Burrows v Macpherson Kelley Lawyers (Sydney) Pty Ltd

• Jurisdiction: Australia Federal only
• Judgment Date: 31 July 2023
• Neutral Citation: [2023] FCA 875
• Date: 31 July 2023
• Court: Federal Court

Federal Court of Australia

Burrows v Macpherson Kelley Lawyers (Sydney) Pty Ltd [2023] FCA 875

File number:	NSD 461 of 2022
Judgment of:	MARKOVIC J
Date of judgment:	31 July 2023
Catchwords:	PRACTICE AND PROCEDURE – application for security for costs – where applicant has commenced multiple proceedings against the respondents in various courts – where applicant has failed to satisfy an outstanding costs order in related proceeding – whether professional fees are payable where respondent is a self-represented legal practice – where applicant has not led any evidence demonstrating ability to meet a costs order – where applicant has failed to comply with a bankruptcy notice – whether there are factors additional to impecuniosity which favour an order for security for costs – whether application for security is oppressive – whether an order for security would stultify the proceeding – where the amount of security is relatively low – whether applicant’s conduct is vexatious – application granted
Legislation:	Bankruptcy Act 1966 (Cth) s 43 Competition and Consumer Act 2010 (Cth), Sch 2 (‘Australian Consumer Law’) ss 18, 21 and 236 Federal Court of Australia Act 1976 (Cth) s 56 Federal Court Rules 2011 (Cth) r 19.01(1)
Cases cited:	All Class Insurance Brokers Pty Ltd (in liquidation) v Chubb Insurance Australia Limited [2020] FCA 840 Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333 Birketu v Castagnet [2022] NSWSC 1435 Burrows v Macpherson and Kelley Lawyer (Sydney) NSW [2022] FedCFamC2G 1048 Burrows v Macpherson and Kelley Lawyers (Sydney) Pty Ltd [2023] FCA 622 Cachia v Hanes (1994) 179 CLR 403 Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165 Knight v Beyond Properties Pty Ltd [2005] FCA 764 Mbuzi v Hall [2010] QSC 359 Potier v Attorney-General (NSW) (2015) 89 NSWLR 284 Shaw v Yarranova Pty Ltd [2011] VSCA 55 Sywak v Visnic (No 2) [2010] NSWSC 374 United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	82
Date of last submissions:	29 March 2023 (Applicant) 28 March 2023 (Respondents)
Date of hearing:	21 March 2023
Counsel for the Applicant:	Mr D A Ward
Counsel for the Respondents:	Mr D Neggo
Solicitor for the Respondents:	Macpherson Kelley Pty Ltd

ORDERS

		NSD 461 of 2022
BETWEEN:	MS ZALI BURROWS Applicant
AND:	MACPHERSON & KELLEY LAWYERS (SYDNEY) PTY LTD ACN 127 962 298 First Respondent ; MACPHERSON KELLEY LAWYERS PTY LTD ACN 122 450 337 Second Respondent ; MR CHRISTOPHER STEPHEN FRAWLEY Third Respondent

order made by:	MARKOVIC J
DATE OF ORDER:	31 July 2023

THE COURT ORDERS THAT:

1. The applicant is to provide security for the respondents’ costs by payment into Court or by way of an unconditional bank guarantee in a form acceptable to the respondents as follows:

   1. $65,000 within 28 days of the date of these Orders; and

   2. $65,000 42 days before the date of the commencement of any final hearing of the proceeding.

2. In the event that the security in Order 1(a) and/or (b) above is not provided within the time specified, the proceeding be stayed until further order.

3. The applicant is to pay the respondents’ costs of paragraphs 4 and 5 of their amended interlocutory application filed on 8 September 2022.

4. Liberty to restore on three days’ notice.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MARKOVIC J:

1. Zali Burrows, the applicant, commenced this proceeding by the filing of an originating application and statement of claim on 20 June 2022. The respondents to the proceeding are Macpherson & Kelley Lawyers (Sydney) Pty Ltd (ACN 127 962 298) (298 PL), Macpherson Kelley Pty Ltd (ACN 122 450 337) (MK) and Christopher Frawley.

2. 298 PL was an incorporated legal practice from February 2008 until June 2015. At all relevant times it was a wholly owned subsidiary of MK.

3. In about 2011 and 2012 298 PL acted for Ms Burrows in a proceeding in the Family Court of Australia (now the Federal Circuit and Family Court of Australia) against her former partner, Stephen Alexander (Family Court Proceeding). Mr Frawley was a director of 298 PL. It is that relationship that has given rise to this proceeding. In particular:

1. Ms Burrows terminated 298 PL’s retainer to act for her in the Family Court Proceeding in November 2012 and thereafter acted for herself in the Family Court Proceeding, although it appears that the proceeding carried on under a new file number, SYC5955/2012 (Family Court File);

2. in November 2015 Ms Burrows commenced a proceeding in the District Court of New South Wales against 298 PL seeking damages for negligence and for breach of contract arising out of that firm’s retainer in the Family Court Proceeding (District Court Proceeding); and

3. it appears that in the course of defending the District Court Proceeding, 298 PL sought and was granted access to the Family Court File.

4. In this proceeding, in her recently filed further amended statement of claim (FASOC) Ms Burrows alleges, in summary, that in obtaining access to the Family Court File without first seeking permission from the parties to that proceeding to do so and in making a copy of one of the documents on the file without seeking permission to do so:

1. 298 PL or, in the alternative MK, made certain representations and/or failed to make certain disclosures to Family Court staff and thereby engaged in misleading or deceptive conduct in breach of s 18 of the ACL, that MK, or in the alternative 298 PL, was knowingly concerned in misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL) and that Mr Frawley was knowingly concerned in the misleading or deceptive conduct in breach of s 18 of the ACL; and

2. 298 PL or, in the alternative, MK engaged in unconscionable conduct contrary to s 21 of the ACL or the unwritten law and that MK, or in the alternative 298 PL, and Mr Frawley were knowingly concerned in that conduct.

5. Ms Burrows claims that she has suffered damage by reason of the alleged conduct and in respect of the contraventions of s 18 and s 21 of the ACL claims damages pursuant to s 236 of the ACL.

6. On 8 September 2022 the respondents filed an amended interlocutory application in which, among other things, they seek an order pursuant to s 56(1) of the Federal Court of Australia Act 1976 (Cth) that Ms Burrows provide security for their costs of the proceeding. As at 21 March 2023 the respondents estimated their recoverable costs to be $133,398.45 (exclusive of GST) and seek that amount by way of security.

Background

7. Ms Burrows is a solicitor. She was admitted to practice on 7 December 2012.

8. As set out at [3] above 298 PL provided legal services to Ms Burrows in the Family Court Proceeding and issued invoices to her.

9. On 1 October 2014 298 PL filed an application in the Supreme Court of New South Wales seeking to have its costs in relation to the Family Court Proceeding assessed. On 6 March 2015 the costs assessor determined (Determination) that 298 PL was entitled to the amount claimed from Ms Burrows, being $12,240.05.

10. On 2 April 2015 the Determination was registered as a judgment in the Local...