Hughes v Janrule Pty Ltd

[2011] ACTCA 23

PAUL JOHN HUGHES v JANRULE PTY LTD [2011] ACTCA 23 (26 October 2011)

PROCEDURE – costs – costs of unsuccessful application for security for costs – adjournment sought when counsel not available to represent successful party on hearing date – successful party’s failure to lodge timely submissions – misconceived written submissions made by successful party – no order as to costs of security for costs application – responsibility of successful party for his lawyers’ approach to the application – whether lawyers should be permitted to charge successful party in respect of responding to security for costs application.

PROCEDURE – courts and judges generally – whether acceptable to email submissions to Judge’s chambers instead of filing and serving them – whether generally acceptable to communicate with Judge’s chambers in relation to a matter without advising other parties.

Court Procedures Rules 2006 (ACT), rr 1703(2)(g), 1753(3)

Benjaminv GB Franchising Australia Pty Ltd [2008] ACTCA 11
Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302
Hughes v Janrule [2010] ACTSC 5
Hughes v Janrule [2011] ACTCA 15

No. ACTCA 7-2010
No. SC 261 of 2006

Judge:             Penfold J
Supreme Court of the ACT

Date:              26 October 2011

IN THE SUPREME COURT OF THE                )

)          No. ACTCA 7-2010
AUSTRALIAN CAPITAL TERRITORY  )          No. SC 261 of 2006

)

COURT OF APPEAL  )

BETWEEN:PAUL JOHN HUGHES

Appellant

AND:JANRULE PTY LTD

Respondent

ORDER

Judge:  Penfold J
Date:  26 October 2011
Place:  Canberra

THE COURT ORDERS THAT:

1. There will be no order in respect of the costs of the application between the appellant and the respondent.

1. The appellant’s lawyers, United Legal, may file, within 3 weeks from the date of this judgment, affidavit evidence and written submissions as to why United Legal should be permitted to charge the appellant for any work undertaken on or after 4 May 2010 in relation to the respondent’s application for security for costs (the relevant work).

1. If affidavit evidence and submissions as described in Order 2 are not filed by 16 November 2011, then United Legal must not charge the appellant for any of the relevant work (as described in Order 2).

Introduction

1. On 9 August 2011, I handed down my judgment in Hughes v Janrule [2011] ACTCA 15 (the security for costs decision). That judgment concerned an application, made by the respondent Janrule, for security for costs to be provided by the appellant Mr Hughes against the judgment of the Master in Hughes v Janrule [2010] ACTSC 5. I refused the application to order security for costs against Mr Hughes, but made no order about the costs of the application, and invited written submissions from the parties about the appropriate costs order.

1. As in my earlier judgment, I shall refer to Janrule as the respondent and Mr Hughes as the appellant.

Submissions

Filing of submissions

1. In inviting written submissions about costs, I ordered that any initial submissions were to be filed and served by 23 August 2011 and any submissions in reply by 30 August 2011.  The respondent’s written submissions were lodged on 23 August.

1. On 29 August 2011, the appellant emailed undated and unsigned written submissions in reply to my associate, but without any indication that those submissions had been filed or served on the respondent, and apparently without copying the email to the respondent’s lawyers.  Those submissions were then lodged later that same day.

Respondent’s submissions

1. The respondent submitted that either:

(a)each party should pay its own costs of the application; or

(b)the unsuccessful respondent should pay the appellant’s costs, except for certain costs that could be specifically attributed to the way the appellant’s solicitors had responded to the application.

1. The respondent’s submissions raised the following issues:

(a)the appellant’s failure to be ready to defend the application on the day listed for it to be heard;

(b)the appellant’s failure to file his written submissions by the day specified in orders made on that abandoned hearing day;

(c)the need for the respondent to prepare a second set of written submissions (and to appear before me to seek leave to do so) because of the appellant’s failure to file his written submissions before the date on which the respondent was required to file its submissions;

(d)the “fatally misconceived” submission made by the appellant to the effect that the Court of Appeal has no procedural powers.

Appellant’s submissions

1. The appellant’s submissions can be summarised as follows:

(a)The appellant was unable to defend the application on the day set down for hearing because counsel who had originally been briefed in the matter “had undergone hip replacement surgery and was simply unavailable”, and the appellant’s solicitors “had only learned that Counsel would not be available shortly before the application”. I do not understand the submission that “There could be no difference in the costs if the Appellant had pre-prepared his submission or Mr Montagnino had to go away and do it”.

(b)The respondent’s complaint about the appellant’s delays in filing written submissions “simply amounts to the Respondent being unreasonable in relation to the timetable to allow submissions to be filed”.

(c)The appellant’s submissions included material about whether the Court of Appeal had power to order security for costs because I had raised that question in the proceedings.

(d)The respondent’s decision to file a second set of submissions cannot be blamed on the appellant.

