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1. This proceeding concerned a dispute about encroachments on land owned by Philip Dimov (plaintiff), which he is seeking to develop. Essentially, the encroachments were concrete footings of neighbouring properties which were said to have crossed the boundary of the site into the plaintiff’s land. The plaintiff brought an action in trespass, alleging that the encroachments limited the number of units that could be developed on the land, causing him loss. The plaintiff sought injunctive relief against the owners of the neighbouring blocks, who were alleged to be responsible for the encroachments, namely: (a) the Owners, Units Plan 2225; and (b) the Owners, Units Plan 2204 (collectively, the defendants).

2. Neither the encroachments nor the trespass was admitted by the defendants. The matter was heard in May 2025 by Mossop J and judgment has now been delivered: Dimov v The Owners – Units Plan No 2225 (No 2) [2025] ACTSC 446 (Dimov (No 2)).

The costs application for determination

3. The application for determination concerns the costs thrown away by the adjournment of the substantive hearing and whether the plaintiff is entitled to recovery of those costs from his former solicitors. The circumstances were that hearing was listed to commence on 15 April 2024.

4. By an application filed on 3 April 2024 and heard on 11 April 2024, the plaintiff sought to adjourn the hearing. The basis for the adjournment was said to be a failure of the plaintiff’s then solicitors to properly prepare the case.

5. That application was granted by Balla AJ on 12 April 2024. In adjourning the hearing, Balla AJ ordered that the plaintiff pay the defendants’ costs thrown away by the vacation of the hearing date forthwith and on an indemnity basis, with a further order requiring “the plaintiff’s legal advisers” to “file affidavits addressing whether they should personally pay the costs order made today by 10 May 2024”. That then caused a parting of ways between the plaintiff and his solicitors and brought about the subsequent application now before the court, which the plaintiff filed on 6 November 2024 (personal costs application).

6. The plaintiff seeks the following orders: (a) That the order made by Balla AJ that the plaintiff pay the defendants’ costs on an indemnity basis be vacated; (b) That the former solicitors pay the defendants’ costs thrown away by the vacation of the hearing date on an indemnity basis; (c) That the former solicitors not charge the plaintiff for any costs or disbursements associated with the vacation of the hearing (including the fees of counsel who appeared on that application); and (d) That the former solicitors pay the plaintiff’s costs associated with the application to vacate the hearing date of 15 April 2024 and the hearing on 27 November 2024.

7. The application named an individual, but it may be that the proper respondent was either the partnership or the corporate entity of which the individual was a principal lawyer. For dealing with the application, it suffices to refer to the respondent as the plaintiff’s former solicitors.

8. The application relied on r 1753 of the Court Procedures Rules 2006 (ACT) (Rules), the terms of which are set out below. Briefly, the rule permits the court to make legal practitioners personally responsible for costs incurred in a proceeding in certain circumstances, including where the court forms the view the practitioner’s conduct has caused delay or was negligent.

9. I have decided that what occurred by way of the preparation for hearing was not conduct warranting a personal costs order against the plaintiff’s former solicitors. As a consequence, the order that the plaintiff pay the defendants’ costs thrown away on an indemnity basis will remain.

10. These reasons: (a) Explain the nature of the complaint regarding what the plaintiff’s former legal advisers did or failed to do by setting out what happened leading up to the adjournment of the hearing; (b) Explain the applicable power and principles where a party seeks a personal costs order against solicitors involved in the proceeding; and (c) Explain why the solicitors’ conduct here did not constitute circumstances where a costs order should be made against them.

The conduct that is the subject of complaint here

11. Due to the history of the proceeding, comments made in the reasons given by the judge who determined the adjournment application, the way the present application unfolded before me and the outcome of the substantive judgment, it is important to identify with precision the conduct that is the subject of complaint, so that there is no confusion.

12. The application identified delay, caused by a failure to prepare the case, as the primary ground of application, with negligence being sought in the alternative.

13. In Dimov (No 2), Mossop J determined that an encroachment of the kind in dispute between the parties was not a trespass at common law: Dimov (No 2) at [93]. That legal question formed no part of the subject matter that was said to be negligent on the present application. Further, as at the date of the adjournment application and the hearing of the present application, the plaintiff was pursuing an alternative claim in nuisance. After the adjournment was granted and after the application was heard, the plaintiff appears to have amended his claim and did not pursue a cause of action in nuisance at trial: see Dimov (No 2) at [2].

14. This application turns on the evidence that was or was not obtained relating to the encroachments and on the plaintiff’s alternative remedy seeking damages.

