Kalloghlian v Mitry Lawyers Pty Ltd

Background

1. In October 2016, the builder carrying out work at Mr Kalloghlian's home ceased work, complaining of unpaid progress payments. Mr Kalloghlian in turn complained to Mr Mitry about this and alleged defects in the building work by the builder and architect. Shortly thereafter, on instructions from Mr Kalloghlian, Mr Mitry sent a letter to the architect and warned that Mr Kalloghlian intended to commence proceedings against them.
2. On 28 October 2016, Mr Mitry had provided Mr Kalloghlian with a draft of that letter and noted "Something to bear on mind - until we have a formal report, we don't have a quantified claim".
3. In early November 2016, Mr Kalloghlian instructed Mr Mitry to engage Mr Worthington, a building expert, to prepare a report about the defects in the works to assist with the consideration of a possible claim against the architect. Mr Worthington had been engaged as an expert for Mr Kalloghlian in previous litigation. Mr Worthington took several months to prepare a preliminary report.
4. On 4 April 2017, the respondents sent Mr Kalloghlian a letter of engagement. That agreement was in a standard form that provided Mr Kalloghlian could give specific or limited instructions, but the respondents were not obliged to seek instructions on every matter. The agreement was not signed or returned by Mr Kalloghlian.
5. On 20 April 2017, Mr Worthington produced his report indicating that the builder and architect had caused loss to Mr Kalloghlian. Mr Mitry did not consider this report one that could be used in litigation, but could be used for negotiation purposes. Having received Mr Kalloghlian's instructions, on 8 May 2017, Mr Mitry served that report on the builder and architect on a "without prejudice" basis, seeking a response within 21 days.
6. Before a response was received, on 11 May 2017, the builder commenced proceedings against Mr Kalloghlian seeking outstanding progress payments of about $587,000 under the building contract. While nothing turns on it, the claim was amended on 25 May 2017.
7. The statement of claim was not served on Mr Kalloghlian until 6 July 2017.
8. Shortly thereafter, in July 2017, a barrister recommended by Mr Worthington, Mr Bland, was briefed to prepare a defence and cross-claim. Mr Kalloghlian emailed Mr Mitry about the decision to brief him: "Worthington is our man so maybe his barrister is the one?". It was not suggested in cross-examination that Mr Bland did not have the requisite experience to assist on the matter. A defence was filed on 16 August 2017, within about 5 weeks of receipt of the claim. The defence referred to a set off by reason of a cross-claim, however, Mr Bland did not prepare a cross-claim that was filed.
9. It appeared that Mr Mitry's practice was to forward correspondence received by the builder's solicitor to both Mr Bland and Mr Kalloghlian, seeking advice and instructions. For example, Mr Mitry asked Mr Bland to prepare the response to the request for particulars of the defence and repeatedly followed up as to progress on that and the cross-claim.
10. In late October 2017, because of Mr Kalloghlian and Mr Mitry's concerns about delays, an alternative barrister, Mr Hand, was briefed, who was known to Mr Mitry as an experienced construction barrister. Mr Kalloghlian was asked his opinion and his response was: "Great get the best in the industry I'm trusting you with you as im not aware".
11. In an early conference in November 2017 with Mr Mitry and Mr Kalloghlian, Mr Hand advised that Mr Worthington could not properly give expert evidence about architectural issues and, therefore, a different expert was required. For the next month, Mr Hand was, in his own words, "difficult to get hold of", despite Mr Mitry's attempts to move matters along. There was also some difficulty in finding an architectural expert who had availability.
12. On 20 December 2017, Mr Mitry updated Mr Kalloghlian on the directions hearing that had been held, which required the builder to serve its evidence in chief by 2 February 2018. Mr Mitry noted, "by which time we should be in a better position to launch in the Supreme Court and likely have this case transferred there". It therefore seems that the discussed plan was always to prepare a cross-claim that would cause the proceedings to be transferred into the Supreme Court. However, that necessarily meant that Mr Mitry needed an evidential basis for asserting that Mr Kalloghlian's claim exceeded the District Court's jurisdictional limit.
13. On 13 February 2018, Mr Mitry had a conference with Mr Hand and Mr Worthington, in which Mr Hand confirmed that he could progress the cross-claim based on the discussion and Mr Worthington "can firm up the report later". Mr Mitry reported that to Mr Kalloghlian, expressly noting that the pleading would be "in relation to the building defects (not architectural defects)".
14. On 21 February 2018, Mr Hand settled the letter of instruction to architect expert, Mr Bullen, which had been sent to him for settling on 5 February 2018. On 22 February 2018, the settled letter was sent to Mr Bullen. By late February 2018, emails were being exchanged to organise for Mr Bullen to inspect the property.
15. On 7 March 2018, the builder served its evidence over one month late. On 22 March 2018, Mr Kalloghlian was ordered to serve his lay evidence on the builder's claim by 20 April 2018.
16. During March 2018, Mr Hand was in communication with the respondents and indicated that he was working on the cross-claim. Mr Mitry therefore wrote to the builder's lawyers indicating that there was an intention to file a cross-claim. On 19 April 2018, Mr Hand provided Mr Mitry a draft cross-claim. On 1 May 2018, the builder provided conditional consent to the filing of the cross-claim.
17. During May 2018, there were further communications between the respondents, Mr Hand and Mr Kalloghlian, and Mr Mitry reported to Mr Kalloghlian: "we will coordinate with Mark Bullen to finalise the architect claim".
18. On 25 May 2018, the cross-claim raising building defects, as drafted by Mr Hand, was filed.
19. During June 2018, the respondents were chasing Mr Hand to settle Mr Worthington's updated report, which he did on 23 June 2018 with the comment: As previously advised, I am concerned that Mr Worthington will be viewed as having 'entered the arena'. However, I understand that our client's strong preference is to retain John as his expert. Mr Hand also advised that some of Mr Worthington's report should be held back pending a decision to bring a claim against the architect. That decision appears to have been awaiting the report of Mr Bullen.
20. On 5 July 2018, Mr Hand had settled the finalised Worthington report (save for an updated letter of instruction). He had also provided comments on Mr Kalloghlian's draft affidavit.
21. On 10 July 2018, Mr Kalloghlian provided comments on his affidavit, which were incorporated, and the affidavit was served on 12 July 2018.
22. On 13 July 2018, the report of Mr Worthington was served.
23. On 30 July 2018, Mr Bullen provided a "preliminary opinion" and it was forwarded by the respondents to Mr Hand with a request for a conference to discuss with Mr Kalloghlian. The email also attached a draft Scott Schedule by Mr Worthington.
24. Mr Mitry's review of Mr Bullen's report was that he did not consider some of the larger matters, about which Mr Kalloghlian complained, were "architectural matters", and that it would not support a claim against the architect. In early August 2018, Mr Mitry discussed the report with Mr Kalloghlian, who wanted Mr Bullen to go back to the house before he finalised the report because he still considered there were architectural problems.
25. On 17 August 2018, Mr Bullen attended Mr Kalloghlian's home, but did not provide any comments on his report or that meeting because his invoices had not been paid. He was only paid by Mr Kalloghlian on 12 October 2018.
