Michael v State of New South Wales

[2013] NSWSC 230

Supreme Court

New South Wales

Medium Neutral Citation:

Michael v State of New South Wales [2013] NSWSC 230

Hearing dates:

8 March 2013

Decision date:

26 March 2013

Before:

Harrison J

Decision:

1. Order Mr Michael to pay so much of the State's costs as are referred to and contained in a schedule of costs attached to the letter dated 1 November 2012 from the Crown Solicitor to Messrs Carroll & O'Dea, being annexure "AP" to the affidavit of Alina Fegan affirmed 30 November 2012, in the specified gross sum of $5,000 pursuant to s 98(4)(c) of the Civil Procedure Act 2005.

2. Order that the costs of this application be the State's costs in the proceedings.

Catchwords:

COSTS - failure to prosecute proceedings diligently - wasted correspondence and appearances - expert conclaves postponed - specified gross sum costs order

Legislation Cited:

Civil Procedure Act 2005, s 98
Uniform Civil Procedure Rules 2005

Cases Cited:

Douglas & Anor v Madden & Ors (No 4) [2010] NSWSC 904
Hamod v State of New South Wales (No 13) [2009] NSWSC 756
Michael v State of New South Wales [2011] NSWSC 231

Category:

Procedural and other rulings

Parties:

Matthew John Michael (Plaintiff)
State of New South Wales (Defendant)

Representation:

Counsel:
R deMeyrick (Plaintiff)
G Mahony (Defendant)
Solicitors:
Carroll & O'Dea Lawyers (Plaintiff)
Crown Solicitor (Defendant)

File Number(s):

2009/00297573

Publication restriction:

Nil

Judgment

1. HIS HONOUR: These proceedings were commenced by statement of claim filed in the District Court on 10 August 2004. Mr Michael claims damages for personal injuries suffered by him as the result of an assault upon him by fellow inmates at Long Bay Gaol in August 2001. Mr Michael was at that time an inmate of the gaol. He alleges that he sustained serious injuries including a fractured skull, acute brain damage, severe facial fractures and other broken bones, a ruptured spleen and other internal injuries. He claims also to continue to suffer from depression and epilepsy caused by the assault.

1. The proceedings were removed to this Court in 2009. They have now been allocated a date for hearing commencing on 8 October 2013.

1. The proceedings have a somewhat long and involved procedural history. That includes a separate hearing before Fullerton J on questions referred to her Honour by me on 30 November 2010 pursuant to UCPR 28.2: see Michael v State of New South Wales [2011] NSWSC 231. It will be apparent from the fact that the matter has been set down for hearing that, with one exception, all outstanding procedural steps and interlocutory issues have now been either taken or concluded.

1. The exception relates to a claim by the State for costs effectively thrown away or occasioned by Mr Michael's alleged failure in a timely way to comply with various interlocutory orders that have been made or to deal with correspondence from the State which has itself been generated by the need to follow up such failures. The application is supported by a not insubstantial affidavit from Alina Fegan, a solicitor employed by the State, affirmed on 30 November 2012 and read without objection. Mr Michael tendered no evidence on the State's application.

1. Ms Fegan's affidavit annexed a copy of an affidavit sworn on 22 March 2012 by Evangelos Manollaras. The State relied upon the matters deposed to in that affidavit as if it had been read in the proceedings. There was no objection to that course. Neither deponent was cross-examined.

1. Mr Manollaras set out the history of correspondence between the parties from 11 November 2011 to 16 March 2012. Much of that correspondence related to attempts by the Crown Solicitor to arrange a series of medical expert conclaves in anticipation of the production of either a joint report or the indication of areas of disagreement between or among the experts. This process also involved attempts to settle agreed facts.

1. The first letter in the sequence was dated 15 November 2011 in which the Crown Solicitor enclosed a series of draft conclave questions for consideration by Mr Michael's solicitors in pharmacological, vocational/rehabilitation and neurological specialties. Further letters were sent to Mr Michael's solicitors before 2 February 2012 when they advised that they were in the process of obtaining available dates for expert witnesses in anticipation of their attending conclaves.

