Alfred Wayne Wilbur v Joseph Bengasino
[2017] VCC 632
•25 May 2017
IN THE COUNTY COURT OF VICTORIA AT MELBOURNE
COMMERCIAL DIVISION GENERAL LIST
Revised Not Restricted
Suitable for Publication
Case No. CI-14-01868
ALFRED WAYNE WILBUR Plaintiff
v
JOSEPH BENGASINO First Defendant
AND
FRANCIS BENGASINO T/AS WILDER MOSES BENGASINO Second Defendant
JUDGE: His Honour Judge Woodward
WHERE HELD: Melbourne
DATE OF HEARING: 16 May 2017
DATE OF JUDGMENT: 25 May 2017
CASE MAY BE CITED AS: Wilbur v Bengasino (No 2)
MEDIUM NEUTRAL CITATION: [2017] VCC 632
Subject: COSTS
REASONS FOR JUDGMENT
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Catchwords: PRACTICE AND PROCEDURE – Application for leave to discontinue a proceeding – costs on discontinuance – plaintiff seeking an order that the defendant pay costs on discontinuance – Rules 63A.15 – whether court should “otherwise order”.
Legislation Cited: Civil Procedure Act 2010 (Vic); County Court Civil Procedure Rules
2008 (Vic); Limitation of Actions Act 1958 (Vic).
Cases Cited: Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16, (2016) 331 ALR 1; Dohrmann v Attorney General for the State of Victoria [1995] 1 VR 274; Blackjack Executive Car Services Pty Ltd v Koulax [2002] VSC 380; Ferny Sky Pty Ltd v Capital Finance Australia [2006] VSC 366; Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] 1 VR 27; Wilbur v Bengasino [2016] VCC 1618.
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APPEARANCES:Counsel Solicitors
For the Plaintiff Mr R G Squirrell Meier Denison Guymer Pty Ltd
For the Defendant Mr H Forrester Obst Legal Pty Ltd
HIS HONOUR:
Rule 63A.15 of the County Court Civil Procedure Rules 2008 (Vic) (“the Rules”) provides that unless the Court otherwise orders, a party who discontinues a proceeding shall pay the costs of the party to whom the discontinuance relates to the time of the discontinuance. The plaintiff, Alfred Wilbur, seeks leave pursuant to r 25.02(2) wholly to discontinue this proceeding brought by him against his former solicitors Wilder Moses Bengasino (WMB). Is this a case where the Court should otherwise order?
The pleadings
On 16 April 2014, Mr Wilbur (first plaintiff) and his wife Fiona Wilbur (second plaintiff) commenced this proceeding against WMB by a generally indorsed writ. The indorsement claimed damages for “negligent advice and/or legal services poorly performed” by WMB in relation to two matters:
(a)advice given by WMB that Mr Wilbur should resign from Clements Building Pty Ltd and withdraw funds alleged to be due to him, as a consequence of which the Wilburs were sued in the Supreme Court by Ian Clements and Clements Building Pty Ltd (“Supreme Court proceeding”); and
(b)the preparation of an indemnity agreement, and conduct of a claim pursuant to that agreement, for expenses incurred by Mr Wilbur in connection with proceedings in VCAT brought against Mr Wilbur as a joined party (“VCAT proceeding”).
The general indorsement identified two categories of loss. First, $97,043.03 in costs and expenses allegedly incurred as a result of the negligent advice of WMB that Mr Wilbur should resign as a director of, and withdraw funds from, Clements Building Pty Ltd. Second, $82,185.26, being the total of various sums disallowed in the VCAT proceeding allegedly as a result of the negligence and poor preparation of the claim for those losses by WMB on behalf of Mr Wilbur.
A statement of claim was not filed and served until 8 October 2015 (“statement of
claim”), by which time Mrs Wilbur had ceased to be a party. The statement of claim at [23] identified three particulars of breach of retainer or negligence, in terms as follows:
(a)“[WMB] did not advise [Mr Wilbur] as to the options open to him other than the said advice.”
(b)“In drafting the said Terms of Settlement and advising acceptance of the same [WMB] did not advise [Mr Wilbur] that the indemnity provided in the Terms of Settlement was not an indemnity on a full indemnity basis.”
