Brott v Janover
[2019] VSC 17
•4 February 2019
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COSTS COURT
S CI 2017 00303
IN THE MATTER OF Section 3.4.38 of the Legal Profession Act 2004
| ISSAC ALEXANDER BROTT | Applicant |
| v | |
| LEWIS ALLEN JANOVER | Respondent |
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JUDGE: | Wood AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 January 2019 |
DATE OF DECISION & REASONS: | 4 February 2019 |
CASE MAY BE CITED AS: | Brott v Janover |
MEDIUM NEUTRAL CITATION: | [2019] VSC 17 |
DECISION & REASONS
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COSTS COURT – Application to set aside order – Rule 49.02(2) Supreme Court (General CivilProcedure) Rules 2015 – Kuek v Devflan Pty Ltd (2012) VSC 571 cited
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr A Sandbach | Thexton Lawyers |
| For the Respondent | Ms P Robertson | Lewis Allen Janover |
HIS HONOUR:
These proceedings were commenced on 7 February 2017. The respondent has previously acted for the applicant in his family law proceedings and the applicant has initiated a review of the legal costs charged by the respondent.
The respondent’s bill of costs claimed $123,380.55. By consent on 6 February 2018 it was referred to the assessment procedure under Part 8 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). This resulted in an estimate of $95,000 on 9 April 2018.
The applicant then objected to the estimate and a taxation was therefore to occur. This matter has been characterised by a series of delays and adjournments[1] although the taxation did commence and was part heard on 15 May 2018.
[1]‘Other Matters’ section of the order made 3 December 2018.
On 11 September 2018 the parties were advised that the taxation would resume on 10 and 11 October 2018. Appearances on behalf of the applicant throughout have been, with leave, by Alan Thompson, a Costs Consultant. Leave was initially granted on 1 June 2017. A document filed by him on that day was on Blackstone Legal Costing Pty Ltd letterhead and he signed as ‘Director’. He renewed that application for leave in an email on 6 February 2018 in that capacity again and searched the Court file on 8 June 2018 in that capacity.
Although Efron & Associates were on record as acting for the applicant at the relevant time, in reality the representation of the applicant has been largely ‘outsourced’ to Mr Thompson, as their agent. Mr Thompson has prepared an affidavit on behalf of the applicant endorsed ‘Prepared by Alan Thompson On behalf of Efron & Associates Lawyers’[2]. Mr Thompson has even signed consent orders on the applicant’s behalf on 14 August 2018 as ‘Alan Thompson for the applicant’. He is not a legal practitioner.
[2]Dated 9 August 2018.
Mr Thompson has utilised two email addresses. Initially he utilised ‘[email protected].’ That changed to ‘[email protected]’ around the time he searched the Court file again on 23 July 2018 in his personal capacity, and that email address has been used by him since then in communications with the respondent and the Court.
The scheduled hearing on 10 October 2018 did not proceed on that day. Mr Thompson appeared but was unwell. The matter was adjourned to 11 October 2018 but the matter did not proceed on 11 October 2018 for the same reason. On 12 October 2018 an order was made adjourning the matter to 13 and 14 November 2018.
Notification of these new hearing dates potentially occurred in two ways.
First, by the Costs Registrar sending an email to Mr Thompson at his latest email address on 12 October 2018 at 9.50am advising the hearing dates. A copy of that email was before the Court[3] and on its face it was sent to his latest email address. The email was also addressed to the respondent and it was received by them.
[3]Exhibit ‘PFR 1’ to the affidavit of Penelope Frances Robertson sworn 17 January 2019.
Secondly, by the provision of an authenticated order to Efron & Associates, the then current solicitors for the applicant. The Court’s Registry practice at the time was to forward orders to the solicitors on record. The order of 12 October 2018 is endorsed with words to indicate it was authenticated on ‘23 November 2018’. This was an error as it was authenticated on 23 October 2018 and entered into the Court’s case management system on the 23 October 2018. Assuming the Registry followed usual practice it would have been sent to Efron & Associates on or around that date.
