Alleged costs conspiracy … Drainage dispute induces hydra-headed litigation spree … Professional indemnity insurance in peril … Gross sum costs orders by the Hammer … 20 years later on its goes … Max Shanahan reports
The conspiracy comprises three strands of litigation. First, the Young v King litigation, which spawned 13 judgments in the NSW Land and Environment Court alone, numerous appeals and failed High Court leave applications.
It began with a 2003 drainage dispute between Young and her neighbours. The dispute was seemingly resolved by consent orders entered by the court in February 2004.
In May 2008, more than four years after the settlement of the original dispute, Muritini and Newell (then a barrister) swooped in.
Representing Young, the duo reanimated the corpse of the what was thought to be dead litigation, seeking to set aside the consent orders on the basis that the neighbours had “conspired with others, including the local council [to] deprive Young’s house of adequate drainage”.
It was further alleged that Young’s former legal advisors were also in on this deep-state drainage deception. The conspiracy was dismissed, and personal costs orders made against Muritini and Newell.
A second strand of litigation, which produced two unsuccessful High Court leave applications, was that of Young v Hones, in which proceedings were brought against lawyers and engineers who had acted for Young in the LEC, and had advised her about the 2004 consent orders.
A third, seemingly unrelated strand of litigation, involved a franchise dispute between the De Costi seafood group and a Mr Wachtenheim, who had the engaged Muritini and Newell as solicitor and counsel.
As with the other cases, there was a proliferation of claims and cross-claims, all of which were dismissed by various judges. Further personal costs orders were eventually made against Muritini and Newell.
We had news about these developments in May 2013.
The claim, as far as can be divined, involved a plan, by “a raft of alleged conspirators”, to put forward baseless costs applications against Muriniti and Newell in the De Costi proceedings, or to prosecute those applications ineptly, so that the duo would have personal costs orders made against them.
In turn, this would cause their respective professional indemnity insurers to (in the case of Newell) decline to renew their insurance, or (in the case of Muriniti) increase premiums payable, with the ultimate goal of preventing or dissuading them from continuing to act for Young in the drainage dispute, thus “perverting the course of justice”.
A major plank of the conspiracy is that in 2014, Suncorp, Newell’s insurer, declined to renew his professional indemnity insurance policy, causing him to be reduced to a mere solicitor – “a matter of significant grievance to him”. As Justice Julie Ward solemnly noted in a prior judgment:
“There must have been sinister reason for this (i.e. it could not have been for the seemingly plausible reason that the insurer might, in its exercise of assessing risk, have decided, in view of numerous claims against Mr Newell, referrals of complaints against Newell to the Legal Services Commissioner, and criticism by various judges of Mr Newell’s conduct of litigation, not to renew the policy.)”
As one does, Muriniti and Newell commenced proceedings in equity in 2020, joining great slabs of Sydney’s legal fraternity as defendants in their attempt to expose the conspiracy.
Barristers and solicitors who had previously acted for Lawcover, Suncorp, De Costi, and even the plaintiffs were joined.
Peripheral actors and the companies themselves were also named as defendants, despite having only the most tenuous connection to the case. In all, 23 defendants were alleged to be part of the conspiracy to deny Young – long since bankrupt – legal representation in long-since disposed proceedings.
After Justice Ward dismissed the equity case in February, and referred the matter to the attorney general for consideration whether an application should be made to name Muriniti and Newell as vexatious litigants, the case appeared again before Hammerschlag CJ in Eq for a costs determination.
Ten of the 23 defendants applied for gross sums costs orders to be made against the litigants.
Hammerschlag was happy to comply, accepting that Muriniti and Newell were likely to continue to be difficult and overly-adversarial, but applied a discount for the defendants’ understandable overzealousness:
“Whilst a broad-brush approach is applied, an application for gross sum orders is not an occasion for the successful party to attempt to overreach the loser on quantum … It is incumbent on the applicant … to place enough material before the court to facilitate a fair and reasonable assessment.”
All in all, Muriniti and Newell were slapped with a discounted $397,800 in costs for their latest legal excursion. And that’s for less than half of the defendants named in the equity claim.
This brain melting palaver isn’t over yet – on November 8, Muriniti and Newell commenced fresh proceedings, “making substantially the same allegations of conspiracy”.