Hera Project Pty Ltd v Stevenson
[2020] VSC 185
•17 April 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2018 02233
| HERA PROJECT PTY LTD | Plaintiff |
| v | |
| CRAIG STEVENSON | Defendant |
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JUDGE: | CHAMPION J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 February 2019 |
DATE OF JUDGMENT: | 17 April 2020 |
CASE MAY BE CITED AS: | Hera Project Pty Ltd v Stevenson |
MEDIUM NEUTRAL CITATION: | [2020] VSC 185 (First revision 17 April 2020) |
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COSTS – Whether plaintiff is entitled costs – Indemnity costs – Supreme Court (General Civil Procedure) Rules 2015 – Indemnity costs ordered against defendants’ solicitor – Defendants’ solicitor caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition – Plaintiff awarded costs pursuant to s 24 of the Supreme Court Act1986 and r 63.23 of the Supreme Court (General Civil Procedure) Rules 2015, such amount to be in the total sum of $55,382.59 (excluding GST).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Warren | Russell Kennedy Lawyers |
| For the Defendant | Mr C Stevenson was not represented by Counsel and represented himself | A Ace Solicitors |
HIS HONOUR:
Introduction
On 11 July 2018 and 9 October 2018, Hera Project Pty Ltd (‘the plaintiff’) applied to the Supreme Court of Victoria for the contempt of Court of Gino and Leah Bisognin (‘the defendants’), pursuant to rr 66.05(1)(a) and 75.06 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’).
On 19 July 2019, I determined that the defendants had each committed contempt of Court by failing to comply with:
(a) the freezing order handed down by Riordan J on 28 June 2018 (‘the first freezing order’);[1] and,
(b) the order made by Riordan J made on 31 August 2018, to which ancillary orders in support of the first freezing order were made, and which was extended on 3 October 2018 (‘the second freezing order’).[2]
[1]See Hera Project Pty Ltd v Bisognin [2019] VSC 483 [12]–[13].
[2]Ibid [19]–[20], [24]–[25].
These reasons concern an application by the plaintiff for an order for costs to be awarded against Mr Craig Stevenson, [‘Mr Stevenson’] trading as A Ace Solicitors, of 21 Hanlon Street, Bundamba, Queensland.
Mr Stevenson acted as the solicitor for Gino and Leah Bisognin, until he filed a Notice of Ceasing to Act on 22 November 2018.
Background
The background of these matters is set out in Hera Project Pty Ltd v Bisognin.[3] It is not necessary to rehearse the detail of those proceedings for the purpose of these reasons. In summary, I determined that both defendants committed contempt of this Court by failing to comply with the abovementioned freezing orders and by failing to provide the relevant material by the required date. On 16 September 2019, I concluded that it was appropriate that the defendants pay the plaintiff’s costs of the proceedings, including any reserved costs, on an indemnity basis. Both the defendants were convicted and sentenced to six months’ imprisonment.
[3][2019] VSC 483.
At no time during the contempt proceedings did Mr or Mrs Bisognin appear before the Court, with the sentences imposed delivered in their absence. Their failure to appear before the Court on the charges of contempt was in the face of the summons directed towards them that they must do so. These failures to respond to the summonses led to arrest warrants being issued in respect of both defendants before they were finally adjudged to have committed their contemptuous behaviour.
The application and orders sought
The plaintiff applies for costs to be awarded against the defendants’ solicitor on the basis that it has incurred costs improperly, without reasonable cause, the costs being wasted by his failure to act with reasonable competence and expedition in his conduct of the contempt proceedings.
The plaintiff submits that costs should be awarded on an indemnity and gross sum basis.
The application is brought pursuant to s 24 of the Supreme Court Act1986, r 63.23 of the Supreme Court (General Civil Procedure) Rules and the inherent supervisory jurisdiction of the Court, and seeks that the solicitor pay the plaintiff’s costs of, and incidental to the proceedings occurring on 17 September 2018 and 19 October 2018, being two dates on which the trial of the contempt proceedings were listed for hearing, and the directions hearing on 31 October 2018.
Pursuant to r 63.23,[4] the plaintiff argues that Mr Stevenson caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition.
[4]Supreme Court (General Civil Procedure) Rules 2015.
