Malouf v Davoren-Whereat

This is an application by Kurt Davoren-Whereat (‘the defendant’) for a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (‘the CPA’) for costs of and incidental to his notice of motion filed 28 October 2024 which sought relief by way of interpleader under r 43.2 of the Uniform Civil Procedure Rules 2005 (NSW) (‘the UCPR’) (‘the interpleader motion’).

The respondents to that motion are Connor Malouf (‘the plaintiff’, as the first respondent), George Mavrakis (the plaintiff’s former solicitor – ‘the second respondent’) and Veritas Law Firm Pty Ltd (the plaintiff’s then current solicitor – ‘the third respondent’).

The third respondent has not participated in the interpleader motion and has indicated that they submit to the orders of the Court (save as to costs).

The following affidavits were read on this application:

None of the deponents were cross-examined.

The application involves resolution of the following issues:

The background facts are within narrow compass, albeit that intermediate and ultimate findings based upon them are contested: the plaintiff’s ultimate submission is that the defendant’s delay in interpleading disentitles it to all, or at least some, of its costs.

Against that short summary of the principal issue, I will briefly sketch the background facts, extending across the nature of the plaintiff’s claim, including its resolution and then deal more particularly with the matters that have generated the present dispute leading to the filing of the interpleader motion. The matters that follow reflect my findings.

The plaintiff commenced proceedings against the defendant by way of statement of claim filed in the District Court on 13 January 2020 seeking damages for personal injury allegedly suffered on 1 April 2017.

At the time of commencement of the proceedings, George Mavrakis of Mavrakis & Associates Lawyers was the solicitor on record for the plaintiff.

On 25 May 2021, Wilson SC DCJ ordered the appointment of Sam Malouf, the plaintiff’s father, as tutor pursuant to r 7.18 of the UCPR and an Amended Statement of Claim was filed on 25 June 2021 to reflect that appointment.

On 7 July 2021, Mr Mavrakis filed a notice of ceasing to act. A notice of appointment of solicitor was subsequently filed by the plaintiff, on 20 October 2021, appointing Michael Short of Veritas Law Firm (the third respondent) as the solicitor on record in lieu of Mr Mavrakis. Subsequently, on or around 13 January 2025, a notice of change of solicitor was filed with the Court, with the plaintiff appointing his current solicitor.

The proceedings were transferred from the District Court to this Court on 24 February 2022.

The plaintiff and defendant agreed to a resolution and on 15 July 2024 a consent judgment, reflecting the settlement reached, was filed with the Court. On that date, Schmidt AJ made further orders declaring the plaintiff was no longer under legal incapacity and removing Sam Malouf as tutor: Connor John Malouf by his tutor Sam Malouf v Kurt Davoren-Whereat [2024] NSWSC 861.

Prior to resolving the action, the defendant’s solicitor received a letter from the second respondent (from his solicitor Paul Taylor of ICL Lawyers), dated 25 June 2024, outlining the gravamen of an ongoing costs dispute between the plaintiff and the second respondent, involving an appeal to the District Court. Relevantly, the letter asserted that by reason of that costs dispute, the second respondent:

The above letter also indicated that the claim for unpaid legal costs by the second respondent against the plaintiff was the amount of $152,801.90 – an amount that was said to include “$31,433.63 for disbursements” that had been paid by the principal of the second respondent “out of his own pocket”. The letter also suggested that the “sum of $170,000.00 [be held] in your trust account pending resolution of our client’s claim” upon the settlement monies.

In reply, by way of email sent on 30 July 2024, the defendant’s solicitor sought confirmation from the second respondent, inter alia: (a) that his understanding that an agreement had been reached between the plaintiff and second respondent, for payment of “the amount awarded for costs as part of the agreed settlement” [being the amount of $200,000.00] to be paid into the trust account of the third respondent, was correct; and (b) that the second respondent did not object to the defendant paying the “agreed settlement, including the agreed amount for costs, into the plaintiff’s current lawyers [at that time, the third respondent] trust account forthwith”.

