Abruzzese v David Jones Ltd (No.4)
[2004] FMCA 12
•30 January 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ABRUZZESE v DAVID JONES LTD (No.4) | [2004] FMCA 12 |
| HUMAN RIGHTS – PRACTICE AND PROCEDURE – COSTS – Application for order that the applicant’s former solicitor pay costs that she is required to pay – whether the former solicitor guilty of undue delay, negligence or default. PRACTICE AND PROCEDURE – Security for costs – summary dismissal of application for security without a hearing. |
Federal Magistrates Court Rules 2001 (Cth)
Abruzzese v David Jones (No 1) [2003] FMCA 280
Abruzzese v David Jones (No 2) [2003] FMCA 367
Abruzzese v David Jones (No 3) [2003] FMCA 437
Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773
White Industries (Qld) Pty Ltd v Flower & Hart (a firm) [1998] FCA 806
| Applicant: | MARIA ABRUZZESE |
| Respondent: | DAVID JONES LTD |
| File No: | SZ437 of 2002 |
| Delivered on: | 30 January 2004 |
| Delivered at: | Sydney |
| Determined without oral hearing |
| Judgment of: | Driver FM |
REPRESENTATION
| Solicitors for the Applicant: | Mr M Di Lizio Di Lizio & Co |
| Solicitors for the Respondent: | Mr C Barton Freehills |
| Mr J Capsanis appeared on his own behalf. |
ORDERS
Mr Capsanis is to pay the costs and disbursements that Ms Abruzzese was ordered to pay pursuant to order 2 made by this Court on
2 October 2003.Mr Capsanis’ application for security for costs of this application is dismissed pursuant to rule 13.10(b) of the Federal Magistrates Court Rules 2001(Cth).
Mr Capsanis is to pay the applicant’s costs of this costs application, fixed in the sum of $700.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SZ437 of 2002
| MARIA ABRUZZESE |
Applicant
And
| DAVID JONES LTD |
Respondent
REASONS FOR JUDGMENT
Introduction and background
This decision concerns an application filed on 24 October 2003 on behalf of Maria Abruzzese for an order that her former solicitor John Peter Capsanis pay all costs which Ms Abruzzese has been ordered to pay David Jones Ltd, the respondent in proceedings instituted by Ms Abruzzese. The application also seeks that Mr Capsanis pay the costs of the present application. This issue arose in the course of a hearing for costs before me on 2 October 2003. At that time I made a costs order against Ms Abruzzese and gave reasons for my decision: Abruzzese v David Lones Ltd (No 3) [2003] FMCA 437. The present application is brought pursuant to liberty granted by me at that time.
I acceded at the hearing on 2 October 2003 to a request from Mr Capsanis that he be given more time to deal with the question of a costs order against him personally. I ordered that there would be no further oral hearing on any application made by Ms Abruzzese for costs against Mr Capsanis unless specifically requested. The purpose of that order was to avoid further unnecessary legal costs in proceedings in which enormous costs have already been incurred and largely thrown away.
On 14 November 2003 Mr Capsanis faxed to my associate a handwritten message foreshadowing an application for security for costs against Ms Abruzzese in respect of the present application. He stated that he proposed to file an application and supporting affidavit on 17 November 2003 and sought that a listing date be notified to the registry to be available at the time of filing of the application. Mr Capsanis filed a response to the present application on 3 December 2003 seeking dismissal of the application with costs, and seeking interim orders for security for costs.
The application for security for costs is vexatious. It assumes that further legal costs need to be incurred. They do not. It relies upon Ms Abruzzese’s conduct of the principal proceedings against David Jones, her low regard for lawyers, her propensity to change lawyers and not pay them and her apparent refusal to pay David Jones’ costs that she has been ordered to pay. Mr Capsanis was, of course, an active participant in Ms Abruzzese’s conduct of her proceedings against David Jones. He acted for her in those proceedings. He was well aware of Ms Abruzzese’s propensity to change solicitors and not pay them but he was still willing to act for her. It now appears that Mr Capsanis was aware that the proceedings against David Jones were hopeless and doomed to fail, yet Mr Capsanis continued to act. As to the costs that Ms Abruzzese was ordered to pay David Jones, it was understood when I made that order that the order would not be enforced until I had decided whether Mr Capsanis should pay those costs. It is astonishing that Mr Capsanis should now seek an order for security for costs against his former client. That is especially so when the proceedings are effectively at an end and I have sought to avoid further legal costs being incurred.
