Lauro v Minter Ellison

Case [2021] SASCA 150

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

LAURO v MINTER ELLISON

[2021] SASCA 150

Judgment of the Court of Appeal  

(The Honourable Justice Lovell, the Honourable Justice Parker and the Honourable Justice David)

23 December 2021

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - GENERALLY

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - APPEAL, REVIEW OR REFERENCE

This is an application for permission to appeal against a decision of a single Judge of this Court dismissing an application for an extension of time to appeal against the order of Chivell DCJ (the trial judge) and dismissing an appeal against the order of Durrant DCJ.

In 2013, the respondent issued a claim for work done and services provided in respect of a number of disputes. The trial commenced in 2015 but was adjourned a number of times due to the appellant’s health condition. After special arrangements were proposed for the appellant to attend trial, the trial was fixed to resume on 17 September 2018. On 17 September 2018, the appellant’s son attended and made an application to adjourn the trial. Judge Chivell confirmed that the trial would resume on 18 September 2018. The appellant did not attend on 18 September 2018 and Chivell DCJ entered default judgment in favour of the respondent. The appellant subsequently applied to set aside the default judgment.

On 7 April 2020, Durrant DCJ dismissed that application (the second judge), finding that the default judgment was regularly obtained and that the applicant had not established a reasonably arguable defence. The applicant was granted permission to appeal against Durrant DCJ’s orders by a single Judge of this Court (the Supreme Court Judge), but his appeal was ultimately dismissed. The applicant now seeks permission to appeal to the Court of Appeal.

Held per Parker AJA (Lovell JA and David AJA agreeing), refusing an extension of time and permission to appeal:

1.The evidence of Dr Giordano concerning the applicant’s medical condition was simply part of the background material about the applicant’s health. The omission of any reference to that evidence did not amount to an error.

2.It is not clear that the reference to “a full and independent review” in the applicant’s defence constituted a request for adjudication under the Legal Practitioners Act 1981 (SA). Nevertheless, given that the proceedings concerned allegations of professional negligence and breaches of professional standards, along with a counterclaim, there would be no utility in referring the disputed costs claim for adjudication.

3.Schedule 3 of the Legal Practitioners Act 1981 (SA) does not operate to preclude the District Court from entering a default judgment for a liquidated sum claimed by way of costs.

4.The entry of the default judgment was a final judgment even though it did not determine the costs that were recoverable by the…

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Lauro v Minter Ellison [2021] SASCA 150
Case
[2021] SASCA 150
Decision Date

CaseChat Overview and Summary

The applicant, Lauro, sought permission to appeal a decision of the Supreme Court of South Australia, which had dismissed his appeals against orders made by the District Court. The respondent was the law firm Minter Ellison, which had instituted proceedings in the District Court to recover unpaid legal fees. Lauro had defended the claim, alleging professional negligence and breaches of professional standards, and had also filed a counterclaim. The District Court had entered a default judgment in favour of Minter Ellison.

The legal issues before the Supreme Court of South Australia concerned the validity of the default judgment entered by the District Court. Specifically, the court had to determine whether the District Court had the power to enter a default judgment for a liquidated sum claimed as costs, notwithstanding the provisions of the *Legal Practitioners Act 1981* (SA) regarding the adjudication of legal costs. Further issues included whether the default judgment was irregular on other grounds, whether the applicant's medical condition provided a reasonable excuse for his failure to attend court, and whether certain human rights or disability discrimination legislation had been breached. The court also considered whether the Supreme Court Judge had erred in refusing an extension of time to appeal.

The Supreme Court, per Parker AJA, found that the *Legal Practitioners Act 1981* (SA) did not preclude the District Court from entering a default judgment for a liquidated sum claimed by way of costs. The court reasoned that the Act's provisions for adjudication of costs only applied when an application for adjudication was made, which had not occurred in this instance. The court also held that the default judgment was final, even though it did not determine the ultimate recoverable costs or preclude future adjudication. Regarding the applicant's medical condition, the court considered the evidence of Dr Giordano and concluded that it was part of the background material about the applicant's health and its omission from a subsequent judgment did not constitute an error. The court found no merit in the arguments concerning alleged breaches of human rights or the *Disability Discrimination Act 1992* (Cth), nor did it find any procedural error or outcome error in the previous judicial decisions.

