Steirn v Spanko Soulos Legal Services Pty Ltd - [2010] NSWSC 1095

NEW SOUTH WALES SUPREME COURT

CITATION:
Steirn v Spanko Soulos Legal Services Pty Ltd [2010] NSWSC 1095

JURISDICTION:

FILE NUMBER(S):
2008/283031

HEARING DATE(S):
6 April 2010, 17 September 2010

JUDGMENT DATE:
30 September 2010

PARTIES:
Clive Steirn - Plaintiff
Spanko Soulos Legal Services Pty Ltd - First Defendant
James Nicopoulos - Second Defendant

JUDGMENT OF:
Schmidt J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable

COUNSEL:
Mr P Barham - Plaintiff
Mr P Curtin - First Defendant
Mr J Nicopoulos - in person

SOLICITORS:
Bowles Lawyers - Plaintiff
Spanko Soulos & Co - First Defendant

CATCHWORDS:
PROCEDURE - costs - costs of adjournment - late adjournment application - counsel - whether brief should have been refused - Bar Rule 87(a) and (c) - departure from usual order - parties' respective conduct - cost to be born by defendant - Suitor's Fund - certificate granted - variation made to earlier order

LEGISLATION CITED:
Civil Procedure Act 2005
Suitor's Fund Act 1951

CATEGORY:
Procedural and other rulings

CASES CITED:
Anderson Stuart v Treleaven [2000] NSWSC 536
Burringbar Real Estate Centre Pty Limited v Ryder [2008] NSWSC 891
R v Hookham (No 2) (1993) 32 NSWLR 345
Robinson v Zhang (2005) 158 A Crim R 575; [2005] NSWCA 439
Steirn v Spanko Soulos Legal Services Pty Limited [2009] NSWSC 1388
Watson v Foxman (1995) 49 NSWLR 315

TEXTS CITED:

DECISION:

The order made in the December 2009 judgment be varied to provide:
"For the reasons given, I make the orders sought by the plaintiff namely, that the appeal be upheld, the judgment be set aside and that the matter, including the Amended Third Party Notice, be remitted to the Local Court, for determination according to law."
Spanko bear the plaintiff’s costs, other than the costs thrown away as the result of the adjournment of the hearing on 28 July 2009.
Mr Nicopoulos bear the costs thrown away by the plaintiff and Spanko as the result of the adjournment of the hearing on 28 July 2009.
Spanko is to have a certificate under the Suitor's Fund, if eligible.

JUDGMENT:

- 28 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
SCHMIDT J
THURSDAY, 30 SEPTEMBER 2010
2008/283031 CLIVE STEIRN v SPANKO SOULOS LEGAL SERVICES PTY LIMITED & ANOR