15. The genesis for the ‘failure to prepare’ complaint was really the termination of the former barrister’s retainer on 18 March 2024, by the former solicitors on instructions from the plaintiff. New counsel was briefed. He formed the view that it was necessary for the plaintiff to obtain further expert and lay affidavit evidence before proceeding to the final hearing. That led to the application seeking the adjournment being filed on 3 April 2024. It is the adjournment of the hearing that founds the complaint of the former solicitors causing “delay”.

16. As to the conduct said to have caused the delay or to have been otherwise negligent, the material disclosing the conduct came primarily from the affidavit that was read in support of the adjournment application, prepared by the solicitor who had carriage of the matter. In it the solicitor deposed to not appreciating until about a month before the hearing that he had not done what was required to file evidence necessary to prove the plaintiff’s case or meet the defendants’ case. There were two main reasons relied upon by the solicitor as necessitating the adjournment of the hearing for the benefit of his client: (a) The plaintiff had not obtained a report from a structural engineer in response to the report of the defendants’ expert dealing with the encroachments; and (b) The former solicitors did not appreciate that certain defences or arguments would be raised at trial and had not obtained the evidence necessary to meet those defences.

17. Those defences were firstly, that the encroachments were the result of an “overpour” of concrete during construction of the wing walls in 2000-2001. Because the defendants were not in existence at that time, they could not be held responsible for them. That argument or defence was not explicit in the defence filed. The defence did not admit the encroachments. It said nothing about the alternative argument that if the encroachments were proven, the defendants were not responsible. The plaintiff learned that this was part of the defendants’ case for the first time during the hearing of the summary judgment application in March 2024. The plaintiff formed the view that further evidence was required to establish that the defendants had adopted the trespass.

18. The second defence was that the encroachments were relatively minor in nature and would easily be removed during the course of any works undertaken by the plaintiff, such that damages were an adequate remedy rather than a mandatory injunction. This required the plaintiff to lead expert evidence as to the likely damage suffered. The plaintiff sought to claim damages not just for the removal of the encroachments but for losses suffered as a result of delay in the development of his land. The solicitor deposed to there being no affidavit from the plaintiff on the question of damages, and that further expert evidence was also required on that point.

19. Those professed deficiencies define the scope of the complaint now articulated by the plaintiff on the personal costs application. However, there are three matters that require specific clarification relevant to the content of the complaint and the respondent to the complaint.

20. First, in oral submissions, the plaintiff also submitted, in the alternative, that if the conduct that was relied upon to vacate the hearing in 2024 did not constitute conduct that caused delay or was otherwise negligent under r 1753 it was an incorrect decision to seek to vacate the hearing and that also should be sheeted home to the former solicitors. This alternative position was not disclosed in the application, nor in the plaintiff’s written submissions. Procedural fairness concerns were discussed during the hearing, both in respect of the former solicitors having fair notice of the argument and with regard to any criticism sought to be made of the application to vacate in circumstances where the counsel appearing on the application was not involved in the present costs dispute.

21. After hearing from the parties, I arrived at the position that I could consider the plaintiff’s alternative argument within certain parameters. The first was the express basis that findings would not be made in respect of a counsel who did not appear on the present application. The second was based on an indication from the former solicitors that they would not suffer practical injustice if the position were considered on the existing evidence before court and the outcome did not adversely affect them. However, if, having considered the existing material, the court formed the view that there may be a concern about the former solicitors’ decision to seek an adjournment and whether that should sound in a personal costs order, then they may seek an opportunity to file further evidence (for example, an affidavit from the counsel who appeared on the adjournment application). Accordingly, this third aspect of the argument was within the court’s consideration, although my findings below mean that affording further procedural fairness to any party is unnecessary.

22. The second matter is that the application was only brought against the plaintiff’s former solicitor. No orders were sought against the plaintiff’s former barrister, and his conduct was not the subject of the application. He appeared on the application as a third party because he was one of the plaintiff’s “legal advisers” and was therefore included in the orders made by Balla AJ when the substantive hearing was initially vacated. This consequence provides a ready example of why particular caution should be exercised before making any orders requiring practitioners to address whether they should personally be responsible for costs incurred mid-trial, particularly in the absence of one of the practitioners subject to that order (the former barrister was not the counsel who appeared at the adjournment application). It is regrettable that costs were incurred by the former barrister involved in those circumstances. I will return to this aspect below when discussing the timing of these types of applications for personal costs orders.