(c)“[WMB] failed to prepare and assess adequately or at all the evidence that was to be adduced on behalf of [Mr Wilbur] as Joined party in support of his application at [VCAT] for an indemnity from Clements.”
There were again two categories of loss identified in the statement of claim at [25], described at [25] as follows:
(a)Supreme Court proceeding – costs paid by [Mr Wilbur] to [WMB] $97,093.03; and
(b)VCAT proceeding – amounts disallowed $82,185.26.
The parties differed on the question of which acts alleged against WMB caused which loss. Counsel for WMB submitted that the conduct alleged in 4(a) and 4(b) above were two acts giving rise to the same loss, namely, the costs and expenses of the Supreme Court proceeding. Thus, on this view, the second category of loss was attributable exclusively to WMB’s conduct of the VCAT proceeding described in 4(c) above.
In contrast, counsel for Mr Wilbur submitted that the conduct alleged in 4(a) (being the allegedly deficient advice given in around September 2006) was the only cause of the first category of loss (the costs and expense of the Supreme Court proceeding), whereas the losses in the VCAT proceeding were caused by both the alleged negligence in the drafting of the terms of settlement (paragraph 4(b)) and by the way in which the VCAT proceeding was handled by WMB (paragraph 4(c)).
I prefer the latter submission. Mr Wilbur’s complaint about the drafting of the terms of settlement and the advice to him to sign those terms, centres on alleged deficiencies in the indemnity provided for as part of the settlement (statement of claim at [18]). The relevant terms of that indemnity were directed to the VCAT proceeding (statement of claim at [16] and [17]). Thus any alleged deficiencies in the drafting of those terms could not have caused the costs and expenses of the Supreme Court proceeding. Those costs can only have been caused by the bringing of the Supreme Court proceeding itself and the provisions of the terms of settlement dealing with the payments and transfer of property by Mr Wilbur provided for under those terms (particulars C(g), (h) and (i) to WMB’s amended defence dated 31 January 2017 at [27]). Those provisions are not the subject of complaint in the proceeding.
That said, I do not exclude the possibility that the allocation of categories of loss to particular claims in the statement of claim at [23] to [25] could reasonably have led to some confusion in the mind of the drafter of the original defence to the statement of claim.
In their defence filed and served on 23 November 2015 (“the original defence”) WMB, in addition to uncontroversial admissions and denials of the various allegations in the statement of claim, raise two substantive defences. First, at [26] in response to the allegation of breach by WMB of any retainer or duty of care, “in the conduct of the Supreme Court [sic] as to the breadth of the indemnity contained in the Terms of Settlement” or in the conduct of the VCAT proceeding, an advocate’s immunity defence. Second, at [27], a defence (“LOA defence”) under the Limitation of Actions Act 1958 (Vic) (“Limitations of Actions Act”) in terms as follows:
“To the extent that the Plaintiff alleges a cause of action of breach by the Defendants of any retainer or duty of care in the conduct of the Supreme Court proceeding as to the breadth of the indemnity contained in the Terms of Settlement, such cause of action is barred by operation of the Limitation of Actions Act (Vic) 1958”.
It is notable that in pleading both the advocate’s immunity defence and the LOA defence, the drafter of the original defence appears to have adopted almost identical
wording (the wording of the advocate’s immunity defence mistakenly omits “proceeding” after “Supreme Court”). In both cases, the wording conflates the allegations concerning the Supreme Court proceeding with those relating to the breadth of the indemnity provided as part of the settlement of that proceeding.
Further, the expression: “in the conduct of the Supreme Court proceeding as to the breadth of the indemnity contained in the Terms of Settlement”, is nonsensical given that the breadth of the indemnity was plainly not in issue in the Supreme Court proceeding. As a minimum, it seems likely that the drafter has omitted “and” immediately before “as to the width of”. On the other hand, the drafter has omitted altogether from the LOA defence any reference to the allegation of deficiencies in advice given by WMB (paragraph 4(a) above).
The interlocutory stages
Following the filing and service of the statement of claim and original defence in late 2015, the interlocutory stages of the proceeding progressed more or less routinely throughout 2016. They are described in the affidavit of Howard Obst sworn on 11 May 2017 (“Obst affidavit”). I say “more or less”, because it is clear from the Obst affidavit and the exhibited correspondence, that the timeliness of Mr Wilbur’s discovery and inspection left much to be desired and his successful application to vacate the original trial date, was rightly subject to a costs penalty.