26. On 17 October 2018, Mr Bullen provided his review of his schedule, but did not consider his opinion was much changed, despite the on-site meeting. That review email was sent to Mr Hand on the same day.
27. Mr Mitry's evidence, on which he was not challenged, was that at about this time he had a conversation with Mr Kalloghlian: Mitry: Bullen's opinion is not going to help much. On what he says, a claim against [the architect] wouldn't be worth it. If you want to press a claim for all the defects, we need to find someone else. Kalloghlian: Let's see if we can find someone else.
28. On 28 October 2018, the respondents asked Mr Hand if he had a "recommendation for a new architect expert. … Mr Bullen just will not work for us". The respondents also asked for Mr Hand's advice about the District Court's jurisdiction in commercial matters and whether it was necessary to transfer the case to the Supreme Court for that reason, with a comment that this "might buy us some further time to cross-claim against the architect too".
29. On 5 November 2018, it appears that Mr Hand's advice included: 1. There might be an Anshun issue if the architect was not joined in the District Court proceeding, but the current evidence against the architect was weak because many issues were a result of "client instructions". 2. The lost rent claim was weak because no loss could be demonstrated as no rent was in fact paid. 3. A new issue of gyprock had arisen "yesterday morning" and therefore Mr Worthington needed to provide a new report.
30. On the same day, an email of advice was sent to Mr Kalloghlian reporting on Mr Hand's advice, and providing the name of a further architect expert, who Mr Worthington had recommended, Dr Briggs.
31. On 6 November 2018, Mr Kalloghlian responded to that email with: …Derek [Hand] needs to tuffen up and start defending us not being negative on anything and everything in our case. He needs to fight. Of course we have suffered a loss we are not in the house What does he want the judges verdict on a plate and then hand it back to the judge? Come on he needs to fight fight fifth fight fight that's how you win a case
32. When Mr Mitry responded, "[h]e needs to fight but also pick weaknesses so we are not blindsided", Mr Kalloghlian emailed: Mate the house had and has issues it's pretty simple He needs to fight those issues Example I've been out of the house for 3.5 years that's evidence in itself I need to live somewhere Architects let them prove or provide my authorisations on there works let them provide some paperwork trail let them Show emails where I have said yes that's ok pls do He needs to ask more questions to the other side and then come back to me and tell me you have done this not now
33. The District Court proceedings were listed for trial commencing 20 November 2018.
34. On 15 November 2018, the parties attended a court ordered mediation. Mr Hand attended with Mr Kalloghlian and Mr Worthington and another lawyer from Mitry Lawyers. The matter did not settle, but Mr Kalloghlian sent Mr Mitry an email: "We must postpone next [week's] hearing due to Worthington's mother in-law passing last Friday and he is a mess." He sent another email the next day: "We must get an adjournment as he [Worthington] is our main man".
35. On 16 November 2018, Mr Hand sent Mr Mitry an email advising on what was necessary by way of evidence for an adjournment application.
36. On 18 November 2018, Mr Hand sent the respondents an email: "following the developments with John Worthington last week, the discussions we had with John and [Mr Kalloghlian] and the filing of the application for an adjournment". Of note in that email, he advised that: 1. He remained concerned that Mr Worthington would be seen as an "advocate" and not an expert, and that "most of his evidence will not be accepted". If another expert witness was retained, that evidence might differ "in many important respects". 2. On the telephone, Mr Worthington had abandoned his position on all of his Scott Schedule items, other than matters that were worth only $155,000. However, in a face-to-face meeting, Mr Worthington's "highest" position would mean that Mr Kalloghlian would be required to pay the builder about $150,000, but the more likely outcome was that the figure would be higher. He also warned that a costs order might be made in favour of the builder for both the builder's claim and the cross-claim. 3. He did not consider that the claim for rent was available. 4. He remained concerned that if the claim against the builder was determined by the District Court, then Mr Kalloghlian would be estopped from bringing any claim against the architect. He noted that Mr Mitry held a different opinion, which may well prove to be "the better one". 5. It was necessary to continue to prepare for the hearing on the basis that the adjournment was not granted.
37. On 19 November 2018, the scheduled hearing dates were vacated because Mr Worthington was not fit to appear. The proceedings were adjourned to 19 March 2019. An order was made allowing Mr Kalloghlian to serve another expert report by Mr Worthington by 15 February 2019. The reporting email from the respondents to Mr Kalloghlian stated, "I note that we will be looking to engage alternate Counsel going forward", which appears to have been based on Mr Kalloghlian's instructions and consistent with his email to the effect that Mr Hand was not "tough" and that Mr Hand should "fight".
38. On 21 November 2018, Mr Kalloghlian wanted to meet, Dr Briggs, the proposed new architect expert onsite. On 4 December 2018, Mr Kalloghlian amended the draft letter of engagement for Dr Briggs. The finalised letter was sent on 11 December 2018, and, in the next weeks, arrangements were being made for him to attend the site, which occurred on 4 January 2019. Dr Briggs apparently had a "concern [of] wasting money with having the claim made. Concern is what is the damages".
39. On 21 January 2019, a further affidavit of Mr Kalloghlian was served.
40. During January 2019, there was further communication with Dr Briggs and a draft report was sought.
41. On 7 February 2019, Mr Hand returned the brief because his invoice from mid-November 2018 had not been paid. The next day, the draft further expert report of Mr Worthington was received by the respondents.
42. By 8 February 2019, Mr Mitry found a senior counsel and junior counsel who were prepared to appear at the upcoming hearing on 19 March 2019, with an estimate of fees of $100,000 to be paid into trust.
43. On 11 February 2019, in response to the provision of those barristers' costs agreements, Mr Kalloghlian emailed Mr Mitry: As you all are aware this matter has to have the Architect claim joined to have the full strength and quantum, and if that happens which it must as discussed on many occasions, it will adjourn the matter for a while. Richard you would recall I met up with you with my high concerns of the matter and how it was progressing Can I have an update on Briggs report and architects claim of where it is up to?
44. Mr Mitry responded within fifteen minutes: Briggs Briggs attended your property and as you know asked for a supplementary letter of instruction which was forwarded last week (after you confirmed instructions). We expect that his report would be imminent now that he has that material. Impending hearing If the report supports a claim in damages against the architect, proceedings will be immediately commenced against the architect. That would mean an application to move the proceedings to the higher jurisdiction, thus adjourning the matter. However, the imperative has been to brief new counsel - as were your instructions. We obtained availability from counsel (senior and junior) who must prepare as if a hearing is going ahead, or, if it is not, for an adjournment application. Otherwise you will be left without counsel who are fully prepared. They would naturally also settle the statement of claim against the architect. They have required money in trust to accept the brief (which is presently a brief on hearing) as I would expect. Please confirm your instructions asap.
