Everitt v David Jones & Waterford Wedgwood (No 2) No. DCCIV-97-579
[2000] SADC 38
•27 March 2000
SARAH EVERITT v DAVID JONES LIMTED and WATERFORD WEDGWOOD AUSTRALIA LTD (NO 2)
[2000] SADC 38
Judge Lunn
Civil
REASONS ON ORDER FOR COSTS AGAINST THE DEFENDANTS’ SOLICITORS PERSONALLY
On 21 September 1999 there was a hearing before a Master of the Court on an argument about whether the defendant should be given leave to file a further Statement of Claim on its 3rd party proceedings. At the commencement of the hearing counsel for the defendant handed to the Master yet a further version of the Statement of Claim, which was the 5th version, although leave had not been granted to file all of the previous versions. The Master then conducted the hearing before him on the basis that he was considering a disputed application for leave to file the version of the Statement of Claim which had been handed to him in lieu of an earlier version which was on the file. On 27 October the Master published reasons and made a fiat that the 3rd party Statement of Claim be struck out which in effect was a refusal of leave to file the version handed to him on 21 September.
On 8 November 1999 the defendant appealed against the order of the Master. That appeal came before me on 1 December 1999. At the outset of the hearing I queried what was the version of the Statement of Claim upon which the Master had ruled. The defendant’s counsel then handed me a copy of what he said was the version which had been put before the Master. The appeal was conducted on the basis of that version. I reserved my decision.
In the course of preparing my reasons I found on the Court file the version of the Statement of Claim which had been handed to the Master on 21 September. This version differed materially from the version which was handed to me in a number of important respects. I re-opened the hearing of the appeal. The defendant’s counsel informed me that inadvertently his instructing solicitor had handed him an unsettled draft of the proposed version and he had handed it to the Master believing that it was the settled version. At the hearing before the Master both counsel believed that the Master had the settled version, and it was the settled version which had been handed to me on the appeal. It was agreed that I would treat the argument before me on the appeal as an application by the defendant for leave to file the settled version of the Statement of Claim as the argument before me had proceeded on that version.
On 15 December I published reasons in which I indicated that while I found that the latest version of the Statement of Claim did disclose a reasonable cause of action various parts of it were objectionable as being embarrassing, ambiguous and the like. A more detailed history of the matter is contained in the reasons which I published on that day, Jud No [1999] SADC 165, unreported.
On 16 December I heard a further oral application by the defendant to file a revised version of the settled Statement of Claim. There was argument whether it satisfactorily addressed the deficiencies which I had raised in my published reasons. I refused leave to file that Statement of Claim, but I ordered that the 3rd party make discovery of certain documents which would assist the defendant in pleading yet a further, and hopefully, an acceptable version of the Statement of Claim. On that day I made orders on the Notice of Appeal as follows:
“1. That the appeal be dismissed.
2. That the defendant pay to the 3rd party its costs of the appeal.
3...... Question of whether those costs are to be paid by the defendant’s solicitors personally is adjourned. ........”
The 3rd party did not apply for costs on a solicitor and client basis. I made a separate order for the costs of the application of 8 June 1999 relating to the various proceedings before Masters for leave to file a further 3rd party Statement of Claim. Paragraph 3 of the order on the appeal was confined to the costs of the appeal. I made it of my own volition. In doing so I was acting under Rule 101.06(1)(a) which provides:
“(a).. Where in a proceeding costs are incurred improperly, or without reasonable cause, or arise because of undue delay, neglect or other default, the Court may, when the solicitor whom it considers to be responsible, whether personally or through a servant or agent, is before the Court ....... make an order:
.......
(ii)... directing the solicitor to repay to his client costs which the client has been ordered to pay to any other party.”
I was not seeking to act under either s42 of the District Court Act or any inherent jurisdiction of the Court.
When the matter came before me on 22 December 1999 counsel for the defendant’s solicitors opposed the making of any order. The matter was adjourned for notice to be given to the insurer of the defendant which was instructing the defendant’s solicitors.