Mr Capsanis has not pursued the question of an oral hearing since he filed his response. Written submissions have been filed by both parties, as has affidavit evidence. In the circumstances, I have decided to proceed to make a decision on the application on the papers.
The evidence
The general background to this matter is set out in my three previous judgments concerning the litigation between Ms Abruzzese and David Jones: Abruzzese v David Jones Ltd (No 1) [2003] FMCA 280; Abruzzese v David Jones Ltd (No 2) [2003] FMCA 367; and Abruzzese v David Jones Ltd (No 3). I do not need to repeat the background in any detail. Suffice to say that the legal proceedings between Ms Abruzzese and David Jones were protracted and vexed. Mr Capsanis is the third of four solicitors retained by Ms Abruzzese. The costs incurred by David Jones were enormous. Ms Abruzzese has probably incurred very substantial legal costs of her own. The costs order that I made against Ms Abruzzese on 2 October 2003 provides David Jones with only a very small proportion of the costs actually incurred in defending the proceedings. The proceedings instituted by Ms Abruzzese against David Jones were ultimately dismissed for default of compliance with court orders.
Ms Abruzzese, in this present application, relies upon an affidavit made on 22 October 2003 and filed on 24 October 2003. I receive that affidavit. In that affidavit Ms Abruzzese details the history of the proceedings and notes that Mr Capsanis was retained to act for her from approximately from the end of April 2003 until September 2003. Mr Capsanis first appeared on behalf of Ms Abruzzese on 30 April 2003. Ms Capsanis accepted the retainer on 16 May 2003.
On 26 August 2003 Mr Capsanis wrote a lengthy letter to Ms Abruzzese explaining the dismissal of her proceedings against David Jones and canvassing possible further action. Ms Abruzzese deposes that on or about 1 August 2003 she was advised by her son Tony that Mr Capsanis had told him that on 4 August 2003 she was required to attend court. She attended court on that day when her proceedings against David Jones were dismissed. She deposes that at that time she heard references about a hearing on 23 July 2003 but was not otherwise aware of a hearing on that date. She deposes that she has obtained transcript of that hearing but she was not otherwise made aware by Mr Capsanis of the hearing on 23 July 2003.
Mr Capsanis relies upon his own affidavit filed in amended form on 4 December 2003. Mr Capsanis deposes relevantly that:
b)following the production of files by Ms Gerace, he saw advice by J Buchanan SC which was negative about Ms Abruzzese’s prospects of success and Mr Buchanan declined to act further for her;
c)Ms Abruzzese’s son attempted (unsuccessfully) to withhold that advice from Mr John McCarthy SC and Mr John Overall, who were briefed to advise further;
d)on 31 July 2003 in conference Mr McCarthy and Mr Overall advised that the only hope for the case was a further adjournment and Mr Capsanis notified the solicitors for David Jones of a further adjournment application subsequently;
e)it was not possible to comply with the Court’s order for written submissions in the absence of translation of Ms Abruzzese’s diaries;
f)the proceedings would have been dismissed in any event;
g)even if the matter had gone to trial, most of Ms Abruzzese’s evidence would have been struck out, due to the unavailability of the diary translations;
h)even if Ms Abruzzese has succeeded on the merits of her claim against David Jones, she could not have done better than Calderbank offers made to her and she would have been liable for David Jones’ costs;
i)Ms Abruzzese has a low opinion of lawyers and has failed to pay accounts rendered to her or costs that she is liable to pay David Jones.
Submissions
Mr Di Lizio, for Ms Abruzzese, makes the following submissions:
The applicant in this application seeks an order against her former lawyer, Mr. John Peter Capsanis (hereinafter referred to as “the lawyer”), for the costs payable by the applicant to David Jones Ltd pursuant to the order made by this Honourable Court on 2 October 2003.
The applicant seeks this order pursuant to rule 21.07(1)(a) of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”) in that it is submitted the lawyer has caused costs to be incurred by the applicant by undue delay, negligence and/or default on his part. It is submitted on behalf of the applicant that the default referred to is default as described in rule 21.07(2)(b) and (c) in that the lawyer failed to lodge a document as required and/or failed to prepare information as required.
