; the rendering, part payment and outstanding balance of legal costs; that the clients wished to acknowledge the outstanding amount of $200,054 (called the debt) as a debt owed to the solicitors; and that the parties had agreed to enter into the deed to secure the payment obligations of the clients on the terms it contained. Relevantly the operative parts of the deed provided as follows: 1. Acknowledgement of Debt and Payment 1.1 The Client acknowledges that they are all jointly and severally liable and indebted to YBL for the debt. 1.2 The Client has agreed to pay YBL the debt (or any part of the debt which at that time remains outstanding) upon payment of the Begun Value to the Client by Michael Begun and Begun Property Pty Limited ("Begun"). The Begun Value is defined in clause 12.2 of the Venture Agreement entered into between BIF, Welbon and others on or around August 2003 ("the Begun Value"). 1.3 The parties acknowledge that the Begun Value is in the process of being determined by a Court appointed valuer. 1.4 The Client authorises YBL to receive, and must do all things and sign all documents necessary to ensure that YBL receives, the Begun Value when paid by Begun and in this regard, the Client provides YBL with an irrevocable authority in the form of Annexure A to deduct from the Begun Value the debt (or any part of the debt which at that time remains outstanding) prior to the balance of Begun Value being released to the Client. 1.5 The Client further authorises YBL to distribute the Begun Value in the following order: (i) the debt (or any part of the debt which at that time remains outstanding) to YBL; and (ii) the balance of the Begun Value to be held on trust by YBL pending further direction from the Client. 2. Default and Power of Attorney 2.1 In default by the Client of any obligation contained in this deed, the Client irrevocably appoints YBL as their attorney, upon which YBL may: (a) in the name of the Client do all things and exercise all such rights necessary to carry into execution the matters contemplated in this deed; and (b) do all things which YBL may lawfully authorise an attorney to do in connection with this deed, or which in YBL's opinion is necessary or expedient to give effect to any right, power or remedy conferred upon YBL by this deed, by law or otherwise (including, without limitation, executing contracts and instituting, conducting and defending legal proceedings). 3. Release 3.1 In consideration for the payment provisions contained in the deed, YBL shall release and discharge the Client from all claims and liabilities of any nature relating to the debt. … 6. Bar to Further Proceedings & Consent to Judgment 6.1 This deed may be pleaded as a full and complete defence by any party to any actions, suits, costs assessment applications or proceedings commenced, continued or taken by another party or on its behalf in connection with any of the matters referred to in this deed. 6.2 The Client agrees that: (i) they will not defend or dispute any proceedings commenced by YBL for a breach of this deed or non-payment of the debt for whatever reason; (ii) they will immediately consent to default or other judgment being ordered against them, jointly and severally, in favour of YBL in the aggregate amount of: A. the debt, or that part of the debt which remains unpaid;

B. YBL's legal costs on any such proceedings, on an indemnity basis; (iii) YBL can rely on the provisions of this deed to evidence the indebtedness of the client to YBL. 6.3 Notwithstanding any termination of this deed, the provisions in this deed relating to payment of the debt and the right of YBL to enforce such payment and to rely on this deed do not merge on completion.