When the matter again came before me on 29 February 2000 counsel for the defendant’s solicitors intimated that notice had been given to the insurer and it had declined to take any independent legal advice on the matter or to become involved.
If the defendant’s solicitors are to be subject to an order under R101.06(1)(a), it can only be because the costs were incurred by their “neglect”. R101.06(2) gives limited examples of default for the purposes of R101.06(1)(a), which are not relevant to the circumstances of this matter, but (2) does indicate that “neglect” must involve culpability. In relation to “neglect” in the context of the Victorian Appeal Costs Fund Act 1964 McDonald J said in Grimwade (1990) 51 A Crim R 470 at 476:
“’Neglect’, as with the word ‘default’ is passive in its quality. It is to be interpreted in the context of s18 of the Act as something which results in a trial being discontinued and a new trial being ordered. I am of the view that within that context, the appropriate and proper meaning to be given to the word ‘neglect’ is to fail to perform a duty or obligation or to omit or fail through carelessness or negligence, to do something.”
That definition is also appropriate for R101.06(1)(a). Counsel argued that more than ordinary neglect or negligence was required because it was qualified in the rule by the word “undue”. I do not accept this. “Undue” in (a) only relates to delay and not to neglect or default. Delay in itself need not necessarily be culpable, but undue delay must be culpable. As R101.06(2) only refers to ordinary culpability it would be unduly limiting the scope of “neglect” or “default” in R101.06(1)(a) to limit them to undue neglect or undue default. The underlying purpose of R101.06(1)(a) is best served by giving “neglect” its ordinary meaning unfettered by “undue”. This is consistent with the English authorities of D v D [1963] 1 All ER 602 at 605 and Jakeman v Jakeman [1963] 3 All ER 889 where it was held that ordinary negligence was sufficient under the equivalent of (1)(a) in contrast to the requirement for serious or gross negligence under the similar inherent jurisdiction of the Court.
The defendant’s solicitors owed an obligation to the Court to ensure that the document which was handed to the Master was the version of the Statement of Claim on which the application was to proceed and the same version which had been given to the 3rd party. It is an important obligation because the informality which regularly occurs in chamber applications of acting upon revised documents being handed up at the last minute without requiring adjournments and insisting upon fresh applications and supporting affidavits depends upon the solicitor handing up the document ensuring that it is the correct version which is given to the Court. Here there were at least five versions of the Statement of Claim in existence, and probably more if drafts are included. If there had been something on the face of the document or in its contents to show that it was only a draft it is likely that the Master would have noticed this, and, while it may have caused some inconvenience, it would not have had the substantial consequences that resulted here. In my time in legal practice I always understood it was a fundamental rule of preparing of documents that any document which was only a draft was to be clearly marked as such to avoid subsequent confusion between the draft and the final copy. No explanation was put forward as to why the copy in question was not marked as a draft. I have no doubt that a reasonably competent solicitor in the circumstances would have ensured that this document was clearly labelled as a draft, and, if he was aware that there were unlabelled drafts in existence, he would have ensured that the document handed up was not such an unlabelled draft.
Accordingly, I find that there was “neglect” within the meaning of R101.06(1)(a) in the wrong version of the proposed Statement of Claim being handed to the Master.
Counsel for the defendant’s solicitors further argued that if there was neglect no real damage flowed from it. I do not accept this. The likelihood is that if the proper version of the Statement of Claim had been put before the Master he would have treated it in a similar way that I treated it. I do not accept that there would still have been an appeal from the Master’s order if he had considered the correct version of the Statement of Claim. The effect of this is that the hearings before me on 1, 3, 15 and 16 December on the Notice of Appeal were only necessary because of the neglect of the defendant’s solicitors.
The order of the Court is:
1...... That the defendant’s solicitors are to repay to their client the costs which the defendant was ordered to pay to the 3rd party by my order of 16 December on the Notice of Appeal.
No order as to the costs of the proceedings on 22 December 1999 and 29 February 2000 and of this order.
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