Doyles Construction Lawyers v Quin

[2007] NSWSC 478

CITATION:	DOYLES CONSTRUCTION LAWYERS v QUIN & ANOR [2007] NSWSC 478
HEARING DATE(S):	Monday 30 April 2007
JUDGMENT DATE :	14 May 2007
JURISDICTION:	Common Law
JUDGMENT OF:	Hall J at 1
DECISION:	(1) That the first defendant be granted leave to commence separate proceedings by way of statement of claim against the plaintiff incorporating causes of action sought to have been raised in the cross-claimed marked “A” to the notice of motion (the “new proceedings’). (2) That the parties to bring in a procedural timetable directed to the following matters:- (a) the filing of a defence to proceedings to be commenced by the first defendant by a specified date; (b) discovery and inspection of documents to be given by the plaintiff (the defendant to the new proceedings) by specified dates; (c) that the plaintiff to the new proceedings is to file and serve affidavits and/or witness statements to constitute the evidence in his case in the new proceedings; (d) that the defendant to those proceedings (the plaintiff in the present proceedings) file and serve affidavits and/or witness statements by a specified date; (e) that subpoenas for the production of documents to third parties be issued and returnable by specified dates (3) It is my intention to re-list the proceedings for mention and further directions, on which date I intend to allocate hearing dates as follows:- (a) hearing dates in respect of the new proceedings on dates to be allocated in October or November 2007; (b) that a hearing date be given soon thereafter to the plaintiff’s present proceedings. (4) In the event that the new proceedings are determined favourably to the plaintiff to those proceedings (the first defendant in the present proceedings), then it would follow that there would be no requirement for the hearing of the statutory appeal. (5) In the event that the “new proceedings” were unsuccessful, then the statutory appeal would proceed. (6) I reserve for further determination the relief otherwise sought in the amended notice of motion filed on 27 April 2007. (7) I grant leave to the parties to apply to have the matter listed on seven days’ notice.
LEGISLATION CITED:	Civil Procedure Act Legal Profession Act 1987
PARTIES:	DOYLES CONSTRUCTION LAWYERS v. QUIN, Ken & ANOR
FILE NUMBER(S):	SC No. 15542 of 2006
COUNSEL:	P: J. Doyle D: F Kalyk
SOLICITORS:	P: Doyles Construction Lawyers D: Pike Pike Fenwick

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HALL J

MONDAY 14 MAY 2007

No. 15542 of 2006

DOYLES CONSTRUCTION LAWYERS v. KEN QUIN & ANOR

JUDGMENT

1 HIS HONOUR: On 20 March 2007, the first defendant sought leave to file and serve a cross-claim in the form annexed to the notice of motion marked A. The defendant also sought further orders which may be shortly stated, firstly, as an order that the plaintiff deliver to the defendant all the defendant’s documents which form part of the plaintiff’s file relating to matters the subject of the plaintiff’s claim for costs and an order that access be given to the defendant to inspect and photocopy documents held by the plaintiff which form part of the plaintiff’s files relating to the matters the subject of the plaintiff’s claim for costs.

2 An amended notice of motion was filed dated 27 April 2007.

3 In it an additional order was sought (paragraph 4 of the notice of motion) that pending the determination of the proceedings and any review in relation to costs, the plaintiff pay to the defendant an amount of money paid by the defendant to the plaintiff “… in excess of the costs as determined in the Certificate as to Determination of Costs of Costs Assessor, Ian Francis Dwyer, dated 6 October 2006 being in the amount of $72,919.28”.

4 On the hearing of the motion, Mr J Doyle, solicitor, appeared on behalf of the plaintiff and Mr F Kalyk of counsel appeared on behalf of the defendants.

5 In the amended notice of motion, paragraph 4 was amended to correct the amount referred to as $75,057.58 together with interest pursuant to s.100 of the Civil Procedure Act from 6 October 2006.

6 Additionally, an order was sought (paragraph 5) that the plaintiff pay the first defendant’s costs of the motion.

7 The first defendant (the applicant) relied upon two affidavits of Roslyn Mary McCulloch, solicitor, sworn respectively on 14 March 2007 and 20 March 2007.

