Nahata v Robertson (No 2)

[2023] NSWSC 1297

Supreme Court

New South Wales

Medium Neutral Citation:

Nahata v Robertson (No 2) [2023] NSWSC 1297

Hearing dates:

29 September 2023

Decision date:

06 November 2023

Jurisdiction:

Equity - Real Property List

Before:

Peden J

Decision:

(1)   Plaintiffs to pay the defendants’ costs on an indemnity basis, as agreed or assessed.

(2) Mr Jeffrey Lee, solicitor, to pay the plaintiffs the whole of the costs, for which the plaintiffs are liable, pursuant to s 99(2)(b)(ii) Civil Procedure Act 2005 (NSW).

Catchwords:

COSTS — Party/Party — Bases of quantification — Indemnity basis — Where unreasonable conduct by plaintiffs — Where application for easement doomed to fail — Where statutory requirements for reasonable engagement with defendants not met

COSTS — Party/Party — Orders against non-parties — Personal costs orders against lawyers — Where solicitor conduct amounts to “serious dereliction of duty, serious misconduct or gross negligence” or unreasonable conduct without cause — Where solicitor conduct caused costs of entire proceedings — Where appropriate to exercise costs discretion against solicitor

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 56, 99

Conveyancing Act 1919 (NSW) s 88K

Cases Cited:

Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244

Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248

Dempster v McAndrew [2003] NSWSC 994

Gordon v Lever (2018) 97 NSWLR 90

J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No 2) [1993] FCA 70

King v Muriniti [2018] NSWCA 98

Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300; [2005] NSWCA 153

McGrath v Mestousis [2017] NSWSC 995

Nadarajapillai v Naderasa (No 2) [2015] NSWCA 209

Nahata v Robertson [2023] NSWSC 642

Newell: Muriniti v De Costi (2018) 97 NSWLR 398

NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838

Rahman v Al-Maharmeh (No 2) [2021] NSWCA 151

Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19

Ridehalgh v Horsefield [1994] Ch 205

RRZ Pty Ltd v Fogo Brazilia Holdings Pty Ltd [2021] NSWSC 873

Stepanoski v Chen [2011] NSWSC 1573

Studholme v Rawson (2020) 102 NSWLR 490

Tuitupou v Davis [2019] NSWSC 160

Texts Cited:

G E Dal Point, Law of Costs (5th Ed, 2021, LexisNexis)

Category:

Costs

Parties:

Himanshu Nahata (First Plaintiff)
Priyanka Jain (Second Plaintiff)
Russell Robertson (First Defendant)
Stana Robertson (Second Defendant)
Jeffrey Lee (Solicitor Respondent)

Representation:

Counsel:
A Pickles SC (Plaintiffs)
J Rogers (Defendants)
G Keesing (Mr Lee)

Solicitors:
Specialist Law (Defendants)
Sparke Helmore Lawyers (Mr Lee)

File Number(s):

2022/250644

Publication restriction:

Nil

Judgment

1. On 15 June 2023, I delivered judgment in the substantive proceedings, dismissing the plaintiffs’ application for the grant of an easement pursuant to s 88K Conveyancing Act1919 (NSW): Nahata v Robertson [2023] NSWSC 642 (“Nahata”). This judgment concerns the costs of those proceedings and ought be read together with it.

2. Mr Jeffrey Lee was the solicitor for the plaintiffs. He represented the plaintiffs at directions hearings and the two-day hearing. His clients sought a drainage easement over the defendants’ property; a drainage easement was required by the local council in a deferred development consent for the plaintiffs to develop their land. The plaintiffs also commenced proceedings for an extension of the easement over neighbouring properties. Those second proceedings would have been heard together with the substantive proceedings, but were resolved without oral hearing.

3. When giving judgment I made the following direction:

I will hear the parties on costs. … [there will be] the allocation of a hearing date.

I am also giving notice to Mr Lee that at that hearing I will be giving him an opportunity to show cause why costs in relation to the proceedings generally should not be ordered against him personally pursuant to section 99 of the Civil Procedure Act.

I direct Mr Lee by 4pm today to inform his clients of the directions hearing next Tuesday and of the purpose of that directions hearing and to provide his clients with a copy of (1) the reasons for judgment (2) Practice Note SC Gen 5 and section 99 of the Civil Procedure Act.

4. Mr Lee was handed a physical copy of those three documents.

5. Directions were made for the filing of evidence and written submissions and for an oral hearing convenient to all the parties, including Mr Lee.

6. The defendants, who were represented by Mr Rogers, submit that the plaintiffs ought to pay their costs on an indemnity basis.

7. The plaintiffs, who were represented by Mr Pickles SC, accepted that they were liable to pay the defendants’ costs on the ordinary basis, but resisted indemnity costs. However, whatever costs order was made against them, the plaintiffs’ application was that all costs, for which the plaintiffs were found liable, ought to be borne personally by Mr Lee pursuant to s 99 Civil Procedure Act 2005 (NSW) (CPA).

8. Mr Lee, who was represented by Ms Keesing, resisted any liability pursuant to s 99 CPA.

9. It is convenient to first deal with the defendants’ application for indemnity costs and then the application of s 99 CPA.

Indemnity costs

10. The defendants seek their costs on an indemnity basis from the plaintiffs, not because of any offer that was unreasonably rejected, but because of alleged unreasonable conduct on the part of the plaintiffs in the litigation: see eg Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 256-8 (Sheppard J).

11. An indemnity costs order is appropriate if “for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case”: J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No 2) [1993] FCA 70 at [5] (French J). Such an order will be warranted where proceedings were maintained by a party having “no reasonable prospect of success”: Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 at [106]-[113] (Basten JA, Giles JA and Young CJ in Eq agreeing).

12. A test of unreasonableness should not be upheld on other than clear grounds, where there is demonstrated blameworthiness of the party, against whom the order is made.

13. The defendants identify two areas of the plaintiffs’ conduct, upon which they rely, to justify an indemnity costs order, namely:

1. a failure to provide the terms of the easement to them and the Court, such that the whole application was doomed to fail; and

2. the failure to engage meaningfully with the defendants as required by s 88K(2)(c).

14. Each is dealt with in turn below.

Failure to provide terms of easement

15. The plaintiffs accept that they, through Mr Lee, failed to provide the terms of the easement or provide the easement in registrable form for the purposes of s 88K(7).

16. However, the plaintiffs submit that the failure to provide the terms of the easement would not have materially changed the length of the hearing, because the issues of reasonable necessity and the plaintiffs’ attempts to obtain the easement would still have arisen. Nevertheless, the plaintiffs submit that “a reasonably competent solicitor would have been aware of the need to provide terms to the defendant”.

17. Mr Lee submits that indemnity costs ought not be ordered, because the defendants had never pointed out the deficiency in the plaintiffs’ presentation of the case. I do not accept that submission. As early as 15 September 2022, the defendants’ lawyers wrote to Mr Lee:

The Claim does not, as far as we are able to ascertain, specify the terms of the easement being sought. This is a defect that is so fundamental that it makes the Claim liable to being struck out: Gordon v Lever (2018) 97 NSWLR 90, 108-109 (Sackville AJA). The Claim should be amended. Any amended claim should remedy this deficiency and any other deficiencies in the Claim.

18. That passage in Gordon v Lever (2018) 97 NSWLR 90 clearly indicates that a Court cannot make a s 88K order unless the terms of the easement are specified in the order itself and the easement must be in “registrable form” that includes the particulars of the easement for the purposes of s 88K(7).

19. Mr Lee refused to engage with that request for the terms of the easement or any later request for information. His persistent attitude was that the plaintiffs’ deferred development consent, that expressly required a drainage easement for final consent, was sufficient information.

20. On 15 September 2022, Mr Nahata asked Mr Lee if he had understood Mr Lee correctly:

We can decide if we need to amend the claim to include more details of the easement – As we are proposing to amend anyhow to include [a third party]?

21. Mr Lee’s response was:

The technical details would be specified in full later – at the Evidentiary stage – it would contain enough information for the Court to impose the Easement that the Plaintiff want from the Defendants.

22. However, at no point did Mr Lee prepare any evidence of “technical details” as to the terms of the easement. The only material tendered to the Court that might be understood as “technical details” were old drawings, and not the drawings that had been approved by the council: see Nahata at [52].

23. Despite various requests from the defendants for a detailed survey plan of the proposed easement that might be necessary for s 88K(7), no such survey was provided to the defendants, nor later to the Court.

24. I do not accept that it was for the defendants to either seek to strike out the plaintiffs’ case, nor provide them with more detailed reasons why the easement would not be granted. Each of the defendants’ enquiries was met with Mr Lee’s response to the effect of:

1. The plaintiffs’ claim was not defective;

2. The s 88K test was “easy to pass”; and

3. No survey or other evidence was required.

25. It would never have been possible for the plaintiffs to obtain an order under s 88K without that specification of the easement: see Studholme v Rawson (2020) 102 NSWLR 490; [2020] NSWCA 76 at [44]-[47] (“Studholme”) (Basten JA with Bell P, as the Chief Justice then was, and Gleeson JA agreeing); Nahata at [51]-[57]. The plaintiffs, through Mr Lee, never considered such specification was necessary and it was never provided. As such, the whole claim was doomed to fail. There was no dispute that there was public utility in the plaintiffs obtaining a drainage easement, however, evidence was required as to why the particular easement sought was “reasonably necessary”, in light of the issues raised by the defendants and the other alternatives. Mr Lee produced no evidence.

Failure to engage with defendants

26. The substantive judgment found that the plaintiffs had not satisfied the requirement in s 88K(2)(c) to make “all reasonable attempts … to obtain the easement or an easement having the same effect but have been unsuccessful”: Nahata at [58]-[106].

27. The defendants submit that, rather than some attempts having been made, the plaintiffs made no genuine attempts to negotiate, let alone all reasonable attempts.

28. Mr Lee submits that there is “no evidence that [further engagement] would have avoided the costs of the proceedings” and that engagement would have been futile, because the defendants did not want the easement over their land. I do not accept that is an accurate statement of the evidence. Further, that submission fails to grapple with the requirements of the subsection and the principles relevant to indemnity costs.

