Dunn v The Trustee of the Lazic Family Trust
[2023] NSWDC 296
•26 July 2023
District Court
New South Wales
- Amendment notes
Medium Neutral Citation: Dunn v The Trustee of the Lazic Family Trust [2023] NSWDC 296 Hearing dates: 26 July 2023 Date of orders: 26 July 2023 Decision date: 26 July 2023 Jurisdiction: Civil Before: Newlinds SC DCJ Decision: 1. The amended notice of motion filed in court today be dismissed.
2. The plaintiff pay Paul Rojas' costs of that motion.
3. Any stay that is currently in place in relation to the costs orders ordered by Wilson J on 18 May 2023 is dissolved.
Catchwords: Costs order against legal practitioner – circumstances for which a legal practitioner is responsible
Legislation Cited: Civil Procedure Act 2005 [NSW] s 99(1)
Legal Profession Uniform Law Application Act 2014, cl 4, sch 2
Uniform Civil Procedure Rules 2005, r 4.2
Category: Costs Parties: Murray Dunn (first plaintiff)
Kate Dinyes (second plaintiff)
Optima Constructions Pty Ltd (ACN 006 026 599) as Trustee for the Lazic Family Trust t/as Optima Windows (first defendant)
Elvis Anthony Lazic (second defendant)
Joco Lazic (third defendant)
Andjelka Lezic (fourth defendant)Representation: Counsel:
Solicitors:
G Campbell (plaintiffs)
Dr J Lucy (defendants)
Rivera Legal (plaintiffs)
Rostron Carlyle Rojas Lawyers (defendants)
File Number(s): 2021/194121 Publication restriction: None
JUDGMENT – ex tempore
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HIS HONOUR: This is an application by the plaintiff against a solicitor seeking orders that that solicitor pay the plaintiff’s costs and indemnify the plaintiff for the costs he has been ordered to pay to the defendant arising out of an application to amend the statement of claim in these proceedings, which application was successful, but on terms that the plaintiff pay the costs of that application.
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The application to amend the statement of claim was heard by Wilson DCJ on the 9 May 2023, which was not long before the hearing of the matter was scheduled to take place.
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On that application, counsel appearing for the plaintiff told the Court, in my view with some justification, that the case could not proceed on the version of the pleading then current; rather, it was necessary for the case to proceed in a way that was just to the plaintiff for the pleading to be substantially amended.
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As between bench and bar on that application, it quickly became common ground that the pleading as it then stood was in what, to put neutrally, could be described as an unsatisfactory state.
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The plaintiff’s counsel argued that the amendment was doing no more than regularising the pleadings so as to catch up with the evidence, and that there was no prejudice to the defendant in allowing the amendment, notwithstanding the fact that the hearing was scheduled to take place shortly thereafter.
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The defendant’s counsel submitted in a way that was accepted by his Honour, that if the amendment was to be allowed, he was not in a position to meet the amended claim and that the hearing would have to be adjourned.
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With some reluctance, Wilson DCJ acceded to the application to amend which, as the argument had unfolded, carried with it the adjournment of the forthcoming hearing. In the course of discussions between bench and bar, when the question of costs arose, Wilson DCJ having ordered that the plaintiff should pay the costs, asked rhetorically why it was that the solicitor who was responsible for the pleading ought not be the person liable to pay the costs.
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That solicitor was not present on the day, there having been a change in solicitors between the various iterations of the pleading. And so, a process was put in place to give Mr Rojas, who the plaintiff asserts is the solicitor responsible for the relevant costs notice of the claim, an appropriate opportunity to answer that claim.
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There has been a number of directions hearing since that time, and the matter has come on before me for hearing. Mr Rojas has, through his counsel, answered the application against him by written and oral submissions.
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There are two issues at the heart of this application. The first is the quality or otherwise of the pleading in its unamended form. The second is the proper construction of section 99(1)(b) of the Civil Procedure Act 2005 [NSW] as it may apply to the facts of this case.
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Dealing with the second question first, the factual circumstances leading to this application, and an explanation as to why the plaintiff contends that Mr Rojas is a legal practitioner against whom s 99(1)(b) gives me jurisdiction to order costs against him as follows.
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The case was originally commenced by the plaintiff personally in NCAT. At some point, Barrie Goldsmith, solicitor, who was then a sole practitioner, commenced acting for the plaintiffs.
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For reasons I do not need to go into, the matter was transferred to this Court whilst Mr Goldsmith remained the solicitor for the plaintiffs. In this Court, he filed a form that, by reference to rule 4.2 of the Uniform Civil Procedure Rules 2005, meant he was the “solicitor on the record” for the plaintiff. In that capacity Mr Goldsmith thereafter caused to be filed a series of pleadings, being variously a statement of claim, an amended statement of claim and a further amended statement of claim. It was that further amended statement of claim that was the iteration of the pleading that was the subject of criticism on the amendment application.
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On 1 July 2021, the firm that Mr Rojas is the managing partner of, RCR Lawyers, “acquired” the law firm of Mr Goldsmith.
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Mr Rojas has explained the transaction as follows:
“Upon that acquisition, all active files to which Goldsmith Lawyers had carriage of were acquired by RCR Lawyers, including the matter in these proceedings for the plaintiffs.
As part of the internal process for effecting the transfer of files, my personal New South Wales Online Court account was used to record the change of solicitor..."
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On 14 July 2021, a form 77 “notice of change of solicitor” was filed by Mr Rojas’ firm. As I have said, it was filed by the use of Mr Rojas’ personal Online Court account to gain access to the computer portal of the Court.