45. Mr Kalloghlian appeared concerned about the cost of two barristers and said, "can I meet with Kidd ASAP to see who he is and feel him out".
46. On 12 February 2019, Mr Kalloghlian suggested an alternative barrister, Mr Thomas, be engaged after he had met Mr Thomas at his business, discussed the case with him and Mr Thomas indicated that he could assist. Mr Mitry received a costs agreement from Mr Thomas, which he forwarded to Mr Kalloghlian, "in case you ultimately do wish to proceed with him".
47. It appears that was Mr Kalloghlian's wish as Mr Thomas was engaged by 13 February 2019. Mr Klooster was engaged as the junior barrister. On 15 February 2019, Mr Worthington's further report was sent to Mr Klooster to settle. It was due that day.
48. On that same day, Mr Thomas provided to Mr Kalloghlian, but not Mr Mitry, a high-level plan for the case moving forward, including claims for misleading or deceptive conduct against the architect, with a retention of the defects claim that had already been brought in the District Court.
49. On 18 February 2019, Dr Briggs gave his opinion that he agreed with Mr Worthington: "there isn't much of a claim against architect… everything that the [architect] done is based on client wishes". Dr Briggs agreed to meet Mr Kalloghlian at the property later that week.
50. Mr Thomas and Mr Klooster made it their priority to prepare an amended cross-claim, to be agitated in the Supreme Court. When Mr Thomas sent an agenda about the work to be done, Mr Kalloghlian responded, "George Thomas at work!".
51. On 19 February 2019, Mr Thomas took a statement from Mr Kalloghlian without the respondents being present.
52. On 25 February 2019, Mr Klooster provided Mr Mitry with a draft District Court amended cross-claim.
53. On 27 February 2019, Mr Klooster provided Mr Mitry with a draft Supreme Court Commercial List Statement, which included 30 separate issues likely to arise, including whether Mr Kalloghlian's agreement with the builder was binding and enforceable, void ab initio or voidable, procured by illegality and unjust pursuant to the Contracts Review Act 1980 (NSW). It was also contended that the cross-defendants deliberately made false statements in breach of the Australian Consumer Law and, as a matter of illegality, engaged in illegal and criminal conduct under the Environmental Planning and Assessment Act 1979 (NSW) and the Crimes Act 1900 (NSW). That pleading retained defects claims similar to those originally pleaded in Mr Kalloghlian's District Court cross-claim, and the particulars of defects referenced Mr Worthington's July 2018 report. It also sought remedies against the builder and architect company directors personally.
54. Mr Mitry candidly stated that neither he nor any of the other barristers had considered these wider claims.
55. On 1 March 2019, Mr Thomas asked Mr Mitry to prepare an affidavit for the purposes of an application to transfer the proceedings to the Supreme Court, which he did that day.
56. On 4 March 2019, Dr Briggs emailed Mr Mitry that he would prepare a draft report for discussion the next day, and Mr Mitry forwarded that to Mr Kalloghlian.
57. On 5 March 2019, the finalised Commercial List Statement was served on the builders, who indicated that a summons was needed to agitate a transfer, which was filed on 8 March 2019.
58. On 6 March 2019 Mr Kalloghlian emailed Mr Mitry: "Let's go for it team".
59. On 8 March 2019, Dr Briggs indicated that there was only one minor architectural defect he could identify. He did not provide a report.
60. On 12 March 2019, the summons seeking leave to effectively run the cross-claim proceedings in the Supreme Court was heard by Hammerschlag J (as the Chief Judge then was) and discontinued with costs, with liberty to apply.
61. Later that day, Mr Klooster provided advice that a notice of motion ought to be filed in the District Court seeking to vacate the hearing by reason of the proposed amended pleadings.
62. On 13 March 2019, Mr Kalloghlian refused to give instructions sought by Mr Thomas that he would pay the quantum of the builder's claim into Court as a condition of the proposed adjournment.
63. On 15 March 2019, the application to adjourn the District Court hearing was dismissed. Later that day, Mr Klooster sent an email with advice about the upcoming hearing, including: 1. If Mr Kalloghlian "wishes to pursue a delay claim against the Builder and/or Architect and the respective individuals, it is imperative that the only matter we can pursue next week are defects". 2. Mr Worthington's evidence "is not great" and that "many of the defects will come down to how experts perform in the box". 3. An offer ought to be made to the builder to pay $320,000 to $350,000 plus 50% of their costs, then estimated at $250,000. 4. If the case was litigated, the likely costs order was unclear.
64. On 17 March 2019, Mr Klooster provided a further advice based on instructions he had received directly from Mr Kalloghlian.
65. On 18 March 2019, Mr Klooster provided to Mr Mitry the finalised Worthington report and asked for instructions not to press some defects, to which Mr Kalloghlian responded: I say [let's] go for all of them and die fighting not running.
66. The District Court hearing scheduled for 19 March 2019 did not proceed because the trial judge recused himself. The matter was listed before the list judge on 26 April 2019.
67. Mr Thomas and Mr Klooster recommended attempting to reagitate the claim in the Supreme Court, and, on 22 March 2019, Mr Kalloghlian had given instructions to the barristers directly to pay the total of the builder's claim into Court.
68. On 28 March 2019, after being prompted by Mr Mitry, Dr Briggs emailed that he did not have confidence that anything he could see would assist Mr Kalloghlian.
69. On 29 March 2019, Mr Thomas and Mr Klooster agitated the application to rely on the Supreme Court proceedings with pleadings described by Hammerschlag J as new "hotshot" pleadings. On that day, Hammerschlag J noted that Mr Kalloghlian was "late" and, on 1 April 2019, made orders by consent that Mr Kalloghlian's District Court proceedings be transferred to this Court. Orders were also made in terms to the following effect: 1. Judgment for the builder in its claim in the District Court proceedings in the sum of $587,715.04 including GST plus interest of $62,256.41 as at 29 March 2019 (and accruing at $88.00 per day); 2. Applicant to pay the builder's costs on its claim provisionally assessed at $215,000 but subject to adjustment on final assessment; 3. Applicant pay the builder's costs of the original motion of 12 March 2019 provisionally assessed in the amount of $10,000 subject to adjustment on final assessment; and 4. Joinder of the architect and other individual defendants and leave to file any commercial list statement by 19 April 2019; 5. Court notes the undertaking of the [builder] not to raise in these proceedings any contention that Mr Kalloghlian is subject to any type of estoppel by reason of the judgment entered for the builder.
70. Around that day, another law firm acting for Mr Kalloghlian demanded that the respondents pay the whole of the builder's claim and the builder's costs, amounting to $874,971.45, by 16 April 2010.
71. No further evidence was filed by any party in the proceedings. On 13 November 2020, a settlement was reached, and orders were made by consent dismissing the Supreme Court proceedings with the parties to bear their own costs (other than the Costs Order Costs). It is not possible to know from the settlement deed how the settlement sum was negotiated, nor whether that settlement was more or less advantageous to Mr Kalloghlian than the likely outcome that had been advised to Mr Kalloghlian by the various barristers.

