Richards v Paul Anthony Carroll, Diana Badui Farah, Hanaan Mary Indari, Stanislaus Anthony Carroll, Gerard Mark Phillips, John Michael O'Dea, Anthony James Baine, Adrian John O'Dea, Robert Patrick Higgins t/as..
[2014] NSWDC 249
•24 November 2014
District Court
New South Wales
Medium Neutral Citation: Richards v Paul Anthony Carroll, Diana Badui Farah, Hanaan Mary Indari, Stanislaus Anthony Carroll, Gerard Mark Phillips, John Michael O'Dea, Anthony James Baine, Adrian John O'Dea, Robert Patrick Higgins t/as Carroll & O'Dea [2014] NSWDC 249 Hearing dates: 24 November 2014 Decision date: 24 November 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Strike out the Reply filed without leave on 10 November 2014.
(2) Grant leave to the plaintiff to file and serve on or before 1 December 2014 an Amended Reply containing the terms of paragraph 1 of the earlier Reply and also specifying the nature and period of the disability alleged by the plaintiff.
(3) Vacate the hearing listed before the Court today.
(4) Order the tutor, Laura Richards, to pay the first defendant's costs of the application for leave to file a Reply and any costs thrown away by reason of the vacation of the hearing date.
(5) Note the undertaking of the plaintiff's solicitor, Herbert Weller, to the first defendant, to meet the costs order in order 4 above, in the event that the tutor or the plaintiff is unable so to do.
(6) Note the undertaking given by the plaintiff, the tutor and the plaintiff's solicitor to the Court to discontinue the proceedings as against the second defendant prior to or on the occasion of the Amended Reply being filed.
(7) Note that the plaintiff does not propose to rely upon the document entitled "National Australia Trustee Balanced Portfolio".
(8) Order the plaintiff to pay the second defendant's costs of the proceedings, as a consequence of the discontinuance.
(9) Any Defence to the Amended Statement of Claim to be filed by the first defendant by 1 December 2014.
(10) Stand over the proceedings for directions on Friday, 5 December 2014 at 9.30am before the list judge.
Catchwords: PROFESSIONAL NEGLIGENCE - claim against solicitor - failed to appoint tutor - plaintiff obtained settlement monies - monies lost on poor investment - some recovery by second solicitor - second solicitor failed to sue first solicitor - limitation period - suspended for disability - pleadings - adjournment Legislation Cited: Limitation Act 1969, s 11, s 50C Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Category: Interlocutory applications Parties: Michael Richards (plaintiff)
Paul Anthony Carroll, Diana Badui Farah, Hanaan Mary Indari, Stanislaus Anthony Carroll, Gerard Mark Phillips, John Michael O'Dea, Anthony James Baine, Adrian John O'Dea, Robert Patrick Higgins t/as Carroll & O'Dea (first defendant)
Enterprise Network for Young Australian Ltd trading as The Youth and Enterprise Legal Centre (second defendant)Representation: Mr N Kabilafkas (first defendant)
Mr W R Chan (second defendant)
Herbert Weller (plaintiff)
HWL Ebsworth (first defendant)
Clamenz Lawyers (second defendant)
File Number(s): 2013/256386 Publication restriction: None
Judgment
Carroll & O'Dea, a firm of solicitors, acted for Michael Richards in a personal injury claim arising out of an accident in 2001. The claim involved allegations of brain damage suffered by Mr Richards. The matter was apparently settled in March 2005 for $840,000 plus $135,000 for costs. Mr Richards received a net sum of $625,000 on 21 April 2005.
Between May and July 2005 Mr Richards appears to have invested $417,000 in a company known as Hinterland Timber Investments ("Hinterland"). Hinterland failed to make some payments and Mr Richards engaged the second defendant, Enterprise Network for Young Australian Ltd trading as The Youth and Enterprise Legal Centre ("the Legal Centre"), to recover the investment.
According to the Statement of Claim Hinterland went into liquidation and its promoter, John Brickwood, became a bankrupt. Mr Richards also sued Anne Marie Brickwood. The total recoveries from proceedings in respect of the investment amounted to $94,500.
On 23 August 2013 Mr Richards commenced these proceedings against Carroll & O'Dea for breach of retainer, alleging a failure to make a claim for funds management, failing to appoint a tutor in the personal injury proceedings and failing to ensure that the award monies were appropriately managed. Mr Richards joined the Legal Centre as a second defendant, alleging that it failed to advise in favour of and take steps to institute proceedings against Carroll & O'Dea.