The plaintiff also notes the power of the Court to make cost orders pursuant to s 29 of the Civil Procedure Act 2010. The plaintiff cites the overarching obligations of a legal practitioner or law practice acting for or on behalf of a party, and the overarching obligations which include an obligation to act promptly and minimise delay.[5]
[5]See ss 10(1)(b) and (c) and s 25.
The plaintiff seeks the above costs to be fixed in a gross sum by the Court, with such costs to be paid forthwith, alternatively, to be assessed by the Costs Court in default of agreement.
Indemnity costs
The plaintiff relied on the authority of Kazal v Thunder Studios[6] and Colgate Palmolive Co v Cussons[7] as to why costs should be awarded on an indemnity basis. The two reasons advanced were firstly, that whilst the discretion is unfettered, costs in a contempt proceeding are usually awarded on an indemnity basis, with the plaintiff submitting that ‘a common consequence of success by a person bringing contempt proceedings is an indemnity costs order;’[8] and, secondly, the ‘particular facts and circumstances of the case in question may warrant the making of an order for payments of costs other than on a party and party basis.’[9]
[6]Inc (California) (2017) 350 ALR 216.
[7]Pty Ltd (1993) 46 FCR 225 at 233–234.
[8]Kazal v Thunder Studios Inc (California) (2017) 350 ALR 216.
[9]Pty Ltd (1993) 46 FCR 225 at 233–234.
Causation
A wasted costs order will not be made unless a party suffered loss as a result of the lawyer’s conduct. The claimant must show ‘a causal connection’.[10]
[10]1165 Stud Road v Power & Ors (No 2) [2015] VSC 735 at [212]–[213].
The plaintiff submits that the solicitor’s argument that he be excused from an award of costs on the basis that his clients failed to attend the two trial hearings should be rejected because a cause of the first trial hearing being aborted, and an adjournment granted, was the result of his failure to advise his clients to attend Court. Further, in respect of both hearings, the plaintiff relies on the argument that the solicitor continued to act for both clients in circumstances where they should have been separately represented.
The plaintiff also submitted that in the circumstances of this application it is open to award costs on a joint and several basis, against Mr Stevenson, and against his clients. I note the argument, but the application before this Court has not been brought against the defendants, Mr and Mrs Bisognin. On that basis, I do not propose to consider a costs order in respect of either of them.
Gross sum
The plaintiff submits that in the circumstances, it is appropriate to award costs in the form of a ‘gross sum’.[11]
[11]Rule 63.07(2)(c) Supreme Court (General Civil Procedure) Rules2015.
Circumstances where it may be appropriate to award costs in the form of a gross sum are to avoid expense, delay and aggravation. An order under the rule does not envisage that any process similar to a taxation take place. The Court will necessarily take an approach that has regard to the information put before the Court. The power to award a gross sum is not limited to complex litigation.
The plaintiff relies on the affidavit of solicitor Leonard Warren dated 16 November 2018, with supporting material, to enable the Court to order costs on a gross sum basis.
The gross sum sought is a total of $55,382.59. In my opinion, given the amount claimed, it is appropriate to proceed on the basis that upon an award of costs being made it should be on the basis of a gross sum, in order to avoid further undue expense, delay and aggravation.
The applicable legal principles
Rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 provides:
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 applies, with any necessary modification, to a barrister as it applies to a solicitor.
The plaintiff cited a decision of the Court of Appeal in Etna v Arif[12] which held, ‘[w]hile mere mistake or error of judgement would not justify an order, misconduct, default or even negligence it is enough if the negligence is serious or gross’ and that ‘errors of judgement do not attract the exercise of the jurisdiction only errors of a duty owed to the Court’.[13]
[12][1999] 2 VR 353 at [82].
[13]Ibid [57].
Submissions for the plaintiff
In support of this application the plaintiff relies upon the following evidence:
(a) The affidavit of solicitor Leonard Warren, affirmed 16 November 2018;
(b) The affidavit of Gareth Kerr, affirmed 26 November 2018; and
(c) The affidavit of Leonard Warren, dated 31 January 2019 filed in respect of the costs application against A Ace Solicitors.
The plaintiff submitted that this Court has the power to award costs against a solicitor in the state of Victoria in three ways:
(a) In its inherent jurisdiction, being a supervisory jurisdiction;
(b) Pursuant to s 24 of the Supreme Court Act 1986 and the rules made under that Act; and,
(c) Under provisions of the Civil Procedure Act2010.