1. By letter dated 27 February 2012 the Crown Solicitor suggested that the conclave of pharmacologists scheduled for 29 February 2012 might have to be postponed. That is what occurred. This would appear to have been because there was no agreement between the parties as to the agreed facts. The letter expressed concern that the parties would be in default of orders made by me with an approaching mention of the matter listed for 23 March 2012. Another letter dated 16 March 2012 expressed hope that "with your cooperation, we might, at least move a step closer to setting up the medical conclave by reaching an agreement in relation to the assumed facts and to the questions to be raised with the experts."

1. Even after the mention referred to, the agreed facts remained outstanding. By letter dated 3 April 2012 the Crown Solicitor indicated that he was waiting for Mr Michael's agreement as to assumed facts, questions to be put to most of the conclaves and draft questions for the neuropsychological conclave for the Crown Solicitor to consider. In the absence of a reply, a follow up letter was sent on 11 April 2012. That letter included a reference to the fact that the author was looking "forward to receiving the draft questions to be put to the neuropsychologists for approval by the defendant and the plaintiff's agreement to the assumed facts and draft questions in respect of the other three conclaves." In the events that occurred, Mr Michael's solicitors did not provide these matters to the Crown Solicitor until 19 October 2012.

1. There was much correspondence dealing with these matters generated in the intervening period. Some of it expresses considerable concern on the Crown Solicitor's part in having to cancel medical appointments with experts and conclaves that could not proceed as arranged because necessary anterior steps had not been taken by Mr Michael's solicitors.

1. On 29 October 2012 the Crown Solicitor wrote to Mr Michael's solicitors dealing again with outstanding issues with respect to the proposed conclaves and orders to be sought at a directions hearing scheduled before me on 2 November 2012. That letter concluded with the following paragraph:

"Finally, as indicated to you during the conference on 10 September 2012, the defendant proposes to seek an order at the upcoming directions hearing that the plaintiff pay the defendant's costs incurred (cancellations of conclaves, delay in proceedings and other related costs) due to the issues and difficulty surrounding the arrangement of the expert conclaves as a result of the plaintiff's lack of cooperation. I will shortly provide you with a schedule of the costs to be sought by the defendant."

1. The letter enclosing that schedule of costs was dated 1 November 2012.

1. At the directions hearing on 2 November 2012, counsel for the State made an application for costs. I gave directions at that time for the filing and service of affidavits to be relied upon in that respect. Only the State has chosen to file evidence on the costs application.

1. Mr Michael's solicitors wrote to the Crown Solicitor on 21 November 2012. The Crown Solicitor responded to that letter a week later. That letter included the following paragraphs:

"It is apparent that the parties will not be able to reach agreement as to the form and substance of the questions with respect to each of the conclaves. In the circumstances, I therefore propose that each party provide their own set of questions to each of the expert conclaves and ask the participants to prepare two reports responding to each set of questions. Should it become necessary, any objection to the questions themselves can be argued before the judge hearing the matter during the substantive hearing of the claim.

...

I confirm that I have now recommenced arranging the three remaining conclaves in this matter and I am endeavouring to obtain dates for the experts to meet early next year. I will contact you if I have difficulty in obtaining availability for any of the plaintiff's experts and also advise you of the confirmed conclave date for each of the respective conclaves.

If you choose to list the matter for argument, I ask that you do so expeditiously and well prior to the dates of the conclaves so that the various experts are not inconvenienced and to avoid wasting costs."

Consideration

1. It was contended on behalf of the State that the costs that are sought are the costs generated by the considerable correspondence that was wasted because Mr Michael's solicitors simply did not respond, as well as costs generated by appearances that suffered a similar fate. These costs in total are calculated, in accordance with the schedule attached to the letter dated 1 November 2012, in the amount of $11,395. That includes counsel's fees of $950. It was submitted that this matter has been listed for directions solely for the purpose of facilitating experts conclaves and ensuring that they proceeded on four separate occasions commencing on 11 November 2011 and again on 23 March, 6 July and 2 November 2012. It was contended that a review of the correspondence reveals constant expressions by the Crown Solicitor of the fond hope that the matter would progress, or that conclaves would be arranged, that agreements about facts and other matters would be reached or that documents would be produced.