JUDGMENT

HER HONOUR: Judgment was given in this matter on 18 December 2009, upholding an appeal from a decision of the Local Court (see Steirn v Spanko Soulos Legal Services Pty Limited [2009] NSWSC 1388.) The parties agreed that the plaintiff must have an order for costs in his favour against the first defendant, Spanko Soulos Legal Services Pty Limited ('Spanko'), other than in relation to the costs of an adjournment of the hearing of the appeal on 29 July 2009. They were unable to agree as to who should be responsible for the costs of that adjournment.
Both the appeal and a cross summons brought by Spanko against the second defendant, Mr Nicopoulos were listed for hearing on 29 July 2009. The proceedings in the Local Court had resulted from the plaintiff’s pursuit of his costs for acting for Mr Nicopoulos in proceedings before the Supreme Court. The plaintiff claimed that he had appeared pursuant to a costs agreement which he had entered with Spanko. On 29 July, the parties agreed that the hearing of the appeal and the cross summons should be separated and that the hearing of the appeal be adjourned. I acceded to both applications. The plaintiff later succeeded on the appeal and the cross summons was then resolved.
The plaintiff sought an order that Mr Nicopoulos bear the costs incurred in relation to the adjournment of the hearing on 29 July, submitting that it would be concluded that the adjournment was the result of the refusal of Mr Nicopoulos’ counsel, Mr Santisi, to accept that he had a conflict of interest and in accordance with Bar Rule 87, ought not to have appeared in these proceedings. It was also submitted that the Court could form the view that Mr Santisi ought to bear those costs, as a legal practitioner.
Spanko’s case was that it should have an order in its favour in relation to the costs of the adjournment on 29 July. It was ready to proceed that day. There was a dispute between the plaintiff and Mr Nicopoulos as to who caused the adjournment that day. In the circumstances, either the plaintiff or Mr Nicopoulos should be required to bear its costs of the adjournment.
Mr Nicopoulos sought an order that the plaintiff bear the costs of the adjournment, submitting that he had taken adequate and appropriate steps in the proceedings, to deal with the difficulty which had emerged and that he had not been the cause of the adjournment.
Evidence was given by the plaintiff Mr Steirn; by Mr Bowles, his solicitor and by Mr Washington, his counsel. Spanko finally called no evidence. Both Mr Nicopoulos and Mr Santisi gave evidence. The witnesses’ recollections of what had transpired differed markedly in a number of relevant respects. I have concluded that this was the result of the failure of memory, not any attempt to mislead the Court. (See Watson v Foxman (1995) 49 NSWLR 315 at 319). Nevertheless, in order to determine what justice requires in relation to the matters over which the parties are in dispute, it is necessary to come to a conclusion as to what occurred. In this case that can best be done by considering what light is shed on the evidence, by what occurred in Court on 29 July.
What the Court file shows
The Court file shows that the summons seeking leave to appeal was filed in February 2008. Spanko filed a cross summons and notice of appearance on 2 April 2008, naming Mr Nicopoulos as cross defendant. On 21 May, there was a notice of contention filed for Spanko. On 23 July 2009, the plaintiff’s written submissions were filed and on 27 July, Spanko filed its submissions. The matter was listed for hearing on 29 July. Until 27 July, Mr Nicopoulos had taken no step in the proceedings. That day Mr Nicopoulos filed both a notice of appearance and a notice of contention. On 29 July, a notice of motion was filed in court for Mr Nicopoulos, seeking that the cross summons be heard separately from and after the hearing on the appeal ‘as between the plaintiff and the defendant’.
On the afternoon of 28 July, Mr Washington advised that there would be an adjournment application the next day. In court on 29 July, Mr Washington said:
"As it was indicated to your Honour's associate yesterday, there's been a communications problem which hasn't so much involved those at the Bar table but rather those that instruct them. The second defendant has only recently filed an appearance and it's become apparent that my learned friend, Mr Santisi, who is on my left, was to appear for the second defendant. Mr Santisi was the junior to the plaintiff in the proceedings before Smart J which have, in turn, spawned these proceedings which relate to Senior Counsel's fees.
The plaintiff's become aware of Mr Santisi's involvement in the matter only at 2pm yesterday and raised with Mr Santisi an objection to his appearing. Without needing to go into that, Mr Santisi has accepted that in all the circumstances it would be inappropriate for him to continue to appear.
Understandably, he pointed out that it was going to be impossible for him to pass the brief with less than a day's notice. It was agreed that in the circumstances it would be manifestly unfair for the plaintiff to try and cling to this hearing date.
As I understand my learned friend, Mr Compos, on my right, he is in accord with that position.
Your Honour, it's certainly not an issue of fault. Clearly, there will be some costs questions to be determined. I have embodied those in some draft consent orders. However, it's most unfortunate but, your Honour, in circumstances where everybody's cognisant of the ethical difficulty, in proper fairness to my learned friend, Mr Santisi, he had raised the issue and he understood that everybody consented to his appearing in the matter. Unfortunately, that's where the chain of communication broke down and where my learned friend believed he had the consent. In fact, the issue of consent was not put to the plaintiff until about 10 past 2pm yesterday. Thus, no opprobrium at all should be visited upon Mr Santisi at this time. "
Mr Santisi responded:
"If I could briefly. I agree with everything that my learned friend has said. It's just that on my instructions, those who instruct me had informed Mr Steirn's solicitor on Wednesday of last week, so I wish to have it noted on the record that the plaintiff's solicitor knew, as of Wednesday last week, as to my intended appearance in the matter.
Insofar as there may be a communication problem, it appears to lie between that solicitor and Mr Steirn. I wish to have that noted in on the record now, in the event that it's later on an issue and it comes to the issue of costs thrown away.
The other issue is that it was my intention today, though, with the proposed orders that my learned friend has provided me and provided for this, to have an application to separate the defendant and cross defendant from the issue as between the plaintiff and the defendant.
The issue between the plaintiff and the defendant is a very discrete issue between them which really doesn't impact on the second defendant and the cross defendant until there is a finding in favour of the plaintiff. If there is no finding in favour of the plaintiff, there can be nothing that flows to the second defendant, the cross defendant, therefore, there would be no utility in him being involved and adding time to the course of the hearing and adding unnecessary costs to his matter as well as the issue between the first defendant cross claimant and himself."
It is apparent from these submissions that on 29 July there was a dispute between Mr Bowles and Mr Nicopoulos as to the nature of their earlier communications about Mr Nicopoulos having briefed Mr Santisi to appear for him in these proceedings.
These submissions caused me to enquire whether this had been the subject of discussion, with Mr Washington handing up draft orders and Mr Santisi a motion. The orders proposed, not those made, provided:
"1.That the hearing of the proceedings before Schmidt J on 29 July 2009 be vacated.
2.That the matter be relisted for hearing before Schmidt J on
3.That the issue of costs lost and thrown away by the adjournment be reserved.
4.That any motion to sever the hearing of the action and the cross action be filed within 7 days of today.
5.That any application on the part of the second defendant for leave under Part 50 rule 50.13 be filed within 7 days of today.
6. That the proceedings be relisted for directions before Schmidt J on "
The motion sought orders severing the hearing of the cross summons from the hearing of the appeal. From the exchange which followed, it became apparent that there was a misunderstanding in relation to Mr Nicopoulos’ role in the proceedings, which was clarified. He was both the second defendant and the defendant to the cross summons. Once clarified, the leave question was not pressed, Mr Nicopoulos clearly being a party to the proceedings.
Spanko’s position was that it was a matter for Mr Nicopoulos, whether he wished to be heard on the appeal and that the severing of the cross summons was a matter for the defendants. Mr Confos, appearing for Spanko advised that he had instructions to consent to the motion, other than as to costs.
Mr Washington had not seen the motion until he came to court. I adjourned shortly to enable instructions to be obtained on the motion and for the parties to discuss the question of costs and a further hearing date. Mr Washington indicated before I adjourned, that he anticipated that Mr Campbell SC would be coming into the matter and that he had his dates, as well as Mr Steirn’s.
On resumption, dates for an adjourned hearing of the appeal were advanced and consent to the motion was given. Mr Santisi advised that Mr Nicopoulos did not wish to be heard on the appeal as to the question of the matter being remitted to the Local Court. He also said:
"Therefore, the reality of it is that whilst the issue arose as to the difficulties of myself and, again, as my friend says, we have both said things from the Bar table there is a dispute as to when his solicitor was in fact told of my intended appearance, and at least it would have been close to four days' notice in the plaintiff's camp of my appearance where objection could have been raised. To date, I've not seen particularised the basis of there being an express exclusion to my appearing because I have a different interpretation. But, as I say, I wasn't going to appear to avoid embarrassment."
Mr Santisi also submitted:
"With the proposed consent, the issue really becomes - I appreciate that there was a state of flux created by some issue over which there is a dispute as to when the plaintiff's solicitor was put on notice, but the reality of it is that, in view of the events today, there would be, in effect, no real reason why the matter couldn't proceed between the plaintiff and the first defendant."
What was discussed between Mr Bowles and Mr Nicopoulos?
In his affidavit Mr Bowles recounted a telephone discussion which he had with Mr Nicopoulos on 22 July 2009. He said that while he experienced difficulty hearing Mr Nicopoulos, they said:
"JN:Jim Nicopoulos here. This matter with Steirn is set down 29 July 2009?
DB:That's right.
JN:I am not involved the appeal by Steirn against Soulos.
DB:I haven't received anything from you. Have you filed anything?
JN:No not yet I will serve a Notice of Appearance. I'm also going to ask Frank Santisi to appear for me. Do you think Steirn will object to Santisi appearing for me?
DB:If you say you have no involvement in the appeal between Steirn and Soulos then I do not know if that will be a problem or not. You will have to put it in writing and I will get instructions from Clive."
Mr Nicopoulos cross examined Mr Bowles, putting to him his version of their conversation. Mr Nicopoulos’ affidavit evidence was that when he spoke to Mr Bowles by mobile phone, he had no difficulties hearing Mr Bowles. He said:
"JN:"the matter in respect to Steirn v Soulos as you are aware is listed on the 29^th July 2009."
DB:"That is correct."