The plaintiff submitted there is authority that a costs application of this nature ought to be decided before the conclusion of the contempt proceedings.[14] However, in the particular circumstances of this case I declined to decide this application before the conclusion of the contempt proceedings.
[14]Tran page 15, 12–21.
The plaintiff relies upon aspects of the solicitor’s conduct throughout the matter. The plaintiff submits that the circumstances of this case warrant the exercise of the Court’s discretion to order costs of, and incidental to, certain occasions in this proceeding on an indemnity basis against the solicitor. It is submitted that the Court may make an order that a solicitor pay all or any of the costs payable by any party other than the client where a solicitor 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.[15]
[15]Supreme Court (General Civil Procedure) Rules 2015 r 63.23(b).
In oral submissions, the plaintiff pointed out as a preliminary matter, that the solicitor obtained leave from this Court to withdraw as solicitor on the record in the proceeding, and having failed to file an appearance for himself in the costs application, sought his costs in resisting the application of costs made by the plaintiff.
It is submitted that a solicitor is taken to have failed to act with reasonable competence and expedition where any application in a proceeding, 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) Lodge or deliver any document for the use of the Court which ought to have been lodged or delivered;
(b) Be prepared with any proper evidence or account; or
(c) Otherwise proceed.[16]
[16]Supreme Court (General Civil Procedure) Rules 2015 r 63.23.
Furthermore, a solicitor may also be liable for the costs of an opposing party where:
(a) The opposing party’s costs have been wasted due to the incompetence (not amounting to serious misconduct) of the solicitor;[17]
[17]Gupta v Comer [1991] 1 All ER 289.
(b) The solicitor lodges a misconduct application which reflects a serious failure to give reasonable attention to the relevant law and facts;[18]
(c) Where the solicitor acting also as counsel failed to consider the legal issues necessary for the proper presentation of argument to the Court;[19] and
(d) The failure to recognise a conflict of interest requiring parties to have separate representation. In Marriage of Antsis[20] two adjournments in the matter had been caused by the failure of the wife’s solicitors to recognise a conflict of interest and to advise her promptly to obtain separate representation.
[18]De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 114 ALR 708 at 712–7.
[19]Ex Christmas Islanders Association Inc v A-G (Cth) (No 20) (2006) 233 ALR 97 at [22].
[20]26 Fam LR 548 at [49]–[51].
The plaintiff relied specifically upon the conduct of the solicitor, where his applications to adjourn the listed trial hearings on 17 September 2018, 19 October 2018 and the hearing on 31 October 2018 were caused by his own acts or omissions which went beyond mere mistakes or errors of judgement but were caused by his failure to act with reasonable competence, expedition, and by his serious negligence.
In written submissions, the plaintiff set out a number of matters which can be conveniently summarised as including:
(a) On 17 September 2018, the date set for trial of the first contempt allegation, Mr and Mrs Bisognin failed to attend the hearing;
(b) In appearing on their behalf, Mr Stevenson submitted that there would be no dispute on the facts of the alleged contempt;
(c) That he did not intend to call any evidence in relation to the matter, and he was instructed not to cross-examine any witnesses;
(d) That it was appropriate for the matter to be dealt with in the absence of the defendants, and if the contempt allegation was proven, he would then seek an adjournment so the question of penalty could be dealt with on another occasion;
(e) The solicitor stated that whilst the contempt was admitted, the defendants did not admit it was an intentional contempt, however he did not have written instructions to admit the contempt;
(f) That the contempt proceeding could proceed in their absence;
(g) That the solicitor did not make it clear to the two defendants that they might be arrested if they failed to attend court, and in fact he may have advised them that their attendance at court was not necessary;
(h) That he failed to turn his mind to whether the defendants should be separately represented, given the possibility that they may have different defences, or may have different roles should the matter of mitigation of penalty arise; and
(i) That the desirability of separate representation having been raised by the Court for the first time, this necessitated an adjournment of the trial.
The plaintiff points out that the solicitor was informed that the plaintiff would seek a personal costs order against him on the next return date, the reasons including his failure to advise his clients of the necessity to appear that day, telling them that it could proceed in their absence, his failure to turn his mind for the need for separate representation, his failure to obtain written instructions to admit the charge of contempt, and his failure to inform the plaintiff that the contempt would be admitted.
