Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5)
[2014] VSC 400
•15 DECEMBER 2014
IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST
S CI 2007 6949
| DURA (AUSTRALIA) CONSTRUCTIONS PTY LTD (ACN 004 284 191) (In Liquidation) (Receivers and Managers Appointed) | Plaintiff |
| v | |
| HUE BOUTIQUE LIVING PTY LTD (Formerly SC Land Richmond Pty Ltd) (ACN 106 117 506) & ORS | Defendants |
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JUDGE: | DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 24–26 JUNE 2014 |
DATE OF JUDGMENT: | 15 DECEMBER 2014 |
CASE MAY BE CITED AS: | DURA (AUSTRALIA) CONSTRUCTIONS PTY LTD v HUE BOUTIQUE LIVING PTY LTD (NO 5) |
MEDIUM NEUTRAL CITATION: | [2014] VSC 400 |
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Practice and Procedure – Overarching obligation not to make a claim or a response to a claim without a proper basis – Whether breached by solicitor for losing party – Liability of solicitor for wasted costs – Requirement that solicitor’s conduct be unreasonable – Briefing of experts – Preparation of witness statements – Investigation of factual basis for a claim - Discretionary considerations in wasted costs jurisdiction – Discretionary considerations under s 29 Civil Procedure Act – Whether solicitor entitled to benefit of a doubt because claims of client legal privilege not waived – Whether relevant privileged communication established – ss 18, 22, 23, 29, 42 Civil Procedure Act2010 (Vic) – r 63.23 Supreme Court (General Civil Procedure) Rules 2005.
Legal Practitioners – Overarching obligation not to make a claim or a response to a claim without a proper basis – Whether breached by solicitor for losing party – Liability of solicitor for wasted costs – Requirement that solicitor’s conduct be unreasonable – Briefing of experts – Preparation of witness statements – Investigation of factual basis for a claim – Discretionary considerations in wasted costs jurisdiction – Discretionary considerations under s 29 Civil Procedure Act – Whether solicitor entitled to benefit of a doubt because claims of client legal privilege not waived – Whether relevant privileged communication established – ss 18, 22, 23, 29, 42 Civil Procedure Act2010 (Vic) – r 63.23 Supreme Court (General Civil Procedure) Rules, 2005.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Collinson QC with Mr N. De Young | Minter Ellison |
| For the Defendant | Mr D. Levin QC with Ms K. Stynes | Herbert Smith Freehills |
TABLE OF CONTENTS
The application................................................................................................................................... 1
The evidence....................................................................................................................................... 3
Hue’s evidence on the application............................................................................................. 4
Noble Lawyers’ evidence on the application............................................................................ 6
How the application is put............................................................................................................. 11
Noble Lawyers’ response................................................................................................................ 16
Relevant statutory provisions and principles............................................................................ 19
Supreme Court Act and Rules...................................................................................................... 19
Non-party costs orders - principles.......................................................................................... 20
Civil Procedure Act 2010.............................................................................................................. 35
Proper basis – s 18(d)........................................................................................................ 37
Costs orders under s 29 – principles........................................................................................ 41
General discretionary considerations...................................................................................... 44
The need for caution.......................................................................................................... 45
Abuse of Process................................................................................................................ 47
Finding fault/ discipline.................................................................................................. 47
Satellite litigation/summary determination................................................................. 48
Briginshaw Standard......................................................................................................... 49
The question of client legal privilege.......................................................................................... 50
The scaffolding claim...................................................................................................................... 63
Summary...................................................................................................................................... 63
Evidence and submissions......................................................................................................... 64
Findings at trial........................................................................................................................... 70
Analysis........................................................................................................................................ 71
The briefing of Dura’s experts...................................................................................................... 80
The briefing and evidence of Mr Browning............................................................................ 82
The briefing and evidence of Mr Faifer................................................................................... 85
The briefing and evidence of Mr Gairns.................................................................................. 89
The briefing and evidence of Mr Lorich.................................................................................. 90
The briefing and evidence of Messrs Shah and Vapp........................................................... 91
Analysis........................................................................................................................................ 92
Preparation of the lay evidence in reply.................................................................................... 103
Hue’s evidence.......................................................................................................................... 104
Analysis...................................................................................................................................... 107
Conclusions..................................................................................................................................... 109
HIS HONOUR:
The application
On 30 March 2012, I delivered reasons for judgment following a 31-day trial of a large construction dispute dismissing the plaintiff/builder's (Dura) claim and awarding damages to the defendant/proprietor (Hue) on its counterclaim. Dura alleged that Hue wrongfully repudiated the building contract and Dura accepted that repudiation as terminating the contract. It sought damages for breach of contract, alternatively a quantum meruit. Hue counterclaimed that the contract was not validly terminated and following service of notices to show cause, Hue took the works from Dura and claimed the costs of completion certified by the superintendent as a debt due. On 16 April 2012, I entered judgment for Hue that it recover from Dura $6,173,155.80, being $4,457,308 for claim and $1,715,847.83 for interest. I ordered that Dura pay Hue’s costs, including any reserved costs and costs of transcript, up to 13 April 2011 on a party and party basis and thereafter on an indemnity basis. There remained further issues to be resolved arising out of the proceeding and a related proceeding. Relevantly, I extended the time limited by s 30(2) of the Civil Procedure Act 2010 for Hue to bring any application it may be advised to make for an order under s 29 of that Act.
Dura unsuccessfully appealed my judgment[1] but, consequently, Hue’s s 29 application against Dura’s solicitor, Noble Lawyers was not filed until 20 December 2013, which was within the extended period allowed.
[1]Dura (Australia)Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2013] VSCA 179 (26 July 2013).
Invoking both the jurisdiction under s 29 and the wasted costs jurisdiction under s 24(1) of the Supreme Court Act 1986 and r 63.23 of the Supreme Court (General Civil Procedure) Rules 2005, Hue seeks an order that Noble Lawyers pay some or all of the legal costs or other costs or expenses of Hue in relation to the proceedings on and from:
(i)14 April 2011, being the date following expiry of Hue’s offer to settle all disputes between the parties made by letter dated 30 March 2011; alternatively,
(ii)5 May 2011, being the date by which Dura’s lay evidence had been served,
(the relevant dates)
on the basis that Noble Lawyers continued a claim and defence on behalf of Dura that it knew or ought reasonably to have known at those times did not have a proper basis. Hue so contends from the conduct of Noble Lawyers in respect of:
(i)the briefing of Dura’s experts;
(ii)the preparation of Dura’s lay evidence in reply; and/or
(iii)the pursuit of Dura’s claim for an excessive provisional sum for scaffolding which it knew or ought reasonably to have known since 27 June 2006 did not have a proper basis.