Section 99 and the Court's inherent power to supervise its officers

1. Section 99 of the Civil Procedure Act 2005 (NSW) provides: 99 Liability of legal practitioner for unnecessary costs (1) This section applies if it appears to the court that costs have been incurred-- (a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or (b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. (2) After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following-- (a) it may, by order, disallow the whole or any part of the costs in the proceedings-- (i) in the case of a barrister, as between the barrister and the instructing solicitor, or as between the barrister and the client, as the case requires, or (ii) in the case of a solicitor, as between the solicitor and the client, (b) it may, by order, direct the legal practitioner-- (i) in the case of a barrister, to pay to the instructing solicitor or client, or both, the whole or any part of any costs that the instructing solicitor or client, or both, have been ordered to pay to any other person, whether or not the solicitor or client has paid those costs, or (ii) in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs, (c) it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party. (3) Before making such an order, the court may refer the matter to a costs assessor (within the meaning of Part 7 of the Legal Profession Uniform Law Application Act 2014) for inquiry and report. (4) The court may direct that notice of any proceedings or order under this section with respect to a legal practitioner be given-- (a) in the case of a barrister, to the instructing solicitor or client, or both, as the court may direct, or (b) in the case of a solicitor, to the client. (5) The court may give ancillary directions to give full effect to an order under this section, including directions to a legal practitioner to provide a bill of costs in assessable form-- (a) to the court, or (b) to a party to the proceedings, or (c) in the case of a barrister, to the instructing solicitor or client, or both, or (d) in the case of a solicitor, to the client. (6) A party's legal practitioner is not entitled to demand, recover or accept-- (a) in the case of a barrister, from the instructing solicitor or client, or (b) in the case of a solicitor, from the client, any part of the amount for which the legal practitioner is directed by the court to indemnify any party pursuant to an order referred to in subsection (2) (c). (7) In this section, "client" includes former client.
2. Mr Kalloghlian only relied upon section 99 as the basis for the orders sought in his original form of motion. However, in opening submissions, Mr Kalloghlian's counsel indicated that he also relied upon the Court's inherent power to make the same costs orders and referred to Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19. In that case, Basten JA at [19] cited Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; 63 NSWLR 300 (Lemoto) and noted in a footnote: At [88] it is said that the court exercised the inherent jurisdiction to order the solicitors to pay the costs of the proceeding in Wylde; in fact no order was made as to payment of costs by any party.
3. In Lemoto, McColl JA (with whom Hodgson and Ipp JJA agreed), outlined the history of legislative power to make "wasted costs orders" and observed the following features of the court's inherent jurisdiction: [84] Historically courts which possessed inherent jurisdiction had power, exercised summarily, to order a solicitor to pay the costs of legal proceedings in relation to which he or she provided legal services. Misconduct, default or serious or gross negligence in the course of the proceedings was sufficient to justify such an order, which while being penal in nature, was made to protect the client who had suffered and indemnify the party injured: Myers v Elman [1940] AC 282 at 289, 303, 318, 319. The jurisdiction is not "a modern invention". It can be traced to the mid-eighteenth century: Myers v Elman (at 290, per Viscount Maugham). The cases traceable to that period demonstrate that a costs order might be made against a solicitor on the basis of "mere negligence of a serious character, the result of which was to occasion useless costs to the other parties": ibid. [85] The summary jurisdiction to order a solicitor to pay costs was an aspect of the court's disciplinary jurisdiction. It was based on the court's right and duty to supervise the conduct of its solicitors: Myers v Elman (at 302 per Lord Atkin, at 318 - 319 per Lord Wright, at 334 - 336 per Lord Porter). Lord Wright pointed out (Myers v Elman at 318 - 319):
4. The supervisory jurisdiction to order costs against a legal practitioner can operate where there has been a failure by the legal practitioner to discharge their duty "to aid in promoting … the cause of justice": Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 at [18] (Basten JA), citing Myers v Elman [1939] All ER 484; Lemoto at [92] (Hodgson JA).
5. The interaction between the inherent jurisdiction and the rule-based jurisdiction in the CPA is subject to some commentary. Dal Pont in Law of Costs (4th ed, Lawbook Co, 2018) states: There is no clear statement, either in the rules or in the case law, that conclusively determines the relationship between the rule-based and the inherent jurisdictions. This is in no way aided by the fact that the rules are phrased in similar but not identical terms as the curial formulation of the inherent jurisdiction. To the extent that the rules reflect the schema of earlier English rules, they may simply confirm the inherent jurisdiction, a point gleaned from New South Wales and Western Australian authority. In the jurisdictions that envisage a lawyer's negligence, or equivalent terminology, may trigger the rule-based jurisdiction, though, scope for the latter's availability extends beyond the strictures of the inherent jurisdiction. Caution dictates, in any case, that it is safer if possible to base any order on both heads of power in the alternative.
6. While I was not taken to any clear statement of authority identifying the difference in the operation of the inherent jurisdiction and section 99, for the reasons that follow, it does not matter.
7. It was not in dispute that the purpose of a personal costs order is to compensate the client who has suffered wasted costs: Myers v Elman [1940] AC 282 at 289 (Viscount Maugham) 319 (Lord Wright). It has also been suggested that a wasted costs order may have a punitive effect: Etna v Arif [1999] 2 VR 353 at 379 (Batt JA, with whom Charles and Callaway JJA agreed); Currie & Co v Law Society [1977] QB 990 at 997-998 (May J); Harley v McDonald [2001] 2 AC 678 at 703 (Privy Council); Kelly v Jowett (2009) 76 NSWLR 405 at [61] (McColl JA with whom Beazley P and Barrett J agreed).
8. The law concerning the operation of s 99 CPA and the inherent jurisdiction has recently been summarised by Ward CJ in Eq (as the President then was) in NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 at [44]-[56]. The following principles are not in dispute and are of particular relevance here: 1. The jurisdiction to make costs orders against legal practitioners is to be exercised "with care and discretion and only in clear cases": Lemoto at 92 (McColl JA, with whom Ipp JA and Hodgson JA agreed); Kelly v Jowett [2009] NSWCA 278 at [60] (McColl JA, with whom Beazley JA and Barrett J agreed). Other similarly sparing thresholds have been used, including "with great caution": Macteldir Pty Ltd v Dimovski [2005] FCA 1528 at [3] (Allsop J) and "not with the benefit of hindsight": Tarabay v Bechara [2010] NSWSC 202 at [37] (Windeyer AJ) (affirmed in [2011] NSWCA 177). 2. The onus of establishing the requisite misconduct lies with the applicant. Where a strong prima facie case is made against the practitioner, there is a shift in the evidential burden to the practitioner to satisfy the court that an order should not be made: Ridehalgh v Horsefield [1994] Ch 205 at 239 (Bingham MR) (Ridehalgh). Because of the serious nature of the allegations, the warnings of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 apply: see eg Ideal Waterproofing Pty Limited v Buildcorp Australia Pty Limited [2006] NSWSC 155 (Sully J). 3. Section 99 is enlivened where costs have been incurred "by the serious neglect, serious incompetence or serious misconduct of a legal practitioner" or "improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible". The power must be understood in the context of obligations in ss 56-60 of the CPA: Nadarajapillai v Naderasa [2015] NSWCA 109 at [11] (Emett JA, with whom McColl and Macfarlan JJA agreed). Section 99 consequences can be faced by practitioners who fail to advance the efficient administration of justice under the overriding purpose in s 56 CPA: Kelly at [57]-[59] (McColl JA, with whom Beazley JA and Barrett J agreed). 4. The adjectives of neglect, incompetence and misconduct are not defined in the CPA. As Basten JA (with whom Ward JA and Emmett JA agreed) has noted in Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 at [24] (Re Felicity), the "various phrases … do not constitute discrete and independent concepts; nor are they to be treated as terms of art". Guidance on their meaning can be traced to Ridehalgh at 232-233 where Bingham MR observed in relation to the UK's equivalent provision with the qualification that the adjectives should not be sharply differentiated or given specific, self-contained meanings: 'Improper' means what it has been understood to mean in this context for at least half a century. The adjective … covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. But it is not in our judgment limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can be fairly stigmatised as such whether or not it violates the letter of a professional code. 'Unreasonable' … aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner's judgment, but it is not unreasonable. The term 'negligent' was the most controversial of the three. It was argued that the Act of 1990, in this context as in others, used 'negligent' as a term of art involving the well known ingredients of duty, breach, causation and damage. Therefore, it was said, conduct cannot be regarded as negligent unless it involves an actionable breach of the legal representative's duty to his own client, to whom alone a duty is owed. We reject this approach: (1) As already noted, the predecessor of the present Order 62 rule 11 made reference to 'reasonable competence'. That expression does not invoke technical concepts of the law of negligence. It seems to us inconceivable that by changing the language Parliament intended to make it harder, rather than easier, for courts to make orders. (2) Since the applicant's right to a wasted costs order against a legal representative depends on showing that the latter is in breach of his duty to the court it makes no sense to superimpose a requirement under this head (but not in the case of impropriety or unreasonableness) that he is also in breach of his duty to his client. 1. Bingham MR's words in Ridehalgh have been cited with approval in Australia: Re Felicity at [24] (Basten JA) and were further elaborated upon in Wentworth v Rogers [1999] NSWCA 403 at [32]-[35] (Handley JA, Stein JA and Sheppard AJA). 2. There are many factual circumstances which can attract section 99. In Myers v Elman [1940] AC 282, Lord Wright observed (at 318-319): The matter complained of need not be criminal. It need not involve peculation or dishonesty. A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor's duty to ascertain with accuracy may suffice. Thus, a solicitor may be held bound in certain events to satisfy himself that he has a retainer to act, or as to the accuracy of an affidavit which his client swears. It is impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction. It need not involve personal obliquity. The term professional misconduct has often been used to describe the ground on which the Court acts. It would perhaps be more accurate to describe it as conduct which involves a failure on the part of a solicitor to fulfil his duty to aid in promoting in his own sphere the cause of justice. 1. In considering whether to make a wasted costs order arising out of a lawyer's conduct of court proceedings, full allowance must be made for the exigencies of acting in that environment and only when, with all allowances made, a legal practitioner's conduct of court proceedings is quite plainly unjustifiable is it be appropriate to make such an order: Lemoto at (McColl JA, with whom Ipp JA and Hodgson JA agreed); Ridehalgh at 236 (Bingham MR). It may be difficult for a court to know all the details and circumstances of the lawyer's instructions: G E Dal Pont, Lawyers Professional Responsibility in Australia and New Zealand (2nd ed, Lawbook Co, 2001) at 374-375. 2. There is also a requirement of causation. Under s 99(1), the costs must have been incurred "by" the impugned conduct or must have been incurred improperly in circumstances where the practitioner "is responsible". The applicant must demonstrate a causal connection between the practitioner's conduct and the claimed loss: Byrne v Sefton Health Authority [2002] 1 WLR 775 at 783 (Chadwick LJ); 1165 Stud Road v Power (No 2) [2015] VSC 735 at [212] (Vickery J) (not modified on appeal); Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors (No 8) [2014] VSC 567 at [161] (Dixon J). The causal link has been described as "essential": Ridehalgh at 237 (Bingham MR). 3. Solicitors are entitled to rely upon counsel but that does not allow a solicitor to blindly rely on counsel's advice or entirely abdicate from his or her responsibilities to the client and the court: Whyked Pty Ltd v Yahoo7 Pty Ltd [2008] NSWSC 477 at [182] (McDougall J); Tarabay v Bechara [2010] NSWSC 202 at [38] (Windeyer AJ).
9. The authorities speak of the jurisdiction being of a "summary nature" and in Harley v McDonald [2001] 2 AC 678 at 704 the Privy Council stated: … the court must take great care to confine its attention to the facts which are clearly before it or to facts relating to the conduct of the case that are immediately and easily verifiable. Allegations that may raise questions about duties owed to the client by the barrister or solicitor and the conduct of the case outside the courtroom are unlikely to be of that character. They are likely therefore to fall outside the proper scope of that inquiry. The court must bear in mind that it is not its function, in the exercise of this jurisdiction, to adjudicate on the position as between the client and his barrister or solicitor.
10. It has also been said that the inherent jurisdiction "can be invoked only while the costs remain a live issue before the court which conducted the proceedings": Harley v McDonald [2001] 2 AC 678 at 702-3 (Privy Council). In Bell v Hartnett [2022] NSWCA 42 at [14] Basten JA stated that s 99 "is a power exercised by the trial judge". See also Atanaskovic Hartnell v Birketu Pty Ltd [2020] NSWSC 573 at [29] - [31] (Hammerschlag J). I was not referred to any authority analogous to the present, where a client has brought a motion seeking an order, pursuant to section 99 or the Court's inherent authority, that her own solicitor ought to pay both: 1. costs that had been agreed to be paid to the opposing side (on terms) and had in fact been paid; and 2. all costs and disbursements paid in pursuit of her claim that had not been prosecuted to finality, but instead maintained and then settled.