29. The focus of the test for indemnity costs is whether the plaintiffs’ conduct of the proceedings was unreasonable.

30. It is correct that the defendants were adamant that they did not want the only easement proposed by the plaintiffs. However, they had provided the plaintiffs with reasons for that objection, including by way of an engineer’s report. The defendants had not only proposed possible alternative easements, but also sought further information from the plaintiffs about issues raised by their expert. However, and critically, the plaintiffs never engaged with the expert’s concerns, nor attempted to negotiate with the defendants an “easement having the same effect”.

31. Generally, there is an obligation on parties to comply with the overriding purpose of the CPA. However, in the context of a s 88K application, the plaintiffs were required to make “all” reasonable attempts, and they failed to make any attempts. In my view, such conduct in running the litigation was unreasonable.

32. The defendants further complain of the attitude taken by the plaintiffs, through Mr Lee, in wasting time over the Court Book, which also required further Court appearances. Mr Lee submits his conduct did not “materially” add to the length of the hearing and costs. The plaintiffs were silent on that issue. As detailed below, I consider Mr Lee’s conduct in relation to the Court Books was unreasonable.

Determination

33. I accept both grounds provided by the defendants as reasons to order indemnity costs. First, the application was doomed to fail in light of clear authority. The Court could not make an order in the form sought on the material provided. It was also unreasonable for the plaintiffs, through Mr Lee, not to provide the defendants with a survey of the easement at any point in the proceedings. Secondly, the plaintiffs, through Mr Lee, failed to negotiate with the defendants at all about an easement. This behaviour is contrary not only to the overriding purpose of the CPA, but also the elements a party ought satisfy when seeking a s 88K easement. For these reasons an indemnity costs order in the defendants' favour is warranted in the circumstances.

Section 99 Civil Procedure Act 2005(NSW)

34. The importance of the supervisory jurisdiction of the Court over legal practitioners in general law was recently discussed in Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244 by Bell CJ (Adamson JA and Griffiths AJA agreeing). There, the Chief Justice set out the principles at [123] and emphasised at [133] that “[the] highest standards of integrity are expected of members of the legal profession”. As part of the Court’s inherent supervisory jurisdiction, the Court may make a wasted costs order against a legal practitioner.

35. The Court also has jurisdiction pursuant to s 99 concerning wasted costs caused by a legal practitioner. That section provides in part:

99 Liability of legal practitioner for unnecessary costs

(1) This section applies if it appears to the court that costs have been incurred  –

(a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or

(b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible.

(2) After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following -

(a) it may, by order, disallow the whole or any part of the costs in the proceedings - …

(ii) in the case of a solicitor, as between the solicitor and client,

(b) it may, by order, direct the legal practitioner – …

(ii) in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs,

(c) it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party.

36. There was no dispute between the parties as to the operation of the section. In Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 (“Re Felicity”) at [12], [14]-[15], [21]-[24] Basten JA (with whom Emmett JA agreed and Ward JA, as the President then was, substantively agreed) stated (citations omitted):

12 Principles extraneous to the power-defining criteria now include the “overriding purpose” identified and explained in ss 56-60 of the Civil Procedure Act. Few cases have given explicit consideration to these statutory obligations in relation to the power to award costs against a practitioner; nevertheless, it is appropriate for the court to take a “robust and proactive approach” to case management, in accordance with the terms of s 58.

…

14 What can be derived from the case law is important, but needs no anxious analysis of authority. It is that to order costs against a lawyer requires a careful balancing of the public interest in maintaining and nurturing a legal profession which provides vigorous representation for litigants in court, uncompromised by a fear of personal sanctions for failure, against the need to maintain and nurture the obligation to provide independent advice to litigants and to give proper weight to the public interest in the efficient administration of justice. It is this latter element of the public interest which finds express recognition, in mandatory terms, in the overriding purpose provisions of the Civil Procedure Act.

15 The power invoked in the present case is that contained in s 99 of the Civil Procedure Act. It is a basic principle of statutory construction that that power must be read contextually, with explicit regard to ss 56-60 of the same Act and must be applied with explicit regard to those provisions in a specific factual context. Indeed, s 56(5) expressly empowers the court in exercising a discretion with respect to costs to take into account any failure to comply with the duty of a party or legal representative to assist the court to further the overriding purpose. Two aspects of s 99 provide a structure to the consideration of its operation. First, the elements identified in s 99(1) provide a gateway or condition precedent to the engagement of the power conferred by subs (2). The power itself is discretionary: the matters which constitute relevant preconditions to its engagement may also be relevant to the decision whether to make an available order against a legal practitioner, or to decline to do so. …

22 … it is convenient to consider both the conditions precedent and the discretionary factors by reference to the circumstances of the individual case. For example, different factors will be relevant where the absence of reasonable support for a proceeding derives from a misunderstanding of the law and a case where the absence of reasonable support derives from a lack of evidence. The kind of case may also be characterised by the stage at which it is contended that the proceedings reveal misconduct. This may well affect the extent of the order. For example, a proceeding commenced (or a defence proffered) on the basis of a misconception as to a basic element of law, may be misconceived from the outset so as to warrant an order that the practitioner responsible pay all of the costs of the successful party. By way of contrast, a case which was constructed around a viable legal premise, may be revealed to be hopeless when the evidence of a key witness fails to provide support. A failure to abandon the case at that stage may warrant an order against the practitioner for the wasted costs incurred from that point in time, but not from any earlier point.

23 The relevance of the obligations imposed on practitioners by s 56(4) of the Civil Procedure Act, and their place in the exercise of the discretion as to costs conferred by s 99 was identified in Kendirjian v Ayoub and in Kelly v Jowett. As explained by Pembroke J in Ireland v Retallack (No 2), what constitutes conduct of proceedings “without reasonable cause”, in circumstances for which the practitioner is responsible, is to be understood in the context of the obligations imposed on a solicitor under s 56(4), failure to comply with which may be taken into account in exercising a discretion with respect to costs, pursuant to s 56(5).

24 The various phrases used in s 99(1)(a) and (b) do not constitute discrete and independent concepts; nor are they to be treated as terms of art. There is no call to construe “serious misconduct” by reference to the term “unsatisfactory professional conduct”, as defined in the Legal Profession Act 2004 (NSW), s 496. The preferable course is that adopted in Ridehalgh v Horsefield, addressing the power of the court to order costs against a solicitor personally where such costs had been incurred by a party “as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative”. Bingham MR (delivering the judgment of the Court including Rose and Waite LJJ) stated:

“‘Improper’ means what it has been understood to mean in this context for at least half a century. The adjective … covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. But it is not in our judgment limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can be fairly stigmatised as such whether or not it violates the letter of a professional code.

‘Unreasonable’ … aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner's judgment, but it is not unreasonable.

The term ‘negligent’ was the most controversial of the three. It was argued that the Act of 1990, in this context as in others, used ‘negligent’ as a term of art involving the well known ingredients of duty, breach, causation and damage. Therefore, it was said, conduct cannot be regarded as negligent unless it involves an actionable breach of the legal representative's duty to his own client, to whom alone a duty is owed. We reject this approach: (1) As already noted, the predecessor of the present Order 62 rule 11 made reference to ‘reasonable competence’. That expression does not invoke technical concepts of the law of negligence. It seems to us inconceivable that by changing the language Parliament intended to make it harder, rather than easier, for courts to make orders. (2) Since the applicant's right to a wasted costs order against a legal representative depends on showing that the latter is in breach of his duty to the court it makes no sense to superimpose a requirement under this head (but not in the case of impropriety or unreasonableness) that he is also in breach of his duty to his client.

We cannot regard this as, in practical terms, a very live issue, since it requires some ingenuity to postulate a situation in which a legal representative causes the other side to incur unnecessary costs without at the same time running up unnecessary costs for his own side and so breaching the ordinary duty owed by a legal representative to his client. But for whatever importance it may have, we are clear that ‘negligent’ should be understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession.

In adopting an untechnical approach to the meaning of negligence in this context, we would however wish firmly to discountenance any suggestion that an applicant for a wasted costs order under this head need prove anything less than he would have to prove in an action for negligence ….

We were invited to give the three adjectives (improper, unreasonable and negligent) specific, self-contained meanings, so as to avoid overlap between the three. We do not read these very familiar expressions in that way. Conduct which is unreasonable may also be improper, and conduct which is negligent will very frequently be (if it is not by definition) unreasonable. We do not think any sharp differentiation between these expressions is useful or necessary or intended.”

37. In Tuitupou v Davis [2019] NSWSC 160 at [61]-[65] Ward CJ in Eq (as the President then was) stated:

61 There is both inherent and statutory jurisdiction to make such an order if there is evidence that there has been a serious dereliction of duty, serious misconduct or gross negligence on the part of the legal practitioner (see Myers v Elman [1939] 4 All ER 484; [1940] AC 282 at 209, 304, 319; and G E Dal Pont, Lexis Nexis, Solicitor Manual, revised ed (at 16 January 2019) at [25,000.10]) – the former in the exercise of the Court’s supervisory jurisdiction over its officers; the latter pursuant to s 99(1) of the Civil Procedure Act.

62 The statutory jurisdiction is enlivened if it appears to the Court that costs have been incurred: by the serious neglect, serious incompetence or serious misconduct of a legal practitioner; or improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. Section 99(2)(c) provides that, after giving the legal practitioner a reasonable opportunity to be heard, the Court may by order direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party.

63 For a costs order against a legal practitioner to be made, a causal connection must be established between the client’s loss (whether the opposing client or the legal practitioner’s own client) and the legal practitioner’s serious dereliction of duty, serious misconduct or gross negligence. Mere negligence (or incompetence) is not sufficient to permit (or warrant) the making of such an order (see for example what was said by Drummond J in Re Bendeich (No 2) (1994) 53 FCR 422 (at 427) as cited in the Solicitor Manual at [25,005.10]):

Lawyers should know that, so long as they are not guilty of either professional misconduct or gross, as opposed to mere, negligence in the way they conduct their client’s case, they will not be exposed to any personal liability to pay either the costs of their own client or those of the opposing litigant.

