George v Biggs (No 2)

[2015] NSWDC 43

District Court

New South Wales

Medium Neutral Citation:

George v Biggs & Anor (No 2) [2015] NSWDC 43

Hearing dates:

2 April 2015

Date of orders:

17 April 2015

Decision date:

17 April 2015

Jurisdiction:

Civil

Before:

Levy SC DCJ

Decision:

1.  The interim stay previously ordered to expire at 4.00pm on 2 April 2015 is extended to 4.00pm on Monday 25 May 2015 pending any further order of the Court of Appeal in the event that a notice of appeal is filed;

2.  In the event that no notice of appeal is filed before 25 May 2015, the stay the subject of Order 1 will discharge;

3.  No later than 28 days after today’s date, the defendants are to pay the witness expenses of Professor Havas in the assessed sum of $31,350 including GST to compensate him for the losses he has incurred in complying with the subpoena served on him on 29 August 2014;

4.  The costs of the plaintiff’s notice of motion filed on 1 April 2015, by which Order (3) above was sought, are to be paid by the defendants on the ordinary basis unless otherwise ordered;

5.  Liberty to apply on 7 days notice if further or other orders are required.

Catchwords:

PRACTICE & PROCEDURE – stay pending appeal; COSTS – expert witness expenses – defendants disputed expenses claimed by plaintiff’s expert in complying with subpoena issued by defendants requiring the expert to attend the trial for cross-examination – application granted for the expenses of an expert witness to be paid by the defendants

Legislation Cited:

Civil Procedure Act 2005, s 3, s 16, s 56, s 58(1), s 62, s 97, s 98
Legal Profession Act 2004, s 364
Uniform Civil Procedure Rules 2005, r 31.31, r 33.11

Cases Cited:

Alexander v Cambridge Credits Corporation Limited 2 [1985] 2 NSWLR 685
Danieletto v Khera (1995) 35 NSWLR 684
Franklins Pty Ltd v Endeavour Holdings Pty Ltd [2013] NSWSC 1204
Foyster v Foyster Holdings [2003] NSWSC 881
George v Biggs & Anor [2015] NSWDC 11
J Aron Corporation v Newmont Yandal Operations [2004] NSWSC 996
Re Dovico; Ex Parte Mayne Wetherall [2012] NSWSC 823

Category:

Procedural and other rulings

Parties:

Sandra George (Plaintiff)
Nigel Biggs (First defendant)
St Vincent's Hospital Sydney Limited (Second defendant)

Representation:

Counsel:
Mr J Anderson (Plaintiff)
Ms L Young (Defendants)

Solicitors:
Martin Bell & Co (Plaintiff)
TressCox Lawyers (Defendants)

File Number(s):

2012/372183

Publication restriction:

None

Judgment

Table of Contents

Background	[1] – [2]
Application for extension of interim stay	[3] – [7]
Application for payment of witness expenses	[8] – [18]
Factual evidence adduced on the motion	[19] – [68]
Submissions of the parties	[69] – [74]
Relevant legislation and authorities	[75] – [81]
Consideration	[82] – [117]
Disposition	[118]
Costs	[119]
Orders	[120]

Background

1. On 24 February 2015, the principal judgment was delivered in these proceedings involving professional negligence, resulting in the entry of judgment for the plaintiff against both defendants in the sum of $330,999.85, with the plaintiff’s costs to be paid by the defendants: George v Biggs & Anor [2015] NSWDC 11.

2. At that time, on the application of the defendants, an order was made for an interim stay of that judgment until 4.00pm on 2 April 2015, in anticipation of a further listing scheduled to take place on that day for an extension of that interim stay. The listing on 2 April 2015 was also arranged because the plaintiff had earlier foreshadowed an application for a special order for costs. These reasons deal with those matters.

Application for extension of interim stay

3. At the hearing on 2 April 2015, on the issue of an extension of the interim stay, the defendants tendered a copy of a notice of intention to appeal, the original of which was filed on 15 March 2015. At the time of the hearing of the application for an extension of the stay, the defendants indicated that specific grounds of appeal had not yet been identified or formulated.

4. In those circumstances, the plaintiff resisted an extension of the interim stay on the basis that she was entitled to the fruits of the victory she had achieved in the litigation: Alexander v Cambridge Credits Corporation Limited 2 [1985] 2 NSWLR 685.

5. Some evidence was given at the trial to the effect that the plaintiff was without significant financial means. It could therefore be inferred, but not necessarily compellingly so, that if the plaintiff was to be paid the proceeds of the litigation, and dissipated part or all of those proceeds, the defendants might be placed in the position of being unable to recover those monies in the event of a successful appeal.

6. As no grounds of appeal had been filed by 2 April 2015, it was determined that the interim stay ordered on 24 February 2015 should be continued until 4.00pm on 25 May 2015, by which time specific grounds of appeal would be expected to be available and filed in appeal proceedings.

7. In those circumstances, any application for a continuation of the interim stay could then be evaluated and made the subject of further orders by the Court of Appeal, if considered appropriate at that time. In the event an appeal was not initiated by 25 May 2015, the extension of the interim stay would then be discharged. On 2 April 2015 orders were made and entered to those effects.

Application for payment of witness expenses to an expert retained by plaintiff

8. Following the trial, and before the principal judgment was delivered, a dispute emerged concerning the amount payable by the defendants for witness expenses due to Professor Thomas Havas, an expert witness who had been retained by the plaintiff’s solicitor, and who had been subpoenaed by the defendants to attend the trial for cross-examination on behalf of the defendants.