On 2 August 2024, the defendant’s solicitor received a letter from the third respondent indicating that the plaintiff had “not been forthcoming” in his execution of an authority to receive and that:

The above letter also requested that the defendant’s solicitor confirm “in writing” that the settlement funds would not be paid to any party “without prior notification to us. This is so as to enable us to apply for any necessary Orders to protect our lien”.

On 6 August 2024, the second respondent’s solicitor sent an email to the defendant’s solicitor (being a response to his email dated 30 July 2024) advising, relevantly, that whilst he had “no objection with you paying the monies only into the trust account of Veritas Lawyers”, that payment to any other persons (including the plaintiff) would prejudice the lien claimed by the second respondent. The email sought confirmation that “you will first give us 14 days’ notice of any intention to disperse the funds, other than to Veritas Lawyers, noting our client’s interest in the judgment”. This email was, to the extent that it did not seek to differentiate between the amount awarded for costs and the balance of the settlement monies, somewhat ambiguous. This position was different to the one that the defendant solicitor understood existed, as reflected in his email sent on 30 July 2024 at 9:43 pm (which referred only to the costs component of the settlement being paid into the third respondent’s trust account: see [17], above).

Following receipt of a ‘Centrelink clearance’ and the payment of the settlement monies by the defendant’s insurer into the trust account of the defendant’s solicitor, an email was sent on 21 August 2024 by the defendant’s solicitor to the solicitors for the second and third respondents confirming as much, but also confirming that the settlement monies would not be released “until we hear further from you regarding payment”. The email also provided:

This proposal (for the full settlement monies to be paid into the third respondent’s trust account), I infer, was based upon the suggestion made by the second respondent’s solicitor in his email dated 6 August 2024 to which I have earlier referred. To the extent that it was based on a misunderstanding by him, it was not corrected by any of the parties or those that represented them.

By emails sent on 30 August and 7 September 2024, the defendant’s solicitor followed up the provision of the outstanding authority to receive from the third respondent. In his email of 7 September 2024, the defendant’s solicitor expressed concern that the delayed payment of settlement monies could give rise to “potential arguments over interest down the track” and requested the third respondent to get back to him “as soon as possible. If the authority has not been signed, I think we should be looking to pay the monies into court”. At this point it is important to emphasise that, in the course of the dealings about the settlement monies, and where they were to be paid, each of the parties acted on the basis that the provision of this document was critical: that was the formal document that reflected the plaintiff’s directions about where the settlement monies were to be paid. That also was the position adopted during the course of submissions by the parties.

In an email sent on 9 September 2024 at 4:39pm, the second respondent’s solicitor advised the defendant’s solicitor, that his understanding was that the third respondent “no longer acts” for the plaintiff. The email also sought confirmation that, “if an authority to receive the settlement sum is provided by [the] plaintiff, can you please provide us with at least 7 days’ notice of any intention to transfer the settlement proceeds…to the plaintiff or his legal representative…”.

Later that day, the solicitor for the defendant responded to the above email by email sent at 9:57pm. In that email, the defendant’s solicitor noted, inter alia, that he had not been advised that the third respondent was no longer acting on behalf of the plaintiff. The balance of this email is not unimportant in the context of the present dispute. By way of summary, it provided:

Additionally, in this email, the solicitor for the defendant also recorded his concerns about “a potential claim for interest if the settlement monies are not distributed”, the avoidance of further costs and his desire not to become involved “in any costs dispute between the plaintiff and his former and/or current lawyers” and, having done so, indicated that, unless served with a copy of an application seeking payment of the settlement sum into Court by 4.00pm on 16 September 2024, that he proposed “to pay out the settlement monies in accordance with any direction for payment provided by the plaintiff or his current lawyers”.