64 As with costs orders generally, the purpose of such a costs order is not to punish the relevant legal practitioner nor to prove that he or she is guilty of professional misconduct; rather, such orders are primarily compensatory in nature.

65 … the jurisdiction should be: exercised sparingly …; “with considerable caution” … “with care and discretion and only in clear cases” …; and “not with the benefit of hindsight”…

38. A legal practitioner will not have acted improperly or unreasonably “simply because he or she acts for a party who pursues a claim or defence which is plainly doomed to fail”: Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300; [2005] NSWCA 153 at [92(b)] (McColl JA, Hodgson and Ipp JJA agreeing). Further, at [92(d)]:

[The Court] must make full allowance for the exigencies of acting [as an advocate in court]; only when, with all allowances made, a legal practitioner’s conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order.

39. The object of ordering costs against a lawyer is, in part, to protect clients from a legal practitioner's serious dereliction of duty, or otherwise serious misconduct or gross negligence. Circumstances where a legal practitioner's conduct has been found to meet the requisite level of seriousness, such that a wasted costs order ought be made includes where the practitioner has failed to fulfill procedural responsibility (leading to the incurrence of unnecessary costs), or where the legal practitioner has failed to give reasonable consideration to relevant law or facts related to the claim: see eg Dempster v McAndrew [2003] NSWSC 994 (Campbell J). See also relevant commentary in G E Dal Point, Law of Costs (5th Ed, 2021, LexisNexis).

40. When considering the application of s 99, there is a three-stage approach as explained by Brereton JA in Rahman v Al-Maharmeh (No 2) [2021] NSWCA 151 at [22] (Meagher and Leeming JJA agreeing):

… asking first, has the legal representative of whom complaint is made acted improperly, unreasonably, or negligently; secondly, if so, did such conduct cause the applicant to incur unnecessary costs; and thirdly, if so, is it in all the circumstances just to order the legal representative to compensate the applicant for the whole or any part of the relevant costs.

41. What is required is a careful application of legal principles to the particular facts before the Court.

42. In the authorities referred to by the parties, wasted costs orders under s 99 have been made in circumstances where:

1. extensive and poorly articulated allegations of fraud and conspiracy were made without evidence or explanation as to why the grounds were pressed (King v Muriniti [2018] NSWCA 98, per Basten JA and Emmett AJA, Gleeson JA agreeing);

2. “incomprehensible” and baseless oral submissions were made in support of amended grounds of appeal that were sought to be relied upon at hearing, without written submissions or any satisfactory explanation for the lateness of the application (Nadarajapillai v Naderasa (No 2) [2015] NSWCA 209, per Emmett JA, McColl and Macfarlan JJA agreeing);

3. there were serious issues in the evidence adduced, including false statements in affidavits and illegally obtained evidence, and allegations of improper conduct against the opposing solicitor made without evidence (Newell: Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49, per Beazley P, Gleeson and White JJA agreeing);

4. notification alerts indicating that the opposing party was secretly monitoring the solicitors’ review of documents on an online platform were not disclosed (NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838, per Ward CJ in Eq, as the President then was); and

5. untenable and misconceived claims were made that demonstrated a misunderstanding of legal principle in a judicial review application were made (Re Felicity).

43. Here, there are two categories of Mr Lee’s conduct that must be assessed:

1. His conduct in relation to the preparation of some Court Books; and

2. His conduct in the litigation generally.

44. Each is dealt with below in turn.

Wasted Court Books

45. One issue that arose in the preparation for the hearing concerned Mr Lee’s conduct in the preparation of Court Books. The evidence concerning the Court Books also provides some evidence of Mr Lee’s approach to the litigation generally, which is also relevant to the question of whether a wasted costs order is appropriate, for the litigation generally.

46. On 17 March 2023, the hearing dates were allocated and the usual order for hearing was made, which required the preparation of a joint Court Book.

47. The email correspondence between the solicitors and the Court demonstrates Mr Lee’s refusal to comply with Court orders or work together with the defendants’ solicitors, which belies Mr Lee’s submission that his conduct did not cause wasted costs.

48. Below is an example of this incredibly disappointing correspondence from Mr Lee, which includes discourtesy, setting unreasonable deadlines and failure to engage with the overriding purpose of the CPA. It further appears that his client, Mr Nahata, gave him instructions to take a more reasonable approach, however, Mr Lee does not appear to have taken that course.

49. On 28 April 2023 and again on 4 May 2023, the defendants’ solicitor, Mr Adam Ahmed, sent email correspondence to Mr Lee seeking co-operation in relation to the Court Book.

50. On 4 May 2023, Mr Lee responded that “We will give the whole Court Book to the Court five business days before the trial (not before Tue [sic] 9 May 2023)”.

51. On 8 May 2023, not having received any proposed index to the Court Book, Mr Ahmed emailed:

Attached is the draft court book index proposed by the defendant.

Can you please confirm your agreement to the index?

Note the court book may need to be amended after tomorrow. However, once it is confirmed:

1. Please start putting together the electronic copy of the court book. In doing so please ensure that:

a. it is appropriately book marked in adobe

b. the page numbers in the electronic copy correspond to the page numbers in the hard copy (ie start the pagination for the cover page or, better yet, have the cover page and the index in a separate pdf, so it can be updated, if needed)

2. Send the electronic court book to us when done so we can double check.

3. Please prepare 2 hard copies for us.

52. On 8 May 2023, Mr Lee responded and included in the Real Property List standard pre-trial directions check list table his response:

As stated in the Pre-trial directions Annexure A we furnished earlier, my firm will provide our electronic court book as well as hard copy materials directly to the court when they are due. You could do likewise from your end.

Whether the parties are in a position to liaise with each other to provide a joint electronic court book, in addition to hard copy materials before the hearing Not in the [sic] position to do so.

53. Mr Lee provided no explanation as to why he stated that it was not possible to liaise with Mr Ahmed about the Court Book.

54. On 9 May 2023, Mr Lee appeared at the pre-trial directions hearing. The transcript on that day includes:

ROGERS: … The next issue is the issue of the joint court book. As I understand it I'm instructed that my instructor has sent a proposed court book index that is not controversial to the …

HER HONOUR: You will have a chance Mr Lee, please sit down.

ROGERS: … and requested to know whether that is the agreed court book and whether the plaintiff is in a position to generate a soft copy of the court book appropriately marked and paginated. The response has been to the effect that the parties will each do their own court book.

…

LEE: I prefer that we have our own court book versus the other court book.

HER HONOUR: No, I don't want two court books. It is small, there should be one. Just because something is included in a court book does not mean it will be relied upon …

LEE: Yes.

HER HONOUR: … at the trial

LEE: Yes.

HER HONOUR: … or it will be admitted into evidence.

LEE: I understand, your Honour.

HER HONOUR: Therefore everything should be included that you want and the defendant wants to avoid duplication …

LEE: I see.

HER HONOUR: That is the idea behind a court book, to put everything in one place and then you can have all the fights and debates you want at the hearing.

LEE: Yes, your Honour.

HER HONOUR: Do you think you can prepare the court book, now that you have had the draft from the defendant's solicitor? I appreciate you don't agree with it.

LEE: Yes.

…

HER HONOUR: … you have liberty to apply if you need directions because you can't organise yourselves, then one of you will exercise that liberty [to apply].

LEE: I see, your Honour. …

55. Other orders were made for the progression of the matter to hearing, including the timing of exchange of objections, and the preparation of a joint chronology, statement of real issues in dispute and written submissions.

56. On 10 May 2023, Mr Lee emailed Mr Ahmed including:

We agree with the attached Court Book index.

You could add the Amended Defence and then email the ‘Associate to the Judge’ and cc us.

Our firm will prepare the Court Book documents in the next few days and will forward a digital copy to you (and to the court). And you can print out two hardcopy sets from the digital copy for yourself.

We will deliver two hardcopy Court Book documents to the court in due course.

You could start emailing us proposed Joint List of Objections, Joint Chronology and Joint Statement of Real Issues and our firm will respond accordingly.

57. Later that day, Mr Ahmed responded including:

My understanding from the orders it that we are supposed to exchange our objections on 12 May 2023 and then confer on limiting those objections.

As such, would you be in a position to send us your objections on 12 May, and we would do the same?

Usually the plaintiff prepares the Joint Chronology and Joint Statement of Real Issues first and the defendant provides commentary on this. Are you comfortable doing it this way?

58. Mr Lee then responded:

We have given you our Outline of Submission sometime ago. It is you who want to object. So, you could now start emailing us proposed Joint List of Objections, Joint Chronology and Joint Statement of Real issues and our firm will respond accordingly.

Otherwise, we tell the court ‘you and we’ could not do the joint reports together. You should have personally attended court to hear what the judge said. And don’t sent us last minute emails anymore. You sent one at 8.37 am on the day of the pre-trial directions hearing – unreasonable. Your amended defence need not be produced – wasting our time to consider it.

We will not reply to your trial plan. Not needed.

59. Later the same day Mr Ahmed responded:

I’m sorry I’m not sure I can do much to accommodate you here. The court orders are quite clear and what you are asking is different to the orders.

If you have no objections, and nothing to contribute to the chronology or statement of real issues then that is another matter. However, I would think at least in the case of the chronology and statement of real issues that would be unlikely for obvious reasons. In the case of the former, please advise if you have no objections.

60. It appears there was no response to that email and on 12 May 2023 Mr Ahmed emailed Mr Lee:

Waiting for your response on the below

Also waiting for:

- The trial plan…

At the very least, please advise when you can get back to us

61. On 15 May 2023, Mr Lee responded including: “We informed you earlier that we would not reply to your trial plan. No need for one. The court did not order it”.

62. On that same day, Mr Lee sought the defendants’ outline of submissions and joint chronology and stated:

We further attach the Court Book documents in Google Drive…

Unless you email us your relevant input by Tues 16 May 23 at 1.00pm, we will proceed to… email to you and to the court, and also deliver two hardcopy versions to the court on Wed 17 May 23.