I should also note the discussion in the Obst affidavit commencing at [36] concerning the lengthy exchange of correspondence between May and July 2016 over asserted deficiencies in the WMB discovery. That issue was ultimately resolved on 19 July 2016 when, at a directions hearing before Judicial Registrar Burchell, counsel for Mr Wilbur accepted an offer (first made on behalf of WMB by letter dated 6 July 2016), that the files being pursued by Mr Wilbur be provided for inspection, rather than formally discovered.
I accept the submission made on behalf of WMB (supported by the Obst affidavit at [36]) that the debate over the adequacy of WMB’s discovery in the period between May and July 2016 was primarily concerned with documents said to be relevant to the
conduct of the VCAT proceeding.
I also accept that at the hearing before Her Honour Judge Hogan on 25 May 2016, Mr Obst on behalf of WMB submitted that, based on the allegations made in the statement of claim, Mr Wilbur’s claims are defeated by the advocate’s immunity defence and the LOA defence (Obst affidavit at [35]). And further, that a written outline of submissions filed and served in respect of the discovery issues in advance of the hearing before Judicial Registrar Burchell on 19 July 2016 set out the issues to be decided in the proceeding and asserted that each issue was either statute barred by reason of the LOA defence or was immune from suit by reason of the advocate’s immunity defence (Obst affidavit at [39]).
On 12 July 2016, WMB’s solicitors sent a letter to Mr Wilbur’s solicitors directed particularly to that part of the statement of claim which alleged negligence in the conduct of the VCAT proceeding, stating that based on the High Court case of Attwells v Jackson Lalic Lawyers Pty Ltd [2016] HCA 16; (2016) 331 ALR 1 (“Attwells”), WMB has a complete defence to the allegations made by Mr Wilbur to the extent that they relate to WMB’s conduct of the VCAT proceeding.
On 17 August 2016, Mr Wilbur’s solicitors sent a letter to WMB’s solicitors attaching a proposed amended statement of claim and indicating that Mr Wilbur would seek an order at the directions hearing on 18 August 2016 before Judicial Registrar Burchell for leave to file and serve the proposed amended statement of claim. Mr Wilbur was given leave to file and serve an amended statement of claim at that directions hearing.
However, on 6 September 2016, Mr Wilbur’s solicitors notified WMB’s solicitors by letter that Mr Wilbur would no longer be filing an amended statement of claim and would instead file and serve a reply to the original defence, which admitted WMB’s advocate’s immunity defence. That reply was filed and served on 8 September 2016. The day before, WMB’s solicitors had written to Mr Wilbur’s solicitors foreshadowing an application for summary judgment on the basis that his proceeding was commenced outside the time limits imposed by s 5 of the Limitation of Actions Act.
On any view, the reply filed by Mr Wilbur on 8 September 2016 was an unqualified concession that he could not succeed on that part of his claim that related to the conduct by WMB of the VCAT proceeding. In the words of the authorities concerning costs on discontinuance discussed further below, it can be seen as a step amounting to effective surrender. Further, the advocate’s immunity defence had been consistently maintained by WMB on and from the filing and service of the original defence.
I became concerned during the course of submissions that it might be suggested on behalf of Mr Wilbur that the there was some point of principle decided in Attwells that had not previously been the subject of clear statement by the High Court. This in turn might have formed the basis for a submission on behalf of Mr Wilbur that he was entitled to maintain his claim concerning the conduct of the VCAT proceeding in the face of the advocate’s immunity defence, at least up until Attwells was decided. Counsel for Mr Wilbur rightly disavowed any such suggestion (see Attwells at [5], [29] and [32]).
Summary judgment application
WMB’s summary judgment application was heard by His Honour Judge Cosgrave on 25 October 2016. His Honour delivered reasons for judgment on 7 November 2016 (Wilbur v Bengasino [2016] VCC 1618). His Honour found correctly, in my respectful view, that the LOA defence as then pleaded, did not traverse Mr Wilbur’s allegation that WMB’s advice to him to resign and withdraw funds from Clements Building Pty Ltd was negligent or in breach of retainer. Given that finding, coupled with the significant consequences for Mr Wilbur of His Honour adopting a more generous or pragmatic view of the original defence, His Honour went on to dismiss the application, with costs.
