Muriniti v Lawcover Insurance Pty Ltd

Case •

[2022] NSWSC 90

•

11 February 2022

No judgment structure available for this case.

Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Muriniti v Lawcover Insurance Pty Ltd [2022] NSWSC 90
Hearing dates: 7-9 December 2021
Date of orders: 11 February 2022
Decision date: 11 February 2022
Jurisdiction:Equity
Before: Ward CJ in Eq
Decision:

1.   Dismiss the plaintiffs’ notice of motion filed on 1 April 2021 with costs.

2.   Dismiss the proceedings against the defendants with costs.

Catchwords:

CIVIL PROCEDURE — Temporary stay of proceedings pending proceedings in other Court

JUDGMENTS AND ORDERS — Amending, varying and setting aside — Fraud, misrepresentation or suppressions of material fact — Where alleged fraud comprised of a complex alleged conspiracy between 23 defendants — Proceedings dismissed

CIVIL PROCEDURE — Dismissal of proceedings — Abuse of process — Embarassing pleadings — Where serious allegations of fraud made by plaintiffs not adequately particularised — Where plaintiffs seek a stay pending determination of related proceedings — Whether abuse of process to leave proceedings involving serious allegations of fraud in abeyance

CIVIL PROCEDURE — Parties — Vexatious litigants — Declaration by Court’s own motion — Whether declaration appropriate

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 99

Crimes Act 1900 (NSW), ss 4, 319

Insurance Contracts Act 1984 (Cth), ss 13, 14, 58

Legal Profession Act 2004 (NSW), ss 345, 348, 349

Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW), rr 4, 43

Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW), rr 21.2-21.4

Limitation Act 1969 (NSW), s 55

Supreme Court Act 1970 (NSW), s 84

Supreme Court Act 1986 (Vic), s 21

Surveillance Devices Act 2007 (NSW), s 7(3)

Uniform Civil Procedure Rules 2005 (NSW) rr 14.6, 14.7, 14.8, 14.14, 14.28, 15.1, 15.3, 15.4, 15.9, 19.5

Vexatious Proceedings Act 2008 (NSW) ss 6, 8, 14

Cases Cited:

Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41

Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39

Attorney-General (NSW) v Klewer (No 3) (2010) 264 ALR 535; [2010] NSWSC 9

Attorney-General (NSW) v Wentworth (1988) 14 NSWLR 481

Attorney-General for the State of Victoria v Horvath, Senior [2001] VSC 269

Attorney-General for the State of Victoria v Weston [2004] VSC 314

Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16

Australian Wool Innovation Ltd v Newkirk [2005] FCA 290

Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27

Berry v CCL Secure Pty Ltd (2020) 94 ALJR 715; [2020] HCA 27

Bodycorp Repairers Pty Ltd v Australian Associated Motor Insurers Ltd [2018] VSCA 174

Brambles Holdings Ltd v Carey (1976) 15 SASR 270

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25

Cabassi v Vila (1940) 64 CLR 130; [1940] HCA 41

CC Containers v Lee [2011] VSC 537

Central Exploration Pty Ltd v Zuks [2020] WASC 46

City of the Gold Coast v Pioneer Concrete (QLD) Pty Ltd (1998) 99 LGERA 263; [1999] FCA 499

D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 2) [2012] NSWDC 286

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 3) [2013] NSWDC 54

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 5) [2015] NSWDC 8

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 6) [2016] NSWDC 378

De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 8) [2020] NSWDC 184

Dean v American Express International, (Supreme Court (NSW), Charteris J 23 March 2007, unrep)

Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1

Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537

Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169

Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678; [2004] NSWCA 140

Fatimi Pty Ltd v Bryant [2002] NSWSC 750

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69

Glover v Kaji Australia Pty Ltd [2020] NSWCA 222

Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404

Hammond v State of New South Wales [2013] NSWSC 1930

Hammond v State of New South Wales [2015] NSWCA 304

Hamod v New South Wales [2011] NSWCA 375

Hobbs v Australian Securities and Investments Commission [2013] NSWCA 432

Hughes v Western Australian Cricket Association (1986) 69 ALR 660; [1986] FCA 465

Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27

Jackson Lalic Lawyers Pty Ltd v Atwells [2014] NSWCA 335

Jacobsen v Jacobsen [2017] NSWSC 1590

Johnston v Smith [2002] NSWSC 409

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Kaji Australia Pty Ltd v Glover (No 4) [2019] NSWSC 1779

Kaji Australia Pty Ltd v Glover (No 5) [2020] NSWSC 1576

Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563; [1995] HCA 68

Lawcover v Muriniti [2017] NSWSC 1557

Lee v Adedian [2016] QSC 92

Leerdam v Noori (2009) 255 ALR 553; [2009] NSWCA 90

McGuirk v The University of New South Wales [2009] NSWSC 1424

McWilliam v Penthouse Publications Ltd [2001] NSWCA 237

Meckiff v Simpson [1968] VR 62

Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391

Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66

Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49

Nguyen v QTQ Mechanical Services Pty Ltd [2019] NSWSC 1629

Potier v Attorney-General (NSW) (2015) 89 NSWLR 284; [2015] NSWCA 129

R De W Kennedy (Finance) Pty Ltd v Ley (Holland J, 29 March 1978, unreported)

Rafailidis v Camden Council [2021] NSWSC 1087

Reichel v Magrath (1889) 14 App Cas 665

Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142

Rogers v The Queen (1994) 181 CLR 251; [1994] HCA 42

Simmons v NSW Trustee and Guardian [2013] NSWSC 1688

Simmons v NSW Trustee and Guardian [2014] NSWCA 405

Smith v Australian Executor Trustees Ltd; Creighton v Australian Executor Trustees Ltd [2017] NSWSC 1406

State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports 81-423

Swinfen v Lord Chelmsford (1860) 5 H&N 890; 157 ER 1436

Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110

Tomlinson v Ramsey Food Proceesing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28

Trau v University of Sydney (1989) 34 IR 466

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Viavattene v Attorney-General (NSW) [2015] NSWCA 44

Walton v Gardiner (1993) 177 CLR 379; [1993] HCA 77

Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433

Williamson v Elders Limited [2017] NSWSC 667

Young v Hones (No 2) [2014] NSWCA 338

Young v Hones (No 5) [2016] NSWSC 822

Young v Hones [2014] NSWCA 337

Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456

Young v Hughes Trueman Pty Ltd [2016] FCA 1176

Young v King (No 11) 2017] NSWLEC 34

Young v King [2004] NSWLEC 93

Texts Cited:

Bullen, Edward, Sir William Blair, Lord Daniel Brennan, Sir Robin Jacob and Sir Brian Langstaff, Bullen & Leake & Jacob’s Precedents of Pleadings (19th ed, 2019, Sweet & Maxwell)

Category:Procedural rulings
Parties: Leonardo Carlo Muriniti (First Plaintiff)
Robert Newell (Second Plaintiff) (Self-represented)
Lawcover Insurance Pty Ltd (First Defendant)
Elissa Baxter (Second Defendant)
AAI Limited (formerly Suncorp) (Third Defendant)
De Costi Seafoods (Holdings) Pty Ltd (Fourth Defendant)
De Costi Seafoods (Franchises) Pty Ltd (Fifth Defendant)
George Costi (Sixth Defendant)
Androulla Costi (Seventh Defendant)
Andrew Thorpe (Eighth Defendant)
Stephen Stanton (Ninth Defendant)
Michael Holmes (Tenth Defendant)
Juliana Ng (Eleventh Defendant)
David Shnider (Twelfth Defendant)
Deborah Searle (Thirteenth Defendant)
Philippe Doyle Gray (Fourteenth Defendant)
Louise Thomson (Fifteenth Defendant)
Bruce Yeldham (Sixteenth Defendant)
Mary Vitalone (Seventeenth Defendant)
David Lloyd (Eighteenth Defendant)
Wendy Blacker (Nineteenth Defendant)
Rory O’Connor (Twentieth Defendant)
Geoffrey Watson (Twenty-First Defendant)
Nicholas Andrew (Twenty-Second Defendant)
Frank Theodore (Twenty-Third Defendant)
Representation:

Counsel:
A Zahra SC with J Anderson (1st, 2nd, 16th, 17th Defendants)
D Villa SC with D Tang (3rd and 21st Defendants)
SJ Stanton (4th, 5th, 6th, 7th, 9th, 12th and 23rd Defendants)
B McClintock SC with S Spiers (8th ,11th ,19th and 20th Defendants)
M Fordham SC (10th Defendant)
B McClintock SC (13th Defendant)
E Olivier (14th Defendant)
M Elliott SC (18th Defendant)
C Coventry (22nd Defendant)

Solicitors:
LC Muriniti & Associates (1st and 2nd Plaintiff)
Sparke Helmore (1st, 16th, 17th and 18th Defendants)
DLA Piper (3rd and 21st Defendants)
Mullane & Lindsay (8th Defendant)
Mills Oakley (10th Defendant)
Colin Biggers & Paisley and Mullane & Lindsay (13th Defendant)
Moray & Agnew (14th Defendant)
Meridian Lawyers (19th and 20th Defendants)
Barry Nilsson Lawyers (22nd Defendant)
File Number(s): 2020/00120678
Publication restriction: Nil

Judgment

  1. HER HONOUR: Before me for hearing commencing on 7 December 2021 were various interlocutory notices of motion – a notice of motion filed on 1 April 2021 by the plaintiffs (a solicitor, Mr Leo Muriniti; and a former barrister, Mr Robert Newell, who now works as a solicitor employed as a consultant in Mr Muriniti’s law firm – L.C. Muriniti and Associates, Solicitors) seeking a temporary stay of the proceeding (or in the alternative leave to file a proposed amended statement of claim); and a series of notices of motion (many of them since amended) filed by the various defendants or groups of defendants, in February and March 2021, essentially now seeking either summary dismissal or a permanent stay of the proceeding (or in the alternative a dismissal of the proceeding for want of prosecution). Somewhat ironically, therefore, both sides seek a stay of the proceeding – albeit that the plaintiffs are seeking only a temporary stay (until the outcome of a costs reference and determination of costs applications in other proceedings in the District Court) and the defendants are seeking (in most cases as an alternative to summary dismissal) a permanent stay.

  2. The original statement of claim was struck out in November last year (in circumstances where the plaintiffs’ position was that they did not intend to proceed with that pleading to trial). The remaining issues for determination on the respective motions are in essence whether the plaintiffs should be granted the temporary stay they seek or whether, as the defendants seek, the proceedings should be summarily dismissed or permanently stayed (or dismissed for want of prosection). The plaintiffs have, in the alternative to their application for a temporary stay, sought leave to file an amended statement of claim but they make no bones about the fact that the draft amended statement of claim served by them shortly before the hearing of the motions is not the pleading that they wish or intend to prosecute at trial.

  3. There was some debate during the hearing of the notices of motion as to whether, if the defendants’ applications were to succeed, the appropriate order was for summary dismissal or permanent stay, but ultimately it was not suggested that there was any relevant difference.