63. About 20 minutes later, Mr Ahmed responded indicating that he was not able to open the Google Drive, asking for a chronology as a Word document and asking about the statement of real issues.

64. About 15 minutes later, Mr Lee responded without attaching a Word document:

Send your own chronology. Too late for a joint one.

No need for statement of real issues.

65. On 16 May 2023 at 9.22am, Mr Stefanus Tirtadjaja, another solicitor working with Mr Ahmed, emailed Mr Lee:

Please find attached our version of the digital copy of the Court Book which is due today at 10am. If we do not hear from you by 9.45am today we will serve this version to the court.

66. At 10.07am, Mr Lee responded:

We disagree with your method. Since you are not emailing anything to us before 1.00pm today, we are submitting the Court Book documents now.

67. At 10.10am, Mr Lee emailed the Court and copied in Mr Ahmed:

We attach the soft copy version of the Court Book documents in this Google Drive…

We will personally deliver two hardcopy sets of the Court Book documents to the court on Tue 16 May 2023.

68. At 10.53am, the Court emailed the parties:

Her Honour ordered the Plaintiffs to produce one version of a Court Book in consultation with the Defendants. That Court Book must be paginated with tabs. Her Honour will not accept two versions of the Court Book.

Additionally, please provide to Chambers the updated trial plan…

69. At 11.08am, Mr Lee responded to the Court complaining about the defendants and including:

Since the Defendant Robertson’s lawyer does not wish to co-operate, we made a decision to email the Court Book documents to you earlier at 10.10am today Tue 16 May 2023.

70. At 11.16am, the Court emailed the parties:

Both these proceedings are listed tomorrow at 9.30am in Court 8A for the lawyers to explain why personal costs orders should not be made against them for failure to comply with the Court’s direction.

This listing will be vacated if the parties provide a single joint Court Book to Chambers by 4.00pm today.

This is not an invitation for the parties to further debate the matter via email.

71. At 11.35am, Mr Lee emailed the Court including:

Noted. There is no need for another pre-trial directions hearing tomorrow Wed 17 May 23. With respect, we cannot attend due to another client matter.

We invite the Defendant Robertson’s lawyer to email us the documents they want to include in the Court Book documents by 1.30pm today Tue 16 May 23 at the latest. We will then update the Court Book documents and communicate with the Court.

72. At 1.04pm, Mr Tirtadjaja emailed Mr Lee, and not the Court:

We agree on the content of the Court Book but your version is not in the correct format acceptable to the court.

The plaintiffs’ suggested Court Book is not a court book, as such, but a collection of documents.

The plaintiffs’ suggested Court Book is not paginated and therefore of limited utility. The Court will want the book to have page numbers which corresponds and referred to the index as per our example below. This is so that the Judge can easily reference the index and search the required documents when required by the page numbers.

With due respect, we have been corresponding with you for some time on this issue and receiving unhelpful responses. We finally received the electronic court book from you at 4:55pm yesterday and had to prepare it ourselves for the reasons set out above. We sent this to you this morning, and rather than agreeing or discussing it with us in the normal way, you sent it the incorrect Court book to the Court. Additionally, you continue to make inaccurate representations to the Court and we ask that you desist from doing that. These representations are inaccurate and inconsistent with the emails. They are also unnecessary. This is just a Court book.

In any event, the defendants’ Court Book contains all the material and is paginated and so should be agreed.

If it is not agreed by 2pm, we will be relying on this letter as to the question of costs at tomorrow’s hearing at 9:30AM.

73. At 1.21pm, Mr Lee responded setting a deadline for a response of only 9 minutes and demonstrating no understanding of the Court’s orders:

We do not agree with your version of the Court Book documents.

We reiterate:

We invite the Defendant Robertson’s lawyer to email us the documents they want to include in the Court Book documents by 1.30pm today Tue 16 May 23 at the latest. We will then update the Court Book documents and communicate with the Court.

The Court Book documents when hand delivered to the Court would be clear enough. Many documents are from third parties – valuations – hard to paginate.

When a document is clicked on Google Drive, the pages will come out nicely and can be easily identified.

74. At 1.28pm, Mr Ahmed complied with Mr Lee’s deadline and responded:

We have already sent you the Court book which includes the documents (except those due on the 17th).

We have already paginated the Court book.

There is nothing further that needs to be done.

It seems that you are advocating for a different Court book style to what the judge has asked for. In that case, it is best if we appear at the directions hearing tomorrow to give you a chance to explain this and see if you can persuade the Court to change its standard procedure for your personal requirements and style.

75. At 1.31pm, Mr Lee responded:

Noted.

No need to attend court tomorrow.

76. At 1.32pm, Mr Lee emailed Mr Nahata forwarding his email correspondence with Mr Ahmed. Mr Nahata responded at 1.42pm:

Let’s just agree if it is the same thing (list of documents)

77. At 2.06pm, Mr Ahmed responded to Mr Lee:

I’m sorry I don’t understand your email.

We have been asked to attend Court tomorrow if we cannot agree on a Court book.

Are you now agreeing to submit our court book?

78. At 2.11pm, Mr Lee responded:

We are delivering the hardcopy Court Book documents to the court today.

No need to attend court tomorrow.

79. At 2.21pm, Mr Ahmed responded:

I require you to send a copy of the electronic court book and cc me in. This way I can check if you sent the correct Court book.

If you do not, I will email the Court and tell them we are still not agreed, and will be attending Court tomorrow. If you don’t turn up that’s up to you.

We will be seeking a costs order against your client.

80. At 2.24pm, Mr Lee responded:

Same as sent to you yesterday.

Stop your discourteous emails. I would report you to the Judge next week.

81. At 2.31pm, Mr Ahmed responded:

Then we will write to the Court and let them know we are not agreed

See you tomorrow

82. At 2.36pm, Mr Lee responded:

It is easy to show the trail of emails that you have been un-cooperative.

There is no need to attend court.

You can forward your documents directly to the ‘Associate to the Judge’ what you think is missing from the Court Book documents. Don’t waste time anymore.

83. At 3.22pm, Mr Tassell, who represented the other neighbours in the plaintiffs’ other proceedings, responded to both Mr Lee and Mr Ahmed:

1. The Practice Note prescribes what is to go into the Court Book which is:

No later than four working days before the hearing the parties are to provide to the Associate to the trial judge a paginated Court Book (and a working copy Court Book) consisting of the pleadings, the evidence, any objections thereto that are essential and an Outline of Submissions.

2. That is straightforward and should not be controversial.

3. Interpret her Honour’s email of 11.16am today as directing the parties to both cases to prepare a Joint Court Book.

4. To that end, I have liaised with Mr Ahmed’s office and have prepared the attached Joint CB index, which follows the Usual Order and we are jointly arranging for that to be prepared in paginated pdf for the Court and parties…

5. There really should not be any dispute about this but if there is I would ask that the plaintiffs identify it so we can work together to resolve it.

6. If that Joint CB is not agreed and provided to the Court by 4pm and her Honour also advises that no appearance is necessary tomorrow, I will appear.

I would like therefore to hear from [Mr Lee] ASAP as wo [sic] whether this draft Joint CB index is agreed as soon as possible.

84. At 3.30pm, Mr Lee responded:

Your … email has come very late. …

As we have said, we are delivering the hardcopy Court Book documents to the court today. They are on their way.

Please don’t waste time and costs anymore. What is not agreed can be easily dealt with on the first day of the court. Just bring all necessary documents.

We have informed the court we cannot attend tomorrow. Have another client matter.

85. At 3.51pm, Mr Ahmed emailed the Court including:

Regrettably, it appears the parties are unable to come to agreement on the Court book.

Apparently the Plaintiff’s are delivering their version of the court book to chambers in hard copy today. We have not been provided with a copy.

Therefore we will be appearing tomorrow.

86. At 4.13pm, Mr Lee emailed the Court:

We advise that the Plaintiffs and Defendants Robertson have largely agreed on the Court Book documents (95%). The hardcopy Court Book documents (two sets) have been delivered today to the Court Registry on Level 5…

We have provided a digital copy to the Defendant Robertson’s lawyer.

As stated, there is no need for another pre-trial hearing tomorrow Wed 17 May 23. With respect, we cannot attend due to another client matter.

87. At 4.15pm, Mr Ahmed emailed the Court, copying in Mr Lee:

Hi Jeffrey

Please do not speak on my behalf

Thank you

88. On 17 May 2023 at 9.30am, the matter was called for pre-trial directions. No one appeared for the plaintiffs. The following interaction took place between the Court and Mr Rogers, counsel for the defendants:

ROGERS: Can I just ask this, your Honour, can we just have a direction that the defendants proposed court book be the Court book; all the documents are there. To the extent that any documents need to be added, they can be added. Certainly, I'm going to be paginating any additional documents if Mr Lee brings

HER HONOUR: Is your client proposing to provide a paginated version to the Court?

ROGERS: Yes.

HER HONOUR: Yes, well I will make that direction that the defendant is to provide to the Court two copies of a paginated version of the Court book. When will you do that, Mr Rogers?

ROGERS: I'll endeavour to do that today, your Honour.

HER HONOUR: By 4pm on 17 May 2023. I'm also going to put on the transcript that I am giving consideration to applying practice note SC GEN 5 which deals with the obligations of practitioners to comply with directions, and at the commencement of the hearing I will hear any submissions as to why or why not I should not exercise that supervisory jurisdiction.

I'm also going to put on the transcript that the legal practitioners in this case, and in all cases, should not be communicating with the Court without consent in circumstances where there has been no request for a communication from the Court, and I refer the parties to, as an example, the decision of Hammerschlag J in Cadence (90) Investments v Simon Dougal Chalmers [2019] NSWSC 1168.

I should also note for the transcript that Mr Lee is not here; nobody from the plaintiff is here.