Dura rejected a most favourable compromise offered by Hue and continued with the proceeding in reliance on evidence that Noble Lawyers knew or ought to have reasonably known could not establish Dura’s claim or refute Hue’s counterclaim.
I should record at the outset that this application follows a long and complex trial and Hue seeks all of its costs in the proceeding after the relevant dates, which are prior to the commencement of the trial. The claim is substantial. In this respect, the application differs from many similar applications that have been concerned with discrete issues or conduct, often interlocutory in nature. The application was largely conducted in a summary way, in a three-day hearing.
The evidence
The background to the issues to be determined in the dispute is set out in my reasons for judgment dated 30 March 2012.[2] I do not propose to set the background matters out again in this judgment, which should be read together with the trial judgment. The application is, in part, based on the evidence at, and conduct of, the trial and I had available to me the transcript and exhibits from the trial.
[2]Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No. 3) [2012] VSC 99 (the trial judgment).
However, the trial evidence was limited, in the interests of precision in identifying the case that Noble Lawyers was to meet, to the material identified in the indexes to Hue’s application book and Noble Lawyers’ supplementary application book, which identified the documentary material that became exhibits 1 and A respectively on the application.
The general rule is, not only that a non‑party is not bound by findings made in the litigation, but that they may not even be used as evidence of the facts found. One exception is in the summary procedure under the wasted costs jurisdiction. In determining the liability of a solicitor to pay the costs of an action, the judge’s findings of fact may be admissible.[3] In Flinn v Flinn,[4] the Court of Appeal said:
The general rule is not only that a non-party is not bound by findings made in the litigation, but they may not be even used as evidence of the facts found. To this general rule there are exceptions which enable findings made in litigation to be used against someone who is not a party to that litigation for the purposes of summary procedure. Specifically it's been laid down in England by the Court of Appeal that on an application against a non-party seeking an order for the costs of the litigation the applicant may in an appropriate case be permitted to rely on evidence given and facts found in the litigation.
Each case depends on its own circumstances and the proper procedure is ultimately a matter for me.[5] I will refer to aspects of the trial evidence and the trial judgment in context when necessary.
[3]Symphony Group plc v Hodgson [1994] QB 179, 193, approved in Flinn v Flinn [1999] VSCA 134; 3 VR 712 [4].
[4]Ibid, [4].
[5]UTSA Pty Ltd (in liq) v Ultra Tune Pty Ltd [2004] VSCA 105, [60]-[64].
Four affidavits were read on the application. Hue’s solicitor, Mr Opperman, swore two affidavits and Mr Noble swore two affidavits. Neither deponent was cross-examined.
Hue’s evidence on the application
Mr Opperman stated that –
(a) Prior to the commencement of the proceeding and since at least May 2006, Noble Lawyers represented Dura in matters arising from Dura’s works on the project. In particular, Noble Lawyers represented Dura in three adjudications under the Building and Construction Industry Security of Payment Act 2002 (Vic) in relation to, among other things, scaffolding costs claimed by Dura. Those adjudications were in May, June and October 2006. Copies of the adjudication decisions were exhibited and this issue is discussed further in due course when the balance of Mr Opperman’s evidence in respect of it is set out in context.
(b) Noble Lawyers also represented Dura in proceedings in VCAT relating to those adjudications and when Dura sought an interim and interlocutory injunction restraining Hue from taking the works out of Dura’s hands in September 2006. The latter application was transferred to this court, commencing this proceeding.
(c) Noble Lawyers continued to represent Dura until it went into liquidation in August 2013.
In July 2009, Noble Lawyers inspected the documents referred to in Hue’s further amended defence and counterclaim. Copies of these documents had previously been provided to Noble Lawyers. These documents included:
(a) the visual audit report dated 8 December 2006;
(b) four reports prepared by Wood & Grieve Engineers;
(c) two reports regarding structural defects prepared by Maurice Farrugia & Associates Pty Ltd; and,
(d) the underlying works audit report dated May 2007.
In February 2010, Hue’s solicitors served on Noble Lawyers expert reports prepared by Mr Atchison, Mr Bonaldi and Mr Andrews.
On 30 March 2011, Hue’s solicitors put to Dura an offer to settle the proceeding. At this point the majority of Dura’s expert evidence had been served and Hue’s defects evidence had been provided to Dura. This offer expired on 14 April 2011. By 5 May 2011, Dura had served its lay evidence.
In September 2011, in response to trial preparation directions that I had given, Noble Lawyers proposed that Mr David Gairns, an expert retained for Dura, participate in the expert conclave proposed to be undertaken between Mr John Browning and Mr David Andrews in relation to timing and delay. Hue objected to participation by Mr Gairns contending that his report was insufficiently substantiated.
Mr Opperman produced a document recording the time taken by each of the parties during the conduct of the trial and for what purpose that time was used. This document was provided to Dura’s legal representatives who have not taken issue with it. Mr Opperman produced as an exhibit a table that was used during the trial, which identifies whether certain documents in evidence were provided to Dura’s experts. He also produced a revised version of this exhibit (exhibit D3).
The costs incurred by Hue in connection with Dura’s scaffolding claim totalled $150,790 and Mr Opperman provided a month by month breakdown of those costs. The costs incurred by Hue in connection with the proceeding following the settlement offer in March 2011 totalled $3,034,084 and Mr Opperman provided a monthly breakdown of those costs with particulars of the costs incurred for professional fees, counsel’s fees, disbursements and for lay and expert witnesses.
Dura was placed into a creditor’s voluntary liquidation on 15 August 2013. On 27 September 2013, receivers and managers were appointed to Dura by Dura (Asia-Pacific) Pty Ltd. None of the costs orders that Hue obtained in the proceeding have been satisfied either in whole or in part.
