Shore v Palios Meegan & Nicholson Holdings P/L & Palios (No 3)

[2009] SADC 66

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

SHORE v PALIOS MEEGAN & NICHOLSON HOLDINGS P/L & PALIOS (No 3)

[2009] SADC 66

Judgment of His Honour Judge Tilmouth

12 June 2009

PROCEDURE - COSTS - RECOVERY OF COSTS

Circumstances in which appropriate to certify "fit for senior counsel" considered.

District Court Civil Rules 2006 Rule 263; British Metal Corp v Ludlow [1938] Ch 787; Casley-Smith v F S Evans and Sons Pty Ltd (No 6) (1989) 148 LSJS 483; Stanley v Phillips (1966) 115 CLR 470; Re Fuller Holdings Pty Ltd (In Liq) (1979) 21 SASR 212; Willis v Edgar [1963] NSWR 664; Kroehn v Kroehn (1912) 15 CLR 137; Gallagher v Gallagher [1965] NSWR 409; R v W T Potts [1935] 1 Ch 334, referred to.
Beasley v Marshall (No 3) (1986) 41 SASR 321, applied.
Australian Securities and Investments Commission (ASIC) v West (2008) 100 SASR 496, considered.

SHORE v PALIOS MEEGAN & NICHOLSON HOLDINGS P/L & PALIOS (No 3)
[2009] SADC 66

The issue

1. Reasons were delivered in this matter on the primary issue of liability on the 23^rd January this year.[1]  The court subsequently handed down further reasons, resolving in principle, issues of damages.  Whilst suggesting a basis for the calculation of damages, the court did not proceed to the point of entering judgment.[2]  The action was then adjourned to enable the parties to speak to the draft calculations and to make further submissions on the remaining issues of interest and costs.

   [1] Shore v Palios Meegan & Nicholson Holdings P/L & Palios [2009] SADC 5

   [2] Shore v Palios Meegan & Nicholson Holdings P/L & Palios (No 2) [2009] SADC 50, 13 May 2009

2. When the matter came on again the parties were agreed, based on the methodology proposed in the second decision, that the proper level of damages was $49,588.57, inclusive of interest.  The court by consent entered judgment accordingly in that amount on 27 May 2009.

3. As it turned out the parties were no longer at odds as to an order for costs in favour of the plaintiff.  They differed only as to whether it was appropriate to certify for senior counsel.  These reasons deal only with that issue.

   Background

4. Before dealing with that question, it is perhaps well to briefly survey the issues engaged in the previous hearings.  In the trial on liability, the basic issue was one of negligence.  In many respects the court was called upon to make factual judgments in relation to that aspect of the matter.  Although the outcome turned on findings as to what advice was (or was not) given by the practitioner, there were a number of complicated and specialist worker’s compensation issues bound up in the process.  In particular it proved necessary to grasp an understanding of the historical worker’s compensation scheme and how it was interpreted by the Workers Compensation Tribunal and the Full Court.  This was by no means a straightforward or simple exercise.[3]  On the other hand the principles relating to the duty and content of the duty of care, were established by well known authorities.[4]  The same could be said of causation and reliance.[5]

   [3]    Shore v Palios (No 1) at par [28-40]

   [4]    Shore v Palios (No 1) at par [49-53]

   [5]    Shore v Palios (No 1) at par [82-83], [99-100]

5. By the time of the damages hearing, the defendants had engaged senior counsel themselves, Mr Livesey QC.  That is a relevant but barely decisive consideration: British Metal Corp v Ludlow.[6]  He raised several complex factual issues, which by and large fell to be resolved on relatively well established legal principles.  Even so the factual matrix was somewhat complex and novel.  Once again the most difficult issues arose from the statutory workers compensation scheme as applied to the facts of the case.  These were by no means easy to grasp, even for experienced counsel in the jurisdiction.

   [6] [1938] Ch 787

   The jurisdiction and power to award costs

6. Rule 263 of the District Court Civil Rules 2006 provides in the first place for costs to be awarded in the unfettered discretion of the court, to “follow the event”.  Although the court exercises a discretion with respect to costs in general and with respect to this issue in particular, these discretions must always be exercised judicially: Casley-Smith v F S Evans and Sons Pty Ltd (No 6).[7]

   [7] (1989) 148 LSJS 483

7. Sometimes orders for costs involve considering whether it is appropriate to allow for two counsel, or indeed for senior counsel, or both for that matter.  In this case Mr Stanley QC appeared as sole counsel throughout the proceedings.  The defendants were represented by an experienced junior counsel with expertise in worker’s compensation jurisdiction in the primary proceedings and by Mr Livesey thereafter.