  4. For the reasons set out below, I am of the view that the plaintiffs’ notice of motion should be dismissed with costs; and that the proceedings should be summarily dismissed again with costs. I see no proper basis on which to give leave for the filing of the proposed amended statement of claim which the plaintiffs themselves acknowledge is not the pleading they wish to take to hearing (leaving aside the manifest deficiencies of the proposed amended statement of claim); and I do not consider it consistent with the overriding statutory purpose mandated by s 56(1) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) nor with the proper administration of justice to grant a temporary stay (for an indefinite period – since the time for completion of the costs reference on which the stay is predicated is uncertain) of proceedings in which very serious allegations of fraud and criminal conduct are made (and which are not properly pleaded or sufficiently particularised).

  5. The continuation (albeit temporarily stayed) of the proceedings in all the circumstances would in my view amount to an abuse of process, bringing the administration of justice into disrepute; and calls to mind the observation by McHugh J (albeit in a different context, namely the extension of a limitation period) in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25 (Brisbane South Regional Health Authority) at 552 that it is “oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed”. Here, it seems to me equally oppressive for the many legal practitioners who have been joined as defendants to have such serious (and, again, inadequately pleaded and particularised) allegations hanging over their heads (relating to conduct allegedly occurring many years ago) for some indeterminate time in order to permit the plaintiffs effectively to await (or search for) evidence to support their conspiracy allegations (and perhaps seek further to “unravel” this or other conspiracies).

  6. Moreover, I do not see that the plaintiffs are prejudiced by the summary dismissal of the proceedings, given the fact that the claims they wish to make are claims of fraud, in respect of which s 55(1) of the Limitation Act 1969 (NSW), extracted in due course below, would, on the plaintiffs’ own case, surely apply.

The Alleged Conspiracy

  1. I address in due course various of the allegations made in the proposed amended statement of claim (which I refer to as such even though, as noted, the plaintiffs do not in fact intend to proceed with this form of pleading). Suffice it at this stage to note that the nub of the plaintiffs’ claims is that there was an unlawful conspiracy to injure the plaintiffs (by use of unlawful means). That conspiracy in simple terms (and I here paraphrase) was an elaborate plan (involving a raft of alleged conspirators) to put forward baseless or manifestly hopeless personal costs applications in what I refer to as the De Costi proceedings in the District Court against the plaintiffs, or, depending on the role of the alleged conspirators, to prosecute those applications ineptly, in order to bring about a position whereby there would be personal costs orders made against the plaintiffs, so as to provide the plaintiffs’ respective professional indemnity insurers (in the case of Mr Newell) to decline to renew his professional indemnity insurance or the relevant policy or (in the case of Mr Muriniti) to increase premiums payable on renewal of his professional indemnity insurance, with the object or purpose of preventing or dissuading the plaintiffs from continuing to act for a particular client (Mrs Young) in separate proceedings (now disposed of) arising out of a neighbourhood drainage dispute with which many of the defendants have had no involvement or connection (and with the “ultimate purpose” of perverting the course of justice by denying the District Court knowledge of the true circumstances of the costs applications against the plaintiffs and by denying Mrs Young legal representation by the plaintiffs thus impeding the conduct of Court proceedings by her).

  2. When faced with the rhetorical question (posed in different forms by various of the defendants) as to what possible interest the alleged conspirators would have in achieving such an objective (those alleged conspirators including professional indemnity insurers who, on the plaintiffs’ case, were in effect acting to promote claims for which the insurers would themselves be liable, and legal practitioners, of varying degrees of experience and with varying degrees of involvement in the relevant matter(s) who, again on the plaintiffs’ case, were acting against their own clients’ interests in a criminal conspiracy), the plaintiffs’ answer (having on their own account spent much time and cost seeking to “unravel” the conspiracy) seems to be that this was in order to conceal other fraudulent or improper conduct coming to light. The convoluted nature of the conspiracy claim is thus evident at the outset.

  3. I should note that the relevance of the many rhetorical questions posed by the defendants is explicable by reference to the observation by Lee J in Young v Hughes Trueman Pty Ltd (No 4) [2017] FCA 456 (Young v Hughes Trueman (No 4)) at [51], in relation to a case in which the plaintiffs had appeared for Mrs Young, that:

This is the central problem that confronts the Solicitors and has confronted them whenever the conspiracy has been examined in Court. There is nothing whatever that is pointed to by way of evidence to suggest that there is not an equally plausible explanation for the actions of each of the alleged co-conspirators. Indeed, here one can go much further than merely pointing to an available hypothesis consistent with the non-existence of a conspiracy: in the present circumstances, even assuming a wrong was caused, the type and motivations of the inferred agreement are so singular and so contrary to ordinary experience that any legal practitioner acting reasonably would conclude that there are a number of explanations (including inadvertence or negligence) which are plainly much more probable. Whatever the perceived deficiencies or shortcomings of the actions of one or other of the actors, how can it be reasonably said that anyone was acting in a way that did not have an apparent legitimate purpose, let alone that all persons were acting in concert and illegitimately?

  1. The various professional indemnity insurers and legal practitioners make the very same argument here.

  2. Unfortunately (for all concerned), this appears to be another instance of the kind described by Bromwich J in an earlier judgment in the case involving Mrs Young (Young v Hughes Trueman Pty Ltd [2016] FCA 1176 (Young v Hughes Trueman) at [41] as “reverse engineering”; his Honour saying that what the plaintiffs appeared there to be doing was to assert (and then would presumably be seeking to prove) “the existence of a conspiracy by reverse engineering the existence of that conspiracy as being the only explanation [for the disparity that was the focus of the conspiracy allegations in that case]”. (The disparity to which his Honour there referred related to plans in respect of an engineering outcome to rectify unauthorised building works, as to which the proposed amended statement of claim here again makes reference.)

  3. The logic underlying the present conspiracy claims seems to be along the same lines – in the case of Mr Newell, for example, that: the refusal to renew his professional indemnity insurance has caused him substantial prejudice (in that he has been unable to continue to practise as a barrister – now for some 7 years); there must have been a sinister reason for this (i.e., it could not have been for the seemingly plausible reason that the insurer might, in its exercise of assessing insurance risk, have decided, in view of numerous claims against Mr Newell, referrals of complaints about Mr Newell to the Legal Services Commissioner, and criticism by various judges of Mr Newell’s conduct of litigation, not to renew the policy); that the reason must have been to prevent or dissuade him from acting for Mrs Young, with the objective of perverting the course of justice and misleading the court (even though many of the alleged conspirators had nothing to do with Mrs Young’s litigation and some are said to have “joined” the conspiracy after relevant events relating to it); and that the means by which that objective was sought to be achieved must have involved the bringing of personal costs applications that were manifestly hopeless and prosecuted in a way that would cause them to fail (even though Mr Newell had a measure of success in defending those costs applications and appealing from adverse orders in relation thereto, with the assistance of some of the very persons alleged to be involved in the conspiracy).

  1. However, Mr Newell in oral submissions appeared adamant that there could be no innocent explanation for the impugned conduct by a disparate group of entities and individuals; and he is seemingly reinforced in that conclusion by an alleged conversation (not apparently hitherto raised and which I am told will be contested) between members of only one of the groups of alleged conspirators, in which it is said that a threat was made in effect to cause him to lose his insurance cover (see [79] of the proposed amended statement of claim).

Parties

  1. It is convenient at the outset to identify the various parties to the proceeding by reference to their respective roles in the events said to give rise to the alleged conspiracy (and I appreciate that there is here some repetition but this is intended to be able to be used as a convenient reference point in the absence of a schedule of dramatis personae).

Plaintiffs

  1. The plaintiffs, as noted, are legal practitioners (Mr Muriniti and Mr Newell), both now practising as solicitors, though in Mr Newell’s case this is a matter of significant grievance to him (he having obtained a practising certificate as a solicitor only after his then professional indemnity insurer, Suncorp (the third defendant), refused to renew his professional indemnity insurance in 2014. Indeed, the refusal by Suncorp to renew Mr Newell’s professional indemnity insurance forms a major plank of the conspiracy allegations now brought by Mr Muriniti and Mr Newell against not only Suncorp but a whole raft of defendants (including the legal practitioners who acted for each of the plaintiffs on the personal costs applications); the ultimate purpose of the alleged conspiracy being said to be to prevent or intimidate Mr Newell and Mr Muriniti from acting in other proceedings for a particular client, Mrs Young.

  2. Mr Newell appeared at the hearing of the various notices of motions as a solicitor advocate on behalf of himself and Mr Muriniti.

  3. Mr Muriniti (the first plaintiff) acted as the solicitor for various parties who feature in the chronology (though in different proceedings); relevantly, for Mrs Young (in a dispute with her neighbours, Mr and Mrs King, arising out of unauthorised works carried out by the Kings on their property – the Young v King litigation; and in disputes with the Kings, their solicitor and Counsel, and others – the Young v Hones litigation, in which allegations of collusion were unsuccessfully made against the various defendants; it being said that there was a plan to “steal” Mrs Young’s house); and for Mr Serge Wachtenheim and his company, Deist Safety Equipment Pty Ltd (Deist), together, the Wachtenheim Parties, in a dispute with various members of the Costi family and entities associated with them (the De Costi Parties) relating to certain franchise arrangements.

  4. Mr Muriniti has at all relevant times been insured for professional indemnity insurance by Lawcover Insurance Pty Ltd (Lawcover) (the first defendant in the present proceeding).

  5. Mr Newell (the second plaintiff) acted as the barrister (retained by Mr Muriniti) for Mrs Young and the Wachtenheim Parties in the matters referred to above, until his professional indemnity insurance was not renewed and thereafter acted for them as a solicitor. (Hence, if the purpose of the conspiracy was to prevent Mr Newell, or for that matter Mr Muriniti, from acting for Mrs Young it has been singularly unsuccessful – though of course the success or otherwise of a conspiracy says nothing as to whether it existed in the first place). The proceedings involving Mrs Young were ultimately disposed of following Mrs Young’s bankruptcy in 2017.

  6. As adverted to above, Mr Newell’s professional indemnity insurer until about 30 June 2014 was Suncorp; and thereafter has been Lawcover.

Lawcover/YPOL defendants – 1st, 2nd, 16th and 17th defendants

  1. The first set of defendants may loosely be described as the Lawcover/YPOL defendants (though this is not the nomenclature used in the proposed amended statement of claim, to which I will refer in due course).

  2. This group of defendants, represented at the hearing of the respective notices of motion by Mr Zahra SC and Mr Anderson of Counsel, comprises the following parties.

  3. The first defendant is Lawcover, as noted above, the professional indemnity insurer of Mr Muriniti at all relevant times and of Mr Newell from about 30 June 2014.

  4. The second defendant is Ms Elissa Baxter, the General Counsel of Lawcover.

  5. The sixteenth defendant is Mr Bruce Yeldham, a principal of Yeldham Price O’Brien Lusk (YPOL), who was appointed by Lawcover to act for the plaintiffs in relation to applications for personal costs orders against them (other than those relating to Mr Newell’s conduct as a barrister).