23. The third matter is that there is no complaint about an application for summary judgment brought by the plaintiff, which was filed on 31 January 2024. It was heard on 15 March 2024 and ultimately abandoned during that hearing when it became clear that the matter was not one that was appropriate for determination on a summary basis, and the substantive hearing was listed to occur the following month. As discussed next, Balla AJ made comments that were critical of the plaintiff’s former solicitors in respect of that application for summary judgment and what the former solicitors should have appreciated about the case prior to that time. However, the plaintiff did not raise issues on this application about the costs thrown away by the application for summary judgment. The question of those costs was expressly reserved for consideration as part of the substantive litigation. Accordingly, notwithstanding those comments, the summary judgment application does not form part of the conduct said to have caused delay or to have been negligent. Reference to that aspect of the conduct of the case is only to provide context for the reasons given at the time of the adjournment.

The adjournment of the hearing and the court’s criticisms of the former solicitors’ conduct

24. The hearing was adjourned by Balla AJ on 12 April 2024. Her Honour took the view (urged upon her by the plaintiff’s counsel and former solicitors) that the plaintiff had failed to obtain evidence of matters which were essential for him to succeed. In adjourning the hearing, the court noted the following deficiencies: (a) The plaintiff should not have proceeded on the basis that the encroachments were admitted, as the encroachments were not admitted in the defences and the expert evidence did not rise as high as an admission. (b) The plaintiff should have appreciated that it was his onus to establish, through lay evidence, that the defendants had adopted rather than created a trespass or nuisance. (c) The solicitors had not obtained any evidence in relation to the (alternative) claim that damages were appropriate, nor to deal with the defendants’ expert evidence that the encroachments were minor and easily removed.

25. Her Honour took the view that there had been an “egregious history of default”. The reasons for that view included first, that the plaintiff’s former solicitors had misunderstood the defendants’ case until March 2024. Second, the plaintiff’s former solicitors had corresponded with the defendants’ lawyers, seeking consent to lay evidence being given by affidavit but never followed up that request. Third, the plaintiff’s former solicitors prepared the application for summary judgment without filing an affidavit in support, which was contrary to the Rules. Fourth, no explanation was given for the failure to obtain evidence in relation to the claim for damages, other than the former solicitors’ belief that the plaintiff would succeed on the primary claim for a summary judgment.

26. Her Honour determined it was in the interests of justice for the hearing to be adjourned and made the indemnity costs order in relation to the costs thrown away as a result, noting that there was no opposition to such a costs order being made (the only dispute in that regard was whether those costs should be paid forthwith).

The court’s power and applicable principles

27. There is no general power at common law to order costs (whether against parties or non-parties): Re JJT; Ex parte Victoria Legal Aid [1998] HCA 44; 195 CLR 184 at 200; Quach v Butt [2017] ACTCA 4 at [90]-[91].

28. In the Territory, the court’s power to make an order entitling the plaintiff to recover costs against his solicitors, or to make an order for costs against a non-party to the proceeding, arises from the Court Procedures Act 2004 (ACT), where sch 1, item 26 permits rules to be made about costs as follows (emphasis added): 26 Costs costs, including, for example, the following: (a) security for costs; (b) entitlement to recover costs; (c) costs of parties in proceedings; (d) costs against non-parties to proceedings; (e) assessment of costs

29. The emphasised words provide the power here.

30. Reference has been made in cases in other jurisdictions to the ancient supervisory jurisdiction of the court over its own officers: Orchard v South Eastern Electricity Board [1987] QB 565 (Orchard) (at 569), cited in Kelly v Jowett [2009] NSWCA 278; 76 NSWLR 405 at [56]. However, rather than descend into the existence of any similar power in a superior court of record created by statute, and the metes and bounds of any such power, it suffices to proceed on the basis that the statutory power is sufficient to enliven the power in the Territory.

31. Rule 1753 of the Rules then governs the circumstances in which costs may be recovered against a legal practitioner (emphasis added): 1753 Costs—legal practitioner’s delay etc (1) This rule applies to a legal practitioner acting for a party to a proceeding if— (a) the hearing of the proceeding, or an application in the proceeding, did not proceed, and a party to the proceeding incurred costs, because the practitioner— (i) failed to attend the hearing either personally or by someone on his or her behalf; or (ii) failed to file a document; or (iii) failed to deliver a document or thing necessary for use in the hearing; or (iv) failed to do anything else required to be done under these rules or in accordance with the practice of the court; or (b) a party to the proceeding incurred costs because of the delay, misconduct or negligence of the practitioner. (2) The court may order the legal practitioner— (a) to repay to a party all or part of any costs ordered to be paid by the party to another party because of the practitioner’s conduct; or (b) to pay the costs incurred by any party because of the practitioner’s conduct. Note Pt 6.2 (Applications in proceedings) applies to an application for an order under this rule. (3) The court may, on its own initiative, order the legal practitioner not to charge the practitioner’s client costs in relation to all or any part of the proceeding if justice requires it.

