Bunbury Water Board v Ertech Pty Ltd

[2010] WADC 20

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   BUNBURY

CITATION:   BUNBURY WATER BOARD -v- ERTECH PTY LTD [2010] WADC 20

CORAM:   REGISTRAR KINGSLEY

HEARD:   5 DECEMBER 2009

DELIVERED          :   17 FEBRUARY 2010

FILE NO/S:   BUN 51 of 2003

BETWEEN:   BUNBURY WATER BOARD

Plaintiff

AND

ERTECH PTY LTD
Defendant

NYLEX CORPORATION PTY
Third Party

BASELL AUSTRAIA PTY LTD
Fourth Party

Catchwords:

Practice - Application for indemnity costs to be paid personally by solicitor

Legislation:

Nil

Result:

Order solicitor pay costs personally on an indemnity basis in defined proportions

Representation:

Counsel:

Plaintiff:     No appearance

Defendant:     Mr R Corboy

Third Party                   :     Ms G Stabler

Fourth Party                 :     No appearance

Solicitors:

Plaintiff:     Slee Anderson & Pidgeon

Defendant:     Jackson McDonald

Third Party                   :     DLA Phillips Fox

Fourth Party                 :     SRB Legal

Case(s) referred to in judgment(s):

Bunbury Water Board v Ertech Pty ltd & Ors [2009] WADC 186

Giannarelli & Shulkes v Wraith (1988) 165 CLR 543

Myers v Elman [1940] AC 282

Rondel v Worsley [1969] 1 AC 191

REGISTRAR KINGSLEY: 

Preamble

1. On 25 March 2009 I made orders that the solicitors for the third party, Wotton & Kearney and DLA Phillips Fox show cause why the costs of the 25 March 2009 in favour of the plaintiff, defendant and third party, including the costs of attendance of the respective parties ought not be paid personally on an indemnity basis. 

2. As the awarding of costs personally against a solicitor may have been beyond the jurisdiction of this Court, I referred the question, pursuant to r 12 District Court Rules 2005, to a Judge.  On 4 December 2009 Judge Eaton determined that a legally qualified Registrar had the power to award costs personally against a solicitor, pursuant to O 66 r 5 Rules of the Supreme Court 197: Bunbury Water Board v Ertech Pty ltd & Ors [2009] WADC 186. The Judge referred the matter back to me to determine the merits of the issue as to whether, and to what extent, a costs order should be made.

Background

1. The action was commenced by writ, filed in Bunbury, on 29 October 2003.  In June 2006 the defendants, pursuant to leave previously given, filed a statement of claim against the third party.  The third party retained Wotton & Kearney, who appointed DLA Phillips Fox as Perth agents, and an appearance was filed on 26 June 2006. 

2. On 8 December 2008 a special appointment pre‑trial conference was listed before me.  All parties attended including Mr N Shute for the third party.  The matter did not resolve on 8 December 2008 and a further special appointment pre‑trial conference was listed for 20 January 2009.  Some difficulties arose in relation to parties being able to attend on 20 January 2009 and the special appointment pre‑trial conference was eventually re‑listed for 25 March 2009.  The orders re‑listing the special appointment pre‑trial conference to 25 March 2009 provided that each party was to appear personally by a solicitor fully instructed on the issues and, other than the plaintiff, by a representative of the insurer with full authority to effect a resolution of the matter.

3. On 25 March 2009 the special appointment pre-trial conference commenced but had to be adjourned because there was no attendance by the principal solicitor from Wotton & Kearney, and no representative from the third party's insurer.  The solicitor who attended, Mr G Stabler, was not fully instructed.  All other parties and, apart from the plaintiff's insurer, insurer representatives were present. 

4. In response to my orders made 25 March 2009 Robin Maurice Shute of Wotton & Kearney filed an affidavit sworn 15 April 2009, and submissions on 16 April 2009.  Gemma Louise Stabler of DLA Phillips Fox filed an affidavit and submissions on 17 April 2009. 

5. At the same time as this litigation was going to the pre-trial conference, there were proceedings between the third party and the fourth party in Melbourne leading to a trial in April 2009.

Robin Shute's affidavit of 15 April 2009

1. Shute deposes that on 12 March 2009 he received a note from Gemma Stabler that the reserved date for the pre-trial conference of 25 March 2009 was fixed without any request for unavailable dates. 

2. Shute informs his clients of the order made on 11 March 2009, and in particular the order that the insurer do attend, by letter dated 13 March 2009.  There is no reference in the letter that the order of 13 February 2009 also requires the attendance by a solicitor fully instructed on the issues. 

3. Shute deposes that he telephoned his client on 17 March 2009 to follow up and that late on 18 March 2009 he was advised by his client, by telephone, that the authorised representative would not attend due to business commitments.  On 19 March 2009 Shute then wrote to the Court, with a copy to all other parties.

4. The essence of the letter of 19 March 2009 is a request by the third party to adjourn the conference to the second week in April 2009 as the client could not attend on 25 March 2009 due to business commitments.

5. On 19 March 2009 the defendant's solicitors sent by facsimile to Wotton & Kearney, and to DLA Phillips Fox, a letter advising the defendant opposed any adjournment of the pre-trial conference.  By letter dated 20 March 2009 the plaintiff's solicitor advised the plaintiff opposed any adjournment. 

6. The next step by Shute is, in my opinion, extraordinary.  By email dated 20 March 2009 to Gemma Stabler, Shute enquires as to whether an application is required "or can you just fix it with the Registrar, as remaking arrangements doesn't look insuperable".  In light of the terms of the order of 13 February 2009, and in face of the opposition to an adjournment by two parties, for Shute to suggest that the issue could be "fixed" with the Registrar is contemptuous.