  6. The seventeenth defendant is Ms Mary Vitalone, an employed solicitor with YPOL.

Mr Lloyd SC – 18th defendant

  1. Another defendant who might loosely be grouped with the Lawcover/YPOL defendants, although separately represented at the hearing by Mr Elliott SC, is Mr David Lloyd SC, the barrister who (then as junior counsel) was retained by YPOL to appear for the plaintiffs in relation to the applications for personal costs orders against them (other than the personal costs applications relating to Mr Newell’s conduct as a barrister – on which Mr Watson SC appeared for Mr Newell).

Suncorp defendants – 3rd and 21st defendants

  1. The second set of defendants may loosely be described as the Suncorp defendants. These defendants were represented by Mr Villa SC and Ms Tang of Counsel. This group of defendants comprises the following parties.

  2. The third defendant is AAI Limited (formerly known as Suncorp) which, as noted, was Mr Newell’s professional indemnity insurer until about 30 June 2014.

  3. The twenty-first defendant is Mr Geoffrey Watson SC, who was briefed by Ms Blacker (the nineteenth defendant) to act for Mr Newell on the personal costs applications that were made against him in his capacity as a barrister.

McLachlan Thorpe defendants – 8th and 11th defendants

  1. The next set of defendants (to which I will refer as the McLachlan Thorpe defendants) comprises the solicitors who acted for the De Costi Parties in the De Costi proceedings, who were represented at the hearing of the present notices of motion by Mr McClintock SC and Mr Spiers of Counsel.

  2. The eighth defendant is Mr Andrew Thorpe, a principal of McLachlan Thorpe.

  3. The eleventh defendant is Ms Juliana Ng, an employed solicitor with McLachlan Thorpe.

  4. Joint submissions were made for the McLachlan Thorpe defendants and Ms Searle, Ms Blacker and Mr O’Connor, to whom I refer in due course.

Mr Michael Holmes - 10th defendant

  1. The tenth defendant is Mr Michael Holmes, then the junior counsel acting for the De Costi Parties during part of the De Costi litigation (see below). Mr Holmes is now an employed solicitor. He was represented at the hearing of the notices of motion by Mr Fordham SC.

De Costi defendants – 4th, 5th, 6th, 7th, 9th, 12th and 23rd defendants

  1. The next main set of defendants (the De Costi defendants) are persons and entities who were involved in the De Costi proceedings against the Wachtenheim Parties for whom the plaintiffs acted. They were represented at the hearing by Mr Stanton of Counsel (himself, the ninth defendant).

  2. The De Costi defendants (as I refer to them) comprise the De Costi Parties (the fourth, fifth, sixth, seventh, twelfth and twenty-third defendants), each of whom was a party to the De Costi litigation, and Mr Stanton (the ninth defendant), their barrister.

  3. The fourth defendant is De Costi Seafoods (Holdings) Pty Ltd (De Costi Holdings).

  4. The fifth defendant is De Costi Seafoods (Franchises) Pty Ltd (De Costi Franchises).

  5. The sixth defendant is Mr George Costi, a director of the De Costi companies (and the husband of Mrs Androulla Costi, the seventh defendant).

  6. The seventh defendant is Mrs Androulla Costi, also a director of the De Costi companies (and the wife of Mr George Costi).

  7. The twenty-third defendant is Mr Frank Theodore, an employee of Mr and Mrs Costi and the brother of Mrs Costi.

  8. The ninth defendant is Mr Stephen Stanton of Counsel, who acted for the De Costi Parties in the De Costi proceedings.

  9. As noted above, Mr Holmes acted as Mr Stanton’s junior counsel at relevant times in that litigation but was separately represented at the hearing of the applications before me; as were the solicitors acting for the De Costi Parties (the McLachlan Thorpe defendants).

  10. The twelfth defendant is Mr David Shnider, the brother-in-law of Mr Wachtenheim and a party to the De Costi proceedings. By the time of the personal costs applications in the De Costi proceedings (to which I refer in due course) Mr Shnider had been made bankrupt.

Ms Searle/Trustee Parties – the 13th-15th defendants

  1. The thirteenth defendant is Ms Deborah Searle, who acted as the solicitor for Mr Shnider in the De Costi proceedings and, after Mr Shnider’s bankruptcy, for Ms Louise Thomson (the trustee of Mr Shnider’s bankrupt estate). Ms Searle was represented at the hearing of the notices of motion by Mr McClintock SC.

  2. The fourteenth defendant is Mr Philippe Doyle-Gray, the barrister who appeared for Mr Shnider, and later Ms Thomson, during the costs applications. Mr Doyle-Gray was represented at the hearing by Mr Olivier of Counsel.

  3. The fifteenth defendant is Ms Louise Thomson, Mr Shnider’s trustee in bankruptcy. Ms Thomson did not file any notice of motion and took no part in the hearing of the notices of motion.

Gadens/New Trustee Lawyers defendants – 19th-20th and 22nd defendants

  1. The last group of defendants is comprised of what I will refer to as the Gadens/New Trust Lawyers defendants.

  2. The nineteenth defendant is Ms Wendy Blacker, a principal of Gadens and then of Barry Nilsson Lawyers, who was appointed by Suncorp to act for Mr Newell and who retained Mr Watson SC as Mr Newell’s Counsel on the personal costs applications arising out of Mr Newell’s conduct as a barrister. Ms Wendy Blacker is currently the director of Wendy Blacker Lawyers.

  3. The twentieth defendant is Mr Rory O’Connor, an employed solicitor of Gadens and later of Barry Nilsson Lawyers, who similarly acted for Mr Newell on the personal costs applications arising out of Mr Newell’s conduct as a barrister. Mr O’Connor is currently Special Counsel at Sparke Helmore Lawyers.

  4. The nineteenth and twentieth defendants (the Gadens Lawyers) were represented at the hearing by Mr McClintock SC and Mr Spiers of Counsel.

  5. The twenty-second defendant is Mr Nicholas Andrew, a solicitor and partner of Barry Nilsson Lawyers, who was appointed by Suncorp to act for Mr Newell on the personal costs applications arising out of Mr Newell’s conduct as a barrister after the Gadens Lawyers joined his firm. Mr Andrew was represented by Ms Coventry of Counsel. Together with the Gadens Lawyers, Mr Andrew forms part of what I refer to as the New Trustee Lawyers.

Background

  1. To set the context for the present applications it is necessary to explain the history of the two separate disputes (the Young litigation – which includes both the various Young v King proceedings and the Young v Hones proceedings; and the De Costi proceedings) which feature heavily in the alleged conspiracy. The history of those matters has been summarised in the affidavit of the Lawcover/YPOL defendants’ solicitor, Mr Coorey, sworn on 23 February 2021 and relied upon for the present applications. In referring to various of the judgments in those proceedings, I do not rely on factual findings in the respective judgments as evidence of any disputed facts in the present applications; rather, I refer to the fact of the relevant judgments and the orders having been entered for the purpose of explaining the relevant chronology of events (and in the context of the suggestion by the Suncorp defendants that I should of my own motion declare the plaintiffs to be vexatious litigants – as to which I say more in due course).

  2. Chronologically, the Young litigation commenced first, although the relevant involvement of the plaintiffs in that litigation does not seem to have commenced until 2008. Nevertheless, as it is the focus of the alleged conspiracy (in the sense that the alleged ultimate purpose of the conspiracy related to the conduct of the proceedings involving Mrs Young), I will refer first to this litigation.

Young litigation

  1. As adverted to above, the Young litigation (which ultimately branched out into separate proceedings involving conspiracy allegations against Mrs Youngs’ legal representatives and others), arose out of a neighbourhood drainage dispute between Mrs Young, on the one hand, and her neighbours, Mr and Mrs King, on the other, following alterations carried out by the Kings to their property in around December 2000.

  2. Proceedings were commenced in the Land and Environment Court by Mrs Young in 2003 in relation to these alleged unauthorised works.

  3. The dispute was initially resolved by consent orders made by McClellan CJ at LEC in 2004 (Young v King [2004] NSWLEC 93), his Honour there noting an undertaking proffered by the Kings in settlement of the proceedings.

  4. However, in May 2008, Mrs Young, by then represented by the plaintiffs, brought an application to set aside the consent orders made by McClellan CJ at LEC (the application based on the emergence of new evidence which it was argued established that the consent orders were procured improperly).

  5. The 2008 application spawned a veritable barrage of litigation (referred to in Young v Hughes Trueman (No 4) at [1] as a “flood of disputation” (the Young v King litigation). Relevantly, the defendants note that there have been some 14 judgments of the Land and Environment Court; subsequent appeals (see for example Young v King (No 11) [2017] NSWLEC 34 (Young v King (No 11)) from the making of personal costs orders against the plaintiffs; and a related dispute between Lawcover and the plaintiffs as to the conduct of the Young v King (No 11) appeals, said to be contrary to terms of the relevant insurance policy.

  6. Then, in 2010, related proceedings were commenced in this Court (the Young v Hones litigation) that included an appeal to the Court of Appeal (see Young v Hones (No 2) [2014] NSWCA 338) (Young v Hones (No 2)) brought by Mrs Young against the former lawyers and engineers who had acted for her in the Land and Environment Court proceedings and had advised her as to the entry of the 2004 consent orders, in which proceedings various conspiracy allegations were made. In the course of this litigation there were two unsuccessful special leave applications to the High Court.

  7. It is relevant to note that it appears from the submissions made by the plaintiffs in the present applications that the plaintiffs contemplate agitating claims relating to the matters that were the subject of the Young v Hones litigation against some or all of the parties previously joined to those proceedings in further proceedings yet to be commenced.

  8. The Young litigation gave rise to a number of judgments in different courts and by different judges over a number of years (see the Exhibit to Mr Coorey’s affidavit); in respect of which there was criticism of the plaintiffs’ conduct. The various judgments are addressed below.

  9. As adverted to above, Mrs Young was ultimately made bankrupt in March 2017 (apparently following unsuccessful attempts by Mrs Young to set aside bankruptcy notices issued to her by the successful defendants in the Young v Hones litigation).

  10. Applications were also made for personal costs orders against the plaintiffs arising out of their representation of Mrs Young in the Young v King litigation.

  11. The Young litigation is thus relevant to the present applications in two respects: first, the proposed amended statement of claim pleads that the ultimate purpose of the conspiracy between the defendants was to interfere with the capacity of Mr Muriniti and Mr Newell to prosecute Mrs Young’s claims and thus impede the conduct of those claims (which presumably included those claims, since Mrs Young was not involved in the De Costi litigation); and, second, Mr Newell was the subject of applications for personal costs orders in Mrs Young’s proceedings both prior to and following the decision of Suncorp not to renew Mr Newell’s professional indemnity insurance.

De Costi proceedings

  1. In August 2006, proceedings were commenced in the District Court by the fourth and fifth defendants (the two De Costi companies) against the Wachtenheim Parties. The De Costi v Wachtenheim litigation is summarised in Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49 at [2]-[18] (Newell v De Costi).

