Electro Research International P/L v Stec & Ors No. Scgrg-94-2045 Judgment No. S6602

[1998] SASC 6602

ELECTRO RESEARCH INTERNATIONAL PTY LTD & ORS V STEC & ORS

Civil

LANDER J

This is a very long running matter but the matter under consideration can be disposed of shortly.  The Court is presently concerned with an application by the first named defendant to set aside an allocatur dated 18 May 1995.

On 16 December 1994 the first and second named defendants made application to the Court to set aside an order made on 29 November 1994 by Judge Kelly, a Master of this Court.  The terms of that order are unimportant for the purpose of this application.  The application was issued by Camatta Lempens Pty Ltd, who described themselves as solicitors for the defendants.

On 8 February 1995, Judge Kelly considered an application made by the plaintiffs dated 25 November 1994, and the application of the defendants of 16 December 1994.  He made a number of declarations and orders all of which are unimportant for the purpose of this matter except order number three, which was:

“That the defendants’ application dated the 16th day of December 1994 stand dismissed out of Court.”

His Honour went on to order:

“... that the plaintiffs recover against the defendants their costs of the action and this order and the order of Judge Kelly made herein on the 29th day of November 1994 on a solicitor/client basis to be taxed.”

On 16 February 1995, an application was made for inter alia an extension of time to appeal from the order made by the Master.  The application was issued by the first defendant himself. 

On 17 February 1995, an appeal was lodged against the order of 8 February 1995 made by Judge Kelly.  Again it was issued by the first named defendant.

On 28 February 1995, an application was issued by the first named defendant seeking inter alia injunctions.  That application was supported by an affidavit of the first named defendant.

On 14 March 1995, Peter Scragg who, on the face of the document, is described as solicitor for the plaintiff, but on the back sheet is described as solicitor for the defendants, filed a notice of change of address for service and of solicitor for all three defendants and a notice of acting.

On 27 March 1995, a further application was issued seeking inter alia an order discharging paragraphs one and two of the order of Judge Kelly made on 8 February 1995.  That application was issued by Peter Scragg of 224 Grote Street, Adelaide who, on the face of the application, is again described as solicitor for the plaintiff but on the back sheet is properly described as solicitor for the defendants.

On 31 March 1995, Mr Scragg appeared on behalf of the defendants in an application before Judge Bowen Pain.  On that day that Master gave directions in relation to the filing of affidavits and for the hearing of the matter on 11 April 1995. 

The matter came on before Judge Kelly on 11 April 1995.  Counsel appeared for the plaintiffs and Mr Scragg appeared for the defendants.  Judge Kelly refused to hear the matter because of time constraints and because he was of the opinion that the matter had become so complex it needed to be resolved by a substantive action.  He adjourned the matter.

On 20 April 1995, Susan Smith who was employed by the solicitors for the plaintiffs posted in a prepaid envelope addressed to the defendant’s solicitor, Peter Scragg, a short form bill of costs and a covering letter from the solicitors for the plaintiffs addressed to Mr Scragg and dated 20 April 1995.  That letter was in the following terms:

“20 April 1995

Our Ref:  NK:AT:940729

Peter Scragg

224 Grote Street

ADELAIDE  SA  5000

Dear Sir

RE:. ELECTRO RESEARCH INTERNATIONAL PTY LTD, ANDREW CONROY, TADEUSZ RYBAK and PETER GEORGOPOLOS v TADEUSZ STEC, BOGDAN LECZYNSKI AND BARBARA STEC

We refer to previous correspondence in this matter.

Please find enclosed by way of service short form bill of costs pursuant to the judgment of Judge Kelly delivered on 8th February 1995.

We should be pleased to receive your response within 21 days.

Yours faithfully
ADAM KANDELAARS

N KANDELAARS”

The letter was never returned and in her affidavit Ms Smith said that she was informed by Australia Post that in the ordinary course of the post the envelope would have been delivered on 21 April 1995.

On 24 April 1995, the first defendant issued an application for various orders in the nature of discovery.  That application was heard by Judge Kelly on 27 April 1995 and adjourned to 30 May 1995. 