8 In the first affidavit, Ms McCulloch stated that on advice of the plaintiff’s solicitors, proceedings were commenced in the Land and Environment Court by the first defendant against the Principal Certifying Authority in respect of certain works adjacent to the first defendant’s premises. The proceedings were also commenced against the adjoining owner.

9 Ms McCulloch stated that the plaintiff solicitors in the present proceedings seek to challenge a determination of their costs made by a costs assessor in relation to the unsuccessful Land and Environment Court proceedings.

10 In paragraph 6 of that affidavit, Ms McCulloch stated:-

“… the Defendant maintains that the proceedings were negligently commenced and maintained by the Plaintiff’s solicitors, as a consequence of which they ought to have no entitlement to their costs in so acting.”

11 In Ms McCulloch’s affidavit sworn on 20 March 2007, she annexed a copy of the Certificate as to Determination of Costs made on 6 October 2006 and stated that she was instructed that no monies had been repaid to the defendant in accordance with that certificate.

12 The Certificate as to Determination of Costs stated that the application was determined by substituting for the disputed costs the amount of costs after 23 December 2004 to be paid to the practitioner the sum of $55,753.50.

13 The Certificate noted that the sum of $128,672.78 by way of costs and disbursements had been received by the practitioner in respect of assessed costs.

14 The Certificate also noted that the amount received exceeds the amount of costs assessed at $55,753.50 by an amount of $72,919.28. The Certificate further stated:-

“The sum of $72,919.28 is to be repaid by the practitioner (s.208J(2) of the Act).”

15 The Certificate was dated 6 October 2006.

16 The plaintiff solicitors relied upon the affidavit of Daniel Vicano sworn on 26 April 2007. According to Mr Vicano’s affidavit, an Application for Review of Determination of a Costs Assessor was filed on 3 November 2006 by the plaintiff in relation to the abovementioned determination issued on 6 October 2006.

17 Mr Vicano further stated that on 28 November 2006, the plaintiff’s solicitors received a letter advising that the Review could not proceed unless and until the proceedings commenced by summons dated 14 November 2006 had been finalised.

18 The summons to which reference is there made was filed in this Court on 14 November 2006. The summons has been referred to in the course of submissions as “the statutory appeal”.

19 In that summons, the plaintiff solicitors claim relief as follows:-

(a) That the plaintiff be granted an extension of time to file for leave to appeal under Rule 50.12(1)(c) of the Uniform Civil Procedure Rules 2005.

(b) That the Certificate as to Determination of Costs as assessed by Mr Ian Francis Dwyer, costs assessor, issued 6 October 2006, be set aside.

(c) The following the determination of the appeal, the matter be re-determined by a Review panel.

20 The summons set out five substantive grounds. Reliance for the appeal was placed upon the provisions of the Legal Profession Act 1987 found in ss.208L and 208M.

21 One of the grounds asserted error in law by the costs assessor in terms of s.208C of that Act “by not applying the rates agreed in the original costs agreement in his determination dated 6 October 2006”.

22 A further ground asserted error in the assessment of costs “the subject of an agreement dated 10 August 2005” in terms of the amount of the costs said to have been in breach of s.208C of the Act.

23 Finally, it is asserted in the appeal grounds that the Costs Assessor failed to provide adequate reasons for the reduction of a substantial amount of costs to the appellant’s bill of costs in his determination.

24 The plaintiff was originally retained by the first defendant on or about 19 May 2004. A costs agreement dated 19 May 2004 was executed.

25 On 10 January 2005, the plaintiff, as earlier noted, filed Class 4 proceedings in the Land and Environment Court on behalf of the first defendant. Those proceedings were determined in that Court (Talbot ACJ) on 16 September 2005. The judgment records that on 13 January 2003, Bankstown City Council had granted development consent for the construction of a villa and townhouse development on the second respondent’s land. The approved works included the construction of a retaining wall abutting the common boundary between the first defendant’s land and the property of the second respondent.

26 In those proceedings, it was claimed on behalf of the first defendant that the construction certificate issued by the first respondent, to the extent that it referred to works pertaining to the retaining wall, was invalid. The Court considered the question of the validity of the certificate at some length and resolved that issue against the first defendant to the present proceedings. Talbot ACJ, inter alia, stated that he was not convinced that it was realistic to regard the fill and agricultural drain as part of the retaining wall contemplated by the development consent. Accordingly, the claim against the first respondent failed.