JN:"Santisi will be appearing for me in respect to this matter. Do you think Steirn will have any objections to this particularly given the fact that Santisi was not a witness in the lower Court proceedings.
DB:"That will not be a problem but if things change I will let you know."
JN:"Ok Thanks mate."
While Mr Bowles agreed with parts of what Mr Nicopoulos put to him, he denied that he advised Mr Nicopoulos that Mr Santisi appearing for him would not be a problem. To that point Mr Nicopoulos had not participated in the appeal. Mr Bowles insisted that he had told Mr Nicopoulos that he had to put it in writing and that he would then get instructions. Mr Bowles explained that he did not then speak to Mr Steirn, expecting to receive correspondence, as well as a notice of appearance from Mr Nicopoulos. He received neither.
Later Mr Bowles inspected the file to see if Mr Nicopoulos had filed anything and then forwarded some documents to counsel. He was not sure how Mr Steirn had come to hear that Mr Santisi was to appear. Mr Bowles did not speak to Mr Steirn about Mr Santisi appearing, until the day before the hearing of the appeal, 28 July, when Mr Steirn rang and asked him whether he had had any conversation with Mr Nicopoulos.
Mr Bowles was aware that Mr Steirn and Mr Santisi spoke on the eve of the hearing, on 28 July. He had earlier briefed Mr Washington to appear. He had not briefed senior counsel to appear. Senior counsel was not briefed until November 2009. Mr Bowles spoke on several occasions on 28 July with Mr Washington. They discussed Mr Santisi’s proposed appearance the next day. Mr Washington asked what he could remember of his conversation with Mr Nicopoulos. Mr Washington and Mr Steirn spoke, as did Mr Bowles and Mr Steirn, who wanted to know whether he had advised Mr Nicopoulos that he would have no objection to Mr Santisi appearing. They also discussed whether Mr Nicopoulos was genuine about appearing and that no notice of appearance had been served.
Mr Bowles' evidence was that the matter was ready to proceed. He could not remember whether any decision was made to seek an adjournment, but he was aware that Mr Steirn had serious concerns about Mr Santisi appearing.
In his cross examination, Mr Nicopoulos insisted that Mr Bowles had told him that he would advise him if there was any problem with Mr Santisi appearing. He heard nothing from him. Shortly after he spoke to Mr Bowles he, or his partner, advised Mr Santisi that there was no problem. Mr Santisi's evidence was that it was he who required Mr Steirn to be approached, because he was conscious that he might object and he did not wish to accept the brief, if it would cause Mr Steirn any embarrassment. Mr Santisi considered that he had no conflict and had received advice from a silk confirming that view. He was advised that Mr Steirn had no objection.
It is necessary to resolve the conflict between Mr Bowles’ and Mr Nicopoulos’ evidence. Having considered the two versions of the conversation on 22 July in light of all of the evidence, I have concluded that Mr Bowles’ evidence must be preferred. That on 22 July, Mr Bowles was sceptical as to Mr Nicopoulos’ intention to participate in the proceedings may be accepted. To that point Mr Nicopoulos had entered no appearance and had taken no steps to participate, or to comply with the Court’s directions as to preparation of the matter for hearing. Mr Nicopoulos to that point had not served anything in accordance with the Court’s directions.
In those circumstances, and having in mind what the proceedings were concerned with, a dispute over Mr Steirn’s costs of representing Mr Nicopoulos in proceedings in the Supreme Court in which Mr Santisi had appeared as his junior, that Mr Bowles would tell Mr Nicopoulos on 22 July that Mr Santisi appearing ‘will not be a problem’, without first seeking Mr Steirn’s instructions, appears unlikely. Consideration of the fact that Mr Santisi was a witness to certain events; that he had been served with a subpoena to give evidence in the Local Court proceedings, which he had resisted; and that a rehearing was being pursued, makes Mr Bowles advising Mr Nicopoulos that Mr Santisi appearing would not be a problem, is even more unlikely.
In 2004, Mr Santisi appeared as Mr Steirn's junior in the proceedings in the Supreme Court which generated the dispute over the payment of Mr Steirn’s fees. Mr Santisi was later asked by Mr Steirn to give evidence in the Local Court proceedings. He wrote to advise Mr Steirn that "[A]s much as I would like to assist, following advice from an eminent Q.C. on the point an issue of privilege arose. Accordingly I must decline the invitation and wish you well in your efforts."
Unsurprisingly, this letter resulted in a subpoena being served on Mr Santisi, requiring him to give evidence. While there was no question that he had discussed the matter of Mr Steirn’s fees with Mr Nicopoulos and that he was unquestionably a witness to events relevant to a resolution of the issues in controversy in the proceedings, it emerged that he had a different recollection than Mr Steirn as to certain matters. Mr Santisi resisted giving evidence. He wrote to Bowles Lawyers on 15 May 2007 that:
"Dear Sir
RE:Clive Stern(sic) v Spanko Soulos Legal Services Pty Limited
I note the service of subpoena to give evidence in the abovementioned matter.
Due to my court commitments I am in a 4 day part heard hearing starting 21 May 2007, after having been listed for a further 4 days and there is no available time that week, especially on 21 May 2007. I wish to advise you of this fact and my court commitments which I believe are equal to court order.
I also note in my view privilege has not been waived as yet and no one has informed me otherwise, especially Mr Nicopoulos the client, therefore anything I might be asked of is privileged.
Further the $25.00 is insufficient funds especially should I suffer a costs order for taking time off from my other matter, which I envisage will not likely occur given the history of the matter.
I trust you will inform the Court of these facts.
Yours faithfully,
Frank S Santisi
Barrister-at-Law"

