Angelo Ferella and Tiziana Ferella v Donato Lo Surdo and Maria Lo Surdo

[2014] NSWSC 1775

Supreme Court

New South Wales

Medium Neutral Citation:	Angelo Ferella and Tiziana Ferella v Donato Lo Surdo and Maria Lo Surdo [2014] NSWSC 1775
Hearing dates:	21 November 2014
Decision date:	21 November 2014
Jurisdiction:	Common Law
Before:	Wilson J
Decision:	Summons dismissed. Order for costs on an indemnity basis in favour of the defendants against the first plaintiff only.
Catchwords:	APPLICATION for a review pursuant to s373 of the Legal Profession Act 2004 - application for leave to file amended summons - failure to comply with court orders - concession by the plaintiff that the summons pleaded no arguable cause of action - summons dismissed COSTS - indemnity costs in favour of the defendants
Legislation Cited:	Legal Profession Act 2004 Supreme Court Act 1970 Civil Procedure Act 2005
Cases Cited:	Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Category:	Principal judgment
Parties:	Angelo Ferella (First Plaintiff) Tiziana Ferella (Second Plaintiff) Donato Lo Surdo (First Defendant) Maria Lo Surdo (Second Defenadant)
Representation:	Counsel: G Foster (First Plaintiff) T Bors (Defendants) No appearance on behalf of the second plaintiff Solicitors: Graham Philip Player (Defendants)
File Number(s):	2014/68667

Judgment

1. On 21 November 2014 the Court dismissed the plaintiff's summons, and awarded costs on an indemnity basis against the first plaintiff in favour of the defendants. These are my reasons for making those orders.

Summons and history of proceedings

1. On 5 March 2014 the plaintiffs Mr. Angelo Ferella ("the first plaintiff") and Ms. Tiziana Ferella ("the second plaintiff") commenced proceedings against Mr. Donato Lo Surdo ("the first defendant") and Ms. Maria Lo Surdo ("the second defendant"). By a summons as amended on 10 March 2014 the plaintiffs sought a number of orders, effectively:

(1)   a review of the decision made on 31 January 2014 by the Manager of the Costs Assessment of the Supreme Court of NSW; and

(2)   an order directing a review of the initial determination by the costs assessor Mr. Webley.

The action purports to be brought pursuant to s.373 of the Legal Profession Act 2004 ("the Act").

1. This matter has some considerable history which pre-dates proceedings before this Court.

1. The issue which gave rise to these proceedings is a dispute between the parties as to the supply by the defendants of goods to the plaintiffs that the plaintiffs allege are defective. The defendants filed a claim against the plaintiffs in the Local Court of New South Wales in 2011 relating to the failure of the plaintiff to pay for the goods.

1. The claim filed in the Local Court by the defendants was heard in that jurisdiction ex parte on 27 May 2011, the plaintiffs having failed to attend the hearing of the matter. Judgment was entered in favour of the defendants, with costs.

1. Although the first plaintiff claims that he filed (by post) a Motion seeking to have the ex parte orders set aside, no such motion was ever received by the Registry of the Local Court.

1. A Costs Assessor was appointed to make an assessment of the costs of the Local Court proceedings, and the Assessor contacted the parties notifying each of his appointment on 1 November 2011. The first plaintiff responded by refusing to participate in the costs assessment process. He declined to make any submission pursuant to s.359 of the Act to the assessor.

1. On 12 December 2011 the first plaintiff filed a Motion in the Local Court seeking to have the ex parte judgment set aside, together with other ancillary orders. That Motion was heard and dismissed by the Local Court on 16 February 2012.

1. A Certificate of Determination of Costs was issued by the Costs Assessor as required by the Legal Profession Act 2004 on 20 February 2012 and sent to the parties on 12 April 2012. Costs and disbursements were assessed at $18697.78, payable by the present plaintiffs.

1. Section 373 of the Act prescribes a mechanism for a review of the costs assessor's decision. The application is to be made within 30 days of the date of the certificate, or within such further time as allowed by a costs assessment manager. The present plaintiffs filed an application for such review on 24 May 2012, outside of the 30 day period prescribed by section 373 of the Act.

1. Disputing receipt of the certificate, the plaintiffs sought an extension of time to lodge a review application. On 31 January 2014, following some further correspondence, the manager of costs assessment of the Supreme Court refused the application for an extension of time.

1. It is this refusal that is the subject of the present summons, together with the initial determination by the costs assessor.

1. The matter was first before the Registrar of the Supreme Court on 7 May 2014 when orders were made for service of affidavits. The Registrar also made an order for any amended summons to be filed by 21 May 2014. That order was not complied with by the plaintiffs.