The solicitor for the second respondent, by email dated 10 September 2024, provided a response. It suggested that “any payment of [the] settlement sum to the plaintiff will prejudice our client’s equitable lien” and that there was “no doubt you are on notice and, if you proceed to pay the monies out despite this notice then all rights are reserved as against any party that interferes with our client’s lien”. The letter also suggested that the “appropriate course”, in light of the defendant’s concerns (relating to potential claims for interest, costs etc) was for the defendant to file:

Somewhat unconventionally, given the plaintiff had solicitors acting for him, the plaintiff’s father contacted the defendant’s solicitor directly by email sent on 11 September 2024 at 4:47pm, and a solicitor from the third respondent was copied into that communication. I am satisfied, however, that this contact occurred, on this and other occasions, with the knowledge and consent of the third respondent: see, by way of example, the email from the third respondent (Theresa Armstrong) to the defendant’s solicitor sent on 9 September 2024 at 12:41pm. The thrust of the communication in the 11 September 2024 email by the plaintiff’s father complained about the interactions that he alleged occurred between the defendant’s solicitor and the solicitor for the second respondent, after which he expressed that he was “very disappointed in your behaviour…[b]ut I thank you for demonstrating to me your true colours”.

The plaintiff’s father sent a further email to the defendant’s solicitor on 12 September 2024. The email was, to put it mildly, strongly worded. Relevantly, it provided: (a) that he had authority to act on the plaintiff’s behalf, and he found the behaviour of the solicitor for the defendant “alarming to say the least in relation to the your judicial duties” (sic) – something that, apparently, “the legal services commission” confirmed following his discussions with them, albeit “without mentioning names”; (b) that the second respondent’s lien was “not lawful”; and (c) the failure to comply with the orders (and, at least, implicitly seeking to accommodate the position of the second respondent) “will have you in Contempt of Court” and that if he continued “to compromise [the plaintiff’s] rights I will have no option but have you referred back to the LEGAL SERVICES COMMISSION where the appropriate documents will be lodged”.

On 13 September 2024 at 12:25 pm, the solicitor for the defendant sent an email to two solicitors from the third respondent – Theresa Armstrong and Michael Short. The defendant’s solicitor noted that he had been contacted by the plaintiff’s father by telephone, with their consent, and also that he had “now received several further emails, to which I have not responded”. The defendant’s solicitor essentially noted the ongoing costs dispute between the plaintiff and the second respondent, and indicated that “unless an agreement is reached [between the plaintiff and the second and third respondents] that a certain amount of money will be put aside and held by [the third respondent] in trust whilst [that] dispute is determined”, that it would become necessary to file a notice of motion (that was attached):

The email concluded with an indication that, unless “advised of an agreement between the relevant parties” about the disbursement of the settlement monies by 4.00pm on 16 September 2024, the solicitor for the defendant would have “no option but to file the motion”.

On 13 September 2024 at 3:17 pm, the plaintiff’s father sent an email to the defendant’s solicitor (copying in Theresa Armstrong) opposing the proposed course of paying monies into Court:

Shortly after this, at 3:47pm, the plaintiff’s father sent a further email to the defendant’s solicitor indicating that the email of the defendant’s solicitor received 13 September 2024 at 12:25pm (see [30]) was not brought promptly to his attention for instructions, and advising that the defendant’s solicitor could seek confirmation of this circumstance “if need be” with the third respondent.

I note as well that there appears to have been some communication with the defendant’s solicitor by Theresa Armstrong – whether that was by telephone or email is not disclosed in the evidence – but following that contact the defendant’s solicitor sent an email to her on 13 September 2024 at 4:06pm. That further email more or less reiterated the position in the email dated 9 September 2024 by stating, relevantly, that “unless there is an agreement between [the plaintiff], [the third respondent] and the [second respondent] in regards (sic) to how the settlement is to be paid out, my only option is to proceed with the motion”.

On 16 September 2024 at 2:49pm, Theresa Armstrong sent the defendant’s solicitor an email that provided a response to the email from the defendant’s solicitor sent on 13 September 2024. Relevantly, that response provided:

In an email response sent at 4:42pm on 16 September 2024, the defendant’s solicitor provided the letter from the second respondent “regarding the lien over the settlement monies”. The defendant’s solicitor reiterated, as was explained to the plaintiff’s father “earlier today”, that “the only way to avoid the filing of the proposed motion and paying the settlement monies into Court” was for the plaintiff and respondents to reach agreement “that a specified amount be held in your trust account pending the outcome of the costs of appeal”. The defendant’s solicitor indicated that he “cannot wait much longer”, sought to be “closely informed of developments” and stated that if he had not heard anything by 4pm on 18 September 2024, he was “instructed to proceed with filing the motion”.