  2. As noted above, the plaintiffs acted for the Wachtenheim Parties in these proceedings – Mr Newell as Counsel and Mr Muriniti as solicitor. The De Costi proceedings essentially involved a franchise dispute between the two De Costi companies and the Wachtenheim Parties.

  3. In February 2007, the Wachtenheim Parties filed a defence and cross-claim (which cross-claim is referred to in the proposed amended statement of claim as the Wachtenheim Cross-Claim). Joined as parties to the proceedings by way of the Wachtenheim cross-claim were the sixth and seventh defendants (Mr and Mrs Costi, the two directors of the De Costi companies) and the twenty-third defendant (Mr Theodore, Mrs Costi’s brother and an employee of the fourth defendant, De Costi Holdings). Subsequently, in January 2008, the twelfth defendant (Mr Shnider, Mr Wachtenheim’s brother-in-law and accountant) was joined as a cross-defendant to the Wachtenheim cross-claim: De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70 (De Costi (No 4) at [1].

  4. The De Costi Parties were represented in those proceedings by Mr Andrew Thorpe, solicitor, and Mr Thorpe’s employed solicitor, Ms Juliana Ng (collectively, the De Costi Solicitors). They in turn briefed Mr Stephen Stanton and Mr Michael Holmes (collectively, together with the De Costi Solicitors, the De Costi Lawyers).

  5. Mr Shnider was separately represented in those proceedings by Ms Deborah Searle, solicitor, and Mr Philippe Doyle Gray, barrister.

  6. Mr Shnider became bankrupt on 7 October 2011 and thus took no further part in the proceedings.

  7. On 12 December 2011, judgment was delivered in favour of the De Costi companies in respect of their substantive claim. However, enforcement of the judgment was stayed, pending determination of the Wachtenheim cross-claim.

  8. On 1 February 2012, the Wachtenheim cross-claim as it related to Mr Shnider was dismissed by consent (with no order as to costs) by Johnstone DCJ, as his Honour then was.

  9. The hearing of the Wachtenheim cross-claim (by that stage by way of a sixth further amended cross-claim) commenced before Taylor SC DCJ on 12 June 2012 and occupied some 75 sitting days (see proposed amended statement of claim at [31](e) and De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 6) [2016] NSWDC 378 (De Costi (No 6)) at [119]).

  10. On 3 May 2013, Taylor SC DCJ dismissed the remainder of the Wachtenheim cross-claim in the De Costi proceedings with costs (De Costi Seafoods (Franchises) v Wachtenheim (No 3) [2013] NSWDC 54) (Wachtenheim Judgment) (see proposed amended statement of claim at [31](f)) and ordered costs against the Wachtenheim Parties. (Pausing here, I note that in the proposed amended statement of claim the plaintiffs refer to the De Costi proceedings as the Wachtenheim Proceedings – see at [31] (the second of two paragraphs numbered 31) of the proposed amended statement of claim.)

  11. The De Costi Parties sought a variation of the costs orders that had been made, relevantly seeking orders pursuant to ss 345 and 348 of the Legal Profession Act 2004 (NSW) (Legal Profession Act) (the so-called “wasted costs” jurisdiction) and s 99 of the Civil Procedure Act that the plaintiffs be ordered to pay the costs of the proceedings personally. On 5 August 2013, a costs application was filed by the De Costi Parties (De Costi Costs Application) (which seems to be the costs application referred to at [25] of the proposed amended statement of claim) to that effect.

  1. Ms Louise Thomson was appointed as trustee to Mr Shnider’s bankrupt estate for the purposes of prosecuting a costs application on behalf of the bankrupt estate (Trustee Costs Application) which was filed on 14 October 2013. Relevantly, the Trustee Costs Application sought the setting aside of the consent orders made by Johnstone DCJ on 1 February 2012 and then for the dismissal (again) of the cross-claim against Mr Shnider but this time with an order that the Wachtenheim Parties pay Mr Shnider’s costs of the cross-claim against him on the indemnity basis: see De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 4) [2014] NSWDC 70 at [6]. The Trustee Costs Application also sought personal costs orders against the plaintiffs of the kind sought by the De Costi Parties. (Where I refer to the two costs applications collectively, I do so as the Costs Applications.)

  2. The Costs Applications, insofar as they related to Mr Muriniti, resulted in a notification to his professional indemnity insurer, Lawcover, whose corporate counsel, Ms Elissa Baxter, had responsibility for management of the claim. Lawcover appointed Mr Bruce Yeldham and his employed solicitor Ms Mary Vitalone (collectively, the Lawcover Solicitors) who in turn briefed Mr David Lloyd of counsel (collectively, together with the Lawcover Solicitors, the Lawcover Lawyers) to act in Mr Muriniti’s interests in respect of the Costs Applications.

  3. The Costs Applications, insofar as they related to Mr Newell, resulted in notification to his professional indemnity insurer, Suncorp (AAI Limited). Suncorp appointed Ms Wendy Blacker and her employed solicitor, Mr Rory O’Connor (the Gadens Lawyers) to act in Newell’s interests in respect of the Costs Applications. Subsequently (upon Ms Blacker and Mr O’Connor moving to Barry Nilsson Lawyers – a matter to which the plaintiffs apparently attach some suspicion – see T 176.45; T 177.1-2), Mr Nicholas Andrew (collectively, together with Ms Blacker and Mr O’Connor, the New Suncorp Lawyers) was appointed as the solicitor on the record for Newell with respect to the Costs Applications. Various counsel were briefed to appear in Mr Newell’s interests at different stages of the Costs Applications. Ultimately, Mr Geoffrey Watson SC was briefed to appear at the first instance hearing, and subsequently on appeal, in relation to the final determination of the De Costi Costs Applications.

  4. Directions were made by Taylor SC DCJ as to the hearing of the Costs Applications. Relevantly, his Honour listed for hearing first (on 16-17 December 2013) the question whether the evidence gave rise to the presumption under s 349 of the Legal Profession Act in respect of the claims that had been made against the De Costi Parties; and, as to the Trustee Costs Application, the application to set aside Johnstone DCJ’s consent orders and for an order that the Wachtenheim Parties pay Mr Shnider’s costs of the cross-claim against him on an indemnity basis. The further orders sought by the trustee (i.e., that the plaintiffs, pursuant to s 348(1)(b) of the Legal Profession Act and s 99(2)(c) of the Civil Procedure Act, indemnify the bankrupt estate of Mr Shnider in respect of any costs payable by Mr Shnider or the bankrupt estate of Mr Shnider in respect of the cross-claim) were to be dealt with later (referred to by the plaintiffs as the residual trustee costs claim).

  5. On 13 June 2014, in De Costi (No 4) Taylor SC DCJ dismissed the Trustee Costs Application (other than the residual trustee costs claim). In relation to the De Costi Costs Application, his Honour found, for the purposes of the s 348 application, that a rebuttable presumption for the purposes of s 349 of the Legal Profession Act arose in respect of the claim against Mrs Costi, but not as against the other De Costi Parties. (Pausing here, there was thus a measure of success for the plaintiffs in defending the Costs Applications to this point.)

  6. Mr Newell and Mr Muriniti subsequently brought an application for summary dismissal of the De Costi Costs Application (other than the claim brought in respect of Mrs Costi’s costs).

  7. On 10 February 2015, in De Costi Seafoods (Franchises) Pty Ltd v Wachtenheim (No 5) [2015] NSWDC 8 (De Costi (No 5)), Taylor SC DCJ dismissed the application for costs under s 348 of the Legal Profession Act except insofar as it related to Mrs Costi, and otherwise dismissed Mr Muriniti and Mr Newell’s applications for summary dismissal. This left for determination the application for costs under s 348 of the Legal Profession Act with respect to Mrs Costi, and the applications under s 99 of the Civil Procedure Act in respect of all the De Costi Parties (as well as the residual trustee costs claim).

  8. On 14-18 March 2016, the De Costi Parties’ claim for personal costs orders under s 99 of the Civil Procedure Act was heard, including the issue as to whether the plaintiffs could rebut the finding concerning the existence of reasonable grounds for the joinder of Mrs Costi. At the hearing in March 2016, Mr Watson SC appeared as counsel for Mr Newell, then instructed by the New Suncorp Lawyers.

  9. Mr Coorey deposed that following the refusal by Taylor SC DCJ to dismiss the balance of Ms Thomson’s (the Trustee) application, Ms Thomson indicated an intention not to pursue the residual costs claim against the plaintiffs.

  10. On 16 December 2016, Taylor SC DCJ handed down judgment on the De Costi Costs Application (De Costi (No 6)) (De Costi Costs Judgment). His Honour held that the plaintiffs had not rebutted the presumption in s 349(1) of the Legal Profession Act (see at [14]), that the power in s 348(1)(b) of that Act should not be restricted to an order only in favour of Ms Costi (see at [27]), upheld a significant number of the De Costi Parties’ complaints under s 99 of the Civil Procedure Act (see at [48], [53], [55]-[56], [71], [77], [80]-[81], [84], [87] and [93]); and held that personal costs orders on the basis of a global assessment of 50% of the De Costi Parties’ costs of the cross-claim were appropriate (see at [124]). His Honour ordered that Mr Newell and Mr Muriniti indemnify the De Costi Parties against 50% of their costs payable with respect to the Wachtenheim cross-claim pursuant to s 99 of the Civil Procedure Act; and that Mr Newell and Mr Muriniti indemnify the De Costi Parties in respect of 20% of the costs payable on account of the costs occasioned by the claim against Mrs Costi pursuant to s 348 of the Legal Profession Act (see at [125]).

  11. In finding that that the s 349 presumption was not displaced in relation to Mrs Costi’s costs, his Honour noted that Mr Newell and Mr Muriniti did not give evidence on the application and, in accordance with Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, his Honour inferred that their evidence could not have assisted with their case (the advice by Counsel for Mr Newell not to give evidence forms part of the complaints made in the proposed amended statement of claim). His Honour held that none of the other materials relied upon established a foundation for an arguable case of unconscionable conduct against Mrs Costi. His Honour held that s 348(1)(b) was limited to costs connected with the baseless claim against Mrs Costi, and it was immaterial that she did not personally pay those costs; that the claim against Mrs Costi was not trivial; that the costs of the claim should be treated as an equal portion of the whole of the costs of the proceedings (i.e., one-fifth or 20% of the costs of the cross-claim against the De Costi Parties).

  12. His Honour found that an order under s 99 of the Civil Procedure Act was appropriate in circumstances where the De Costi Parties had incurred costs by reason of the following serious neglect, serious incompetence or serious misconduct of Mr Newell and Mr Muriniti: in the absence of explanation, the repeated serving of amended pleadings ultimately resulting in the filing of the fifth further amended statement of cross-claim; that the pleadings were inconsistent with the particulars and were riddled with ambiguity and prolixity, where no exculpatory explanation is provided; the maintaining of a cause of action that had no evidence to support it; the excessive number of affidavits of Mr Wachtenheim that were read in the proceedings; the significant volume of evidence concerning other franchise stores that was not probative to the issues in the trial; the involvement in the preparation of a false affidavit and instruction of expert to “cover up” dishonesty (these being matters the subject of complaint in the proposed amended statement of claim); inappropriate dealing with witnesses (this being a reference to an illegal tape recording incident with Mr Shnider, and improper dealings with a witness, Mr Kevin Ng, again those being matters of complaint in the proposed amended statement of claim); and the making of serious allegations of impropriety without a proper basis.