On 16 May 1995, the affidavit of Susan Smith was filed to prove service of the short form bill of costs upon Mr Scragg.  On the same day an affidavit of Neil Kandelaars was filed in which he deposed to having instructed Susan Smith to post the documents to which she referred in her affidavit.  He also stated in his affidavit that the defendants had failed to comply with the provisions of r101A.02(2) of the Supreme Court Rules by failing to respond to the plaintiffs’ short form bill of costs within twenty-one days of delivery of the same, or at all, and in those circumstances he requested that the Registrar of the Court issue an allocatur in the sum sought in the plaintiffs’ short form bill of costs pursuant to r101A.02(4).

An allocatur issued on 18 May 1995 in the sum of $26,289.07.

To that point of time no notice had been filed by Mr Scragg advising that he had ceased to act.  No notice had been filed by Mr Stec under r11.04 that he was acting in person.  In those circumstances the only address for service on file was that of Mr Scragg.

The first defendant issued an application for a number of orders on 29 May 1995 and issued a number of further applications in the following months. 

On 3 November 1995, the plaintiff filed a notice that he was now acting in person and he gave his address for service as 9 Darwendale Street, Hackham West, SA 5163.

To that point of time during the relevant time the only address for service of any document in relation to the proceedings was that of Mr Scragg.

The first defendant complains that at no time was he served with the short form bill of costs or any other bill nor was he at any time given any notice of the claim for costs prior to the allocatur being signed.  I think that is right.  I think the evidence supports the first defendant’s contention that he was not served with the bill of costs nor was he given notice of the possibility that an allocatur might be signed.

The first defendant also claims that Mr Scragg was not served with the bill of costs.  In support of that he has exhibited an account which he received from Mr Scragg.  That account identifies the work which Mr Scragg did during the period of his instructions and identifies the day upon which the work was done and the work that was done.  It is right to say that the account does not indicate the receipt of the bill of costs. 

I set out Mr Scragg’s account:

“Mr T Stec

9 Darwendale Street

HACKHAM WEST  5163

05-05-95

In reference to: Company

Amount

20-02-95  Attendance on Bob   160.00

23-03-95  Attendance on you to check   310.00

affidavit, amending affidavit,

telephone attendance on Richard

27-03-95  Attendance on you   160.00

28-03-95  Attendance at court fax to   100.00

opposing solicitors correspondence

to opposing solicitors  

30-03-95  Attendance at court and attendance

on you   280.00

0 - 4-95     Faxes received x 18 pages  18.00

04-04-95  Peruse Affidavit, telephone

attendance on Bob  40.00

06-04-95  Telephone attendance on Bob,

Telephone attendance on you  40.00

07-04-95  Attendance on you, draw and engross              390.00

2 affidavits, attendance on you to

sign, fax to opposing solicitors

11-04-95  Attendance at court engaged 1.5 hours            320.00

12-04-95  Telephone attendance on opposing

solicitors, receiving and perusing

fax, fax to you  60.00

13-04-95  Telephone attendance on you  20.00

18-04-95  Attendance on you, telephone   130.00

attendance on opposing solicitors x

2  

20-04-95  Telephone attendance on you,   102.00

receive fax consider and send to

Owens  

Telephone attendance on you x 2  40.00

21-04-95  Telephone attendance on you on

mobile  25.00

26-04-95  Attendance on solicitor to discuss  40.00

________

For professional services rendered            $2,235.00

Previous balance   $610.00

07-04-95  Payment - thank you   ($610.00)

________

Balance due   $2,235.00    ”

------------

The account shows that on 21 April 1995, Mr Scragg had a telephone attendance upon the first defendant and on 26 April 1995, an attendance on the first defendant.  There is no indication in the account that he did receive the bill of costs.

The account indicates that he was first instructed on 20 February 1995 and had a number of attendances upon the first defendant before 11 April 1995 when he attended upon the application before Judge Kelly.  On 12 April 1995, he spoke to “opposing solicitors” and on 13 April 1995 he had a telephone attendance on the first defendant.  The account shows that Mr Scragg had two further telephone attendances on “opposing solicitors” on 18 April 1995. 