27 On 27 March 2006, Talbot J ordered that the first defendant to the present proceedings pay the first respondent’s costs of and incidental to the proceedings in that Court.

Consideration

28 The amended notice of motion, insofar as it sought leave to file and serve a cross-claim, on one view proceeds on a false basis. Leave was sought, as earlier noted, to file a cross-summons in the terms of Annexure A to the notice of motion. The proposed cross-claim recites the first defendant’s ownership of the land, the works carried out and the damage occasioned to his premises.

29 The proposed cross-claim also recites the fact that the Council, on 30 November 2006, issued a notice of proposed demolition order requiring a substantial part of the garage on his property to be demolished, which order the first defendant has complied with.

30 The proposed pleading also contends that by about April 2004, the excavation works undertaken by the owner of the adjoining property (Artec Developments Pty Limited) had been completed but nonetheless following that time and in conference with Mr Doyle, he instructed the plaintiff firm to act for him.

31 On 6 August 2004, a letter was sent by the plaintiff to the first defendant stating that it was understood that the first defendant wished to commence proceedings in the Land and Environment Court:-

“… requesting an order for compliance with the condition/s of development consent.
Should you wish to consider commencing such proceedings, we advise as follows …”

32 The letter went on to refer to the need to obtain an expert report and for an appraisal of the prospects of success of obtaining an injunction by a barrister against the PCA.

33 The proposed cross-claim alleges that the advice was given negligently and contrary to instructions. Additionally, it is proposed to allege that the advice failed to properly consider the courses open to the cross-claimant in respect of the matter then under consideration. An allegation has also been formulated that the advice failed to recognise that damages were not available as a remedy in the Land and Environment Court.

34 On 3 December 2004, the plaintiff solicitors wrote to the first defendant. A copy of the letter is Exhibit 1 in the present proceedings.

Submissions of the parties

35 On behalf of the first defendant, it was said that the rectification works for the damage to the property was of the order of $45,000. An initial costs agreement was said to have been entered into in April 2004. The estimate for the works referred to in that letter in terms of costs was given as at between $2,000 and $4,000.

36 In the letter, Exhibit 1, the cost of proceedings in the Land and Environment Court was estimated at approximately $15,000 for counsels’ fees and $20,000 for solicitor costs.

37 Mr Kalyk, on behalf of the first defendant, referred to the costs as actually charged as being approximately $273,000 including disbursements and counsels’ fees. Attention was drawn to this amount and contrasted to the estimate of costs given. It was suggested that the costs were disproportionate, having regard to the amount of the estimated damage to the property.

38 Mr Kalyk advised the proceedings have been commenced in the District Court against the adjoining owner, but these remain unresolved. He emphasised that the first defendant contended that the proceedings instituted in the Land and Environment Court could never have resulted in appropriate remedial relief.

39 Following the making of the costs assessment, Mr Kalyk observed the amount said to be owing under the certificate by way of repayment, namely, $75,057.50 has still not been repaid to the first defendant.

40 In relation to the relief claimed by way of access to the plaintiff’s documents, Mr Kalyk stated that the reason such orders were sought were to ensure that, in respect of the proposed cross-claim, the defendant wished to see any material that would provide an answer to the allegations proposed to be raised against the plaintiff and also to be aware of any material that was supportive of the allegations made.

41 Mr Kalyk also emphasised that in the present case, there were no unpaid costs, that the first defendant, in fact, was owed money and that, in any event, any lien had been discharged by termination of the retainer.

42 Mr Doyle relied upon the two affidavits of Mr Vicano.

43 In relation to the proposed cross-claim, Mr Doyle observed as follows:-

• It was necessary to examine the matter at various stages, in particular, as at June 2005 and September 2005.

• That it is essential to determine what precisely the plaintiffs were instructed to do and what they in fact did on behalf of the first defendant.

• The issues as to what should a competent solicitor do in all the circumstances (having regard, in particular, to the cross-claim issues and the statutory appeal issues).

44 Mr Doyle also observed that there had been over a year’s delay in the first defendant raising the proposed cross-claim issues.

45 Mr Doyle contended that there was no efficient way of interfacing the proposed cross-claim with the statutory appeal and that there was no benefit to anyone in doing so and delay and confusion would result.