The plaintiff notes the following:
(a) That upon the Court granting an application for an adjournment on 17 September 2018, the matter was re-listed for trial on 19 October 2018;
(b) In the intervening period a second charge of contempt was filed against the defendants;
(c) On 10 October 2018 the solicitor swore an affidavit setting out the basis of a further adjournment application, based on the pending marriage of the defendants’ son on 19 October 2018;
(d) On 18 October 2018 the plaintiff’s solicitor reminded the defendants’ solicitor that he needed to obtain written instructions about the conduct of the matter, and to turn his mind to the question of separate representation for the defendants. The plaintiff’s solicitor put Mr Stevenson on notice that a personal costs order would be sought against him, and set out the reasons for that application;
(e) The plaintiff notes that on 19 October 2018, Mr Stevenson again appeared on behalf of both defendants, who again were not present. The plaintiff points out that the solicitor informed the Court that he had received a call around 7am from Mrs Bisognin, stating that she had taken her husband to hospital;
(f) The solicitor applied for an adjournment of the trial based on a psychologist’s letter which appeared to express an opinion as to the capacity of Mr Bisognin to understand the proceedings, and raising his fitness to stand trial. The solicitor confirmed that he had taken no steps to secure a psychiatrist’s report, following him being provided with the report of a psychologist;
(g) Further, when this matter was raised in Court, the solicitor made a last-minute application to withdraw from the proceedings, with no prior warning, and no prior communication provided to the plaintiff’s solicitor, or to the Court;
(h) Furthermore, no explanation was provided by the solicitor as to why medical evidence was not prepared prior to the hearing.
The plaintiff points out that the Court raised the failure of the solicitor to obtain instructions from Mrs Bisognin on how she intended to conduct her defence, and that in the Court’s opinion, the solicitor appeared was completely unprepared, and therefore unable to proceed with the trial. Further, the Court informed Mr Stevenson that he needed to consider whether he could continue to act for both his clients given the different ways that they might conduct their defences.
The plaintiff notes that when the above matters were raised at the hearing, Mr Stevenson sought an adjournment of one month to obtain a psychiatric report about the mental state of Mr Bisognin as the psychological report had only been intended to go to mitigation of penalty as opposed to his client’s fitness to contest the charges. The solicitor argued it would be improper to hold the trial without investigating that issue. In respect of Mrs Bisognin, the basis of the application for adjournment was that there had been a second contempt summons filed previously, and that it appeared her defence would be that she was ‘mostly a passenger’ in that her husband was looking after the proceedings for the relevant time.
On 19 September 2018 the plaintiff made an application for costs against Mr Stevenson, setting out the grounds on which costs would be sought.
Submissions for the respondent
Appearing on his own behalf, Mr Stevenson submits that on each relevant occasion, the trial was prevented from proceeding due to the failed appearance of the two defendants, being a circumstance that was out of his control. Further, he points out that it is relevant that after his withdrawal from the proceedings both defendants continued to refuse to attend further hearings.
It is submitted that whether or not the solicitor’s conduct was incompetent is irrelevant because the conduct did not cause any costs to be thrown away. For example, with respect to the first hearing date, the matter could not proceed because the plaintiff was pressing for a custodial penalty and the Court decided to not proceed in the absence of the parties.
It was submitted that costs should not be awarded because they were not incurred as a result of his conduct as the solicitor for the defendants. In oral submissions, the solicitor emphasised that his conduct had not caused the first hearing to be aborted as it was the Court’s decision not to proceed due to the possibility of sentences of imprisonment being imposed. Thus it was submitted that the additional cost, or alleged additional cost, was solely due to the defendants not attending the hearing, which was the fault of his clients, and not something attributable to him. In support of his arguments the solicitor referred to and read various passages in the transcript of the September 2018 hearing and argued that the matters he raised at that time supported his assertions.
With respect to the circumstances surrounding the provision of a psychological report, it was submitted that there is no evidence that the failure to provide a report in a proper form or at all, is attributable to the conduct of the solicitor. It was submitted that there was no evidence to suggest the conduct of the solicitor amounted to incompetence.
As to the issue of separate representation of each defendant in the contempt proceedings, it is submitted that this issue only first arose when the Court raised the possibility that they may need to be separately represented on the basis of the potential for differing defences. It is pointed out that this was not a matter which the solicitor could have taken instructions about because neither client was present at the hearing.