There are two further matters to observe at this point in connection with the summary judgment application. First, His Honour Judge Cosgrave refers at [20] to an argument on behalf of Mr Wilbur that the date of Mr Wilbur’s first alleged loss resulting from the advice claim arose not when he first paid WMB for their costs of the Supreme Court
proceeding (on 16 March 2007), but when he first received from WMB a bill of costs that complied with the Legal Profession Act 2004 (Vic) (17 April 2008). His Honour expresses doubts about the strength of that argument, but it was unnecessary for him to reach a concluded view. It was accepted by both counsel in the application before me that this argument first emerged during the hearing of the summary judgment application.
Second, the onus applicable on an application for summary judgment is effectively reversed on an application to depart from the usual order for costs on discontinuance. In the former, a defendant must satisfy the Court that the plaintiff’s claim had “no real prospects of success” (s 62 of the Civil Procedure Act 2010 (Vic) (“CPA”)). And even if a defendant overcomes that significant obstacle, the Court retains a discretion to dismiss the application (s 64 CPA). In this application, the onus is squarely on the party seeking leave to discontinue (the plaintiff Mr Wilbur) to satisfy the Court that some course other than that expressly provided for in r 63A.15 should be taken.
The discontinuance
On 9 February 2017, WMB filed and served an amended defence expanding the breadth of the LOA defence, to expressly include WMB’s advice to Mr Wilbur in September 2006 that he should resign and withdraw funds from Clements Building Pty Ltd. Mr Wilbur filed and served an amended reply dated 21 February 2017 which relied on the argument first raised during the summary judgment application, to the effect that Mr Wilbur’s claim in respect of the negligent advice arose on 17 April 2008, when WMB first rendered a bill of costs in compliance with the requirements of the Legal Profession Act 2004 (Vic).
On 21 April 2017, Mr Wilbur abandoned his reply to the expanded LOA defence. His solicitors wrote to the solicitors for WMB that day stating that Mr Wilbur would at the commencement of the trial fixed for 16 May 2017 seek leave wholly to discontinue the proceeding and seek his costs of the proceeding up to 9 February 2017 (being the date of WMB’s amended defence). WMB’s solicitors replied on 24 April 2017 indicating that WMB would consent to leave been granted to discontinue, but that they
would oppose the costs order proposed by Mr Wilbur and seek instead an order for their costs.
Applicable legal principles
The principles which apply generally in relation to costs where a party wishes to discontinue are well settled and are conveniently summarised by the Honourable Justice Whelan (as he then was) in Ferny Sky Pty Ltd v Capital Finance Australia [2006] VSC 366 (Unreported) (“Ferny Sky”). After confirming that: “under our rules it is clear that the onus is on the discontinuing party to establish that some course other than that expressly provided for by the rules should be taken”, His Honour stated: “Having considered the authorities and having heard argument, it seems to me that the principles applicable to the case before me are these”. I take the liberty of quoting those principles in full (omitting citations), because they are equally applicable to the case before me and, unsurprisingly, I am unable to improve on them.
(1)Where neither party desires to proceed with litigation, the court should facilitate the conclusion of the proceeding by making a costs order. In this context it is legitimate to take into account the desirability of encouraging reasonable conduct by parties to litigation which furthers the expeditious and cost-effective resolution of disputes.
(2)In the absence of a trial on the merits it will usually not be appropriate for a court considering the issue of costs to determine the merits or to attempt to assess the likely outcome of a hypothetical trial. But in some cases, a judge may feel confident that one party was almost certain to have succeeded if the matter had been fully tried and, in such circumstances, the judge is justified in determining costs on that basis. In some cases, the discontinuance itself can be seen as an acknowledgement of likely or even certain defeat or as what has been described as a step amounting to "effective surrender". Cases where external events overtake a proceeding or render it futile are in a different category. Such cases are not relevant here.
(3)It is appropriate to consider whether the plaintiff has acted reasonably in commencing or in continuing the proceeding and, in a particular case, the conduct of the defendant might also be relevant.
