Quinn and Scattini (a Firm) v United Communications Networks Pty Ltd

[2006] QDC 25

[2006] QDC 025

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No BD3500 of 2005

QUINN AND SCATTINI (A FIRM)	Plaintiff
and
UNITED COMMUNICATIONS NETWORKS PTY LTD (ACN 073 283 083)	Respondent

BRISBANE

..DATE 31/01/2006

ORDER

CATCHWORDS: Uniform Civil Procedure Rules r 171, r 281 ff, r 292, r 374 - summary judgment for plaintiff solicitor's suing for costs pursuant to a client agreement - defendant dissatisfied with outcome of litigation it instituted as plaintiff in Supreme Court against Brisbane City Council,
asserted solicitors and counsel should have discovered strength of Council's case much earlier - another Judge had struck out defence and counterclaim, fixing a deadline for repleading - deadline passed, repleading still had not occurred - no reason for refusal of summary judgment shown.

HIS HONOUR:  This matter started out as an application for

judgment under rule 292 by the plaintiff, a firm of

solicitors. 

It was before Judge McGill on the 29th of November last year.  His Honour permitted Mr Huang, as a director of the defendant, to act as its advocate.  By that time the application had been amended to seek an order, presumably under rule 171, that the defendant's defence and counterclaim be struck out and the plaintiff be at liberty to enter judgment.

That formulation strikes me as harking back to the former practice under which judges commonly struck out a pleading and ordered, as sought in this case the defendant be placed in the same position as if it had not pleaded, opening the way for a default judgment.  Examination of rules 281 and following reveals the curiosity that everything depends on the lack of a notice of intention to defend.

As a matter of historical fact, the defendant has filed such a subsequent notice and assuming, which is doubtful, that an attack could have been made on it, none was.  The notice remains in place, which seems to mean that no judgment is available under the rules following rule 281; even under rule 288. 

The rule 171 application was successful with Judge McGill ordering that the defence and counterclaim of the 18th of October 2005 be struck out, however, liberty to re-plead was given. 

His Honour required that any "amended defence and counterclaim be filed and served by the 24th of January 2006", and adjourned the application until today, reserving costs.  There has been no amended pleading filed.  Instead, yesterday morning Mr Huang filed a lengthy affidavit by himself which was made available about 3.45 p.m. yesterday, to the plaintiff.

In the circumstances, which include that Mr Huang has been located in New South Wales, it would seem unfair to decline to consider the material in the affidavit.  It is not a pleading.  Mr Huang tells the Court today he was under some confusion as to what was required of him and thought the affidavit would be sufficient.

While there is no order of Judge McGill appearing as a separate document on the file, the endorsement on the order sheet is clear and I would find it extremely difficult to accept that Mr Huang on the 29th of November 2005 would not have appreciated what was required of him.
He was responsible for preparation of the original "defence and counter-claim", a document which his Honour plainly considered unsatisfactory.  There is a bare allegation of professional incompetence and failure to act in the best interest of the defendant as the plaintiff's client.  There is an assertion that, of fees paid by the defendant, only the first $22,150.64 was properly payable, and a further assertion that a balance paid of $32,200.88 should be refunded to the defendant, which also purported to "reserve rights as per its letter to the plaintiff on 9 September 2005 to refer the plaintiff to the Law Society and/or to take any further action including to sue for the damage caused yet to be assessed."

The defendant's position, given the striking-out of its "statement of defence and counter-claim" is even less protected than before 29.11.05. 

The state of accounts as contended for by the plaintiff is very different.  It asserts that $72,552.41 remains owing.  A formal client agreement signed by the defendant is in evidence.  That greatly simplifies the plaintiff's task, by exempting it from the traditional requirements of having to produce a bill in taxable form and the like; all that is required is billing in accordance with the client agreement. 

That necessarily means that work must be done and presumably appropriately done.  As I understand Mr Huang, he does not raise any issue along those lines, his point being that the work was wasted in that the plaintiff failed to appreciate and give advice in accordance with the true facts underlying the defendant's issues with the Brisbane City Council. 

The Council determined to resume for environmental purposes, including provision of a fauna corridor, a large development site which the defendant owns in the Greenbank area.  The defendant's plans to develop the site were obviously going to be frustrated if the Council succeeded in its plan to resume the whole site.  The modus operandi adopted was to challenge the Council's determination in judicial review proceedings in the Supreme Court. 

Those seem to have been based on the contention that the Council proceeded without making appropriate investigations in relation to the appropriateness of the resumption.  Experienced counsel, Mr Lyons QC and Mr Nevison, were engaged early in the story.  To satisfy directions issued in the Supreme Court they prepared a "Statement of Facts, Issues, and Contentions" for the applicant, a document of 96 paragraphs extending over 28 pages, which was exhibited to Mr Huang's recent affidavit. 

He found the advocacy contained in the statement highly persuasive and may have become more confident in his company's position than was warranted, given the caution which had been urged by the plaintiff in a letter of the 28th of April 2005, which was faxed to him on that day.  A copy is Exhibit 1.  In the judicial review proceedings, matters did not proceed in accordance with the timetable set.  Experience suggests this is a frequent occurrence in litigation.  As things developed, it was only close to the date of the hearing before Atkinson J that the Council was required to reveal its full hand.