The evidence from the solicitor for the defendant was that, on 18 and 19 September 2024, he received telephone calls from the plaintiff’s father and he “repeatedly indicated that unless agreement could be reached between the plaintiff, [the second respondent] and [the third respondent]….the defendant ha[d] no choice but to apply to pay the settlement monies into Court… [The plaintiff’s father] repeatedly stated that he did not want the settlement monies paid into Court and requested time to attempt to reach an agreement with [the second respondent]”: affidavit of Timothy Pitt sworn 28 October 2024, par 26.

On 2 October 2024 at 7:02pm the solicitor for the second respondent sent an email to the defendant’s solicitor. That email covered a range of matters: it sought an update about the settlement monies; it noted that the second respondent anticipates taking a hearing date in connection with the costs assessment appeal, with the consequence that the second respondent’s entitlement to costs (and the quantum of them) would be resolved at that hearing; and essentially confirmed that the second respondent was agreeable to the defendant’s solicitor, “holding all the settlement funds on trust pending resolution or court order” so long as that was “agreeable by all parties”. The email noted that, if agreement could not be reached, “then, as the stakeholder those funds should be paid into court” and that the second respondent “reserves all rights”.

On 9 October 2024 at 10:09am, Theresa Armstrong sent an email to the defendant’s solicitor (copying in the plaintiff’s father). That email agreed to a deduction of the amount of $70,000 and its payment to Medicare. The email also indicated that “we shall shortly be in receipt of an Authority to Receive directing payment in respect of the balance of the settlement monies”.

On 10 October 2024, the third respondent sent by email an executed “Authority and Direction to pay” (‘the authority’) to the defendant’s solicitor with a letter of that date. The authority provided for an advance payment to Medicare (in the sum of 10% of the settlement monies – being $70,000), payment to the third respondent (in the sum of $176,000) and the payment of the balance of the settlement monies to the plaintiff directly. There were no payment directions to the second respondent in the authority. The covering letter concluded:

The plaintiff’s father sent an email to the defendant’s solicitor on 15 October 2024 at 10:20am that relevantly provided:

The third respondent (Theresa Armstrong) followed up the defendant’s solicitor “with respect to release of payments as per the plaintiff’s direction and authority” in an email sent on 15 October 2024 at 5:17pm. Subsequently, in an email sent on 15 October 2024 at 5:32pm, the defendant’s solicitor reiterated to the third respondent (Theresa Armstrong) the likelihood of an interpleader motion being filed:

The defendant’s solicitor sent separate emails to the solicitors for the second respondent and the third respondent (Theresa Armstrong) on 23 October 2024, indicating that he held instructions to file an interpleader motion, and seeking confirmation that there was no objection to the defendant paying 10% of settlement monies to Medicare as an advance payment prior to filing of the motion. Both respondents agreed to the advance payment.

The plaintiff’s father sent an email to the defendant’s solicitor on 24 October 2024 at 11:53pm, relevantly as follows:

On 28 October 2024, the defendant filed the interpleader motion with the Court. Subsequently, in accordance with prayer 2 of that motion, the amount of $630,000 was, pursuant to r 43.7(2)(c) of the UCPR, paid into Court.

There was no dispute about the relevant principle that applies in the present circumstances: “[o]rdinarily an interpleader is entitled to an indemnity for its costs if it has acted reasonably”: NSW Land and Housing Corporation v DJ's Home and Property Maintenance Pty Ltd (in liquidation) [2013] NSWSC 1167 at [56] (Hammerschlag J), citing McPherson, Thom & Co v Sandhurst and Northern District Trustees, Executors and Agency Co Ltd [1929] VLR 295, 301 (‘McPherson’).

The passage from McPherson referred to by his Honour provides:

Although the parties agreed that the relevant principle to be applied was as I have set out, competing positions were adopted about the application of that principle to the facts. By way of short summary, the respective positions were as follows.