9. The timing of the attendance of Professor Havas at the hearing to give evidence required that a series of timetabling adjustments be made to accommodate the progress of the trial, which had become complicated. This was due to a number of factors that can be conveniently characterised as the accidents occurring in the course of litigation and having the effect of disrupting the plans of the parties concerning the progress of the litigation, including the timing of the calling of witnesses. This had the effect of causing considerable inconvenience to the professional schedule of Professor Havas and to his patients.

10. Those circumstances were influenced by the inadequacy of the earlier indicated time estimate for the trial, the time taken for the evidence of the plaintiff to be completed, including through an interpreter, an interruption to the continued availability of the interpreter, and the practical need to ensure that all factual evidence had been called before the respective experts gave their evidence.

11. In those circumstances, the stated requirement in a subpoena served by the defendants on Professor Havas requiring him to attend on the first day of the hearing, namely 21 October 2014 (Exhibit “A”), necessarily had to be changed on a number of occasions.

12. A series of ensuing communications then unfolded between the respective legal representatives of the parties and Professor Havas before he was eventually called to give his evidence. The defendants have subsequently disputed the witness expenses claimed by Professor Havas.

13. In order to resolve the issue of Professor Havas’ witness expenses, in the course of these reasons it is necessary to review the detail of the communications referred to in the preceding paragraphs.

14. In the course of those communications Professor Havas was required to cancel a considerable number of his pre-arranged professional engagements and commitments, which included operations, other procedures, meetings, rounds and consultations. He also had to re-familiarise himself with the matters at issue in the proceedings before he gave his evidence. He ultimately gave his evidence commencing at 2.00pm on 31 October 2014, which was the eighth day of the trial. His evidence was completed on that day.

15. As a consequence of those events, Professor Havas incurred a wasted day on 21 October 2015. He was also obliged to prepare for his evidence on 22, 23 and 31 October 2015, including conferences with legal practitioners, and he allocated 4 hours of his time for giving evidence on 31 October 2015, including travelling time.

16. Professor Havas’ initial tax invoice for those services, dated 3 November 2014, was in the amount of $28,500. That amount was broken down into the identified component categories, namely consultations with legal representatives, preparation, travelling, and time occupied giving evidence.

17. It was common ground that the abovementioned tax invoice issued by Professor Havas required an amendment to reflect the impact of the GST. During the hearing of the present application, a revised tax invoice dated 2 April 2015 was obtained from Professor Havas in the sum of $31,350, which specified the same services stated in his first invoice, but added a GST component of $2850. The other difference between the original and the revised tax invoices from Professor Havas was that whereas the former tax invoice had been addressed to the plaintiff personally, the revised tax invoice was addressed to the solicitors for the defendants: Exhibit “B”.

18. Exhibit “B” was accompanied by a letter from Professor Havas that was obviously mis-dated 1 April 2015. Nothing of significance turns on that error. The letter stated that in respect of the times which were the subject of his claim for expenses, he had not generated [other] income in the time in which he had spent complying with the subpoena.

Factual evidence adduced on the motion

19. The evidence in support of the motion seeking payment of the expenses of Professor Havas was in the form of affidavits and some supplementary documents to clarify matters. Those affidavits, and the attached correspondence, revealed the details of the background circumstances of behind the scenes arrangements leading up to the attendance of expert witnesses, including Professor Havas at the trial.

20. On 1 April 2015, Professor Havas swore an affidavit deposing as to the factual events that occurred between the service of the subpoena upon him and the later emergence of the dispute over his entitlement to payment of his expenses.

21. On 29 August 2014, the solicitor for the defendants served Professor Havas with the subpoena to give evidence at the trial: Exhibit “A”. The subpoena required Professor Havas to attend at the commencement of the trial on 21 October 2014.

22. At the time of service of the subpoena, Professor Havas was provided with $50 conduct money for that purpose. This was presumably intended to cover his travelling expenses.

23. By paragraphs 6 and 7 of the formal parts of the subpoena, Professor Havas was advised that he may apply to the court for an order that the issuing party for the subpoena pay an amount in addition to conduct money and any witness’ expenses “in respect of the loss or expense” in complying with the subpoena. The subpoena also warned the recipient that a failure to comply with the subpoena without lawful excuse was a contempt of court which may lead to an arrest pursuant to s 97 of the Civil Procedure Act 2005.

24. The remaining affidavits relating to the present application were sworn by solicitors for the respective parties. The first affidavit was sworn by Mr Martin Bell, the solicitor for the plaintiff, on 30 March 2015. The second was an affidavit from Ms Caroline Blair, a solicitor for the defendants, sworn on 2 April 2015. Ms Blair had assumed responsibility for the defendants’ solicitor’s file from the date of delivery of judgment on 24 February 2015, which was well after the disputed events in question.

25. All of those affidavits were read. None of the deponents were required for cross-examination on the contents of the affidavits, or on the extensive exhibited correspondence.

26. On 29 August 2014, at the time the subpoena was served, by the accompanying letter, Professor Havas was advised by the solicitor for the defendants that the plaintiff’s solicitor who had engaged him as an expert, was the appropriate point of contact for him to try and minimise any inconvenience to himself concerning the need for him to attend the trial. At that time, Professor Havas was advised that the defendants would be responsible for his reasonable witness fees incurred in relation to his obligation to attend court pursuant to the subpoena. At that time there was no indication given to him of what was considered by the defendants to be reasonable expenses, or by Professor Havas as to what his expenses were likely to involve.

27. Earlier, as at 13 May 2014, which was after the hearing date had been fixed, and well before the service of the defendants’ subpoena, Professor Havas’ secretary had indicated to the plaintiff’s solicitor that he was quite busy and would need to be given some notice in order to cancel patients, operating appointments and the like.

