Lovick & Sons Developments & Anor v Doppstadt Australia & Anor

[2009] NSWSC 773

CITATION:	Lovick & Sons Developments & Anor v Doppstadt Australia & Anor [2009] NSWSC 773
HEARING DATE(S):	22 June 2009
JUDGMENT DATE :	22 June 2009
JURISDICTION:	Equity
JUDGMENT OF:	Slattery J at 1
EX TEMPORE JUDGMENT DATE:	22 June 2009
DECISION:	I decline to make an order for costs in favour of either party on this motion.
CATCHWORDS:	COSTS - Failure of communication between the two opposing firms of solicitors - Deed governing handover of the file not served as required - Insufficient action taken by both parties - Costs lie where they fall
LEGISLATION CITED:	Legal Profession Act 2004
CATEGORY:	Principal judgment
TEXTS CITED:	G. E. Dal Pont, Law of Costs, 2nd ed (2009) LexisNexis Butterworths
PARTIES:	Lovick & Sons Developments Pty Ltd (First Plaintiff) Lovick Engineering Pty Ltd (Second Plaintiff) Doppstadt Australia Pty Ltd (First Defendant) Raymond John Davis (Second Defendant)
FILE NUMBER(S):	SC 1307/06
COUNSEL:	D Lloyd (Plaintiffs) S T Chrysanthou (Defendants)
SOLICITORS:	Whiteley, Ironside & Shillington (Plaintiffs) Ferrier & Associates (Defendants)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

SLATTERY J

MONDAY 22 JUNE 2009

1307/06 LOVICK & SONS DEVELOPMENTS PTY LTD AND LOVICK ENGINEERING PTY LTD v DOPPSTADT AUSTRALIA PTY LTD AND ANOR

JUDGMENT

1 HIS HONOUR: I have before me today in these proceedings a notice of motion brought by the plaintiffs, Lovick & Sons Pty Ltd and Lovick Engineers Pty Ltd, not against the defendants but against their former solicitors, Ferrier and Associates under s 728 of the Legal Profession Act 2004 seeking that Ferrier and Associates deliver to the plaintiff the plaintiffs’ files in the proceedings. Ferrier and Associates filed a notice of ceasing to act in the proceedings on 3 June 2009, having given notice on the 2 June 2009 to the plaintiffs of their proposed ceasing to act. I understand, from what I have been told and from the materials I have perused in the course of hearing this costs argument, that Ferrier and Associates ceased to act by reason of their costs not having been paid. Once that failure occurred Ferrier and Associates gave notice under their costs agreement to the plaintiffs that they were proposing to cease to act and they then did so in accordance with that notice.

2 There is no dispute that Ferrier and Associates were entitled to give that notice and no issue of their professional conduct or of any breach of the retainer by them arises out of their ceasing to act in the proceedings.

3 The issue before the Court today is the consequences of that ceasing to act. At the time Ferrier and Associates ceased to act, the proceedings were listed for a directions hearing on 15 June 2009. That directions hearing was an occasion no doubt when both Ferrier and Associates and the plaintiffs and their new solicitors could have anticipated that the defendants would be seeking to have the proceedings advanced notwithstanding the change of solicitors.

4 Considerable efforts were undertaken on both sides of these proceedings to manage the consequences of the change of solicitors. Both Ferrier and Associates and the new solicitors for the plaintiffs, Messrs Whitely, Ironside and Shillington through the solicitor handling the matter, Mr T J Tancred, undertook strenuous efforts to communicate with one another to try and resolve the issue of the hand-over of the file. In the result, those communications failed, leading to this matter coming before the Court today.

5 The communications between 5 June 2009 and last Friday, 19 June, foreshadowed the plaintiff’s application pursuant to s 728 of the Legal Profession Act 2004 that Ferrier and Associates deliver to the plaintiffs their files in relation to these proceedings on the condition that the plaintiffs and their solicitors deliver to Ferrier and Associates an executed version of the deed annexed to the notice of motion filed on 18 June 2009 and that Ferrier and Associates do so by 5pm on 22 June 2009.

6 Orders to this effect were sought by way of notice of motion which was filed on the 18 June 2009. Those orders were consented to this morning by the respondent to the motion, Ferrier and Associates.

7 The issue that is before me is the costs of this motion and the costs of a directions hearing that occurred on 15 June 2009 in which, because the matter of the handover of the files was then unresolved, a costs order was made by the registrar in favour of the defendant against the plaintiff. The plaintiffs say that their former solicitors Ferrier and Associates, should bear those costs.