89. On 17 May 2023 at 1.16pm, Mr Nahata emailed Mr Lee:

We should have just agreed to N2 lawyer version (if it’s just list of documents)

Perhaps a pre trial had not happened then today

90. Mr Lee affirmed an affidavit dated 19 May 2023, mostly in the form of submissions, in which he stated, “I am aware that the Court Book should be paginated”. His explanation for his conduct amounted to blaming what he described as the defendants’ “belligerence” and failure to co-operate. No apology was proffered for his failure to comply with the Court’s orders, nor to attend on 17 May 2023 to explain his conduct. The defendants were put to the expense of that appearance, which was caused by Mr Lee’s conduct.

91. At the commencement of the hearing on 23 May 2023, there was the following exchange:

HER HONOUR: … the first issue we need to deal with is the non-compliance with Court orders. Mr Lee, I've received your affidavit. It was made quite clear on 9 May that you were to provide a single court book to the Court. You wanted to prepare your own court book. You said you'd already commenced doing that and I indicated that it needed to be a single court book and the usual practice note - the usual order for hearing requires that it is paginated. You did not provide a paginated court book to the Court, citing a complaint that the defendants had not provided unidentified (as said) material to you. It appears you took it upon yourself to then provide a court book to the Court by Google Drive, which was not - had not been ordered by the Court, and you provided a hard copy to the Court which was not paginated. Is it your intention to charge your client for the preparation of the court book which cannot be used by the Court because it was not paginated?

LEE: Your Honour, I think that's between me and my client, isn't it?

HER HONOUR: No, because I'm considering exercising my supervisory jurisdiction over you as an officer of the Court in circumstances where you did not comply with the Court's orders.

LEE: Your Honour, when the Court's order is given last minute how is one going to respond to it?

HER HONOUR: I'm not asking you to ask me a question, Mr Lee. I've asked you a question. Do you intend to charge your client for a court book that cannot be used?

LEE: Can I ask the question of the Court then? If I say it was between me and my client you can order what you like but I believe it is between me and my client.

HER HONOUR: Sir, have you read the practice note 5?

LEE: Yes, I have.

HER HONOUR: And I'm asking for your submission as to why I should not exercise supervisory jurisdiction over you, as an officer of the Court, in terms of costs.

LEE: Your Honour--

HER HONOUR: My decision will be influenced by your answer to that question.

LEE: Your Honour, I've explained that the other party responded - respondents lawyer Adam Ahmed, has not been helpful to me right at the start, and I already appear before the Court to tell you, your Honour, that could we please provide our version of the court book so that I can paginate it and the defendant's lawyer can do the court book and they can paginate theirs. Your Honour, then maybe this..(not transcribable).. no, the plaintiff's must do it. It's the normal process, your Honour said. So I tried the very best of my ability, your Honour, to ask the other side, my friend, to give me the material so I can paginate everything. The material was never forthcoming, your Honour. I have no choice but to prepare hard copy - two hard copies for your Honour, so that you have the hard copies to do today's work. I did not ask the other party to prepare their version of the court book. If they had given me everything in advance I would have paginated for your Honour. I promise you, your Honour, that was my intention. I know about pagination. I've done so many - I've been a lawyer for 30 over years, I know about pagination. I tried my very best to try to paginate. I do not have the material where the Court..(not transcribable).. agreed by my friend about 50% was not given to me in advance. I cannot paginate 1,600 pages of material when I don't have 500 pages of material so it is impossible, your Honour, with respect, to paginate a document in one day when I must supply everything to your Honour in the Court by 4pm the hard copy version. I tried my so very best to do what I want for my client mostly, and for the Court.

HER HONOUR: Sir, you always have liberty to apply if you are experiencing a problem. You never did that. You took it upon yourself to send through a version of the court book that didn't comply with the Court's order.

92. Then:

HER HONOUR: So your statement to me that you did not have 500 pages was false, is that right?

LEE: Yes, it was false.

HER HONOUR: Yes, it was false. As an officer of the Court you are saying something to me which is false.

LEE: I am saying something to make a point, your Honour. …

HER HONOUR: Yes. Now, I’m going to ask you the question I started with. Do you intend charging your client for preparing a court book that was unpaginated? … Sir, I’m going to ask you again for the third time. Do you intend charging your client for preparing a court book that is not being used? That was wasted?

LEE: Your Honour, that is between my client and myself. You can make an order, but I believe that’s something between myself and my client…

HER HONOUR: So you’re refusing to answer my question?

LEE: In this case, I am.

HER HONOUR: Thank you. Well, I’ll be giving a judgment about the application of practice note 5 and further steps that the Court may take in relation to supervision of you as an officer of the Court in due course.

LEE: In due course I will also make a note – I will also make an appeal of your judgment today.

HER HONOUR: I haven’t given any judgment sir. You can do whatever you want.

LEE: You made an order today which I am going to make an appeal.

93. On the second day of the hearing, on 24 May 2023, Mr Lee made further submissions about the preparation of the Court Book:

Okay. Yesterday your Honour said there was 1,000 pages that I could have printed and paginate and there’s 40 pages that I could wait for the other party to give me later. Now, let me explain, your Honour. We have a second case… now that one will have probably 1,000 pages as well of material if not 400 pages then. Around there. I’m expressing a point that you know to paginate 1,000 pages, plus 40 pages, plus 1,000 pages by 17 May at 4 o’clock is a mere impossibility, your Honour. That’s my view. I understand your Honour disagree with me but if you disagree with me please make the order and I will appeal the order. Thank you very much, your Honour. On that pagination that’s all I want to say. You don’t have to make a decision now of course. It’s up to you, your Honour.

94. All of those submissions are extraordinary, particularly in light of Mr Ahmed and Mr Tassell’s emails, which demonstrated that the defendants had already prepared a Court Book that complied with the Court’s orders, which had been provided to Mr Lee. Mr Lee also appears to have ignored his client’s email asking him to agree with the defendants, which could have avoided a further Court appearance.

95. Mr Lee’s conduct, including his discourteous correspondence with the other lawyers, his knowing false statement to the Court and rudeness fell well below the standard expected of an officer of the Court.

96. After judgment was given, on 20 June 2023, Mr Lee provided a letter to the Court, stating that he did not intend to charge his clients for the unpaginated and unhelpful Court Books that he had prepared. He did not otherwise explain his conduct, including his unprofessional and rude conduct in Court. While I take Mr Lee’s letter into account, it does not fully deal with the issue of whether the plaintiffs ought to pay the defendants’ costs of the time-consuming debate and Court appearances about the Court Books.

97. Mr Lee does not complain that he has not had notice of the complaint made against him concerning the wasted Court Books, nor that he required more time to answer it. Mr Lee has apologised for his answers to questions from the Court on 24 May 2023 through his solicitor. No other apology for any other conduct is proffered.

98. However, Mr Lee’s submission is that his conduct with regards to the preparation of the unusable Court Book does not warrant the application of s 99 because, while Ms Keesing describes it as “regrettable”, she submits it was not “serious neglect, incompetence or misconduct”, and neither was it “improper” in the circumstances. I reject those submissions for the reasons below.

99. First, Mr Lee submits that his conduct “[permits] of a reasonable explanation” as a “genuine attempt to assist the Court”. That submission picks up the definition of “unreasonable conduct” in Ridehalgh v Horsefield [1994] Ch 205 (“Ridehalgh”), quoted above, where it was stated that the “acid test” of whether conduct is “unreasonable” is whether there is a “reasonable explanation”. Self-evidently an explanation that is not “reasonable” does not assist. Further, that “acid test” was not suggested to be relevant to whether conduct is seriously incompetent or serious misconduct.

100. I do not accept Ms Keesing’s submission that Mr Lee’s conduct has a “reasonable explanation”. Mr Lee’s 19 May 2023 affidavit includes his statement that he understood the Court Books needed to be paginated. However, Mr Lee’s objective conduct demonstrated no compliance with the Court’s orders regarding the preparation of the matter for hearing, despite the purpose of the material having been explained to him by the Court and the defendants’ lawyers, and his claim to understand, and his assurance to the Court that he would be able to comply. I do not consider Mr Lee’s conduct can be reasonably explained by a misconceived attempt to assist the Court, when he chose not to comply, nor seek further instructions from the Court.

101. No explanation is given for his failure to prepare the required joint list of issues, chronology and objections for inclusion in the Court Book; instead it appears that there is no reasonable explanation, other than Mr Lee did not consider those documents “needed” as he stated more than once in his correspondence, despite the Court’s order. In all these dealings, his conduct was also contrary to the requirements of s 56 CPA.

102. Secondly, Mr Lee submits that a significant consideration is that he was “by the relevant time acting without fee, and at all times with only limited resources and assistance”. I do not accept either aspect of the submission for the following reasons.

103. Ms Keesing’s submission that the authorities support Mr Lee’s factual situation is inaccurate. While there are authorities that state that a relevant consideration for the application of the discretion is where a lawyer is “acting without fee”, that consideration has been applied in very different situations to the present. For example, Ms Keesing refers to Robb J’s statement in RRZ Pty Ltd v Fogo Brazilia Holdings Pty Ltd [2021] NSWSC 873 at [61]:

While the outcome has been unsatisfactory, and some misjudgments may have been made, the Court should be wary of treating too harshly solicitors who are prepared to act in the cause of impecunious plaintiffs who are seeking redress in respect of substantial losses. Where solicitors in those circumstances are prepared to act without fee, or even as in this case, advance money to their clients to get over immediate difficulties caused by impecuniosity, realism suggests that there may be occasions where misjudgments are made that do not warrant a finding by the Court of delinquency of a magnitude sufficient to visit costs orders on the solicitor personally.

104. That case was very different to the present. There, the solicitor knew the plaintiff was impecunious and could not pay his fees. The solicitor also funded counsel’s fees and provided his client with further funds to avoid deregistration by ASIC and to commence proceedings to protect its position. At [60] Robb J stated, taking into account the fact that the solicitor was unfunded and was evidently acting urgently and apparently in the best interests of his client:

…My own view is that Mr Levitt should have advised the plaintiff to offer to submit immediately to a stay of the proceedings pending the commencement of the proposed representative proceedings, but I would not categorise his failure to take that course as being delinquent.