  13. Mr Newell and Mr Muriniti then brought an appeal from the De Costi Costs Judgment (they say on the instructions of Suncorp and Lawcover). In Newell v De Costi the Court of Appeal (Beazley P, as Her Excellency then was, Gleeson JA agreeing) upheld the conclusion by Taylor SC DCJ that this was an appropriate case in which each of Mr Muriniti and Mr Newell ought be required to indemnify the De Costi Parties in respect of some of their costs of the substantive proceedings, but that his Honour had erred in quantifying or describing the extent of that indemnity.

  14. In particular, in the course of her Honour’s reasons it was held that: his Honour was correct in finding that Mr Newell and Mr Muriniti were liable to the De Costi parties on account of costs occasioned by the claim against Mrs Costi pursuant to s 348 of the Legal Profession Act, but erred in his determination that the costs of the claim against Mrs Costi should be treated as an equal portion of the whole of the costs of the proceedings. It was held that his Honour erred in determining that Mr Newell and Mr Muriniti were equally liable for each instance of the impugned conduct; that his Honour was required, but failed, to make specific findings in respect of the responsibility of each of Mr Newell and Mr Muriniti for the relevant conduct (see at [228]-[232] and [253]-[257]).

  15. The Court of Appeal made declarations to the effect that each of Mr Newell and Mr Muriniti was liable to indemnify the De Costi Parties (see at [239]).

  16. In the case of both Mr Newell and Mr Muriniti, this was by reason of the following matters: the joinder of Mrs Costi as cross-defendant; the filing or service of more than three versions of the cross-claim; the failure to reduce the evidence in the various affidavits of Mr Wachtenheim to one affidavit or at least many fewer affidavits than those served; the making and deployment of, and the submissions and hearing in respect of, the illegal tape recording that was the subject of the second judgment in the District Court in De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 2) [2012] NSWDC 286 (De Costi (No 2)), including the costs of the application dealt with in De Costi (No 2); the failure to discover correspondence between Mr Newell, Mr Muriniti and Mr Shnider; the affidavit of Mr Ng; the allegations of impropriety against Mr Thorpe; and the allegations of impropriety that the respondents had obtained a misleading affidavit from Mr Shnider and Mr Shnider’s evidence (see at [239]).

  17. In addition in respect of Mr Muriniti, the Court of Appeal also referred to the following matters in the declaration of his liability to indemnify the De Costi Parties: the instructions given by Mr Muriniti to Mr Dent; the false account contained in Mr Wachtenheim’s affidavit dated 15 December 2011 as to how he was alerted to the issue of the understatement of sales revenue in Mr Wachtenheim’s affidavit dated 23 August 2011; and the non-production of a diary indicated by the chronology of events forwarded by Mr Muriniti to Mr Dent.

  18. The Court of Appeal remitted the proceedings to the District Court for determination of the costs allegedly wasted by reason of the conduct the subject of the declarations. Pausing here, personal liability for costs falling within the categories identified in the declarations made has thus been established; the only remaining question (absent the setting aside of the Court of Appeal decision as based upon fraud) could be the quantum of those costs (and the apportionment as between Mr Newell and Mr Muriniti of responsibility for those costs). Hence the complaint by the defendants that what the plaintiffs here seek to do is impermissibly to re-litigate the matters that have been resolved by the Court of Appeal. The plaintiffs’ response to this is that no question of re-litigation arises because the relief they seek includes setting aside those orders as having been obtained by collusion (see at T 22.1-6).

  19. Following the remittal to the District Court, on 20 March 2019 Taylor SC DCJ made orders appointing a Referee (to be nominated by the President of the Law Society), to assess the alleged wasted costs (the costs reference), following which, on 30 April 2019, Ms Alyson Ashe was nominated as referee: see, for example De Costi Seafoods (Franchises) Pty Limited v Wachtenheim (No 8) [2020] NSWDC 184 (De Costi (No 8)) at [6] and [11].

  20. What followed thereafter has been the subject of much complaint by the plaintiffs (and I was taken through the correspondence in relation to this in some detail). Indeed, Mr Newell made clear that the plaintiffs have attached great importance to the costs reference for the reason that they say half of their case depends on the outcome of the reference (T 19.38). At T 26.22-25, Mr Newell explained this further, saying that half of the case turns on whether the s 99 conduct was upheld (which, I interpose to note, it clearly was – though the plaintiffs seek to set aside those judgments for fraud) and the other half turns on whether the s 99 conduct had ever carried with it a significant waste of costs.

  21. Mr Newell says (see at T 19ff) that:

… The plaintiffs contend that by reason of the conduct complained of by the plaintiffs, which the plaintiffs allege was collusion sponsored by the two insurers and their legal representatives, the conduct findings were made which ought never have to been made on the known evidence.  That is one part of the matter.  The second part of the matter, the flip side of the coin, is that the conduct complaints we say did not result in any significant wasted costs, and when, as we believe but cannot yet plead for reasons I’ll take your Honour to, the costs would be shown to be in most cases de minimis, if not non‑existent. 

…

We expect them not to be significant but we don’t wish to plead that because we'd be stepping on Taylor DCJ’s toes.  It’s not a matter ‑ we can’t go off to the Supreme Court and plead what Taylor DCJ should be doing and we've emphasised that to the defendants, and we haven’t ‑ our concern is we haven’t got a response that suggests that’s been understood.  There are cases where there might be wasted costs but nonetheless we’re seeking to have those ‑ it might be built into the Court of Appeal’s orders that there are wasted costs but your Honour should bear in mind that the plaintiffs are seeking to have those orders set aside as having been obtained by fraud, so that those orders ultimately will not be binding, in our respectful opinion.

  1. Relevantly, Mr Newell says that the plaintiffs have been “exacting” as to how the reference is conducted “so as to ensure that evidence is preserved for the very proceedings that have been commenced in this Court” (T 25.30). It is said that the plainitffs have considered at all material times that it was essential to prove the case that the de minimis nature of the wasted costs categories be shown (and that the plaintiffs have resisted a settlement by the insurers – which I note also forms part of the conduct complained of in the proposed amended statement of claim – so that the “evidence does not disappear in the settlement”) (T 25.31-35). At T 26.28-29, Mr Newell said that one of the reasons that the reference was protracted was that the plaintiffs “were astute to conduct the reference, with regard to making absolutely certain that those costs were assessed accurately” and that they want it done meticulously. (At the same time, and seemingly inconsistently, the plaintiffs say that they have drawn a conclusion that the protracted nature of the reference is due to an anxiety on the part of certain parties, in particular the De Costi Parties not to have the reference completed (T 27.33-35).)

  2. Returning to the chronology of events, as noted the referee was appointed in April 2019.

  3. On 14 August 2019, the plaintiffs filed a motion seeking termination of the reference and termination of the appointment of the independent costs assessor. It is said that this was because of some concerns the plaintiffs had with the referee’s conduct and with the conduct of the De Costi Parties. That motion was heard by Taylor SC DCJ. It was unsuccessful: De Costi (No 8).

  4. Following the determination of that notice of motion, it appears that by April 2020 Mr Newell became concerned that there might be a limitation problem for the present proceeding because the letter he had received from Suncorp declining to renew his insurance was dated 24 April 2014. Mr Newell says that, on one view of the matter, he would not have suffered any loss until 30 June 2014 (when he was without insurance), but that it occurred to the plaintiffs that this might not be correct if it were to be argued that, as at 24 April 2014, the damage was inevitable (see T 26.1-2). This led to the commencement of the present proceedings by the filing of the original statement of claim on 22 April 2020 (see below), a document said to have been prepared in great haste. The statement of claim was not served until September 2020.

  5. Before turning to the present proceedings, it is helpful to conclude the chronology of events in relation to the costs reference (as they stand at present).

  6. On 1 February 2021, the referee sent an email requesting that by 8 February 2021 both parties indicate the present position as to advancing some signed directions and, for the costs applicants, their progress towards the costs claim. (The plaintiffs rely on this to show that nothing had been done to indicate progress.) The response by the costs applicants was to explain the delay by reference to the solicitor’s involvement in another complicated matter (an explanation one might think the plaintiffs would understand since their explanation for delay in the present proceedings included reference to their involvement in other matters – i.e., the District Court proceedings and costs reference) and to indicate that the applicants would respond by mid-April 2021. The plaintiffs say that the inference to be drawn is that nothing had been done on the costs reference (T 30.28-29); and note that the referee’s response to that was that this was inadequate.

  7. The plaintiffs then wrote a lengthy letter apparently pressing the referee to ask the costs applicants whether their solicitors were actually acting in the matter. The plaintiffs perceived there to be an obvious conflict (presumably because the solicitors were those against whom the present conspiracy applications are made) and that no work had been done. Mr Newell said that they were “in some doubt that the matter could progress and … wanted an assurance that they were actually solicitors intending to act” (T 31.7-8). The referee’s response was that the plaintiffs should seek to re-list the matter in view of the non-progress.

  8. The plaintiffs then wrote to the referee complaining that they had been unable to obtain answers to their questions “about certain indications of the methodology to be applied by the referee” and in particular that there was no explanation for a statement that a lump sum methodology was to be applied and “that there was antipathy by the referee to get bogged down in a particularised cost assessment” (T 31.14-19). (Pausing here, a particularised costs assessment (descending into the minutiae) seems exactly what the plaintiffs want, insofar as Mr Newell informed me that “the plaintiffs were concerned that the question of what the precise costs were would not be glossed over to the detriment of intended proceedings” and said that therefore they were exacting in seeking explanations for the methodology (T 31.21-23) but those were never received.)

  1. The referee then sent a short report to Taylor SC DCJ requesting that the proceedings be relisted and the plaintiffs reiterated their concern to know whether the costs applicants’ solicitors were actually acting. The concern Mr Newell expressed was that if there was “suddenly going to be a claim” that the solicitors could not act then this would delay completion of the reference (see T 31.37-38). The plaintifs then corresponded with the defendants as to the status of the reference.

  2. On 2 March 2021, the matter was listed before Taylor SC DCJ. Mr Newell says that the plaintiffs raised their concerns “including the concern that they didn’t know whether the reference would be delayed by the sudden decision that the … costs applicant’s solicitors could not act” (T 32.1-2). His Honour made directions for a timetable for the costs applicants to submit their claim and supporting documents by 30 April 2021 and for the plaintiffs to respond to the claim. An order was made that, failing the claim being filed by the date specified the plaintiffs have leave to file a motion to have the costs application dismissed for want of prosecution.

  3. On 1 April 2021, the plaintiffs wrote to the defendants in the present proceedings as to the delay in the costs application progress (which was attributed to the De Costi Parties), and in this letter the plaintiffs explained why they would be seeking a stay of the proceedings; and the difficulties they had.