Noble Lawyers’ evidence on the application
Mr Darren Noble swore and filed an affidavit in opposition. He stated:
(a) He was admitted to practice in March 2000 and his primary area of specialty is building and construction matters.
(b) Dura first retained Noble Lawyers in relation to its dispute with Hue in 2006 and that retainer was subsequently extended to acting as Dura’s solicitor in the proceedings before VCAT and in this court. His retainer was terminated when Dura went into liquidation.
(c) Mr Noble stated that at all material times he believed that each of Dura’s experts had all necessary information and documentation to prepare their reports and had the necessary expertise and experience so as to qualify them to give the evidence contained in their reports. He was not aware prior to the trial that any of the experts were missing any information or documentation or required any further information or documentation or that they did not have the requisite expertise or experience. Mr Noble believed that each of Dura’s experts would give relevant and admissible evidence in the proceeding. Mr Opperman put in evidence a further version of exhibit D3 by a supplementary affidavit.
(d) Mr Noble read each of Dura’s experts’ reports when they were filed and served. Each of the experts conferred with Dura’s counsel prior to the provision of their reports and prior to trial, including with Mr Margetts SC and Mr Andrew prior to the commencement of the trial.
(e) Mr Noble explained how each expert was briefed and when they received material and I have set out his evidence in this respect in context below.
(f) Hue did not raise any objections to the qualifications, experience, or assumptions of any of Dura’s experts or the admissibility of any of their reports prior to the trial of the proceeding notwithstanding trial directions that each party notify the other of such objections by 26 August 2011.
(g) In September 2011, when preparations were being made for expert conclaves, Hue’s legal advisers did not object to any of Dura’s experts participating in conclaves based on a lack of relevant expertise or experience. During October 2011, various groupings of experts produced five different joint reports.
(h) Mr Noble prepared the reply witness statements of Messrs Hendricks, Maaser, Balsden, and Brunner as statements that replied to the tables that set out defective works and references to the reports. Mr Noble spent approximately 85 hours conferring with Mr Brunner in this context.
(i) Mr Noble stated his belief that there was a proper basis for each and every allegation made in the pleadings filed and served on behalf of Dura in the proceeding and a proper basis for each and every allegation made in previous versions of the pleadings.
In a supplementary affidavit, Mr Noble produced copies of correspondence between Noble Lawyers and various experts to which I have referred above.
It seemed that Hue was conscious that the application was a summary hearing. It chose not to cross-examine Mr Noble. I will in due course discuss in some detail two particular aspects of this application when Hue contended for inferences to make its case that may have been more readily established by further evidence or if Hue had cross-examined Mr Noble on his affidavit. Those issues were whether there was a proper basis for Mr Noble’s beliefs and whether there were confidential communications that were relevant, which might be protected by client legal privilege. The inferences for which Hue contended were likely to have significant adverse consequences for Mr Noble. On the other side of the coin, Noble Lawyers invites an inference that it is entitled to the benefit of a doubt arising from the refusal of Dura to release communications from client legal privilege without establishing the necessary factual basis for it. I will explain these issues more fully in due course.
Noble Lawyers relied on Ashby v Slipper,[6] where the Full Court of the Federal Court of Australia considered that the trial judge ought to have refrained from making serious findings about a solicitor’s professional conduct and integrity where the solicitor was neither cross-examined nor represented. Mr Harmer’s circumstances were in no way those of Mr Noble but there, as here, there had been no specific pleading or identification of the issues, and no cross-examination of the solicitor upon material issues that the solicitor had explained by affidavit. The majority was not persuaded that the primary judge was warranted in rejecting the sworn and unchallenged evidence of the solicitor (and Ashby); principally on the basis that Mr Harmer was not afforded the opportunity in evidence to respond to the primary judge’s concerns. Siopis J, dissenting, was critical that Mr Harmer’s evidence was cast at a high level of generality, comprising a bare denial that he intended to harm Mr Slipper, and an assertion that he included certain allegations because he believed that they were relevant to a particular claim. Mr Harmer did not depose to the facts or matters upon which he relied for holding his expressed belief. Mr Noble here did not take the opportunity to elucidate or explain such matters as the basis for his beliefs that all claims were properly based factually or the subject matter of his communications that might attract client legal privilege.
[6][2014] FCAFC 15, [142].
In Offstage Support Association Inc v Time of My LifePty Ltd (No 2),[7] Edmonds J considered an application for indemnity costs against a solicitor personally. The solicitor commenced a winding-up application that Edmonds J had dismissed as an abuse of process because the application enjoyed no prospect of success either in law or based on the filed evidence. The solicitor’s affidavit in response to the application deposed in general terms that he formed the view prior to the commencement of the application, and at a later stage in the proceeding that the matter was properly arguable, and did not involve an abuse of process. The solicitor was not cross-examined on those parts of his affidavit. Accepting that Edmonds J found the views that the solicitor deposed that he held were:
[N]ot views which, in my opinion, a competent solicitor experienced in this area of the law could reasonably come to; and I have no reason to doubt that Mr McCartney is a competent solicitor experienced in this area of the law. For those reasons, I attach no weight at all to what Mr McCartney deposes to ...
[7][2011] FCA 1183; (2011) 284 ALR 362.
In White Industries (Qld) Pty Ltd v Flower & Hart (a firm),[8] an issue also arose as to whether there was a basis for senior counsel to have pleaded an allegation of fraud. Flower & Hart submitted that the failure by senior counsel to turn his mind to the basis for the fraud pleading should have been put to him in evidence. Goldberg J said:
[8][1998] FCA 806; (1998) 156 ALR 169, 225.
The documentary evidence which White tendered is such that it raises the issue that fraud was alleged without any factual basis for the allegation and it was open to infer from that documentation that fraud was pleaded without any factual basis for it. It is relevant to a consideration of that issue to know and understand how counsel and solicitors saw the basis for the fraud pleading. In the absence of any evidence from them on that topic, squarely raised in White’s amended statement of facts and contentions and White’s contentions of fact and law, it is open for me to infer from the documentation that they did not at the time address the justification for pleading fraud. If I draw such an inference that assists me in reaching a conclusion that there was no factual basis for pleading fraud, certainly fraud with knowledge.