3 Despite this apparent resolution, there was a dispute between the clients and the solicitors as to payment in respect of further costs incurred or to be incurred after the date of the deed, as a result of which the solicitors ceased to act in or about December 2006. On or about 21 February 2007, the solicitors applied to the Manager, Cost Assessment for a practitioner-client assessment of costs, including the costs that were the subject of the deed, although seemingly also including some further costs additional to those referred to in the deed. The costs assessment proceedings remain pending and have not been concluded. 4 There were proceedings between the clients and a third party in the Supreme Court of Queensland in connection with the determination of the Begun Value referred to in the deed. For present purposes, the evidence establishes that despite clause 1.4 of the deed, the Begun Value was paid to the clients' present solicitors, Messrs Hall and Partners Pty Ltd, who are the fifth defendant in the proceedings, in or about October 2007. 5 By summons filed on 29 November 2007, the solicitors instituted these proceedings, claiming an order that the clients specifically perform clauses 1.2, 1.4 and 1.5 of the deed and forthwith pay or cause to be paid the amount of $200,054 from the trust account of Hall Partners to the trust account of the solicitors. Two of the defendants, Welbon Building and Mr Wellard, filed a cross-claim on 2 January 2008 claiming, inter alia, orders staying the costs assessment proceedings until the solicitors had complied with certain directions of the costs assessor, a stay of the instant proceedings until the costs had been assessed in the costs assessment proceedings, an order setting aside the deed, and damages (apparently for allegedly wrongful assertion of a lien and/or breach of confidence). On 1 February 2008, the solicitors filed a motion seeking orders summarily dismissing or striking out the cross-claim, or alternatively requiring it to be verified, and summary judgment on the claim in their summons. By a motion filed on 18 February 2008, Welbon Building and Mr Wellard, whom I shall call the active defendants, seek orders summarily dismissing the summons and leave to file an amended cross-claim. Application for leave to amend cross-claim 6 It is convenient to deal first with the application for leave to file an amended cross-claim. The proposed amended cross-claim claims damages for wrongful detention of property of the cross-claimants, that property being the file and documents retained by the solicitors in purported exercise of their retaining lien, together with exemplary and aggravated damages for the same matter. In short, the cross-claim alleges that, properly construed, the deed released the debt, or at least had the effect that the only security for it was to be the entitlement to receive payment from the Begun Value when received, and that the solicitors were not entitled in those circumstances to assert a lien; and that by wrongly asserting a lien, they inhibited the clients' conduct of the proceedings in the Supreme Court of Queensland, with the consequence that the clients obtained a significantly inferior result in those proceedings to that which they ought, had they not been not so inhibited. The claim for exemplary and aggravated damages involves the assertion that the acts of wrongful detention were done by the solicitors deliberately in disregard of the rights of the clients and with the knowledge that they would cause distress and anguish to the clients. 7 Three grounds were advanced in support of the submission that leave to amend the cross-claim should be refused. The first was that exemplary damages and aggravated damages are not available in equity, for which proposition the judgment of the Court of Appeal in Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 was cited. However, that submission overlooks the circumstance that, although the claim is filed as a cross-claim in proceedings instituted in the Equity Division, it is in fact not an equitable claim at all, but a claim for damages at common law for wrongful detention of property, in respect of which aggravated and exemplary damages may in an appropriate case be awarded. 8 The second basis upon which leave to amend was opposed was that not all parties to the deed were joined to the cross-claim. This submission is wrong in fact. Although only Welbon Building and Mr Wellard are cross-claimants, the other parties to the deed, namely Business in Focus and Mr Begley, have been joined as additional cross-defendants, as well as the solicitors. And even if the submission were not wrong in fact, there would be no requirement that the other parties to the deed be joined in circumstances where the cross-claim is not one to enforce the deed or to have it declared void, but one for damages for wrongful detention of property, in which the deed is merely an incidental though relevant matter. 9 Thirdly, it was objected that the proposed amended cross-claim had not been verified. That objection is correct, but any leave to file it will be subject to appropriate verification before it is filed. 10 Accordingly, all the objections fail. I will give leave to the cross-claimants to amend the cross-claim by filing a document, in the form of that entitled "Amended Cross-Claim" initialled by me, dated this day and placed with the papers, subject to verification. Applications for summary judgment and dismissal 11 I turn then to the claim for summary judgment on the solicitors' claim and the counter-veiling claim for summary dismissal, the arguments on each being for the most part the mirror-image of those on the other. I accept, as Mr B J Skinner for the solicitors submitted, that the pendency of the cross-claim is no obstacle to giving summary judgment on the claim: it is open to the Court to give summary judgment on the claim, leaving the cross-claim to be determined, and in those circumstances the Court, as a matter of discretion, may or may not stay enforcement of the judgment on the claim pending determination of the cross-claim. 12 I also accept for present purposes - as the evidence before me establishes, apparently uncontroversially - that the Begun Value has been paid. Thus, insofar as the obligation, imposed by clause 1.2 of the deed, to pay the debt, was conditioned "upon payment of the Begun Value to the client", I proceed on the basis that that condition has been satisfied. 13 Uniform Civil Procedure Rules, rule 13.1, provides that if on application by the plaintiff in relation to the plaintiff's claim for relief, there is evidence of the facts on which the claim or part of the claim is based, and there is evidence given by the plaintiff or some responsible person that "in the belief of the person giving the evidence, the defendant has no defence to the claim or no defence except as to the amount of any damages claimed", the Court may give such judgment for the plaintiff or make such order on the claim as the case requires. In his affidavit sworn in support of the application on 1 February 2008, Mr Amirbeaggi deposes: Upon the basis of the materials available to me, the defendants do not have any or any bona fide defence to the claims made by the plaintiffs in the proceedings.