There was no appearance by the applicant on 13 November 2018. The objection to the estimated figure was quite properly taken by the Costs Registrar to have been abandoned as the applicant had failed to prosecute the matter. As a result a decision was made by the Costs Registrar to reinstate the respondent’s costs entitlement at the estimated figure. The respondent applied for additional costs incurred as a result of the applicant’s failed attempt to object to the estimated figure. The Costs Registrar deferred finalising the matter until the respondent had an opportunity to provide further material in relation to their costs since 26 April 2018 being the date the applicant objected to the estimate. This material was emailed by the respondent to the Costs Registrar on 19 November 2018, but not copied to Mr Thompson or Efron & Associates. The Costs Registrar finalised the matter with an order made on 3 December 2018 as follows:
1. The costs of the Respondent are taxed and allowed in the sum of $95,000.00.
2. There be no order as to costs of the proceeding up to and including 26 April 2018.
3. From 27 April 2018, the Applicant pay the Respondent’s costs of the proceeding (except for the costs of and incidental to the respondent’s security for costs application) on a standard basis, to be taxed in default of agreement.
4. Liberty to Apply.
On 19 December 2018 the applicant filed an application to set aside the order of 3 December 2018. This is supported by an affidavit of Graeme Efron, affirmed 13 December 2018. Ordinarily in an interlocutory application affidavits are sworn on the basis of belief and information received from others. Mr Efron deposes that ’I am informed by Alan Thompson and verily believe that he never received the 12 Oct email and did not ever become aware at any time on or before 13 November that the taxation had been listed for that day’.[4] Mr Efron also deposes that ‘I have reviewed my emails and this file and am of the belief that notwithstanding that this firm is the solicitor on record this office was not notified of the hearing date of 13 November 2018 whereas Orders were made against the Applicant due to default of appearance at taxation.’[5]
[4]Paragraph 7 of the affidavit of Graeme Efron.
[5]Paragraph 5 of the affidavit of Graeme Efron.
The respondent relies on an affidavit of Penelope Frances Robertson sworn 17 January 2019. There is no direct evidence she can give to contradict the content of the affidavit of Mr Efron quoted above. She was able to depose to her receipt (on 12 October 2018 at 9.50am) of the email notification of the hearing date of 13 November 2018[6] referred to in paragraph 9 above which was also addressed to Mr Thompson.
[6]Paragraph 11 of the affidavit of Penelope Frances Robertson and exhibit ‘JFR 1’.
Mr Thompson has in reality been cast in the role of, and authorised to act as, the person with conduct of the matter by, and on behalf of, the applicant via Efron & Associates. No affidavit by Mr Thompson was filed by the applicant. This is an interlocutory application and a legal practitioner deposing on the basis of ‘information and belief’ is an option. However, that is facultative on the part of the applicant. It is an option but it does not necessarily mean the content is uncritically accepted. The true operator of the applicant’s case is Mr Thompson. It is clear from the file and affidavit of Ms Robertson that previous emails sent to his latest address had been received.[7]
[7]Paragraph 12 of the affidavit of Penelope Frances Robertson.
On 8 January 2019 Efron & Associates acting for the applicant issued a subpoena addressed to Mr Thompson to give evidence at the hearing on 24 January 2019. He gave evidence at the hearing to the effect that he did not receive the email of 12 October 2018. This evidence was not challenged.[8] The respondent did not seek to cross examine Mr Efron on the basis of the assertion in his affidavit that his office did not receive the authenticated order.
[8]Transcript – 24 January 2019 – page 4 – lines 21 to 23.
Two days prior to the hearing Efron & Associates were replaced as solicitors on the record by Thexton Legal.
There is power in the Rules to set aside orders in a number of circumstances. That is, pursuant to rule 21.07 where there is judgment in default of appearance or defence, rule 22.15 on a summary judgment, rule 46.08 where there was non appearance on the hearing of an application, and rule 49.02(2) on the absence of a party at the trial of a proceeding.
The latter rule is the applicable one as the finalisation of the taxation of the respondent’s costs represents the entire subject matter in this proceeding and the hearings on 13 and 14 November would have finalised the proceeding. The bar is higher for an applicant in those circumstances when pursuing an application to set aside a judgment where there was a failure by them to appear.[9]
[9]Kostokanellis v Allen (1974) VR 596 at 605.