Goldberg J then added:[9]
It would have been simple and straightforward in those circumstances for [senior counsel] and/or [junior counsel] to set out the basis for which, or the chain of reasoning by which, they pleaded fraud at least fraud with knowledge. They did not do so. I make these observations, conscious, as I have noted earlier, that the burden of proof lies on White to prove that fraud was pleaded where there was no factual basis for the allegation.
Approving of the observations of Handley JA in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd,[10] Goldberg J declined to infer that counsel and the solicitor considered there was a justification and factual basis for alleging fraud.
[9]Ibid, 226.
[10](1991) 22 NSWLR 389, 418-419.
In Ferrcom, the issue was whether Ferrcom could have obtained insurance for the crane as a registered vehicle without a particular endorsement. The majority of the court, Kirby P and Handley JA found that Commercial Union would have cancelled the existing policy and would not have accepted any further risk. The court declined to infer that Ferrcom could and would have obtained insurance cover for the crane without the endorsement. Handley JA held[11] that the court should not draw inferences favourable to Ferrcom on these matters when no attempt was made to prove them by direct evidence and in particular, when no relevant questions were asked of Ferrcom’s director, or in cross-examination of other witnesses, and it was appropriate to apply the principles of Jones v Dunkel.[12] Handley JA accepted that a party, by failing to examine a witness in chief on some topic, indicates as the most natural inference that the party fears to do so. This fear is then some evidence that such examination in chief would have exposed facts unfavourable to the party.
[11]Ibid, 418-419.
[12][1959] HCA 8; (1959) 101 CLR 298.
Having been Dura’s solicitor since 2006, I would have expected that Mr Noble would be able to give evidence of the material facts and path of reasoning that demonstrated the basis for his beliefs as expressed in his affidavit. As a party to privileged communications, Mr Noble would be able to identify those communications and the basis of a privilege claim with particularity. As was the case in Flower & Hart, the allegation was squarely raised and the basis for it was set out by Hue, but Mr Noble did not respond by explaining the material facts on which his belief was based. As I will later explain in detail, I do not consider that any inference favourable to Mr Noble should be drawn when he either ignored or failed to deal with these issues. If there was a rational basis for the stated beliefs, Mr Noble could have deposed to that basis. By application of the principle explained in Ferrcom, Mr Noble was not entitled to any inference in his favour on either the issue of his belief in a proper basis or his assertion of relevant privileged communications. Ashby v Slipper is distinguishable on its facts as Mr Harmer was neither a party to the proceeding nor represented before the court and was not afforded any opportunity to respond to the trial judge’s concerns about his conduct. On analogous application to the present facts, I prefer the analysis of the dissenting judge in Ashby.
How the application is put
Hue submitted that objectively viewed and analysed, the expert and lay evidence upon which Dura principally relied and which was known to Noble Lawyers by 14 April 2011 and 5 May 2011 respectively, was grossly inadequate to either refute the evidence of Hue known to Noble Lawyers at that time; or to advance Dura’s claim.
On 30 March 2011, Hue’s solicitors sent a letter to Noble Lawyers that clearly articulated its view about the weaknesses in Dura’s claim and defence to the counterclaim, suggesting Dura had no substantial prospect of success in the proceeding. Hue contended that its expert evidence, by then provided to Dura, demonstrated that Dura’s works were grossly defective. By Calderbank letters in each of the building proceeding and the trust proceeding,[13] Hue offered to settle all disputes between the parties in both proceedings. The offer remained open until 13 April 2011.
[13]A related proceeding in this Court, No. 2025/2007, the trial of which was to follow the building proceeding.
When the offer was open for consideration, Noble Lawyers had sufficient materials available to it assess the merits of Dura’s case. In particular, Noble Lawyers had:
(a) Dura’s expert evidence:
(i) Mr Shah’s report dated 25 November 2009;
(ii) Mr Vapp’s report dated 24 February 2010;
(iii) Mr Martin’s report dated 1 April 2011;
(iv) Mr Gairns’ reports dated 23 May, 25 July, 13 September and 26 October 2006 which were ultimately incorporated into his report dated 13 April 2011;
(v) Mr Lorich’s reports dated 18 April 2007 (three reports), 6 August 2007 and 16 July 2008, all of which were ultimately incorporated into his report dated 20 April 2011;
(vi) Mr Browning’s report dated 18 March 2010 which was ultimately incorporated into his report dated 20 April 2011;
(vii) Mr Faifer’s reports dated 11 May, 12 July, 30 July, 10 August, 10 September and 24 October 2007 and eight letters from Mr Faifer to Dura or Noble Lawyers dated between October 2006 and April 2007 all of which were ultimately incorporated into Mr Faifer’s report dated 28 April 2011; and
(b) Hue’s expert evidence and reports:
(viii) the visual audit report dated 8 December 2006;
(ix)the underlying works audit report dated May 2007;
(x) four reports prepared by Wood & Grieve Engineers dated 2, 7, 12 and 27 February 2007;
(xi)two reports regarding structural defects prepared by Maurice Farrugia & Associates Pty Ltd dated 3 November 2006 and 16 February 2007;
(each of which was referred to in schedule 1 of the defence and counterclaim)
(xii) the report of Mr Atchison dated 29 January 2010;
(xiii) the report of Mr Bonaldi dated 30 October 2009;
(xiv) the report of Mr Andrews dated 23 February 2010.
I will refer to the documents in this sub-paragraph (b) as Hue’s defects evidence.
(c)By 5 May 2011, Dura had served the following key lay witness statements:
(xv) Mr Maaser’s primary statement dated 21 April 2011;
(xvi) Mr Hendricks’ primary statement dated 4 May 2011; and
(xvii) Mr Brunner’s primary statement dated 21 April 2011.
More specifically, Hue emphasised three matters that contributed to Noble Lawyers’ inability properly to assess that the Calderbank offer was very favourable to Dura. First, Noble Lawyers had not acted competently in briefing, and reviewing reports from, Dura’s experts. Secondly, Dura’s key lay evidence was not sufficiently reliable to justify continuing Dura’s claim or defence in the expectation of a more favourable outcome at trial. Thirdly, Dura was pressing an untenable, and unprovable, claim to an exaggerated provisional cost for scaffolding and other items.
