Mal Owen Consulting Pty Limited v Ashcroft (No 2)
[2017] NSWDC 443
•25 August 2017
District Court
New South Wales
Medium Neutral Citation: Mal Owen Consulting Pty Limited v Ashcroft (No 2) [2017] NSWDC 443 Hearing dates: 25 August 2017 Date of orders: 25 August 2017 Decision date: 25 August 2017 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: I decline to make the costs orders proposed by the parties
Catchwords: COSTS – consent orders proposed by parties – rejection of consent orders – reasonably unworkable Cases Cited: Mal Owen Consulting Pty Ltd v Ashcroft [2018] NSWCA 135 Category: Costs Parties: Mal Owen Consulting Pty Limited ACN 000 151 771 (plaintiff)
Peter Ashcroft (defendant)Representation: Counsel:
Solicitors:
Mr I Griscti (defendant)
Gilchrist Connell (defendant)
File Number(s): 2012/352794 Publication restriction: None
Judgment
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These proceedings concern an action by the plaintiff, Mal Owen Consulting Pty Limited, to sue its former solicitor, Peter Ashcroft, in negligence. The proceedings failed[1] because Mal Owen Consulting was unable to establish that any damage was caused by the negligence of the solicitor. The matter is before the Court today for the purpose of a hearing in relation to costs.
1. An appeal against the judgment was successful, see Mal Owen Consulting Pty Ltd v Ashcroft [2018] NSWCA 135.
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Shortly before the hearing, the parties foreshadowed proposed consent orders and I have been provided with a document entitled "Consent Order" signed by the representatives of the parties. Because of concerns I had regarding the terms of that order, I advised the parties that the matter would remain in the list for hearing today.
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Only the defendant appeared. The plaintiff did not appear, notwithstanding that the matter was called outside the court three times.
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By way of background, shortly before the trial, the solicitor for the defendant served a letter which attached a proposed amended defence. That letter was the first indication that the defence would not deny a breach of duty by Mr Ashcroft: the proposed amended defence admitted that Mr Ashcroft had acted in breach of his duty. The defendant received no response to that letter before trial, and on the second day of the trial, the defendant was given leave to amend his defence, including making the admission in relation to the breach of duty by Mr Ashcroft.
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The consent orders proposed by the parties in relation to costs are in the following terms:
“TERMS OF JUDGMENT MADE BY THE COURT BY CONSENT
1. The plaintiff to pay the defendant's costs up to and including 9 July 2015 on an ordinary basis, save that the defendant shall not be entitled to recover costs incurred in relation to the issue of breach of duty.
2. The plaintiff to pay the defendant's costs from and including 10 July 2015 onwards on an indemnity basis, save that the defendant shall not be entitled to recover costs incurred in relation to the issue of breach of duty."
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The document was, as I said, headed "Consent Order", and was signed by the representatives of the parties. It was in the form of a court document. Accordingly, the plain intention manifested by the document is that the parties agreed to settle the costs dispute on terms that the Court make the orders specified.
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The Court is not obliged to make any orders on which the parties agree. There are circumstances where the Court may think it inappropriate to give to orders agreed by the parties the imprimatur of the Court's approval. It is not necessary to canvass all the possible circumstances when the Court might refuse to make proposed consent orders. In my view, one circumstance where the Court would be entitled to decline to make orders is where the orders require the use of the Court's processes and are not reasonably workable. I am of the view that the proposed orders in this case are not reasonably workable for two reasons.
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First, the terms of the orders seem to be inherently ambiguous. The term “costs incurred in relation to the issue of breach of duty" is uncertain. The proposed orders would leave open the question of whether, in order to fit within that category, costs must have been exclusively incurred in relation to the breach of duty, or whether it is sufficient if costs are only partly in relation to breach, and if the latter, whether items of costs be apportioned according to the extent to which the costs directly relate to the breach.
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A wide ambit of the terms "in relation to" might suggest that if part of a particular item of costs is related to the issue of breach of duty, then all of those costs fall within the exception. But on the other hand, the defendant submitted, perhaps revealing a view at the other end of the spectrum, that the only costs that he submitted were within the terms of the order would be those exclusively related to the issue of breach of duty. This inherent uncertainty is the first reason why the orders are not reasonably workable.
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The second reason, and related to the first, is that if the orders were made, the costs assessor would be obliged to categorise the costs. That would not be a simple matter. Even if the assessor is able to determine the vexed construction question indicated above, he or she would nevertheless need to determine whether any particular item of cost is wholly or partially "in relation to the issue of breach of duty" and to what extent. It is not clear to me how an assessor could reasonably undertake that task.
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Further, the uncertain meaning and difficult application of the proposed orders would increase the likelihood of further dispute between the parties. The Court should be reluctant to make orders which, because of the uncertainty in the terms of the orders or in their application, might increase the likelihood of further dispute between the parties.
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For those reasons, I decline to make the costs orders proposed by the parties.
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The matter having been listed before the Court for hearing today, the defendant sought, nevertheless, to proceed to a hearing in respect of costs. I cannot see any reason why the defendant should be deprived of that hearing. Given that the matter was listed for that purpose, there is nothing to suggest that the plaintiff was unaware of it and, indeed, in correspondence in terms of the consent orders, I am satisfied that the plaintiff was well aware of the hearing today. The defendant informed the Court that the plaintiff's representatives had informed the defendant's representatives that they were no longer instructed to appear at the hearing today.
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I propose to allow the defendant to proceed with the question concerning the appropriate costs order.
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Endnote
Decision last updated: 30 October 2018