The order of 3 December 2018 at paragraph 23 (i) to (iv) collates the myriad failures and unsatisfactory conduct on behalf of the applicant in the course of the proceedings which has added to the expense and delay of the proceedings, including failure to comply with orders and time limits set. Some of the expense and delay was caused by a foreshadowed application by the respondent for security for costs. That application did not proceed.
In oral submissions at the hearing the respondent relies on the conduct of the applicant in this history to submit that the order finalising the proceeding should not be set aside. The respondent was also critical of the failure of Mr Thompson or Efron & Associates to contact the Court soon after their non appearance on 11 October 2018 to acertain what was to occur in relation to rescheduling the part heard taxation.[10]
[10]Transcript – 24 January 2019 – page 9, line 10 to page 10, line 2.
There is some merit in the criticism in relation to inaction on behalf of the applicant since the hearings scheduled for 10 and 11 October 2018. The taxation did not proceed due to the absence of Mr Thompson because of illness on those dates. The applicant’s solicitor on record at the time and/or Mr Thompson should have made contact with the Court soon thereafter to advise of future availability and enquire as to the rescheduling of the taxation hearing aborted due to the absence of an appearance for the applicant. No constructive or efficacious action was taken by either of them for seven weeks until 27 November 2018 when Mr Thompson approached the Court[11] or 30 November 2018 when Mr Efron contacted the Costs Registrar.[12] Mr Thompson gave evidence he made no contact with Mr Efron in the intervening period until 27 November 2018.[13] Having engaged a non lawyer to represent his client, Mr Efron had a responsibility to closely monitor the progress of the matter particularly given the hearings on 10 and 11 October 2018 could not proceed as a result of Mr Thompson’s unavailability. If those steps had been taken in a timely manner the applicant’s representatives would have had adequate notice of the hearing scheduled for 13 November 2008 and the entire proceeding could have been finalised by 14 November 2018. This current application would not have been necessary and the finalisation of the proceeding would not have been further delayed.
[11]Transcript – 24 January 2019 – page 5 – lines 10 to 13.
[12]Paragraph 4 of the affidavit of Graeme Efron.
[13]Transcript – 24 January 2019 - page 6 - lines 14 to 16.
If the respondent had copied in the applicant to their costs submissions sent on the 19 November 2018 to the Court, the applicant’s representatives would have been alerted that a listing had taken place in their absence and the matter could have potentially been relisted before the order of 3 December 2018 was made.
There is sufficient justification to set aside the order of 3 December 2018 on the basis that the Court cannot be satisfied the applicant had notice of the hearing date scheduled for 13 November 2018.
The unfortunate history of the matter including comment in relation to the Civil Procedure Act 2010 is outlined in the order of of the Costs Registrar made 3 December 2018. Setting aside that order should in no way be taken as a criticism of the Costs Registrar for making the order that he did. Finalising the proceeding was entirely justified given the non appearance of the applicant and absence of an explanation at that time.
True it is that the Civil Procedure Act 2010 can be utilised when scrutinising the conduct of parties in a matter and there is authority to the effect that this can be relevant to the substantive relief sought in a proceeding and not just in relation to costs.[14] However, as submitted by the applicant at the hearing this would require an application on notice and the only application before the Court is the application to set aside the order of 3 December 2018.[15]
[14]Actrol Parts Pty Ltd v Coppi (No 3) (2015) VSC 758.
[15]Transcript – 24 January 2019 – page 10 – lines 3 to 13.
For the reasons stated the order of 3 December 2018 should be set aside. However, going forward it is timely to remind parties of the passage from the judgment of Kyrou J (as he then was) in Kuek v Devflan Pty Ltd:[16]
The Act must be taken seriously by litigants and their lawyers. In an appropriate case, the Court is entitled to – and will – say to a party seeking to enforce its rights in a manner that is antithetical to the overarching purpose and to that party’s overarching obligations that ‘enough is enough’, and will act to curtail those rights in the interests of the administration of justice.
[16](2012) VSC 571 at [79].
An order will be made setting aside the order of 3 December 2018. The issue of costs of the application remains to be addressed together with directions for the future resumption of the part heard taxation before the Costs Registrar. The parties should have an opportunity to consider these reasons before any further orders are made.
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