Noble Lawyers had failed to act with reasonable competence in briefing all but one of its client’s eight experts in that:
(a) its experts did not have the requisite expertise;
(b) its experts gave irrelevant opinions;
(c)Noble Lawyers wilfully or negligently withheld from experts materials that were fundamental to the validity of their opinions;
(d)its experts failed to identify their assumptions or made assumptions that could never be proved and their opinions were fatally flawed; and
(e)Noble Lawyers allowed Dura’s witnesses to brief and/or assist Dura’s experts in the preparation of their reports and critically undermined the independence of experts.
Hue contended that Noble Lawyers knew or ought to have appreciated that Dura’s claims and defences were not supported by admissible expert evidence. Noble Lawyers must, or ought to, have known that as a result, Dura’s key lay evidence (notably that of Messrs Maaser, Hendricks and Brunner) would not withstand scrutiny and could not be relied upon to justify the continuation of Dura’s claim or defence.
For Noble Lawyers to continue to pursue Dura’s claim and defence to counterclaim beyond 14 April 2011, or alternatively 5 May 2011, based on such evidence was conduct by which Noble Lawyers:
(a)unreasonably or improperly initiated or continued the proceeding when it had no, or substantially no, prospects of success;
(b) acted in wilful disregard of known facts and law; and
(c) failed to give reasonable attention to the relevant law and facts.
Noble Lawyers’ conduct:
(a)was in breach of Noble Lawyers’ overarching obligation not to make a claim or respond to a claim without a proper basis;
(b)caused costs to be incurred improperly or without reasonable cause; caused costs to be wasted by a failure to act with reasonable competence and expedition, and enlivened the court’s jurisdiction:
(i) to make orders under s 29 of the CPA;
(ii) to make a costs order against it under r 63.23;
(iii) to make a costs order against it under its inherent jurisdiction.
Hue contended that Noble Lawyers’ obligation to comply with the overarching obligations under the Civil Procedure Act, and its common law obligations were continuing obligations that required Noble Lawyers to continue to assess the merits of Dura’s claim and its defence to Hue’s counterclaim as evidence became available. Consequently, the conduct of Noble Lawyers about which Hue complains is conduct that continued from 14 April 2011, or alternatively 5 May 2011, until the ultimate substantive orders made in this proceeding on 3 May 2012 and, in particular included the period of preparation for, and the running of the trial (from 3 October to 18 November 2011).
In addition, Noble Lawyers caused costs to be wasted, or incurred improperly or without reasonable cause, by:
(a)continuing to press, in Dura’s claim for damages, the difference between the sum claimed in its final Payment Claim No 26 as the provisional sum for scaffolding in the sum of $805,346.90 and the sum allowed by the Superintendent, namely $157,000 (the scaffolding claim), in circumstances where Noble Lawyers knew or ought to have known that:
(i)the claim depended for its success on proof of the payment by Dura of the relevant subcontractor’s invoices; and
(ii) Dura had not paid those invoices;
(b)failing to act with reasonable competence in relation to the preparation of Dura’s lay evidence in reply (specifically the reply statements of Messrs Maaser, Hendricks, Brunner, and Balsdon in that Noble Lawyers:
(i)produced witness statements littered with broad assertions and other irrelevant and inadmissible material;
(ii)failed to protect the integrity of Dura’s lay witnesses by allowing them to interact during the preparation of their evidence; and
(iii)produced witness statements which were not based on the witnesses’ own knowledge.
Noble Lawyers’ conduct caused Hue to incur substantial costs. Hue claimed costs in connection with the proceeding following the settlement offer in March 2011 totalling $3,034,084. Hue claimed that the costs incurred in connection with Dura’s scaffolding claim totalled (separately) $150,790.
Noble Lawyers’ response
Noble Lawyers submitted that Hue was inviting the court to conduct a wide-ranging review of a large and complex building case that ran for six weeks and raised many issues for determination. Noble Lawyers contended that the application rested primarily upon a contention that it should have been plain to it that the evidence of each of Dura’s eight experts could not be relied on, and submitted that such enquiry was speculative. Questions must arise as to the extent to which Dura may have succeeded (partially or otherwise) on its claim or defence on the basis of some of its expert evidence, or some of its lay evidence, or its legal arguments as to the invalidity of Hue’s purported termination of the contract works or concessions by Hue’s witnesses. Noble Lawyers submitted that, assessed at the appropriate time, Dura might have won the case on the lay evidence. Deficiencies in the expert evidence did not mean that the case was doomed, and to conclude otherwise involves assessment in hindsight.
Noble Lawyers also submitted the application should be dismissed, as it is impossible to perform the task in a summary way. There is a public policy interest in seeking to preserve valuable court resources from being used for a re-trial of determined issues in a different factual and contextual landscape, to facilitate a claim by a successful litigant to recover its costs of the proceeding from the opposing party’s lawyer, in circumstances where the opposing party became insolvent after judgment.
I pause to observe that it would have been preferable for me to have deal first with the question of whether a wasted costs order should have been entertained at all based on this submission. Lord Bingham said in Medcalf:[14]
Save in the clearest case, applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action is itself likely to be expensive and time-consuming. The desirability of compensating litigating parties who have been put to unnecessary expense by the unjustified conduct of their opponents' lawyers is, without doubt, an important public interest, but it is, as the Court of Appeal pointed out in Ridehalgh at page 226, only one of the public interests which have to be considered.
However, Hue’s application was not based solely on the wasted coasts jurisdiction and included allegations of breach of overarching obligations under the Civil Procedure Act that I have a duty to consider.[15]
[14][2002] UKHL 27; [2003] 1 AC 120, 136 [24].
[15]Yara Australia Pty Ltd v Oswal [[2013] VSCA 337, [26].
Dura declined to waive client legal privilege. There was no evidence before the court as to what advice Noble Lawyers or Dura’s counsel gave to their client about the prospects of its claim and defence to counterclaim. Nor was there any evidence as to what advice counsel gave Noble Lawyers by about prospects or the admissibility of Dura’s expert reports. However, the communications between Mr Noble and counsel were described as regular and intense in the lead up to the filing and service of Dura’s lay and expert evidence and the commencement of the trial.