28. On 4 September 2014, which was 6 days after the subpoena had been served, and 7 weeks before the trial was due to commence, Professor Havas’ secretary enquired as to whether he would be required on 21 October 2014. She was advised that there had been no change to the arrangements required by the terms of the subpoena.

29. On 23 September 2014, Professor Havas’ secretary again enquired of the solicitor for the plaintiff as to whether he would be needed on 21 October 2014, and for the ensuing days set aside for the hearing. The plaintiff’s solicitor made a note of Professor Havas’ preferred days, but in those discussions, Professor Havas was not released from the terms of the subpoena. Only the defendants’ solicitor could have given him such a release in those circumstances.

30. On 9 October 2014, which was 12 days before the hearing was due to commence, Professor Havas’ secretary rang the solicitor for the plaintiff to make further enquiries about the matter. At that time, she was informed that the question of whether there would be joint expert evidence at the trial remained unresolved, and no firm indication would be given as to whether Professor Havas could be released from the terms of the subpoena on any of the days that had been set aside for the trial.

31. On 13 October 2014, the solicitor for the defendants made a telephone call to Professor Havas’ secretary who was at that time advised that it was not known when he would be called to give his evidence. The note made by the solicitor for the defendants as to what was told to Professor Havas’ secretary was “best guess Wednesday, but pl may have a better idea”.

32. On 14 October 2014, Professor Havas’ secretary sent an email to the solicitor for the plaintiff in the following terms informing him of his professional commitments:

“Further to your conversation with Professor Havas I am instructed to provide you with the following;

•   On Wednesday next week Professor Havas is consulting at Bondi Junction. In the morning he has 24 patients booked and in the afternoon he is running a specialist Voice Clinic with 8 professional voice users, most of whom have booked their appointment months in advance and are coming form (sic) all parts of Sydney and the State.

•   On Thursday he has a full operating list at the Prince of Wales Private Hospital and at this point has 7 cases booked

•   At 3pm at the conclusion of his operating list he is doing a Boutique Clinic at Bondi Junction, this involves patients with complex or quaternary referral problems, each being 35-40 minutes of consultation time, he has 4 patients booked.

•   On Friday he is consulting at his Kogarah rooms all day and at this stage has 26 patients booked in the morning and 16 patients booked in the afternoon.

I am sure you will understand that the surgical patients have all made arrangements to have time off work for there (sic) operation and convalescence and it would be extremely unreasonable to cancel them.

With regards to rescheduling Boutique Clinics and or general consulting clinics, this would involve a vast amount of our clinical time and would incur significant financial loss for the practice.

If it became the case that this was necessary we could of course give you audited figures to what our losses were.

Again I stress the importance of knowing exactly when Professor Havas will be required so we can minimise disruption to the health and well being of our patients.”

33. On 15 October 2014, appropriately, the solicitor for the plaintiff sent a copy of the above communication received from Professor Havas’ secretary to the solicitor for the defendants, enquiring of the defendants’ intentions concerning the evidence of Professor Havas. The obvious thrust of that letter concerned clarification of when Professor Havas would be required to give his evidence.

34. On 17 October 2014, the solicitor for the defendants replied to the plaintiff’s solicitor indicating that the plaintiff’s solicitor was in a better position to advise Professor Havas as to when he would be required to give evidence, so that Professor Havas could make appropriate arrangements. At that time the letter from the solicitor for the defendants also stated:

“…

With respect to Dr Havas’ fees for attendance, our client will be responsible for reasonable witness fees incurred in relation to his obligation to attend court pursuant to the subpoena, not compensation for loss of income from patient appointments, which is what his letter to you appears to suggest. You may want to clarify the legal position him (sic).

We look forward to confirmation from you as to when you expect to call Dr Havas in the plaintiff’s case.

…”

35. With the benefit of hindsight, it is unfortunate that the issue was not brought to the attention of the court for resolution at that stage as appropriate directions and indications could have been given that may well have avoided the present dispute.

36. In the described events, Professor Havas was not called as a witness on the first day of the trial. In an action for alleged professional negligence, it would have been impractical and undesirable to have taken his evidence at that time without having first heard the factual evidence.

37. At 1.41pm on 21 October 2014, as a result of the morning’s proceedings in court, the plaintiff’s solicitor advised Professor Havas by email that the earliest time he would be required would be on the following Thursday. Professor Havas was asked to indicate his available times on Thursday, Friday, and thereafter for the purposes of informing the court for making appropriate arrangements.

38. At 2.03pm on 21 October 2014 the solicitor for the plaintiff sought confirmation from Professor Havas as to his availability to give evidence at 2.00pm on Thursday 23 October 2014.

39. At 4.03pm on 21 October 2014, the solicitor for the plaintiff sent an email to Professor Havas confirming the proposal for his evidence to be called at 2.00pm on 23 October 2014. That email advised the details of the location and suggested that a tax invoice should in due course be sent to the defendants’ solicitor in respect of the attendance at court.

40. At 5.43pm on 21 October 2014, the solicitor for the plaintiff informed the solicitor for the defendants by email that Professor Havas’ evidence was scheduled to commence at 2.00pm on 23 October 2014.

41. On 22 October 2014, it became plain that owing to the progress of the hearing, the evidence of Professor Havas would not proceed on 23 October 2014 according to the revised arrangements. An attempt was made to contact Professor Havas to inform him of this fact. A message to that effect was left for him.

42. At some time on the morning of Thursday 23 October 2014, the plaintiff’s solicitor informed Professor Havas that he would not be required to give evidence on the following day as had been planned. This was due to the evolving timetabling issues in the trial. The matter at issue in this regard was that the factual evidence still had to be completed before the taking of expert evidence. In the course of those events an apology was given to Professor Havas for the inconvenience that had arisen due to the cancelled arrangements.