Whilst the account of Mr Scragg does not show the receipt of the bill of costs I am not prepared to infer that he did not receive it.  The evidence of Susan Smith is that the document was sent to him and that it was not returned.  Mr Scragg’s account is equivocal.  I am not prepared to infer, contrary to Ms Smith’s affidavit, that the bill of costs was not received. 

I find that the bill of costs was received by Mr Scragg on 21 April 1995.

I also find that Mr Scragg was acting for the first defendant on the date that the bill of costs was sent.  I infer that he was acting from the item dated 20 April 1995 where Mr Scragg had a telephone attendance on the first defendant and received a fax which he considered and sent to Mr Owens, who was a member of the firm acting for the plaintiffs.

It follows therefore that I find that on the day the bill of costs was sent to Mr Scragg, Mr Scragg was then acting for the first defendant.  I make that finding notwithstanding that the first defendant claims in his affidavit that:

“Since 11 April 1995 Mr Scragg, who was unsuccessful in a matter of the above mentioned meeting, lost authority to act on behalf of the defendants in the Supreme Court.”

In my opinion Mr Scragg’s account is inconsistent with his ceasing to act after 11 April 1995.  It is consistent with him ceasing to act sometime between 21 April 1995 and 26 April 1995.

Mr Stec claims that because he had terminated Mr Scragg’s instructions on 11 April 1995 then service upon Mr Scragg was not good service upon him.  He claims that it ought to have been entirely clear to the solicitors acting for the plaintiffs that Mr Scragg was no longer acting for him on 11 April 1995 and certainly by 24 April 1995 when he issued the application in his own right.  Moreover he claims that as he attended before Judge Kelly in his own right on 30 April 1995 it must have been readily apparent to those solicitors that he was no longer represented by Mr Scragg.

He does not claim that he gave any specific notice to the solicitors acting for the plaintiff or indeed that he told them that Mr Scragg was no longer acting for him.  It was not until November 1995 that he filed a notice that he was acting in his own right.

The purpose of an address for service is clear.  It is to give the opposing party an address at which that other party may leave documents for the first party.  Without an address for service it would be necessary for parties to serve each other personally on each occasion.  It would make litigation more expensive, more time consuming and more frustrating than it presently is.

A party is entitled to rely upon the other party’s address for service for the purpose of service until the first mentioned party is advised of a change of address for service or, until it comes to the attention of the first mentioned party that documents served at that address for service have been returned unclaimed, or on an attempt at service at the address the party cannot be found and there is nothing at the address indicating any connection with the party who has given the address for service: Rule 11.03. 

If a party wishes to change that party’s address for service the party must give the opposing party clear notice of the change at the time that the first mentioned party wishes to change the address for service.  If a solicitor ceases to act for a party because a party has instructed some other solicitor the first mentioned solicitor should require the new solicitor to notify the court immediately by change of address for service that that new solicitor is now acting for the party.  The rules provide for procedures where a notice of change of solicitors has not been filed: Rule 11.05.

If a solicitor ceases to act for a party and the party thereafter intends to represent himself or herself, the solicitor ought to require that party to file a notice that the person is acting in person and give a new address for service: Rule11.04.

The Rules make provision for a procedure whereby the address for service can be changed with minimum effort and in the event that a party does not file the appropriate documents solicitors can themselves apply to the Court for an order declaring that the solicitor is no longer acting for that party: Rule 11.06.   

Until such time as a solicitor files a notice that he or she is no longer acting, or the party for whom the solicitor was previously acting files a notice that he or she is acting in  person and giving an address for service of notices and proceedings, the opposing party can, in my opinion, rely upon the address for service at which that party can leave documents: Milera v Wilson (1980) 23 SASR 485. The former solicitor’s obligations to the former client continue in the event that a notice of change of address for service has not been filed: see Lady De La Pole v Dick (1885) 29 Ch D 351 at 356-357.

It would be different, of course, if a solicitor for a party is on notice that the other solicitor is no longer acting for that party.  That solicitor cannot continue to ignore the reality of the situation and serve a solicitor who he or she knows is no longer acting for the party: Horbelt v Raft Pools Pty Ltd (1987) 47 SASR 389.