1. The matter was next before the Registrar on 27 June 2014. I am informed from the bar table that the plaintiff there sought to file an amended summons. The application was opposed and the parties were referred to the duty judge, before whom the application was withdrawn. The matter was returned to the Registrar's list, and the matter was listed for hearing on 21 November 2014.

1. No material had been filed since that last mention before the Registrar.

Representation at the hearing of 21 November 2014

1. On 21 November 2014 Mr. Foster of counsel appeared for the first plaintiff. Mr. Ferella was present in court. Mr. Foster considered himself as instructed to appear on behalf of the second plaintiff, Ms. Tiziana Ferella, but counsel had no instructions from Ms. Ferella personally, and had never had any dealings with her in person, or via telephone. Mr. Foster had not received anything in writing from the second plaintiff, and none of the documents filed with the Court bore her signature.

1. Mr. Foster regarded his instructions to act for the second plaintiff as deriving from the authority given him by the first plaintiff, who asserted that he had such authority from his sister. That assertion could not be confirmed with the second plaintiff, as she did not attend the hearing before me. The court was advised from the bar table that Ms. Ferella had not appeared before this court at any time in relation to these proceedings.

1. The defendants took issue with Mr. Foster's capacity to appear for the second plaintiff, and questioned Mr. Ferella's authority to act on behalf of his sister. It was suggested that difficulties had arisen in past proceedings with respect to the issue of appearances and representation, and the knowing participation by the second plaintiff in these proceedings was questioned by the defendants.

1. The only evidence tendered to establish that Mr. Ferella had the authority to act for the second plaintiff is an affidavit of Mr. Ferella, dated 19 June 2014. This evidence is no more than the deponent's assertion that he has such authority.

1. There is no signed authority by Ms. Ferella. There is no affidavit by Ms. Ferella. There is nothing in the documents or evidentiary material that originates with the second plaintiff. This is most unsatisfactory.

1. It is impossible for the court to be satisfied that Ms. Ferella has in fact authorised the first plaintiff to act on her behalf; or that she has instructed Mr. Foster. Accordingly, the matter proceeded on the basis that Ms Ferella did not appear before the Court. Her status as the second plaintiff in these proceedings cannot be determined on the available evidence and, particularly insofar as any order made may be to her detriment, the Court cannot be satisfied that she is knowingly a party to the present application.

The Hearing

1. On 21 November 2014 at the commencement of the hearing, the first plaintiff sought leave to file an amended summons in court.

1. The originating summons (as earlier amended, on 10 March 2014) sought a review by this court of the costs assessment, pursuant to s.373 of the Act. The proposed amended summons which the first plaintiff wished to file at the hearing sought relief pursuant to s.69 of the Supreme Court Act 1970 in lieu of the relief earlier sought. This "amendment" in effect substituted the cause of action previously relied upon by the plaintiff with an entirely new cause of action.

1. The defendants opposed any grant of leave being made to the first plaintiff to file an amended summons in court, asserting that they would be prejudiced by the proposed amendment. It was submitted that the defendants had prepared to meet the plaintiffs' action on the basis of the summons as pleaded. The defendants complained that their ability to present their case would be significantly compromised by such a substantial and untimely amendment.

1. Although it was of some importance, given the application for leave to amend, the plaintiff was able to offer no information at all as to his reasons for the failure to comply with the Registrar's orders of 7 May 2014 in relation to the filing of any amended summons, or for the decision he made to withdraw the application for leave to file an amended summons when the application was before the duty judge on 27 June 2014.

1. These derelictions in pursuing his litigation are thus entirely unexplained.

1. The first plaintiff conceded that the summons as pleaded and before the court for hearing had no merit and could not be successful; the decision of 31 January 2014 by the manager of costs assessment is not reviewable pursuant to s.373 of the Legal Profession Act 2004 and no cause of action is available to the plaintiff pursuant to that provision.

1. The plaintiff asserts that the only cause of action in fact available to him is a claim pursuant to s.69 of the Supreme Court Act 1970, which allows the court to provide a relief or remedy by way of a judgment or order, whether the court formerly had jurisdiction to provide such relief by way of writ or certiorari.

1. However, such an action was not before the court by the summons of 10 March 2014, and could only come before the court if the plaintiff was granted leave to file the amended summons.

1. The absence of any satisfactory explanation from the first plaintiff as to the failure to file an amended summons within the timeframe specified by the Registrar on 7 May 2014, or indeed in the five months that have elapsed since, is a significant consideration for the court when considering the application for leave.

1. Through his counsel the plaintiff suggested that he had intended to prepare the summons and seek leave to file it at some stage before the hearing, but he had not done so. This is hardly a reasonable excuse for or explanation of the failure to comply with the orders of the court.