Particulars of Application

1. Because of the nature of the application, it is important to set out the specific matters relied upon by Mr Kalloghlian in his points of claim, which, taken together, were said to justify the orders sought, namely: 11. Despite the absence of a response or satisfactory response from either of the [builder] or [architect] [to Mr Mitry's letter of demand] and despite instructions to do so, the Respondents did not: (a) take steps to commence Court proceedings against the [builder or architect]; and/or (b) cause to be prepared an expert's report of probative value for the purpose of the Court proceedings… 12. By Statement of Claim filed 11 May 2017 and Amended Statement of Claim filed 25 May 2017 in the District Court… the [builder] brought proceedings against the [Mr Kalloghlian] alleging that the [Mr Kalloghlian] was liable to [the builder] for unpaid progress claims under the Building Contract in the sum of $587,715.04 plus interest and costs. 13. On or about 18 August 2017, the Respondent drafted, filed and served on behalf of the [Mr Kalloghlian] a Defence to the Amended Statement of Claim that: (a) was poorly pleaded and particularised and was liable to be struck out in whole or in part; (b) admitted the Building Contract; (c) pleaded the existence of breaches by the [builder] of the Building Contract but did not particularise them, whether by reference to the First Worthington Report or in any other way; and (d) pleaded a set off by reference to a Cross Claim but failed to file a Cross Claim. 15. On or about 8 November 2017 the [Mr Kalloghlian] submitted to the Court that the [Mr Kalloghlian] intended to make an application for transfer of the District Court Proceedings to the Supreme Court but failed to make such an application. 16. On or about 25 May 2018, the respondents drafted, filed and served on behalf of the [Mr Kalloghlian] in the District Court Proceedings a Cross Claim which: (a) was filed eight months late and in breach of the directions of the Court; (b) was poorly particularised and liable to be struck out in whole or in part; (c) pleaded the Building Contract; (d) particularlised a number of defects derived from the First Worthington Report but did not particularise them, whether by reference to the First Worthington Report or in any other way; and (e) brought no claim against [the architect]. 17. On or about 13 July 2018 the respondents caused to be served in the District Court Proceedings a further report of Worthington which: (a) was served six months late and in breach of the directions of the Court; (b) having regard to its form and aspects of its content, was of little or no probative value for the purpose of the District Court Proceedings; and (c) if solely relied upon in the District Court Proceedings, placed the [Mr Kalloghlian] at risk of failure and paying the costs of the [builder], such as to justify a decision not to proceed to final hearing in reliance on it. 19. The Third Worthington Report was not served in the District Court Proceedings, in the absence of which, or the service of an alternative report, the [Mr Kalloghlian] was at risk of failure in the District Court Proceedings and paying the costs of the [builder], such as to justify a decision not to proceed to final hearing without such a report. 21. On 5 March 2019, the respondents caused to be served on the solicitor for the [builder] a draft of the Technology and Construction List Statement filed in these proceedings which relevantly: (a) denies the enforceability of the Building Contract contrary to the admissions made in the District Court Proceedings; (b) for the first time seeks to join the [architect] as a party to raise causes of action which were the subject of the First Worthington Report and could have been raised in the normal course of the District Court Proceedings; (c) for the first time seeks to join the [builder's director and architect's director] which could have occurred (or been the subject of a successful transfer to the Supreme Court) in the normal course of the District Court Proceedings; (d) pleads new causes of action, including under the Australian Consumer Law, the Contracts Review Act 1980, estoppel, illegality, mistake and uncertainty, which could have occurred (or been the subject of a successful transfer to the Supreme Court) in the normal course of the District Court Proceedings; (e) refers to the service of additional expert evidence and not the Third Worthington Report, which was not served; and (f) if relied upon, amounted to a case against all of the [builder and architect] which was substantially new relative to the case in the District Court Proceedings, the effect of which was that the costs incurred by the [Mr Kalloghlian] and the [builder] in the District Court Proceedings were wasted.
2. Despite counsel for Mr Kalloghlian asserting that the points of claim ought not be read strictly, and instead ought to be read as a "big picture" demonstrating unacceptable delay generally and failure to bring a case against the architect despite instructions from 2016 to do so, I do not accept that it is open to a party seeking to invoke the Court's supervisory jurisdiction or section 99 to be "vague" in the serious allegations that are made. The authorities all clearly require that the legal practitioner "must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it": Lemoto at 92 (McColl JA, with whom Hodgson JA and Ipp JA agreed). Therefore, I consider that Mr Kalloghlian is bound by his points of claim, particularly in circumstances where his counsel appeared to take some care with them and amended them several times, including on the final day of the hearing.
3. For the reasons that are detailed further below, I consider Mr Kalloghlian's notice of motion must be dismissed.
4. First, I am not persuaded that the costs claimed have been incurred by Mr Kalloghlian as a result of the respondents' "improper, unreasonable or negligent act or omission". While there was some delay in progressing the matter, their conduct has a reasonable explanation.
5. Secondly, I am not persuaded that any conduct of the respondents caused costs to be incurred that would not otherwise have been incurred, but for that conduct.
6. Finally, I do not consider it appropriate in all the circumstances to make a personal costs order as sought, particularly in circumstances where Mr Kalloghlian delayed with this application that appears more concerned with alleged professional negligence than the Court's supervision of a solicitor.
7. It has been established since at least Ridehalgh that the concept of a lawyer's neglect is not the same thing as an actionable negligence requiring the ingredients of duty, breach, causation and damage: at 232 (Bingham MR). Technical concepts of negligence have no home in the s 99 analysis and are instead to be agitated through professional negligence suits where appropriate.

