KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme (No 2)

Catchwords: CIVIL PROCEDURE – Abuse of process – Where Court previously found that cross-claim was an abuse of process – Consideration of appropriate form of relief – Whether cross-claim must be permanently stayed – Permanent stay ordered
COSTS – Application for indemnity costs – Where cross-claim found to be an abuse of process – Where indemnity costs should ordinarily be ordered where action taken is an abuse of process – Indemnity costs ordered

Legislation Cited: Nil

Cases Cited: Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359
Goodrich v Racing Victoria Racing Appeals and Disciplinary Board [2020] VSCA 110
KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme [2025] NSWSC 1320

Texts Cited: Nil

Category: Consequential orders

Parties: KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers (Plaintiff)
Dana Rahme (Defendant)

Representation: Counsel:
Q Rares (Plaintiff)
C Bevan (Defendant)
Solicitors:
Kekatos Lawyers (Plaintiff)
Solon Lawyers (Defendant)

File Number(s): 2023/139994

Publication restriction: Nil

JUDGMENT

1. On 10 November 2025, the Court gave judgment in *KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme [*2025] NSWSC 1320 (“the primary judgment”) in respect of the plaintiff’s Notice of Motion filed 18 December 2024 (“the motion”).

2. This judgment shall use the short forms adopted in the primary judgment.

3. The primary judgment concluded that the Statement of Cross-Claim filed by the defendant on 19 April 2024 was an abuse of process resulting in an estoppel. However, while various forms of relief were sought in the motion (some which appeared to be in the alternative), the exact form of relief that would follow from the Court’s conclusions were not the subject of detailed submissions by either party.

4. As such, the primary judgment made provision for the receipt of further written submissions as to the appropriate form of relief. This judgment concerns the determination of that question.

5. I agree with counsel for the plaintiff, Mr Q Rares, that the ordinary disposition of the motion is that, in light of the finding of abuse of process, and having regard to the estoppel that arises, the Court should terminate the proceeding by granting a permanent stay.

6. In Goodrich v Racing Victoria Racing Appeals and Disciplinary Board [2020] VSCA 110 (“Goodrich”), it was held by the Victorian Court of Appeal at [50] (per Tate, Kyrou and Emerton JJA) that:

“Where an abuse of process is established, the court or tribunal may terminate the proceeding by way of a permanent stay. If a proceeding is found to constitute an abuse of process, there is no discretion to refuse a stay. That is so even if the relevant party may otherwise have had a prima facie case.” (footnotes omitted)

7. The defendant does not dispute that statement of principle, but rather submits that parts of the CC may be preserved as not being infected by the findings of abuse of process.

8. The difficulty with that proposition is that the very foundation of the CC is the denial of the written costs’ agreements, and the assertion of an oral agreement containing different terms. That problem is not overcome by pointing to parts of the CC which may not directly traverse those issues.

9. The reason for that conclusion is threefold:

10. The submission advanced by the defendant is contrary to the leave granted by the Court, as the Court found the CC to be an abuse of process. The plaintiff is correct to submit that it was on this basis that the Court did not need to consider the issue of embarrassment.

11. The matter was not argued before the Court on the basis now put forward for the first time in argument as to the appropriate form of orders.

12. The pleading of the CC vis-à-vis the oral agreement, does, in fact, infect the whole of the CC. As the Court found in the primary judgment, “the terms of the written costs agreements are entirely at odds with what is pleaded by the defendant in the CC” (at [52]) and “the submissions advanced by the plaintiff were entirely inconsistent with the position taken by her in the earlier proceedings regarding the assessment of party/party costs.” (at [62]). The Court found that “the CC is clearly an abuse of process” (the primary judgment at [69]).

CONCLUSION

10. The appropriate order, in all of the circumstances, is a permanent stay of the CC.

11. I accept the submission of the plaintiff, that, in the light of the conclusions in the primary judgment (and, it may be added, this judgment), an order for indemnity costs should be made consistently with this Court’s decision in Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362 (per Powell J):

“The circumstances in which one is justified in departing from that established principle are, as it seems to me, limited, and it seems to me that, as a general rule, an order that costs be taxed on an indemnity basis is justified only where the action taken, or the action threatened, by the defendant constituted, or would have constituted, an abuse of the process of the court, or where the actions of the defendant, in the conduct of any defence to the proceedings, have involved an abuse of the process of the court, in the sense that the court's time, and the litigants' money, has been wasted on totally frivolous and thoroughly unjustified defences.”

ORDERS

12. The Court makes the following orders:

13. The defendant’s Cross-Claim filed 19 April 2024 be permanently stayed.

14. The defendant is to pay the costs of the plaintiff of the motion on an indemnity basis.

**********