14 In my view that deposition does not satisfy the requirements of rule 13.1, which requires the deponent to swear to a belief simpliciter that the defendant has no defence to the claim. The requirement of the rule is not satisfied by an opinion conditioned by being limited to the basis of materials available to the deponent, nor does it distinguish a bona fide defence from a defence. An applicant for summary must swear: "I believe the defendant has no defence." The rule is in the form in which it is for the very good reason to require applicants for summary judgment to give close consideration to all the possibilities, and to take great care, before swearing to an affidavit in support of such an application. 15 For that reason, no attempt having been made to adduce any further evidence, it seems to me that the application for summary judgment must fail in any event. But as I need to consider the application for summary dismissal also, I will deal with it on the merits. 16 The proceedings were commenced by summons, so that it is not open to say from the absence of a pleaded defence that no defence has been raised. For the defendants, Mr Raine identified, in short, four bases on which summary judgment should be refused, the last two of which also are invoked in support of his claim for summary dismissal. 17 The first is the point to which I have already adverted, that the formal evidentiary requirements of an application for summary judgment are not satisfied. As I have already indicated, I would accept that submission, but I will in any event deal with the case on the merits. 18 The second was that one could not discount the possibility that other defences, not yet articulated, might be raised. Given that the defendants must be taken to have been on notice for some time that this was an application for summary judgment, one would have thought that they would have been in a position to formulate any such defence and indicate what it might be in response to the application, even if they were not in a position to adduce evidence to establish it. At various points, in the earlier form of the cross-claim, the possibility of defences of undue influence and misrepresentation in connection with the clients' exemption of the deed were mentioned. It was not submitted before me that these were triable defences which do not appear in the amended cross-claim. In those circumstances, I would not be inclined to refuse an application for summary judgment on the speculative basis that the possibility that some defence not yet contemplated might emerge in the future. 19 However, the third and fourth propositions require much closer consideration: the third was that the deed was invalid by operation of (NSW) Legal Profession Act 2004, s 327, and the fourth was that the proceedings were an abuse of process by operation of Legal Profession Act, s 355(b). 20 Legal Profession Act, s 302, defines a costs agreement to mean "an agreement about the payment of legal costs". Section 4 defines "legal costs" to mean "amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements but not including interest".

21 The making of costs agreements between a client and a law practice is provided for by s 322(1). Section 322(2) requires that a costs agreement must be written or evidenced in writing, and subsection (5) provides: Except as provided by s 395A, a costs agreement cannot provide that the legal costs to which it relates are not subject to costs assessment under Division 11.

22 A note subscribed in the Act to s 322(5) records: If it attempts to do so, the costs agreement will be void - see s 327(1).

23 Section 326 provides: Subject to this Division and Division 11, a costs agreement may be enforced in the same way as any other contract.

24 Subsection 327(1) - referred to in the above-mentioned note to s 322(5) - provides: A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void.

25 The practical significance of a costs agreement is that, unless set aside (which it may be inter alia by a costs assessor under s 328), on a practitioner-client assessment, costs that are subject to a costs agreement must be assessed by reference to the provisions of the agreement [s 361(1)]. 26 Division 11 deals with and provides for costs assessment by assessors. Section 395A is entitled "Contracting Out of the Division By Sophisticated Clients" and provides: A sophisticated client of a law practice ... may contract out of this Division.