Noble Lawyers submitted that the court should only make a costs order against it if satisfied that there is nothing that Noble Lawyers could have said, if unconstrained, to resist the order, and that it is in all the circumstances fair to make the order. Hue had not discharged that burden and the court must assume in Noble Lawyers’ favour that it had the benefit of such advice in relation to questions concerning the prospects of success of Dura’s claim and defence and the relevance and admissibility of Dura’s eight expert reports.
Dura submitted that as a matter of causation, it is incumbent on the applicant to establish, on the balance of probabilities, that costs had been wasted because of the impugned conduct of the lawyer. That is, the applicant has to satisfy the court that the lawyer’s conduct caused certain costs to be wasted in that the applicant would not have incurred the costs claimed if the lawyer had not acted or advised as they did.[16] It is insufficient for the applicants to establish merely a loss of a chance.[17] There was no causative connection between the alleged deficiencies in briefing experts and the costs of the trial.
[16]Guss v Geelong Building Society [2001] VSC 288, [65].
[17]Brown v Bennett (No. 2) [2002] 1 WLR 713, [54] (Neuberger J), apparently approved in UTSA Pty Ltd (in liq) v Ultra Tune Pty Ltd [2004] VSCA 105, [59].
Noble Lawyers submitted that Hue’s causation theory was unworkable and it had failed to prove causation. Its written case was that the evidence was not competently prepared but in oral submissions, Hue suggested that either Dura or Noble Lawyers specifically intended to withhold material so that the experts would look as if they were persuasive when they were not. Either way, by the relevant dates, Noble Lawyers was sufficiently informed to have identified that the Calderbank offer was not only a much better proposition for Dura than a judgment, but there was no proper basis for bringing the claim. Hue’s submission was not that Dura’s claim was doomed to failure but that Dura’s decision to reject the Calderbank offer, or Noble Lawyers’ advice that it does so, was made without the benefit of properly informed expert opinion.
Implicit in this contention was the notion that with the benefit of properly briefed experts, Dura may have acted differently. Noble Lawyers challenged this contention as requiring evidence that had not been led from Dura’s decision makers. To the contrary, Noble Lawyers submitted that at the relevant dates sufficient evidence both lay and expert supported the proposition that the claim was not hopeless. There were disputed facts and a summary judgment application would not have been contemplated. In that sense, it could not be said that it could be apparent to Noble Lawyers that the claim lacked a proper basis.
The failure of Hue to present a causation case also arises from its decision not to cross-examine Mr Noble or to call evidence from the Dura’s decision makers and its experts. Hue has made the application appear as a summary one, although it took 3 days, because to present it properly would take weeks due to the nature of the necessary causation case.
Relevant statutory provisions and principles
Supreme Court Act and Rules
Hue’s application proceeded under Section 24 of the Supreme Court Act 1986, the court’s inherent jurisdiction and r 63.23 of the Rules. The Act states:
24 Costs to be in the discretion of Court
(1)Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
The rule is in the following terms:
63.23 Costs liability of lawyer
(1)Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that—
(a)all or any of the costs between the solicitor and the client be disallowed or that the solicitor repay to the client the whole or part of any money paid on account of costs;
(b)the solicitor pay to the solicitor's client all or any of the costs which the client has been ordered to pay to any party;
(c)the solicitor pay all or any of the costs payable by any party other than the client.
(2)Without limiting paragraph (1), a solicitor fails to act with reasonable competence and expedition for the purpose of that paragraph where any application in or trial of a proceeding cannot conveniently be heard or proceed, or fails or is adjourned without any useful progress being made, by reason of the failure of the solicitor to—
(a)attend in person or by a proper representative;
(b)file any document which ought to have been filed;
(c)lodge or deliver any document for the use of the Court which ought to have been lodged or delivered;
(d)be prepared with any proper evidence or account; or
(e)otherwise proceed.
(3)The Court shall not make an order under paragraph (1) without giving the solicitor a reasonable opportunity to be heard.
(4)The Court may, before making an order under paragraph (1), refer the matter to a Costs Judge or another Associate Judge for inquiry and report.
…
(6)The Court may order that notice of any proceeding or order against a solicitor under this Rule be given to the client in such manner as the Court directs.
(7)This Rule shall, with any necessary modification, apply to a barrister as it applies to a solicitor.
Non-party costs orders - principles
It is settled law that the court has the power, pursuant to s 24 of the Supreme Court Act1986, to make an order for costs against a non-party, including the solicitors for a party, although such an order is exceptional.[18] Rule 63.23 expressly permits such orders, often referred to as wasted costs orders. Goldberg J explained in White Industries (Qld) Pty Ltd v Flower & Hart (a firm)[19] that the primary source of that particular power is to be found in ‘the ability of the court to enforce duties owed by practitioners to the court.’
[18]Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178; Burns Philp & Co Ltd v Bhagat [1993] 1 VR 203, 220 (Brooking J, Fullagar and Tadgell JJ agreeing); Flinn v Flinn [1999] VSCA 134.
[19][1998] FCA 806; (1998) 156 ALR 169, 229.
The jurisdiction to order costs against a non-party has been described as exceptional and a power that must be exercised judicially. Exceptional in this context means no more than outside the ordinary run of cases, where parties pursue or defend claims for their own benefit and at their own expense and pay, or receive, costs as the court determines.[20] It is a jurisdiction that may be called into play where the non-party funds, controls, or benefits from the litigation,[21] although the circumstances that attract the jurisdiction may differ from those that are relevant when the non-party is a party’s solicitor.
[20]Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors (No. 2) (New Zealand) [2004] UKPC 39, [2004] 1 WLR 2807.
[21]Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178; Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors (No. 2), ibid; Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd [2009] HCA 43, 239 CLR 75; S H Lock (NZ) Limited v New Zealand Bloodstock Leasing Limited [2011] NZCA 675.
Such an order is within the disciplinary jurisdiction of the court, even though the main object of the order, in this case, is compensatory. The House of Lords in Myers v Elman[22] found the modern source of the jurisdiction in an examination of the inherent jurisdiction of the court. It ought to be borne in mind that since Myers v Elman the jurisdiction has become regulated by rules of court, in Victoria r 63.23 and in England O 62 r 8, and that the applicable rules in both jurisdictions have been amended in significant respects from time to time.
[22][1940] AC 282.