Mr Santisi was not finally called to give evidence in the Local Court. His evidence was that he advised both Mr Steirn and Mr Nicopoulos that his view was that his evidence would assist neither party. He enquired of Mr Nicopoulos whether he would waive privilege. He received no response, but was not finally called.
The point of the appeal was to achieve a rehearing in the Local Court. It is entirely possible that one or other of the parties to such proceedings, if achieved, including Spanko, would seek to call Mr Santisi as a witness. There is no question that he had personal knowledge of the matters lying at the heart of the dispute between Mr Steirn and Spanko.
In those circumstances, that Mr Bowles was likely to have responded in the way Mr Nicopoulos recollects, that he could see no problem in Mr Santisi appearing, is implausible. That there had been a serious falling-out between Mr Steirn on the one hand and Mr Nicopoulos and Mr Santisi on the other, is evident. Mr Nicopoulos continued to brief Mr Santisi. In the circumstances it is much more likely that Mr Bowles responded to Mr Nicopoulos’ enquiry as was his recollection, namely that he would have to seek instructions and that the request should be put in writing. That approach accorded with Mr Steirn’s requirement that dealings with Mr Nicopoulos be conducted in writing. Unquestionably it would have been preferable had Mr Bowles raised Mr Nicopoulos’ approach with Mr Steirn or Mr Washington. Their evidence that Mr Bowles did not discuss it with Mr Steirn until 28 July, must be accepted.
Mr Santisi’s evidence was that when earlier approached to appear, he was concerned that Mr Steirn might object and thus required his solicitor first to ascertain that he had no objection to his appearance. He did not consider that he had a conflict, having considered the Bar Rules and taken a silk’s advice, but he did not wish to embarrass Mr Steirn and would not have accepted the brief, if he objected. Mr Santisi said that he later received an email from his solicitor advising that an approach had been made to Mr Bowles and that Mr Steirn had no objection. A call was made for that email, but it was not produced. What it said and whether Mr Santisi recollected its contents accurately, is not known. Once Mr Steirn became aware on 28 July of Mr Santisi’s proposed appearance, he objected immediately, as Mr Santisi had anticipated. By that time Mr Santisi took a different view, insisting that there was no difficulty with his appearance. He later came to a different view, after consulting another silk. It was then that it was decided to sever the cross summons. He advised Mr Washington of this on the afternoon of 28 July.
While it may be accepted that as a matter of prudence Mr Bowles ought to have informed Mr Steirn of Mr Nicopoulos’ approach, rather than waiting for Mr Nicopoulos to put his enquiry in writing and to serve his notice of appearance, that he advised Mr Nicopoulos that there was no objection to Mr Santisi’s appearance, is a conclusion which I am unable to reach. Either Mr Nicopoulos’ misunderstood, misheard or misremembered their conversation.
Mr Santisi’s involvement in the disputed events in 2004
Mr Steirn’s evidence was that he received a telephone call from Mr Santisi on 17 May 2004 and as a result, met with him and Mr Nicopoulos later in the morning. Mr Santisi told him that Mr Nicopoulos’ matter was part heard in the Supreme Court. They discussed Mr Soulos briefing him and filing a notice of appearance, as well as his daily fee and his practice of sending his fee agreement to his instructing solicitor. Mr Nicopoulos agreed. He left and he and Mr Santisi continued, discussing and preparing the matter. While Mr Santisi was in his chambers, Mr Steirn spoke to Mr Soulos by telephone about instructing him, his fees and the fee agreement. Mr Steirn was formally briefed and began reading a large volume of documents. He later appeared with Mr Santisi as his junior.
When his dispute with Spanko over fees was later going to trial, Mr Steirn instructed Mr Bowles that Mr Santisi would be in a position to give relevant evidence on his behalf, given his presence during these conversations. In February 2006 he spoke to Mr Santisi about giving evidence, but Mr Santisi said he would have to take advice. He later received the letter in which Mr Santisi advised of the privilege point.
A subpoena to give evidence was later served on Mr Santisi. He was finally not called after Mr Santisi’s May 2007 letter. Mr Santisi’s evidence was that he never heard further from either Mr Steirn or Mr Nicopoulos about giving evidence, after he enquired whether Mr Nicopoulos had waived his privilege.
In cross examination, Mr Santisi’s evidence was that he was appearing for Mr Nicopoulos on a contingency basis in the Supreme Court proceedings in which Mr Steirn was briefed to appear. He did not recollect events which occurred in 2004 in the same way as Mr Steirn. He did not meet with him on 17 May 2004, as Mr Steirn remembered. He was appearing in a criminal trial in the Supreme Court that day, which concluded at about 12.30 or 1pm. He did not meet earlier that morning with Mr Steirn and Mr Nicopoulos, as Mr Steirn claimed. He had no recollection of the conversations which Mr Steirn claimed he had that day with Mr Soulos, although he did discuss the proceedings with Mr Steirn in the afternoon of that day.
Mr Santisi said that he was not present when Mr Steirn met with Mr Nicopoulos that morning and did not hear the words they exchanged. When he attended Mr Steirn’s chambers in the afternoon, Mr Nicopoulos was there with his personal assistant. Fees were not discussed in his presence. His brief had already been provided to the plaintiff. He was given another brief that day and they worked together on the matter for the rest of the day.
Mr Santisi did remember the need for an independent solicitor being raised by Mr Steirn and Mr Nicopoulos saying that “I’ll sort that out’. Mr Steirn asked Mr Santisi about his fee arrangements with Mr Nicopoulos and he told him:
"I cannot recall if it what(sic) on the 18 or 19 May 2004 but I feel certain that it was on the 18 May 2004, that Mr Stern(sic) asked me, in the absence of Mr Nicopolous, "What are your fee arrangements with Jim." To which I replied, "I am doing the matter on a spec basis, he gives me work and I feel pretty confident about the matter, though it's becoming bigger than Ben Hur." I recall Mr Stern(sic) saying, "Well he hasn't briefed me in the past so I want to be paid." To which I replied, "I don't think he has any money, so you need to sort it out with him." I left the conversation at that point. I think it was after this conversation, that funding issues that I mentioned at paragraph 17 arose."
In cross examination, Mr Santisi said that he also discussed Mr Steirn's fees with Mr Nicopoulos.
