Lemoto v Able Technical Pty Ltd

Case [2005] NSWCA 153

NEW SOUTH WALES COURT OF APPEAL

CITATION:      Lemoto v Able Technical Pty Ltd & 2 Ors [2005]  NSWCA 153

FILE NUMBER(S):
40432/04

HEARING DATE(S):               30 March 2005

JUDGMENT DATE: 09/05/2005

PARTIES:
Semisi Lemoto (Appellant)
Able Technical Pty Limited (First Respondent)
B & C Mailing Pty Limited (Second Respondent)
Christine Stoddart (Third Respondent)

JUDGMENT OF:       Hodgson JA Ipp JA McColl JA   

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S):          DC 13332/01

LOWER COURT JUDICIAL OFFICER:     Phegan DCJ

COUNSEL:
S Norton SC, M D Causer (Appellant)
First Respondent (No Appearance)
M T McCulloch SC, R G Gambi (Second Respondent)
K Richardson (Third Respondent)

SOLICITORS:
First Law Pacifica (Appellant)
Owen Hodges Lawyers (First Respondent)
Hunt & Hunt Lawyers (Second Respondent)
Gilbert + Tobin (Third Respondent)

CATCHWORDS:
LEGAL PROFESSION - whether costs order properly made against solicitor pursuant to s 198M Legal Profession Act 1987 - whether case that solicitor provided legal services on a claim for damages without reasonable prospects of success - NATURAL JUSTICE - procedural fairness - failure to give full and sufficient notice of basis on which costs order might be made against solicitor - failure to give full and sufficient opportunity to respond to question whether costs order should be made to have regard to principles of natural justice - PROCEDURE - mode of making s 198 M costs application - procedure devised to deal with question whether a s 198M order should be made should have regard to principles of natural justice - JUDICIAL OFFICERS - exercise of judicial power - obligation to give reasons - STATUTORY INTERPRETATION -  construction of Part 11, Division 5C of the Legal Professional Act 1987 - WORDS AND PHRASES - "without reasonable prospects of success" (D)

LEGISLATION CITED:
Arbitration (Civil Actions) Act 1983
Civil Liability Act 2002
Conciliation and Arbitration Act 1904 (Cth)
Courts Legislation (Civil Procedure) Amendment Act 1991
District Court Act 1973
District Court Rules 1973
Legal Profession Act 1987
Supreme Court Act 1970
Supreme Court Act 1981 (Imp)
Supreme Court Rules 1970

DECISION:
(1) Extend to 18 June 2004 the time in which the appellant might seek leave to appeal against such orders as were made by the primary judge prior to 19 May 2004 (2)Grant leave to appeal and allow the appeal (3) Set aside the costs order made by Phegan DCJ in Chambers on 25 February 2004 (4)Order the first and second respondents to pay the appellant's costs of the appeal and of the application for leave to appeal (5)Third respondent to bear her costs of the appeal and of the application for leave to appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA         40432/04
DC         13332/01

HODGSON JA
IPP JA
McCOLL JA

Monday, 9 May 2005

LEMOTO v ABLE TECHNICAL PTY LTD & 2 ORS

FACTS

The appellant acted as the solicitor for the third respondent in proceedings in the District Court in which she sought to recover damages for injuries she allegedly suffered while working at the second respondent’s…

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Details
AGLC
Lemoto v Able Technical Pty Ltd [2005] NSWCA 153
Case
[2005] NSWCA 153
Decision Date

CaseChat Overview and Summary

The appeal concerned a costs order made against a solicitor, Ms Ryan, pursuant to section 198M of the *Legal Profession Act 1987* (NSW). The primary judge had found that the plaintiff, Ms Lemoto, had failed to establish a causal connection between her workplace incident and her subsequent condition, and also that the defendants had not breached their duty of care. Following these findings, the primary judge made an order against Ms Ryan, the solicitor for Ms Lemoto, on the basis that her client's claim was brought without reasonable prospects of success. Ms Ryan appealed this order.

The central legal issues before the appellate court were whether the primary judge had erred in making the costs order against Ms Ryan. This involved determining whether the plaintiff's case was indeed without reasonable prospects of success, and crucially, whether the principles of natural justice had been observed. Specifically, the court considered whether Ms Ryan had been given sufficient notice of the basis on which the costs order might be made against her and a proper opportunity to respond to that specific question.

The appellate court reasoned that while the primary judge had found the plaintiff's case had failed on the balance of probabilities, this did not automatically equate to the claim being brought without reasonable prospects of success. The primary judge's own comments indicated that there was room for a favourable interpretation of the medical evidence, and that a causal connection could not be excluded as a possibility. Furthermore, the court found that the procedure adopted by the primary judge in making the s 198M application did not afford Ms Ryan procedural fairness. She was not given adequate notice of the specific grounds upon which the costs order was being sought against her, nor a sufficient opportunity to make submissions in response to that specific application.

Consequently, the appellate court allowed the appeal, set aside the costs order made against Ms Ryan, and ordered the respondents to pay Ms Ryan's costs of the appeal.

Orders

Orders of the court

(1) Extend to 18 June 2004 the time in which the appellant might seek leave to appeal against such orders as were made by the primary judge prior to 19 May 2004 (2)Grant leave to appeal and allow the appeal (3) Set aside the costs order made by Phegan DCJ in Chambers on 25 February 2004 (4)Order the first and second respondents to pay the appellant's costs of the appeal and of the application for leave to appeal (5)Third respondent to bear her costs of the appeal and of the application for leave to appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Nevertheless, his Honour held that:“In fairness to the plaintiff, it has to be said that even when allowance is made for the unreliability of her evidence and for the difference in the medical opinions, there is still room on the medical evidence for a conclusion that the lifting incidents on 11 October 1999 were the precipitating cause of the disc protrusion. Certainly one could not say, on the basis of all of the medical evidence, that such a connection is excluded. It is quite consistent with the degenerative condition and the earlier episodes of the onset of back pain and symptoms of sciatica, to conclude that up until 11 October there had been no precipitating event sufficient to bring about the debilitating condition which the plaintiff subsequently suffered. A causal connection in that sense certainly could not be excluded as a possibility. It should also be said in fairness to the plaintiff that the evidence of gradual onset of pain and of its exacerbation, at least when the plaintiff was subsequently employed in late October and early November of 1999, is all consistent with the possibility that there was an undetected but nonetheless real herniation on 11 October.However, evaluating the evidence as a whole and in taking proper account of the various matters that I have now recorded, both with regard to the plaintiff’s medical history leading up the incident in October but perhaps even more importantly the plaintiff’s history in the period immediately following her employment with the second defendant, the plaintiff has failed on the balance of probabilities to establish a causal connection between whatever happened on that occasion and the onset of the condition which ultimately required the intervention of surgery in the early part of 2000. For that reason alone, the plaintiff’s case against both of the defendants fails.The difficulty for the plaintiff is that, while one can interpret the evidence in a way favourable to the plaintiff, such a favourable interpretation only stands alongside a number of other equally feasible alternatives, and in those circumstances there is a failure on the plaintiff’s part to shift the onus even on the balance of probabilities in her favour.” (emphasis added) His Honour’s conclusion on the second causation issue was sufficient to conclude the case adversely to the third respondent. However, even though, as he acknowledged, it was not “strictly necessary … for the judgment to go any further”, he went on to indicate “in brief outline”, that the third respondent’s claim would also have failed because she had not established that either the first or second respondent had breached its duty of care. Insofar as the second respondent was concerned, the primary judge found:“The plaintiff was told on more than one occasion and by more than one employee of the second defendant that part of her job was to bring the videos that were contained in the boxes of forty on the pallet to the table where she was working at assembling the smaller boxes and inserting the video cassettes for the purpose of the mail-out. Words were used in that context which varied from a reference to the large boxes to references to videos or video cassettes. However, even on the plaintiff’s evidence, there was never an explicit direction that a full box containing forty video cassettes had to be carried from the pallet to the worktable. The plaintiff herself conceded in this regard, and it is to her credit that she did, that it was her interpretation of the words which were used, rather than the words themselves that led her to conclude that she was expected to carry boxes of 40 than anything less … The other area of uncertainty which was again, on the plaintiff’s own admission, a product of her interpretation of the words which were used, was a significance that the plaintiff attached to the comment of the person she described as Maria on the afternoon of 11 October in the context of Maria’s observation that the plaintiff had been seen asking an employee from another department to carry a box of video cassettes for her. According to the plaintiff she was told that she must ‘carry her own weight’ or words to that effect. There was nothing said by Maria in that context explicitly requiring the plaintiff to carry a box of forty videos. As a matter of common sense, the reference to carrying one’s own weight is more likely to be understood as no more than a version of the common phrase of ‘pulling’ one’s own weight. In other words, and indeed the plaintiff did give evidence to this effect, that what was being said to her was that every employee had to do their share of the work and specific tasks could not be delegated to other employees to the extent that it slowed down or interfered with that other employee’s work. That was the gist of what was being said to the plaintiff. In the transportation of video cassettes from the pallets to the worktable, the plaintiff had to do her share. What was not said to the plaintiff at any stage, even on the plaintiff’s own evidence, was that she was required to carry a box of forty videos. … The case against the defendants therefore, insofar as it was based on an alleged requirement that the plaintiff lift and carry boxes of forty videos was a consequence not of any explicit instruction to that effect, but of the plaintiff’s interpretation of statements that were made to her by employees of the second defendant. It was the plaintiff’s own decision, by way of such interpretation, on the afternoon of 11 October that led her to the attempts which she made unsuccessfully to lift and carry a full box. It was the plaintiff’s resolution to do it, not the defendant’s instructions.In coming to that conclusion, I acknowledge that such a conclusion was understandable. But that does not take the case against the defendants any further. The plaintiff had not long before been told that her job was at an end; she was, in words which she used at least in her statement of May 2000, ‘embarrassed and humiliated’ by what had been said to her by the person called Maria; she persuaded herself in the light of comments that had been made that she was expected to carry the full box, apart from any other reason, because it would speed up her rate of progress because it would cut down the number of trips she had to make from the worktable to the pallet and that she felt under some pressure to speed up in the light of the comments that had been made. In those circumstances the fact that she perceived herself to be under some imperative to try to lift the box is understandable. But it is certainly not enough to expose the defendants to liability for compelling her to do so. The pressures which she might have felt, real as they were, were not of a kind sufficient to suggest a disregard on the part of the second defendant of the plaintiff’s safety.” (emphasis added)

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mr Gambi then made it plain that he was resisting Ms Ryan’s application for an adjournment on the basis that the primary judge could deal with the question of costs based on offers of compromise and Calderbank letters “on the papers”. The following exchange took place:“Mr Gambi: … the question of whether or not there was any real prospect of success in our submission there really wasn’t any, and the plaintiff really should have known about it at the conclusion of the arbitration.His Honour: Now that the s 191 [sic, this was presumably a reference to s 198M of the Legal Profession Act] matter is being put on a more formal basis, it seems to me that that is a discrete issue which I would be wary of resolving in short compass this morning. I take your point, I should read the Arbitrator’s award in the circumstances even though it might be brief enough for me to read quickly. I would prefer not to resolve that issue.” (emphasis added) His Honour then observed that he had not previously dealt with an application pursuant to s 198M. He opined that where a “formal application” pursuant to that section was made then “the counsel and/or solicitor for the party concerned would be entitled to prepare by way of response whether it is by way of affidavit and/or some other means, a response to that application”. He indicated that he was sympathetic to adjourning the s 198M matter but that the question of costs as between the parties could proceed. Before proceeding with that course, however, the primary judge enquired whether there was any “mechanism” for an application pursuant to s 198M. Mr Gambi submitted that “s 148B” of the District Court Act 1973 (NSW) was the “starting point”. Although the transcript records Mr Gambi as having referred to “s 148B”, he most probably referred to s 148E which gives the District Court power to make legal practitioners liable for their client’s costs in certain circumstances. He gave the primary judge a copy of s 198J and s 198M of the Act and contended that the latter section was the source of his Honour’s power. At this stage, with respect, the primary judge appears to have become somewhat distracted by a belief that the second respondent’s application was one pursuant to s 198M(1)(a), namely that the appellant repay to the third respondent any costs she was ordered to pay to any other party rather than, as appeared tolerably clear from Mr Gambi’s application, an order pursuant to s 198M(1)(b) directing the third respondent’s legal representatives to indemnify the first and second respondents in respect of their costs of the proceedings. It was in the context of observing that the issue was “strictly one between the plaintiff and those acting for her” in which the second respondent had, according to the primary judge, only an “oblique … interest” that his Honour also expressed a concern that the application should not lead to an “escalation of further costs on the part of those representing the successful parties, having obtained a favourable costs order as to whether they had any further role in the pursuance of the matter as between client and those representing the unsuccessful client …”.