The order which is sought by the applicant is an order pursuant to 21.07(4) (c) namely that the lawyer pay to the applicant the costs that the applicant has been ordered to pay to David Jones Ltd.
The lawyer was retained by the applicant as her lawyer shortly before 16 May 2003 (see letter from J.P. Capsanis & Co to Applicant dated 16 May 2003 being Annexure “A” in the affidavit of Maria Abruzzese.
The applicant had previously employed two other lawyers, Maria Turco, who had commenced the application on behalf of the applicant. Ms. Turco was employed by the applicant until the end of October 2002. As from that date the applicant was represented by Maria Gerace until the end of April 2003.
On 4 August 2003 the applicant’s application was dismissed by this Honourable Court, the following arder being made by the Court:-
1.The applicant has not complied with order 2 made on 23 July 2003, and that the application has been dismissed pursuant to order 3 made on that day.
The order 2 referred in the orders made on 4 August 2003 was that:-
That written submissions and list of authorities be filed and served by the applicant by 4.00 pm on 28 July 2003.
The effect of the dismissal of these proceedings pursuant to the self executing order made by this Honourable Court on 23 July 2003 was that an application for costs was made by David Jones Ltd which was heard by this Honourable Court on 2 October 2003. At the conclusion of that application an order was made by the Court which, inter alia, required the applicant (Mrs. Abruzzese) to pay to David Jones Ltd costs as outlined in that order.
It is submitted on behalf of the applicant that the order to pay costs which was made against her was a direct and manifest result of the failure by the lawyer to file and serve within the required time written submissions and list of authorities and that there was no failure by the applicant in these proceedings which excused the lawyer.
In making this submission I refer this Honourable Court to the transcript of the proceedings of 23 July 2003. On that occasion the matter was brought before this Honourable Court by the then respondent David Jones Ltd as a result of the failure by the applicant to provide an outline of submissions and a list of authorities. (See transcript page 2 point 2). The directions which were the subject of the hearing on 23 July 2003 had previously been made on 30 April 2003 by this Honourable Court. On that day (30 April 2003) an order was made, inter alia:-
that the applicant file and serve written submissions and list of authorities on or before 18 July 2003”.
At the hearing of this issue on 23 July 2003 the lawyer submitted, inter alia, as follows:-
At page 5 at point 32:-
One of the matters I would have put to the respondent’s solicitors in relation to submissions is the difficulty that is being experienced in referencing any possible drafting of submissions to the legal files that have been held by the previous solicitors for the applicant in this matter”.
Further at page 6 at point 22 the lawyer submitted as follows:-
I would have been proposing another seven days extension, which would still allow the respondent to…………..”
As a result of the application for an extension of time by the lawyer, orders were then made requiring, inter alia, the filing of written submissions and list of authorities by 28 July 2003 at 4.00 p.m.
On 4 August 2003 the matter was again re-listed before this Honourable Court by the then respondent (David Jones Ltd). Before the Court at that time were the following issues:-
j)an application for dismissal of the principal application filed by the then respondent (David Jones Ltd);
k)an application for adjournment of the hearing filed on behalf of the applicant;
l)the issue of an appointment of litigation guardian for the applicant.
In the event the initial application for dismissal of the principal application was heard by this Honourable Court and the order was made dismissing the application for failure by the applicant to file and serve written submissions and list of authorities. On that occasion an opportunity was given to the applicant’s lawyer, through her barrister, Mr. Overall, to explain the failure to file and serve written submissions and list of authorities.
Two reasons were given as explanation for such failure on behalf of the applicant and they are as follows:-
a)“There is an affidavit filed on 30 July which was two days after the requirement to provide submissions. That the being the case, the applicant did not have the opportunity to consider that affidavit in the preparation of those submissions.”
b)“The difficulty which had been experienced in the translation of the affidavit.”
As correctly pointed out by the Court on that day the issue in relation to the translation of the diaries was not relevant to the current application before the Court and it is submitted on behalf of the applicant that this issue was not previously raised by the lawyer on 23 July 2003 when the orders were made by this Honourable Court in relation to the provision of written submissions and list of authorities by 28 July 2003.
