THIRTIETH CEMALUX PTY LTD v SCHWARTZ SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MAHONEY ACJ and PRIESTLEY AP 26 August 1996 [1996] NSWCA 527 Mahoney ACJ. This is an application made on behalf of the successful respondent to a summons for leave to appeal that within the terms of Pt 52 r 66(1) the solicitor for the applicant be directed to indemnify the successful respondent to the summons against the costs payable by that respondent. The application has been made at some length and it is not necessary for me to attempt to detail all of the matters which have been urged in support of it. Rule 66(1) provides: Where costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default and it appears to a court that a solicitor is responsible (whether personally or through a servant or agent) the court may after giving the solicitor a reasonable opportunity to be heard; (a)... (b) ... (c) direct the solicitor to indemnify any party other than the client against costs payable by the party indemnified. No reliance has been placed upon any other part of r 66. The application for costs within the rule has been based essentially upon the claim that the basis upon which the application for leave to appeal has been made is so wrong and so defective that it is obvious to anybody reading the application that it must fail. It has been argued from that, as I understand the argument, that, accordingly, it should be inferred that the solicitor was 'responsible' for what has occurred within r 66(1) and that, therefore, the order for costs there referred to should not be made. There is, in my opinion, a good deal of force in the submission by Mr McGovern, for the respondent to the summons for leave to appeal, that the summons has been brought upon a mistaken or a misstated basis. He has referred to several matters in respect of which it would appear on the face of the matter that there was no ground for the assertions made in the summons. It would appear that, at least, there has been a gross mistake in relation to the bases alleged in the summons. However, the problem facing the present application is, in my opinion, that it depends upon the court drawing the inference to which I have referred or some other inference, such as would make the solicitor here in question 'responsible' within the terms of r 66(1). I should interpolate that the solicitor has put on no evidence and that Mr Perram, who appeared for the applicant upon the summons for leave to appeal appeared for the solicitor upon the present application and indicated that he was ready to deal with the matter at the present time. The question, therefore, is whether the court, upon the basis of the matters to which Mr McGovern has referred, should draw the inference that the solicitor is 'responsible' within the terms of r 66(1). 2 UNREPORTED JUDGMENTS To suggest that a solicitor is responsible for matters of the kind referred to in that sub-rule, namely that costs have been incurred improperly or without reasonable cause or are wasted by undue delay or any other misconduct or default is a serious matter. It is a matter which might go to the professional competence of the solicitor or beyond that. In the circumstances I would not be prepared to draw the inference that is in question. This Court does not know why the solicitor made the application in the form that he did. It does not know whether he acted upon instructions, whether he consulted counsel in relation to the matter or what occurred. The suggestion is, I think, that it should be inferred that the solicitor acted purely upon the basis of his own views of the matter, that he sought no advice, that he acted in accordance with the advice given to him by no person and that he, as would perhaps appear in the present case to be inferred, did what he did deliberately to delay what was taking place in the proceedings. The matter may be the subject of some considerable suspicion but in the circumstances I am not prepared to draw the inference that has beensuggested as basing the present application. In my opinion, therefore, the application should be refused. Priestley AP. I agree. Mahoney ACJ. The application for costs against the solicitor is refused. The order the court has made that the application be dismissed with costs is the order which will take effect in the present proceedings. Orders accordingly.