In Etna v Arif,[23] Batt JA (Charles and Callaway JJA agreeing) stated:
It is established that an order that a solicitor personally pay costs is not an order "as to costs only" which are in the discretion of the court, but rather is an order in the disciplinary jurisdiction of the court (even though the main object of the order may be compensatory): InRe Bradford, Thursby and Farish (1883) 15 QBD 635; Thompson v Fraser [1985] 3 All ER 511 at 512; [1986] 1 WLR 17; and Michael v Freehill Hollingdale & Page (1990) 3 WAR 223 at 228 and 231-233; cf. In Re Hardwick (1883) 12 QBD 148; In the first-mentioned case (scil., In Re Bradford, Thursby & Farish) it was held that a judge had no discretion to make an order for costs against a solicitor personally unless there had been misconduct or negligence and that on that question there ought to be an appeal without leave. Later cases have taken a wider view and in Thompson v Fraser Sir John Donaldson MR said that the Court was unanimously of the view that an appeal in such circumstances did not relate only to costs "or, indeed, primarily to costs: it relates to the conduct of the solicitor." Although the word "only" does not appear in the Victorian s 17A(1)(b), that difference does not, in my view, make the long-established line of authority distinguishable and, whilst it is not binding upon this Court, I consider that we should follow it.
[23][1999] VSCA 99; [1999] 2 VR 353, 379 [69] (citations omitted). See also Abrahams v Wainwright Ryan [1999] 1 VR 102.
In Etna,[24] Batt JA was concerned to construe the requirement of the phrase ‘wasted by undue delay or negligence or by any other misconduct or default’ which no longer appears in the rule, amended in 2000 to ‘wasted by a failure to act with reasonable competence and expedition’ in order to widen the circumstances in which costs orders could be made against legal representatives.[25] Batt JA held that ‘negligence’ in the former phrase had a more stringent meaning than it does in the law of tort, which has sometimes been referred to as a technical meaning. Whatever be the standard of care required, it is the solicitor's duty to the Court, not to the litigant, that is relevant.
[24]Ibid, 385 [82].
[25]See SR No 36 of 2000.
In Etna,[26] Batt JA adopted the summary in Ridehalgh v Horsefield[27] of five fundamental propositions that govern the exercise of the jurisdiction. They were:
(1) The court's jurisdiction to make a wasted costs order against a solicitor is quite distinct from the disciplinary jurisdiction exercised over solicitors. (2) Whereas a disciplinary order against a solicitor requires a finding that he has been personally guilty of serious professional misconduct the making of a wasted costs order does not. (3) The court's jurisdiction to make a wasted costs order against a solicitor is founded on breach of the duty owed by the solicitor to the court to perform his duty as an officer of the court in promoting within his own sphere the cause of justice. (4) To show a breach of that duty it is not necessary to establish dishonesty, criminal conduct, personal obliquity or behaviour such as would warrant striking a solicitor off the roll. While mere mistake or error of judgment would not justify an order, misconduct, default or even negligence is enough if the negligence is serious or gross. (5) The jurisdiction is compensatory and not merely punitive.
[26][1999] 2 VR 353, 385 [82].
[27][1994] Ch 205, 227. The House of Lords decision of Myers v Elman [1940] AC 282 was considered to be authority for these propositions.
However, following the amendment of r 63.23 in 2000, the fourth proposition must be revisited. Counsel did not address this issue directly in submissions but it seems clear that the amended phrase ‘reasonable competence and expedition’ invokes a lesser standard that gross negligence or dereliction of duty. It is a standard capable of being satisfied on proof of a failure to act with the standard of competence expected of ordinary members of the legal profession. That standard may in particular circumstances be assessed by reference to any special qualifications, experience, or attributes possessed by the legal practitioner, such as a speciality area of practice, in advocacy as a barrister or in a field of law, such as taxation law or building and construction litigation.
In Ridehalgh,[28] the court said:
As already noted, the predecessor of the present Ord 62, r 11 made reference to "reasonable competence." That expression does not invoke technical concepts of the law of negligence. It seems to us inconceivable that by changing the language Parliament intended to make it harder, rather than easier, for courts to make orders. Since the applicant's right to a wasted costs order against a legal representative depends on showing that the latter is in breach of his duty to the court it makes no sense to superimpose a requirement under this head (but not in the case of impropriety or unreasonableness) that he is also in breach of his duty to his client. … But for whatever importance it may have, we are clear that "negligent" should be understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession.
In adopting an untechnical approach to the meaning of negligence in this context, we would however wish firmly to discountenance any suggestion that an applicant for a wasted costs order under this head need prove anything less than he would have to prove in an action for negligence: advice, acts or omissions in the course of their professional work which no member of the profession who was reasonably well-informed and competent would have given or done or omitted to do; an error such as no reasonably well-informed and competent member of that profession could have made.
Those remarks are apposite and, with respect, I would adopt them.
[28]Ibid, 232 (citations omitted).
In Apollo 169 Management Pty Ltd v Pinefield Nominees Pty Ltd (No. 2),[29] Emerton J rejected a submission that the amendment of the rule in 2000 did not change, significantly or at all, the threshold for the making of a wasted costs order. With respect, I agree with her Honour’s conclusion that the words ‘failure to act with reasonable competence and expedition’ do not require findings of gross negligence. A claim of a failure to act with reasonable competence can be made out by proof of negligence to the ordinary standard bearing in mind that breach is of the practitioner’s duty to the court.
[29][2010] VSC 475, [30]–[33], agreeing with Ashley J (as he then was) in Guss v Geelong Building Society (in liq) [2001] VSC 288, [13].
In New South Wales, there has been substantial legislative reform of the basis for a legal practitioner’s liability for a wasted costs order where there are not reasonable prospects of success on the claim. The reformed provisions, Part 11, Division 5C of the Legal Profession Act 1987 (NSW) were examined in Lemoto v Able Technical Pty Ltd & Ors,[30] to which I was referred by both parties. McColl JA[31] reviewed the English and Australian authorities that stated the law at the time of statutory reform in New South Wales and gleaned a number of principles as governing the power to order legal practitioners to pay costs in proceedings in which they have represented parties.[32] In Heidrich v Standard Bank London Ltd,[33] Ward LJ also summarized the salient points of principle that emerged from the cases since Ridehalgh.
