Trichardt v Carmelli
[2022] VMC 33
•6 December 2022
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
Case No. N11438481
| ANTON PETRUS TRICHARDT and MONIQUE ELIZABETH HARDINGE | First Plaintiff Second Plaintiff |
| v | |
| MIRKA CARMELLI and MITCH KARAFILI | First Defendant Second Defendant |
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MAGISTRATE: | Magistrate T. W. Greenway |
WHERE HELD: | Melbourne Magistrates’ Court (online) |
DATE OF HEARING: | 23 November 2022 |
DATE OF DECISION: | 6 December 2022 |
CASE MAY BE CITED AS: | Trichardt & Anor v Carmelli & Anor |
MEDIUM NEUTRAL CITATION: | [2022] VMC 33 |
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SUMMARY JUDGMENT – Liability for barristers’ fees – Formation of contract – Alleged contravention of disclosure requirements - Uniform Legal Profession Law ss 174(1)(b), 171, 176 and 178.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr P. Agardy | Charles Fice Lawyers |
| For the Defendant | Mr L. Watts | Kingsford Lawyers |
HIS HONOUR:
Introduction
The plaintiffs (Trichardt and Hardinge) are practicing barristers and members of the Victorian Bar. The first defendant (Carmelli) is the principal solicitor of the legal firm MCK Legal.
The plaintiffs assert that Carmelli retained them to act on behalf of Lifestyle Residences Hobsons Bay Pty Ltd (Lifestyle). The retainer concerned the removal of a caveat (Lifestyle Matter).
In October 2021, the plaintiffs each provided Carmelli with a Costs Agreement and Disclosure Statement.[1] The plaintiffs worked on the Lifestyle Matter until approximately February 2022 and rendered invoices for their work.
[1]Dated 27 and 28 October 2022 respectively.
The plaintiffs now apply for summary judgment against Carmelli for breach of their retainer agreements.[2] The sum claimed is $57,030.83 (Fees).[3]
[2]Summons dated 10 October 2022.
[3]Being $46,260.00 for Trichardt and $10,770.83 for Hardinge.
In addition, the plaintiffs allege that the second defendant (Karafili) is also liable for their Fees. Karafili is a certified public accountant practicing under the name Mitch Karafili & Co. Carmelli and Karafili are domestic partners and share offices at 103 Lygon Street, Brunswick.
The plaintiffs claim that Karafili provided an indemnity and/or guarantee in respect of their fees. The indemnity was contained in an email dated 16 December 2021, where Karafili stated ‘… Anton and Monique, please proceed with the writ. I will take responsibility of paying the fees…’ (16 December Email).
Proceedings were commenced against the defendants on 11 July 2022 and defences were filed on 2 and 3 August 2022 respectively.
On 7 September 2022, the plaintiffs served a notice to admit on the defendants’ solicitors. While Carmelli served a notice of dispute, Karafili did not. Accordingly, the plaintiffs contend that Karafili is deemed to have admitted the contents of the notice to admit.
In those circumstances, the plaintiffs seek judgment[4] against Karafili for the Fees pursuant to r 35.04(1) of the Magistrates’ Court General Civil Procedure Rules 2020 (Rules).[5]
[4]Summons dated 30 September 2022.
[5]Magistrates’ Court General Civil Procedure Rules 2020 (Rules), r 35.04(1).
The plaintiffs’ applications were returnable on 3 November 2022.[6] On 2 November 2022, the defendants filed a summons seeking leave to file a counterclaim out of time. That application was also heard on 3 November 2022. At the hearing, the defendants informed the Court that they also sought to amend their defences.
In addition, the plaintiffs applied for Karafili’s defence to be struck out for a failure to make discovery. This default was subsequently remedied, and the plaintiffs no longer press this application.
Accordingly, orders were made that included:
(1) The defendants file and serve the proposed amended defence, counterclaim and any further affidavit by 7 November 2022;
(2) Any application for leave for the defendants to withdraw any admissions by 7 November 2022;
(3) The plaintiffs file and serve any responding affidavit by 21 November 2022; and
(4) The applications were adjourned to 23 November 2022.
The defendants no longer seek to file an amended counterclaim. Instead, each defendant made an application[7] that:
(a) judgment be entered for them pursuant to r 23.01 of the Rules; or alternatively
(b) leave be granted to file and serve an amended defence.[8]
[7]Each by summons dated 16 November 2022 and supporting affidavits of the same date.
[8] Although not expressly sought in each summons, the application was made in the
supporting affidavits at paragraph 16 as to Carmelli and paragraph 8 for Karafili. The proposed amended defence are exhibits MC-8 and pages 5-9 of MK-2.