32. The plaintiff relied on the emphasised words in seeking costs against his former solicitors. Before considering their application here, it is important to note the words of r 1753(2), which provide that the court’s power is discretionary. Even if a failure of the kind contemplated by the rule or “delay, misconduct or negligence” is established against the practitioner, the court retains discretion whether to make a personal costs order.

33. The rule was based on what is now r 690 of the Uniform Civil Procedures Rules 1999 (Qld) (previously r 708), which states (emphasis added): 690 Lawyer’s delay or neglect The court may order a lawyer to repay to the lawyer’s client all or part of any costs ordered to be paid by the client to another party if the party incurred the costs because of the lawyer’s delay, misconduct or negligence.

34. What constitutes misconduct or negligence is not defined in the Rules.

Principles guiding the exercise of the discretion

35. The parties assisted the court by providing fulsome submissions, referring to a number of authorities in other jurisdictions discussing principles that guide the exercise of the discretion where similar provision has been made for the court to make a personal costs order against a solicitor. Among them were Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; 63 NSWLR 300 (Lemoto); De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544 (De Sousa) at 547-548; and Myers v Elman [1940] AC 282 at 319.

36. Caution should be exercised when reviewing the authorities across different jurisdictions, because the wording of the different provisions is not precisely the same. For example, in NSW, what is required is “serious neglect, serious incompetence or serious misconduct”: Civil Procedure Act 2005 (NSW), s 99(1)(a). In Victoria, the court is permitted to make a variety of orders against legal practitioners for breaching an “overarching obligation”, which includes minimising delay: Civil Procedure Act 2010 (Vic), ss 14 and 25.

37. With that caution in mind, there are nevertheless common principles that guide when the court will intervene to make a legal practitioner responsible for an adverse costs order, or to prevent a legal practitioner from recovering their costs of part or all of a proceeding: (a) The jurisdiction should be exercised sparingly: The power 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”: Lemoto at [92(a)]; De Sousa at 547-548. (b) Lack of success by itself is not a sufficient basis: A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence which is plainly doomed to fail: Lemoto at [92(b)]; White Industries (Qld) Pty Ltd v Flower & Hart (a firm) [1998] FCA 805; 156 ALR 169 at 237. (c) The assessment includes making allowance for the environment in which litigation occurs: It is only appropriate to make a personal costs order such as a wasted costs order when, making full allowance for the exigencies of acting in court proceedings, a legal practitioner’s conduct of court proceedings is quite plainly unjustifiable: Lemoto at [92(d)], citing Ridehalgh v Horsfield [1994] Ch 205 (Ridehalgh) at 236-237.

38. There are also principles commonly applied in the procedure of hearing an application for a personal costs order or a wasted costs order: (a) The procedure should be “as simple and summary as fairness permits”, lest the costs dispute itself become a costly form of satellite litigation: Lemoto at [92(g)], citing Ridehalgh at 238-289 (among other authorities). See also Gippsreal Ltd v Kenny [2016] VSCA 319 (Gippsreal) at [102]. (b) “A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it”: Lemoto at [92(e)] and the cases there-cited.

39. The reference to a sufficient opportunity includes making allowance for issues of legal privilege that may arise. When the court is considering the conduct of a legal practitioner during litigation, there may be advice given or decisions made which would ordinarily be privileged from scrutiny by the court. Due allowance should thus be made for the difficulties a legal practitioner may have in responding to the application due to the client’s maintenance of legal privilege. As stated by Young CJ in Eq (Santow and Bryson JJA agreeing) in Re The Black Stump Enterprises Pty Ltd and Associated Companies (No 2) [2006] NSWCA 60 at [10]: One of the difficulties for a court … is in making an assessment as to whether it is the solicitor or the client that is the real cause of the problem. This is exacerbated in that legal professional privilege may prevent the lawyer from informing the Court of what truly happened. Without the client's release, the lawyer may well be unable to give the Court full information; see eg Kumar v MIMIA [2004] FCA 18; (2004) 133 FCR 582.

40. Accordingly, where a legal practitioner’s ability to rebut the complaint is hampered by the duty of confidentiality to the client, the practitioner should be given the benefit of the doubt: Lemoto at [92(f)], citing Orchard (at 572) and Ridehalgh (at 229). In circumstances where legal professional privilege precludes a practitioner by from advancing a full answer to the complaint made, the court should not make an order against the practitioner without satisfying itself that it is in all the circumstances fair to do so: Medcalf v Mardell [2002] UKHL 27; [2003] 1 AC 120 (Medcalf) (at [23] per Lord Bingham), cited in Lemoto at [92(f)].