(4)Under r 63.15 the Court may "otherwise order" in respect of
some or all of the costs.1”
Counsel for Mr Wilbur submitted to me, against his own client’s interest, that I had no power to order WMB to pay Mr Wilbur’s costs upon discontinuance pursuant to r 25.02, relying on the decision of O’Bryan J in Dohrmann v Attorney General for the State of Victoria [1995] 1 VR 274 (“Dohrmann”) at 277 at L40. According to counsel, I could only make such an order if I was satisfied that WMB’s conduct in relation to the pleading of the LOA defence amounted to a breach of their overarching obligations under the CPA. In this counsel was mistaken.
In Blackjack Executive Car Services Pty Ltd v Koulax [2002] VSC 380 (Unreported) (“Blackjack”), Habersberger J at [9] to [11] referred to two decisions decided before Dohrmann (at least one of which was apparently not cited to O’Bryan J), where judges of the Supreme Court had proceeded on the basis that they had power to order that a defendant pay the plaintiff’s costs on discontinuance by the plaintiff. His Honour concluded that these cases all indicated that the restrictive approach adopted by O’Bryan J in respect of r 63.15 was not correct.
Subsequent decisions, (including Ferny Sky, which cited Blackjack with approval) also have proceeded on the basis that the overriding discretion of the court on costs (in this Court, pursuant to s 78A of the County Court Act 1958 (Vic)) extends in appropriate cases to making an order on discontinuance by a plaintiff, that the defendant pay all or part of the plaintiff’s costs. In Patsios & Anor v Glavinic & Anor [2006] VSC 92 (Unreported), Smith J at [6] expressly accepted the proposition stated by Habersberger J in Blackjack that when a plaintiff discontinues a proceeding, a court is empowered to make whatever order for costs it considers appropriate, including an order that the defendant pay the plaintiff’s costs.
In the event, a significant proportion of the hearing was occupied by counsel for Mr Wilbur seeking to persuade me that the failure by WMB to plead an LOA defence that fully traversed Mr Wilbur’s allegations of negligence and breach of retainer, amounted to a breach of WMB’s overarching obligations under the CPA. He need not have done
Ferny Sky Pty Ltd v Capital Finance Australia [2006] VSC 366, per Whelan J at [25]
so. Likewise, counsel for WMB took time seeking to persuade me otherwise.
For completeness, I am satisfied that no conduct of either Mr Wilbur or WMB in the course of the proceeding amounted to a departure from the standards prescribed by the CPA sufficient to support a finding of breach by either party of any of their overarching obligations. Having said this, some of the factors relied on by counsel in this context do inform consideration of whether parties have acted reasonably in the sense discussed in the extract from Ferny Sky above.
Consideration
The first principle stated by Whelan J in Ferny Sky concerns the importance (since given added emphasis by the introduction of CPA) of encouraging parties regularly to undertake a realistic assessment of the prospects of success of their various claims, and take steps to resolve those claims accordingly. There is some tension between this principle and the second and third principles stated by Whelan J. If a party undertakes that assessment and determines unilaterally to bring a proceeding to an end in circumstances amounting to an “effective surrender”, or the party’s commencement and continuation of the proceeding is found to be unreasonable, the application of those latter principles will inevitably result in that party being penalised by an adverse costs order.
In this context, I have had regard to the observations of Judge Cosgrave at [17] of His Honour’s reasons in the summary judgment application, where His Honour noted that Mr Wilbur’s concession on 6 September 2016 of the advocate’s immunity defence suggests “that the plaintiff is not adopting a wholly unrealistic attitude to the litigation and is giving careful consideration to legal arguments properly raised by the opposing party”. I also have regard to submissions of counsel for Mr Wilbur before me that an order requiring Mr Wilbur to pay the whole costs of the proceeding, simply offers him no incentive to act reasonably.
In my view, the tension in the principles is resolved simply by applying r 65A.15 in accordance with its terms. The costs order that a court will ordinarily make to facilitate the conclusion of a proceeding by discontinuance, is an order that the discontinuing
party pay the costs. This is despite the fact that the prospect of an adverse costs order is self-evidently a disincentive to a party taking steps to end a proceeding. Further, I do not accept that the prospect of an adverse costs order offers Mr Wilbur no incentive to act reasonably. Avoiding exposure to future costs, even at a late stage of a proceeding, is a powerful incentive to a party to act reasonably in resolving a dispute, particularly a dispute that the party concerned has concluded they are likely to lose.