[30][2005] NSWCA 153, 63 NSWLR 300.
[31]Hodgson and Ipp JJA agreeing.
[32]Ibid, 320 [92] (citations omitted).
[33][2008] EWCA Civ 905, [10]. See also Gill v Humanware Europe PLC [2010] EWCA Civ 799, [2010] ICR 1343.
Drawing from both judgments, the following matters need to be considered in the exercise of the wasted costs jurisdiction:
(a) The court's jurisdiction to make a wasted costs order against a solicitor is founded on breach of the duty owed by the legal practitioner to the court to perform his duty as an officer of the court in promoting, within his own sphere, the cause of justice.
(b) ‘Negligent’ should be understood in an untechnical way to denote failure to act in a way no reasonably well-informed and competent ordinary member of the profession would have done.
(c) The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised with care and discretion and only in clear cases.
(d) The wasted costs jurisdiction discloses a tension between two important public interests, one that the wasted costs orders should not become a back-door means of recovering costs not otherwise recoverable against a legally-aided or impoverished litigant, and that the remedy should not grow unchecked to become more damaging than the disease and, two, that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their or their opponents' lawyers.
(e) A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence that is plainly doomed to fail.
(f) The legal practitioner is not the judge of the credibility of the witnesses or the validity of the argument.
(g) A judge considering making a wasted costs order arising out of an advocate’s conduct of court proceedings must make full allowance for the exigencies of acting in that environment; only when, with all allowances made, an advocate’s conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order.
(h) A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it, and a legal practitioner should not be called on to reply unless an apparently strong prima facie case has been made.
(i) Where a legal practitioner’s ability to rebut the complaint is hampered because the client maintains client legal privilege, full allowance must be given for the practitioner’s inability to tell the full story and he or she should be given the benefit of the doubt. In such circumstances, the court should not make an order against a practitioner without satisfying itself that it is in all the circumstances fair to do so, or, put the other way, it is only when, with all allowances made, a practitioner's conduct of proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order.
(j) The procedure to be followed in determining applications for wasted costs must be fair and as simple and summary as fairness permits.
McColl JA in Lemoto noted consistency in the authorities concerning the sparing exercise of the jurisdiction to make wasted costs orders against legal practitioners and cases in which orders are sought that a lay non-party pay the costs of litigation; it is settled that such an order is exceptional.[34]
[34](2005) 63 NSWLR 300, 322 [93] (citations omitted).
The issues that now arise in respect of Hue’s claim to a wasted costs order are these:
(a) In what, if any, respects did Noble Lawyers fail to perform its duty (Noble Lawyers’ conduct)?
(b) Was Noble Lawyers’ conduct a failure to act with reasonable competence and expedition, meaning a failure to act to the standard of competence expected of a solicitor specialising in building and construction law and litigation?
(c) Did Noble Lawyers’ conduct cause costs to be incurred improperly or without reasonable cause, or to be wasted?
The first issue directs attention to the content of the duty of an officer of the court in promoting, as a solicitor, the cause of justice. Historically, the solicitor’s failure to fulfil his duty to the court in the administration of justice enlivened the jurisdiction and it is in this respect that a legal practitioner must act reasonably to the requisite standard. The authorities establish that a solicitor owes a duty to the court:
(a) to conduct litigation ‘with due propriety’,[35] meaning not engaging in conduct of such a nature as to tend to defeat justice. Examples of such conduct include failing to be satisfied that the solicitor has a retainer to act,[36] or failing to be satisfied that a litigant understands his discovery obligations when swearing an affidavit of discovery,[37] personally failing to observe court orders and directions or failing to ensure that the solicitor’s client observed court orders and directions,[38] and conduct causing the opposite party to unnecessarily incur costs.[39] Such conduct cannot be constrained to defined categories or examples but will be conduct that falls short of that in which a reasonably competent practitioner would engage to ensure the timely and efficient conduct of litigation.
[35]Myers v Elman [1940] AC 282, 302 (Lord Wright).
[36]Bray v Dye (No 2) (2010) 27 VR 324; [2010] VSC 152; Sitzler Savage Pty Ltd v Northern Mining Holdings Pty Ltd [2012] VSC 104; Cohen v Victoria (No 3) [2011] VSC 229.
[37]Re Bendeich [1994] FCA 1504; (1994) 126 ALR 643 (1994) 53 FCR 422, 427 [12].
[38]Ibid.
[39]Gippsreal Ltd v Kurek Investments Pty Ltd [2009] VSC 344.
(b) to ensure that the court's process is not abused or used for improper or ulterior purposes,[40] such as unreasonably commencing or maintaining proceedings with no or no substantial prospects of success for an improper purpose.[41] As Goldberg J stated in Flower & Hart,[42] there are limitations on the broad proposition.
(c) to ensure the business of the courts is conducted with the expediency consistent with the due administration of justice,[43] which may not be achieved when a legal practitioner commences or maintains a proceeding that is futile or foredoomed to fail.[44]
The details of complaint and response in respect of each individual defect or incomplete work necessarily arose for consideration on the case as pleaded. The fact that Noble Lawyers presented that detail in a less than satisfactory manner largely through inadequate resources is not a matter that persuades me to exercise the wasted costs jurisdiction. The risks of incurring and not recovering costs in a proceeding are assumed by the litigants, not the legal representatives, and the fact that one legal team is less well, or even under, resourced is an accepted risk in litigation. For this reason, were I otherwise satisfied that it was appropriate to exercise the wasted costs jurisdiction, I would not, in the exercise of my discretion, do so.
Conclusions
Hue has failed to establish that there was a breach of the overarching obligations under the Civil Procedure Act that it alleged. Hue has also failed to persuade me that it is appropriate, in the circumstances of this proceeding, to make a wasted costs order arising out of Noble Lawyers’ briefing practices concerning expert evidence or the preparation of reply witness statements. However, I am persuaded that a wasted costs order is appropriate in respect of Noble Lawyers’ conduct in maintaining the scaffolding provisional sum claimed. I will order that Mr Darren Noble and Noble Lawyers pay Hue Boutique Living Pty Ltd the sum of $113,092.50. I will hear counsel on the question of interest and in respect of the costs of this application.
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