Why and how did the adjournment application come about?
Mr Steirn’s evidence was that he became aware that Mr Nicopoulos proposed to instruct Mr Santisi to appear in these proceedings on 28 July. This evidence was not put in issue. His view was that Mr Santisi was a material witness to what had occurred and he objected to his appearance, taking the view that it would offend the Bar Rules for him to do so. In conference with Mr Washington that day, he gave instructions as to his objections and the reasons for them. Mr Washington said that he would phone Mr Santisi. Mr Santisi said that he intended to appear.
Mr Steirn then spoke to Mr Santisi himself, to draw his attention to the Bar Rules. He told Mr Santisi that he could not appear, that he had a conflict. Mr Santisi disagreed and told him that Mr Nicopoulos had made an enquiry of Mr Bowles, who was to advise if there was any problem. He denied that Mr Santisi said that Mr Bowles had said that there was no problem. He remembered discussing whose fault it was and saying ‘Its not my solicitor’s fault because any communication from you had to be in writing.’ Mr Steirn could not remember if it was Mr Bowles, or Mr Washington, who told him that Mr Santisi proposed to appear.
Mr Steirn acknowledged that Mr Santisi had sworn affidavits that he was not privy to the conversations between him and Mr Soulos. He disagreed. He could not say what Mr Santisi had heard of their conversation, but he was certain that he was present when they occurred.
Mr Steirn also said in cross examination that he did not give instructions to Mr Washington or to Mr Bowles to seek an ajournment of the hearing on 29 July. He was anxious to have the matter heard and it was ready to proceed. He could not recall whether he was aware of an application to sever hearing of the cross claim, or whether he gave instructions about that application. He wasn’t present in court that morning.
Mr Steirn said that he and Mr Washington had spoken to Mr Campbell SC about the matter before 29 July, but he did not brief him until after the adjournment, on Mr Washington’s advice He was told of the adjournment after it had occurred. He could not conceive that Mr Santisi would appear, given the Bar Rules.
Mr Washington gave evidence that he spoke to Mr Steirn on 28 July, who informed him that he had just been told that Mr Santisi was to appear and that he had a conflict and could not appear. Mr Washington spoke to Mr Santisi at about 2.30pm and asked him if this understanding was correct. Mr Santisi confirmed that he had been briefed and Mr Washington told him that it was Mr Steirn's view that he was a material witness to the discussions and that he could not appear in the proceedings, because there was an irreconcilable conflict, which required him to withdraw. Mr Santisi said:
"I don't consider that there is any conflict. I do a lot of work for Mr Nicopoulos and he wants me to appear for him tomorrow which I intend to do."
On 29 July, while at the bar table with Mr Confos, appearing for Spanko and Mr Santisi, Mr Santisi advised that they would press a motion to have the cross claim severed, with the result that he would not appear on the appeal. Mr Washington advised that he intended to seek an adjournment.
In cross examination, Mr Washington explained that he was junior counsel, first retained in May or June 2009. He had first attended a conference with the plaintiff in Mr Campbell’s chambers, when he was asked to appear at the hearing in July. Mr Campbell was unable to appear. He was not briefed to appear as Mr Campbell’s junior.
It was Mr Steirn who first advised him on 28 July that Mr Santisi was to appear, when they met to discuss final preparation for the next day’s hearing. Mr Steirn regarded it as inappropriate for Mr Santisi to appear and Mr Washington telephoned Mr Santisi to explain Mr Steirn’s views to him at about 2.30pm. Mr Washington disagreed with aspects of the conversation recollected by Mr Santisi. His evidence was that Mr Santisi did not say:
"Q…"Yes, I've been instructed. I don't know if Clive has told you, he spoke to me earlier and he has raised an objection." Do you remember Mr Santisi saying that?
A. No.
Q. You say it didn't happen?
A. Yes.
...
Q. "I was told your solicitor didn't see a problem given that it is an appeal and given that I was merely appearing as against Soulos. He said that he would get back to us if it was an issue and I was told that there was no objection raised." What do you say to that?
A. That conversation didn't take place.
Q. And Mr Santisi said to you, "The first time there was an objection was when Clive rang me earlier today. I made inquiries of a senior silk and he can't see a problem technically."?
A. No, that didn't take place.
Q. "You can understand the perception taken by Clive because now I feel embarrassed by the situation"?
A. That didn't happen.
Q. I suggest to you that it did?
A. Well, it just didn't.
Q. And furthermore, Mr Santisi said, "I'm going to appear and withdraw, but you can't force my client on, can you, nor can you ask for any costs against him. It is your solicitor's fault for not taking it up with Clive before today."?
A. That just did not occur."
Mr Washington agreed that he said words to the effect of ‘I think we should contact the judge this afternoon and let her know that this matter cannot proceed tomorrow’, but that they followed an entirely different conversation. Mr Washington also denied that he said he would have to ring Nick Confos, Mr Soulos' solicitor. Mr Confos was a counsel of his acquaintance since the early 1970’s. His evidence was that he said:
Q. Could you have said "Mr Soulos's barrister"?
A. The words that I said to Mr Santisi were: "I will have to speak to Nick Confos, Mr Soulos's barrister, and inform him, so that an application can be made to inform the judge in chambers that, owing to Mr Santisi's unwillingness to accept that he had a conflict of interest, that the matter - that an application for adjournment would have to be made."
Mr Washington agreed that he spoke to Mr Santisi again at 4pm to advise that he had been unable to contact Mr Confos. He denied that Mr Santisi then told him that he had been thinking about the matter and that ‘[i]t will be my application to separate the issues. My appearance will be limited to that, so there shouldn’t be an issue. There is no reason why you, Clive, Soulos and Nick can’t continue before the judge tomorrow’. He was certain that had not taken place and that it was a complete fabrication.
He also denied that he had said that ‘I don’t think that Nick is ready because there is an issue with the accuracy of the transcript’. That was not raised until 29 July. Mr Washington also denied having discussed with Mr Santisi, a silk or senior counsel not being available. He said that he had told Mr Santisi after the adjournment, that he expected to be led when the hearing proceeded. He did not have senior counsel’s available dates, but expected Mr Campbell or some other silk would become available to lead him.