The proposed amended defences raise additional issues of non-compliance with the Legal Profession Uniform Law (Uniform Law).[9] By reason of non-compliance, the defendants say the plaintiffs cannot maintain these proceedings until their Fees have been assessed. [10]
[9]Legal Profession Uniform Law Application Act 2014 (Uniform Law), Schedule 1.
[10]Uniform Law, s 178.
Accordingly, there are four extant applications before the Court:
(a) the plaintiffs’ application for summary judgment against Carmelli;
(b) the plaintiffs’ application for judgment on admissions against Karafili;
(c) the defendants’ application to amend their defences; and
(d) the defendants’ application for a stay/dismissal of the plaintiffs’ complaint.
As the amendments raise additional matters, I consider the defendants’ applications to amend should be determined first.
Application to Amend the Defences
Carmelli – nature and importance of the proposed amendments
The substance of Carmelli’s initial defence was that there was no costs agreement or retainer with the plaintiffs.[11] Furthermore, Carmelli denied providing the plaintiffs with instructions on the Lifestyle Matter.
[11]Defence dated 2 August 2022.
Reference was made to an email sent by Carmelli to Trichardt of 11:00 am on 20 October 2022 which stated: “the cost agreement should be between you and Dale Harrison” and a similar email at 11:30 am which stated: “Dear Anton, the cost agreement should be with Dale and not me”.
As to Hardinge’s claim, Carmelli pointed to an email of 27 October 2021 at 2:37 pm where she informed Hardinge that the costs agreement would be forwarded to the client for his consent. Carmelli maintains that no consent was provided.
By the amended defence, Carmelli supplements the denial of any agreement with the plaintiffs.[12] In submissions, counsel for Carmelli also refined this defence to include a tripartite or similar arrangement as found in Petselis v Tatarka[13]. However, no such agreement is pleaded in the amended defence.
[12]Paragraphs 6A, 6B, 6C,7A, 7B, 8A, 9, 9B, 9C.
[13] (2019) 57 VR 375 – an agreement in which a solicitor retains and briefs the barrister,
but the contractual obligation to pay the barrister’s fee is borne solely by the client.
Alternatively, if the Court were to find an agreement between the plaintiffs and Carmelli, the amended defence raises a contravention of s 174(1)(b) of the Uniform Law. That section relevantly provides:
A law practice must, when or as soon as practicable after there is any significant change to anything previously disclosed under this subsection, provide the client with sufficient information disclosing the change, including information about any significant change to the legal costs that will be payable by the client.[14]
[14]Uniform Law, s 174(1)(b).
The substance of the proposed amendments to the defence of Trichardt’s claim are as follows:
9A. Further or in the alternative, if there was a Costs Agreement between herself and Trichardt (Trichardt Costs Agreement), which is denied, Trichardt’s Costs Agreement contained, inter alia, the following terms and conditions:
(i) Fees rendered by Trichardt would be reasonable and proportionate to the work required to be undertaken and completed.
(ii) Trichardt would notify Carmelli as soon as practicable of any significant changes to his estimate of total legal costs.
(iii) Trichardt would provide Carmelli with ongoing disclosure as soon as practicable after there was a significant change to previously provided information.
Particulars
The said terms are to be implied by reason of section 174 of the Legal Profession Uniform Law (Vic).
16A. Further or in the alternative, if she is liable for the fees the subject of Trichardt’s said invoices pursuant to a Costs Agreement with Trichardt, which is denied, in breach of the terms of such Costs Agreement:
(iv) The fees rendered by Trichardt were not reasonable and proportionate to the work required to be undertaken and completed.
(v) Trichardt failed to notify Carmelli as soon as practicable of significant changes to his costs compared with the costs estimate contained in his 27 October 2021 Disclosure
(vi) Trichardt failed to provide Carmelli with ongoing disclosure as soon as practicable after there was a significant change to previously provided information.
by reason of which any liability on her part to pay Trichardt’s fees was discharged.
Particulars to subparagraph (ii)
(a) the fees rendered in Trichardt’s said invoices were fees rendered for reviewing briefed material, advice, preparation and meetings with Mitch Karafili, preparation for an meeting with Mitch Karafili, Mr Burgess and investors, and settling application and affidavits (the Said Work)
(b) Trichardt’s fees for the Said work:
· were 187% above the estimate for the Said Work of $39,200;
· constituted a significant change from the fee estimate;
given by Trichardt in his 27 October 2021 Disclosure.
16B. Further, in rendering his said fees Trichardt failed to comply with his disclosure obligations under the Legal Profession Uniform Law (Victoria) as no notification was given by him of significant changes in his fee estimate.
16C. Further, by reason of the matters referred to in the preceding paragraph, Trichardt’s fees will only become due and payable upon a taxation of the fees rendered by him. [15]
[15]proposed amendments to the defence of Trichardt’s claim.