8 The order which has been consented to contains the key to the problem at the heart of why this matter was not resolved before today. Order 1 provides that the plaintiffs’ files be returned on condition that the plaintiffs and their solicitors deliver to Ferrier and Associates an executed version of the deed annexed to the notice of motion filed on 18 June 2009. There is no doubt on the face of this order that one essential part of the exchange that was proposed to take place when the file was handed over, was that an executed deed would be required to be made and delivered at the same time. Early notice of the need for the file was given by the new solicitors for the plaintiffs’, to Ferrier and Associates. The new solicitors gave notice of their demand for the file from Ferrier and Associates by correspondence on 3 June 2009, 5 June 2009 and 9 June 2009, in terms which appear to be reasonable. The new solicitors foreshadowed the difficulty which their clients faced, namely, that the new solicitors for the plaintiffs would have to deal with the defendants on and from 15 June and needed the file for that purpose. For reasons that may be hard to explain, other than the fact that the present counsel for the plaintiffs was only first briefed to appear on the 15 June, one essential feature of that correspondence was missing. The precise form of the deed which the new solicitors, were proposing to have executed in exchange for the delivery of the file, was not settled and served on Ferrier and Associates.

9 Without going through the correspondence in any more detail than I have, it should be concluded that there was sufficient notice from the new solicitors to Ferrier and Associates at an early stage that the precise terms of the deed would be of some importance to Ferrier and Associates before they gave their final assent to transferring the plaintiff’s files. That was largely recognised after the costs orders were made on 15 June against the plaintiffs. More focussed action then took place in the plaintiffs camp to have this matter resolved, including the preparation of the notice of motion and the settling of a deed. However the notice of motion was not ultimately filed until 18 June and the form of deed which was to be executed was not served upon Ferrier and Associates until, at the latest, 16 June. It may have been served on the 15 June but that is unclear. I do not think that the difference of one day affects my exercise of discretion in relation to costs in this matter.

10 There is little doubt that there was a misunderstanding on the part of Ferrier and Associates whether the motion that is now before the Court had been filed by the 17 June. Ferrier and Associates sought to have the motion withdrawn so that entry into the proposed deed could take place. It was not pointed out at that stage by the new solicitors that the motion had not in fact been filed. It was filed only on the 18th, as the Court file shows. There was at that moment, that is, at some time on the afternoon of the 17 June, an opportunity for all parties to stop and take stock of their positions to see whether the matter could be resolved. In response to the patent misunderstanding by Ferrier and Associates on that afternoon, the new solicitors might simply have said “yes we have not filed a motion as yet and if you give us a response within 24 hours as to whether or not you are prepared to execute the deed in the form that we have provided, then we won't file the motion”. That did not happen. With the benefit of the hindsight that the Court now has, had there been a degree of co-operation on both sides of the matter at this point, there was an opportunity for the matter to be resolved at this point and as a result to save the costs of today.

11 What clearly had happened by the last three days of last week was that the parties were preparing for today and the momentum of the matter was such that that a pause was not contemplated by either side. The plaintiffs say that they are in effect the successful party and they have referred me to passages from G. E. Dal Pont, Law of Costs, 2nd ed (2009) LexisNexis Butterworths, that stand for the well established principle that a successful party should not ordinarily be deprived of its costs. This is not the typical case however where after a full contest, the plaintiffs have been successful. Rather there has been a concession today on the doorstep of the Court. The plaintiffs seek costs against Ferrier and Associates of the motion. Ferrier and Associates seek costs against the plaintiffs of the motion.

12 This history indicates that although the new solicitors for the plaintiffs gave notice before they filed the motion for the file under s 728, they failed in two respects to position themselves appropriately to seek costs when the ultimate concession was made by the defendant: first by failing to finalise the form of deed that they were proposing should be provided by Ferrier and Associates at the time that the file was handed over; and secondly, by failing to make clear on the afternoon of 17 June that the motion had not been filed when Ferrier and Associates were clearly labouring under the misapprehension that it had been.

13 Those two matters on my assessment of the course of events, created the pressure that led to a contested hearing today or at least deprived both sides of the opportunity resolving the matter earlier without the expenditure of the costs of today. This is not a case where one can clearly say that the plaintiffs were successful and should be given their costs.

14 On the other hand, it can be said of Ferrier and Associates that a more helpful response when it did not receive the draft deed from the plaintiff might have been to draft its own deed, setting out its own terms and to respond to say this is the basis on which the firm was prepared to exit the proceedings or at least to enquire as to the whereabouts of the missing deed. If this had been done then today’s contest would probably not have occurred. In those circumstances I do not think that Ferrier and Associates should have their costs of the motion. The result of that is that costs will lie where they fall. I decline to make an order for costs in favour of either party on this motion.

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