27 The recitals to the deed make clear that the debt the subject of the deed is a debt for legal costs within that term as defined in the Act - namely, costs which a party has been charged in connection with proceedings or in connection with the rendering of legal services. The deed then makes provision for how that debt will be paid. It seems to me quite clear that the deed is, within the terms of s 302, an agreement about the payment of legal costs. Essentially, it provides that the legal costs rendered to that point will be paid upon payment of the Begun Value to the client. In my opinion, the deed is a costs agreement as defined. 28 Clause 6.1 of the agreement purports to provide that the deed may be pleaded as a full and complete defence to any costs assessment application. In that respect it purports to bar proceedings for costs assessment in respect of the costs which are the subject of the deed. It therefore has the effect of providing that the legal costs to which it relates are not subject to costs assessment under Division 11, in contravention of s 322(5). It follows that the deed, being a costs agreement, is void pursuant to s 327(1), it not being suggested that the clients or any of them fall within the definition of sophisticated client in the Act. 29 Although it has not expressly been raised in argument, I have given consideration to a line of authority to the effect that a party may waive its right to assessment of a bill of costs by a deliberate informed decision. In Kamay v Miss X (1986) FLC ¶91-754, Treyvaud J in the Family Court of Australia, following a judgment of Holroyd J, in the Supreme Court of Victoria, in Sharp v Dane (1903) 25 ALT 54; 9 ALR 155, held that the then Order 38 of the Family Law Rules - which provided for the taxation of solicitor-client costs in Family Law proceedings and for costs agreements between solicitors and clients - did not infringe the common law right of the solicitor and the client to avoid the provisions of the order, including by waiving its operation. His Honour held that a client may waive the right to receive a detailed bill of costs by an intentional act with knowledge, and found that that was what had happened in the case before him, concluding (at 75,502): I hold, as a matter of law, that the wife was entitled to waive the operation of the provisions of Order 38 to the accounts for costs rendered by Miss X. I find that the wife here waived her rights, contained in Order 38 Rule 20, to seek to dispute Ms X's accounts for costs; that she did so with full knowledge of her rights, which had been explained to her by the persons, other than Miss X, to whom this judgment makes reference; that in reliance upon the waiver, Miss X acted in later proceedings for the wife. Accordingly, I hold that the wife is no longer entitled to dispute the two accounts for costs, the subject of these proceedings.

30 In this Court, Yeldham J reached a similar conclusion in Dodd v Gillis (1989) 16 NSWLR 623. The (NSW) Legal Practitioners Act 1898, s 21, provided: No solicitor shall commence or maintain any action or suit for the recovery of any fees, charges or disbursements for any business done by such solicitor until the expiration of one month after a bill of such fees signed by the solicitor had been delivered to the party charged.

31 His Honour held that a solicitor may nonetheless sue without complying with s 21 where the client had expressly waived the protection given to him by that section, and that that had happened in circumstances where lump sum bills were delivered followed by accounts stated, which were acknowledged by the client as reasonable and as due and payable. His Honour further held, albeit obiter, that a solicitor may sue for his fees charges and disbursements without complying with s 21 where there was a legally binding contract between the solicitor and the client whereby the client had agreed to pay a lump sum for work done or to be done. In reaching that conclusion, his Honour referred to passages in Saddington's, Legal Practitioners Act 1898-1936 (1937), to the effect that all these provisions were "in favour of and for the benefit of the client", and could therefore be waived by the client. His Honour concluded (at 627): In my opinion the principles which emerge from the cases I have mentioned and from the books by Saddington make it clear that a client may expressly waive the protection given to him by the Legal Practitioners Act , s 121, subject always to other rights which he has under Pt V and in particular s 29 to which reference has been made.

32 The cases to which I have referred were not decided under Legal Profession Act 2004. Part 3.2 of that Act, entitled "Costs Disclosure and Assessment", commences with s 301, which provides that the purposes of the Part include to provide a mechanism for the assessment of legal costs and the setting aside of certain costs agreements, and to regulate the billing of costs for legal services. Unlike the provisions of the Family Law Rules to which Treyvaud J referred in Kamay v Miss X, s 322(5) discloses a plain intention that the right to costs assessment is one which cannot be excluded by a costs agreement, except in the case of a sophisticated client. That impression is reinforced by s 395A - providing, in effect, that only a sophisticated client can contract out of the right to costs assessment under Division 11. Whatever was the position under the earlier legislation with which Kamay v Miss X and Dodd v Gillis were concerned, under the present Act, it is not open to a solicitor and client (other than a sophisticated client) to contract out of or to waive the right to costs assessment. 33 Accordingly, in my view, Mr Raine's third submission succeeds. 34 As to the fourth submission, Legal Profession Act, s 355(b), provides: If an application for costs assessment is made in accordance with this Division: (a) … (b) the law practice must not commence or maintain any proceedings to recover the legal costs until the costs assessment has been completed.