In relation to the late provision of the affidavit of Mr. Street, this again, in our respectful submission demonstrates that the failure to lodge the appropriate written submissions and list of authorities is due solely to the default of the lawyer. The preparing and filing of written submissions and list of authorities in our respectful submission was an independent act which was capable of being carried out on the basis of the material which the lawyer had available to him at the time. Any amendments which were rendered necessary by the late filing of an affidavit by the respondent would have been dealt with in due course. The lawyer had a duty to ensure that the matter was made ready for hearing by complying with the directions.
In his letter dated 26 August 2003 written to the applicant which is Annexure “B” to the affidavit of the applicant, the lawyer states as follows at paragraph 2 thereof:-
The application for dismissal was in the context of additional claims by the respondent for dismissal, the details of which appear in the attached copy of the document faxed by the respondent on Saturday, 2 August 2003.
It follows that if the proceedings were not dismissed for default related to the submissions, it is likely the proceedings would have been dismissed on another ground set out in the attached document, most likely to default in filing a verified full English translation of your diary.
In our respectful submission the justification suggested by the lawyer for the dismissal of the proceedings is not relevant to the application which is presently before the Court. The issue of the translation of the diaries never arose as there was a principal default arising directly from the inaction of the lawyer. The issue of the diaries could have been resolved in other ways as indicated by the Court on the day and was not a relevant consideration in relation to the issue then before the Court.
Further in his letter referred to above the lawyer states as follows:-
Submissions were required to be in a form that included reference to the evidence filed on your behalf.
As your evidence depended on the diaries, the submissions could not be prepared in the proper form in the absence of the translation of the diaries.
Generally, the lawyer seeks to rely on the fact that the diaries were not translated and that in order to conduct the matter properly it was necessary to translate those diaries. In our respectful submission the lawyer would have been aware of this at least from 16 July 2003 when he was granted access to the documents held by the previous solicitor and that submissions in relation to the difficulty in translating the diaries or the requirements of time which were involved in the translation of the diaries ought to have been made at the directions hearing on 23 July 2003. At that time those submissions were not made even though there was some extensive discussion in the directions hearing as to the issue of the translation of the diaries.
In our respectful submission the lawyer does not say and cannot say that there are factors of which he was not aware at the date he appeared before the Court on 23 July 2003 or of which he could not have become aware of due diligence so that proper evidence could have been given if necessary in relation to the time requirements and Court issues relating to the translation of the diaries.
The lawyer was afforded an opportunity on the directions hearing on 23 July 2003 and 4 August 2003 to provide a reason or excuse as to why the submissions and list of authorities had not been properly filed and served and on neither occasion did he suggest that the reason why they had not been prepared was that which was stated in his letter and quoted above. Had that been the case then it was open to the lawyer to apply to vacate the order made on 23 July 2003 on the grounds outlined in his letter referred to above. In our respectful submission the laywer had sufficient time to be aware of the issues of the diaries and to make proper representations and submissions in relation to those diaries at the appropriate time so as to avoid the result of which in the end occurred, namely the dismissal of the proceedings on the basis of the written submissions and list of authorities had not been filed and served. Upon having accepted to represent the applicant the lawyer had a duty to ensure that the applicant was properly represented. Such proper representation would have included an assessment of the necessity of the translation of the diaries. In our respectful submission it is irrelevant to speculate what course the matter might have taken had the lawyer complied with the directions. The effect of the lawyer’s failure was to deprive the applicant of an opportunity to have her case heard resulting directly in the cost order which was made on 2 October 2003. It is our respectful submission in those circumstances the order sought by the applicant ought to be made.
Mr Capsanis submits as follows:
The applicant Maria Abruzzese claims that the respondent John Peter Capsanis caused costs to be incurred by her by undue delay, negligence and/or default on his part.
The alleged undue delay and/or negligence are not further particularised and it’s therefore assumed, not pursued on such grounds.
The alleged default is particularised as follows. The respondent failed to lodge a document as required and/or failed to prepare information as required.
There is no claim by the applicant that, but for such alleged default, the hearing may otherwise have proceeded conveniently, the latter being a pre-requisite of the rule.
There is no claim by the applicant that the respondent unreasonably failed to lodge a document as required, the latter being a pre-requisite of the rule.