The operation of rule 1753 of the Rules – the meaning of “delay, misconduct or negligence”

41. It is uncertain precisely what is meant by “delay, misconduct or negligence”. Clearly, the conduct must be more than minor oversight, having regard to the principles set out above. That is supported by cases such as Holman v Campbell (No 2) [2024] QCA 259, when discussing the application of the similarly worded r 690, in stating at [20] “legal error does not of itself bespeak misconduct or support the serious finding of negligence”.

42. By contrast, in the federal jurisdiction, misconduct is defined as part of the relevant rule (40.07) of the Federal Court Rules 2011 (Cth), which is in the following terms: 40.07 Liability of lawyer to their client for misconduct (1) A party who has reasonable cause to believe that additional costs have been incurred because of the party’s lawyer’s misconduct, may apply to the Court for an order: (a) that the whole or part of the costs as between the lawyer and the party be disallowed; or (b) if the lawyer is a barrister—that the whole or part of the costs as between the barrister and the barrister’s instructing lawyer be disallowed; or (c) that the lawyer pay to the party costs that the party has been ordered to pay to another party; or (d) that the lawyer indemnify any other party against any costs payable by that party. (2) For this rule, a lawyer has engaged in misconduct if: (a) a proceeding or an application is delayed, adjourned or abandoned because of the lawyer’s failure: (i) to attend or make arrangements for a proper representative to attend a hearing; or (ii) to file a relevant document; or (iii) to provide the Court or another party with a relevant document; or (iv) to be prepared for a hearing; or (v) to comply with these rules or an order of the Court; or (b) the lawyer: (i) incurs costs improperly or without reasonable cause; or (ii) incurs costs that are unnecessary or wasteful; or (iii) is guilty of undue delay.

43. While it is not appropriate to import into r 1753 of the Rules concepts of misconduct from the rules of court operating in other jurisdictions, I have included the definition to help explain why the courts is not concerned here with any form or delay or negligence. Words such as “delay”, “misconduct” and “negligence” do not sit in a vacuum. They sit in a particular context informed by the existing common law: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at [408].

44. There is a fine line between supervising compliance with professional duties and seeking costs otherwise not recoverable. The court must be astute to safeguard the possible abuse of process arising from costs applications seeking recovery of costs from legal advisers. In Ridehalgh (at 238– 239) the Court of Appeal in England was concerned with an application to recover costs against the solicitors where the plaintiff was a legally aided or impoverished litigant.

45. The same vigilance is required to ensure that an application for wasted costs against a solicitor is not used as an alternate costs recovery mechanism in circumstances which would otherwise prevent recovery by the advocate’s immunity from suit. The authorities make it clear that the exercise of the jurisdiction should be confined to “cases which are apt for summary disposal by the court”: Harley v McDonald [2001] UKPC 18; [2001] 2 AC 678 at 703 [50]; Medcalf (at [24]). Where circumstances involve serious breaches of the practitioner’s duty to the client which involve allegations of professional misconduct or negligence, it is not appropriate for the court to intervene and there are other avenues for redress.

46. For those reasons, I do not understand r 1753 to be intended to necessarily import definitions of misconduct under the Legal Profession Act 2006 (ACT) (s 387) or negligence under the Civil Law (Wrongs) Act 2002 (ACT) (s 40), as that would be contrary to the principled admonition that the consideration of whether this type of costs order should be made is as simple as fairness permits.

47. Nevertheless, there has to be something which amounts to a clear failure of a solicitor’s professional duty. Words such as substantial, significant, weighty and so forth are all adjectives that may capture the type of conduct, but such words are also apt to skew the court’s assessment because of their potential to create a legal test. The parties here engaged in submissions about whether “gross negligence” was required. Although that obviously would entitle the exercise of the discretion, r 1753 is not directed solely to that level of conduct. It suffices that for such an order (that is made sparingly) to be warranted, there must be something improper about the conduct, in the nature of a clear substantial failure for reasons unconnected with the ultimate success of the litigation.

48. Similarly, although delay enlivens the power, it is not any delay that warrants the exercise of the discretion. The sanction for delay should ordinarily be understood as requiring an assessment that there has been a dereliction of the solicitor’s professional duties before a solicitor’s delay will sound in a personal costs order. There is a point where delay becomes undue and that is more likely to be the sphere of conduct warranting close scrutiny by the court.

Timing of applications under r 1753: generally after the substantive hearing

49. A further aspect of r 1753 is that there is no temporal requirement for the consideration of the conduct. In my view, in circumstances such as those that arose here, it was preferable to reserve the question of any personal costs orders until after the conclusion of any substantive proceeding. The delayed delivery of this judgment reflects that view.

50. There are many disadvantages in seeking to address potentially unreasonable solicitor conduct in the middle of contested litigation.