Conduct of the respondents

1. Mr Kalloghlian must demonstrate on the Briginshaw standard that the respondents, or Mr Mitry, behaved in a way for which there is no reasonable explanation and/or breached his duties to the Court and thereby incurred wasted costs for his client.
2. Mr Kalloghlian relied upon two affidavits he had sworn and an abundance of documentary material. He conceded in cross-examination that his lawyer wrote his affidavits in his presence, but that he did not check the dates or details of comments included in his affidavits, such as whether steps taken in the litigation were late or "in breach of a court order". For that reason, I give little weight to the conclusory comments in his affidavits, and instead have relied upon the documents themselves.
3. While Mr Kalloghlian may have been making an honest attempt in the witness box, he was generally an unimpressive witness. His mantra-like answer to many questions in cross-examination was "I relied upon Mr Mitry" or "Mr Mitry was looking after it all" or "I left Mr Mitry to decide", even though such answers were not always responsive to the question asked. He refused to accept that in many emails he in fact gave instructions to Mr Mitry, gave a clear indication of what he wanted to happen, or Mr Mitry recorded that he was doing as Mr Kalloghlian requested. Below I provide further findings about Mr Kalloghlian's involvement in his proceedings.
4. I consider that Mr Mitry was truthful. He made appropriate concessions. For example, when asked about whether delay was acceptable in litigation, he responded that it was not. Where there is an inconsistency between the evidence of Mr Mitry and Mr Kalloghlian, I prefer Mr Mitry's evidence.
5. I make the following findings based on the documents and the oral evidence: 1. Mr Kalloghlian was involved in each step of his litigation and was kept aware of what was going on through emails and telephone calls with the respondents. He engaged in giving his opinions about all matters, from his own affidavits, to letters of instruction to experts, which counsel should be briefed and whether matters ought to be pressed or abandoned. 2. In relation to the experts engaged, Mr Kalloghlian was consistently involved and aware of progress, and he gave specific instructions when he wanted to. For example: 1. He gave instructions to engage Mr Worthington as the building expert for his dispute with the builder. This was demonstrated by him emailing Mr Mitry: "let's get him [to the house] ASAP". Mr Kalloghlian was also at the house when Mr Worthington was inspecting it, even though Mr Mitry was not. Mr Mitry asked for Mr Kalloghlian's instructions to send the engagement letter to Mr Worthington. While there were various iterations of the engagement letter, each one was sent to Mr Kalloghlian for approval. 2. Mr Kalloghlian also approved the engagement of architect, Mr Bullen, and was present during an original inspection, and he requested Mr Bullen attend again to review his expert report, when it appeared unsupportive of the case Mr Kalloghlian wished to agitate against the architect. 3. Further, when Dr Briggs was engaged, Mr Kalloghlian amended the letter of instruction to suit him and discussed the matter with him. 1. As to the complaint that the respondents did not commence proceedings against the architect promptly, I find that at all times Mr Kalloghlian was advised by Mr Mitry and the various barristers who were engaged prior to February 2019 that the proposed claim against the architect, which Mr Kalloghlian referred to as "defects", required an expert report before it could properly be pleaded and progressed. I do not accept Mr Kalloghlian's evidence that he did not know why a claim against the architect had not been commenced before 2019 or that the lack of an architect's report was only first discussed in November 2018. He was told that Mr Worthington did not have expertise to opine on issues concerning the architect and he agreed that Mr Bullen ought to be engaged. When the expert report of Mr Bullen was provided in draft and was unfavourable, Mr Kalloghlian gave instructions for another expert architect to be briefed to provide a report, in the hope that it would be more favourable. When the first District Court hearing was adjourned in November 2018 because Mr Worthington was medically unwell, Mr Kalloghlian emailed Mr Mitry that "another important reason to adjourn" the hearing was that there was not yet an architect report and that he was "meeting a guy on Monday". 2. At all times, Mr Kalloghlian was kept informed about the progress of the pleadings. For example, he was copied into emails from Mr Mitry to barristers asking for updates on pleadings and other tasks. Mr Kalloghlian in fact emailed a barrister to ask for an update; I do not accept his evidence that he only did so because Mr Mitry told him to. 3. Mr Kalloghlian was kept informed about the weaknesses of his case against the builder. The barristers consistently advised that Mr Worthington's evidence was not very good, but Mr Hand recorded that it was Mr Kalloghlian's preference to keep him as his expert. Mr Worthington's July 2018 expert report even remained part of the 2019 Commercial List Statement. 4. Mr Kalloghlian was very much involved and interested in the barristers who were briefed. He appeared to want to brief Mr Worthington's preferred barrister, Mr Bland, at the beginning. I do not accept that he left the decision to Mr Mitry. Mr Mitry recommended changing counsel because of delays with progress, and that Mr Hand ought to be briefed. However, when Mr Hand expressed concern in November 2018 about the expert evidence and aspects of the claim, Mr Kalloghlian told Mr Mitry he was "too negative" and that he wanted alternative counsel. 5. When Mr Mitry found a senior counsel and junior barrister who were able to take over and appear at the rescheduled hearing in March 2019, Mr Kalloghlian raised a concern about the requirement to pay $100,000 into trust for those barristers, and then asked how much the senior counsel alone would cost and was informed it would be $96,000. Mr Kalloghlian was also not prepared to engage the senior barrister until he had met him and "got a feel for him". While he suggested that it was Mr Mitry's decision to brief Mr Thomas, I do not accept that was the case. Mr Kalloghlian did accept in cross-examination that he did listen to the advice of the barristers: "I was led by them all". However, then tried to distance his involvement and knowledge: "I was the customer there - I was dealing with professional lawyers - I'm not a lawyer." I do not accept that he did not understand what was going on with his case, including the detail. 6. I consider that Mr Mitry accepted that he was responsible for running the case, and he appears to have applied himself independently to the progress of the case (for example, disagreeing with Mr Hand about the possible impact of an Anshun argument) and discussing the barristers' advice with Mr Kalloghlian. It was not suggested that Mr Mitry had acted inappropriately as a mere conduit, nor that he left everything to the barristers or the client. However, it is clear that he relied upon the advice of counsel in progressing the case, which is not inappropriate or unreasonable: see eg Whyked Pty Limited v Yahoo!7 Pty Limited [2008] NSWSC 477. Mr Mitry engaged Mr Worthington to investigate possible claims and thereafter counsel were at all times briefed and asked to prepare the pleadings, settle the evidence, including the expert reports, and to provide advice to Mr Kalloghlian. There is evidence of frequent conferences and emails with counsel, often including Mr Kalloghlian. 7. Further, all barristers, except for Mr Hand, and experts appear to have been paid directly by Mr Kalloghlian, which demonstrated he was aware of the work they were performing for him. While nothing turns on it, I do not consider that the applicant has proved that the agreement was other than claimed by Mr Mitry, namely that Mr Kalloghlian would pay disbursements, including barristers and experts, directly.
6. The real complaint of the Mr Kalloghlian appears to be that Mr Thomas' Commercial List Statement raising, inter alia, misleading or deceptive conduct against the architect was not prepared at the outset of the matter by Mr Mitry. Mr Mitry candidly accepted that he had never considered the causes of action that Mr Thomas pleaded and none of the barristers had either.