Mr Washington also disagreed with other aspects of Mr Santisi’s version of their discussion on 29 July at Court, which it is unnecessary to recount.
Mr Washington said that he had told Mr Steirn that he intended to make an adjournment application on the afternoon of 28 July. He had two discussions with Mr Bowles, the first before he spoke to Mr Santisi and then afterwards, quite late in the afternoon, when he told him of the adjournment application to be made in the face of Mr Santisi's intransigence and unwillingness to remove himself from the proceedings. The adjournment would enable a complaint to be made to the Bar Council, in order to have Mr Santisi’s refusal dealt with. That was considered preferable to raising the matter before the Court. The view was taken that while Mr Santisi was not finally called at the earlier hearing, he remained a material witness as to what had occurred. The requirements of Bar Rule 87 triggered the adjournment application.
Mr Washington denied that the adjournment was sought in order to obtain an opportunity to brief senior counsel to appear. It was not until the morning of 29 July, that he had discussed with the plaintiff the possibility of briefing senior counsel if the matter went over.
Mr Washington said that he had difficulty contacting Mr Confos on the afternoon of 28 July and he finally spoke to him between 4.30 and 5pm on 28 July when they discussed what had happened with Mr Santisi refusing to withdraw, the intended adjournment application and the disruption to his preparation for the hearing. He then advised my Associate of the adjournment application which would be made the next morning. He agreed that he told Mr Confos that he was not ready to run this thing because of the conflict and as a result, he’d stopped his preparation. He disagreed that he told Mr Confos that he and Mr Santisi had agreed that the matter should go over. Mr Santisi had indicated that he would not resist an adjournment application, while not resiling from his position that he would continue his appearance. Mr Washington recollected that it was not until the morning of 29 July that the severance of the cross summons was raised by Mr Santisi. Mr Confos was prepared for the matter to go over.
Mr Washington also explained that the adjournment application was made on 29 July, even after it was learned that Mr Santisi would make an application to sever the cross claim, because final preparation for the hearing had been deranged by the time taken to deal with the conflict which had emerged. His preparation for the hearing had not been completed and he took the view that the plaintiff would be disadvantaged if the hearing then proceeded. Mr Confos was happy for the matter to go over in the circumstances and the result was that the adjournment application was made and granted.
Mr Washington agreed that if the matter had been forced on, he would have run it, but in his view that was less than ideal in the circumstances which had arisen. He denied that the reason for the adjournment was in order that senior counsel could be briefed. He did not remember having Mr Campbell’s dates with him at Court.
It is convenient to note, at this point, that no evidence was finally called by Spanko from Mr Confos. During an adjournment of the hearing, a decision was made by Spanko that Mr Confos would not be called. Mr Washington had earlier made reference in his evidence to conversations which he had had with Mr Confos, and was cross examined about them. Notice had earlier been given for Mr Steirn that Mr Confos was required for cross examination. This was revisited when dates were fixed for the further hearing of the matter.
At the resumed hearing, Mr Nicopoulos sought to rely on Mr Confos’ affidavit. Despite being aware of Spanko’s decision not to call Mr Confos, he had taken no steps himself to call Mr Confos, or to have him available for cross examination. In the circumstances, where Mr Nicopoulos was long on notice that Mr Confos was required for cross examination, but had taken no steps to have him attend court, I refused an application for an urgent subpoena to be issued to require Mr Confos, who was in Court appearing in another matter, to come to Court in order to be cross examined. I took the view that the course urged by Mr Nicopoulos, was in the circumstances not consistent with the fundamental objective of the just quick and cheap resolution of the real issues in the proceedings, having in mind the parties’ respective conduct and their adherence to their obligations under the CivilProcedure Act 2005. The course urged by Mr Nicopoulos was not appropriate, having regard to his failure to take simply available and necessary steps, if he seriously wished to rely on Mr Confos’ affidavit; what was here in issue between the parties; and the Court time and the expense already incurred to that point, in the pursuit of the matter remaining in issue between the parties.
Mr Santisi's evidence has been earlier outlined.
Mr Nicopoulos’ evidence was that he disagreed with Mr Steirn’s evidence as to their discussions in 2004, in various respects. In his affidavit, Mr Nicopoulos did not deal with the circumstances in which the adjournment application, or the motion to sever the cross summons were made. In cross examination, he said that he could not remember what time on 28 July, Mr Santisi raised with him severing the cross summons. He had lunch with Mr Santisi that day and it could have been at lunch, or shortly afterwards. It was certainly before the sun set.
It is apparent from all of this evidence, as well as from what the Court was advised on 29 July, despite the dispute as to the time when certain discussions occurred and the detail of what was said, that the adjournment application made that day was the result of Mr Santisi having been briefed to appear in the matter for Mr Nicopoulos.
Both Mr Santisi and Mr Nicopoulos, himself a solicitor, recognised the difficulty with that course, hence Mr Nicopoulos’ approach to Mr Bowles on 22 July. When it became apparent on 28 July that there was no consent to Mr Santisi’s appearance, in the circumstances Mr Santisi ought himself to have withdrawn, or his instructions ought to have been withdrawn by Mr Nicopoulos. Mr Santisi only came to that recognition on 29 July after initially refusing to withdraw and then taking advice from another silk and hitting upon a plan which would permit him to continue appearing for Mr Nicopoulos, by severing the hearing of the cross claim. Had that recognition been arrived at from the outset, the dispute which resulted in the adjournment application would have been avoided.