Carroll & O'Dea have pleaded the Limitation Act 1969 in a Defence filed 28 January 2014. Two weeks ago, 10 November 2014, the plaintiff without leave filed a Reply alleging that the limitation period was suspended under s 11 of the Limitation Act 1969 because the plaintiff suffered a disability and also that the action was not discoverable, "within three years of the commencement of the claim", under s 50C of the Limitation Act 1969.
Mr Richards appeared via his solicitor, Herbert Weller. Last Friday, 21 November 2014, Mr Weller filed a Consent to Act as Tutor form on behalf of Mr Richards whereby Laura Richards - Mr Richards' sister - consented to act as his tutor.
Carroll & O'Dea oppose leave being granted to file the Reply on the basis that not only will it result in a vacation of the hearing date and consequent wasted costs, but that there is other prejudice that results from the hearing not being finalised in accordance with the orders of the Court when it was set down for hearing commencing today.
Carroll & O'Dea claim that were leave to be granted with a Reply to be filed, they would need to explore the mental condition of Mr Richards during the past decade or so and they have not had that opportunity. However, they submitted that were they able to have Mr Richards medically examined, any prejudice would - to a large extent - be cured.
Carroll & O'Dea submit that leave should be refused in accordance with the decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. The Legal Centre also sought that leave be refused because the delay in the proceedings adversely impacts on it being able to provide legal services. This is said to occur because the Legal Centre is precluded from obtaining the finance necessary to provide legal services whilst ever the proceedings remain unresolved.
Mr Weller, in submissions, made a number of concessions regarding the matter, which can be listed seriatim as follows:
(1) Mr Richards needs leave to regularise the filing of the Reply.
(2) The Reply in referring to s 50C of the Limitation Act 1969 was in error. Mr Richards did not intend to rely upon s 50C but only on s 11.
(3) The Reply was filed two weeks ago and for the first time raised the issue of Mr Richards' mental condition in the period from 2005 impacting on the limitation period.
(4) The defendants are entitled to have an opportunity to have Mr Richards medically examined.
(5) The proceedings should be adjourned with the hearing date vacated to enable that to occur.
(6) Nothing could be said in opposition to the proposition that the defendants should have the costs of the application for leave to file a Reply and the wasted costs of the vacation of the hearing date. Mr Weller also accepted that if leave were granted, he would take steps to discontinue the claim against the Legal Centre. He said that the claim against the Legal Centre could not be maintained in the event that the running of the limitation period was suspended under s 11, because the action against Carroll & O'Dea would then be available.
(7) Mr Weller said that he would pay any costs order in respect of the application or the costs thrown away that were not met by Mr Richards.
In my view, the Reply raises the issue of whether the plaintiff is entitled to a suspension of the limitation period and is a crucial matter that the plaintiff must establish if he is to litigate the merits of his dispute with his former solicitors, Carroll & O'Dea. To deny the leave would be effectively to ensure that the proceedings failed. This should not be taken as any indication of the plaintiff's prospects in the proceedings or on the limitation question.
To grant leave to the plaintiff necessarily produces some prejudice to the other parties that the plaintiff must meet, so far as he can.
Accordingly, in view of the concessions made by Mr Weller and the other matters referred to, I make the following orders:
(1) Strike out the Reply filed without leave on 10 November 2014.
(2) Grant leave to the plaintiff to file and serve on or before 1 December 2014 an Amended Reply containing the terms of paragraph 1 of the earlier Reply and also specifying the nature and period of the disability alleged by the plaintiff.
(3) Vacate the hearing listed before the Court today.
(4) Order the tutor, Laura Richards, to pay the first defendant's costs of the application for leave to file a Reply and any costs thrown away by reason of the vacation of the hearing date.
(5) Note the undertaking of the plaintiff's solicitor, Herbert Weller, to the first defendant, to meet the costs order in order 4 above, in the event that the tutor or the plaintiff is unable so to do.
(6) Note the undertaking given by the plaintiff, the tutor and the plaintiff's solicitor to the Court to discontinue the proceedings as against the second defendant prior to or on the occasion of the Amended Reply being filed.
(7) Note that the plaintiff does not propose to rely upon the document entitled "National Australia Trustee Balanced Portfolio".
(8) Order the plaintiff to pay the second defendant's costs of the proceedings, as a consequence of the discontinuance.
(9) Any Defence to the Amended Statement of Claim to be filed by the first defendant by 1 December 2014.
(10) Stand over the proceedings for directions on Friday, 5 December 2014 at 9.30am before the list judge.
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Decision last updated: 22 December 2014
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