7. It was accepted by Mr Kalloghlian that there was no defence to the builder's claim; there was only a set-off pleaded for any defects that could be proved. However, the defect claims, whether in the District Court cross-claim or the Commercial List Statement, were never the subject of a judgment. It is not for the Court in a summary motion to determine the likely outcome of those claims and assess the likely costs consequences, should the matter have been finally determined. In Muriniti v Kalil [2022] NSWCA 109 at 46, Brereton JA stated that often a s 99 application cannot be determined until the end of a trial, when it can be seen whether steps taken in the matter were warranted or unreasonable. This reasoning is similar in effect to that of McHugh J in Minister for Immigration & Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624: the "court cannot try a hypothetical action between the parties".
8. As a generalisation, the applicant's complaints ignore the fact that there is no judgment that has decided the claims relevant to the points of claim, which are cumulatively asserted to provide a basis for the personal costs order. Dealing with each of the points of claim in turn, which are then to be considered together: 1. Paragraph 11 concerned a complaint before the District Court proceedings commenced, and therefore did not relate to "costs" within a proceeding. I do not consider investigating the possible causes of action that might be available to the applicant by engaging an expert to be grossly incompetent. Further, this complaint did not contribute to the builder's costs. 2. Paragraph 13 concerned the working or draft defence that was prepared by Mr Bland. It is not possible for me to assess whether the pleading ought to be characterised as defective or "liable to be struck out", as it was not finalised. It was not struck out. While there was delay by Mr Bland in producing that document, the evidence was that Mr Kalloghlian considered it a good idea to brief him as the barrister recommended by Mr Worthington, and Mr Mitry did in fact chase Mr Bland for the pleading. None of the matters alleged caused the builder to incur costs, and the work done by Mr Mitry was not grossly incompetent. 3. Paragraph 14 concerned sending a letter of demand to the builder about the proposed Supreme Court proceedings. At that time, the barrister's advice was that an expert report was necessary before commencing those proceedings, which would involve the hoped-for joinder of the architect. This conduct can be reasonably explained by Mr Mitry's reliance on counsel's advice. Merely sending a letter would not improperly increase costs in any event. 4. Paragraph 15 does not appear to be based on any evidence. I was not taken to anything that demonstrated that Mr Kalloghlian made that submission. 5. Paragraph 16 contains an allegation that the cross-claim in the District Court was filed 8 months late "in breach of court orders". That is not correct as the timeframe for filing had been extended by consent on numerous occasions. Again, the conduct of Mr Mitry can be explained by his reliance on counsel and the expert Mr Worthington taking longer than may be desirable to prepare a report. However, Mr Kalloghlian wanted Mr Worthington to be the expert and was kept informed of progress. I do not consider the delay caused by any gross incompetence of Mr Mitry. 6. Paragraph 17 complains that the second Worthington Report was served "late" based on orders made in December 2017. However, there had been agreed orders extending the time for service and I was not taken to evidence that demonstrated that the applicant was consistently in breach of court orders for delay. Another vague complaint was that the report was faulty in some unspecified way, even though the applicant continued to rely on that report even in the List Statement filed in this Court. It is impossible to see how the preparation of that report, or its late service, could have improperly increased costs of any party. It was also alleged that, without a further report from Mr Worthington, Mr Kalloghlian was "at risk of failure in the District Court Proceedings and paying the costs of the [builder]". Again, because the case was not in fact litigated, it is not possible to determine the effect of a want of further evidence. The risk did not eventuate in relation to the cross-claim being agitated by Mr Kalloghlian, as the only costs that were ordered (by consent) to be paid by Mr Kalloghlian were those relating to the builder's claim (not the cross-claim). In relation to the builder's claim, there was no defence. 7. Paragraph 19 complained that the third report of Mr Worthington was not served in the District Court proceedings. The report was sent to Mr Klooster on 15 February 2019 to be settled. He did not settle it until mid-March 2019. However, during the intervening time, Mr Thomas and Mr Klooster provided advice, which was accepted by Mr Kalloghlian and Mr Mitry, to reframe the whole case and seek to transfer the proceedings from the District Court to the Supreme Court. No adverse consequence appears to have been caused by the failure to serve that report, because the proceedings settled. It has not been demonstrated that Mr Mitry failed to comply with instructions of Mr Kalloghlian or advice from counsel to serve that report. Further, it has not been demonstrated that, had the report been served, a different outcome would have been achieved. Gross incompetence has not been demonstrated. 8. Paragraph 21 merely referred to the filing of the List Statement in this Court and the allegations that Mr Kalloghlian asserts ought to have been agitated by his lawyers from the outset. In this regard, Mr Kalloghlian asserted that he provided Mr Mitry with instructions in October 2016 that could have been deployed to bring a case similar to the List Statement and so would have avoided "wasted costs". I do not accept that Mr Kalloghlian provided Mr Mitry with substantially more instructions than those recorded in the original statement taken by Mr Mitry, or told him that he had significant concerns about having been misled about the price of the renovations works. However, even if I am wrong, Mr Kalloghlian has still failed to demonstrate that Mr Mitry behaved in a way that no reasonable practitioner would have behaved. I do not consider that the alleged failure to plead a cause of action that has not been demonstrated to have been the correct or a successful cause of action can amount to gross negligence or improper conduct. I do not consider that Mr Mitry behaved inappropriately in engaging experts to investigate possible claims and relying on the advice of barristers as to the most advantageous claims to be pleaded.
9. For completeness, I mention that Mr Kalloghlian relied upon comments by Hammerschlag J during the argument on 29 March 2019 to demonstrate that Mr Mitry had behaved inappropriately: The trouble is that you've got a problem. Your client's in a bind here because the case on what you were telling me was incompetently framed and incompetently managed. … So he's probably got a case he would think against his previous lawyers. … That's the next person that's going to be joined in the proceedings. So I don't know, I can't determine that but this is a complaint that says that he was badly served. He had this really hotshot case and no-one brought it; for two years there were proceedings in the District Court, as Judge Letherbarrow remarks in his refusal of the application. Reliance on comments made by his Honour without evidence and context is misconceived, as they do not amount to a "finding" or conclusion. Indeed, a fair understanding of what his Honour was saying was that if what he was being told was correct, then the claim was not properly framed or managed, and that Mr Kalloghlian may think he had a claim against his former lawyers. I do not consider the comments assist the applicant.
10. I also note that Mr Thomas informed Hammerschlag J that a reason for the delays was Mr Kalloghlian's involvement in Family Court proceedings.
11. I consider that Mr Kalloghlian has failed to discharge his onus of proving that the respondents behaved in a way that was "quite plainly unjustifiable", and has not persuaded me it is appropriate to make a personal costs order.