7. On 20 March 2009 Shute is advised by Gemma Stabler by facsimile that I am on leave and that the faxes (requesting the adjournment) would be brought to my attention on on Monday 23 March 2009.

8. Late on Monday, 23 March 2009 DLA Phillips Fox, on instructions from Wotton & Kearney, sought to lodge an application seeking an adjournment of the pre-trial conference on 25 March 2009.  That application was not able to be lodged with the Court as the requisite fee was not paid.

9. Notwithstanding the order of 13 February 2009 required the attendance of a solicitor fully instructed on the issue there is no reference in Shute's affidavit as to why he could not attend the pre‑trial conference on 25 March 2009.

Gemma Stabler's affidavit sworn 17 April 2009

1. Stabler's affidavit goes into some detail detailing the course of correspondence between her and Robin Shute.  Having considered the correspondence I have the impression that Stabler has been placed in a difficult situation by the lack of full instructions, and cavalier approach to this litigation by Shute.  I refer to an email received from Shute on 3 March 2009 wherein he states:

   "The simple position in this case is that the Mangles Reservoir contained Potable water.  The liner was not able to hold Potable water without cracking … In the circumstances my client's instructions are to make no further offer and indeed it is committed to trial in April in Melbourne … I leave it to you to play it by ear." 

2. I also refer to the fact that on 11 March 2009 at the pre-trial conference Gemma Stabler was effectively uninstructed. 

3. On 12 March 2009 Stabler emails Shute advising of the re-listing of the pre-trial conference to 25 March 2009 and the order for attendances.  Shute acknowledges his requirement to attend in an email to Stabler on 16 March 2009 stating "I hardly need a trip to Perth".  Nothing more is heard from Shute until 19 March 2009 when Shute copies Stabler into an email to all parties, and the letter to the court, requesting an adjournment. 

4. On 20 March 2009 Stabler sends a copy of the defendant's email of 19 March 2009 (advising it opposed any adjournment) as Shute had previously advised he had not got a copy of it.  On 20 March 2009 Stabler advises Shute that the usual procedure when seeking an adjournment is to ask the other parties if they agree, and if not, to bring an application.  Stabler acknowledges the plaintiff and the defendant have already voiced opposition to an adjournment.

5. However, Stabler then advises Shute that a call to the District Court would quickly resolve the question of whether the Registrar would make a decision on the correspondence or whether a formal application would be necessary.  I find that advice extraordinary. 

6. In the face of voiced opposition by two parties, and having regard to the conduct of the litigation in the past, of which Stabler was aware, to consider that I would contemplate dealing with the adjournment on the correspondence was remarkable.

7. By 19 March 2010 DLA Phillips Fox knew that the authorised representative of the third party would not be attending the pre‑trial conference in compliance with the court order.  As far as DLA Phillips Fox were aware Shute was attending.

Lawyers duty to the court

1. From early times lawyers have been characterised as officers of the court (Lawyers Professional Responsibility, Dal Pont, 3^rd Ed, Law Book 6 2006, p 310).  The lawyers duty to the court is paramount (Giannarelli & Shulkes v Wraith (1988) 165 CLR 543 at 555 (Mason CJ) and 586 (Brennan J)). As Lord Reid in Rondel v Worsley [1969] 1 AC 191 at 227 stated:

   "Every counsel had a duty to his client fearlessly to raise every issue, advance every argument, and ask every question, however distasteful which he thinks will help his client's case.  But as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public, which may, and often does, lead to a conflict with his client's wishes, as with what the client thinks are his personal interests." 

2. The paramount duty to the court brings to the representation of the client an independent judgment.  The independence is reflected in a number of ways but includes the manner in which an action is conducted (Dal Pont, p 374).  This statement by the Dal Pont reflects the fourth broad category of duty, gathered and categorised by Justice Ipp, "Lawyers Duties to the Court" ((1998) 114 LQR 63), that lawyers owe a duty to the court to conduct a case efficiently and expeditiously.  The duty owed to the court is a legal duty, imposed by the general law and is personal in nature (Myers v Elman [1940] AC 282).

3. The general duty to conduct causes efficiently and expeditiously reflects changes in community standards and attitudes – and now reflected in the Rules (see r 24A Rules of the Supreme Court and r 4 District Court Rules 2005). 

4. As Rondel v Worsley (supra) illustrates counsel, as an officer of the court is concerned with the administration of justice, and has an overriding duty to the court (p 227).  The lawyer must foster respect of the law and its administration (Dal Pont p 423).  This means a lawyer must faithfully and timeously comply with orders of the court – including case management orders.  If an order cannot be met the court should be approached by application supported by affidavit explaining the impending default and seeking the order be varied. 

Conclusion

1. The affidavit of Shute gives no explanation as to why he could not attend the pre-trial conference.  This failure is a telling illustration of Shute's contempt for this Court's process.  His instructions to his Perth agents DLA Phillips Fox were often wholly lacking in detail, and clearly contemptuous of the court process and orders.  In my opinion Shute bears the bulk of the blame for the failed per-trial conference.

2. However DLA Phillips Fox owed their own independent obligations to the Court.  When it became clear to that firm there would be no compliance with the court order it fell to that firm to take its own action – namely to counsel compliance and, if necessary, bring an application.  The email train disclosed in Gemma Stabler's affidavit does not show this course of action.  Accordingly DLA Phillips Fox must share some of the burden.

3. For these reasons I order the firm Wotton & Kearney pay 80 per cent of the costs of the pre-trial conference, on an indemnity basis, of the attendance of the plaintiff, defendant and fourth party and their representatives.

4. I order that DLA Phillips Fox pay 20 per cent of the costs of the pre‑trial conference, on an indemnity basis, of the attendance of the plaintiff, defendant and fourth parties and their representatives.