There is no claim the respondent has unreasonably failed to prepare the information, the unreasonable aspect of the omission being a pre-requisite of the rule.
The above sets out the allegations and omissions of the application filed by the applicant on the 24 October 2003 and the submissions and affidavit of the applicant filed same date.
It is submitted the application be dismissed with costs as it fails to allege and support each of the necessary conditions precedent for an order pursuant to rule 21.07(1)(a) and 21.07(2)(b) and (c) as above.
Furthermore, pursuant to rule 4.05(1), an applicant must also file and affidavit stating the facts relied on.
The affidavit filed by the applicant contains no facts in support of any contention, if it were made by the applicant, that the hearing may have proceeded conveniently if the document have been lodged and that the respondent has unreasonably failed to lodge the document.
The applicant having failed to lodge an affidavit setting out all the necessary facts in support of such grounds, the application should be dismissed with costs.
In the application of the applicant, the applicant seeks an order that “The respondent pay to the applicant all costs which the applicant has been ordered to pay to David Jones Limited”. The applicant does not seek an order in the alternative that the respondent pay part of the costs that the applicant has been ordered to pay.
Having thus elected, the application stands or falls on whether the applicant has made out the application for payment of all the stated costs.
On the 2 October 2003, in his reasons for judgment His Honour at point 14 observed that one consequence of Ms Gerace’s withdraw from the record was that she exercised a lien over her file which prevented Mr Capsanis, when he acted for Ms Abruzzese, from properly preparing the case for trial and until that file was produced, Mr Capsanis was under some disability in representing Ms Abruzzese. After that file was produced that disability was removed. Having gained access to the file it should have been apparent to Mr Capsanis the significance of any earlier advice received and the significance of offers previously made. Nevertheless, the preparation of the matter for trial remained unsatisfactory and defaults during that period are relevant considerations.
His Honour observed at point 15 that it should have been apparent to Ms Abruzzese and her legal advisers 14 days after Ms Gerace’s file was required to be produced that either the proceedings would need to be vigorously prepared for trial or the proceedings should be compromised.
The period of 14 days after Ms Gerace’s file was required to be produced expired on the 30 July 203.
The reason for the unavailability of the file of Ms Gerace’s was the applicant’s refusal to pay Ms Gerace’s outstanding costs for which Ms Gerace vigorously argued to maintain her lien. Had the costs been paid, the disadvantage His Honour is referring to in relation to preparation prior to 30 July 2003 may have been negated.
Furthermore, the applicant failed to provide appropriate instructions for the translation of her extensive diaries either prior to the 30 July 2003 or subsequent to that date.
The diaries were critical to her case and in the absence of such translations, even with the availability of Ms Gerace’s file, the preparation for trial was made impossible through the fault of the applicant.
In the above circumstances the applicant’s claim the respondent pay all her costs are without reasonable grounds or foundation and therefore the application should be dismissed with costs.
As per earlier submission herein, the applicant has failed to allege all of the necessary conditions precedent and in having failed to do so, as earlier submitted the application should fail. However without prejudiced to such submission, the respondent says that he has not caused the costs as claimed, to be incurred by the applicant. If he has caused such costs, then it was not because of undue delay, negligence or other default attributable to unreasonable failure to lodge a document as required or to prepare information so that a hearing may not proceed conveniently.
In particular, the document related to written submissions on behalf of the applicant.
The written submissions would need to have been prepared in the manner that they be most useful to the court and the parties, including the nature of the evidence to be led and in support of legal and evidentiary argument with cross-referencing to the evidence as filed including the primary affidavits of the applicant.
The cross-referencing would reasonably and necessarily require citation of paragraph numbers in the applicant’s affidavits and other identification in the evidence as filed on behalf of the applicant. This could not be done in any meaningful way without the admissibility of the applicant’s diaries which was not available through the fault of the applicant in failing to provide translated versions of her extensive diaries.
Nor could the hearing proceed conveniently, or at all, in the absence of the translated diaries.
