RPS Freightways Pty Ltd v Singh (No. 2)

[2018] NSWDC 284

District Court

New South Wales

Medium Neutral Citation:	RPS Freightways Pty Ltd v Singh (No. 2) [2018] NSWDC 284
Hearing dates:	27 September 2018
Date of orders:	02 October 2018
Decision date:	02 October 2018
Jurisdiction:	Civil
Before:	Gibson DCJ
Decision:	(1) On the application of the defendant, vacate the hearing date of these proceedings (on day 2 of the three day hearing). (2) List the hearing of the plaintiff’s application for the solicitors for the defendant to pay the plaintiff’s costs occasioned by the vacating of the hearing date. (3) Pursuant to r 7.29 Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), the solicitors acting for the defendant until today (by reason of no prior order under UCPR r 7.29) are granted leave to withdraw. (4) Matter stood over for directions to Monday 22 October 2018 with liberty to apply. (5) Note Judge Gibson to provide reasons for the orders made by email to the parties (including reasons as to whether Judge Gibson should remain the trial judge in any further fresh or adjourned hearing). (6) Refer the defendant to the Law Society of NSW for independent legal advice as to his entitlements, including any entitlement to disbursements as a litigant in person. (7) Pursuant to s 26 Civil Procedure Act 2005 (NSW), direct the parties to attend for mediation before an Assistant Registrar of this court on Tuesday 23 October 2018.
Catchwords:	PRACTICE AND PROCEDURE – solicitor ceases to act less than 28 days before the hearing – registry stamps Notice of Ceasing to Act – application by former client (defendant) for adjournment of the hearing – whether leave to withdraw under UCPR r 7.29 required – whether leave for the solicitor to withdraw should be granted – former client no longer has confidence in the solicitor – leave to withdraw granted – costs issues
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 26 Legal Profession Uniform Law Australian Australian Solicitors’ Conduct Rules 2015 (NSW), r 13.1.3 Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 20.03 Uniform Civil Procedure Rules 2005 (NSW), r 7.29
Cases Cited:	Bendigo and Adelaide Bank Limited v Jaeger (District Court of New South Wales, Letherbarrow SC DCJ, 23 August 2017) Herald & Weekly Times v Popovic (2003) 9 VR 1 Investec Bank Australia Limited v Mann [2012] VSC 81
Category:	Procedural and other rulings
Parties:	Plaintiff: RPS Freightways Pty Ltd Defendant: Amandeep Singh
Representation:	Counsel: Plaintiff: Mr A Cheema Defendant: Mr A Singh (in person)   Solicitors: Plaintiff: Morgan Conley Defendant: De Marco Lawyers
File Number(s):	2017/262809
Publication restriction:	None

Judgment

1. These proceedings were fixed for hearing for three days, commencing on 26 September 2018. As is noted in my judgment of 26 September 2018, the defendant, Mr Singh, appearing for himself with the assistance of his wife, asked for an adjournment. His first reason for that request was that, although he and his wife said they gave all relevant information to his solicitor and paid $32,000 on account of legal costs (for which they had to sell their house), no affidavits had been prepared or served. The second was that, on or about 31 August 2018, Mr Singh’s solicitor filed a Notice of Intention of Ceasing to Act and he had not been able to find fresh legal representation in the interim.

2. I made the following orders yesterday:

1. These proceedings stood over part-heard to 12:00pm 27 September 2018 before Gibson DCJ.

2. Costs of today reserved.

3. The solicitors for the defendant, De Marco Lawyers of 794A Pascoe Vale Rd, Glenroy VIC 3046, are to attend court at midday 27 September 2018 to seek leave to withdraw from the proceedings pursuant to UCPR r 7.29 and to show cause why they should not pay the costs of today and such other costs as may be occasioned by their purported withdrawal from acting made on or after 31 August 2018. If there is no appearance, orders will be made in their absence.

4. A copy of these orders is to be provided by the court to the solicitors for the defendant, together with a copy of the reasons for decision of Gibson DCJ.

3. I made the following orders today:

1. On the application of the defendant, vacate the hearing date of these proceedings (on day 2 of the three day hearing).

2. List the hearing of the plaintiff’s application for the solicitors for the defendant to pay the plaintiff’s costs occasioned by the vacating of the hearing date.

3. Pursuant to r 7.29 Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), the solicitors acting for the defendant until today (by reason of no prior order under UCPR r 7.29) are granted leave to withdraw.

4. Matter stood over for directions to Monday 22 October 2018 with liberty to apply.

5. Note Judge Gibson to provide reasons for the orders made by email to the parties (including reasons as to whether Judge Gibson should remain the trial judge in any further fresh or adjourned hearing).