105. Here, Mr Lee was not “unfunded” or “acting without fee”. There is no evidence here that the plaintiffs were unable or unwilling to pay for Mr Lee’s services. Upon receiving Mr Lee’s 22 March 2023 invoice for $19,976, Mr Nahata responded:

Is it possible to revise the invoice and/or extend any further discounts on this invoice?

I have transferred $15,000… but I’m hoping we can make some adjustments on the invoice.

Our total legal fees till date [sic] adds up to ~$65,000 (including this invoice).

I believe the trials will add another $30,000 to above $65k. Spending anything above $200,000 for both easements (including compensation, defendants legal fees and our legal fees) is just over the limits for us.

106. I do not consider this email demonstrates that the plaintiffs were unable to pay Mr Lee’s invoice. Instead, it was a request for a discount and an indication of concern about the size of the costs of the two s 88K applications. Ostensibly, Mr Lee understood it as such, because in his response he was prepared to delay payment and/or allow a further discount. He stated:

An amount of $15,000.00 has been received from you as (part) payment of my firm Comasters Invoice dated 22 March 2023. It is short by $4,976.00 now.

I will decide later, probably in May or June 2023, on whether to revise Comasters Invoice dated 22 March 2023 and/or extend any further discount.

107. By March 2023, Mr Lee had been paid the total amount that he had required from the plaintiffs. Mr Lee volunteered that he would not agitate for any further payment until “May or June”. While Mr Lee chose not to put his costs agreement in evidence, his email indicates that he chose not to enforce alleged existing contractual rights against the plaintiffs, or invoice for all legal services before the hearing. There is no evidence that Mr Lee was of the view that, if he chose to demand further payment from the plaintiffs, that it would not be forthcoming. There is nothing in the exchange of emails that demonstrates that Mr Lee was “acting without fee” in the relevant sense.

108. Similarly, I reject Ms Keesing’s following submission:

Mr Lee was put in the unenviable position of having to prepare both the present proceedings and the related [other neighbour] proceedings (which only settled on 18 May 2023), in circumstances where he was significantly out of pocket and had no certainty that he would be paid for either his fees or disbursements…

109. That submission ignores relevant facts. In March 2023, the hearing was some two months away, and, had Mr Lee chosen to, he could have terminated his retainer and the plaintiffs would have had ample time to engage other lawyers for the hearing. Mr Lee’s email indicates that less than $5,000.00 was owing from his last invoice.

110. Further, there is no evidence of Mr Lee incurring anything other than $607.20 by way of disbursements from March 2023 to the end of the hearing. Therefore, to suggest that Mr Lee would be “significantly out of pocket” for disbursements is hyperbole. Further, the impact of the related proceedings is overstated. The plaintiffs sought an easement for drainage that would traverse the defendants’ property and then move over that of the other neighbours. It is not suggested that the plaintiffs’ primary evidence and arguments for almost all aspects of both s 88K applications were not the same. It is likely that claims against both neighbours could have been dealt with by one pleading and one proceeding, as they were always going to be heard together.

111. Further, Ms Keesing’s submission below is wrong as a matter of fact:

… Mr Lee’s decision not to issue a further invoice was made in circumstances where the plaintiffs had in fact refused to pay any part of Mr Lee’s previous invoice issued on 23 March 2023, and only very belatedly (the day before the hearing), paid a portion of the amount owing.

112. The hearing was on 22 and 23 May 2023, not March 2023. No invoice issued on 23 March 2023 was in evidence.

113. I also do not accept Ms Keesing’s written submission that Mr Lee was acting with “limited resources” and that is a relevant factor to be considered here. Orally, Ms Keesing put it:

I don't say that it means that Mr Lee was in a practical sense incapable, for example, of putting together a Court book, but I do submit that your Honour should be mindful of the fact that Mr Lee is a sole practitioner operating a small outfit without any specialist resources for IT and printing and the like.

114. Mr Lee has never represented himself as a sole practitioner or without access to specialist resources. In his early email to the plaintiffs concerning a fee estimate to commence the proceedings, he indicated that his “firm” had five professional staff:

My firm would prepare one Statement of Claim…

The principal lawyer charges at $600.00 per professional hour and the other staff members charge at lower proportions of $450.00, $380.00, $250.00 and $200.00 per professional hour.

115. He consistently referred to his “firm” and that “we” were doing work. At the hearing, Mr Lee was assisted by a solicitor he referred to as his “Senior Associate”.

116. Mr Lee’s solicitor’s affidavit complains that Mr Lee did not have assistance at the hearing:

Mr Lee also did not have the assistance of a barrister, or any other legal or administrative assistance not employed by him, at any time during and for the purposes of the conduct of the proceedings.

117. However, Mr Lee had represented to the plaintiffs that there was no need to engage a barrister for further assistance. On 24 February 2023, he emailed Mr Nahata:

To answer your question, I believe my law firm could get a positive judgment (result) at the trial without engaging a barrister – probably saving you $20,000.00 to $40,000.00 overall.

118. It reflects poorly on Mr Lee that he represented to his clients that his “firm” could successfully run the hearing, and now he submits that the Court ought afford him leniency when exercising the discretion as to costs, because he was a “sole practitioner”, who had “limited resources and assistance”. I do not accept that Mr Lee had limited resources and assistance. Mr Lee appeared confident that he was able to carry out his duties to his clients, and successfully run the case without further assistance or resources.

119. Further, it is common knowledge that, when an index for a Court Book has been prepared and the bulk of documents are to hand, preparation of the physical and electronic Court Book is a simple and relatively inexpensive exercise, which can be achieved by engaging the various office support businesses used by lawyers.

120. Other cases relied upon by Mr Lee for this issue do not provide a basis for him resisting a wasted costs order. In Ridehalgh, various solicitors’ conduct was held not to constitute improper conduct deserving of wasted costs orders. There, the solicitors, against whom wasted costs orders were sought, had variously obtained and relied on counsel’s advice, acted in accordance with instructions, not been put on notice of deficiencies in the claim by the opposing side, or had made a reasonable, not careless, legal error in a complex area of law. The facts in those cases are disparate to those involved here, where Mr Lee informed the plaintiffs that it was unnecessary to obtain counsel’s advice, and that the case was “straightforward”, despite the defendants’ explanations about the issues.

Determination

121. For the reasons above, I consider that the following conduct of Mr Lee was improper and delinquent, rather than merely incompetent and/or unreasonable and without reasonable explanation.

122. Mr Lee refused to engage with the defendants’ lawyers about the appropriate form of Court Book, despite clear orders and further explanations from the Court and the other lawyers. His provision of the wasted Court Book to the Court was without the defendants’ consent and contrary to the Court’s orders, despite the defendants indicating they had prepared a compliant Court Book and the plaintiffs asking Mr Lee to consent to that Court Book.

123. There is no explanation for Mr Lee’s failure to comply with the directions for a chronology, joint statement of real issues in dispute and to engage in limiting the objections to evidence and include those documents in the Court Book. He appears to have made a unilateral decision that such documents were “not needed”.

124. Mr Lee’s decision not to have any person appear for the plaintiffs at the pre-trial directions on 17 May 2023 was based on his communicated decision that it was “not needed”, despite the purpose of that directions hearing to resolve the practical problem of his failure to comply with the Court’s orders.

125. Mr Lee’s conduct at the beginning of the hearing on 23 May 2023, and in particular his responses to questions from the Court and his false statement to the Court about his difficulties in preparing a Court Book including pagination, have not been defended. However, there is only an apology for Mr Lee’s conduct on 24 May 2023.

126. I consider that Mr Lee’s conduct had the effect of causing the defendants to incur unnecessary costs in communicating with him with a view to co-operating in compliance with the Court’s orders, and also the cost of additional Court appearances.

127. I consider it just to order that Mr Lee pay the defendants’ costs incurred in connection with the wasted Court Books, as this is appropriate compensation in the circumstances. I note the plaintiffs instructed Mr Lee to agree with the defendants on the issue of the Court Books, which would have saved some costs, and Mr Lee ignored that instruction. I accept Mr Lee’s statement to the Court that he will not charge his clients for these wasted costs.

Other conduct of Mr Lee during hearing

128. As noted above, when the substantive judgment was given, Mr Lee was informed that at the costs hearing he would be asked to provide evidence and submissions as to why he ought not personally be responsible for the costs of the whole proceedings.

129. The plaintiffs also seek an order under s 99 that Mr Lee pay all the costs of the proceedings, because Mr Lee commenced the proceedings for the plaintiffs in a way that demonstrated “a misconception as to a basic element of law”: Re Felicity at [22]. Mr Pickles’ submission was that Mr Lee’s “communications demonstrate a complete lack of understanding of the principles and requirements of obtaining an easement under s 88K”. Various matters are raised and dealt with below.

130. Mr Lee did not submit that he had not had a sufficient opportunity to deal with the allegations and he did not seek an adjournment to be afforded further time. Instead, Ms Keesing provided detailed written and oral submissions resisting any s 99 order.

131. I note that Mr Lee has given evidence though his solicitor, that he has recorded and not invoiced the plaintiffs for professional time in the sum of $39,338.31 inclusive of GST. He further undertakes to the Court not to seek to recover any further sums from the plaintiffs concerning the proceedings. However, that does not deal with the issue of the defendants’ costs.

132. The various criticisms of Mr Lee are dealt with below. The evidence and findings detailed in the context of the Court Books are also relevant to the issues below. As explained below, I consider that Mr Lee’s conduct demonstrated “serious dereliction of duty, serious misconduct or gross negligence” that caused the costs of the whole misconceived proceedings, and that it is appropriate that it is an appropriate exercise of the costs discretion to order that he pay those wasted costs as compensation.

133. First, it is alleged that Mr Lee failed to engage as required by s 88K(2)(c) with the defendants. It is not in dispute that a Court can consider engagement by an applicant up to the date of an order: see eg Studholme at [83].