Causation

1. As to the second question, while not strictly necessary to decide, I am not persuaded that the conduct of the respondents caused wasted costs as claimed.
2. Dealing with the $225,000 provisional costs sum payable to the builder, those costs were only referrable to the builder's claim for unpaid progress payments. No costs were ordered to be paid by Mr Kalloghlian in relation to the cross-claim; all rights were effectively preserved in the transfer to the Supreme Court.
3. The builder's case was always one in relation to which Mr Kalloghlian had no defence, other than a set off for any amount successfully recovered from the builder by way of cross-claim. Even if Mr Kalloghlian's cross-claim had been prosecuted in the District Court and the benefit of a set-off was applied, it did not mean that the builder would not have been entitled to a costs order for its costs of its claim. This was advised by Mr Hand in November 2018.
4. None of the conduct complained of in the points of claim could have caused the builder to incur wasted costs, for which Mr Kalloghlian became liable.
5. In relation to the Solicitor/Client costs claimed by Mr Kalloghlian, in circumstances where the invoices related to investigating claims and pursuing the cross-claim based on defects, which was retained in the Supreme Court proceedings, it is not apparent why they are "wasted". Further, as there was no further evidence served in the Supreme Court proceedings after the transfer in April 2019, that suggests that the District Court evidence that had been prepared was considered sufficient to support the Supreme Court claims. As previously noted, the expert report of Mr Worthington was expressly referred to in the Supreme Court proceedings and can be taken to have been necessary.
6. I am not persuaded that this is an appropriate case to make a personal costs order for the combined reasons above.

Does UCPR 36.16 restrict the operation of s 99?

1. As an alternative submission, the respondents invoked r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW), which relevantly precludes any variation of a final costs order unless a Notice of Motion is filed within 14 days after the order is entered: Hurford Hardwood Kempsey Pty Ltd v Kempsey Timbers (Sawmilling Pty Ltd) (No 5) [2020] NSWSC 287 at [108], [114]-[115] (Stevenson J); Rodi v Gelonesi [2016] NSWCA 348 at [36]-[40] (Payne JA, with whom Meagher and Gleeson JJA agreed). The respondents submitted that Mr Kalloghlian's Notice of Motion sought to vary the November 2020 Court order disposing of the proceedings on the basis that the parties would bear their own costs, and it was out of time because it was filed within 10 months, not 14 days, of the final orders.
2. I do not accept Mr Kalloghlian's argument that the only cases where r 36.16 has been considered an impediment to a section 99 order are where the applicant was attempting to, in effect, have an alternative costs order made because they were unable to obtain payment of costs from the party originally ordered to pay them. I consider that in each case the concern was that the orders sought amounted to a variation of a costs order, which triggered the operation of the rule.
3. While it may well be appropriate to prevent an applicant from seeking alternative costs orders more than 14 days after obtaining consent orders from the Court, because I have already concluded that it is not appropriate to make a personal costs order against the respondents, it is unnecessary to decide.

Orders

1. For the reasons above, the appropriate orders are: 1. Applicant's motion dismissed. 2. Applicant to pay the respondents' costs as agreed or assessed. 3. Grant leave to any party to approach my Associate by email within 7 days of the date of this judgment, should an alternative costs order be sought. 1. That email must provide any evidence relied on together with submissions of no more than 3 pages and be copied to the other party. 2. That other party has leave to provide in response any evidence and submissions of no more than 3 pages within 7 days after receipt of the original material contemplated in order 3(a). 3. The party that made the application has leave to provide reply submissions of no more than 1 page within 2 days after receipt of the response contemplated in order 3(b).

Amendments 14 March 2023 - Correction to case citation and date DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 March 2023