1. The underlying proposition is that the appearances referred to, and at the very least most of the correspondence now in evidence, would have been unnecessary if Mr Michael's solicitors had complied with orders or requests for information when first they were made. This was characterised as a clear lack of diligence on the part of Mr Michael's solicitors to attend to and prosecute the proceedings in a diligent fashion. Counsel for the State pointed in particular to the absence of any evidence or any explanation from Mr Michael's solicitors that answered the complaints that underpinned the present application.

1. I was referred to the decision of Schmidt J in Douglas & Anor v Madden & Ors (No 4) [2010] NSWSC 904 at [18] and [24] as follows:

"In this case the plaintiffs repeated failures to adhere to the Court's directions and orders and its delays in pursuing its case, may not be overlooked in a resolution of what here now lies between the parties as to costs. Consideration must also, of course, be given to the explanation advanced for the plaintiffs' further defaults.

...

The circumstances are such that consistently with the requirements of the Civil Procedure Act, these defendants may not be justly required to bear the costs which they have unnecessarily incurred, or to await their payment, for however long it might take these plaintiffs to finally prosecute their case."

1. There was no application in this case that the costs claimed ought to be paid forthwith.

1. Counsel for Mr Michael emphasised that this matter had a long history and that the issues were complicated. Breach of duty of care has been admitted so that it could not be suggested that Mr Michael had an interest in delaying the proceedings. Counsel made what may well be an accurate assessment of the issue when he submitted that those instructing him presumably "were overwhelmed with the process of conclaving". He also described it as "a process of organising...and dealing with the assumptions and the factual matrix that extend[ed] back decades." Not quite.

1. There has in my opinion been a less than enthusiastic response from Mr Michael's solicitors to much of the correspondence from the Crown Solicitor written with a view to moving the proceedings along. I have not attempted to analyse or dissect the costs schedule provided by the Crown Solicitor in minute detail, as it is quite long and to some extent opaque. It is sufficiently clear, however, that it contains a narrative of work done and costs incurred by the Crown Solicitor that to some extent at least have been rendered useless or worth less as a consequence of the questionable alacrity with which Mr Michael's solicitors have attended to requests from time to time.

1. I raised with counsel for Mr Michael the issue of a specified gross sum costs order, in the event that I were minded to accede in any degree to the current application. He discouraged me from taking such a course.

1. Section 98 of the Civil Procedure Act 2005 deals with the power to make a specified gross sum costs order. That section is in these relevant terms:

"98 Courts powers as to costs

(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

(2) ...

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

...

(c) a specified gross sum instead of assessed costs..."

1. Consistently with the modern approach to litigation, and in particular the need to streamline procedures with a view to eliminating or reducing costs, I consider that this is in fact an appropriate case for the making of a specified gross sum costs order. I made such an order, and considered some of the principles that apply, in Hamod v State of New South Wales (No 13) [2009] NSWSC 756. The purpose of the provision is to avoid the expense, delay and aggravation involved in protracted litigation arising out of the costs assessment process.

1. The costs involved in this application are in relative terms not large. The time and effort involved in assessing the costs claimed would be wholly disproportionate if the matter were referred to a costs assessor in due course. It would be onerous to impose the burden of deciding what costs were referable to the delinquencies for which the Crown Solicitor contends upon a costs assessor at some time much removed from the application or the events that have generated it. I am better placed in every respect to determine the issue quickly and cheaply. The wisdom that informs the relevant section assumes as well that a lump sum costs order can be made justly, even if by more traditional standards the making of such an order might at one time have been considered peremptory and accordingly unjust.

1. I consider that the application for costs has merit. I do not consider that the costs claimed are all payable by Mr Michael. Much of what the Crown Solicitor has complained of is legal work that has been generated by or arises from unremarkable inefficiencies for which neither party is especially responsible and that to some extent are an unavoidable by-product of all litigation.

Orders

1. In these circumstances I consider that the following orders should be made:

1. Order Mr Michael to pay so much of the State's costs as are referred to and contained in a schedule of costs attached to the letter dated 1 November 2012 from the Crown Solicitor to Messrs Carroll & O'Dea, being annexure "AP" to the affidavit of Alina Fegan affirmed 30 November 2012, in the specified gross sum of $5,000 pursuant to s 98(4)(c) of the Civil Procedure Act.

2. Order that the costs of this application be the State's costs in the proceedings.

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Decision last updated: 26 March 2013