134. However, the requirement under the subsection is that the applicant make “all reasonable attempts” to obtain the easement or an easement to the same effect. Mr Lee’s misconceived attitude was that the Court would order the only easement that the plaintiffs sought, being that identified in the deferred development consent. His correspondence with the defendants’ solicitors demonstrates that he refused to engage in the issues raised by the defendants concerning how the stormwater drainage system would operate over the easement, which were matters relevant to whether the particular easement would be ordered or not.

135. After the proceedings were commenced there was no engagement by the plaintiffs, through Mr Lee, in relation to any easement. Despite the defendants making various offers, no meaningful response was ever provided by Mr Lee. This demonstrated a misunderstanding as to the operation of s88K, but also the overriding purpose of the CPA.

136. Secondly, it is alleged he failed to advise the plaintiffs of the need to engage with the defendants to obtain an easement.

137. Mr Lee has not provided any specific evidence of advice he gave the plaintiffs, including in relation to s 88K(2)(c). There are some email communications in evidence.

138. I do not accept Ms Keesing’s submission that I ought to find that Mr Lee was not retained to negotiate with the defendants on the plaintiffs’ behalf. His early email to Mr Nahata on 23 June 2022 included:

If the neighbours persist with denying you the requested easements, an application to the Supreme Court of NSW under s88K of the Conveyancing Act 1919 would be required…

139. Despite referring to s 88K, Mr Lee’s email only informed the plaintiffs that legal proceedings would be necessary if the defendants and other neighbours refused the “requested easements”. There is no reference in his email to the necessity for engagement in relation to other easements “to the same effect”.

140. From time to time, the plaintiffs did ask Mr Lee questions and he responded. For example, as early as 8 September 2022, Mr Nahata asked Mr Lee various questions:

… Can the law ask us to lodge 88k against [neighbours other than defendants]?

There are other factors like building around Sydney water manholes… But there are no reports or denied approvals from Sydney water that can demonstrate that.

So – How is reasonable necessity addressed by the court in 88k applications – Where there can be multiple paths for easement providing the same benefit?

141. Mr Nahata was clearly concerned about whether an application ought to be made in relation to “multiple paths for easement providing the same benefit”, and against other neighbours.

142. On the same day, Mr Lee responded by email:

In most of my other Section 88k matters, there has been no need for an independent valuation.

I’d say the judge would not expect one too. Particularly, when we already have shown what was given to the Valuer and the Plaintiffs have offered more compensation.

Reasonable necessity test is easy to pass, from case law. Otherwise, the whole of Sydney cannot be developed.

143. That response did not engage with Mr Nahata’s question about “multiple paths for easement providing the same benefit”, namely the possible alternative easement through other neighbours’ land. Mr Lee’s response that the test is “easy to pass” demonstrates a fundamental misunderstanding of the operation of s 88K. Easements are only ever imposed where all of the elements of the section have been met and the Court is satisfied that the discretion ought to be exercised. There are reported cases where applications have failed because of the existence of other equally good or better easements, and that ought to have been known to Mr Lee as he referenced “caselaw” he had read. As stated in Nahata at [64]:

In Govindan-Lee v Sawkins (2016) 18 BPR 35,883; [2016] NSWSC 328 at [49], Darke J stated (emphasis added):

The plaintiff bears the onus of showing reasonable necessity and is best placed to adduce evidence about this alternative [easement]. It is unsatisfactory that the plaintiff has failed to bring forward evidence that would facilitate a more comprehensive assessment of this alternative [easement], including of any difficulties or uncertainties involved in it.

144. None of Mr Lee’s correspondence demonstrates any comprehension of the analysis, in which the Court would engage, including considering alternative easements and whether reasonable attempts had been made to obtain an easement to the “same effect”.

145. Ms Keesing submits that the plaintiffs had instructed Mr Lee to stop engaging with the defendants’ solicitors about an easement. She relies on a text message sent on 14 February 2023 by Mr Nahata to Mr Robertson:

Can you please ask your lawyer to not continuously call my lawyer for the alternative route and increase the legal costs. We’ve already informed him that other alternative cannot work along 248 and 246.

146. I do not accept Ms Keesing’s submission that the text message demonstrates that the plaintiffs excluded Mr Lee from the negotiation process, and therefore they cannot now complain that he acted in accordance with instructions. Instead, that February 2023 text message must be considered in the context of the advice that had been given by Mr Lee to the plaintiffs in 2022, including that the s 88K test was “easy” to pass and not advising of how alternative easements would be relevant to the determination of the application, even where Mr Nahata had expressly asked that question. The plaintiffs appear to have accepted the earlier advice that there was no need to engage about the alternative easement, which explains the 2023 text message.

147. Even if Ms Keesing was correct and Mr Lee was not instructed to engage about the alternative easement across other neighbours’ properties, that does not explain why Mr Lee never engaged with the defendants’ concern about the impact of the proposed easement and the want of expert evidence, which also would have been relevant to whether the particular easement sought would be imposed on the defendants. This is considered further below.

148. Thirdly, it is alleged Mr Lee failed to engage experts, in order to demonstrate that the proposed easement was one that ought be imposed over the defendants’ land, despite the concern about the impact on the existing retaining wall and other improvements on the defendants’ land.

149. On 8 September 2022, Mr Lee received an email query from a lawyer acting for other neighbours “Just confirm … there is no independent expert report on this proposal”.

150. Mr Lee forwarded that email to Mr Nahata including:

To answer his question, I would be inclined to tell him there is no need for an independent expert report in this case. The law in Section 88K is clear. The plaintiffs have already made out their case that the easement is reasonably necessary. The Plaintiffs would not pay for a so-called independent expert report.

151. On 9 November 2022, it appears the plaintiffs accepted Mr Lee’s advice and Mr Lee wrote to Mr Ahmed:

The Plaintiffs have instructed that they do not agree to deposit $12,500.00 (plus GST) or any monies into your law firm’s trust account for the Defendants to obtain further valuer and engineer reports. These reports are unnecessary as described by caselaw in Section 88K issues.

152. Mr Lee’s attitude that no expert evidence or further detail on the proposed easement was required persisted. On 22 May 2023, Mr Lee wrote to Mr Ahmed including:

If you update yourself on S88K laws, you will understand this:

S88K does not need an expert report, full stop. Costly. Unnecessary. Can be discussed after agreeing to give easement. Be friendly. Public utility comes first. Not ‘retaining wall’ – no excuse. With expert engineering, anything can put back.

153. Later that day, he sent another email to Mr Ahmed:

We are not responding to your ridiculous letter (convoluted) sent at the eleventh hour (Monday 22 May 2023 10.46 AM). No proper law firm does that. … read the evidence – you are doing a disfavour to your clients.

You will clearly lose at the trial, in our opinion. We are going to claim costs against you and your clients.

154. These examples demonstrate that Mr Lee lacked any understanding of the legal test of “reasonable necessity” and a Court’s concern about imposing an easement over a defendant’s land. Many cases involve the comparison of alternative easements to the one proposed by a plaintiff. Further, expert evidence is often required where there are going to be building works constructed on a defendant’s land. Also, Mr Lee’s threat of a personal costs order against Mr Ahmed was gratuitous and unprofessional.

155. Here, there was never a dispute about the public utility of the plaintiffs developing their land and obtaining an appropriate stormwater easement. The issue was where that easement ought to be situated, considering the impact on various neighbours, including the defendants and existing improvements on the land. However, Mr Lee appeared to understand that because the local council had provided the plaintiffs with deferred development consent that required a stormwater easement, that public utility overcame any detailed consideration of any other requirements under s 88K. As noted above, he did not recognise any ongoing requirement to attempt to negotiate an outcome either. This had been his position since 5 September 2022, when he wrote to the defendants’ solicitors:

Our firm made this file note of what was discussed during the phone conversation:

…

[Mr Lee] further discussed how the requirements for the Section 88K order have been met, and that Russell Robertson would have to comply. The law in this case would say the easement is recognised as reasonably necessary.

We wish to reiterate:

Our clients are able to legally impose the easement on your client’s title.

a. [The plaintiffs’] proposed easement is reasonably necessary for the effective use or development of land – evidenced by the ‘deferred commencement consent’ from the Council with the condition of obtaining an easement;

b. The use of the land is not inconsistent with public interest;

c. The owner of the property burdened by the easement, will be reasonably compensated; and

d. All reasonable attempts have been made to obtain the easement despite being unsuccessful. …

156. Further, on 6 February 2023, a few months before the trial, Mr Nahata and Mr Lee had the following email exchange concerning the plaintiffs’ reply evidence. Mr Lee’s advice was that no expert evidence was required in response to the defendants’ expert evidence:

[Nahata] - What documents/information do I need to start preparing?

[Lee] As a start, obtain a report from your directional drilling contractors as to how the stormwater pipes can be laid effectively over any existing utility lines (to convince N1).

[Nahata] - Do we need to submit more expert reports?

[Lee] In my opinion, no, past Section 88k cases do not need such lengthy reports. New system of working can always overcome issues that come up. The object is to get the court’s approval and work reasonably after that.

[Nahata] – Can you send me their Expert Report once you receive them?

[Lee] The engineering report was forwarded to you on Friday 3 Feb 2023…

157. The advice that no expert report was necessary for evidence, and instead was “to convince N1”, was given in circumstances, where the defendants had provided a detailed engineering report that identified multiple concerns with the proposed drainage easement set out in Nahata at [67]. Mr Lee advised his clients that it was unnecessary to respond to that expert report, which directly related to the question of whether the proposed easement could be imposed over the defendants’ land, where impact on the servient tenement’s land is a relevant consideration to the test in s 88K(1). Mr Lee misunderstood the legal position and assumed that details of the construction of the stormwater drainage system were irrelevant to the application, and such important detail could be worked out “reasonably after [the judgment]”.

158. I note that at the hearing Mr Lee relied upon the decision of Bryson AJ in Stepanoski v Chen [2011] NSWSC 1573, which ought to have made clear to him that engineering issues are relevant to whether a particular easement would be imposed: see Nahata at [99]-[105].