46 Furthermore, he contended that no proper cause of action had been shown and that it was not possible to assess the strength of the merits of the proposed cross-claim.

47 In relation to the delivery up of documents, Mr Doyle made a number of submissions. In particular, he contended that the documents were, in fact, owned by the plaintiff firm and that there was no evidence of injustice or hardship to the first defendant in being denied access to the documents.

48 So far as the order seeking payment of monies out, he contended that there was no cause of action, no debt and there was no basis upon which the court could make an order for payment out.

Consideration

49 Part 9 of the Uniform Civil Procedure Rules 2004 deals with cross-claims. Rule 9.1(1)(b) provides that a party (the cross-claimant) may make a cross-claim in proceedings commenced by summons. Rule 9.1(2)(b) provides that a cross-claim is to be made by cross-summons in the case of a cross-claim in proceedings commenced by summons.

50 It was contended on behalf of the first defendant that leave was required because the cross-claim was not filed within the time prescribed.

51 There is evident difficulty in seeking to proceed with a cross-claim alleging breach of contract and negligence, if leave were to be granted, in the context of the plaintiff’s proceedings, commenced by way of summons which are in the nature of a statutory appeal. The general proposition is that parties who are identical and which issues are closely connected may have primary proceedings heard and determined together with proceedings by way of cross-claim. It has been stated that, of course, “a relevant connection” between the claims is required before cross-claims can be brought: see Supreme Court Practice, 9.8.5. In some circumstances, a Court may, where cross-claim proceedings are on foot, dismiss such proceedings with leave to the defendant to commence fresh proceedings if it considers it appropriate.

52 I am of the view that it is not appropriate for leave to be granted to the first defendant to bring a cross-claim sought in the context of proceedings in the nature of a statutory appeal.

53 The present application, however, should not be determined on a narrow basis, divorced from the background and context of the unfortunate history of this matter and the evident dispute between the parties.

54 Without having seen evidence of the relevant facts, if the first defendant wishes to proceed against the plaintiff’s, then it will, by some means, be necessary to decide issues such as:-

(a) Whether the first defendant may be said to have had a cause of action at common law against the adjoining owner for depriving him or his property of the right to support;

(b) if so, what court proceedings should have been instituted and whether, in particular, proceedings were available in this Court by way of injunctive relief and damages;

(c) Whether proceedings were appropriately instituted in the Land and Environment Court;

55 In determining what interlocutory relief ought to be granted and the form of such relief, it is plainly necessary for the existing and prospective litigation between the parties to be determined as soon as possible and in accordance with the case management programme. To that end, I propose, subject to hearing the further submissions of the parties, to make the following directions:-

(a) That the first defendant be granted leave to commence separate proceedings by way of statement of claim against the plaintiff incorporating causes of action sought to have been raised in the cross-claimed marked “A” to the notice of motion (the “new proceedings’).

(b) That the parties to bring in a procedural timetable directed to the following matters:-

(i) the filing of a defence to proceedings to be commenced by the first defendant by a specified date;

(ii) discovery and inspection of documents to be given by the plaintiff (the defendant to the new proceedings) by specified dates;

(iii) that the plaintiff to the new proceedings is to file and serve affidavits and/or witness statements to constitute the evidence in his case in the new proceedings;

(iv) that the defendant to those proceedings (the plaintiff in the present proceedings) file and serve affidavits and/or witness statements by a specified date;
(v) that subpoenas for the production of documents to third parties be issued and returnable by specified dates

(c) It is my intention to re-list the proceedings for mention and further directions, on which date I intend to allocate hearing dates as follows:-

(i) hearing dates in respect of the new proceedings on dates to be allocated in October or November 2007;
(ii) that a hearing date be given soon thereafter to the plaintiff’s present proceedings.

56 In the event that the new proceedings are determined favourably to the plaintiff to those proceedings (the first defendant in the present proceedings), then it would follow that there would be no requirement for the hearing of the statutory appeal.

57 In the event that the “new proceedings” were unsuccessful, then the statutory appeal would proceed.

58 I reserve for further determination the relief otherwise sought in the amended notice of motion filed on 27 April 2007.

59 I grant leave to the parties to apply to have the matter listed on seven days’ notice.

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