   Certification for senior counsel

8. In Beasley v Marshall (No 3)[8] a test was laid down by the Full Court of the conditions making it appropriate to certify fit for senior counsel, it was whether a reasonable litigant at the proper time for delivery of the brief, would consider it necessary or prudent to brief Queens Counsel for the adequate presentation of the case, based on the remarks of Taylor and Owen JJ in Stanley v Phillips.[9]

   [8] (1986) 41 SASR 321, per King CJ at 331 (Prior J agreeing), Olsson J at 334

   [9] (1966) 115 CLR 470 at 486

9. Olssen J considered a useful question to propose was whether a reasonable and competent solicitor advising the client at the time or immediately before the brief was delivered, was justified on the state of his or her knowledge at that time in concluding the case required the engagement of senior counsel.[10]  Beasley v Marshall (No 3):[11]

   [10]   Above at 334

   [11]   Above at 331 per King CJ and 354 per Olsson J

10. In Australian Securities and Investments Commission (ASIC) v West,[12] Gray J after reviewing the authorities made such an order because of the complexity of the issues, the requirement to assess, marshal and present voluminous evidentiary material, the significant assets involved, the substantial sums of money at stake, the impact of the proceedings upon the rights and liabilities of a number of people affected and the public interest in the proper conduct of the proceedings.

    [12] (2008) 100 SASR 496; (2008) 66 ACSR 143 at [221]

11. There is a surprising body of case law dealing with the question.[13]  Most, as might be expected, arise when certification for both senior and junior counsel is sought.  There is no set or inflexible rule dictating a particular outcome.  As Olsson J observed in Beasley v Marshall (No 3),[14] “it is patently untenable to attempt to classify generic types of cases as warranting or not warranting senior counsel”.

    [13]   See Dal Pont “Law of Costs” Lexis Nexis Butterworths Australia (2^nd Ed) para [17.73-17.91] and Master Norman “Legal Costs South Australia”, Butterworths Australia 2000 para [2399]

    [14]   Above at 334

12. Because there is no longer any rigid requirement that senior counsel should appear with a junior, the test is no longer whether a prudent person would engage two counsel, as in Re Fuller Holdings Pty Ltd (In Liq).[15]This requires an objective enquiry, one not merely focused on the importance of the case to one or other of the parties: Willis v Edgar.[16]

    [15] (1979) 21 SASR 212 at 213

    [16] [1963] NSWR 664 at 666-667

    Particular considerations

13. An examination of the cases reveals that even though there is no exhaustive list or set criteria, a number of factors consistently emerge.  These include the volume of materials involved; Stanley v Phillips[17] the nature and extent of cross-examination that might be required; Kroehn v Kroehn[18] the anticipated length of the case: Willis v Edgar;[19] the complexity or difficulty of the issues of fact or law: Beasley v Marshall (No 3),[20] whether serious implications of personal or professional reputation or integrity are involved: Gallagher v Gallagher,[21] and if the case involves practice in fields of a specialised kind: Beasley v Marshall (No 3).[22]

    [17] (1966) 115 CLR 470 at 479-480

    [18] (1912) 15 CLR 137 at 141

    [19]   Above at 667

    [20]   Above at 332

    [21] [1965] NSWR 409 at 411

    [22]   Above at 332

    Consideration of the merits

14. Proceedings were issued in this matter in August 2005.  The trial commenced in October 2008.  The pleadings filed by the plaintiff do not suggest they were settled by senior counsel.  The defence of December 2005 put all matters of substance in issue.  It is not unreasonable to infer that such proceedings would be fiercely contested, as indeed they were.

15. Any reasonable solicitor engaged by Mrs Shore would have appreciated by then that complicated and highly specialised issues involving the effect of the Worker’s Compensation Act 1986 (SA) would be raised.  In addition, allegations of negligence against an experienced and well known solicitor specialising in the field were alleged and denied.  Therefore, as a first step, it was more than reasonable to approach leading counsel in the workers compensation field, which was done.  Counsel would also necessarily require some aptitude in professional or legal negligence.  Such counsel was engaged by the solicitor for the plaintiff.

16. Before addressing the various considerations emerging from the cases, it should be noted this matter was originally listed for five days.  In point of fact the liability trial occupied some nine days and ran into over 717 pages of transcript.  It could have been expected in advance, that Mrs Shore was likely to be cross-examined extensively, which proved to be the case.  Likewise, a skilled, informed cross-examination in a highly specialised area was always going to be required of the practitioner.  Furthermore, as might have been anticipated, evidence was called of an expert nature, detailing the conventional practices of solicitors in the worker’s compensation field and of the WorkCover Corporation, which administered the statutory scheme.

17. One of the significant policy considerations that must be borne in mind, is whether the cost of litigation is unjustifiably inflated by engaging (either two or senior counsel), especially when that would be a luxury rather than a proper precaution to take in order to see the case is duly presented: R v W T Potts[23] and May v Hutcherson and Newton.[24]It is of particular moment in this instance that the solicitor mitigated the potential impact of costs by engaging senior counsel to appear, without junior counsel.

    [23] [1935] 1 Ch 334 at 340

    [24] [1964] Qd R 426 at 431 per Gibbs J

    Conclusion

18. Many attributes commonly leading to a favourable order certifying fit for counsel, are present in abundance in this case.  Most responsible solicitors acting prudently for a not over endowed litigant, would invariably have consulted senior counsel from the word go to conduct this litigation, in my view.  The subsequent events, and the nature and difficulty of the issues as appear from the earlier judgments, serve to reinforce that conclusion.  The characteristics identified above make it an appropriate case, to engage senior counsel after the defence was served.

    Order

19. Accordingly the order of the court is to certify fit for senior counsel.