35. At 10.52am on 23 October 2014, understandably, and with some frustration, Professor Havas sent the following email to the plaintiff’s solicitor:

“We received a phone call from your office at 6.41PM last night...hardly the afternoon essentially informing me this morning that I would not be required this afternoon as arranged.

Thus far I have set aside four hours on Tuesday (21 October}, shortened my operating list and set aside four hours today (Thursday 23 October) and spent two hours reviewing the material and case notes last night in readiness for court today.

The situation is complicated by the fact that a lawyer from Tress Cox Maddox (sic) contacted me and informed me that I would NOT be required to attend court... !!!!!

What exactly is going on?

If Tress Cox Maddox (sic) don't want / need me who does...?

Until I get clarification /communication and certainty I am reluctant to commit any more time and more importantly to inconvenience any more patients than the twenty odd already considerably inconvenienced by cancellation and rescheduling of their appointments/ operations.

I await your expeditious reply.”

44. At either 2.53pm or 3.20pm on 23 October 2014 (the headers on the emails may not have been accurate), the solicitor for the plaintiff replied to Professor Havas’ email cited in the preceding paragraph (albeit under cover of an incorrect case heading reference) confirming that because factual evidence had to be taken before expert evidence was given, no definite indication could be given to him as to when he would be called as a witness. The plaintiff’s solicitor reiterated to Professor Havas that as it was the defendants who required him for cross-examination, he should expect to be contacted concerning suitable arrangements for his attendance for that purpose when an indicative time became sufficiently clear.

45. At 3.43pm on 23 October 2014, Professor Havas sent an email to the solicitor for the defendants seeking clarification of the requirements of him as the plan for him to give evidence that day had been cancelled the previous afternoon, and it had been indicated to him he would be required the following week. Professor Havas attached his correspondence with the plaintiff’s solicitor in that regard. He also indicated at that time that he had already set aside 10 hours of his time, the cost of which he identified as being $1500 per hour plus GST.

46. At 5.29pm on 23 October 2014, the defendants’ solicitor replied to Professor Havas, stating, inter alia: “The defendants are liable for reasonable witness expenses as indicated on the subpoena.” At that time the defendants’ solicitor correctly indicated to him that it was difficult to make reliable predictions as to the timing of the evidence. There was no mention of any daily or hourly rates in that reply, and no clear indication was given that Professor Havas’ cited hourly rate would be disputed. I shall return to this matter in the consideration of the issues calling for decision.

47. Discussions then ensued concerning a plan for Professor Havas to be called to give his evidence on 31 October 2014.

48. On 29 October 2014, Professor Havas’ secretary wrote to the defendants’ solicitor in the following terms:

“On Friday 31st October 2014 Professor Havas' schedule is as follows;

•   6am round at Prince of Wales Hospital

•   7am registrar meeting at Prince of Wales

•   8am consulting at St George all day, with 26 patients in the morning and 24 in the afternoon

It would take Professor Havas at least 1 hour to get to court and the most convenient time is 2pm Friday, which will still involve cancelling 4-5 patients in the morning and all of the afternoon patients.

What you have to understand, is that every single patient has taken time off work or school to come and see us. If you let Professor Havas know tomorrow morning it only gives us 24 hours to notify and reschedule them. It is imperative that you do this as some are travelling from the country.

You must be mindful of the fact that this will cause enormous inconvenience to a large number of people (at short notice) and this will be the third time that we have rescheduled patients/operations to facilitate helping the court.”

49. Later on 29 October 2015, the defendants’ solicitor confirmed to Professor Havas that he was required to give his evidence at 2.00pm on 31 October 2015. On 30 October 2014, that indication was again confirmed to Professor Havas’ rooms in a telephone call and in an email from the defendants’ solicitor. The evidence of Professor Havas was then given and completed on the afternoon of 31 October 2015.

50. On 3 November 2014, Professor Havas sent his tax invoice in the sum of $28,500 to the plaintiff’s solicitor, although on its face, that tax invoice was addressed to the plaintiff.

51. On 5 November 2014, the plaintiff’s solicitor wrote to Professor Havas suggesting that his tax invoice should be directed to the solicitor for the defendants, as the subpoena had been issued by the solicitor for the defendants requiring him for cross-examination. That tax invoice then made its way to the solicitor for the defendants.

52. On 12 November 2014, in a telephone conversation between the solicitor for the defendants and Professor Havas’ secretary, the solicitor for the defendants advised that Professor Havas’ tax invoice had been sent to the client, Treasury Managed Fund, for instructions.

53. On 14 November 2014, the solicitor for the defendants wrote to Professor Havas indicating a preparedness to pay him $790 per hour for 5 hours in respect of his evidence given on 31 October 2014, namely $3950. The letter was in the following terms:

“We refer to your invoice dated 3 November 2014 in the sum of $28,500. We note that you were required for cross examination at 2pm on Friday 31 October 2014. Your evidence concluded at approximately 3.45pm on 31 October 2014.

We confirm that our client is responsible for reasonable witness fees incurred in relation to your obligation to attend court pursuant to the subpoena. However, this is not subject to any other fee arrangements which you may have entered into with the plaintiff’s solicitors and is not compensation for loss of income.

The Law Society of NSW and the Australian Medical Association (NSW) Limited have released a revised statement of medico-legal relations that includes an up to date schedule of allowances and suggested fees. That schedule provides an allowance of a maximum of $790 per hour.

Accordingly our client offers to pay you 5 hours for your evidence on 31 October 2014 at the suggested rate of $790 per hour, being a total of $3,950, for your compliance with the subpoena.”