159. I reject Ms Keesing’s submission that it was necessary for the plaintiffs to demonstrate they were prepared to pay for expert evidence to make good this complaint. The plaintiffs had asked Mr Lee whether it was necessary to obtain expert evidence more than once and were repeatedly advised it was not. There is no evidence from Mr Lee that the plaintiffs raised a concern about costs before the March 2023 email asking for a discount on his invoice.

160. At the hearing, Mr Lee sought to make submissions concerning an expert engineering technique he called “horizontal direct drilling” that might be used for the stormwater drainage pipework through the defendants’ retaining wall. He attempted to “prove” that technique by reference to a decision of Darke J in McGrath v Mestousis [2017] NSWSC 995, where there was expert evidence about using that technique in a particular situation. Mr Lee made the following submission:

HER HONOUR: That’s a quote from a report by an expert. … that is where an expert has looked at a particular site, has looked at a particular technique –

LEE: Yes, I appreciate that.

HER HONOUR: And then has drawn a conclusion.

LEE: Yes, I appreciate your Honour’s ruling.

HER HONOUR: So where do I have that in your clients’ case? Where do I have an expert who’s gone to the site and says, “We can use this technique and in my opinion if we use this technique there will be little or no impact on the existing structures and services”?

LEE: I fully appreciate where your Honour is drawing a conclusion about the fact that your Honour cannot use in your judgment. I suppose my simple point is HDD or horizonal direct drilling these days is common. That’s my only submission.

161. I consider the clear inference of the reason why there was no evidence to support Mr Lee’s submission or to rebut the defendants’ expert evidence was because Mr Lee’s advice to the plaintiffs was no such evidence was needed. That demonstrates a fundamental misunderstanding about what was necessary for his clients to prosecute their particular case.

162. Fourthly, it is alleged he failed to obtain a survey or provide the terms of the easement, so that the Court could make an order for an easement.

163. As noted above, the law is clear that the Court must be provided with the necessary detail, in order to make any order imposing an easement. Mr Lee’s failure to provide that detail, or seek an adjournment to obtain that detail, in my view demonstrates a fundamental misunderstanding of the legal principles involved in a s 88K case. As also noted above, I do not consider it was incumbent on the defendants to do any more than they had done to point out to Mr Lee the requirement for that information; their repeated requests for information were rebuffed, often rudely. As an example, the plaintiffs refer to the 15 September 2022 letter from the defendants, which was sent shortly after proceedings had been commenced and is considered above.

164. Even during the trial, Mr Lee failed to engage with the need for a survey or details for the purpose of obtaining an easement. Instead, he suggested that obtaining surveys was not possible, was too expensive or was not needed. None of those matters were supported by any evidence. His submissions were:

… getting a survey from any neighbour is extremely difficult, your Honour. As a matter of fact, a survey – talking to the neighbour – okay, no, no. Don’t go there. Sorry. So, if I can turn to court book page 184 which has a nice diagram of a picture of the area. So, the little blue section actually refers to five different properties, your Honour. …

To get a survey for each of these five properties my client has to approach them for permission, firstly. Secondly, the surveyor is going to cost $1,400 per survey. The section 88K says to plaintiff, like Himanshu Nahata, to obtain five surveys in order to convince defendant Robertson that the other properties are not suitable. I don’t think so, your Honour. Defendant Robertson, as far as I can remember now, did not – I’m not entirely 100% sure but did not allow my client to do a survey on his property -

165. I reject Ms Keesing’s submission that it was “not unreasonable … for Mr Lee to proceed at all times on the understanding that the terms of the proposed easement were not in question”. Had Mr Lee understood the requirements of s 88K, then those terms and specifications would have been prepared and presented to the Court, the approved plans would have been in evidence, and the defendants’ queries would have been answered. He represented to his clients that he understood the “law” concerning s 88K and gave advice and prepared the case on that basis. However, there is no evidence of any such understanding on his part.

166. Fifthly, it is alleged that Mr Lee’s conduct of the hearing itself demonstrated serious incompetence and/or serious misconduct.

167. I accept that various aspects of Mr Lee’s conduct during the trial wasted time and was not of assistance to his clients or the Court. For example, contrary to the Court’s pre-trial directions, Mr Lee had not engaged with the defendants’ objections to his clients’ evidence. When given the opportunity to deal with each of the objections, Mr Lee did not engage with the Evidence Act1995 (NSW) in any way. For example:

HER HONOUR: … He then goes into, in effect, expert evidence talking about the way these things will be carried out. Does he have any expertise?

LEE: Your Honour, my client, Himanshu Nahata is very knowledgeable about…

HER HONOUR: Does he have any expertise to satisfy section 79 of the Evidence Act?

LEE: No, your Honour.

…

HER HONOUR: …Mr Lee, why don’t you have a look at all of those paragraphs? It’s not saying you won’t be able to say these things in submissions. But is it evidence that complies with the Evidence Act?

LEE: Yes, I fully understand your Honour’s rulings, and I was trying to make – this is actually a response to the affidavit of Mr Robertson, as I recall, and I’m trying to – it’s a reply. So, I was trying to convince my friend that section 88K works this way. I know it sounds like a submission. I realise that, your Honour.

…

HER HONOUR: Yes. How can you have that, Mr Lee?

LEE: Again I raised it to try to convince my friend that direction tooling was a method and I do not know how else to inform my friend, so we did this because my client, Himanshu Nahata actually met with a directional drilling technology person at the site, and the directional drilling technology person, informed my client that it is possible to do it –

HER HONOUR: But then you accept it’s hearsay?

LEE: - I did not get directional drilling technology person to give me an affidavit, no, your Honour. … Once again, your Honour. I apologise for putting it as in evidence… My objective was to once again inform my friend what section 88K is about.

168. Further, Mr Lee was often discourteous and did not seem to understand how an officer of the Court ought to behave. A few examples are:

1. At the view of the properties, he sought to have opinions of Court staff concerning their visual assessment of the height of trees recorded on transcript to support a submission he wished to make.

2. At the commencement of his submissions, he threw papers, such that an adjournment was required so he could compose himself.

3. He consistently interrupted, and threatened appeals, even before a ruling was made.

169. I do not accept Ms Keesing’s submission that the “regrettable” exchanges with the Court did not add to the length of the hearing or the costs incurred. Had Mr Lee complied with the orders to confer on objections, considered the application of the rules of evidence and not been argumentative and interrupted, time would have been saved. While this conduct alone is insufficient to make an order under s 99, it remains a relevant consideration to the exercise of the costs discretion.

Determination

170. Taking all the matters into account, I consider that there is no reasonable explanation for Mr Lee’s conduct other than serious incompetence, or serious misconduct or neglect of his professional obligations, that is beyond mere incompetence. I have given full allowance for the exigencies of the litigious environment in which Mr Lee was acting, having regard to his representations that he was a lawyer of over 30 years’ experience, and no barrister was needed for the hearing. Mr Lee’s conduct was not a mere mistake or error of judgment. Instead, I consider Mr Lee’s conduct in question involves a failure by him “to fulfil [his] duty to aid in promoting in [his] own sphere the cause of justice”: NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 at [574] (Ward CJ in Eq, as the President then was).

171. Further, this is a case where the proceedings were commenced on the basis of Mr Lee’s misconception as to a basic element of law, namely, what an applicant must prove in a s 88K case. While bringing such an application for an easement was not of itself misconceived, because the plaintiffs required an easement to develop their property, Mr Lee never considered it necessary to bring forward to the Court any of the essential evidence for the application to be successful; instead, he was adamant that the plaintiffs’ deferred development consent was all that was required and the defendants’ refusal to agree to the particular easement sought absolved the plaintiffs from engaging with the defendants’ legitimate concerns. Mr Lee did not revise his attitude at any time, despite the correspondence and offers made by the defendants’ lawyers and despite questions from his own clients. That dogged and fundamentally misconceived attitude demonstrates “serious dereliction of duty, serious misconduct or gross negligence”.

172. This is not a case where some evidence or witness failed to provide support for the case, such that a different outcome might have been possible. Instead, here, there was no evidence, upon which the Court could legitimately exercise the discretion to order an easement over the defendants’ land, despite the public utility in them developing their land and having some form of easement for stormwater drainage. I consider that Mr Lee’s conduct caused the costs of the whole proceedings to be wasted. I consider it just to order that Mr Lee compensate the plaintiffs for the wasted costs.

Other non-compliance with Court orders

173. At the costs hearing, Ms Keesing was asked whether Mr Lee had complied with the Court’s direction given on 15 June 2023 when judgment was delivered, to notify the plaintiffs of the Court’s orders concerning the future determination of costs and provide them with a copy of the judgment, a copy of NSW Supreme Court Practice Note Eq 5 and s 99. I ordered Mr Lee to provide an affidavit to the Court as to whether he had complied with that direction. He provided an affidavit within the timeframe ordered.

174. Mr Lee’s affidavit is to the effect that he did not comply with the 15 June 2023 direction. He affirms that he:

1. attended Court when judgment was delivered with his “assistant”;

2. did not take notes;

3. did not hear the direction; and

4. did not check the transcript.

175. That day he sent a reporting email to his clients. Only after the plaintiffs asked for a copy of the judgment, he provided one to them.

176. On 28 July 2023, Mr Lee was provided with the transcript from 15 June 2023, but did not comply with the direction.

177. Mr Lee apologises in his affidavit for not complying with that direction.

178. While this failure by Mr Lee to comply with a Court order is not relevant to the issue of the costs of the proceedings, it does not reflect well on Mr Lee that he failed to comply with another Court direction to provide his client with that important information. The failure to take notes or listen to the Court’s direction has not been explained. A solicitor and officer of the Court ought to do better.

Orders

179. For the reasons identified above, the appropriate orders are:

1. Plaintiffs to pay the defendants’ costs on an indemnity basis, as agreed or assessed.

2. Mr Jeffrey Lee, solicitor, to pay the plaintiffs the whole of the costs, for which the plaintiffs are liable, pursuant to s 99(2)(b)(ii) Civil Procedure Act 2005 (NSW).

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Decision last updated: 06 November 2023