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That notice of change of solicitor relevantly recorded:
“Murray Dunn and Katy Dines, plaintiffs, have appointed Barrie Goldsmith, Rostron Carlyle Rojas Lawyers to act as the plaintiff's solicitor in these proceedings in the place of Barrie Goldsmith, Goldsmith Lawyers.”
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From about 8 December 2020 Barrie Goldsmith had been the solicitor on the record. Barrie Goldsmith was the former principal of the law firm Goldsmith Lawyers and upon the acquisition, became employed by RCR Lawyers as special counsel. The Form 77 was thus a misnomer. It did not nominate a change of solicitor for the plaintiff. Rather, it identified that Mr Goldsmith’s address had changed.
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As special counsel, employed by RCR Lawyers, Mr Goldsmith maintained the conduct and carriage of the matter for the plaintiff as solicitor on the record.
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The first question for determination is whether, in those circumstances, Mr Rojas is a person to whom section 99(1)(b) applies.
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That section is in the following terms:
(1), this section applies if it appears to the Court that costs have been occurred,
(a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or
(b), improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible.
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The plaintiff does not rely on subsection (a). To be clear, the plaintiff does not suggest that Mr Rojas has engaged in any serious neglect, serious incompetence or serious misconduct. Rather, the plaintiff says that there were “circumstances” where costs were incurred without reasonable cause, i.e., the application to amend the statement of claim for which circumstances Mr Rojas “was responsible”.
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The plaintiff contends that upon acquisition of Mr Goldsmith's practice by RCR Lawyers, RCR Lawyers being a partnership of which Mr Rojas was the managing partner, Mr Goldsmith became an employee of, amongst other people, Mr Rojas. So much may be accepted.
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The plaintiff then says that Mr Rojas was responsible for the circumstances which led to the cost order on the application to amend.
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Those circumstances were the alleged unsatisfactory nature of the earlier iteration of the pleading. It is to be remembered that it was Mr Goldsmith who filed the pleading before he had any relationship with Mr Rojas, and at all relevant times Mr Goldsmith was the plaintiff’s “solicitor on the record”.
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Essentially, the plaintiff is seeking to attribute relevant “responsibility” to Mr Rojas for what was obviously the conduct of Mr Goldsmith by the use of concepts known to tort and contract law such as vicarious liability.
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However, I do not think that properly construed s 99(1)(b) allows that. In my view, when properly construing s 99(1)(b), one first needs to identify some “circumstances” and then ask the question whether a particular legal practitioner is “responsible for those circumstances”.
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All of this is in the context of court rules which have, for as long as I can remember, contained within them the concept of a “solicitor on the record”.
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Although it was not the plaintiff’s case when the matter commenced this morning, I think eventually counsel for the plaintiff quite properly conceded that on the proper construction of the Uniform Civil Procedure Rules, and an analysis of the various documents that had been filed in the proceedings, it was Mr Goldsmith who was the solicitor on the record at the time the impugned pleading was drafted and filed. It seems clear enough to me that he was therefore responsible for that pleading. He had no connection at all with Mr Rojas at that time. Indeed, it is Mr Goldsmith who signed in each of the iterations of the pleading the relevant certification to the effect that he had formed the view that there were reasonable grounds for the claim for damages as required under clause 4 of schedule 2 of the Legal Profession Uniform Law Application Act 2014.
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It is accepted by the plaintiff that, notwithstanding the transfer of the file to the new firm and solicitors, and Mr Goldsmith becoming an employee of that firm, that Mr Goldsmith remained the solicitor with the carriage of the file. As I have said, I think that is accepted, but if it is not, I find that he was the solicitor on the record.
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The circumstances which the plaintiff says makes Mr Rojas responsible for the state of the pleadings really boil down to two things. Firstly, they say that the fact that Mr Rojas did not check Mr Goldsmith’s work in circumstances where he was his employer, together with the fact that when the notice of change of solicitor document was filed it was filed using Mr Rojas’ access code to the court portal, is enough to make Mr Rojas responsible for the state of the pleadings.
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I am not persuaded by either submission. Whilst I accept that there may be circumstances where more than one legal practitioner might be “responsible” for the “same circumstances”, in this case, it seems to me clear that on the proper construction of section 99(1)(b) in the facts that I have described, Mr Rojas is not the legal practitioner responsible for the relevant circumstances, vis the alleged unsatisfactory state of the pleadings. Therefore, section 99(1) is not engaged, and I have no power to make any order against him by virtue of that statutory provision.
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Because I am told that there is a prospect that if this application is unsuccessful, a further application of a similar nature might be brought against Mr Goldsmith, I think it would be inappropriate for me to embark on any findings as to the state of the pleadings at the time of the amendment. I will not say anything more about that topic because it would be unfair on Mr Goldsmith, because he should be heard if there is such an application, as such findings might potentially reflect badly on him.
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The orders I make are:
The amended notice of motion filed in court today be dismissed.
The plaintiff pay Paul Rojas’ costs of that motion.
Any stay that is currently in place in relation to the costs orders made by Wilson J on 18 May 2023 is dissolved.
LUCY: Could I also ask your Honour just to clarify with the second order. As your Honour is aware, Mr Rojas filed an affidavit and submissions prior to the filing of the motion. Is that order intended‑‑
HIS HONOUR: It would be my intention that the orders would capture all of the costs of Mr Rojas in dealing with the foreshadowed application and the application for costs against him.
LUCY: If the Court pleases.
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Amendments
04 August 2023 - Practioner's name incorrectly spelt.
Decision last updated: 04 August 2023
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