54. On 15 November 2014, Professor Havas pressed the solicitor for the plaintiff for payment of his tax invoice on the basis that the plaintiff’s solicitor had not referred him to the defendants’ solicitor in respect of the arrangements.

55. I do not regard the direction of that communication to be significant because the terms of the subpoena issued to Professor Havas by the defendants’ solicitor were clear. As indicated at paragraph [26] above, the solicitor for the defendants had invited Professor Havas to liaise with the solicitor for the plaintiff as to when he would be required. In that regard, I consider that the solicitor for the plaintiff should be seen as being the agent of the defendants for such communications. In my view, nothing of significance turns on the distinction.

56. On 18 November 2014, Professor Havas sent a letter to the solicitor for the defendants in response to the defendants’ solicitor’s letter dated 14 November 2014. That response was in the following terms:

“I am in receipt of your communication dated, 14th November 2014.

Needless to say I am extremely disappointed.

I have no need to remind you of what a Senior/Queens Counsel charges for an hour of their time.

My experience, expertise and seniority are certainly to that level.

At every stage, I made it clear that my hourly rate for attending court is $1500; this does not compensate me for lost income but I think is reasonable considering the expertise and experience that I bring.

In my view, it is imperative that Medical Experts of high standing and experience give opinion in cases, to ensure that plaintiffs and defendants have access to the highest levels of medical opinion, issued with impartiality and integrity. For this to take place these experts need to be treated with equity and respect.

It is a matter of record, that upon instruction I cancelled operating at the Prince of Wales Hospital, operating at the Prince of Wales Private Hospital and consulting in my Bondi Junction office, to facilitate availability for this case.”

57. On 18 November 2014, Professor Havas also took a conciliatory and practical course by asking the solicitors for the respective parties to mutually work out appropriate compensation for his time.

58. On 21 November 2014, there was a telephone discussion between a solicitor on behalf of the defendants and Professor Havas, in which Professor Havas was invited to make a complaint if the matter of his disputed expenses could not be resolved on terms satisfactory to him.

59. By 25 November 2014, the outstanding matter of Professor Havas’ expenses had not been resolved. On that date, the solicitor for the plaintiff wrote a very detailed letter to Professor Havas summarising the events surrounding the timing of his evidence and the communications which related to those events. Amongst other matters, Professor Havas was advised that:

“… As a matter of protocol, we were acting as the go between yourself and TressCox in organising your attendance for cross-examination. This was largely as a courtesy given your role as an expert witness in the plaintiff’s case.

At every stage of these dealings, we attempted to ensure your convenience was met. Relevantly, you were informed of any developments in relation to your attendance at court as soon as practicable. We also ensured the court was abreast of your availabilities at all relevant times. Any change in schedule of the court was wholly unanticipated and beyond our control. These are what His Honour described as 'accidents of litigation.'´”

60. That letter to Professor Havas from the solicitor for the plaintiff then went on to conclude as follows:

“While exhaustively stated above, we confirm the following:

i.   The plaintiff has never required you to attend court to give evidence;

ii.   The plaintiff has always been content to rely on your reports;

iii.   The subpoena to attend to give evidence was issued by TressCox Lawyers on behalf of the defendants for the purpose of cross-examination;

iv. It (sic) the party who required your attendance at court who must procure this attendance and reimburse reasonable expenses for compliance, pursuant to rule 31.30 of the UCPR. Relevantly, this is not the plaintiff;

v.   As a matter of standard practice, we were acting as an intermediary between TressCox and yourself in organizing your attendance. This was largely as a courtesy given your role as an expert witness in the plaintiff’s case;

vi.   At all stages of these dealings, you were informed of any developments in relation to your attendance at court as soon as practicable;

vii.   Any changes to this schedule were unforeseeable and largely beyond our control;

viii.   We attempted to meet your convenience at every stage of the proceedings as the go between.

That TressCox has only elected to pay for your court appearance, travel time and preparation is regrettable, but we trust you understand the requirements of the regulations and will direct all further correspondence to them in relation to this matter. We certainly would not seek to justify the conduct of those at TressCox and don't. You should take up your concerns with them.

If TressCox fail to act reasonably, please let us know and we will be glad to take this matter up with the court.”

61. At that time, the plaintiff’s solicitor advised Professor Havas that it was regrettable that he had only been offered compensation for travel time and preparation. In that context it was suggested to him that if he could not resolve the issue with the defendants’ solicitor, the plaintiff’s solicitor would be prepared to take the matter up with the court, the inference being that this would be on behalf of Professor Havas.

62. By 26 November 2014, Professor Havas had taken up the suggestion that he make a complaint to the Legal Services Commission concerning his unresolved expenses. On that date the solicitor for the defendants provided the solicitor for the plaintiff with a courtesy copy of Professor Havas’ undated letter of complaint in which he reiterated the history of the matter in dispute.

63. On 3 December 2014 the solicitor for the plaintiff sent the following letter to the solicitor for the defendants:

“Thank you for your letter of 26 November 2014.

Given that you issued the Subpoena, that you maintained your need to call Profess Havas and the manner in which the trial proceeded, your offer to Professor Havas in the circumstances seems less than reasonable.

In the circumstances, it causes us professional embarrassment as Professor Havas has obviously incurred considerable expense at your hands.

We would suggest that this matter be dealt with by the Court to avoid further unnecessary consternation.”

64. On 9 December 2014, the solicitor for the defendants wrote to Professor Havas in the following terms:

“We confirm that our client is responsible for reasonable witness fees incurred in relation to your obligation to attend court pursuant to the subpoena.