Consideration of submissions

The need for the hearing to be adjourned

1. I set out below a chronology of events leading up to the hearing that was listed before me on 19 May 2010. 

Date	Event
3 March 2010	Notice of appeal filed.
19 March 2010	Notice of intention to respond filed.
31 March 2010	Letter from respondent to appellant foreshadowing application for security for costs (Needham affidavit 22/4/10, pp 69-70).
23 April 2010	Application for security for costs filed, showing hearing date of 19 May 2010.
29 April 2010	Letter from appellant to respondent indicating intention to oppose application (Ex A).
4 or 6 May 2010	Application served on appellant (the appellant’s documents show both dates).
13 May 2010	Before the Deputy Registrar:  Hearing date for security for costs noted as listed for 19 May 2010 (the Deputy Registrar’s bench sheet suggests that the matter was mentioned on behalf of the appellant by the respondent’s lawyer, who appeared by telephone).

1. Thus, the appellant had two weeks’ notice of the hearing date on 19 May.  On the morning of 19 May, the appellant appeared by counsel, who indicated:

(a)that both counsel who had appeared at the trial were unavailable; and

(b)that he (the new counsel) had been briefed only the day before and instructed to seek an adjournment.

1. I adjourned the matter until the afternoon in order to deal with another Court of Appeal application that was ready to proceed. When the hearing resumed that afternoon, the appellant was represented by his solicitor, not by counsel who had appeared that morning.

1. No explanation was offered for the unavailability of senior counsel.  Junior counsel’s absence was explained by reference to the fact that he had recently had a hip replacement and had an associated medical appointment that morning.  There was no suggestion that this was an emergency appointment or involved a particularly long consultation, and I see no reason to assume that it was other than an appointment scheduled some time previously, or that it was an appointment for a consultation that would occupy the whole day.  The request for an adjournment was nevertheless only advised to the respondent’s counsel the day before the scheduled hearing.

1. If there was any good reason why the original junior counsel could not have negotiated a hearing time during the specified day that enabled him to attend his medical appointment as well, it was not drawn to my attention.

1. Equally, no good reason was identified for the appellant’s decision to wait until the day set for the hearing to seek an adjournment, rather than making an earlier attempt to re-schedule the hearing day.

1. As it turned out, I would not have been able to hear the application until the afternoon anyway, and it may be that the original counsel could have been available at that time.

1. Two comments must be made about these matters.

(a)First, it is hard to avoid the inference that it suited the appellant’s lawyers to have an excuse for delaying the hearing of the application.

(b)Secondly, the appellant’s most recent submissions on this issue (set out at [7(a)] above) appear to have only a very tenuous connection with the facts of the matter; for instance, the existence of a morning medical appointment some time subsequent to the hip replacement surgery seems not to justify the description of counsel as being “simply unavailable” due to having “undergone hip replacement surgery”. 

Failures in relation to written submissions

1. When the hearing resumed in the afternoon of 19 May 2010, counsel for the respondent made oral submissions supplementing the written submissions that he had handed up.  A jurisdictional issue, being the power of a single Judge to order security for costs in the Court of Appeal, emerged during those submissions, and at around 4.00 pm I adjourned the matter and made orders for the parties to file written submissions, including in relation to the jurisdictional issue.

1. The original orders were that the appellant was to file and serve written submissions by 2 June 2010, and the respondent was to file and serve any submissions in reply by 7 June 2010.  Submissions on behalf of the appellant dated 23 June 2010 were faxed to my chambers on 24 June 2010, but were not apparently either filed or served on the respondent at that time, although at some later point the respondent received a copy of those submissions.  The matter was re-listed before me on 20 July 2010 so that the respondent could seek leave to file further written submissions. I made further orders about written submissions.  The respondent was to file and serve submissions in reply by 28 July 2010. The appellant was to file and serve, also by 28 July 2010, the written submissions dated 23 June 2010 which had already been provided to my chambers.  Those submissions were then lodged on 20 July 2010 (nearly a month after having been sent to my chambers).

1. The appellant says that the respondent’s complaint about these failure “simply amounts to the Respondent being unreasonable in relation to the timetable to allow submissions to be filed”.  I cannot see that in the ordinary course of events, a party is being unreasonable in expecting that orders made by a court will be complied with, including as to timing. On the contrary, a party who treats deadlines set by the Court as optional, quite apart from showing disrespect to the Court, takes a real risk of being shut out from pursuing legal rights, or alternatively, as in this case, of incurring costs penalties.

Procedural powers of Court of Appeal

1. During the hearing of the application I raised the question whether a single Judge had the power to order security for costs in relation to a matter before the Court of Appeal. That seemed to me to be a substantive question, which had been the subject of previous consideration by Refshauge J (Benjaminv GB Franchising Australia Pty Ltd [2008] ACTCA 11 at [25]-[27]) but without the benefit of argument. My answer to that question, having considered the detailed and thoughtful submissions put by the respondent in this matter but without any help from the appellant’s submissions, was to the same effect as Refshauge J’s answer but for different reasons (see [30]-[62] of the security for costs judgment).

1. At no stage did I raise the possibility, as asserted by the appellant now, that the Court of Appeal might have no procedural powers.  My comments on that question (at [14]-[29] of the security for costs judgment) are consistent with the respondent’s description of the appellant’s submissions as “fatally misconceived”.

Respondent’s decision to file a second set of submissions

1. The respondent’s costs submissions noted the requirement to prepare two sets of written submissions, and to seek leave to file the second set (at [6(c)] above). The appellant’s response to this was as follows:

In relation to paragraph 6(b) of the respondent’s submissions and the requirement to prepare written submissions on two occasions, that is untrue. They chose of their own volition to exercise that liberty ... to put in further written submissions.

1. It is true that the respondent chose to file a second set of submissions. However, under the deadlines set in the orders made on 19 May 2010, the appellant was to file written submissions first, and the respondent’s written submissions were intended to be made in reply to the appellant’s written submissions.  Despite the appellant’s failure to file the written submissions in time, it seems to me that the respondent was within its rights to comply with the Court’s order to file written submissions within the specified time. When it did finally receive the appellant’s submissions, the respondent was also within its rights to seek leave to file submissions in reply, rather than assuming that a second set of submissions would be received in the absence of leave; for the appellant to claim that the respondent’s decision to file submissions in reply did not reflect a failure in compliance on the appellant’s part is so ludicrous that it is hard to believe that the claim is made in good faith.

Conclusions

1. The appellant’s submissions in this matter continue the practice of the appellant’s lawyers providing written submissions that are not only late but are also based on assertions as to the facts, and arguments as to the law, that are vague, unsupported, sometimes ludicrous and often somewhat incoherent.

1. In Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302, the New South Wales Court of Appeal (Davies AJA, with whom Mason P and Meagher JA agreed) said at [15]-[17] that whether “the complexity, duration and expense of the litigation could have been reduced” by different behaviour by a party was a proper matter to be taken into account in determining liability for costs. I am satisfied that the complexity, duration or expense of the determination of the application for security for costs could have been reduced if the appellant (or perhaps more accurately the appellant’s lawyers) had responded to the application differently:

(a)by ensuring that counsel was available on the hearing date of which the appellant had two weeks’ notice, or by making an earlier application for a new date having regard to counsel’s medical arrangements;

(b)by filing written submissions on time; and

(c)by confining those written submissions to matters genuinely in doubt.

1. For those reasons, I consider that the appellant, despite being successful in resisting the application for security for costs, should not have his costs of the application, and accordingly there will be no order for costs in respect of the application. The only question remaining in my mind is whether I should also make an order under rr 1703(2)(g) and 1753(3) of the Court Procedures Rules 2006 (ACT) that the appellant’s lawyers should not charge the appellant any costs in relation to the application for security for costs. It seems unlikely that the appellant was personally responsible for the failure of the appellant’s lawyers to conduct themselves as described at [24] above, or that the lawyers were acting on express instructions in respect of any aspect of that failure, so justice would seem to require that the appellant should not bear the costs of that failure.

Other matters

1. These reasons refer to two incidents in which the appellants have apparently chosen to provide material direct to my chambers, and not to the respondents, instead of lodging it in the proper way through the Court registry and serving it appropriately (at [4] and [17] above).

1. I note first that in general it seems to me to be improper for a lawyer to communicate with a judge’s chambers about a matter before the court without making that communication known to the other party (although clearly there are some exceptions, such as applications that are by legislation required or permitted to be made ex parte, or housekeeping questions such as whether to robe for a particular court event). Furthermore, when a communication is by email, there would seem to be no excuse for not copying the communication to the other party at the time it is made.

1. Secondly, I cannot help but suspect that there is more than incompetence behind the appellant’s lawyers’ approach to providing documents, although whether the explanation is a desire to minimise costs by avoiding filing fees or a desire to wrong-foot their opponents is not clear.  Either way, it is clearly not an acceptable way to conduct litigation.

Orders

1. Accordingly, there will be no order in respect of the costs of the application as between the parties.

1. However, I order that the appellant’s lawyers, United Legal, may file, within 21 days, affidavit evidence and written submissions as to why United Legal should be permitted to charge the appellant for any work undertaken on or after 4 May 2010 (being the earlier date of service shown in the appellant’s documents – see [8] above) in relation to the respondent’s application for security for costs (the relevant work).

1. I further order that if affidavit evidence and submissions as described at [30] above are not filed by 16 November 2011, then United Legal must not charge the appellant for any of the relevant work.

   I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Penfold.

   Associate:          Riki Sutherland

   Date:                26 October 2011

Counsel for the applicant:  Mr R Crowe SC
Solicitor for the applicant:  Sparke Helmore
Counsel for the respondent:  Mr R Montagnino, Mr P Glover
Solicitor for the respondent:  United Legal
Date of last written submissions:                   29 August 2011  
Date of judgment:  26 October 2011