Consequently, the Supreme Court refused the applicant's application for permission to appeal and an extension of time. The court concluded that the proposed grounds of appeal were not reasonably arguable, and therefore, no extension of time should be granted.

Orders

Orders of the court

Held per Parker AJA (Lovell JA and David AJA agreeing), refusing an extension of time and permission to appeal:

1. The evidence of Dr Giordano concerning the applicant’s medical condition was simply part of the background material about the applicant’s health. The omission of any reference to that evidence did not amount to an error.

2. It is not clear that the reference to “a full and independent review” in the applicant’s defence constituted a request for adjudication under the Legal Practitioners Act 1981 (SA). Nevertheless, given that the proceedings concerned allegations of professional negligence and breaches of professional standards, along with a counterclaim, there would be no utility in referring the disputed costs claim for adjudication.

3. Schedule 3 of the Legal Practitioners Act 1981 (SA) does not operate to preclude the District Court from entering a default judgment for a liquidated sum claimed by way of costs.

4. The entry of the default judgment was a final judgment even though it did not determine the costs that were recoverable by the respondent under the terms of its retainer and nor did it preclude the applicant from seeking adjudication of the costs claimed by the respondent under Schedule 3 of the LPA.

5. The Supreme Court Judge’s analysis of the legal principles relevant to the entry of default judgments was plainly correct.

6. It is not reasonably arguable that the Supreme Court Judge erred in concluding that the Court was not required to warn the applicant that a default judgment may be entered if he failed to attend.

7. Leaving aside the fact that the respondent did in fact inform the Court of the applicant’s status as a protected person, it cannot be said that this alleged failure renders the default judgment irregular where the applicant has not alleged any prejudice as a result of the alleged failure and where the Court was aware of the issue and retained a discretion as to whether to appoint a litigation guardian.

8. As the matter was decided by default judgment, the argument that the respondent’s lawyers should not have been permitted to conduct the case as they were required as witnesses remains an academic point that has no influence on the outcome of the proceedings such that permission to appeal should not be granted.

9. The limited dispensation from the pre-trial procedural requirements has not previously been the subject of complaint, is not the subject of submissions and did not cause the applicant any prejudice.

10. The respondent’s contention that claims for breach of contract are not capable of giving rise to a liquidated debt does not establish that the default judgment was irregular.

11. It is not apparent how the applicant’s human rights or rights under the Disability Discrimination Act 1992 (Cth) were breached.

12. The application for permission to appeal is misdirected to the extent that it asserts that the Supreme Court Judge erred in the exercise of a discretion. The real issue is whether the Supreme Court Judge failed to identify a process error or an outcome error in the exercise of the second judge’s discretion.

13. Proposed grounds of appeal 6(f), 6(h), 8, 9, 10 and 14(b) concern a decision that the Supreme Court Judge was not called upon to make and rely on criteria that are not relevant. Accordingly, the grounds are not reasonably arguable.

14. The matters referred to by the second judge were either uncontested questions of fact or findings of fact he made after hearing evidence from the applicant. Each of the matters considered by the second judge were clearly relevant to the exercise of his Honour’s discretion and thus there was no process error. There was also no outcome error.

15. The Supreme Court Judge did not err in declining to grant an extension of time of more than 18 months to appeal against the decision of the trial Judge. As the proposed grounds of appeal are not reasonably arguable, no extension of time should be granted.

Background

Background to the litigation

A number of the grounds pursued on this appeal (the second appeal) were not advanced in the appeal considered by Bleby J (the first appeal). However, as those new grounds do not rely on facts that were not before the District Court, I have considered those grounds in the interests of justice.Background Before referring to the proposed grounds of appeal and the application for permission to appeal, it is necessary to state the background. On 28 June 2013 the respondent, the law firm Minter Ellison, instituted proceedings in the District Court seeking to recover the sum of $132,090.09, together with interest, in respect of work done and services provided pursuant to the terms of engagement contained in a letter dated 31 May 2011. The amount claimed by the respondents was the subject of a series of invoices issued to the applicant and his wife in 2011 and 2012. Although the applicant’s wife was named as second defendant, the action against her was later discontinued. While some amounts had been paid, the respondent claimed that it had suffered a loss of $132,090.09. The work done and services provided by the respondent were in the course of it acting for the applicant in three proceedings in the Magistrates Court, one matter in the District Court and another in the Supreme Court. The defendants in those actions had been engaged by the applicant in relation to home building work. The applicant pleaded in his defence dated 6 December 2013, amongst other matters, that the respondent had acted contrary to instructions, had been negligent, had acted contrary to the retainer and failed to provide itemised accounts for each of the listed matters. Those allegations lacked supporting particulars. The applicant also denied that the District Court was the appropriate forum and pleaded in relation to the latter contention that a formal review should be undertaken of all invoices and the matter should be dealt with by the Legal Practitioners Conduct Board. The applicant also referred to his ill health which allegedly prevented him from attending to legal matters at that time. The applicant also made a counterclaim against the respondents and pleaded that he had a set off for a like or equal amount to any sum found due and owing to the respondent. In essence, the basis for the set off was an allegation that the respondent had been negligent and rendered excessive and/or unreasonable charges. Once again, this pleading lacked particulars. The respondent denied that the applicant was entitled to set off any amount owed and also denied that he was entitled to any damages by way of counterclaim. The trial commenced in the District Court on 12 February 2015 before Judge Chivell. However, the proceedings were adjourned very soon after their commencement due to the ill health of the applicant. The subsequent history of the action has been set out in considerable detail in the judgment of Judge Durrant in Minter Ellison A Firm v Lauro.[1] That summary was adopted by Bleby J in the judgment that is the subject of the present application and in which he dismissed appeals by the applicant from the orders made by Judge Chivell and Judge Durrant.[2] [1] [2020] SADC 41 at [7]-[13].[2] [2020] SASC 137 at [6].

Evidence

Evidence Before The Court

At another point in his submissions the applicant has referred to a failure to recognise his rights under the International Covenant on Civil and Political Rights. That Covenant has been adopted as Schedule 2 to the Australian Human Rights Commission Act 1986 (Cth). The Covenant declares a series of fundamental human rights, such as the right to liberty, to equal treatment before the courts, the presumption of innocence in criminal proceedings, freedom of conscience and religion, freedom of association, freedom from discrimination on grounds of race, sex, religion, national or social origin and so forth. These rights operate in Australia to the extent that they have been adopted into domestic law by various Commonwealth statutes, e.g. the Racial Discrimination Act 1975 (Cth), the Sex Discrimination Act 1984 (Cth), the Disability Discrimination Act 1992 (Cth) and so forth. It is not apparent how the applicant’s rights under such legislation are said to have been breached. In particular, I do not consider that there has been any direct or indirect discrimination within the meaning of ss 5 or 6 of the Disability Discrimination Act and nor is the decision making of the Court an activity that is subject to Part 2 of that Act. The medical evidence In grounds 6(f), 6(h), 8, 9, 10 and 14(b), the applicant contends that Bleby J erred by upholding the finding of Judge Chivell that he had no intention of attending the trial and wrongly exercised his discretion to dismiss the appeal when he should have found that the applicant had a reasonable excuse for failing to attend based upon all the medical evidence and the alternative arrangements proposed on his behalf by his son. While a number of medical reports were provided to the District Court in 2016 and 2017, it is only necessary to refer to the reports attached to the further submissions of the applicant dated 21 May 2021 and the evidence given by Dr Mario Giordano on 17 March 2015. Dr Giordano is a general practitioner who had treated the applicant for some time and had received reports from a cardiologist, Dr Enzo De Angelis, and previously from Dr Julie Bradley and others about his condition. Dr Giordano stated that the applicant suffered from early morning hypertension and had a history of coronary artery disease. He had suffered a heart attack in 2008 when participating in court proceedings. That was followed by bypass surgery. The surgery was complicated by a post-operative pulmonary embolism. If progress was being made with controlling the applicant’s blood pressure with the assistance of medication prescribed by Dr De Angelis, Dr Giordano considered that he could attend court. Dr Giordano agreed that it would be advantageous if the applicant was only required to attend court in the afternoon. He expressed the opinion that in the absence of any major changes in the applicant’s condition he should be able to attend court in April 2016. Dr Giordano also explained that if the applicant’s systolic blood pressure was about 120 or 130, which “spiked” to about 160 or 170 for a brief period due to the stress of court proceedings, he did not think that would be a problem. However, if his blood pressure was about 180 or 190 and it then “spiked” to 200 or 210 that would be a serious issue. That might result in a further myocardial infarction or a stroke or something similar.

Decision

Reasons for decision

It is apparent that the evidence of Dr Giordano had been accepted and acted upon by Judge Chivell for more than three years as had a series of more recent medical reports. In these circumstances, and as the basis for the decision that the trial should resume was his Honour’s conclusion that the applicant was unwilling to deal with the Court in a constructive way, the evidence of Dr Giordano was simply part of the background material about the applicant’s health. I do not consider it to be reasonably arguable that the omission by Judge Durrant of any reference to that evidence caused his Honour or Bleby J to err.The alleged irregularity of the default judgment – right to adjudication of costs The applicant contends that the default judgment was irregular on two broad grounds. First, the applicant contends that the default judgment should not have been entered in the absence of the claim for payment of legal fees being adjudicated in accordance with the LPA or under the inherent jurisdiction of this Court. Secondly, the applicant contends on a multiplicity of other grounds that the default judgment was irregular and should not have been entered. Those two broad issues must be considered separately. At [36] to [74] Bleby J conducted a detailed examination of the power of the District Court to enter a default judgment for a liquidated sum in an action for the recovery of costs where the disputed costs had not been adjudicated, whether under the LPA or in the inherent jurisdiction of this Court. In conducting that review Bleby J examined at [44] the authorities that are the subject of the complaint by the applicant that the respondent had failed to draw these cases to the attention of Judge Chivell and the further complaint that Judge Durrant erred in his consideration of these cases. Bleby J referred to the decision of Gray and Sulan JJ in Kowalski v RJ Cole & Partners which summarised the effect of the decision of King CJ (with Mohr and Matheson JJ agreeing) in King William Law Chambers that the role of this Court is confined to the proper quantification of fees payable for legal work and the question of liability is to be determined by the court in which the proceeding had been brought.[10] His Honour also noted that,[11] consistently with those findings, David Bleby J (with Gray and Layton JJ agreeing) had held in von Doussas Legal Pty Ltd v Nasr that the LPA does not confer on this Court the exclusive jurisdiction to determine disputes about costs.[12] [10] Lauro v Minter Ellison [2020] SASC 137 at [48].[11] Ibid at [54]. [12] (2009) 105 SASR 46 at [71]. Importantly, Bleby J[13] found that the jurisdiction of this Court to determine the quantum of a costs claim only arises once an application for adjudication is made under cl 37(1) of Schedule 3 to the LPA.[14] His Honour found that no such application had been made in this case.[15] His Honour also noted that if an application had been made, the recovery proceedings commenced by the respondent would have been stayed by force of cl 44(b) of Schedule 3 until the adjudication was completed.[16] [13] i.e. the Hon Justice Christopher Bleby as distinct from the Hon Justice David Bleby.[14] Lauro v Minter Ellison [2020] SASC 137 at [63]-[64] and [68].[15] Ibid at [69]. [16] Ibid at [65].

Ratio Decidendi

Legal Principle Established

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