These matters were clearly understood by the applicant’s son and the applicant herself from the applicant’s own attendances at court on direction hearings and other interlocutory hearings and from detailed discussion with the respondent, and counsel including senior counsel in a conference of several hours duration in the chambers of John McCarthy SC on the 31 July 2003 in the presence of the respondent, John Overall of counsel and Tony Abruzzese present on behalf of the applicant from which it was resolved on written instructions to seek an adjournment and vacate the hearing dates commencing 5 August 2003.
For the above further reasons, it is submitted the application be dismissed with costs.
On the 2 October 2003, in relation to the current matter, His Honour, inter alia, in order 4, observed that if an application is made pursuant to order 3, any affidavit in support of the application and any written submission in support of the application are to be filed and served at the same time and further provision was made in relation to documents filed by the respondent, viz., His Honour at paragraph 23 of his Reasons for Judgment further ordered that any document filed by the applicant or the respondent should also be served on the respondent.
The latter order appears to have been made pursuant to rule 21.07(5)(b) on the request of the solicitors for David Jones Limited.
The applicant not having served documents on the said original respondent is in default and therefore the application should be dismissed with costs pursuant to rule 13.03.
Even if the proceedings were not dismissed on the 4 August 2003 on the ground of not having lodged the written submissions (in sufficient form), it is inevitable that the proceedings would have been dismissed on one or other of the grounds set out in the Annexure “A” hereto. If the proceedings continued to the commencement of hearing, it is probable if not inevitable that they would have been dismissed at the outset by reason of the applicant’s inadmissible evidence. Should the proceedings have survived to a continuation of hearing, it’s inevitable particularly on whatever surviving evidence remained, that a verdict could not have exceeded the Calderbank offer(s). In each of the said scenarios the applicant would have incurred a liability for costs which in an indirect manner the applicant is claiming against the respondent.
Generally, it is submitted the discretion of a court in all the above circumstances should be exercised in favour of the respondent, the circumstances including the conduct of the applicant during the litigation and her significant contribution to the costs of the other party now claimed by the applicant against the respondent. Further, in the public interest, had she given reasonable consideration to the offers of settlement by David Jones, much would have been saved in terms of her own costs, the costs of the other side, and the time and other resources of the court. Also the applicant’s failure to provide proper instructions in terms of the translated diaries and to disclose senior counsel’s advice.
It is further submitted the application for security of costs be granted for the reasons set out in the respondent’s affidavit filed today’s date.
Reasoning
Rule 21.07 of the Federal Magistrates Court Rules provides, relevantly, that the Court may make an order for costs against a lawyer if the lawyer has caused costs to be incurred by a party or another person because of undue delay, negligence, improper conduct or other misconduct or default. Rule 21.07(3) provides that an order for costs against a lawyer may be made on the application of a party. Rule 21.07(4) relevantly provides that the Court may order that the lawyer pay to the party the costs or part of the costs that the party has been ordered to pay to another person. Rule 21.07(5) provides that before making an order for costs the Court must give to the lawyer, and any other person who may be affected by the decision, a reasonable opportunity to be heard.
I find that Mr Capsanis has had a reasonable opportunity to be heard.
I find, having regard to my reasons for decision in Abruzzese v David Jones Ltd (No 3), the affidavit of Ms Abruzzese in these proceedings and the submissions by Mr Di Lizio, that the proceedings instituted by Ms Abruzzese against David Jones were dismissed by reason of the default of Mr Capsanis. Rule 21.07(2) provides that a lawyer may be in default if a hearing may not proceed conveniently because the lawyer has unreasonably failed, relevantly, to file, lodge or deliver a document as required. In the present case, the trial of Ms Abruzzese’s application against David Jones did not proceed because Ms Abruzzese had failed to comply with a self executing court order that written submissions be filed by a fixed date. Mr Capsanis had filed a document purporting to be written submissions by the due date but the document was in fact a regurgitation of points of claim filed some 11 months previously by the solicitor then acting for Ms Abruzzese: See Abruzzese v David Jones Ltd (No 2).
I accept that Mr Capsanis faced difficulties in acting for Ms Abruzzese. Probably foremost among those difficulties was the fact that the second solicitor who acted for Ms Abruzzese claimed a lien over her file due to the non payment of fees. I dealt with that issue in Abruzzese v David Jones Ltd (No 1). After the file was produced following that decision, the difficulty facing Mr Capsanis was removed. As I noted in Abruzzese v David Jones Ltd (No 3) at paragraph 14, having gained access to the file, it should have been apparent to Mr Capsanis the significance of any earlier advice received by Ms Abruzzese and the significance of offers previously made. Nevertheless, the preparation of the matter for trial remained unsatisfactory and the default for which Mr Capsanis is responsible led to the dismissal of Ms Abruzzese’s proceedings.