That caused alarm to the plaintiff and counsel because, summarising, it revealed that the Council had acted on the basis of much fuller investigation than had been hitherto supposed. 

The advice of counsel, it seems, became quite pessimistic, but Mr Huang elected to fight on.  That is understandable given the unavailability of any amelioration of the legal costs that he faced. 

The lawyers ultimately withdrew before the hearing before her Honour was completed on the basis of ethical constraints which they considered precluded them from accepting Mr Huang's instructions to run before her Honour the argument that the circumstances were such that the Council lacked power to make the resumption.  The late disclosure of the full circumstances attending the Council's determination to resume, as I understand it, produced the ethical difficulty for counsel and solicitors. 

The application in the Supreme Court failed but the letter Mr Huang referred to indicated that he intended to appeal. There is no evidence before this Court to suggest what, if anything, has happened in that regard. 

Mr Huang's position is that it was incumbent on the plaintiff and counsel to discover the true circumstances at a much earlier stage and spare him the exposure to quite significant legal costs.  The total of them is of the order of $125,000 the bulk of which is for outlays, and in particular counsel's fees.  The professional fees to be retained by the firm are of the order of $50,000. 

The plaintiff has allocated payments received in identified ways.  It did not intend by listing in paragraph of Mr Jiear's affidavit counsel fees, filing fees, experts fees and photocopying expenses of $72,200.64 to suggest that the amount currently sued for represents such outlays.  A supplementary affidavit makes it clear that professional fees currently outstanding to the firm are $25,608. 

I am perfectly willing to accept Mr Huang's feeling devastated at the turn events took in August 2005 at the time of the hearing before Atkinson J.  The case is that things can go wrong in litigation without it necessarily being anyone's fault.  In hindsight, I suppose there are always likely to be possibilities of constructing a case of professional negligence. 

Judge McGill has defined the parameters for the defendant's doing so in this claim, having ruled that the filed pleading should be struck out.  Advantage was not taken of the possibilities allowed to retrieve the situation. 

Mr Horvath has conceded that a claim of negligence against solicitors can be the basis of a defence to a claim such as the present one and doubtless the counterclaim can still be pursued even if the plaintiff succeeds in obtaining a judgment (in the absence of anything equivalent to a judgment for the plaintiff on the counterclaim being forthcoming).

Mr Horvath's submission is that rule 292 is still available to his client even if the rules following 281 are not - for the reason averted to.  It appears to me that rule 374 may also, in principle, be available, based on the defendant's having left itself bereft of any defence or counterclaim.  On the assumption that Mr Huang is asking for a further indulgence in respect of the filing of an amended defence I would not be disposed in the circumstances to allow it.  Mr Huang's affidavit does not, if I may refer to the old parlance, show definite facts justifying the granting of leave to defend.  It may be that the defendant has a good counterclaim, but the affidavit does not show it nor that judgment should be withheld pending more investigation.  It is not shown there is any issue that should be tried. I would leave it open to him,   
however, if he is so advised, to pursue the counterclaim but, as things stand, I would not be inclined to allow pursuit of it to stand in the way of enforcement of any judgment on the claim that the plaintiff may obtain.  The difficulty of invoking rule 374 which in rule (5)(a) contemplates the giving of a judgment against the party who has failed to comply with an order to take a step is that the application does not strictly comply with sub rule (4). 

In the circumstances, hard as it may seem to Mr Huang, I cannot see any injustice in the matters proceeding as Judge McGill plainly contemplated on the 29th of November.  I think there ought to be judgment for the plaintiff on its claim for $72,552.41 with costs including the costs reserved by Judge McGill.  I would give the defendant leave to file a counter claim if so advised within 30 days.

Did that cover what you are interested in?

MR HORVATH:  Yes.  Is your Honour going to make a separate order confirming that there's no restriction on the enforcement of the judgement pending that 30 days?

HIS HONOUR:  Well, there's no application for a stay or anything.

MR HORVATH:  Yes.  I have actually a draft order; it's been mangled a bit I have to say.  It's the original order from the 29th.  We've calculated the interest in that if that assists your Honour.  The only other issue with that order is that it - at that stage it didn't contemplate reserved costs of that application - of that day's hearing.

HIS HONOUR:  "And including reserved costs", I will say in paragraph 3.  The defendant has leave to file counterclaim herein within - well, on or before - what is 30 days?  It gets complicated because we're in February now.

MR HORVATH:  I think it's 28 this time around. 
HIS HONOUR:  28th of February is 28 days.

MR HORVATH:  I'm told it's a leap year this year.  I didn't‑‑‑‑‑

HIS HONOUR:  No it's not.

MR HORVATH:  It's not.  I'm going around in circles.  We better make it the second.

HIS HONOUR:  On or before the 2nd of March 2006 but without prejudice to the enforceability of the judgment - in the absence of further order.  Order as per draft.

MR HORVATH:  I can have my instructing solicitor email that to your associate, your Honour, if that assists.

HIS HONOUR:  Email what?

MR HORVATH:  The amended version of the order.

HIS HONOUR:  If you want to, all right.

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