  4. On 30 April 2021, the De Costi Parties served a large volume of documents that they said comprised their claim. On 20 May 2021, the plaintiffs indicated to the referee that they were concerned about the form of the claim and (perhaps ironically, given their concern to preserve all the evidence in relation to the claim) the difficulties they were having with regard to the volume of the material that had been served. On 11 June 2021, the plaintiffs made submissions to the referee as to the contents and form of the claim and what they said they needed to respond to and there was then corrpoesndence in which the plaintiffs pressed for directions from the referee “to place the claim in a shape that could be understood and responded to” (T 33.26-27). Part of the complaint was that there were no costs agreements included in the claim materials.

  5. The plaintiffs say that on 16 June 2021 the De Costi Parties “purportedly” provided the cost agreement material that it is said should have been provided when the claim was first brought in August 2013. One of the complaints by the plaintiffs (conveyed to the McLachlan Thorpe lawyers on 17 June 2021, and said to be the subject of the motion filed by Mr Muriniti in September 2021 in the District Court proceedings) related to the lack of a cost agreement “justifying” the fees of the ninth defendant (Mr Stanton) in the present proceedings.

  6. There was further correspondence about the cost agreements material; and ultimately it appears that the plaintiffs were satisfied as to the adequacy of the material other than in respect of the ninth defendant (T 33.49-50). In relation to the ninth defendant, reference was made to a letter dated 25 May 2012 from Mr Stanton to the solicitors for the cost applicants referring to a private arrangement which the plaintiffs consider indicates a collateral agreement inconsistent with his cost agreement. The plaintiffs pressed for a statement (if no documents could be produced) as to the alleged terms of the cost agreement (and say that this is sought in Mr Muriniti’s motion of 22 September 2021). On 24 June 2021, the plaintiffs complained to the referee about about the non‑production of the cost agreements and sought a direction that cost agreements be provided. (The relevance of this is said to be that the protacted delay of the reference is due to what is alleged to be the “recalcitrance” of the costs applicants in putting forward any costs claim for a lengthy period and ultimately for putting forward a claim without the adequate material for such a claim (T 34.41-43).)

  7. On 25 June 2021, the costs applicants then confirmed that enquiries had been made as requested and that no further cost agreements could be produced; and the plaintiffs then complained to the referee that there had been no articulation of the terms of the cost agreement that Mr Stanton had in place.

  8. On 28 June 2021, the referee indicated a willingness to make certain directions which were made on that same date. The plaintiffs were unhappy with those directions and pressed the referee to consider their request for directions. On 30 June 2021, the referee indicated she would consider those directions and the plaintiffs put forward a lengthy letter setting out what directions were sought. The cost applicants provided their response to the proposed directions. The plainitffs complained again and foreshadowed the filing of a notice of motion.

  9. In particular, the plaintiffs explained that one of the principal concerns was that the cost applicants had not put forward any claim as to why the work was reasonable necessary and that the De Costi Parties were suggesting that this could be done at a later stage. The complaint by the plaintiffs was that the result of that would be to frustrate the scheme of the directions made by Taylor SC DCJ because the plaintiffs did not know how it was contended that certain work was actually reasonably necessary (and that, if the plaintiff found this out at the reply stage, this would create “a black hole as to what was going to happen” and as to whether or not submissions would start again (T 35.46-49)).

  10. The plaintiffs pressed the referee for a “robust” response to the cost applicants’ position; and complained that it did not make sense for the plaintiffs to put forward a response before a claim had been framed.

  11. On 30 July 2021, the referee made detailed directions (about which Mr Newell said that “to a point” the plaintiffs were happy) but the plaintiffs complained in two letters, both of which were sent on 2 August 2021, that it did not make sense that the costs applicants were to respond within one month but the plaintiffs would file their response (also) within one month (which they said meant they would be filing a response to a claim which had not been made).

  12. On 11 August 2021, the solicitors for the cost applicants sought clarification of the directions (which the plaintiffs maintain were not in any way unclear). The plaintiffs now complain (and this is apparently also the subject of the motion to be heard on 3 February 2022) that the cost applicants were setting up a misunderstanding of the directions so as, once again, not to put forward their claim in the form in which the plaintiffs say that it should have been put forward.

  13. The referee then provided a response to the request for clarification of the directions (about which the plaintiffs have expressed concerns about “the way the matter was left”).

  14. In response to the plaintiffs’ foreshadowing of a notice of motion, the cost applicants wrote on 27 August 2021 to the effect that they would be wasting costs putting forward their claim if a motion were to be filed; a proposition that the plaintiffs cavil with, in that they say that the simple answer was to get their claim filed quickly (T 36.49-50; 40.1). Mr Newell says that the “purport of that step” was that the costs applicants never intended to put forward their claim.

  15. The next step was then the filing of the plaintiffs’ notice of motion on 22 September 2021 (listed to be heard on 3 February 2022 in the District Court) seeking directions for the De Costi Parties to comply with certain directions of the referee made on 30 July 2021.

  16. The plaintiffs rely on the above sequence of events as evidencing their insistence that the claim be put forward in a shape that could properly be scrutinised and say that it “became a problem just to advance it at all” (T 37.20-21). Their complaint in the notice of motion is that there has not been compliance with the directions of the referee.

  17. The plaintiffs make much complaint on the present applications on the fact that, some two and a half years after the referee was appointed, the costs reference has not been completed and final orders have not been made in respect of the De Costi Parties’ Costs Application against the plaintiffs, from which the plaintiffs draw the inference that the costs applicants are aware that there have been no significant wasted costs and that they are deferring the progress of the costs reference (as part of the conspiracy to prevent Mr Newell from practising as a barrister).

  18. Pausing here, it would seem to me from the above that at least some of the delay in the determination of the costs referee (and hence of the ultimate determination by Taylor SC DCJ of the costs issue) is referable to the conduct of the plaintiffs in the course of that referral – indeed, in oral submissions Mr Newell appeared at first to attribute some of the delay to the fact that the plaintiffs had been exacting in their insistence that there be a meticulous assessment process in order to ensure that all the evidence be preserved (see for example at T 26.30 where he said that one of the reasons that the reference was protracted was because the plaintiffs want it done meticulously). Certainly, the litany of complaints made of the referee (and motions in relation to the referee and as to the conduct of the reference) cannot have assisted in minimising any delay in the costs referral process or, conversely, in expediting that process. However, the position of the plaintiffs appears to be that blame for the delay lies squarely at the De Costi Parties’ door (as I will explain in due course), accusing the De Costi Parties of recalcitrance in putting forward their costs claim (see at T 34.42); and as noted, the delay in progressing the costs reference, forms part of the conspiracy allegations alleged by the plaintiffs.

  19. For completeness, I note that, although it is not altogether made clear, the reference to the “de Costi Cost Application” in the proposed amended statement of claim (see for example, at [25]) appears to be a reference to the motion brought by the De Costi Parties on 5 August 2013. Again, although it is not made clear in the proposed amended statement of claim, the reference to the “Shnider Costs Application” (see for example, at [23] of the statement of claim) and the term “Trustee Costs Claim” in the proposed amended statement of claim (see for example at [23]) appears to be a reference to the motion brought by Ms Thomson as the trustee of Mr Shnider’s bankrupt estate on 14 October 2013 which was materially the same as the De Costi Parties’ August application.

Present proceeding

  1. Meanwhile, as noted on 22 April 2020 the plaintiffs filed the initial statement of claim in the present proceeding though it was not served until 11 September 2020 at the earliest (some parties being served later), not long before it would have become stale.

  2. The plaintiffs make clear in their submissions on the present applications that the pleading was prepared and filed in order to avert a potential statute of limitations argument by the defendants. They submit that in late April 2020 (having, they say, been fully occupied in trying to conduct the costs reference) they were “confronted with the predicament that there was a possibility that a limitation problem could develop”. It is submitted at [17] of the plaintiffs’ submissions that:

… At the same time, the District Court costs proceedings on which the Plaintiffs’ contemplated action was based, had not been fully litigated. Final orders had not been made. The facts produced by the Reference were expected to be a large part of the foundation for the contemplated Equity Division Proceedings. That is because the Plaintiffs believed that the conduct informing many of the declarations made by the Court of Appeal did not occasion any or any significant wasted costs. In the premises, the outcome of the District Court proceedings was [expected to] provide a large part of the Plaintiffs’ claim to be pleaded that the de Costi costs application was maintained for a collateral purpose and assisted by collusion. Put simply, half of the contemplated claim could not be pleaded because the matter was under still consideration [sic] by the District Court. Further, a vital tranche of evidence supporting the Plaintiffs contemplated claim concerned the events which occurred and were occurring during the course of the Reference.

  1. The plaintiffs say that the statement of claim was prepared and filed in great haste (see at [22] of the plaintiffs’ submissions, referring to the affidavit of Mr Muriniti sworn 31 August 2021 in which he deposes to the District Court proceedings occupying a great deal of attention and time), though the defendants here point out that much of the matters the subject of the present proposed pleading have been known by the plaintiffs for quite some time.

  2. The plaintiffs submit that they could not plead the outcomes (of the cost reference); and could not plead contentions about the claims before Taylor SC DCJ, as that would involve agitating in the Supreme Court matters still properly before Taylor SC DCJ for consideration; and that this would amount to an obvious abuse of process. Hence the plaintiffs say that even now they are not able to put forward a proposed amendment which contains the case which they expect to take to trial (and, significantly for the present application, they made clear that the proposed amended pleading is not the one that they want to prosecute in this proceeding) (see for example at T 39.35-50)).

  3. As explained in oral submissions, Mr Newell put the position thus (at T 38-39):

Well, the statement of claim will not contain any pleading about the conduct of the reference, the conduct of the parties to the reference, its implications for the overarching allegations, and the results of the reference from which it will be inferred, we hope, that the costs are actually de minimis. Of the particular items of conduct, the subject of the Court of Appeal’s declarations, and that is the flip side of the coin of whether the conduct should have been found at all.  The question is, is it an illusory claim in the sense that the costs are so minimal that it begs the question how the claim was protracted for so many years.  The reason I say that is because Taylor DCJ had made a decision on 13 June 2014 which left the matters that are now complained of as the only matters to be decided.

On 13 June 2014 if the matter had been abandoned, based on Taylor DCJ’s judgment which we say gutted the claim, then Mr Newell would have had no difficulty obtaining insurance by 30 June because the claim had been effectively abandoned. Now, we say that would follow as day follows night. After 13 June 2014 the claim continued to be progressed for another three or four years, and it’s now been progressed through the reference in a very delayed state. Probably we say that the ‑ if it transpires that the s 99 matters attract only the most de minimis costs, it would confirm that the proper commercial course, and the only course properly in the interests of the cost applicants ‑ sorry, the de Costi parties ‑ was to abandon the claim from and after 13 June 2014 when Taylor DCJ’s decision virtually said there was nothing in it.

