Chattaway v Lloyd
[2024] SADC 76
•28 June 2024
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CHATTAWAY v LLOYD & ORS
[2024] SADC 76
Reasons for Decision of her Honour Judge Schammer
28 June 2024
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - PARTIES AND NON-PARTIES - PERSON UNDER DISABILITY
By application dated 30 April 2024, the third and fourth respondents seek an order that the applicant’s litigation guardian pay their costs incurred of and incidental to:
• The applicant’s application filed on 14 November 2023, seeking to adjourn the trial which was part heard and listed to resume on 20 November 2023 (FDN 259).
• The applicant’s application filed on 29 November 2023, seeking to further adjourn the trial which was part heard and had been relisted to resume on 4 December 2023 (FDN 273).
• The applicant’s application filed on 3 April 2024, seeking to adjourn the trial which was part heard and had been relisted to resume on 8 April 2024 (FDN 302).
Whether in the particular circumstances of this case, having regard to the nature and reason for each application and subsequent adjournment, the Court should depart from making the usual order (namely that the applicant, rather than the applicant’s litigation guardian, be ordered to pay such costs).
Orders:
1. The applicant’s litigation guardian pay the third and fourth respondents’ costs of and incidental to the applicant’s applications to adjourn in FDN 259 and FDN 273 and the consequent vacation of the trial dates of 20 November 2023 to 1 December 2023 and from 4 December 2023 to 6 December 2023.
2. The applicant’s litigation guardian pay the third and fourth respondents’ costs of and incidental to the applicant’s application to adjourn in FDN 302 and the consequent vacation of the trial dates of 8 and 9 April 2024.
3. Such costs are to be paid on a standard costs basis, certified as fit for senior counsel.
Criminal Law Consolidation Act 1935 (SA) s 269O, referred to.
Chattaway v Lloyd & Ors [2023] SADC 72; Yakmor v Hamdoush (No.2) [2009] NSWCA 284; Challenger Life Company Limited v Estate of the Late Robert John Real (No2) [2017] FCA 1059; In the Matter of the estate of Robert Edwin Hutchinson, deceased and Ors v Taylor and Van Lambaart [2019] VSC 495; Gissing v Sheffield [2016] FamCA 101, considered.
CHATTAWAY v LLOYD & ORS
[2024] SADC 76[Civil]
Introduction
By application dated 30 April 2024,[1] the third and fourth respondents seek an order that the applicant’s litigation guardian pay their costs incurred of and incidental to:
·The applicant’s application filed on 14 November 2023, seeking to adjourn the trial which was part heard and listed to resume on 20 November 2023 (FDN 259).
·The applicant’s application filed on 29 November 2023, seeking to further adjourn the trial which was part heard and had been relisted to resume on 4 December 2023 (FDN 273).
·The applicant’s application filed on 3 April 2024, seeking to adjourn the trial which was part heard and had been relisted to resume on 8 April 2024 (FDN 302).
[1] FDN 308, supported by the 21st affidavit of David William Johns sworn 29 April 2024 (21 Johns).
The applicant acknowledges that an order for costs should be made in favour of the third and fourth respondents with respect to these applications, and the costs incurred by reason of the adjournment of the trial arising from each application. However, the applicant submits that there is no reason for the Court to depart from the usual order made, that is, that the costs be payable by the applicant, and not the litigation guardian.
For the reasons as outlined herein, I am satisfied that in the circumstances of this matter, there is good reason for the Court to exercise its discretion to depart from the usual course and to make the orders as sought by the third and fourth respondents.
Background
The procedural history of this action has already been set out by me in significant detail in my earlier Reasons for Decision made 21 June 2023.[2] I adopt and repeat what is set out therein.
[2] [2023] SADC 72 at [14]-[44], see also the Reasons of Master Blumberg dated 7 September 2020 (No.8 of 2020).
The cause of action arises from an alleged assault which occurred at a party in December 2010. The applicant suffers significant mental health issues, including schizophrenia. Whether there is a causal link between the alleged assault and the development of the applicant’s schizophrenia is (one of the matters) in dispute.
In late 2014, the applicant was charged with the attempted murder of his parents following an incident on 29 October 2014. He was found mentally incompetent to commit the offences and on 16 December 2016, a supervision order was made under s 269O of the Criminal Law Consolidation Act 1935(SA), whereby the applicant was committed to detention with a limiting term of ten years to commence on 16 December 2016.