Our client does not intend or purport to compare fees charged across various industries and specialisations except to say that your attendance was in the capacity of an expert witness, not as a Senior Counsel or Queens Counsel and the two are not directly comparable. This is in no way suggesting that one skill set is more valuable than the other nor is it an attempt to diminish the experience expert witness (sic) bring to proceedings, but rather simply highlight that an appearance as a witness does not perform the same functionary role in the proceedings as counsel, and our client does not consider it liable to pay those rates.

Whilst not binding the AMA and NSW Law Society provide an upper rate of $790 per hour for expert witness fees.

Accordingly our clients repeat the offer to pay you 5 hours for your evidence on 31 October 2014 at the upper rate of $790 per hour, being a total of $3,950, for your witness fees in complying with the subpoena.”

65. That suggestion was unsatisfactory to Professor Havas.

66. On 10 December 2014 the plaintiff’s solicitor wrote to the solicitor for the defendants indicating he intended to seek an order from the court for payment of an appropriate sum in respect of Professor Havas’ tax invoice dated 3 November 2014.

67. On 6 January 2015, Professor Havas wrote to the solicitor for the defendants indicating he was keen to resolve the dispute and offered to participate in a mediation to seek to settle the fee dispute without further escalation. It is not known whether or not a mediation of the dispute took place, but the dispute remained unresolved. Subsequently, the solicitor for the plaintiff filed the notice of motion under present consideration.

68. I was informed that as at the time the motion was heard, a draft bill of costs had been prepared, but had not yet been filed for assessment. I was also informed that the plaintiff’s bill of costs did not include any claim for Professor Havas’ expenses in relation to him giving evidence in the proceedings as this was considered to be the responsibility of the defendants who had issued him with a subpoena.

Submissions of the parties

69. The defendants did not seek to cross-examine Professor Havas on either his affidavit, his respective tax invoices, the related correspondence, or on the question of the reasonableness of his claimed expenses.

70. Instead, the defendants argued that the plaintiff had no standing to make the application in respect of Professor Havas’ expenses, arguing that Professor Havas was the proper person to bring such an application.

71. The defendants further argued that the claim by Professor Havas was in essence properly characterised as an application for a specified gross sum instead of costs pursuant to s 98(4)(c) of the Civil Procedure Act 2005.

72. The defendants also argued that Professor Havas has suffered no loss because his patient commitments had been rescheduled. It was further argued that the reasonableness of the amount he had claimed was a matter in issue.

73. The defendants submitted that for the above reasons, the application for payment of Professor Havas’ witness expenses should fail and that instead, the matter should be dealt within the course of a costs assessment.

74. In essence, the plaintiff argued to the contrary of each of those propositions.

Relevant legislation and authorities

75. In order to resolve the present dispute it is necessary to consider the terms of the relevant legislative and regulatory framework. The definition of “costs” which appears in s 3 of the Civil Procedure Act 2005, is as follows:

“3 Definitions

(1) In this Act:

...

"costs" , in relation to proceedings, means costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration.

…”

76. Section 98 of the Civil Procedure Act 2005, which confers a wide discretion on the court on costs matters, relevantly provides:

“98 Courts powers as to costs

(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

(a) costs up to, or from, a specified stage of the proceedings, or

(b) a specified proportion of the assessed costs, or

(c) a specified gross sum instead of assessed costs, or

(d) such proportion of the assessed costs as does not exceed a specified amount.

…”

77. Uniform Civil Procedure Rules 2005, r 33.11 relevantly provides as follows:

“33.11 Costs and expenses of compliance

(1) The court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.

(2) If an order is made under subrule (1), the court must fix the amount or direct that it be fixed in accordance with the court’s usual procedure in relation to costs.

(3) An amount fixed under this rule is separate from and in addition to:

(a) any conduct money paid to the addressee, and

(b) any witness expenses payable to the addressee.”

78. The effect of UCPR r 33.11 is that the court is empowered to make orders to deal with the disputed amount of Professor Havas’ witness expenses if satisfied that the amount claimed represents reasonable loss or expense in complying with the subpoena: Re Dovico; Ex Parte Mayne Wetherall [2012] NSWSC 823, at [7]. The effect of s 3(1) and s 98 of the Civil Procedure Act 2005, does not require that power to be read down to a narrow meaning.

79. That power should not be construed “in any narrow fashion”: J Aron Corporation v Newmont Yandal Operations [2004] NSWSC 996, at [22]. The proper administration of justice requires that a narrow construction of the power should be avoided: Danieletto v Khera (1995) 35 NSWLR 684, at p 686. In that case, at p 688 the rationale for a wide and beneficial interpretation of the power was identified as follows:

“… A law which entitled a party to conscript the time and attention of others without paying for it would be oppressive. It would also be very poor policy as it would tend to generate resistance to the ordinary administration of justice.”

80. The function of the rule is to compensate the applicant seeking the relief for actual loss or expense incurred: Franklins Pty Ltd v Endeavour Holdings Pty Ltd [2013] NSWSC 1204, at [12].

81. The notion of loss includes reasonable reimbursement for time spent in complying with the subpoena where that time would otherwise have been occupied in productive activities: Foyster v Foyster Holdings [2003] NSWSC 881, at [14].

Consideration

82. The paragraphs that follow set out my consideration of the arguments relied upon by the defendants on the question of the disputed expenses claimed by Professor Havas.

The standing of plaintiff’s solicitor to make the application

83. As to the argument by the defendants concerning the standing of the plaintiff to make an application for the payment of the expenses due to Professor Havas, as distinct from Professor Havas making the application himself, in the circumstances, I consider that argument involves a distinction without a material difference.