51. The first has already been discussed, in that the solicitor will be in a position where it may be necessary to divulge legal advice in order to properly answer the criticisms levelled at the solicitor. Any questions of privilege and whether a claim for privilege is maintained are plainly going to be different while the substantive dispute itself is yet to be resolved.

52. The second is that embarking upon a consideration of whether a legal representative should be the subject of a personal costs order prior to the conclusion of the litigation when costs issues are ordinarily determined will immediately put the solicitor in a conflict of interest with their client and likely have the effect of causing the solicitor to cease acting for the client, thereby occasioning additional costs and further delay of the substantive hearing by a change in legal representation. Whether the client may decide to change legal representation anyway is not to the point.

53. Thirdly, and as is apparent from what occurred in the present litigation, it diverts the attention of the parties from pursuing the just resolution of the issues genuinely in dispute and is therefore a procedural step that runs entirely contrary to s 5A of the Court Procedures Act 2004 (ACT).

54. The focus of the parties should generally be directed to resolving the substantive issues in dispute first in as efficient a manner as possible, which includes taking the most efficient path to a substantive hearing and not engaging in satellite litigation against solicitors. There are always exceptions, and some instances of contempt are an example, but there was no suggestion of that type of conduct here. All that occurred in this proceeding was an increase of legal costs for the parties involved and now also for the plaintiff’s former legal representatives, without apparently bringing the parties any closer to the resolution of their dispute.

55. These considerations are in part reflected in the observations made in Gippsreal, where the Victorian Court of Appeal stated at [101] (emphasis added): …a number of considerations indicate that such an application should be made no later than the time the parties seek final orders for costs in a proceeding, which is usually at the end of a trial when the Court publishes its reasons for judgment. An important consideration is the nature of the finding that a judge must make in order to engage r 63.23, namely, that a legal practitioner has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition. The Court is best placed to hear submissions on this when the conduct of the litigation by the parties and their lawyers is fresh in the trial judge’s mind, which is usually when the judge determines costs issues in the light of his or her substantive findings in the proceeding. Further, the lawyer against whom allegations are made under r 63.23 — which have the potential to seriously damage his or her professional reputation — is best able to defend him or herself, and assist the Court, at the time that costs issues are determined, rather than after final orders are made.

56. Gippsreal was dealing with circumstances where an application for a personal costs order was made well after the finalisation of the proceeding. In this case, the application was pressed to be heard before the substantive hearing and was heard by a different judicial officer than the trial judge. That was because the court vacating the hearing made the costs order payable by the plaintiff forthwith on an indemnity basis. When making that order, it appears that weight was given to the fact that this was commercial litigation, without appreciating the complexities arising when a judicial officer also contemplates those adverse costs consequences being ultimately visited upon the plaintiff’s legal advisers. Even the step of requiring affidavits to be prepared by the practitioners involved addressing whether they should personally pay the costs thrown away by the adjournment will likely give rise to the disadvantages discussed above. A preferable course would have been to defer the entire question until the point at which the merit of the case had been determined, notwithstanding the nature of the litigation being commercial.

The circumstances do not warrant personal costs orders against the former solicitors

57. Applying the principles above, I am not persuaded that any conduct by the former solicitors was of such significance as to cause the court to make a personal costs order under r 1753.

58. I will not make the order sought because of the following: (a) The factual evidence was not objectively deficient: Assuming that the legal question of what constitutes trespass fell in the plaintiff’s favour (ultimately it did not), there was a path to success on the evidence that had been filed. The plaintiff was not “foredoomed to fail” on the factual evidence available. (b) The maintenance of legal privilege impacts upon the level of scrutiny that can be achieved by the court and the findings that can be made: The former barrister and the former solicitors were precluded from advancing a full answer to the plaintiff’s complaint by the maintenance of legal privilege on the application. In those circumstances, the court cannot find that the initial position taken by the former solicitors as to the required evidence was unreasonable. (c) The adjournment itself may have been inappropriate but was not unreasonable for the same reasons: Seeking an adjournment was a course that may have been viewed by some as inappropriate or unnecessary, but without full disclosure of what advice passed from the newly retained counsel to the former solicitors, no finding that the decision was unreasonable ought to be made.

59. Expanding on the first of those reasons, I do not share the view that there was any egregious history of default. The deficiencies that were identified as necessitating the adjournment were a failure to obtain expert evidence in reply, failure to obtain lay affidavit evidence and failure to obtain evidence on damages. During the hearing of the adjournment application, there was no mention of the legal argument that ultimately succeeded, which was whether the encroachment constituted a trespass at all because of its nature in being affixed to the land. The defence or argument that was the concern of the adjournment application was that if there was an encroachment, a proprietary trespass was assumed, but the defendants did not adopt or could not be held responsible for that trespass. Alternatively, it was argued that damages for shaving the encroachments from the wing walls was an appropriate remedy rather than a mandatory injunction.