6. Refer the defendant to the Law Society of NSW for independent legal advice as to his entitlements, including any entitlement to disbursements as a litigant in person.

7. Pursuant to s 26 Civil Procedure Act 2005 (NSW), direct the parties to attend for mediation before an Assistant Registrar of this court on Tuesday 23 October 2018.

4. I set out below my reasons for these orders.

Background

5. Mr Bronius Zumeris, the solicitor who filed the Notice of Intention of Ceasing to Act, sworn an affidavit dated 26 September 2018 upon which he was cross-examined (by telephone) by Mr Cheema, counsel for the plaintiff. Mr Singh, who was in a distressed state during much of the hearing, had no questions to ask his former solicitor, beyond a general concern that he had been left without representation at short notice.

6. Mr Zumeris did not dispute that Mr Singh had paid $32,000 (or some similar amount, which he was unable to check) but stated that Mr Singh had failed to comply with repeated requests for payment of money going back to November 2017.

7. I note, from the correspondence attached to Mr Zumeris’ affidavit, that on 2 November 2017 Mr Singh wrote to Mr Zumeris saying that “I have signed and sent the documents to you already, so what else do you need from me please let me know”. Clearly some instructions must have been given and processed along the way, as counsel was briefed and later a defence was filed.

8. Mr Zumeris first warned that he would file a Notice of Ceasing to Act in an email dated 5 April 2018, where he complained about Mr Singh’s failure to pay outstanding amounts. Mr Zumeris then gave advice on an offer and drafted a counter-offer, but noted that outstanding costs were $4,963.66 as at 30 April 2018.

9. An amended statement of claim was filed on 15 June 2018, and Mr Zumeris told Mr Singh that costs were now $8,824.66. Mr Singh was again warned that a “Notice of Solicitor Ceasing to Act” would be filed unless this was paid. Part payment was made of this bill, leaving $6,324.66 outstanding, and a further $3,000 payment was sought. The proceedings were then set down for hearing and a timetable for the filing of affidavits was dismissed. There is no reference to the previous timetables, for which the defendant was already in default.

10. There was a conference on 23 August 2018, but this was attended by Mr Singh’s wife and another member of the family, as Mr Singh was ill. Request was made for the outstanding sums owed (now $6,751.96) and Mr Singh was told that if he did not attend to this sum by 4:00pm 29 August 2018, “we will have no alternative but to withdraw Counsel’s brief and advise our agent solicitors that they and our office cease to act for you forthwith”.

11. On 30 August 2018 Mr Zumeris wrote to Mr Singh, noting the absence of instructions or money, and stating that he had “no alternative but to file and serve the necessary Notice of Ceasing to Act”.

12. No such Notice was served on the plaintiff’s solicitors. The defendant’s solicitor’s secretary sent an email to [email protected] on Friday 31 August 2018 (without notifying the plaintiff’s solicitors, or sending them a copy) as follows:

“Dear Sir/Madam,

We refer to the above proceeding and confirm we are the solicitors on record for the Defendant. This proceeding is returnable for Hearing commencing 26 September 2018.

For your information, we attach copy of Notice of Intention to File Notice of Ceasing to Act we have forwarded to the Court for filing under cover of our correspondence of even date sent by DX Express.

We have made enquiries of the Law Society of NSW Ethics Department, who have advised us to write to the Court directly and advise the Court of the circumstances. We refer to section 13.1.3 of the Australian Solicitors Conduct Rules, which allows a law practice to terminate the engagement for just cause and reasonable notice.

In short, we are of the view that requirements for termination have been fulfilled by reason of, amongst other things, the following:

1. we have repeatedly requested provision of instructions and documents from the Defendant, along with placing our firm in funds to secure Counsel for the Hearing;

2. the Defendant has not attended our requests to enable our firm to draw relevant documents for filing and service. Nor has our firm be placed in funds to meet the anticipated costs and disbursements of our agent solicitors and Counsel;

3. as at the date of writing, no further instructions have been received, no further monies have been deposited into our Trust Account nor any Notice of Removal of Solicitor or similar document been served.

We trust the above satisfactorily addresses the reasons for our firm seeking to cease acting.

Should further information be required, please do not hesitate to contact the writer. We await your reply confirming that our Notice is in order.

Yours faithfully,

Sofia Matera

Senior Legal Executive

For and on behalf of Bronius Zumeris, Solicitor”

13. This was followed by a letter to the District Court registry sent by DX on 31 August 2018 enclosing the Notice for stamping and return.