So one of the fundamental questions that goes to the purpose of the matter is why it was perpetuated after that time.  It’s got two features.  One is that the conduct itself was, properly understood, should not have been made out, and secondly, the conduct did not attract any significant costs.  So the question of whether there’s de minimis costs goes to the question of whether the proceedings were protracted after 13 June 2014, remembering your Honour that Mr Newell’s insurance expires on 30 June 2014, and as pleaded Mr Newell wrote to Suncorp to say, in light of this judgment, perhaps he would like to reconsider your non‑renewal decision, and it’s pleaded that an unsatisfactory response to that request occurred.

  1. Thus it is submitted that the plaintiffs are not capable of pleading all of the circumstances which support the claim, including “what we expect to be the manner of reference and the connected matter of the de minimis nature of the costs that were the subject of perpetuation of the claim from June 2014 to the present time”. The defendants, however, point to communications around the time of the filing of the initial statement of claim which indicate not only that the plaintiffs recognised the need to amend the statement of claim as early as 15 May 2020, but also that steps were apparently being taken to attend to this at that time.

  2. In particular, it is noted that Mr Muriniti made the following request in the Online Court in this matter on 15 May 2020 (see Ex 1, p 783):

Given the large number of Defendants involved and the complexity of the present proceedings (and the proposed additional proceedings) and the fact that the proceedings presently before the Court require the Statement of Claim to be amended (which is presently being attended to) and that none of the parties have yet been served, we request that the matter be stood over for directions for a period of 4 weeks. [Emphasis as per submissions]

  1. It is also noted that, on 15 June 2020, Mr Muriniti told the Court that the “proceedings in question are extremely complete [sic]”; that an additional six weeks (i.e., to mid-August 2020) were required to “complete amending the Statement of Claim before it can be served”; and that that task had not been completed because of “a number of other professional commitments”, because it was “much more demanding and time consuming” than anticipated, and due to illness (see Ex 1, p 784).

  2. On 11 September 2020, service of the initial (unamended) statement of claim was effected by email on various of the defendants. Both sides have referred to the covering letter from Mr Muriniti with which the pleading was served, which stated:

We refer to the above matter. We enclose by way of service a statement of claim.

The circumstances are that the Statement of Claim was filed because it appeared that it might be necessary for abundant caution to protect time, notwithstanding that the claim is in fraud and the cause of action was concealed.

The need to protect time was perceived as necessary notwithstanding that the circumstances giving rise to the claim have not settled.

It is our position that the Statement of Claim (in its present form) requires significant amendment. An assessment of costs claimed by the de Costis is presently being undertaken pursuant to a reference order by his Honour Judge Taylor following the remittal to his Honour from the Court of Appeal.

The result and the evidence produced by that referral process will be central to the case as it is intended to be pleaded.

As such it is our position and we will contend as such, that we are not in a position to prepare a pleading at this point in time in the form intended to be taken to trial.

We propose to address this predicament by a proposed stay in the proceedings until final orders are made in the matter before His Honour judge Taylor. The stay application will give the court an opportunity to consider the best course in view of both common sense and section 56 CPA.

As is obvious, the underpinning of the claims in the instant proceedings is the alleged conspiracy to defraud Mrs. Young.

That matter is presently the subject of negotiations with the trustee in bankruptcy for Mrs. Young with a view to assignment of the cause of action. We would expect those proceedings to be filed before the Reference before Judge Taylor is completed.

So as to avoid inconsistent judgments, it appears that the circumstances require that the proceedings arising out of the fraud on Mrs. Young should be heard with the instant proceedings or concurrently or immediately before the instant proceedings.

  1. That said, I do not accept the principal premise on which the temporary stay application is put (namely that the plaintiffs are not in a position to plead their claims until the outcome of the costs reference is known). It seems to me that the plaintiffs are in no different position than many parties who file pleadings based on the contingency that certain outcomes will follow from impugned conduct. Nor do I consider that it would be impossible to make such allegations without trespassing on the jurisdiction of the District Court.

  2. While ordinarily I would be minded (if a pleading is struck out for pleading deficiencies) to afford an opportunity to replead, in essence the plaintiffs have already had that opportunity (having served the proposed amended statement of claim after the original statement of claim was struck out) and even now they maintain that they are not in a position to replead (so that giving them an opportunity, which they do not seek, would surely be futile).

  3. The real issue, to my mind, is therefore whether it is an abuse of process to permit the proceedings to remain on foot (but temporarily stayed) in all the circumstances.

  4. In UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 (UBS v Tyne), the plurality (Kiefel CJ, Bell and Keane JJ) opened by observing that the varied circumstances in which the use of the court’s processes will amount to an abuse do not lend themselves to exhaustive statement ([1]). Gageler J in that case (at [62]), agreeing in the result, noted that the doctrine of abuse of process is informed by considerations of finality and fairness (see Tomlinson v Ramsey Food Proceesing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [21]).

  5. One of the circumstances in which there will be an abuse of process is where the continuance of proceedings will bring the administration of justice into disrepute (see UBS v Tyne at [44]).

  6. There are public interest considerations underlying the power of courts to stay or dismiss proceedings for abuse of process – to prevent the waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes, to maintain confidence in, and respect for, the authority of the courts.

  7. In the present case, one of the bases on which the summary dismissal or permanent stay orders are sought is that the proceeding involves the re-litigation of issues already heard and determined (in relation to the personal costs orders) (see Lord Halsbury LC in Reichel v Magrath (1889) 14 App Cas 665 at 668; Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110 at [50] (Handley JA, with whom Powell JA and Mason P agreed); Rippon v Chilcotin). In Walton v Gardiner, Mason CJ, Deane and Dawson JJ observed (at 393) that:

... proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. …

  1. In State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports 81-423, Giles CJ identified the following matters relevant to determining whether a proceeding is an abuse of process on the re-litigation ground: the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; the opportunity available and taken to fully litigate the issue; the terms and finality of the finding as to the issue; the identity between the relevant issues in the two proceedings; any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.

  2. As to this, I have noted above that the plaintiffs maintain that the proceeding they wish to bring does not impermissibly involve the re-litigation of issues already determined, on the basis that what they are seeking is in fact to have the earlier judgments set aside as being based upon fraud. (There was also some debate as to whether particular issues relating to the Young v King litigation had been before the relevant courts – see T 147.29-31; T 147.47-50). It is unnecessary here to enter into this debate because the basis on which I am proposing to grant the primary relief sought by the defendants is not the re-litigation complaint.

  3. Another basis on which the relief is sought by the defendants relates to the assertion that some or all of the claims made (against the barristers and solicitors) are not maintainable having regard to the principles of advocates or witness immunity. Again, it is unnecessary to enter into debate as to the scope or applicability of the principles of such immunity (on which the High Court has opined in, for example, the Attwells decision), because again this is not the basis on which I propose to grant the relief sought.

  4. As to the complaint that the proposed amended statement of claim discloses no reasonable cause of action, there is force in the complaint that the pleading deficiencies are such that no reasonable cause of action is disclosed against one or more of the defendants, though I note the high threshold to be satisfied in determining summarily to dismiss proceedings on such a basis (see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at 129 (Barwick CJ) (General Steel); Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at 91 (Dixon J, as his Honour then was); and the discussion in Smith v Australian Executor Trustees Ltd; Creighton v Australian Executor Trustees Ltd [2017] NSWSC 1406 at [68]-[69]).

  5. Ultimately, the basis on which (even if other of the above bases might otherwise have been available) I consider it appropriate summarily to dismiss the proceedings is that I consider it an abuse of process to make such serious allegations (of fraudulent and criminal conduct) without a proper pleading and then to seek for those proceedings to remain in abeyance for an indefinite period of time.

  6. In my opinion, the stay of the present proceedings until completion of the costs reference (in effect for an unknown period, which would permit further time for the plaintifis to seek to “unravel” the conspiracy or to discover new evidence or to confirm their existing suspicions or conspiracy theories) while leaving on foot the very serious (and deficiently pleaded) allegations of criminal conduct and fraud against a raft of disparate groups of defendants would be unjustifiably oppressive to those defendants and would bring the administration of justice into disrepute.

  7. I accept that this is not necessarily a case (as in Batistatos v Roads and Traffic Authority(NSW) (2006) 226 CLR 256; [2006] HCA 27 (Batistatos)) where the lengthy delay of proceedings would make the fair trial of the claim impossible (though it is quite some time since the events complained of and I note the observations of the High Court in Jackamarra v Krakouer at [29] and McHugh J in Brisbane South Regional Health, on the question of delay, at 552-553, as to what might be referred to as presumptive prejudice from delay). Nor is this a case where the proeedings of one court have been invoked to litigate claims made but discontinued in earlier proceedings (as was the case in UBS v Tyne) although there is a very real sense in which the claims that the plainitffs wish now to advance (or to advance in the contemplated further proceedings) will include allegations that have been advanced (if not in each case determined) in other proceedings (such as those relating to the Young v King litigation) and the matters that would require, and to some extent invevitably involve, the exporation, if not indeed the re-litigation, of matters already determined (such as the wasted costs liability findings).

  8. However, the impact of delay and the prejudice to the defendants of the proceedings remaining on foot cannot be discounted. Just as McHugh J in Brisbane South Regional Health made reference to the rationales for the existence of limitation periods (in the context of the discretion to extend time), it is relevant to note that similar rationales must underlie the provisions of the rules which identify when a statement of claim that has been filed but not served will become stale; and the overriding statutory mandate for the just, quick and cheap resolution of the real issues in dispute (s 56 of the Civil Procedure Act). It is not consistent with those rationales or principles for litigation to be commenced with the (admitted) intention of avoiding a limitations problem but then leaving the conduct of the proceeding in abeyance.

  9. Just as it has been recognised that “it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed” (Brisbane South Regional Health at 552-553 (McHugh J)), it is also oppressive (and cruel) to make serious allegations of criminal conduct (including suborning perjury and the like) and neither plead those allegations properly nor make any attempt to prosecute the claims expeditiously (or at all).

  10. This enlivens the power of the Court to stay proceedings which amount to an abuse of process so as to safeguard the administration of justice, to protect the integrity of the Court’s process and to prevent serious and unjustified prejudice or harassment (see Rogers v The Queen (1994) 181 CLR 251; [1994] HCA 42 at 286; Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66 at 74-75; Batistatos at [9]-[16]).

  11. Balancing the oppression to the defendants against the prejudice to the plaintiffs of the present proceeding being dismissed, the former substantially outweighs the latter in circumstances where the claim is one based on fraud and hence the concern as to the spectre of a limitations problem seems more imagined than real.

  12. As to the alternative basis, of dismissal for want of prosecution, again the overriding purpose mandated by s 56 of the Civil Procedure Act is relevant (see Hobbs v Australian Securities and Investments Commission [2013] NSWCA 432 at [52] (Barrett JA)). However, at this stage I would not have considered the delay to be sufficient to warrant dismissal on this ground (particularly when there is an explanation put forward for the delay – as unsatisfactory as I consider that explanation to be) particularly having regard to the great care that it is recognised must be exercised . Finally, I have had regard to the principles applicable to an application for summary dismissal as summarised by Gleeson JA (with whom Beazley P, as Her Excellency then was, and Barrett JA agreed) in Simmons v NSW Trustee and Guardian [2014] NSWCA 405 at [196]-[200], there noting the “great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his cause by the appointed tribunal” quoting Barcwick CJ in General Steel at 130; and Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] (Gaudron, McHugh, Gummow and Hayne JJ).