35 It is noteworthy that it was the solicitors who themselves instituted the costs assessment proceedings in February 2007. Accordingly, if the present proceedings are correctly characterised as "proceedings to recover the legal costs", the solicitors were not entitled to commence them and are not entitled to maintain them. The question is whether these are proceedings to recover legal costs. For the solicitors, Mr Skinner submits that the proceedings are to recover a debt under the deed, and not to recover legal costs. 36 In Koutsourais v Metledge & Associates [2004] NSWCA 313, a solicitor had claimed costs against two clients, one of them a corporation, of some $21,255, about half of which had been paid, leaving in excess of $9,000 outstanding. It was accepted that some of the outstanding amount was properly attributable to each of the clients in proportions not identified. The solicitor served statutory demands on the corporate client, and in consideration of not proceeding on those demands, the solicitor and the clients compromised the claim on the basis of an instalment arrangement, which provided that in default of payment of any instalment, the whole amount would immediately be payable by the corporate client. Default was made, and the solicitor sued on the instalment agreement for the whole amount payable. Hodgson JA said: [9] So the question is, did this accord and satisfaction mean that proceedings to enforce it were not proceedings for the recovery of costs. In my opinion, this accord and satisfaction was insufficient to have that effect, for these reasons. First, the amount to be paid was still the precise amount claimed for costs. Second, the entity identified as liable for the whole was one of two entities which were together previously liable for the whole of the costs, albeit in undetermined shares. In my view, in substance it was still the recovery of costs that was being sought in the proceedings.

[10] In my opinion, this case is distinguishable from Connolly Suthers v Frost [1995] 2 Qd R 117. In that case, it was conceded that the Queensland equivalent of s 192 had no application. This is understandable, where the contract sued upon was twice removed from the contract pursuant to which the solicitor became entitled to costs; and the contract actually sued on was a compromise of litigation that had actually been commenced.

[11] In my opinion, factors which would tend to make proceedings ultimately based, at least in part, on a lawyer's entitlement to costs, other than proceedings for recovery of costs, would include: a compromise of previous legal proceedings; a compromise involving other matters as well as costs; a compromise accepting in respect of costs a substantially lesser sum; and legal advice to the client at the time of the compromise. Each and all of these factors would in my opinion tend towards changing the character of proceedings based on the compromise from being proceedings for the recovery of costs. None of these factors was present in this case.

37 In Burbidge v Wolf [2008] NSWSC 60, a barrister brought proceedings for the recovery of money on the bases of trust, restitution or unconscionability. The client contended that they were nonetheless proceedings for recovery of costs, which the barrister could not sustain in the absence of disclosure in accordance with the Act. Nicholas J said: [37] In Koutsourais v Metledge & Associates [2004] NSWCA 313, para 4 and para 9, Hodgson JA (Beazley, Bryson JJA agreeing) held that the task for the court is to determine whether the proceedings amount in substance to proceedings for the recovery of costs by a (barrister or) solicitor. His opinion was that this is a question concerning the sufficiency of the connection between the legal costs and the proceedings, which sometimes will be a difficult one of degree. Alternatively, the question may be posed: can it be said that the proceedings are not proceedings for the recovery of costs?

38 Later, his Honour said: [41] The scope of the statutory immunity of a person under s 182(2) and s 192(1) extends to all proceedings which are, in substance, proceedings for the recovery of costs. It follows that if the proceedings are of such kind, the immunity operates irrespective of the nature of the cause of action upon which the claim is based, or of the form of relief sought. In Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 par 150, Basten JA said that in such proceedings recovery cannot arise without compliance with the statutory scheme. He continued: … Section 192 … deals not with the entitlement, but the right to take proceedings for recovery of costs. As noted above, in the absence of disclosure, there is no right in a lawyer to recover, and no obligation of a client to pay, costs, absent assessment: s 182(1).