Mr Capsanis’ affidavit evidence and written submissions only make this point stronger. After he gained access to Ms Gerace’s file and the advice of Mr Buchanan SC it was apparent to him that the prospects of success of the claim against David Jones were poor. Following the conference with Mr McCarthy and Mr Overall on 31 July 2003 it was apparent that Ms Abruzzese’s position was hopeless. It was agreed on that day to seek an adjournment, as the only possibility to breathe some life into the case. However, Mr Capsanis says, at paragraphs 11-13 of his affidavit, the proceedings would probably have been dismissed anyway and, even if by some miracle Ms Abruzzese had succeeded in her claim, costs would have been awarded against her due to the Calderbank offers from David Jones. Be that as it may, it was Mr Capsanis who destroyed any hope of securing an adjournment by his failure to comply with my order for the filing of written submissions. His purported compliance was a transparent copy of particulars. He now says that it was impossible for him to comply with the order for written submissions as he could not get proper instructions. In the circumstances, he should have ceased to act. He did not do so until 5 September 2003. In continuing to act and in filing a document that could not seriously be accepted as written submissions, he is the author of his own misfortune.
In Abruzzese v David Jones Ltd (No 3) I ordered that Ms Abruzzese is to pay the costs and disbursements of David Jones Ltd on an indemnity basis in respect of any costs incurred after 30 July 2003. At paragraph 15 of that decision I said:
In my view, putting together the evidence of advice available to Ms Abruzzese about her prospects of success, the three offers of compromise made by David Jones and the default in compliance with orders of the Court in the latter stages of the proceedings, an indemnity costs orders is called for. The question is when the indemnity costs should be payable from. I have come to the view that it should have been apparent to Ms Abruzzese and her legal advisers 14 days after Ms Gerace's file was required to be produced pursuant to the orders I made in Abruzzese v David Jones (No 1) that either the proceedings would need to be vigorously prepared for trial or the proceedings should be compromised. In fact neither occurred.
In my view, the circumstances of this matter properly call for an order that Mr Capsanis pay the costs and disbursements that Ms Abruzzese was ordered to pay pursuant to order 2 made by me on 2 October 2003.
Mr Capsanis’ technical objections to the application have no substance. It is no answer to the claim to say that notwithstanding his default the proceedings could not have proceeded conveniently. That is based on his assessment that Ms Abruzzese’s claim against David Jones was doomed and her case was in a hopeless position. If that be right and if Mr Capsanis could not obtain proper instructions, then Mr Capsanis should not have continued to act. He could be liable for a greater proposition of the costs: White Industries (Qld) Pty Ltd v Flower & Hart (a firm) [1998] FCA 806; approved on appeal Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773 at [48]. A solicitor is obliged, independently from counsel, to properly assess the merits of his client’s case, and should not pursue a claim that cannot succeed. I also reject Mr Capsanis’ contention that it is not alleged against him that his default was unreasonable. In my view, it is clear enough from the material relied upon by Ms Abruzzese and my own previous decisions that Mr Capsanis’ default was unreasonable.
Finally, I reject Mr Capsanis’ submission that Ms Abruzzese has elected to pursue a claim against him for all of the costs she is required to pay and that thus having made an election, she cannot have part of those costs. Ms Abruzzese has applied for a costs order. The application having been made, it is for the Court to decide what, if any, costs Mr Capsanis should pay. It is not a matter for the applicant’s election.
Mr Capsanis should also pay the applicant’s costs of this present costs application. The costs issue could have been resolved on 2 October 2003 and the costs that have been incurred since then result from Mr Capsanis’ request for more time to deal with the costs application against himself. The outcome is that a costs order has been made against Mr Capsanis. The applicant has been partially successful. Scale costs for this application are $1,135 plus the daily hearing fee. There has been no hearing. The scale costs should be reduced to $700, noting that the applicant was not wholly successful.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 30 January 2004
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