The appeal
11 Mr Wowk filed an appearance in this court in which he submitted save as to costs. Mr Donovan did not file an appearance, but on the leave application indicated that his position was that of a submitting appearance. The Court was informed on the leave application that Mr Kennedy had told Mr Firth's instructing solicitor that he would not be appearing. None of Messrs Wowk, Donovan and Kennedy appeared when called when this matter was heard. From copy letters provided to us we were satisfied that each had notice that the appeal was to be heard.
12 The question of Mr Kennedy's joinder as the second respondent is one which need not be determined. He had a practical interest in upholding the trial judge's order, in that payment by Mr Firth would discharge his liability under the paragraph 19 costs order, although the question of contribution would remain. Whether he had a legal interest warranting his joinder as a respondent to the appeal is more doubtful.
13 Some of Mr Firth's grounds of appeal took up an obvious error in the trial judge's order. No doubt recognising that Mr Firth had acted for Mr Kennedy only from early December 2005, the order claimed by Messrs Wowk and Donovan was for indemnity against costs "on or after 7 December 2005". The order made by the trial judge was not so limited.
14 When leave to appeal was granted the Court asked whether application had been made to the trial judge to correct the error under the slip rule, and indicated that the error might be dealt with in that way rather than by an appeal. Mr Firth submitted before us that the slip rule was not available. As at present advised I consider that it was, but it is not necessary to come to a concluded view because Mr Firth's challenges to the order made against him went beyond its temporal extent. It is as well to remind, however, that an appeal should not be brought if the error is capable of correction under the slip rule. The proper course is to apply for correction.
15 Another of Mr Firth's grounds of appeal was that the trial judge "erred in finding that the District Court had jurisdiction". He made two submissions in relation to jurisdiction.
16 The first was that s 348 only permits an order "in respect of the practice or of a legal practitioner associate of the practice responsible for providing the services" and Mr Firth was not the legal practitioner associate responsible for providing the services. It is correct that Mr Firth was not the legal practitioner associate responsible for providing the services for the period prior to early December 2005, but he was thereafter. There was jurisdiction, or more correctly power, to make an order against him, although the exercise of the power was flawed by the error earlier described.
17 The second was that the effect of s 349 was that an order can only be made by the District Court where it is the court hearing proceedings on a claim for damages, and that Mr Kennedy's claim did not come to a hearing. Accordingly, it was said, only the Supreme Court could make an order against Mr Firth pursuant to s 348(2). I do not agree. Section 349 operates to establish a rebuttable presumption where the court has heard proceedings on a claim for damages and finds that the facts established by the evidence did not form a basis for a reasonable belief. The presumption may suffice to establish what must appear to a court as required by s 348(1), but is not necessary. For s 348(1) it is enough that it appears to the court that the law practice has provided legal services to a party without reasonable prospect of success, and that may appear for reasons other than a finding in a substantive hearing. The court for that purpose is the court "in which proceedings are taken on a claim for damages", in the present case the District Court, and taking proceedings on a claim for damages is less than conducting a hearing.
18 Mr Firth's grounds of appeal were otherwise concerned with whether he had provided legal services to Mr Kennedy without reasonable prospects of success. However, there was a further error in the trial judge's order, although not one on which Mr Firth relied until the Court drew attention to it, which makes it unnecessary to consider that question.
19 Section 348(1) authorises the orders in its paras (a) and (b). Para (a) had no application. The trial judge purported to act under para (b). An order could be made under para (b) directing Mr Firth to indemnify Messrs Wowk and Donovan "against the whole or any part of the costs payable by the party indemnified": that is, against the whole or any part of the costs payable by Messrs Wowk and Donovan. But the order made by the trial judge was not such an order. It was an order that Mr Firth indemnify Messrs Wowk and Donovan "in respect of the costs order made in paragraph 19". Indemnity is oddly used in the order, but the order meant that Mr Firth should pay Messrs Wowk and Donovan the costs payable by Mr Kennedy pursuant to the paragraph 19 costs order. Section 348(1)(b) did not authorise the order made by the trial judge.
20 The costs payable by Mr Kennedy to Messrs Wowk and Donovan may upon assessment have been the same in amount as the costs payable by Messrs Wowk and Donovan, but they may not. At least according to the notice of motion of 14 December 2006 Doherty Partners were the solicitors for Messrs Wowk and Donovan, and correspondence in evidence suggests that Doherty Partners acted throughout, but it is quite unclear what costs might be recoverable from Mr Kennedy. Those costs might include recompense for time spent by Mr Wowk or Mr Donovan, see Laurence v M D Nikolaidis & Co [2003] NSWCA 129; (2003) 57 NSWLR 355 especially at [52]-[58] 372-4. Thus the error which I have above described was a material error, or at least it is not shown that it was not a material error.
21 It follows that the appeal must be allowed and the order made by the trial judge must be set aside. Messrs Wowk and Donovan could perhaps have cross-appealed with a view to obtaining a different order on the basis of the judge's findings, but did not do so.
22 Mr Firth said that the finding that he had provided legal services to Mr Kennedy without reasonable prospects of success was a serious one, and pointed out that such conduct was capable of being unsatisfactory professional conduct or professional misconduct (see Legal Profession Act s 347(1)). The seriousness may be accepted, but as I have said it is not necessary to consider the question and it is sufficient to record that the findings are challenged and the challenge remains open.