It is submitted that the issue of separate representation was ultimately not required because the defendants did not have versions of events which differed from each other. Further, it is submitted that the defendants elected not to seek alternative representation and the solicitor made an election that there was no conflict, and was prepared to proceed with the hearing.
In oral submissions, it was argued that it is not appropriate for the making of an order of costs against a solicitor in circumstances where that solicitor is held liable for having a difficult client who continuously changes their instructions. It would be inappropriate in those circumstances to make an award of costs against a solicitor, particularly in a criminal or quasi-criminal matter. It is submitted that there was no incurring of costs due to the solicitors conduct, and it is not conceded that there ultimately was a conflict of interest.
As to the matter of written instructions, it is submitted that the failure to have written instructions, whilst not satisfactory, does not amount to incompetence. It was submitted it is not uncommon for a solicitor to obtain instructions from a client on the day of the hearing, but again, this could not be done as the defendants did not appear at the hearing. It may be noted that in oral submissions it was conceded that there should always be written instructions to enter a plea of guilty, which the solicitor had failed to provide to obtain in the case of these defendants.
With respect to the allegation made by the plaintiff that the solicitor failed to consult the plaintiff’s solicitors, it was submitted that it is of some relevance that the plaintiff did not at any time provide a proposed agreed set of facts with respect to the contempt proceedings. The solicitor points out the contempt proceedings are a criminal and not a civil matter, and thus it is for the plaintiff to prove its case. It was argued that there is no obligation on the respondent to agree to any facts when they have not been put to them.
It was submitted that the allegation of failing to obtain medical evidence in relation to the defendant’s attendance at hospital on 19 October 2018, is incorrect. Mr Stevenson submitted that evidence was provided to the Court, but due to difficulties with the hospital system there was no written evidence provided to the Court until sometime later. It was further submitted that there were no substantial costs caused by this failure, particularly since both parties were already present at the hearing for the mention of another matter.
In written submissions, the solicitor argued that in all of the circumstances, the application for costs should fail with no award being made against him. To the contrary, it was submitted that the Court should award costs against the plaintiff, in favour of the solicitor, Mr Stevenson.
Mr Stevenson submitted that none of the delays and the causes of adjournments were a matter of his responsibility, or attributable to any of his actions. In essence, he argued that any delays caused in resolving these proceedings was not attributable to his incompetence, but rather the failure of the two defendants to appear in Court, or to cooperate with him in the preparation for the listed hearings. It was submitted that costs should not be awarded to the plaintiff because they were not incurred by the conduct of the solicitor.
Discussion
The principles governing the award of indemnity costs are well established. Pursuant to s 24(1) of the Supreme Court Act 1986, the Court ‘has full power to determine by whom and to what extent the costs are to be paid.’ For there to be a departure from the usual practice of costs being awarded on a standard basis, there must be some special or unusual feature of the case justifying such a departure.[21]
[21]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225,223; Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 [7]–[8]; Talacko v Talacko (Costs Ruling) [2018] VSC 807.
Rule 63.23(1)[22] provides that the making of an order for costs against a solicitor, the solicitor must have caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition.
[22]Supreme Court (General Civil Procedure) Rules 2015.
The plaintiff submits that the aborted hearings on 17 September 2018 and 19 October 2018, as well as the consequential need for the hearing on 31 October 2018, were caused by the solicitor’s acts or omissions which went beyond mere mistakes or errors of judgement but rather, were caused by his failure to act with reasonable competence, expedition, and by his serious negligence.
The contempt proceedings against the defendants have had a sorry history, which has been characterised by a lack of preparation and diligence on the part of the defendants’ solicitor fulfilling his responsibilities to the plaintiff, and to the Court. The state of preparation for the contempt proceedings to proceed to trial on the two listed trial dates appeared to me to be negligible, and haphazard. The Court’s time, and that of the plaintiff, was wasted. Furthermore, in the context of this general lack of application, submissions from the solicitor on the two listed trial hearing dates were often confused and in some instances, incomprehensible. The question for determination is whether the actions of the solicitor were such as to warrant the making of an order for costs pursuant to the pre-requisites set out in r 63.23.
Contrary to the submissions put by the solicitor, responsibility for the adjournments of the trial hearings cannot be simply laid at the failure of the defendants to provide instructions to him, or attend the two trial hearings. I reject that argument put forward by the defendants’ solicitor. The fact that his clients failed to attend any of the contempt proceedings listed before me was a lamentable approach to this litigation on their part. In my opinion, their failures in this regard did not relieve their solicitor from his responsibility towards the other party, and to the Court. In my opinion that responsibility was lacking on the part of the defendants’ solicitor.