84. The true matter at issue here is the non-payment of Professor Havas’ outstanding tax invoice. In my view it makes no substantive difference as to who filed the motion under present consideration, or who made the formal application to the court to resolve the issue. In that regard, it appears that the plaintiff and Professor Havas are in the same general interest. Either way, in essence, an application for an order for payment of Professor Havas’ expenses would have been made by either as applicant.

85. In those circumstances, on 2 April 2015, in considering the above issue I considered that the dictates of justice and the requirement of facilitating a just, quick and cheap resolution of the dispute that has emerged over Professor Havas’ expenses justified an order that the filing of a separate application by Professor Havas personally, should be dispensed with: s 14, s 56 and s 58(1) of the Civil Procedure Act 2005; UCPR r 18.2(2)(c): T43.46, 2 April 2015.

86. I took the view that Professor Havas’ affidavit sworn on 1 April 2015 should be treated as comprising his application to the court, as was foreshadowed by the terms of the subpoena that was served upon him on behalf of the defendants: Exhibit “A”.

87. In my view, no consequential injustice occurs for any party by adopting that course as it has the effect of ensuring that the true matter at issue is raised for timely resolution without further delay and needless expense.

Whether the application is for a specified gross sum instead of costs

88. The defendants argued that the claim for Professor Havas’ expenses is in reality a claim for costs, and since the claim is made in advance of a costs assessment, it was argued that the claim was for a specified gross sum instead of assessed costs within the meaning of s 98(4)(c) of the Civil Procedure Act 2005, and therefore should not be allowed. The argument has some superficial attraction.

89. However, I do not accept that argument. It is based on an incorrect contextual interpretation of costs as forming part of the plaintiff’s costs of the proceedings, and it does not adequately reflect the wider definition of costs as including fees and expenses, which must include expenses incurred by witnesses, as contemplated by s 3(1) of the Civil Procedure Act 2005.

90. Professor Havas’ expenses were incurred at the behest of the defendants who required him to comply with the subpoena they served on him, and as such, those expenses should not form part of the plaintiff’s costs of the proceedings. The claim is not a specified gross sum instead of the plaintiff’s costs.

91. In my view the interpretation argued by the defendants is unduly narrow, and contrary to the intention behind the wide definition of costs, which on a beneficial and purposive construction, must include fees and expenses: s 3(1) of the Civil Procedure Act 2005. On the authorities to which I have referred at paragraphs [78] to [81] above, I consider Professor Havas’ claim for witness expenses fits well within the category of fees and expenses as contemplated by s 3(1) of that Act, and UCPR r 33.11.

92. On that construction, I find that the court has power to make an order for payment of such expenses in a specified amount. Such expenses form part of the costs incurred by the defendants in the proceedings: s 98(1)(b) of the Civil Procedure Act 2005.

Timetabling of evidence and rescheduling of patients

93. Courts have always recognised that when expert witnesses are engaged and agree to assist the court to resolve issues in litigation such as this, that inconvenience to the experts can and does arise unpredictably, as has occurred in this case.

94. In this case, it would appear that the potential impact of such inconvenience could have been considerably lessened if the parties had earlier appreciated that the time estimate given at call-over for the hearing of the case was problematic. The impact could also have been lessened had the parties approached the court for appropriate directions on or shortly after 9 October 2014, when it was known that there was an unresolved question as to whether the experts would be giving their evidence concurrently at the trial. That was a matter in which the court had an interest with regard to the proper administration of justice.

95. If the parties had taken appropriate steps to draw those matters to the attention of the court before the hearing in order to seek directions pursuant to s 16 and s 62(1) of the Civil Procedure Act 2005, or UCPR r 2.1, the time estimate of the case and the proposed course of the trial could have been considered, the relevant matters influencing timetabling of evidence could have been exposed for analysis at an earlier time, and more realistic indications could have been given to the expert witnesses with a view to minimising inconvenience to them in respect of their other professional commitments. Regrettably that course was not taken.

96. In the ensuing circumstances, Professor Havas was unfortunately obliged to serially rearrange his professional commitments. This resulted in him incurring loss for which he should be fairly compensated: Foyster v Foyster Holdings [2003] NSWSC 881, at [14].

97. In my view, it is not a reasonable answer to Professor Havas to argue he rescheduled his patients and therefore suffered no loss. He had to do so because a material portion of his professional time was taken up with compliance with the demands of the subpoena issued on behalf of the defendants, which in turn required him to utilise other time when he could have been attending to other tasks. Opportunity costing of professional time is a relevant matter to be taken into account.

Alleged unreasonableness of claim for expenses

98. In the context of the defendants’ argument that the claimed expenses of Professor Havas were unreasonable, it is material to observe that the defendants did not seek to challenge Professor Havas’ affidavit or the other evidence comprising and contained in his correspondence and tax invoices relating to the surrounding circumstances of his compliance with the subpoena.

99. In those circumstances, the consideration of the reasonableness of the claimed expenses must proceed by reference to that unchallenged evidence, the reasoning within it, and according to inherent notions of reasonableness.

100. The starting point for this strand of the analysis is to recognise that the nature of the challenge to the reasonableness of the expenses claimed by Professor Havas amounts to nothing more than a bald assertion of unreasonableness.

101. Without breaching patient confidentiality, and without challenge, Professor Havas has provided significant and in my view sufficient details of his cancelled commitments necessitated by the demands of him complying with the subpoena served by the defendants.

102. Those unchallenged details preclude any impression of inherent unreasonableness. It is not open for the court to accept criticisms of the manner in which those expenses have been calculated where the defendants did not challenge the factual background, or the numbers of patients whose procedures, appointments and the like were cancelled.