Turning next to the second principle in Ferny Sky, the first thing to note is that this case (like Ferny Sky) is not one where external events have overtaken the proceeding or rendered it futile. In those circumstances, the question I am required to ask myself is whether I feel confident that one party was almost certain to have succeeded if the matter had been fully tried. In considering that question I can call in aid the discontinuance itself, to see whether that amounts to an acknowledgement of likely or even certain defeat.
In my answer to that question, I propose to consider the proceeding in two parts. First, the claim concerning the conduct by WMB of the VCAT proceeding and, second, the claim the subject of the LOA defence.
Mr Wilbur’s decision to concede the advocate’s immunity defence in respect of the first part can fairly be described as amounting to an acknowledgement of at least likely defeat, in respect of a defence that was pleaded by WMB at the earliest opportunity. It follows that, as a minimum, Mr Wilbur must pay WMB’s costs on a standard basis in respect of that part of the proceeding. Those costs would include (but not be limited to) most of the costs incurred between May and July 2016 in connection with documents said to be relevant to the conduct of the VCAT proceeding.
The position in relation to the second part of the proceeding is less straight forward.
Counsel for Mr Wilbur has rightly drawn to my attention that an LOA defence must be pleaded in order to be taken: Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] 1 VR 27 at 74-6. Further Judge Cosgrave found at [14] that the LOA defence in the form pleaded in the original defence, did not traverse Mr Wilbur’s claim concerning the
provision by WMB of the allegedly negligent advice which ultimately gave rise to the Supreme Court proceeding. Both these matters weigh in favour of treating the second part of the proceeding differently from the first.
On the other hand, there was no evidence before me, nor was it submitted on behalf of Mr Wilbur, that WMB had made a calculated decision to limit the LOA defence in the manner identified by Judge Cosgrave. Indeed, counsel for Mr Wilbur positively asserted it as likely that WMB were, before amending their defence, proceeding in the belief that the LOA defence pleaded in the original defence at [27] applied to the whole of Mr Wilbur’s claims. Further, as discussed above (at [16]), on at least two occasions during 2016, WMB’s solicitors expressly asserted a position consistent with that belief. I am therefore satisfied that WMB’s failure to plead a complete LOA defence as found by His Honour Judge Cosgrave was no more than a regrettable but unintended drafting oversight in an otherwise carefully drawn and comprehensive pleading.
There is no evidence before me explaining why Mr Wilbur delayed for over seven years from the beginning stages of the events in question in the second half of 2006 (and, in particular, the giving of the impugned advice in September or that year), before commencing this proceeding. However, limitation issues at least must have been front of mind for those advising Mr Wilbur at around the time he commenced the proceeding in April 2014, having regard to the length of that delay. It can also be assumed that Mr Wilbur’s legal advisers were alive to the prospect of an advocate’s immunity defence. It is therefore likely that Mr Wilbur (properly advised) was aware from an early stage that he would face considerable difficulty in meeting a combination of an advocate’s immunity defence and LOA defence in respect of all claims advanced by him in the proceeding.
Counsel for Mr Wilbur has effectively conceded as much by submitting that it was self- evident that Mr Wilbur suffered loss and damage by following the alleged negligent advice in 2006, and that this loss and damage accrued before 16 April 2008 (being the date six years before the commencement of this proceeding). He also submitted that it must have been evident to WMB from the commencement of the proceeding or
shortly thereafter that the cause of action for damages arising out of the 2006 advice was subject to the LOA defence. What was evident to WMB must have been equally evident to Mr Wilbur and his legal advisers, if not more so.
Despite this, Mr Wilbur commenced and, after some early delay, actively pursued this proceeding almost to trial. This included foreshadowing during submissions in the summary judgment application, an argument in answer to a WMB’s proposed expanded LOA defence, and then formally pleading this argument by way of amended reply dated 21 February 2017. I accept the submission by counsel for WMB that it therefore cannot be assumed that, if WMB had pleaded a complete LOA defence at an earlier stage in the proceeding (as they believed they had done), Mr Wilbur’s decision to seek to discontinue the proceeding would also have been made earlier.