[42] Accordingly, it does not seem to me that the plaintiff can circumvent the immunity by claiming that the defendant's liability to pay his fees arose under a trust, or that, in the circumstances, it was unconscionable for her to refuse to pay.

39 These cases establish that the test is whether, however they might be framed, the proceedings are in substance proceedings for the recovery of costs by a lawyer. That requires examination of the connection between the legal costs and the proceedings, which may be a question of degree and sometimes a difficult one. As Nicholas J put it, however, the answer may be informed by reversing the question: Can it be said that the proceedings are not proceedings for the recovery of costs?

40 As his Honour also pointed out, the immunity from a suit for recovery of legal costs cannot be circumvented by framing the proceedings as proceedings arising under a trust or for restitution. 41 In Koutsourais, Hodgson JA helpfully identified factors which pointed one way and the other. Significant considerations in favour of the conclusion that, despite the accord and satisfaction represented by the instalment agreement, the proceedings were still for the recovery of costs, included (1) that the amount to be paid was still the precise amount claimed for costs, and (2) that the entity identified as liable for the whole was one of two entities together previously liable for the whole of the costs, albeit in undetermined shares. Those two factors are present in the instant case: the amount claimed under the deed is the precise amount of the legal costs outstanding as at the date of the deed; and the parties against whom it is claimed are the parties who were previously liable for those costs. 42 None of the factors which his Honour identified as potentially rendering a proceeding ultimately based on a lawyer's entitlement to costs as one other than a proceeding for recovery of costs are present: there has been no compromise of previous legal proceedings in respect of those costs, let alone one involving other matters as well as costs; there has been no acceptance in respect of costs of a substantially lesser sum; and, although there is reference in the agreement to an opportunity to obtain legal advice, there is no evidence that legal advice was in fact obtained at the time of the deed. 43 I am clearly of the view that these proceedings are proceedings for the recovery of costs. It follows that, assessment proceedings being on foot, the solicitors were not entitled to commence these proceedings and are not entitled to maintain them. Mr Raine's fourth submission succeeds. 44 For the foregoing reasons, it seems to me not only that, even if the formal requirements for an application for summary judgment had been met, the plaintiff would not have been entitled to summary judgment, but that the plaintiffs' case cannot possibly succeed. It follows that the defendants are entitled to have the proceedings summarily dismissed. 45 Accordingly, my orders are:

1. Order that the plaintiffs' notice of motion filed on 1 February 2008 be dismissed. 2. On the defendants' notice of motion filed 18 February 2008, order that the summons be dismissed. 3. Grant leave to the defendants to amend their cross-claim by filing an amended cross-claim in the form initialled by me, dated this day and placed with the papers, subject to that cross-claim first being verified. 4. Order that the plaintiffs pay the defendants' costs of the proceedings, including of the motions. 5. Order that the plaintiffs' notice of motion filed on 7 March 2008 be dismissed with costs. [Counsel addressed on costs]

46 More than once, I have indicated that I think nowadays applications for indemnity costs are too frequently made on insufficient grounds. This however is not such a case. 47 First, at 12.40pm on Friday 1 February, shortly prior to the filing of the plaintiffs' motion for summary judgment, the defendants made an offer, expressed to be without prejudice as to costs, that they would consent to order 2 in the summons, with the summons to be otherwise dismissed with no order as to costs. The effect of that offer, if accepted, would have been to provide the plaintiffs with, in substance, all that they sought in the proceedings (being the outstanding debt). Plainly, it was a much more advantageous result for the plaintiffs than has ultimately ensued. 48 Secondly, an indemnity costs order will be made where the proceedings are such that properly advised, the unsuccessful party ought never have brought or maintained or resisted the proceedings. In that respect, the test is very similar to that which applies on an application for summary judgment. I have, of course, been satisfied on the defendants' application for summary dismissal that this case is liable to be summarily dismissed. 49 The terms of the offer are such that on that account alone I would make an indemnity costs order. It suffices to say that the circumstances in which the proceedings have been dismissed simply reinforces that conclusion. 50 I order that the costs payable by the plaintiffs to the defendants under my previous orders be assessed on the indemnity basis. **********

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