On both occasions the contempt trials had been listed well ahead of the dates set down, with both the plaintiff and the Court, left in a position where preparation for those hearings was necessarily and reasonably undertaken. In my opinion, a solicitor, acting competently and responsibly, should not have allowed the other party to the litigation, and the Court, to proceed on the basis the listed hearings would be taking place, and thus prepare and set aside time for the matters to be heard.
In my opinion the defendants’ solicitor approached these hearings in an unprepared state, and failed in his duty to ensure that he possessed proper evidence, which would allow the hearings to proceed. I am satisfied that a solicitor in his position, acting competently, should have been aware that both he, and his case, was so lacking in preparation and readiness that the hearings were unlikely to proceed, such that no useful progress could be made in the trial of this action. That these circumstances occurred when the plaintiff was pressing for a determination on the contempt proceedings that involved a finding of guilt, and sentences of imprisonment to be imposed, made it all the more necessary that the defendants’ solicitor apply himself assiduously and competently to the task of representing his client’s interests.
In respect of the first hearing, the solicitor conceded he did not obtain written instructions about how the matter was to be approached in circumstances where his clients chose not to attend the hearing. The same situation applied for the second trial date. On its own, this issue may not have justified serious criticism, but it is notable that when this issue emerged, the solicitor appeared not to have thought about this issue in circumstances where it became a contributing factor to his applications for adjournment of the proceedings.
Relevant to the hearing of this application for an award of costs, the solicitor pointed out that at the hearing on 17 September 2018, the Court concluded that while the matter could proceed in the absence of the defendants, because the possibility of sentences of imprisonment being imposed, it was the Court’s decision that it was not prepared to proceed with the hearing of the trial. In the face of that submission, the plaintiff referred to a further conclusion in the ruling of the Court on that day in which the opinion was expressed that the matter was not in a state of readiness to proceed. It eventuated that on that occasion the solicitor conceded his concerns regarding his previous advice to the defendants that if they did not attend the hearing the matter could have proceeded in their absence.
Further, at the hearing of this application, when it was pointed out to the solicitor that the plaintiff had prepared a significant amount of affidavit material, with detailed references to the transcript and case law, compared to his filing of no material by way of affidavit, it was conceded by the solicitor that ‘what happened in Court is not disputed’. Rather, it was argued that there were differing interpretations about what had actually happened with regard to factual issues.
In the face of arguing that there were ‘one or two inferences’ that should not be drawn on the evidence put forward by the plaintiff’s solicitor, and there being no responding affidavit material filed by the solicitor, leave was sought for the solicitor to enter the witness box, so to give evidence in relation to a number of matters and to face cross-examination. It goes without saying that this proposal was made without notice, and amounted to a stark demonstration of the degree of lack of preparation and thought given to this hearing.
In response to the failure to file affidavit material dealing with factual matters, the solicitor conceded that such material should have been filed by a particular date prior to the hearing of the application, as set by the Court. The solicitor accepted that the failure to file responding affidavit material challenging facts or inferences was an unsatisfactory situation. In an attempt to provide justification for this failure the solicitor asserted that his difficulty in providing material on affidavit was due to legal professional privilege between he and his clients. He argued that much of the material that would need to be considered was complicated and consideration needed to be given to whether or not any information was privileged. He further asserted that should he enter the witness box and be cross-examined in his own defence, he would claim legal professional privilege about some matters likely to be put in cross-examination.
Addressing assertions as to his lack of preparation for this application, the solicitor informed the Court that he had engaged Counsel to represent him at this hearing but that person could no longer appear because of a scheduling conflict. He then informed the Court that he had engaged alternate Counsel, but that person had advised him at lunchtime that he had a plane to catch and was worried about the possibility that he wouldn’t make the flight. Further, the solicitor told the Court that he had attempted to brief two further members of Counsel to represent him, but that each attempt had been unsuccessful. It was in the context of having unsuccessfully attempted to instruct four members of Counsel, he then appeared on his own behalf. I find this explanation for being in an unprepared or disadvantaged state to defend this application as wholly unconvincing. The justification was entirely consistent with the chaotic way in which the solicitor has addressed the contempt proceedings, and this application.