In my opinion Mr Scragg was still acting for the first defendant at the time that the bill of costs was served.  Even if he was not, the notice of address at which documents were to be served remained Mr Scragg’s address.  There is no evidence to suggest, apart from the application made by Mr Stec himself on 24 April 1995, that Mr Stec had advised the solicitors acting for the plaintiffs that Mr Scragg was no longer acting for him.

I do not think that the application of 24 April 1995 issued by Mr Stec himself, and his appearance before the Master on 30 April 1995, constitutes sufficient notice in the circumstances of this case that Mr Scragg had ceased to act for Mr Stec.

I think, therefore, that the bill of costs was properly served.

Mr Stec claimed that the allocatur should not have been signed because of non-compliance with r101A.  I disagree with that argument.  Rule 101A requires a party to prepare and serve a short form bill of costs.  That was done.  Rule 101A.02(2) requires that the person to whom the bill is delivered respond within twenty-one days of the delivery of the short form bill of costs and serve a copy of the responses on the applicant.  The rule specifically provides that in the event that the respondent fails to comply with this requirement the whole of the costs sought by the applicant shall be deemed to be admitted and payable. 

There was, of course, no response in this case and in my opinion twenty-one days after service the whole of the costs sought by the plaintiffs in this case became admitted and payable:

Rule 101A.02(4) provides:

“(4)   If at the expiration of the period of 21 days referred to in paragraph (2) above the respondent has not delivered to the applicant a copy of the short from bill of costs containing the respondent’s responses or if within 21 days of the service of an offer pursuant to paragraph (3) above the parties reach agreement as to the amount payable or part thereof, the applicant may apply by letter to the Registrar for an allocatur to be issued by the Court in accordance with the provisions of Rule 101.17 and the Registrar, upon being satisfied in such manner as he shall think fit that either the respondent has failed to comply with the provisions of subrule (2) above or (as the case may be) that the respondent consents to the issue of the allocatur, shall thereupon cause to be issued the allocatur in the sum sought.”

It can be seen from that rule that after the period of twenty-one days, if the Registrar is satisfied that the respondent has failed to comply with the provisions of r101A.02(2), the Registrar shall thereupon cause to be issued the allocatur in the sum sought.

That is what occurred here and that, in my opinion, was appropriate.  I therefore reject the argument that the allocatur was not properly signed. 

In my opinion the allocatur took effect as from 18 May 1995 and of course the effect of an allocatur is that it is enforceable in the same manner as a judgment of the Court for the amount of the allocatur (r101.18(2)).

Mr Stec, however, argued that the allocatur had been set aside by an order of Perry J made on 14 August 1995 and that thereafter the allocatur ceased to have effect.

On 14 August 1995 Perry J made a number of orders, and in particular paragraph 2(a) which I set out:

“(a).. An order setting aside the said order [including orders for costs] and substituting therefor an order that the operation of the resolutions passed at the meeting of 12 May 1994 and 24 October 1994 be suspended until further order, and in particular but without limiting the effect of the suspension, to the intent that the second and third defendants do not act as directors of the company and the second defendant does not act as secretary of it unless and untli (sic) so permitted by further order of the court.”

I think Mr Stec is partly right about that.  I think he is right when he argues that the effect of the order of Perry J was to set aside the order made by Master Kelly on 8 February 1995 including that part of the order which relates to costs. 

I think from the date of Perry J’s order the order of Judge Kelly’s ceased to operate.

However that is not an end of the matter because a further order in relation to those orders has been made.  On 12 December 1996, Olsson J, who after trial of the action reached the same conclusion as Judge Kelly had on 25 November of 1994, made the following order:

“6..... That any stay of the order for costs made on the 8th day of February 1995 by Judge Kelly Master of the Supreme Court be set aside and that the said order for costs and (sic) do stand against the defendants Tadeusz Stec and Bogdan Leczynski.”

I do not think there can be any doubt that that order referred to the previous order made by Perry J in which he set aside the order of Judge Kelly and substituted an order that the operation of the resolutions be suspended until further order.  The order made by Olsson J is quite clear and that is that it revives the order of Judge Kelly made on 8 February 1995 in all respects and in particular in so far as it relates to costs.

Therefore the third objection to the allocatur in my opinion fails.

I therefore dismiss the application made by Mr Stec.