The plaintiff argued that there had been some “disentitling conduct” – an argument that reduced to a submission that the “delay in the… defendant bringing the motion [was] conduct which would otherwise disentitle it to an indemnity” (plaintiff’s submissions dated 12 December 2024 at [4] and [16] and 11 February 2025 at [8] and [9]).

The defendant’s short submission was that he had acted reasonably and promptly and, in particular, was “proactive in encouraging the parties to reach agreement among themselves, in an effort to avoid unnecessary cost” (defendant’s submissions dated 6 December 2024 at [25]).

The second respondent accepted that the defendant had acted reasonably and promptly, but submitted that the responsibility for the costs should lie with the plaintiff.

The plaintiff’s submission that there was disentitling conduct was solely focused upon the suggested delay by the defendant. In terms of precisely when the failure to interplead was manifest, the plaintiff’s submission was that this should have occurred on or around 25 June 2024 – it was submitted that “it would have been apparent” by that time that a dispute had arisen and that an “interpleader application was required at that time” (plaintiff’s submissions dated 11 February 2025 at [7]); or, alternatively, this should have occurred on or around 13 September 2024 – it was submitted that, at this time, it should have been apparent to the defendant’s solicitor that “the only option” was to interplead (plaintiff’s submissions dated 12 December 2024 at [16]).

I do not accept any of the plaintiff’s submissions on this topic. In my view, the defendant has not been guilty of any delay, less still unreasonable delay, and nor do I characterise the defendant’s conduct as in any way disentitling. I accept, as Mr Marshall essentially submitted, that the proper characterisation was that the defendant had acted reasonably and properly and that his conduct in encouraging the parties to reach agreement among themselves in relation to the disbursement of the settlement monies strove to minimise, rather than to escalate, the costs of all involved.

The defendant’s solicitor (and thus, the defendant) was placed in a difficult position given there were competing claims for the settlement monies, and he encouraged, and allowed the parties time, to achieve a practical solution – essentially, by having the competing parties agree to preserving the status quo by having an agreed sum of money held in a solicitor’s trust account pending agreement, or further order. The defendant’s solicitor did not, contrary to what was argued by the plaintiff, take on the role of a mediator or arbitrator, or anything approaching that.

The desire of the defendant’s solicitor to practically assist in solving the issue about the disbursement of the settlement monies in a manner that accommodated the claim by the second respondent is readily apparent from the correspondence. Thus, on 21 August 2024, following receipt of a “Centrelink clearance” and the payment of the settlement monies by the defendant’s insurer into the defendant’s solicitors trust account, the defendant’s solicitor tried to implement what he understood to be a joint position – namely, for the entire sum to be paid into the third respondent’s trust account: see [21], above. Further, following that time, the defendant’s solicitor followed up the third respondent, by email dated 7 September 2024, expressing concern about the delay, and foreshadowed the possibility of the need to pay the money into Court.

The plaintiff’s father opposed any payment into Court, a fact that is evident from, at least, his email sent on 13 September 2024 that stated as much. Further, I accept and find that attempts were still being made by the third respondent (Theresa Armstrong) to deal with what had been suggested by the defendant’s solicitor to be needed to avoid the money being paid into Court – namely, an agreement “that a certain amount of money will be put aside and held by your firm in trust” pending resolution of the costs dispute between the plaintiff and second respondent: see the email dated 16 September 2024 sent at 4:42pm. To assist in her dealings with the plaintiff and his father, the defendant’s solicitor provided the original communication from the second respondent’s solicitor dated 25 June 2024, claiming the lien over the settlement monies: see the email sent on 16 September 2024 at 4:42pm. The content of this email (and the plaintiffs father’s conduct), in my view, undercuts the plaintiff’s submission that, by 13 September 2024 (or any earlier time) the only option available was to interplead. The prospect of agreement remained.

So too does the plaintiff’s father’s contact with the defendant’s solicitor on 18 and 19 September 2024 (set out in [35], above). I accept and find that on each of those days the plaintiff’s father requested the defendant’s solicitor not pay the monies into Court, as he was seeking time to attempt to reach agreement with the second respondent. Put simply, at least so far as the defendant’s solicitor was concerned, there was still ongoing efforts to reach a compromise between the plaintiff and second respondent, in relation to the disbursement of the settlement monies. To the extent the plaintiff now submitted that, contrary to the position taken on 18 and 19 September 2024, only a confined period of time should have been granted to the plaintiff’s father to negotiate a compromise with the second respondent, I do not consider that to be in any way realistic, particularly given no authority to receive had been provided.