14. Mr Zumeris admitted in cross-examination that when this letter was sent, he was aware of the 28-day period in the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) because he had received information from counsel to that effect, which he subsequently “clarified” in a telephone call to the Law Society of New South Wales. He said that he “rarely” conducted litigation in New South Wales and assumed that the procedure which was acceptable in Melbourne (namely writing to the registry) would suffice. What was more, he told the court, this procedure had resulted in a Notice of Ceasing to Act being stamped and returned to his office late yesterday, which meant he was excused from appearing, and this application before the court was not necessary, as De Marco Lawyers had now been granted leave by this administrative procedure, which was also in place in Victoria.

15. Mr Cheema asked Mr Zumeris why, if he had repeatedly had difficulties obtaining money or instructions from the defendant, he had waited until less than 28 days from the hearing to cease to act. Mr Zumeris replied that he thought it was reasonable to keep acting right up until the last moment. He also referred to r 13.1.3 of the Legal Profession Uniform Law Australian Australian Solicitors’ Conduct Rules 2015 (NSW), which he considered permitted such a course.

16. Mr Cheema asked why Mr Zumeris had not included his own client or the plaintiff’s solicitors as a recipient of the email sent to the Court on 31 August 2018. Mr Zumeris agreed with the proposition that he had not thought it either important or necessary to do so.

17. Mr Cheema asked why, if that was the case, his client had not been notified until 12 September 2018, and why Mr Zumeris had thought it necessary to wait until then. Mr Zumeris said he thought he had to serve a sealed copy on the plaintiff, and that it was not necessary to inform the plaintiff’s solicitors until a sealed copy of the Notice was returned by the court.

18. However, that is not what the correspondence demonstrates. The plaintiff’s solicitors, concerned at the failure to reply to without prejudice communications or to file affidavits in accordance with the timetable, had written to Mr Zumeris on 6 September 2018 to inquire whether his firm was still acting, in light of comments in an earlier letter of 23 August 2018. They warned that an application for summary dismissal would be brought. Mr Zumeris’ reply was as follows:

“Thank you for your letter of today.

We write as a professional courtesy.

If we had instructions to respond to you then we would have responded to you. We hold no such instructions.

At this point in time we remain the solicitors on the record for the defendant.

We clearly put you and your client on notice of certain matters of practical reality in our without prejudice correspondence. You and/or your client appear to have ignored those realities. Doing so is at your client’s own financial peril. You have no doubt advised your client of the financial consequences of your client proceeding down its current path.

Your client may wish to reconsider its approach to this matter and have regard to certain practical realities.” [emphasis added]

19. It was not until Friday 14 September 2018 that Mr Zumeris’ secretary sent a Notice of Ceasing to Act (which I note was unstamped). On that same day, a Notice of Ceasing to Act was sent to the court by express DX. That includes the notation that “leave to file this notice was granted on 7 September 2018”, although no such leave was granted under r 7.29. It was following receipt of this document that the plaintiff brought its unsuccessful application for summary judgment before Gibb DCJ.

20. What is the correct procedure for a solicitor to withdraw less than 28 days before a hearing? Is it sufficient to file the notice in the registry and for Mr Zumeris’ secretary to send a separate explanation to the District Court? Is this the procedure in Victoria, as claimed by Mr Zumeris?

The relevant principles of law

21. UCPR r 7.29 provides:

“7.29 Withdrawal of solicitor

(1) A solicitor who ceases to act for a party in any proceedings may file notice of the change and serve the notice on the parties.

(2) Except by leave of the court, a solicitor may not file or serve notice of the change unless he or she has filed and served on the client a notice of intention to file and serve the notice of change:

(a) in the case of proceedings for which a date for trial has been fixed, at least 28 days before doing so, or

(b) in any other case, at least 7 days before doing so.

(3) Unless notice of the change is filed with the leave of the court, a solicitor filing such a notice must include in the notice a statement as to the date on which service of the notice of intention required by subrule (2) was effected.

(4) A solicitor may serve a notice of change or notice of intention under this rule on the former client by posting it to the former client at the residential or business address of the former client last known to the solicitor.”

22. The relevant rules in Victoria are in almost identical terms, in that both require “leave of the court” and are not an administrative process. In fact, the Victorian provisions are much stricter. There would be an additional problem Mr Zumeris would face, if these proceedings had been in a Victorian court instead of New South Wales, in that Mr Singh, the defendant in these proceedings, is “outside Victoria” and the proceedings had been set down for trial.

23. Regulation 20.03 Supreme Court (General Civil Procedure) Rules 2005 (Vic) provides:

“Solicitor ceasing to act

(1) Where a solicitor ceases to act for a party in a proceeding, unless a notice of change is filed and served under Rule 20.01, the solicitor shall forthwith—

(a) file notice that the solicitor has ceased to act; and

(b) serve a copy on all parties.

(2) A notice under paragraph (1) shall state the address of the party last known to the solicitor.