103. Professor Havas is entitled to have his professional time valued: Foyster v Foyster Holdings [2003] NSWSC 881, at [14]; J Aron Corporation v Newmont Yandal Operations [2004] NSWSC 996, at [22]. No evidentiary attack was made on the amounts identified as having been foregone by Professor Havas in respect of the procedures or the other identified patient services that were cancelled. Other than by submissions, there was no attack on the hourly rate that he had disclosed in his email addressed to the solicitor for the defendants and dated 23 October 2014.

104. For the purpose of argument, reasonably in my view, Professor Havas has sought to compare his fees to those charged by Senior or Queens Counsel of like seniority and experience.

105. Whilst that comparison, like most comparisons, is not entirely apt, there are sufficient points of similarity in terms of valuation of lost professional time to make the comparison informative.

106. In my view there is no merit in the argument advanced on behalf of the defendants to the effect that Professor Havas has suffered no loss because the cancelled patient procedures and appointments were rescheduled.

107. That argument must be seen to be fallacious because it ignores the fact that Professor Havas’ professional time has a value. Without fault on the part of Professor Havas, some of that time was wasted on the occasions identified in the evidence. Other components of Professor Havas’ time were spent in complying with the subpoena. In combination, those times require just compensation.

Argued comparison of rates charged by other experts

108. The defendants sought to critically compare Professor Havas’ fees with those of Professor Fagan, who had given factual evidence in the case for the defendants, and with those of Dr Stenning, an expert retained on behalf of the plaintiff, and who was also required by the defendants to attend the trial for cross-examination. Each of those experts had rendered substantially lesser fees in comparison to Professor Havas in relation to attending and giving evidence at the trial: Exhibits “1” and “2”.

109. In my view, that argument and the comparison sought to be made should not be accepted because of material matters of assumption that were not the subject of evidence.

110. The argument relied upon by the defendants does not reflect the fact that both Professor Fagan and Dr Stenning appear to be at different phases of their professional practice, in comparison to Professor Havas. There was no evidence to suggest the comparison sought to be made in respect of the individual tax invoices was a reasonable approach to take in this instance. My impression is to the contrary.

111. For example, there was no evidence to suggest that Professor Fagan and Dr Stenning had to cancel procedures, appointments, hospital rounds or other commitments in the same manner as was incurred by Professor Havas. Nor was there any evidence to suggest that their time had been wasted by reason of the timetabling of factual evidence. Furthermore, Professor Fagan was a factual witness, whereas Dr Stenning was an expert witness.

112. Significantly, it was not suggested that the component portions of Professor Havas’ professional fees for the scheduled operations and consultations he was required to cancel were in any way unreasonable, or outside the range of charges for professional fees that such services would attract, either in primary, secondary, tertiary or quaternary ENT practice.

Reliance on AMA and Law Society statements of indicative maximum hourly rate for quantification of witness expenses for expert medical practitioners

113. The defendants relied upon a revised statement of medico-legal relations published by the Law Society of NSW and the Australian Medical Association (NSW) Limited providing for a maximum allowance of $790 per hour for witness expenses. The date of that statement was not the subject of evidence.

114. In my view, the defendants’ reliance on the indicative hourly rate in the AMA and Law Society statement does not involve a fair or valid comparison with Professor Havas’ situation. In any event, in the letter from the solicitor for the defendants to Professor Havas dated 9 December 2014, the solicitor for the defendants acknowledged the stated upper rate of $790 per hour now relied upon by the defendants was not binding.

115. It is therefore somewhat arbitrary, contrary and unreasonable to seek to rely on that rate without attempting to reconcile that rate with what Professor Havas has in fact lost in complying with the subpoena.

116. Furthermore, it has not been shown that Professor Havas was a member of the AMA, and there is no evidence to suggest that he had ever agreed to be bound by the indicative rates cited from the subject AMA/Law Society statement.

117. By way of broad analogy, it is a matter of common knowledge in the community generally that medical practitioners do not necessarily restrict their fees to patients to the rates set out by the Commonwealth government in the Medicare benefits schedule. It does not necessarily follow that fees beyond those specified in that reimbursement of benefits schedule are necessarily unreasonable. Evidence would be required for the acceptance of such a contention.

Disposition

118. I find that Professor Havas’ expenses have been reasonably claimed in the amount of $28,500 by reference to his stated charges which are consistent with his professional fees for medical services. This equates to $31,350 including GST, which should be added as the medico-legal expense the subject of Professor Havas’ tax invoice is not a GST exempt medical service. I therefore conclude that such expenses should be paid by the defendants in that amount. I consider that such expenses should be paid to Professor Havas no later than the expiry of 28 days, if not forthwith.

Costs

119. Consistent with the outcome of the present application, the costs of the application of pursuing the expenses found to be due to Professor Havas should be borne by the defendants on the ordinary basis, unless otherwise ordered.

Orders

120. I make the following orders:

1. The interim stay previously ordered to expire at 4.00pm on 2 April 2015 is extended to 4.00pm on Monday 25 May 2015 pending any further order of the Court of Appeal in the event that a notice of appeal is filed;

2. In the event that no notice of appeal is filed before 25 May 2015, the stay the subject of Order 1 will discharge;

3. No later than 28 days after today’s date, the defendants are to pay the witness expenses of Professor Havas in the assessed sum of $31,350 including GST to compensate him for the losses he has incurred in complying with the subpoena served on him on 29 August 2014;

4. The costs of the plaintiff’s notice of motion filed on 1 April 2015, by which Order (3) above was sought, are to be paid by the defendants on the ordinary basis unless otherwise ordered;

5. Liberty to apply on 7 days notice if further or other orders are required.

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Decision last updated: 17 April 2015