60. It was not the case that the former solicitors failed to obtain any expert evidence at all. The plaintiff’s expert evidence established an encroachment. The issue was that the defendants’ structural engineer identified a different solution that required the plaintiff to then consult a structural engineer. Although the plaintiff knew about that evidence well in advance, the pleaded defence did not assist in making it clear what the import of that evidence was. The defence did not admit any encroachment and denied that the plaintiff was entitled to any relief. It did not contend that any encroachment was minor and could be easily remedied. While better communication between the lawyers would have revealed the more nuanced position that had developed as a result of the expert engineering report, the delay in getting to the heart of the dispute does not lie entirely at the feet of the plaintiff’s former solicitors.

61. As to the newly arising or recently appreciated understanding of the defendants’ case, that was entirely understandable given the defence that had been filed. The fact that the defendants were not in existence and therefore not responsible for any encroachment proven was not pleaded in the defence. The defence was evasive and opaque on that point. It is no answer to say that the plaintiff should have asked for particulars of the defence. Because that fact was a positive defence to any factual finding of an encroachment, it was required to be included from the outset in accordance with the Rules. There is an appreciable difference between admitting an encroachment and admitting the encroachment but denying that it constituted a trespass at law. A defence that simply did not admit an encroachment and denied the ultimate relief claimed did not go far enough in exposing the defence of the claim. The belated understanding by the plaintiff’s former solicitors of that aspect of the defendants’ case was not unreasonable.

62. With regard to what was required to meet this aspect of the defendants’ case, all that was required to be established was that the defendants had notice of the encroachment and failed to take action over an extended period of time. That was capable of being established by the existing expert evidence and some short additional lay evidence. The plaintiff was available to give that evidence at the hearing. In the Territory, as acknowledged by the court vacating the application, r 6700 of the Rules provides that evidence at the trial of a proceeding started by original claim must be given viva voce (orally in open court) rather than by way of affidavit. Indeed, when such an order for lay affidavit evidence was sought from the judge hearing the adjournment application, it was declined on the basis of r 6700. Accordingly, the fact that there was no lay affidavit evidence from the plaintiff was irrelevant. It did not cause the adjournment and did not create undue delay.

63. During the hearing of the adjournment application, what was being agitated was that the plaintiff also wanted to lead evidence about the economic cost of the delay in relation to the development of the property, resulting from the need to have the encroachments removed. That evidence was able to be given by the plaintiff in the same manner and there was no deficiency in not serving an affidavit about it because the parties were proceeding under the usual course provided for by r 6700 of the Rules.

64. That leaves the perceived failure to obtain separate expert evidence on damages. In the event that the plaintiff succeeded in establishing that the encroachments constituted a trespass, there is a real question whether it was the plaintiff’s onus to establish any case for damages confined to trespass itself. Where trespass to a proprietary right of a continuing nature is established, the court will generally interfere by injunction: Reliance Finance Corporation Pty Ltd v Orwin Walshe & Ward [1964-5] NSWR 970 at 976 per McLelland CJ in Eq. It is then the onus of the defendant to establish hardship by a specific remedy such that damages becomes appropriate. The plaintiff should not be compelled to exchange or suffer continuing invasion of its proprietary right for a money payment at the behest of the wrongdoer: Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311.

65. Thus, if liability in trespass was established, the remedy that may have followed was that the defendants were required to carry out the remedial work at their cost. Commonly there will be a subsequent implementation of a detailed scheme because whatever solution is developed will require planning approval. That would undoubtedly have been the position here where the encroachments involved footings to buildings. It is up to the defendants to establish that any appropriate remedy is disproportionate. It is thus not as simple as saying that it is up to the plaintiff to prove his case for a particular remedy. In light of the law as to the appropriate primary remedy in this type of case being injunctive relief, the conduct of the plaintiff’s solicitors in not obtaining evidence directed to damages or the cost of removing the encroachments on the wing walls was not unreasonable.

66. To the extent that the plaintiff sought to make a case beyond that (being losses associated with delay in development) that may have been a separate component that did require additional evidence from the plaintiff. However, as I have said above, this was able to be led at the hearing without an affidavit and even if that were not the case, the lack of evidence on one component did not mean that the plaintiff’s entitlement to damages entirely was “foredoomed to fail”, for the reasons just explained.

67. What occurred was that the plaintiff was understandably unhappy about running an application for summary judgment that was withdrawn at the heel of the hunt in circumstances where it was highly unlikely to have succeeded in the first place. He brought in fresh counsel, who took a different view about the case. The mere fact that one counsel has a different perspective about what was required to best present the case at trial does not necessarily mean that the previous conduct of the matter and preparations for the substantive hearing was inadequate, let alone deficient in a manner that would enliven the application of r 1753.

