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Mercantile Legal sets a Precedent

Mercantile Legal are dedicated to ensuring that our client’s costs are protected in all aspects of litigation and debt recovery.

A client was the subject of an attempt to extract funds from them by use of an assignment of debt. The assignee, who shall remain nameless, effects assignments in return for payment of legal advice for which he would otherwise not be entitled – he is not a legal practitioner. Our client had successfully recovered over $30,000.00 from a guarantor of a company that had voluntarily entered liquidation. Through the auspices of a carefully orchestrated action by a hostile solicitor, the debtor obtained a costs order against our client, that was later withdrawn prior to all amounts (including costs) being paid to our client, save for the costs of a second creditors petition, which the client elected not to pursue.

The assignee had purported to accept an assignment of the costs order prior to the assignors having withdrawn the costs order. The assignor then went bankrupt. Years later the assignee attempted to act on the assignment of the costs order, to the point of issuing a statutory demand against our client. Unsurprisingly, Mercantile Legal successfully set aside the statutory demand and received an order for the client’s costs.

The assignee promptly filed an application for leave to appeal (where the amount in dispute is below $100,000.00, leave to appeal must be sought). While the matter has not yet been heard, Mercantile Legal set a precedent in that we forced the assignee to pay into court an amount to secure the clients costs of the leave to appeal. While only a modest amount, the security for costs application set a precedent for others to be able to seek costs where leave to appeal is sought.

See below for the link to the decision.

http://www.lawlink.nsw.gov.au/scjudgments/2010nswca.nsf/09da2a0a2a27441dca2570e6001e144d/a983200e54e7f17bca2577f30016b30a?OpenDocument

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