The applicant has been detained either in forensic mental health facilities or custody continuously since October 2014 and is currently detained at the Broadmoor Hospital in the United Kingdom.
The action is being driven and managed by the applicant’s father and litigation guardian, Robert Chattaway, in circumstances where the applicant does not have the capacity to do so.
There have been multiple procedural delays in the action. Many of these delays have related to the applicant’s failure to abide by various procedural orders of the Court. Some of the delays are directly relevant to a forensic decision made to call the applicant to give evidence, notwithstanding the multiple challenges, both from a medical and practical perspective, presented by that course of action.
The trial on the issues of liability and causation eventually commenced in March 2023,[3] with only a limited number of available court days to sit. It was therefore apparent to all parties at the outset of the trial that it would need to proceed part heard.
[3] The delays having risen due to matters pertaining to the applicant.
On 31 March 2023, the Court relisted the balance of the part heard trial to commence on Monday 20 November 2023, with 20 days set aside.
The Applicant’s Subsequent Applications to Adjourn
On Tuesday 14 November 2023, that is, less than a week prior to the resumption of the part heard trial, the applicant filed an application seeking an order that the trial be delayed by a period of two weeks or adjourned,[4] for reasons related primarily to ‘some difficulties regarding compliance with the retainer of counsel.’[5] Very limited information was provided in support of the application. The applicant’s solicitor, Mr Kerin deposed that upon the terms of the retainer being met, which he expected to occur ‘in the course of this week’, counsel required a week thereafter to prepare the matter for trial.
[4] FDN 259.
[5] FDN 260 at [2].
On 15 November 2023, the Court made numerous orders,[6] including an order vacating the trial dates as listed between 20 November 2023 and 1 December 2023 (inclusive) and relisting the trial to resume on 4 December 2023 at 5:30pm for the applicant to give evidence via video link from Broadmoor Hospital (noting the time difference). The costs of the application and resulting adjournment were reserved. In addition, the Court ordered that the applicant was to file an affidavit within 28 days providing further information as to why counsel was unable to appear and represent the applicant on the trial dates as had been listed.
[6] FDN 262. The transcript of the hearing on 15 November 2023 provides further context, as does FDN 261, the 18th Johns affidavit.
On Thursday 30 November 2023, the applicant filed an application seeking an order that the trial listed to commence on Monday 4 December 2023 be vacated.[7] In his 21st affidavit, Mr Kerin, deposed that the terms of counsels’ retainer had not yet been fulfilled, that the applicant was in a position to do so ‘today or tomorrow’ but, in any event, this would leave insufficient time for counsel to proof the applicant and prepare for trial.[8] In that affidavit, Mr Kerin also deposed that Dr Nabi was of the view that the applicant’s mental health was ‘still in a recovery phase’ (after its sudden deterioration in January 2023) such that he would cope better if his evidence was deferred for a period of two months.[9]
[7] FDN 273.
[8] FDN 274 at [3]-[5].
[9] FDN 274 at [7]-[8] and ‘AJK-51’. Noting this issue was first identified by the Court in mid-2022. This was raised by the Court on a consistent basis thereafter, and in particular, reiterated as being a matter of significant ongoing concern, given what transpired when the applicant gave evidence in March 2023.
By his 22nd affidavit filed on 1 December 2023, Mr Kerin further deposed, inter alia, that although the terms of counsels’ retainer had now been fulfilled, there was insufficient time for counsel to properly prepare the matter for the trial date as listed.[10]
[10] FDN 276 at [6].
On 1 December 2023, the Court made orders, inter alia,[11] vacating the trial dates as listed between 4 December 2023 and 6 December 2023 (inclusive) and relisting the trial to resume on 7 December 2023, at which time it was intended to hear the evidence of lay and other witnesses as to the issue of medical causation, rather than the evidence of the applicant.[12] The costs of the adjournment were reserved.
[11] FDN 262. The transcript of the hearing on 15 November 2023 provides further context, as does FDN 261, the 18th Johns affidavit.
[12] FDN 277. The transcript of the hearing on 1 December 2023 provides further context.
The trial resumed on 7 December 2023. Mr Kerin appeared as counsel for the applicant, given the continued unavailability of either senior or junior counsel.
On 13 December 2023, the Court fixed dates to hear the balance of the outstanding evidence, with those dates scheduled to give priority to the availability of the witnesses, the respondents and their counsel and the applicant and his counsel (in that order). That order of priority was determined in the interests of justice, given that the multiple and continued delays in the trial had been caused by matters relating to the applicant, not the respondents, or the Court. Specifically, the delays relating to the failure by the applicant to fulfill the terms of counsel’s retainer between April and November 2023 were avoidable and remained unexplained. Further, at that time, the Court was unable to relist the trial for hearing on any date(s) between late-April 2024 and mid-September 2024, due to other trial commitments.
The trial was listed to resume on 5 February 2024, with two weeks set aside to hear the evidence of the applicant and Dr Rowe, on 5 March 2024, with three days set aside to hear the evidence of Professor McFarlane and on 8 April 2024, with two days set aside to hear the evidence of Professor Nielssen.
On 14 December 2023, the Court extended the time for the applicant to file the affidavit providing further detail as to the reason for counsels’ unavailability at the trial in November and December 2023. That affidavit was eventually provided on 22 December 2023. In his 23rd affidavit made on that date, Mr Kerin deposed that at the end of March 2023, that is, at the end of the first part of the part heard trial, both senior and junior counsel for the applicant rendered accounts. Those accounts were payable by, respectively, 21 April 2023 and 12 April 2023. Those accounts were required to be paid, respectively, within 2 weeks and 30 days of their dates of issue.
Mr Kerin deposed that notwithstanding he wrote to the applicant, via his litigation guardian, on 25 July 2023, 8 September 2023, 18 October 2023, 24 October 2023, 13 November 2023 and 27 November 2023, the payment of those accounts only finally occurred on 29 November 2023. By this stage, it was too late for counsel to prepare for the trial on the date as initially listed, that is, 20 November 2023, or as then relisted, namely, 4 December 2023.
The trial resumed on 5 February 2024 at which time the Court heard the evidence of the applicant and Dr Rowe as planned. Junior counsel represented the applicant.
Due to the unavailability of the applicant’s senior counsel, who was, apparently, unexpectedly stranded in Fiji, the trial did not resume on 5 March 2024 and was instead relisted to resume on 6 March 2024. Senior counsel then appeared for the applicant. Fortunately, Professor McFarlane’s evidence was able to be completed within the timeframe as scheduled.
On Wednesday 3 April 2024, the applicant filed an application seeking an order that the trial listed to resume on Monday 8 April 2024 be adjourned, due to the unavailability of both senior and junior counsel, either to conduct the cross-examination of Professor Nielssen or to advise on matters relating to the closing of the applicant’s case on causation.[13]
[13] FDN 302 and FDN 303, noting that it was understood as at 13 December 2023, when this trial date was first set, that it was unlikely to suit the applicant’s Senior Counsel.
On 3 April 2024, the Court made orders vacating the trial dates on 8 and 9 April 2024, relisting the trial to resume on 1 May 2024 with two days set aside. This date was selected having specific regard to the availability of senior counsel for the applicant and was a date as nominated by him. In addition, the applicant was ordered to provide notice to the Court and to the parties by COB 10 April 2024 as to whether he intended to call any further evidence.[14] The applicant failed to comply with the latter order.
[14] FDN 305. The transcript for the hearing on 3 April 2024 also provides further context.
On 30 April 2024, the applicant filed a further application seeking an order that the trial date be vacated as senior counsel was no longer available to appear on the dates as listed (1 and 2 May) due to other trial commitments in Fiji and junior counsel was also unavailable.[15]
[15] FDN 310, supported by the 26th affidavit of Mr Kerin, FDN 311.
The Court refused to allow any further adjournment of the trial.
The trial resumed on 1 May 2024, at which time Mr Kerin represented the applicant.
The third and fourth respondents have incurred significant and wasted costs due to the adjournments granted arising from FDN 259, FDN 273 and FDN 302. Those costs necessarily include costs incurred by way of cancellation fees for counsel, additional preparation costs incurred due to the need for the matter to be constantly revisited and the brief re-read and costs associated with cancelling and then re-arranging for the expert, Professor Nielssen, to travel to Adelaide from interstate to give evidence. Those costs are not insignificant.
Principles
The Uniform Civil Rules set out presumptive costs rules at r 194.4 and general costs principles at r 194.5.
Rule 194.5(4) states that ‘The costs of an adjournment of a hearing, directions hearing or trial arising from a party’s default are to be paid by the party in default’.
The ‘default’ referred to therein, is usually a procedural default arising from a party’s lack of readiness to proceed due to an inability to comply with orders as to the provision of expert reports, discovery and the like. In my view, properly understood, the term ‘default’, includes a default which has caused a party to not be prepared and ready to proceed to trial on the date as listed.
Pursuant to r 23.10, upon a litigation guardian being appointed, the applicant is treated as the substantive party to the proceeding and the litigation guardian is treated as his ‘quasi-attorney’. Unless otherwise ordered, the litigation guardian may take any step in the proceeding that could be taken by applicant, if the applicant had the capacity to act in his own right.[16]
[16] Rule 23.10(3).
Rule 23.10(4) states:
(4)Unless the Court otherwise orders, any right or liability to receive or pay costs in a proceeding vests in the person under a legal incapacity and not in the litigation guardian.
The rule has the effect of reversing the position as set forth in earlier iterations of the rules that a ‘next friend’ (or litigation guardian) was personally liable for costs ordered against a plaintiff. It does not affect the question whether a litigation guardian is entitled to be indemnified out of the assets of a person under a legal incapacity.[17]
[17] Rule 23.10(5).
Part 3 of the rules outlines the overarching obligations of the parties and their lawyers, which include an obligation to be prepared for and ready to proceed with a trial at an appointed time[18] and an obligation to use reasonable endeavours to act promptly and minimise delay.[19] Pursuant to r 3.1(2), a person who is otherwise entitled to exercise control or influence over a party, must act in accordance with r 3.1(1). I am satisfied that a litigation guardian is such a person.
[18] Rule 3.1(1)(j)
[19] Rule 3.1(1)(k).
Further, pursuant to r 3.2(1), in exercising its power in relation to a proceeding, the Court may take into account any failure by a person to comply with these overarching obligations. An express example of how the Court may do so is provided at r 3.2(3)(b), namely that the Court may order that a person who has failed to comply with an overarching obligation pay the costs of any person arising from that failure.
Authorities
In the absence of there being any authorities dealing specifically with r 23.10(4), the Court was referred to several authorities which were said to provide guidance as to the various factors which may inform the Court when determining whether to make a costs order against a litigation guardian.[20]
[20] Yakmor v Hamdoush (No.2) [2009] NSWCA 284, Challenger Life Company Limited v Estate of the Late Robert John Real (No2) [2017] FCA 1059, In the Matter of the estate of Robert EdwinHutchinson, deceased and Ors v Taylor and Van Lambaart [2019] VSC 495.
The cases are distinguishable, as, in each instance, there was no specific rule being the equivalent of r 23.10(4). Rather, the court, in each instance, had regard to common law principles, when considering whether it was appropriate to make a costs order against a litigation guardian acting on behalf of either an unsuccessful plaintiff or an unsuccessful defendant.
As observed in Yakmor v Hamdoush (No 2),[21] it was recognised at common law that a purpose for the appointment of a next friend to act on behalf of a person under legal incapacity was not only to bring and conduct the proceedings on behalf of that person, but to assume a responsibility for costs in circumstances where otherwise there would be no such person under any liability for such costs.
[21] [2009] NSWCA 284 at [20]-[21].
In Challenger Life Company Limited v Estate of the Late Robert John Real (No 2),[22] the Federal Court considered a line of authorities, many of which referred to the contrasting position of a next friend acting on behalf of a plaintiff under a legal disability and a litigation guardian acting on behalf of a defendant under a legal disability. Simply put, a plaintiff has a choice as to whether to bring or continue proceedings, whereas a defendant has no real control over his or her involvement in proceedings.
[22] [2017] FCA 1059.
The Federal Court accepted, consistent with what was said by Cronin J in Gissing v Sheffield,[23] that there was a substantial line of authority to the effect that a person who defends an action on behalf of a person under a legal incapacity will generally not be ordered to pay the plaintiff’s costs in the absence of misconduct.
[23] [2016] FamCA 101.
It noted what Cronin J said in Gissing, namely:[24]
The traditional view seems to have been that if a proceeding in a civil jurisdiction is brought by a plaintiff under disability and it fails, and costs thereafter follow, the litigation guardian is personally liable for those costs but provided that person has acted properly, he or she is entitled to be indemnified for the costs …
[24] Ibid at [17].
Counsel for the applicant referred to the decision of the Supreme Court of Victoria in In theMatter of the estate of Robert Edwin Hutchinson, deceased and Ors v Taylor and Van Lambaart,[25] in support of a proposition that the Court should not make a personal costs order against a litigation guardian lightly and in the absence of there being misconduct or negligence on the part of the litigation guardian in the discharge of their role.
[25] [2019] VSC 495.
In that case, the Supreme Court of Victoria appeared to accept that this proposition applied irrespective of whether the litigation guardian was acting on behalf of a plaintiff, or defendant,[26] albeit the decisions cited expressly related to the latter situation.
[26] Ibid at [39], noting the Court was not ultimately required to address the defendant’s application in that action that a costs order be made against the litigation guardian acting on behalf of one of the plaintiffs.
Discussion/Findings
The proceedings in this action were issued on 31 January 2014, being the day before the applicant turned 21. The proceedings were issued through the applicant’s litigation guardian and father, on the basis that the applicant was a person under a ‘legal disability’. As the applicant was an adult at the time the proceedings were issued, under the rules applicable as at that date, he must have been under a disability because, either:
·his affairs were administered (wholly or in part) under a law for the protection of persons suffering from mental or physical disabilities; or
·he was not physically or mentally able -
·to manage his affairs, or
·to make rational decisions about taking, defending or settling proceedings (or to communicate decisions to others).
The applicant has been legally detained throughout the entirety of the proceedings and remains legally detained. There is no doubt that he suffers a significant psychiatric illness. The practical reality is that the litigation guardian has been responsible both practically and legally for taking every step that has been taken in this proceeding to date.
The litigation guardian has been present at Court during the majority of directions hearings and for much of the trial to date, including during the first part of the trial in March 2023. The litigation guardian is well aware of the numerous and repeated delays that have occurred in this matter, both because of the applicant’s non-compliance with numerous court orders relating to procedural steps and because of matters relating to the applicant’s mental illness, and its impact on his ability to give evidence, which resulted in the adjournment of the first part of the trial.
The litigation guardian has been present in Court during discussions about the listing of the matter for trial and the setting of the various trial dates.
The applicant has not engaged in any remunerative employment since the proceedings were issued. The only reasonable inference that can be drawn from all of the information available to the Court is that the litigation guardian is incurring costs associated with the ongoing conduct of this action, for and on behalf of the applicant, from which he will seek to be indemnified in the event the action is successful. Those costs include those being incurred by junior and senior counsel.
As of 31 March 2023, the litigation guardian knew that the trial was to resume part heard on 20 November 2023. He knew that the other parties to the action had already incurred considerable costs associated with the delay in the trial commencing in February 2023 and as a result of the many and repeated delays due to the applicant’s procedural non-compliance in the years prior.
The litigation guardian made the decision to retain both senior and junior counsel to represent the applicant at trial and to accept the terms of their retainers. Those terms were not met. The litigation guardian was well aware of the complexity of this action, intended to instruct counsel to represent the applicant at trial and did not wish to proceed to trial unless his counsel of choice was available to represent the applicant. His failure to meet the terms of the retainer, in those circumstances, meant the applicant was not ready to proceed to trial on 20 November 2023 or on 4 December 2023.
The applications FDN 259 and 273 were issued as a direct result of the litigation guardian’s default. The trial was then adjourned and unable to finish in the 2023 calendar year because of that default. The application FDN 302 and the further adjournment of the trial in April 2024 was consequential upon and therefore a result of the earlier adjournments.
The litigation guardian is required to act in accordance with the overarching obligations set out in r 3.1. The litigation guardian’s default meant that the applicant was not prepared for or ready to proceed to trial on 20 November 2023, 4 December 2023 or, consequentially, on 8 April 2024, being a breach of the overarching obligation in r 3.1(1)(j).
I acknowledge that in the usual course, the appropriate order would be that the applicant pay the respondents’ costs as sought.
However, having regard to the particular circumstances arising in this matter, as previously outlined herein, I am satisfied that it is appropriate to depart from the usual course.
The only appropriate order to make, both having regard to r 3.2 and, in the interests of justice, is that the applicant’s litigation guardian pay the third and fourth respondents’ costs of and incidental to the applicant’s applications FDN 259, FDN 273 and FDN 302 and the consequent vacation of the trial dates arising therefrom.
Orders
1.The applicant’s litigation guardian pay the third and fourth respondents’ costs of and incidental to the applicant’s applications to adjourn in FDN 259 and FDN 273 and the consequent vacation of the trial dates of 20 November 2023 to 1 December 2023 and from 4 December 2023 to 6 December 2023.
2.The applicant’s litigation guardian pay the third and fourth respondents’ costs of and incidental to the applicant’s application to adjourn in FDN 302 and the consequent vacation of the trial dates of 8 and 9 April 2024.
3.Such costs are to be paid on a standard costs basis, certified as fit for senior counsel.
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