1. The reasons advanced for the failure to diligently pursue the plaintiff's suit are not dissimilar to such explanations advanced by Mr. Ferella to other courts in the past. For his failure to attend the hearing of the action taken against him by the defendants in 2011, the first plaintiff asserted in an affidavit sworn on 22 June 2011 and subsequently filed in the Local Court that he had mistaken the hearing date, attending the Local Court some three days after the matter had been heard ex parte.

1. For his failure to seek a timely review of the ex parte orders made against him on 27 May 2011, the applicant asserted in an affidavit of 5 December 2011 which was subsequently filed with the Local Court that he had sought to file a Notice of Motion in June 2011, but that the documents, which were sent to the Local Court Registry by post, must have been lost in the mail.

1. The defendants urged the court to dismiss the current summons. The defendants submitted that if the present action is dismissed, the plaintiffs would not be precluded from commencing a fresh action pursuant to s.69 of the Supreme Court Act 1970 at a future date, as such a cause of action is not a part of the present summons.

1. The plaintiff conceded that he would not be prejudiced in initiating a cause of action in reliance on s.69 of the Supreme Court Act 1970 were the current Motion to be dismissed.

1. As the plaintiff properly conceded, the summons of 10 March 2014 is without merit. The action is pleaded under s.373 of the Legal Profession Act 2004 which has a limited and specific application. The section prescribes a mechanism for a review of the initial costs assessment determination which is to be made to the costs assessment Manager rather than to this Court. The section does not empower this court to order a review of the initial costs determination made by the costs assessor.

1. Further, the section has no application to the decision made by the costs assessments manager on 31 January 2014 to refuse to allow the extension of time sought by the plaintiffs. That decision is not reviewable or appealable pursuant to s.373 of the Legal Profession Act 2004.

1. As such, the plaintiffs cannot succeed on the terms pleaded in the summons of 10 March 2014.

1. Whilst the Court has power pursuant to s.64 of the Civil Procedure Act 2005 to grant leave to the plaintiff to amend the summons, leave is refused.

1. In making that determination of the issue of leave I have had regard to the provisions of ss.56, 57 and 58 of the Civil Procedure Act 2005 but, in my view, the interests of justice are not best served by permitting the amendment to be made. That would simply result in delaying these proceedings further, and adding to the already no doubt considerable costs incurred by those involved.

1. The defendants would be significantly prejudiced if the amendment was made although, conversely, the first plaintiff will suffer no real prejudice if the summons as presently pleaded is dismissed.

1. Accordingly, the plaintiffs' summons is dismissed.

1. As noted above, as the present summons does not incorporate any pleadings pursuant to s.69 of the Supreme Court Act 1970, this decision does not preclude the plaintiffs from commencing any further action pursuant to that section.

Costs

1. Once the order had been made dismissing the summons, the defendants sought an order for indemnity costs with respect to the present proceedings. The application was opposed.

1. The defendants submitted that they have been put to cost by the plaintiffs' summons, it being a summons which has not been diligently pursued by the plaintiffs, and which in any event had no prospects of success from the outset, a fact the first plaintiff had conceded. The plaintiffs submit that costs should be awarded on a party-party basis.

1. In response to this the defendants submit that, while that would be a more usual course where an issue is to be determined by a court, in this matter, under the present summons, there is nothing that could have been adjudicated, as there is no cause of action available. The defendants point additionally to the untimely way in which the first plaintiff has pursued his suit before the Court, to their disadvantage.

1. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Woodward J noted at 401:

"I believe that it is appropriate to consider awarding "solicitor and client" or "indemnity" costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some willful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion."

1. The summons as amended on 10 March 2014 pleaded no arguable cause of action, as the pleaded action under s.373 of the Legal Profession Act 2004 was never available to or attainable by the plaintiffs. The plaintiff could hardly be regarded as having pursued the litigation he initiated in a timely way, with his dilatoriness adding to the defendants' costs. The defendants were put to the costs of preparing for and appearing in proceedings which were conducted in a dilatory way, and which never had any prospect of success in any event. The costs so incurred were thus completely unnecessary.

1. The plaintiff did nothing to advance his action, despite opportunities to do so. He failed to file an amended summons in accordance with the orders of the Registrar. He withdrew the application when given an opportunity to make it before a duty judge in June 2014. He has done nothing to attempt to bring an arguable summons before the court in the following months.

1. Thus, the defendants are entitled to indemnity costs. In the circumstances where the position of the second plaintiff is unclear, I make the order for costs against the first plaintiff only.

Orders

1. The court makes the following orders:

(1)   Summons as amended on 10 March 2014 is dismissed.

(2)   Order made for indemnity costs in favour of the defendants against the first plaintiff only (Mr. Angelo Ferella).

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Decision last updated: 11 December 2014