Mr Santisi’s initial refusal to withdraw on 28 July, led to the decision to make an adjournment application, in order to approach the Bar Council and the steps taken to pursue that course. The Court was given notice of that application late on 28 July. No notice was given by Mr Santisi of Mr Nicopoulos' proposed motion. The decision to pursue an adjournment, in order that the Bar Association could be approached rested on a view as to what Bar Rule 87(a) and (c) required of Mr Santisi in the circumstances. The Bar Rule provided:
"Briefs which must be refused
87.A barrister must refuse a brief or instructions to appear before a court if:
(a)the barrister has information which is confidential to any other person other than the prospective client, and:
(i)the information may, as a real possibility, be helpful to the prospective client's case; and
(ii)the person entitled to the confidentially has not consented to the barrister using the information as the barrister thinks fit in the case;
...
(c)the barrister has reasonable grounds to believe that the barrister may, as a real possibility, be a witness in the case;"
...
While Mr Santisi took a different view of the Bar Rule to that taken by Mr Steirn and refused to withdraw, in the circumstances, in the event of a rehearing, it was clearly a real possibility that Mr Santisi would be called as a witness. Questions of privilege seemingly have been resolved by the evidence earlier given by Mr Nicopoulos himself in the Local Court and the evidence in these proceedings.
While Mr Steirn did not recollect that a decision to seek an adjournment had been made, Mr Washington’s evidence that the decision was made on 28 July must be accepted. It is consistent with Mr Washington’s advice to the Court on 28 July; with what he put in Court on 29 July; with the orders which had been prepared beforehand; and with the approach taken by the other parties, who consented to the adjournment. It is also consistent with Mr Steirn not himself being present in Court on 29 July. Plainly enough, on 28 July when Mr Santisi was insisting that he would appear and Mr Steirn had decided that it was necessary to approach the Bar Association about the situation, an adjournment of the hearing became necessary, as was Mr Washington’s evidence. Mr Washington met again with Mr Steirn on the morning of 29 July when they discussed briefing senior counsel for the adjourned hearing. At Court, Mr Washington had with him both Mr Steirn and Mr Campbell’s dates.
An adjournment application, in order that the Bar Association might be approached, might of course not have succeeded, particularly if opposed. Spanko’s attitude thus needed to be ascertained and hence Mr Confos was approached by Mr Washington on the afternoon of 28 July. When Mr Santisi received instructions to pursue the severance motion, he also approached Mr Confos. The result was that the next day, Spanko consented both to the adjournment application and to the severance motion.
Mr Washington's discussion with Mr Confos occurred after Mr Santisi initially refused to withdraw and then after consulting a silk, finally accepting that he ought not to appear on the appeal. Mr Santisi’s evidence was that he then hit upon the idea of severing the cross summons brought by Spanko, as a means whereby he could continue to appear. He denied that this was an idea which he had arrived at with the assistance of the senior counsel who he had consulted. This also required that Mr Nicopoulos, both a defendant in the appeal as well as the cross summons, not participate in the appeal. When Mr Santisi and Mr Nicopoulos discussed these ideas, and when Mr Nicopoulos instructed that the motion be pursued, is unclear, but this must have occurred after Mr Santisi had reconsidered his position after taking further advice.
The decision to seek to separate the hearing of the cross summons, was not a matter for Mr Santisi to decide, but for Mr Nicopoulos. They gave no evidence as to how, or when that discussion took place. Logically, it must have been before Mr Washington was advised of the decision. That these developments disrupted Mr Washington’s final preparation of the matter for the next day’s hearing must be accepted, involving as they did various discussions with Mr Bowles, Mr Steirn, Mr Santisi, Mr Confos and the Court, as well as consideration being given to the Bar Rules and an approach to the Bar Association.
Mr Santisi and Mr Washington disagreed as to when it was that the idea was conveyed to Mr Washington. Given the terms of the proposed orders which Mr Washington handed up on 29 July, that he had earlier become aware of Mr Nicopoulos’ proposed motion, is apparent. While the orders encompassed that motion, the position was that Mr Washington was not provided with the motion until he arrived at Court. I took an adjournment in order that instructions on the motion could be obtained, as well as further dates being discussed. It follows that the motion must have been discussed before the orders were prepared. Given what the draft orders provided for, despite Mr Washington’s recollection, it is possible that the motion was discussed on 28 July, as was Mr Santisi’s recollection. It must be accepted that it was discussed before the parties’ legal representatives met at Court on 29 July.
That Mr Washington did not obtain instructions from Mr Steirn on the motion until after the hearing commenced on 29 July is also apparent, not only from their evidence, but also from what the transcript that day revealed.
Mr Nicopoulos’ case was that there was no need for the hearing of the appeal to have been adjourned on 29 July. It could have proceeded at 11.30am, after the severance of the cross summons. I am unable to accept his case, so advanced.
On the evidence it must be accepted that the decision to seek an adjournment was the result of a combination of events for which Mr Nicopoulos and Mr Santisi had responsibility. They included Mr Nicopoulos’ complete inactivity in the proceedings until the hearing was imminent; his briefing Mr Santisi, despite his involvement in the matters which lay at the heart of the litigation; his approach on 22 July to Mr Bowles, who was sceptical as to his intended involvement in the proceedings and asked to be served with a notice of appearance and that the enquiry being pursued in relation to Mr Santisi’s appearance be put in writing; Mr Nicopoulos’ failure to take any steps until 27 July and even then, not serving the notice of appearance or putting anything in writing about Mr Santisi’s appearance; Mr Steirn’s anticipated objection to Mr Santisi’s appearance materialising as expected, when he became aware of it on 28 July; Mr Santisi’s initial refusal to withdraw, which led to Mr Steirn’s decision to approach the Bar Council and to seek an adjournment of the hearing; Mr Santisi’s belated acceptance that there was a basis for Mr Steirn’s objection, after he had taken further advice; and Mr Nicopoulos' later decision to seek to sever the hearing of the cross summons and not to participate in the appeal, so that Mr Santisi would not need to appear on the hearing of the appeal.
It is apparent that Mr Nicopoulos’ decision to seek to sever the hearing of the cross summons and advice of it being provided to Mr Washington, cannot have been made as early as lunchtime on 28 July, as Mr Nicopoulos said was possible. Given Mr Santisi and Mr Washington’s evidence, it cannot have been made until much later in the afternoon, after Mr Santisi had spoken to both Mr Washington and Mr Steirn, had sought further advice and had hit on the idea of the severance application.
Had Mr Nicopoulos not briefed Mr Santisi, in circumstances where there was an obvious difficulty with his appearance, and had an acceptance that he ought not to appear been forthcoming promptly from Mr Santisi, when objection was taken, the adjournment of the hearing on 28 July would not have been sought. I accept Mr Washington’s evidence that the matter had been prepared for hearing and that the adjournment was not sought, in order that senior counsel could be briefed.
Written submissions had been filed and Mr Washington and Mr Steirn met after lunch on 28 July, in order to undertake final preparation for the hearing, when that became diverted by the difficulty which arose in relation to Mr Santisi’s appearance. Unquestionably, if I had declined to adjourn the hearing on 29 July, Mr Washington would have had to proceed, as he accepted in cross examination. In Mr Washington’s view that course would have disadvantaged Mr Steirn, given the disruption caused to his final preparations. The adjournment was thus pressed and not objected to, even when severance of the hearing of the cross summons was sought and agreed to.
Neither Mr Nicopoulos nor Spanko opposed the adjournment of the hearing of the appeal in the circumstances, notwithstanding the observations of Mr Santisi, that the other parties could have proceeded, given the severance of the cross summons. In the circumstances, I take the view that justice requires that Mr Nicopoulos must bear the costs thrown away by both Mr Steirn and Spanko, as the result of the adjournment. While it was submitted that an order could be made against Mr Santisi, it was not one sought by Mr Nicopoulos or Spanko. I am not convinced that in these circumstances, there should be a departure from the usual order that it is the party, rather than the party's legal representative, who must bear the costs order.
Suitors Fund Act 1951
Spanko sought an order in its favour under the Suitors Fund Act (see Burringbar Real Estate Centre Pty Limited v Ryder [2008] NSWSC 891 and R v Hookham (No 2) (1993) 32 NSWLR 345).
In the December 2009 judgement I concluded that the appeal had to be upheld, the plaintiff having established that Acting Magistrate Price had erred in his conclusion that there was no costs agreement reached between Mr Steirn and Spanko and that he had failed to give adequate reasons for his decision. I also concluded that there was a failure to make necessary factual findings on critical matters, over which the parties had joined issue.
I am satisfied that the circumstances are such that Spanko, a defendant ordered to pay the plaintiff’s costs of the appeal, should have an order as to a certificate (see Robinson v Zhang (2005) 158 A Crim R 575; [2005] NSWCA 439 at [38]). The order should be on the basis that it have the certificate, if eligible (see Anderson Stuart v Treleaven [2000] NSWSC 536 at [13]).
Variation to the earlier Order
Spanko also sought a further order to make it clear that the rehearing in the Local Court would encompass its amended third party notice. There was no objection to that course.
Order
For the reasons given, I order that:
1.The order made in the December 2009 judgment be varied to provide:
"For the reasons given, I make the orders sought by the plaintiff namely, that the appeal be upheld, the judgment be set aside and that the matter, including the Amended Third Party Notice, be remitted to the Local Court, for determination according to law."
2.Spanko bear the plaintiff’s costs, other than the costs thrown away as the result of the adjournment of the hearing on 28 July 2009.
3.Mr Nicopoulos bear the costs thrown away by the plaintiff and Spanko as the result of the adjournment of the hearing on 28 July 2009.
4.Spanko is to have a certificate under the Suitor's Fund, if eligible.
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LAST UPDATED:
30 September 2010