After weighing these competing considerations in relation to the second part of the proceeding, I consider that:
(a)the LOA defence as ultimately pleaded was one that could reasonably have been foreseen from the date the proceeding was commenced, and probably earlier;
(b)there is nothing in the material filed on behalf of either party to support a conclusion that Mr Wilbur could have been, or was in fact, under any misapprehension about WMB’s intention to rely on a complete LOA defence in respect of all Mr Wilbur’s claims in the proceeding; and
(c)Mr Wilbur’s eventual concession in the face of WMB’s amended defence, was an acknowledgement of likely or even certain defeat.
Thus, the fact that Mr Wilbur secured an order dismissing WMB’s application for summary judgment on the basis that, apparently by error or oversight, the original defence did not plead a complete defence to his claims is, in my judgment, not a sufficient basis for displacing the usual order under r 65A.15. I note, in passing, that this error or oversight by WMB has already attracted a not insignificant penalty in the
form of the order that they pay the costs of the summary judgment application.
Given what I have found in respect of the application of the second principle in Ferny Sky, it is unnecessary for me to consider in any detail, under the third principle:
(a)whether the plaintiff has acted reasonably in commencing or in continuing the proceeding; or
(b)the conduct of the defendant.
Again, there are competing considerations. The commencement and continuing of the proceeding in the face of a likely advocate’s immunity and LOA defence is troubling for the reasons discussed above. On the other hand, Mr Wilbur’s decision to continue the proceeding was, at least for a time, encouraged by WMB’s error or oversight in failing to plead a complete LOA defence. But as with the second principle, in my view, the conduct of WMB seen in the context of the proceeding as a whole, does not justify departing from the usual order for costs on discontinuance.
In the circumstances, I am satisfied that, except for the costs order in his favour made by Judge Cosgrave and the costs of this application, there should be no “other order” in this case and Mr Wilbur should pay the costs of the proceeding including reserved costs, to be taxed on the standard basis in default of agreement.
So far as the costs of this application are concerned, I have not had the benefit of detailed submissions from either party on where those costs should lie. Subject to this, it seems to me that WMB’s drafting infelicity that led to Mr Wilbur’s success before Judge Cosgrave has continued to have some limited currency. Having succeeded before Judge Cosgrave, it was not unreasonable for Mr Wilbur to have sought in the application before me further orders that reflected a similar approach. Mr Wilbur has been thwarted in that attempt primarily because, in this application, he bears the onus of satisfying me that I should depart from the usual order as provided for in r 63A.15. On the other hand, the fact that Mr Wilbur has failed in this application would ordinarily result in an order that he pay the costs of this application in addition to the costs of the
proceeding as a whole.
Doing the best that I can to balance these considerations, and noting that under the fourth principle in Ferny Sky I may “otherwise order” in respect of some or all of the costs, my tentative view is that the appropriate order on the costs of this application is that each party should bear their own. However, in case there have been offers made to settle this application in advance of hearing or some other consideration of which I am presently unaware, I invite any party who wishes to make further submissions on the question of costs of this application, to do so by filing and serving by no later than 4.00pm on 1 June 2017 submissions in writing of no more than four pages, attaching any relevant correspondence. Any submissions in response (also limited to four pages) should be filed and served by 4.00pm on 8 June 2017. I would thereafter propose to determine the costs of this application on the papers, unless either party persuades me by their written submissions that a further short hearing is justified.
If I hear nothing further from the parties before the first time and date stated above, I will proceed to make orders as follows:
(a)The plaintiff have leave wholly to discontinue this proceeding.
(b)The plaintiff pay the costs of the proceeding including reserved costs, except for the costs that defendant was ordered by Judge Cosgrave to pay by order made 8 November 2016 and except for the costs of and incidental to this application, such costs to be taxed on the standard basis in default of agreement.
(c)There be no order for costs of and incidental to this application.
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Certificate
I certify that these 18 pages are a true copy of the reasons for Judgment of His Honour
Judge Woodward delivered on 25 May 2017. Dated: 25 May 2017
Simon Bobko
Associate to His Honour Judge Woodward
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