68. All of this is fortified by the former legal advisers being prevented from disclosing what advice was given on these matters, due to the timing of the personal costs application being brought before the substantive hearing and judgment. In finding that the conduct in preparing for the substantive hearing was not unreasonable, I have proceeded on the law applying to each of the identified deficiencies and the Rules concerning expert and lay evidence. The true position may have been significantly different if the forensic and strategic decisions were able to be disclosed. However, the above is sufficient to give the practitioners involved the benefit of the doubt. It would be unfair on the present state of the evidence to determine that the former solicitors caused the delay or were negligent by their failure to properly prepare the case.

69. Conversely, and for the same reasons, the fact that it is far from clear that the matter was unable to run does not mean that the adjournment application, which directly delayed the hearing, was itself conduct that was improper or negligent in the sense that warrants an order under r 1753.

70. In that regard, the former solicitors’ advice that an adjournment was required was made in circumstances where new counsel had come into the matter, and his advice similarly was not disclosed on the personal costs application. It might be inferred that the advice was what was communicated to the court, which was that the plaintiff’s case would not succeed without an adjournment to obtain the further evidence. The court constituted on that day accepted that submission, albeit without the benefit of the extensive submissions and evidence that have since been presented by the parties and without the benefit of time to consider the law on nuisance and trespass. However, the same principle applying when legal privilege is maintained applies equally to the former solicitors’ advice to make an application to adjourn the case. The high bar for establishing a basis for a personal costs order against a former legal adviser in the conduct of the case has not been met.

The indemnity costs order should not be vacated

71. The plaintiff sought an order vacating the order made against him for the payment of the defendants’ costs thrown away on an indemnity basis. As I understood the submissions, the plaintiff did not dispute that the defendants’ wasted costs should be paid on an indemnity basis; simply that it was the former solicitors and not him who should have to pay them.

72. In case I am wrong about that, for completeness I have dealt briefly with whether the order for indemnity costs should be vacated and an order for the wasted costs to be paid on an ordinary basis should be substituted in its place.

73. At the application for the adjournment, the plaintiff’s counsel accepted that the costs thrown away by the vacation of the hearing should be paid by the plaintiff. He sought that those costs be paid on the ordinary basis. The court pressed him on whether the costs should in fact be paid on an indemnity basis. The plaintiff’s counsel indicated that he did not seek to be heard on that. In effect, while not consented to, there was no opposition to the court making such an order and the court took this into account when determining the basis on which the costs thrown away should be paid.

74. The order for indemnity costs was discretionary. It was made on the basis that it was appropriate to compensate the defendants for the belated adjournment of the hearing in circumstances where the matter was listed to run the following Monday. The judicial officer hearing the application was best placed to exercise the discretion based on the findings that her Honour made at the time. That a different judicial officer may later form a different view about whether a particular interlocutory order should have been made is not the test. The court must be careful to guard against a costs application of this type becoming a de facto appeal of the earlier costs order.

75. In circumstances where there was no opposition, and no changed circumstances in terms of what occurred as between the plaintiff and defendants, it would be inappropriate to disturb the interlocutory costs order made by the court. There was material put before the court on this application as to the quantum of such an order. However, that will be a matter for assessment if it has not already occurred.

Conclusion

76. For the above reasons, the application will be dismissed. The plaintiff resisted an order for costs on the basis that he was simply giving effect to what Balla AJ had put in motion.

77. Insofar as the defendants are concerned, they were not seeking a personal costs order. The filing of the application is what brought the parties to court at this point and the defendants were affected because one of the orders sought was vacation of the indemnity costs order in their favour. They are entitled to be compensated.

78. Insofar as the former solicitors are concerned, again, the filing of the application is what brought about their personal involvement in the proceeding at this stage. Costs are compensatory. The former solicitors have succeeded in answering the claim for personal costs orders. Costs should follow the event.

79. The position is different insofar as it relates to the former barrister. The plaintiff did not seek orders against him. His involvement in the proceedings is a result of an ambiguous order made by the court and was possibly unintended by the court. It is regrettable that the extent of the order was not clarified at an earlier point. It resulted in the former barrister incurring costs that were ultimately unnecessary. However, those costs should not be borne by the plaintiff when he expressly did not pursue the former barrister. Orders

80. The orders of the Court are: (1) The application in proceeding dated 6 November 2024 is dismissed. (2) The plaintiff is to pay the defendants’ costs and the former solicitors’ costs of the application. (3) The former barrister is to bear his own costs of the application.

I certify that the preceding eighty [80] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam.

Associate: Date: