Loretta Craig v Anthony Johnson

[2019] NSWSC 223

Supreme Court

New South Wales

Medium Neutral Citation:

Loretta Craig & Ors v Anthony Johnson & Ors [2019] NSWSC 223

Hearing dates:

22 February 2019

Date of orders:

22 February 2019

Decision date:

22 February 2019

Jurisdiction:

Common Law

Before:

Lonergan J

Decision:

(1)   The Directions Hearing listed at 10:30 am on 28 February 2019 is vacated.

 

(2)   The order that the defendants file their evidence by 22 February 2019 (order 7 made on 4 December 2018), is vacated.

 

(3)   The matter be listed for further directions at 9:00 am on Tuesday, 9 April 2019 before me.

 

(4)   The parties have liberty to apply on 3 days prior notice.   

(5) The plaintiffs’ amended notice of motion filed on 24 May 2018 regarding the UCPR 28 r 2 application for separation of assessment of quantum of loss from the determination of liability is stood over for further directions on 9 April 2019 at 9:00 am.

Catchwords:

CIVIL PROCEDURE – service of lay evidence – issues arising as a result of appeal – case management orders

Legislation Cited:

Civil Liability Act 2002 (NSW), s 5O
Civil Procedure Act 2005 (NSW), s 56

Category:

Procedural and other rulings

Parties:

Lorretta Kistmah Craig & 4 Ors (Plaintiffs)
Anthony Francis Johnson & 60 Ors (Defendants)

Representation:

Counsel:
I Archibald (Plaintiffs)
D Lloyd (Defendants)

  Solicitors:
Charles Filgate Giles & Associates (Plaintiffs)
Moray & Agnew (Defendants)

File Number(s):

2016/328254

Judgment

1. These are professional negligence proceedings commenced in 2016 seeking damages for negligence from the defendants, partners in Johnson Winter & Slattery. It is alleged by the plaintiffs that that firm represented them in a commercial dispute in the Equity Division of this Court (“the Equity Proceedings”) that were heard in 2013 and that the firm gave negligent advice in relation to an offer of settlement that had been made to them in the Equity Proceedings. The offer was not accepted and the plaintiffs lost their case.

2. The defendants deny liability and have pleaded s 5O of the Civil Liability Act 2002 (NSW) in their Defence.

3. The matter has had a number of procedural and other delays and various notices of motion have been filed including a notice of motion filed on 5 October 2017 seeking separate determination of liability and damages issues.

Plaintiffs’ notice of motion for separate determination

4. The notice of motion was listed for hearing before Lonergan J on 24 May 2018. An amended notice of motion was filed and served, refining somewhat the order relating to separate determination.

5. Argument proceeded for a substantial part of a day. It became clear during argument that without the final position in respect of lay witness statements, the application could not sensibly be determined, and the motion was stood over part heard, with directions and orders made regarding the service of lay witness statements.

6. Those directions have only partly been complied with. There have been further timetables and some delays associated with the filing and service of a further amended statement of claim in November 2018 which on its face significantly re-cast the case against the defendants.

7. As a result of that development, a further timetable was laid down for the service of a Defence, reply, and the time within which the defendant was to finalise their lay witness statements.

Plaintiffs’ Motion filed 15 May 2018 regarding access to privileged documents

8. In the meantime, another notice of motion filed by the plaintiff on 15 May 2018 sought orders that objection taken by Ms Inverarity over documents related to the Equity Proceedings be overruled, and that the plaintiffs in these proceedings have leave to inspect the documents produced. The documents produced relate to instructions and solicitor/client/counsel correspondence about and around the offer of settlement made in the Equity Proceedings that forms the foundation of these proceedings.

9. Argument on the motion proceeded on 1 June 2018. On 30 October 2018, the motion was dismissed with costs (Lorretta Craig & Ors v Anthony Johnson & Ors [2018] NSWC 1539).

10. On 26 November 2018 a notice of intention to appeal that decision was filed in the Court of Appeal, and I have been informed by counsel today, an application for leave to appeal and a summary of argument have also now been filed.

Directions Today

11. The matter is listed for further directions today given the appeal. An order that the defendants file and serve their lay witness statements expires today. The defendants’ concern is that until the position in respect of the issue of access to the privileged material is determined finally, the defendants ought not to be required to serve their lay evidence, because it may be that the plaintiffs’ case will take on further evidentiary developments, depending on the outcome of the appeal.

12. Counsel for the defendants Mr Lloyd, explained that whilst on one analysis the documents now the subject of the appeal only go to one aspect of the plaintiffs’ case, it is a critical one because it is inextricably tied up with the issue of the defendants liability and what they would have or ought to have done in respect of the offer of settlement and what would have transpired had further questions been asked by them about the offer of settlement that had been made.

13. Mr Lloyd explained that it would be unfair to have the defendants commit to a position on lay witness statements when the plaintiffs’ lay evidence position remains incomplete. In particular, he drew attention to the fact that the plaintiffs had served affidavits of expected evidence from the solicitor Ms Inverarity as well as from her then clients, the defendants in the Equity Proceedings. It was expected that evidence would be sought to be led from them about their intentions in respect of the offer of settlement that was made, and what the instructions were as to what the settlement meant and entailed. Obviously if the plaintiffs’ application to appeal is successful, the expected evidence may well include matters not currently on the table.

14. Mr Lloyd advised that at this stage, given leave to appeal was required, in the usual course, a decision would be made by the President in Chambers as to whether the matter would proceed first only on the question of leave or whether the question of leave would proceed to be heard together with the substantive appeal. The former course may result in a short hearing soon, whereas the latter course may well entail delay.

15. The appeal is listed before the Registrar on 11 March 2019 for directions. At that time some clarity should emerge as to when the application for leave and/or the appeal are likely to be dealt with by the Court of Appeal.

16. Mr Archibald appearing for the plaintiffs, whilst at first took the view that the defendants should at least put on such statements as they could as they could, to be further augmented after determination of the appeal, revised his view to an extent, and favoured a tight timetable for statements after determination of the appeal to ensure the matter was kept on track.

17. Mr Archibald very properly emphasised the need to take into account s 56 of the Civil Procedure Act 2005 (NSW) and the overriding purpose when making decisions regarding the proceedings, to facilitate just, quick and cheap resolution of the real issues.

18. It seems to me that it would be unfair to require the defendants to put on statements now in a piecemeal fashion when the plaintiffs’ evidentiary position is not finalised and has to abide the outcome of the matters currently awaiting determination by the Court of Appeal.

19. As pointed out by Mr Lloyd, the causation or “counterfactual” considerations that may arise from further material potentially to be led from Ms Inverarity and her then clients, directly affects liability issues because of the way paragraph 41 of the amended statement of claim particularises the defendants’ conduct and the likely course of events that would have ensued had the plaintiffs been properly advised.

20. There was some commonality between Mr Archibald and Mr Lloyd as to the best way forward for management of the proceedings. The area for difference really came down to whether I should set a timetable now as to when the lay evidence ought to be finalised, or whether it was preferable to bring the matter back before me so that orders could be made to progress the matter once the result of the appeal – or its likely determination date – was known.

21. In all the circumstances, I determined that it was preferable to bring the matter back before me in April, with liberty to apply.

22. It is of some concern that the matter is taking so long to proceed to a state of finalisation of witness statements, let alone service of expert evidence and delineation of issues, particularly given the subject matter of the proceedings and that the events complained about occurred six years ago, however at this stage there does not seem to be any other appropriate solution until the application for leave to appeal is determined.

23. Accordingly, I made case management orders as follows:

1. The Directions Hearing listed at 10:30 am on 28 February 2019 is vacated.

2. The order that the defendants file their evidence by 22 February 2019 (order 7 made on 4 December 2018), is vacated.

3. The matter be listed for further directions at 9:00 am on Tuesday, 9 April 2019 before me.

4. The parties have liberty to apply on 3 days prior notice.   

5. The plaintiffs’ amended notice of motion filed on 24 May 2018 regarding the UCPR 28 r 2 application for separation of assessment of quantum of loss from the determination of liability is stood over for further directions on 9 April 2019 at 9:00 am.

Note: The parties, in recognition of s 56 of the Civil Procedure Act, are mindful of the need, as soon as the issues on the appeal are determined, to be in a state of readiness to be able to complete their respective evidentiary positions within a short time frame.

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Decision last updated: 15 March 2019