On 10 October 2024, the third respondent (Theresa Armstrong) sent to the defendant’s solicitor the authority dated 9 October 2024: that authority reflected what was foreshadowed in the email from the defendant’s solicitor dated 9 September 2024 sent at 9:57pm. (I am satisfied that, prior to this time, neither the plaintiff nor the third respondent communicated with the defendant’s solicitor to the effect that there was no prospect of achieving a compromise with the second respondent about the disbursement of the settlement monies). I have earlier covered the events that occurred after this time: essentially, and in particular from 15 October 2024, the plaintiff demanded the settlement monies be paid in accordance with the authority and the second respondent’s position, as articulated in the email dated 2 October 2024, remained.

I am satisfied that, ultimately, despite the attempts by the defendant’s solicitor to avoid the need to interplead by encouraging the parties, and allowing them time, to reach an agreement that would preserve the lien pending determination by the District Court, he was unable to do so.

Perhaps, looking back now and understanding how the events have played out, it seems clear that the plaintiff and second respondent were unlikely to agree about how to deal with the settlement monies (although, as I later note, they subsequently have). However, as a matter of foresight, and as the events developed in the way that I have described, I do not accept that the defendant’s solicitor has acted unreasonably in trying to facilitate an agreement (and allowing the parties to do that) rather than interpleading. I do not accept that litigious exuberance was called for, as the plaintiff now seems to suggest. Rather, in my view, the defendant’s solicitor acted entirely appropriately and responsibly in acting in the way he did.

For completeness I add the following. First, as is clear from the above, I do not accept that, as the plaintiff argued, the receipt by the defendant’s solicitor of the letter dated 25 June 2024 was, in and of itself, sufficient to mandate an interpleader motion to be filed. Additionally, that is also because, as Mr Marshall submitted, at that time there was no settlement (and, as a corollary, no lien) and, further, what had been conveyed to the defendant’s solicitor was that there was an agreement in place for the disbursement of funds that accommodated the second respondent’s lien: see the email dated 30 July 2024 sent at 9:43 pm and the email dated 9 September 2024 sent at 9:57 pm. Secondly, to the extent that the plaintiff submitted that as there was, in effect, always a costs dispute between the plaintiff and second respondent, that was itself sufficient to oblige the defendant to interplead, I do not accept the submission. The distinction, which I consider to be important, is that, whilst the costs dispute gave context to why there was an issue about dispersing the settlement monies, the true and relevant issue in the present context was whether the plaintiff and second respondent could have, in the absence of a court order, agreed upon how the disbursement of the settlement monies could be achieved without compromising the second respondent’s lien.

It follows that the defendant is entitled to an indemnity for his costs.

Section 98 of the CPA grants the Court discretion to award costs. By s 98(4)(c), the Court is entitled to make a gross sum costs order in place of assessed costs:

In AA v PD (No 2) [2023] NSWSC 945 at [10], I summarised the organising principles relating to gross sum costs orders as follows:

There are a number of matters that I consider demonstrate that this is an appropriate case for the exercise of the Court’s discretion, under s 98(4)(c) of the CPA, to make a gross sum costs order. Those matters include the following. First, no party suggested that it was inappropriate for the Court to do so. Secondly, given I have concluded that the defendant is entitled to its costs, it is consistent with the just, quick and cheap resolution of the single outstanding issue (involving a non-party to the remaining costs dispute) to make a gross sum costs order. Thirdly, in the event that there was a requirement to have the costs assessed, that is likely to cause further delay, cost and expense.

I am satisfied there is more than sufficient material available to make such a determination. No party submitted to the contrary.

The defendant seeks an order that its costs in the amount of $34,910 (excluding GST) be payable – an amount that represents professional costs and disbursements incurred, as well as anticipated to be incurred in the current hearing. The basis for these costs, as well as the evidence to support the quantification, was contained in the affidavits of the solicitor for the defendant.