  13. Had I approached the matter solely on the question of delay I would have been minded to make orders requiring a proper amended pleading to be served within a short period of time before making any order to dismiss for want of prosecution. As it is, however, I consider that permitting a temporary stay of the proceedings (and thus leaving in abeyance the very serious allegations that have been made) would be to facilitate an abuse of process and would bring the administration of justice into disrepute.

  14. Finally, as to the submission that I should make an order declaring the plaintiffs as vexatious litigants, I do not consider this to be appropriate.

  15. Section 8 of the Vexatious Proceedings Act identifies the circumstances in which a court is empowered to make a vexatious proceedings order, providing relevantly that:

(1)    When orders may be made

An authorised court may make an order under this section (a vexatious proceedings order) in relation to a person if the court is satisfied that:

(a)   the person has frequently instituted or conducted vexatious proceedings in Australia, or

(b)    the person, acting in concert with a person who is subject to a vexatious proceedings order or who is referred to in paragraph (a), has instituted or conducted vexatious proceedings in Australia.

…

(4)    Orders may be made on court’s own motion or on application

An authorised court may make a vexatious proceedings order of its own motion or on the application of any of the following persons:

(a)   the Attorney General,

(b)   the Solicitor General,

(c)   the appropriate registrar for the court,

(d)   a person against or in relation to whom another person has instituted or conducted vexatious proceedings,

(e)   a person who, in the opinion of the court, has a sufficient interest in the matter.

…

(6)  A judicial officer, member or registrar of a court or tribunal may make a recommendation to the Attorney General that he or she consider making an application for a vexatious proceedings order in relation to a specified person.

(7)    Orders that may be made by Supreme Court The Supreme Court may make any one or more of the following vexatious proceedings orders in relation to a person:

(a)   an order staying all or part of any proceedings in New South Wales already instituted by the person,

(b)   an order prohibiting the person from instituting proceedings in New South Wales,

(c)   any other order that the Court considers appropriate in relation to the person.

  1. “Vexatious proceedings” are defined by s 6 to include: (a) proceedings that are an abuse of process of a court or tribunal; and (b) proceedings instituted to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and (c) proceedings instituted or pursued without reasonable ground; and (d) proceedings that are conducted to achieve a wrongful purpose, or in a way that harasses, or causes unreasonable annoyance, delay or detriment, regardless of the subjective intention or motive of the person who instituted the proceedings.

  2. Although the definition in s 6 is not expressed to be exclusive, Basten JA in Viavattene v Attorney-General (NSW) [2015] NSWCA 44 (Viavattene v Attorney-General) at [14] concluded that it would be rare for a court to treat proceedings as vexatious unless they could be fairly characterised as falling under one of the descriptions in s 6. On the differences in meaning as between the descriptions in s 6, his Honour concluded at [18] that the only significant difference between the paragraphs is that the former deals with the institution of proceedings and the latter their conduct.

  3. The making of a vexatious proceedings order is a serious remedy that forecloses the person the subject of such an order from access to the Court (and thereby to justice) unless leave is granted to institute proceedings (s 14). Both the legislative framework and judicial exegesis on the touchstone of “vexatiousness” place emphasis on annoyance, harassment, hopelessness, groundlessness or untenability. In assessing whether a given person has instituted or conducted vexatious proceedings in Australia the totality of their behaviour, across various courts and jurisdictions, is to be examined. Whether that conduct is sufficiently “frequent” is to be assessed in context.

  4. The legal principles relevant to the declaration of vexatious litigants were summarised in Attorney-General for the State of Victoria v Weston [2004] VSC 314. Although Weston deals with the regime pursuant to s 21 of the Supreme Court Act 1986 (Vic), it has been cited frequently in several jurisdictions (see, for example Attorney General (NSW) v Klewer (No 3) (2010) 264 ALR 535; [2010] NSWSC 9 (Attorney General v Klewer)). In Weston, Whelan J held as follows:

23.   It seems to me that the applicable legal principles may be summarised as follows:

(1)    The application seeks a remedy of a most serious nature and a clear and compelling case must be shown to warrant it.

(2)    The requirements of the section are that the person must have instituted proceedings which are vexatious and to have done so habitually and persistently and without reasonable cause.

(3)   If the requirements are met, the Court must then consider whether an order ought to be made.

(4)    A proceeding is ‘instituted’ where originating process is filed, and also where a person counterclaims, appeals against an otherwise final determination of the substantive matter, or applies to have an otherwise final determination set aside. Interlocutory applications and appeals on interlocutory applications do not ordinarily constitute the institution of proceedings.

(5)    Vexatious proceedings are proceedings which have either been brought for an improper purpose, or which have been revealed to be hopeless. Hopelessness ought to be apparent from the ultimate disposition. A genuine claim, or element of a claim, may exist within a vexatious proceeding, where it is deeply buried in untenable claims and bizarre allegations.

(6)    Vexatious proceedings are instituted ‘habitually’ where they appear to be commenced as a matter of course. ‘Persistence’ suggests determination and an element of stubbornness. An absence of reasonable grounds will necessarily be the position where the proceedings have been revealed to be hopeless.

(7)    If the requirements of the section are met, the person’s conduct as a whole must be then assessed to determine if, in all the circumstances, an order ought to be made.

  1. Dealing with the former s 84 of the Supreme Court Act 1970 (NSW), Roden J in Attorney-General (NSW) v Wentworth (1988) 14 NSWLR 481 at 484 described the nature of the remedy as extreme, noting that in R De W Kennedy (Finance) Pty Ltd v Ley (Holland J, 29 March 1978, unreported), Holland J referred to this as the “most drastic” of the powers of the court to control litigation and litigants and said that “this denies to such a litigant a right that all other citizens have, namely, to call upon the Court to adjudicate a claim simply by making it in Court in the prescribed manner”.

  2. As to the meaning of “vexatious”, Roden J said at 487 that the relevant vexation “cannot be found simply in the habitual or persistent manner in which legal proceedings are instituted, in a lack of reasonable ground for their institution, or in a combination of factors”; that something more would be required. Similarly, his Honour considered that the use of the words “without any reasonable ground” implied that it would be possible to institute vexatious legal proceedings “and indeed to do so habitually and persistently, with reasonable ground”. His Honour there referred to the definition of vexatious actions in the Oxford Companion to Law (1980), as “[a]ctions brought, not bona fide, but brought to annoy or embarrass the other party or not likely to lead to any practical result”.

  3. Harrison J defined “vexatious” in Attorney General v Klewer at [275] as follows:

Proceedings are vexatious if they are either instituted with the intention of annoying or embarrassing the person against whom they are brought, are brought for collateral purposes, and not the purpose of having the court adjudicate on the issues to which they give rise or, irrespective of the motive of the litigant, are so obviously untenable or manifestly groundless as to be utterly hopeless. The collateral purpose need not refer to the sole purpose, but merely to a purpose for which the proceedings were brought and for which they should not have been commenced: see Donnelly v Capricornia Prospecting Pty Ltd [1999] NSWLEC 39; (1999) 102 LGERA 310 and the cases cited at 322. Litigation is vexatious if it is brought for collateral or ulterior purposes, or if it is not a bona fide attempt to have the questions in dispute adjudicated: Attorney-General for New South Wales v Solomon (1987) 8 NSWLR 667 at 674.

  1. In Attorney-General for the State of Victoria v Horvath, Senior [2001] VSC 269 at [28] the Court said, in relation to the Victorian equivalent of s 8:

It is one thing to know what the word "vexatious" means. It is another thing to apply s 21(2) to the circumstances of a particular case. In the latter task the following matters are, according to the authorities, relevant: first, where an order has been made dismissing an action as frivolous or vexatious, or striking a pleading out, it is not for a court considering a s 21 application to go behind the order and go into the merits of the argument as a court of appeal would do. Second, findings which are required do not depend on viva voce evidence or credibility of witnesses. The critical evidence is to be found in court files - documents, judgments, orders and reasons. For that reason, any hearsay material contained in an affidavit in support of an application, even though objectionable, should be treated simply as a distraction, and ignored. … Fourth, and this is a more general proposition with respect to s 21, in determining whether the Attorney-General has made out a case, the court is not concerned with a minute individual examination of each proceeding. It must consider the overall impression created by the number of proceedings, their general character and their results.

  1. As to the meaning of “frequently”, as a jurisdictional precondition to the making of an order under s 8 of the Vexatious Proceedings Act, in Potier v Attorney-General (NSW) (2015) 89 NSWLR 284; [2015] NSWCA 129 at [114], Leeming JA considered that the word turns on its context, and that it was not possible to formulate a precise test. His Honour noted (at [115]) that the change in language from the predecessor provision in s 84 of the Supreme Court Act 1970 (NSW) from “habitually and persistently” to “frequently” was a deliberate lowering of the threshold condition. At [116], his Honour observed that “there are vexatious proceedings and there are vexatious proceedings”; considering that the quality of the vexatiousness of a proceeding, and the nature of the proceeding itself, inform the assessment of frequency. Citing Viavattene v Attorney-General (NSW) [2015] NSWCA 44 at [49], his Honour noted that “[t]he issue posed by the statutory term ‘frequently’ is not to be assessed merely by an arithmetic calculation”.

  2. In the present case, I am concerned that Mr Muritini (though represented at the hearing of the applications by Mr Newell) might well have a different position in relation to such a claim; and neither of the plaintiffs really dealt with that issue in their submissions. However, I am also concerned by the history of proceedings in which serious allegations of conspiracy and fraud have been made and the conduct of the plaintiffs in that regard has been the subject of much criticism; and yet the plaintiffs are clearly contemplating yet further proceedings raising the same kind of conspiracy issues that were raised in the Young v Hones litigation (but apparently this time linking that in some unidentified way to the conspiracy here alleged in relation to the De Costi proceedings). It is undeniable that the Court’s resources have been burdened, and the parties have incurred significant costs, in the proliferation of conspiracy allegations of the kind here made.

  3. In all the circumstances, I have given careful consideration as to referring the matter to the Attorney-General for his consideration as to whether an application for such a declaration should be brought. That would give the plaintiffs (if such an application were to be brought) the proper opportunity to defend the application. In light of the above mentioned further proceeding which it is apparently envisaged will raise again the conspiracy allegations the subject of the Young v Hones ligitation, I consider it appropriate to do so.

Orders

  1. For the above reasons I make the following orders:

  1. Dismiss the plaintiffs’ notice of motion filed on 1 April 2021 with costs.

  2. Dismiss the proceedings against the defendants with costs.

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Decision last updated: 11 February 2022

Most Recent Citation
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Cases Cited

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Statutory Material Cited

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Agar v Hyde [2000] HCA 41
Agar v Hyde [2000] HCA 41
Agar v Hyde [2000] HCA 41