(3) Except by leave of the Court, a solicitor shall not file a notice under paragraph (1)—

(a) where the address of the party in the notice is outside Victoria;

(b) after a proceeding has been set down for trial;

(c) within 28 days after a proceeding has been finally determined subject only to an appeal, if any, to the Court of Appeal.

(4) Except by leave of the Court of Appeal, a solicitor shall not file a notice under paragraph (1) where in the proceeding—

(a) a summons for leave to appeal to the Court of Appeal has been filed; or

(b) notice of appeal to the Court of Appeal has been served.”

24. In Investec Bank Australia Limited v Mann [2012] VSC 81, Pagone J stated (at [2]) that mere lack of funding did not absolve a solicitor from complying with his obligations (at [7]). In those proceedings, the fact that the application was made 11 days before trial constituted “special circumstances” for not granting leave (at [8]). Pagone J added:

“The removal, or absence, of legal practitioners close to trial is sometimes used as a reason for an adjournment of the hearing with inconvenience to the court, the other parties and to other litigants. Practitioners ought to guard against the possibility of the court finding itself with unrepresented litigants close to the hearing date.” (at [8])

25. Pagone J’s observations about the solicitor needing to establish cessation of acting might also constitute a problem in the present case, where Mr Zumeris responded to his opponent’s inquiry by stating that his firm continued to be on the record for the defendant. Under the Victorian provisions, they would have had to be served with the Notice of Ceasing to Act “forthwith”, instead of being misled by correspondence stating that the plaintiff’s solicitors were still on the record.

26. The phrase “leave of the court” means that judicial, not administrative, determination of the issue is required. The conduct of judicial officers is carried out independently of the legislative and executive branches of government, and does not amount to the exercise of power at a government or administrative level: Herald & Weekly Times v Popovic (2003) 9 VR 1 at [10]. Mr Zumeris’ sealed Notice of Ceasing to Act, obtained through an administrative process, does not obviate or replace his need to obtain leave from the court. Mr Zumeris forgot about the separation of powers.

27. But for one factor, this is a case where leave would not be granted. As was the case in Bendigo and Adelaide Bank Limited v Jaeger (District Court of New South Wales, Letherbarrow SC DCJ, 23 August 2017), Mr Singh says he has lost trust in Mr Zumeris. In those circumstances, conformably with Letherbarrow SC DCJ’s orders in those proceedings, Mr Zumeris should be granted leave to withdraw – but at a cost, since the hearing of these proceedings will have to be vacated as a result.

28. The vacating of the hearing must occur for a number of reasons. First, hearing this application has taken up the better part of two of the three days for the hearing. Second, by reason of the contents of Mr Zumeris’ affidavit, I have seen confidential offers which may make it difficult to determine the issues and, with the benefit of reflexion, make me consider that another judge should hear these proceedings when they are ultimately fixed for trial on the merits. In those circumstances, I am obliged to vacate the hearing, but the issue of Mr Zumeris’ liability for the costs thrown away will be a matter for directions when this application is next before the court. Mr Cheema has foreshadowed an application on behalf of his client, and I have referred Mr Singh to the Law Society of New South Wales for advice about this and other matters pertaining to this litigation.

Costs

29. The vacation of the hearing date means that there are costs consequences, which I note are the subject of the timetabling orders set out below; the costs of this application and of the hearing will be determined at a later date and should accordingly be regarded as reserved, although I have made no formal order to this effect.

Law reform

30. The provisions of r 7.29 UCPR are clearly insufficient in terms of preventing this kind of conduct, which not only causes inconvenience to the opposing party but to the court.

31. Stricter and more comprehensive provisions are required. The drafters of the UCPR should consider adopting r 20.03 Supreme Court (General Civil Procedure) Rules 2005 (Vic), which would dampen the enthusiasm of practitioners to withdraw in circumstances such as the present.

Orders

1. On the application of the defendant, vacate the hearing date of these proceedings (on day 2 of the three day hearing).

2. List the hearing of the plaintiff’s application for the solicitors for the defendant to pay the plaintiff’s costs occasioned by the vacating of the hearing date.

3. Pursuant to r 7.29 Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), the solicitors acting for the defendant until today (by reason of no prior order under UCPR r 7.29) are granted leave to withdraw.

4. Matter stood over for directions to Monday 22 October 2018 with liberty to apply.

5. Note Judge Gibson to provide reasons for the orders made by email to the parties (including reasons as to whether Judge Gibson should remain the trial judge in any further fresh or adjourned hearing).

6. Refer the defendant to the Law Society of NSW for independent legal advice as to his entitlements, including any entitlement to disbursements as a litigant in person.

7. Pursuant to s 26 Civil Procedure Act 2005 (NSW), direct the parties to attend for mediation before an Assistant Registrar of this court on Tuesday 23 October 2018.

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Decision last updated: 29 October 2018