Upon being confronted with his lack of preparation, the solicitor then sought an adjournment of this application in order for the plaintiff’s solicitors to consider such affidavit material as he would be in a position to provide should the matter be adjourned. His lack of preparation and application to the matter at hand was clearly evident. These circumstances occurred in the context of the plaintiff solicitor putting significant time and effort into preparing for the hearing. In all the circumstances I refused to adjourn the matter. Thereupon followed an unstructured and at times incomprehensible series of arguments put forward in opposition to the application for costs.
The solicitor argued that the plaintiff’s application for an aware of costs was fatally flawed. He submitted that none of the conduct complained of contributed to any additional expense. It was submitted that this is the heart of his argument, namely that his conduct did not fall below the standards set, and that there is a difference between doing a ‘sensationally good job, doing a poor job, et cetera et cetera’. I disagree with this submission.
The two trial listings have been wasted in circumstances where I am satisfied that the plaintiff’s solicitor undertook significant and necessary preparation which placed his client in a position to proceed with both hearings. By comparison, the approach of the solicitor for the defendants to the litigation has been wanting to the point where his actions failed to ensure the proceedings could make useful progress. I am satisfied that he has failed to act with reasonable competence and expedition as provided for by r 63.23 and that the trial of the proceedings could not conveniently be heard or proceed, with them being adjourned without any useful progress being made.
There are a number of identified categories of conduct which can enliven the discretion to order indemnity costs.[23] Rule 63.23(2)[24] sets out a list of failures which may result in a costs order being made. In my opinion, as discussed above, a number of those failures have been made out in this case.
[23]Ibid.
[24]Supreme Court (General Civil Procedure) Rules 2015.
In line with the authorities and legislation, I consider that an order for costs should be made against the solicitor in that his conduct has caused unnecessary preparation and adjournments of hearings, when, if he had been acting responsibly and competently, such preparation would not have been unnecessary. My conclusion is that costs were incurred improperly or without reasonable cause or to be wasted by a failure of the solicitor to act with reasonable competence and expedition.[25]
[25]Ibid.
Conclusions
Taking all matters into account, I am of the opinion that the plaintiff was ready and sought to proceed on the hearing dates of 17 September 2018, and 19 October 2018. By reason of the unsatisfactory and incompetent approach taken by the defendants’ solicitor I am satisfied that the plaintiff has wasted costs in the amount claimed.
Furthermore, I am of the opinion that as the solicitor acting as counsel for the plaintiff, the solicitor failed to consider the legal issues necessary for the proper presentation of arguments to the Court, and failed to recognise a conflict of interest requiring parties to have separate representation. In respect of the first hearing the solicitor appears to have ignored this matter and only considered it as an issue when it was raised by the Court.
I agree with the plaintiff’s submissions that its costs of, and incidental to, the aborted trials fixed for hearing on 17 September 2018, and 19 October 2018 and further, to include the directions hearing on 31 October 2018 in this proceeding, as well as this application for costs, should be awarded.
I will also accordingly order that Mr Stevenson pay the plaintiff’s costs of, and incidental to this application, on an indemnity basis, including any reserved costs pursuant to s 24 of the Supreme Court Act1986 and r 63.23 of the Supreme Court (General Civil Procedure) Rules 2015. Taking all matters into account the amount ordered will be in the total sum of $55,382.59 (excluding GST), the breakdown of which will be annexed to the end of this judgment.
I order that the costs be paid no later than 15 May 2020.
ANNEXURE 1[26]
[26]This annexure replicates the table of associated costs filed by the plaintiff on 31 January 2019 and provided to the Court.
Part A. Claims – Costs in this Proceeding
| Claim No. | Item | Amount exclusive of GST | |
| Professional Legal Costs | |||
| 1 | Preparation for the trial on 17 September 2018 Includes: Principal – 3.3 hours @$650 per hour =$2,145.00 Junior Lawyer – 9 hours @ $350 per hour =$3,150.00 | $5,295.00 | |
| 2 | Attendance at the trial on 17 September 2018 (including travel to and from) Includes: Principal – 3 hours @$650 per hour =$1,950.00 Junior Lawyer – 3 hours @ $350 per hour =$1,050.00 | $3,000.00 | |
| 3 | Trial on 17 September 2018 – post trial work includes perusal of transcript, updating client, correspondence with the Court and associated matters Includes: Principal – .7 hours @$650 per hour =$455.00 Junior Lawyer – .9 hours @ $350 per hour =$315.00 | $770.00 | |
| 4 | Preparation for the trial on 19 October 2018 Includes: Principal – 6.5 hours @$650 per hour =$4,225.00 Senior Associate – 1.5 hours @$520 per hour =$572.00 Junior Lawyer – 4.2 hours @ $350 per hour =$1,470.00 | $6,267.00 | |
| 5 | Attendance at the trial on 19 October 2018 (including travel to and from) Includes: Principal – 4.5 hours @$650 per hour =$2,925.00 Junior Lawyer – 4.5 hours @ $350 per hour =$1,575.00 | $4,500.00 | |
| 6 | Trial on 19 October 2018 – post trial work includes perusal of transcript, updating client, correspondence with the Court and associated matters Includes: Principal – .1 hours @$650 per hour =$65.00 Junior Lawyer – .5 hours @ $350 per hour =$175.00 | $240.00 | |
| 7 | Preparation for the directions hearing on 31 October 2018 Includes: Principal – 2.9 hours @$650 per hour =$1,885.00 Junior Lawyer – 2.4 hours @ $350 per hour =$840.00 | $2,725.00 | |
| 8 | Attendance at the directions hearing on 31 October 2018 (including travel to and from) Includes: Principal – 1.3 hours @$650 per hour =$845.00 Junior Lawyer – 1.3 hours @ $350 per hour =$455.00 | $1,300.00 | |
| 9 | Directions hearing on 31 October 2018 – post hearing work includes drafting orders, perusal of transcript, updating client, correspondence with the Court and associated matters Includes: Principal – 1.3 hours @$650 per hour =$845.00 Junior Lawyer – 1.3 hours @ $350 per hour =$455.00 | $1,300.00 | |
| 10 | Directions hearing on 31 October 2018 - post work includes drafting orders, perusal of transcript, updating client, correspondence with the Court and associated matters Includes: Principal – 1.3 hours @$650 per hour =$845.00 Junior Lawyer – 1.3 hours @ $350 per hour =$455.00 | $1,300.00 | |
| Subtotal: | $26,697.00 | ||
| Disbursements | |||
| 1 | Transcript for trial on 17 September 2018 | $301.46 | |
| 2 | Trial Fee for 17 September 2018 | $1,278.80 | |
| 3 | Transcript for trial on 19 October 2018 | $301.46 | |
| 4 | Trial Fee for 19 October 2018 | $2051.90 | |
| 5 | Transcript for directions hearing on 31 October 2018 | $195.38 | |
| Subtotal: | $4,129.00 | ||
| TOTAL | $30,826.00 | ||
Part B. Claims – Costs in this Application
| Claim No. | Item | Amount exclusive of GST |
| Professional Legal Costs | ||
| 11 | Drafting submission, affidavit in support of Leonard Adrian Warren and table of claimable costs Includes: Principal – 7.70 hours @$650 per hour =$5,005.00 Junior Lawyer – 18.90 hours @ $350 per hour =$6,615.00 | $11,620.00 |
| 12 | Hearing listed for 28 November 2018 – Drafting affidavit, drafting and perusal of correspondence between the parties and the Court and consideration of the adjournment application by Ace Law, attendance and drafting orders Includes: Principal – 5.20 hours @$650 per hour =$3,380.00 Junior Lawyer – 3.00 hours @ $350 per hour =$1,050.00 | $4,430.00 |
| 13 | Hearing on 1 February 2019 – preparation and attendance Includes: Principal – 7 hours @$650 per hour =$4,550.00 Junior Lawyer – 6 hours @ $350 per hour =$2,100.00 | $6,650.00 |
| Subtotal: | $22,700.00 | |
| Disbursements | ||
| 1 | Transcript of hearing on 16 July 2018 | $132.59 |
| 2 | Transcript of hearing on 13 August 2018 | $198.00 |
| 3 | Transcript of hearing on 31 August 2018 | $183.00 |
| 4 | (Anticipated) Transcript for hearing on 1 February 2018 | $1,343.00 |
| Subtotal | $1,856.59 | |
Part C. Total of Claims
| Amount exclusive of GST $ | |
| Total costs for the proceeding claimed | $30,826.00 |
| Total costs in the application claimed | $24,556.59 |
| Total | $55,382.59 |
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