The plaintiff relied upon an affidavit from Sharon Drew, the solicitor for the plaintiff, sworn 12 December 2024 to argue that only a lesser amount was reasonably related to the interpleader motion.

Ms Drew has considerable expertise in the area of legal costs and has practiced in that area since around 1999. Put simply, her evidence was that, having reviewed the professional fees and disbursements claimed by the defendant’s solicitor, a lesser amount would be recovered if the matter were formally assessed – namely, the amount of $31,150 (excluding GST) (affidavit of Sharon Drew, sworn 12 December 2024 at [18]).

It is unnecessary to undertake any close analysis of the differences between the respective assessments, simply because the defendant was prepared to accept the quantification of the costs and disbursements in the amount suggested by Ms Drew (defendant’s submissions dated 13 September 2024 at [3]). Further, given I have found that the defendant has at all times acted reasonably, no question of adjusting that assessment is necessary.

The plaintiff and second respondent submitted that ultimate responsibility for costs should fall upon the opposing party. A fallback submission advanced by the plaintiff was, however, that the liability in costs should be joint and equal.

As is clear from the background facts, and as the plaintiff and second respondent accepted, there is no evidence about what discussions were had between the plaintiff (including those that represented him) and the second respondent (including those that represented him) in order to achieve an agreement about how the settlement monies were to be dispersed. The plaintiff and second respondent each argued that it was the other party who had acted unreasonably, and thus resulted in the need for the defendant to interplead.

The second respondent argued that he had acted reasonably at all times, and the plaintiff unreasonably, because he had offered to accept the amount of $170,000 to protect his equitable lien in the letter dated 25 June 2024 and, subsequently, following the filing of the interpleader motion, an order to that broad effect was made: see order 7(b) made on 28 November 2024. The difficulty with this submission, which I do not accept, is that the communications on behalf of the second respondent are not, in subsequent correspondence, couched in those terms – rather, as is evident from the email from the second respondent’s solicitor dated 10 September 2024, the second respondent sought the payment into court of “the entire settlement sum” and not the lesser amount. To the extent that it was submitted on behalf of the second respondent that the email was expressed in those terms because the second respondent was unaware of the precise amount of the settlement sum, there is, as Mr Rogers accepted, no evidence of this, and I am not prepared to make that finding. Further, to the extent that it relies upon an inference, that is not an inference I am prepared to draw, particularly given the absence of evidence from the second respondent, and any explanation for why that evidence was not produced.

In my view, the costs should be payable from the monies paid into Court and, ultimately, the plaintiff and second respondent should equally be responsible for them. Each of them adopted positions that only reflected what they considered fully served their interests.

Thus, the second respondent, putting to one side what was contained in the letter of 25 June 2024, at all times required (less any statutory deductions), the entire settlement monies to be held pending determination of its costs dispute in the District Court: that stance can be seen in the emails sent on 6 August 2024 at 11:45 am and 10 September 2024 at 2:59 pm. And, in relation to the plaintiff, the position evident in the communications to which reference has earlier been made (reflected as well in the authority), he took the opposite position: that none of the settlement monies should be held to accommodate the claimed lien (which had no legal footing or at least not to the extravagant extent claimed) but should be dispersed directly to the plaintiff (less what was dispersed to the third respondent). I suspect there may have been some attempts directly between the plaintiff (and/or his solicitor, the third respondent) and the second respondent, based upon the communications that the plaintiff’s father had with the defendant’s solicitor on 18 and 19 September 2024, to arrive at a compromise but beyond that suspicion I simply do not know: neither the plaintiff nor the second respondent sought to prove the nature and extent of any of those discussions.

The sensible solution was to agree to what was originally conveyed in the letter dated 25 June 2024. An amount of that order reasonably reflects the limit of the lien: Firth v Centrelink (2002) 55 NSWLR 451; [2002] NSWSC 564 at [35](f). That, ultimately occurred – but after the interpleader motion had been filed. Yet neither the plaintiff, nor ultimately the second respondent, as I have found, adopted that position, so as to avoid the need to interplead.

For the above reasons I make the following orders: