Dain v Mark Group Australia Pty Ltd (No.3)

[2013] FCCA 78

FEDERAL CIRCUIT COURT OF AUSTRALIA

DAIN v MARK GROUP AUSTRALIA PTY LTD (No.3) [2013] FCCA 78

Catchwords:
PRACTICE AND PROCEDURE – Representatives – whether applicant’s solicitor was retained by applicant – whether to order applicant’s solicitor to appear on applicant’s behalf – whether to adjourn.

COSTS – Indemnity – where unsuccessful applications brought late and without merit – where little evidence provided to support first application – whether applications brought constituted unreasonable act or omission which caused the respondent to incur costs – whether to order costs.

Legislation:
Federal Magistrates Court Rules2001 (Cth)
Legal Profession Act 2004 (NSW)
Fair Work Act 2009 (Cth) ss.569, 569A, 570

Applicant: MATT DAIN

Respondent: MARK GROUP AUSTRALIA PTY LTD

File Number: SYG 456 of 2012

Judgment of: Judge Raphael

Hearing date: 9 April 2013

Date of Last Submission: 9 April 2013

Delivered at: Sydney

Delivered on: 9 April 2013

REPRESENTATION

For the Applicant: In person.

Counsel for the Respondent: Mr M.J. Kimber SC, Mr Mahendra

Solicitors for the Respondent: Mark Diamond & Associates

ORDERS

1. Applicant pay the respondent’s costs of the application for an adjournment made on 8 April 2013 such costs to be taxed at 80% of the Federal Court scale, if not agreed, and paid within 28 days of any adjourned hearing.

2. Second application made by the applicant for an adjournment and heard on 8 and 9 April 2013 be dismissed.

3. The costs of that application and the costs thrown away be paid by the applicant on an indemnity basis. Such costs be taxed, if not agreed, and paid within 28 days of any adjourned hearing.

4. The applicant pay the costs of Mr Pope assessed in the sum of $2,500.00.

FEDERAL CIRCUIT
COURT OF AUSTRALIA
AT SYDNEY

SYG 456 of 2012

MATT DAIN

Applicant

And

MARK GROUP AUSTRALIA PTY LTD

Respondent

REASONS FOR JUDGMENT

1. This case was set down for hearing on 8 and 9 April 2013.  That order was made on 12 December 2012, on which day I had adjourned the hearing that was meant to take place then.  The basis of the adjournment, so far as I can recall the matter, was that Mr Dain, who was self-represented, had failed properly to subpoena certain witnesses who had then declined to attend.  It was a generous grant of an adjournment, based upon the submissions that I heard that day from Mr Dain.  The orders also referred to an amended statement of claim which, when it appeared, excluded a claim for breach of contract made in this court’s accrued jurisdiction. 

2. Yesterday morning, 8 April 2013, I was faced with an application for an adjournment.  Mr Dain was represented by Mr Wallis of counsel.  The grounds of that adjournment, shortly put, were that Mr Dain had sought some documentation from the respondent, the documentation had been provided, and that Mr Dain believed that documentation did not accord with the facts, insofar as it did not record sales made or appointments made which would, had they been recorded, have led to some additional payments being made to Mr Dain.

3. I gave my decision in the matter, which will shortly be published, but again in short form, I declined the application on the basis that Mr Dain had never directly requested the particular documents that he was now asking for, so that there did not appear at first sight to be any breach of the notice to produce or the subpoena upon which he relied.  More importantly, that these went to his accrued jurisdiction claim that had been abandoned in December, after – indeed, it would appear from documents that I have since looked at in relation to the case – long after Mr Dain was first aware that those documents might not be accurate because he had already, at an earlier stage, spoken with customers and obtained from them an indication that they had purchased the respondent’s product, or arranged for an appointment with one of the respondent’s salesmen that had not been recorded.

4. After my decision, Mr Wallis left the court with my permission, because he had made it quite clear that he was only instructed in relation to that application.  This left Mr Dain a self-represented litigant.  It should be noted that in the rather lengthy history of this case, Mr Dain has appeared for himself on numerous occasions, and that every now and again a legal representative turns up.  It is also a fact that Mr Dain signed the application and the amended application as the applicant, and there was no reference to legal representatives in either of those documents. 

5. Mr Dain gave his evidence in chief by way of affidavit, and prior to the luncheon adjournment the court’s time was taken up with dealing with objections to that affidavit from Mr Kimber, who appears for the respondent.  After lunch, Mr Dain came to the court with another document, a letter addressed to this court in the following form:

   “Dear Honourable Associate to Magistrate Kenneth Raphael

   Federal Magistrates Court

   8^th April 2013

   REF: FMC SYG 456/2012

   I would like the court to know the following

   I have filed a complaint with the Legal Services Commissioner today in relation to my solicitor James Pope not turning up as my instructing solicitor for counsel today.

   I thought Magistrate Raphael should know this as he inferred that it may be my intention to self represent…not at all…I am not comfortable in the position that I have found myself in, nor do I or the witness Hine Rophia who will be required to give evidence tomorrow deserve to be in this position

   All invoices were fully paid by my family and there was surplus funds in trust to cover his fees and counsels fees for the application which I have seeked his advice on for the last few weeks. I have documents to support and irrefutable evidence to support this

   I had to rush at the last minute after 4pm on Friday to find counsel as my solicitor informed me that counsel that he assured me would be fine for Monday fell thru…It was only after 3.15pm on Sunday that I was able to brief Philip Wallace in his Chambers.

   Yours Sincerely,

   Matt Dain”

6. It now transpires that Mr Dain never did file a complaint with the Legal Services Commissioner, a fact that he revealed to myself in evidence. The essence of Mr Dain’s application was that he had retained a solicitor, Mr Pope, to appear for him in this substantive hearing. Mr Pope had not filed a notice of appearance or a notice of address for service in compliance with rule 6.01(4) of the Federal Magistrates Court Rules2001 (Cth). Neither, if Mr Pope was so instructed, had he filed the requisite documentation in order to cease acting as a solicitor, such documentation being required by part 9, rule 9.03 of the Rules.

7. The normal effect of a lawyer failing to comply with these provisions of the Rules is that they are considered to be still on the record and acting for a party, and they should therefore appear and represent him.  It was because of this allegation, and the possibility that I might make that finding, that I ordered that Mr Pope appear before the court at 3.30pm that afternoon.  Mr Pope did so.  It was then decided that Mr Dain should go into evidence and tell the court why he made these allegations against Mr Pope, and that the matter would then be adjourned so that Mr Pope could obtain representation and cross-examine Mr Dain today.  This is what occurred. 

8. Mr Dain appears first to have approached Mr Pope in late February 2013.  He asked Mr Pope to act and gave him $650.00 on account of costs.  Mr Pope wrote to Mr Dain on 27 February 2013, and in this regard it would appear that all correspondence between the parties was made by email with letters attached.  Mr Pope, in the letter of the 27 February, sent Mr Dain a retainer agreement and a fee disclosure statement in accordance with the provisions of the Legal Profession Act 2004 (NSW). Mr Dain deposed to the fact that he never returned that document to Mr Pope. Nor did he sign it, but the parties appear to have continued on the basis that Mr Dain accepted the fee agreement which is now found as Exhibit Z in these proceedings. The scope of work is described as “to represent you in an employment matter.” At paragraph (e) of the document, there is an estimate of professional fees, internal expenses and disbursements. It states:

   “On our present instructions, we estimate the cost of the work to be:

   Professional fees: $6,000.00

   Disbursements:    $   450.00

   TOTAL            $6,450.00”

   The usual disclaimer – that this was an estimate only – is made. 

9. Mr Pope gave advice to Mr Dain and collected papers from a barrister who had represented Mr Dain, called Mr Howell.  On 6 March 2013, a bill was prepared which was sent, together with a letter of 7 March 2013, to Mr Dain.  Mr Dain says that the letter was not received by him by email until 18 March 2013, and this has not been the subject of any evidence from Mr Pope, so I accept that evidence from Mr Dain.  The letter of 7 March states relevantly:

   “In order to brief Counsel, we need sufficient funds in trust to cover Counsel’s fees and we ask that you arrange for further moneys to be placed in our account to cover the costs of representation for you on 14 March 2013  and on 8 and 9 April 2013.  We estimate that the total fees to be required in the fees attendances will be $8,000.00.  In relation to the appearance on 14 March 2013 we expect Counsel’s fee to be in the vicinity of $2,000.00 - $3,000.00 and on 8 and9 April an allowance should be made of $2,500.00 per day.”

10. I pause here to make one point.  During the course of cross-examination of Mr Dain much was said about the advice he had received concerning his prospects of success.  Generally speaking, he was being told that he was consistently being advised that he had little prospect of success.  However, Mr Pope’s letter does say this:

    “Nonetheless, you seem to have a case with merit.”

11. The letter also states that a particular named barrister would be briefed and that he would be available on all three days of the hearing.  I also interpose at this stage to say that the hearing on 14 March 2013 was on an application made by the respondent to dismiss the case on the grounds of abuse of process.  I have a further document, now known as Exhibit Z3, which is a tax invoice also dated 6 March 2013.  It is for $6,200.00 and represents work done between 7 and 14 March 2013.

12. The fact that the document is dated 6 March gives me, amongst other things, reason for concern, but nevertheless, the account was presented at some date after 6 March and probably after 14 March and was paid by Mr Dain, who found the money from his own resources and those of his father.  The application that was made on 14 March was eventually withdrawn after the court made it fairly clear that it did not consider it to be one of substance.

13. After 14 March 2013, the relationship between Mr Dain and Mr Pope becomes somewhat murky.  Mr Pope certainly continued to do some work for Mr Dain.  On 22 March 2013, Mr Pope sent him a draft application in a case and an affidavit, which appears to refer to the application that was made on the first day of the hearing.  Mr Pope had told the solicitors for the respondent that he was acting, and he had received correspondence from them.  Mr Dain’s evidence is that this application, which he says he was advised by Mr Pope he was likely to be successful in, was to have been presented by a barrister briefed by Mr Pope.

14. As things developed, Mr Pope did not brief the barrister, possibly because the one recommended was unavailable.  Other people became unavailable.  On 3 April 2013 Mr Dain was asked by Mr Pope to provide him with cover for counsel’s fees on the application and Mr Dain gave him $2,400.00 in cash.  Mr Pope made Mr Dain sign a document entitled “Written Acknowledgment and Instructions”, Exhibit Z4, which is in the following form:

    “I, Matt Dain, acknowledge that I have been advised by my solicitor James Pope that he cannot act on my behalf in relation to the hearing of this matter which is to take place on 8 and 9 April unless adequate provision is made in relation to outstanding legal costs and in relation to the briefing of Counsel to appear at the hearing. I acknowledge that these arrangements as at this date have not been satisfactorily adhered to in relation to his retainer and unless acceptable arrangements are made urgently his retainer will be terminated.

    I acknowledge receipt of the advice of Mr Jim Pearce of Counsel that there are such serious problems with my application that I may be not only unsuccessful but may suffer a costs award against me.

    I confirm that Mr Pope has advised me to settle this matter on such favourable terms which might be available.”

15. Mr Dain was not entirely happy.  He wanted Mr Pope to make an acknowledgment himself and so, in another identical document, Mr Pope has handwritten the following:

    “Note: The $2,400.00 given today will go into trust for Counsels fees for the NTP application if counsel can be found and the deficiencies in the present arrangements can be remedied.  That is, if more money can be found.”

16. Mr Pope and Mr Dain discussed the retaining of counsel.  Mr Dain says that the people that Mr Pope suggested were unavailable or became unavailable and that over the weekend he had to find his own barrister, which he did.  It was Mr Wallis, who he briefed directly.  It is open to argument, that if it is accepted that Mr Wallis was briefed directly by Mr Dain, and no one has suggested that he wasn’t, that the $2,400.00 that was paid into Mr Pope’s trust account for payment of counsel’s fees could not be used for that purpose unless it was a specific instruction from Mr Dain so to do.  This is because the responsibility for payment of the fees lay upon Mr Dain himself and not upon the solicitor.  That would mean that Mr Pope had in his trust account $2,400.00 available for legal services.  However, that argument was not made.

17. Mr Wallis did appear, with the result that has already been referred to.  Mr Pope did not attend as the instructing solicitor.  This struck a particular nerve in Mr Dain, who seemed to think that had Mr Pope been here, his case or his application would have had a better prospect of success.  From what I have heard, I cannot myself see that this would be the case, but in any event, it is something that Mr Dain feels very strongly.

18. As will be seen from the history that I have just rehearsed, there really is no evidence at all that Mr Pope was ever retained to appear at this hearing.  The nearest he came to that position was in March when he gave Mr Dain his terms for doing so.  Those terms appeared to be the payment into his trust account of sufficient funds to cover the costs of such a hearing, an estimate of which had been given.  Mr Dain’s view is that those weren’t really the terms of the relationship between them, because in the month in which Mr Pope had been acting for him, two bills had been submitted and two bills had been paid and that he really did not expect to have to advance money under those circumstances.

19. Under cross-examination from Mr Kimber, Mr Dain told the court that the question of his representation at the hearing was confused.  My understanding of his evidence and my interpretation of it is that Mr Dain was convinced that his application would be successful and probably gave little thought to what would occur if it was not.  He was taxed on this matter by Mr Kimber and he did say that it was “a risk I will have to take.”  However, having been unsuccessful in his application, he was left in the position of having to represent himself at the hearing.  I cannot be satisfied from the evidence given by Mr Dain and the documentation that I have seen that Mr Pope was retained to appear at the hearing in a way that would provide a binding obligation on him.  These are always difficult matters because it is notorious that these costs agreements people sign generally do not end up reflecting the way in which the relationship between the solicitor and client turn out.  And it must be that a solicitor is entitled to ensure that he will be paid for any representation he provides, which is what Mr Pope attempted to do. 

20. As Mr Pope was not, to my mind, retained by Mr Dain to represent him at the hearing as matters transpired, I could not utilise his failure to comply with Rule 9.04 of the Rules to require him to represent Mr Dain.  Therefore, I cannot accede to Mr Dain’s application for an adjournment.  As I said just before commencing these reasons, it seems to me that the whole concept of an adjournment from the facts that have come out was inappropriate.  If I came to the view that Mr Pope had been retained to appear, then he would have been made to appear.  And if I came to the view that he had not, then Mr Dain was obliged to continue his self-representation. That is the situation as I see it.  Mr Dain must continue.

21. There are two additional matters.  The first is that I believe that it is incumbent upon a court where it suspects that some matters pertaining to its officers have not been conducted in an appropriate manner to refer the papers to the Legal Services Commission or the Law Society, providing those organisations with sufficient documentation for them to take up the matter themselves and make their own adjudication upon it.  It is not for this court to do that.  I do have concerns about Mr Pope’s conduct.  In expressing them, I do not make any finding.  But they are noted in this decision, and this decision will be sent to the Legal Services Commission.

22. The concerns I have relate to what appears to be the failure by Mr Pope to file a notice of address for service at a time where he was acting as a solicitor and corresponding with the respondent solicitors.  Also, not withstanding that Mr Pope was not retained at this hearing, that he failed to comply with the provisions of Rule 9.04 in relation to the retainer that he did have.  As I have said, it may well be that Mr Pope has a perfectly adequate explanation for all of this and that he will convince the authorities that the matter is not one that needs investigation, but that I shall leave to them.

23. The second matter is the question of costs.  It is the case that a day and a half of this court’s time has been wasted in relation to a case that has been now set down for hearing twice and which will not be completed by this evening.  The time was lost because of the failure of Mr Dain’s first application and in respect of this second application.  Mr Kimber asks that the costs thrown away, be paid by Mr Dain on an indemnity basis, and further that they be ordered to be paid forthwith.

24. I am sympathetic to Mr Kimber’s submissions in regard to this second application.  I would not order indemnity costs in respect of the first application.  I can see how it was being brought, and I can see why Mr Dain and those advising him, who were perhaps not quite as au fait with what had occurred in the past as Mr Dain was, encouraged it.  But even though I do not propose to award indemnity costs in respect of that application, I do think that what costs are awarded and taxed should be paid before this matter returns to court and in sufficient time before this matter returns to court so that the respondents are not put to a great further expense when upon failure to make the payment the proceedings are dismissed, because that would in all likelihood be the effect of such failure.

25. I am reminded by Mr Kimber that these proceedings are brought in the Fair Work jurisdiction of this court, where costs are not usually awarded unless I can be satisfied of matters under s.570 of the Fair Work Act 2009 (Cth). That section states that:

    “(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.”

    (2) The party may be ordered to pay costs only if:

    (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause;  or

    (b) the court is satisfied that the party’s unreasonable action or remission caused the other party to incur the costs;  or

    (c)  the court is satisfied of both of the following:

    (i)      the party unreasonably refused to participate in a matter before FWA;

    (ii)  the matter arose from the same facts and proceedings.” 

    Section 569 and 569A do not apply in this case.

1. In my view, if Mr Dain’s actions constituted an unreasonable act or omission which caused the respondent to incur those costs.  They are effectively costs thrown away as a result of the applicant making two unsuccessful and unmeritorious applications.  The fact that the applications were made at the late stage they were, the fact that the evidence to support them was inadequate and the fact that in regard to the second application where the indemnity costs have been ordered there really was no prospect of an adjournment at all assist me to come to that conclusion.

2. The orders I would propose to make are, therefore, that the second application made by Mr Dain be dismissed;  that the applicant pay the respondent’s costs of the application made on 8 April 2013, such costs to be taxed, if not agreed, at 80% of the Federal Court rates and paid within 28 days of any adjourned hearing.  I will order that the second application made by Mr Dain and heard on the 8^th and 9^th of April be dismissed, and the costs of that application and the costs thrown away be paid by Mr Dain on an indemnity basis and that such costs be taxed, if not agreed, and paid within 28 days of any adjourned hearing.

3. I have not heard any application for costs on behalf of Mr Pope.  I think he has certainly been put to some expense.  The court has made no findings against him, merely expressed some concerns.  I think it would be fair that Mr Pope be reimbursed, at least in part, for what has occurred, and I propose to assess those costs and order that Mr Dain pay the costs of Mr Pope assessed in the sum of $2500.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Raphael.

Date:  18 April 2013