A similar alternative pleading is set out in relation to Hardinge’s claim:
17A. Further or in the alternative, if Carmelli is liable for the fees the subject of Hardinge’s said invoice pursuant to a Costs Agreement with Hardinge, which is denied, in breach of the terms of such Costs Agreement:
(vii) The fees rendered by Hardinge were not reasonable and proportionate to the work required to be undertaken and completed.
(viii) Hardinge failed to notify Carmelli as soon as practicable of significant changes to her costs compared with the costs estimate contained in her 27 October 2021 Disclosure
(ix) Hardinge failed to provide Carmelli with ongoing disclosure as soon as practicable after there was a significant change to previously provided information.
by reason of which any liability on he part to pay Hardinge’s fees was discharged.
Particulars to subparagraph (ii)
(a) Counsel had not completed settling the application and affidavits.
(b) The fees rendered in Hardinge’s said invoice were fees rendered for discussions with Trichardt, conferences with Karafili (and allegedly Carmelli), reviewing briefed materials, preparing chronologies, research regarding circumstances where a second application for recoupment [sic] removal of caveat may be made, further discussions with Trichardt, further review of cases as to when second application for removal of caveat may be made, email to Karafili re-outstanding documents, reviewing document in respect of application for leave to file amended statement of claim and consider impact for application for removal of caveat, preparing list of required actions, review of further materials provided by client, reviewing submissions from first caveat removal application (Hardinge’s Said Work), and as such only constituted part of the work required to complete the first item in Hardinge’s fee estimate of $10,000 for drafting and settling application and affidavits.
(c) Hardinge’s fees for Hardinge’s Said Work:
· Were above the estimate for the Said Work by reason that the drafting and settling of the application and affidaivts was not complete and required further work;
· Constituted a significant change from Hardinge’s fee estimate
17B. Further, in rendering the said fees Hardinge failed to comply with her disclosure obligations under the Legal Profession Uniform Law (Victoria) as no notification was given by her of significant changes in her fee estimate.
17C. Further, by reason of the matters referred to in the preceding paragraph, Hardinge’s fees will only become due and payable upon a taxation of the fees rendered by her. [16]
[16]alternative pleading is set out in relation to Hardinge’s claim.
The plaintiffs oppose the amendments. They submit that the amendments are not genuine and made with the intention of frustrating and delaying the proceedings. In particular, the plaintiffs submit that the defendants have not provided an explanation for their:
(a) change of position, as set out in the proposed amended defences; and
(b) delay in making the amendment application.
The plaintiffs maintain the amendments are not in the interests of justice and would lessen public confidence in the judicial system.[17]
[17] Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd [2022] VSC 383, 25; Teico
Investments v WA Blue Gum Ltd [2022] VSC 379, 25.
Determination
The principles relating to the granting or refusal of leave to amend pleadings are well established. They arise from:
(a) The Magistrates Court Civil Procedure Rules 2018, particularly r 36.01(1)(a);
(b) The provisions of the Civil Procedure Act 2010 (CPA), particularly s 9(1) and the overarching obligations; and
(c) Statements of the High Court in Aon Risk Services Australia Ltd v Australian National University. [18]
[18][2009] HCA 27.
The principles were summarised by Elliott J in Cargill Australia Ltd v Viterra Malt Pty Ltd [No 18]:
The principles relating to the granting or refusal of leave to amend pleadings are well established. Rule 36.01(1)(a) of the Supreme Court (General Civil Procedure) Rules2015 (Vic) empowers the court to grant leave to any party to amend any document for the purpose of ‘determining the real question in controversy between the parties to any proceeding’. Leave may be granted at any stage of the proceeding.
In deciding whether to grant leave to a party to amend its pleadings, the court must consider whether the proposed amendments facilitate the identification of the real issues in dispute and the just resolution of the proceeding.
The power to grant leave to a party to amend its pleading to raise an arguable issue is a discretionary power. There is no right or entitlement for a party to amend its pleading subject to the payment of costs referable to the amendment. The nature and importance of the proposed amendments must be considered. This factor must be weighed against case management considerations such as cost, delay and the potential for unfair prejudice to other parties to the proceeding, the court and other litigants that might arise if the proposed amendments are allowed.
Further, in exercising the power to grant leave, the court may give any direction or impose any term or condition it thinks fit. [19]
[19]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 18], (Elliott J).
Furthermore, as recently stated by the Court of Appeal in Baptcare Ltd v Ingpen:
[While] time, costs and limited judicial resources are relevant considerations in the determination of whether to allow certain interlocutory process … ‘the primary question still remains: what do the interests of justice dictate?’; Aon reminds courts that ‘the prism through which these interests are viewed is wider than just that of the moving party’…
[I]t is important that … trial judges engage with the [CPA’s] provisions in balancing the competing interests of the parties and those of the administration of justice more generally. [20]
[20][2022] VSCA 250, 22 and 38 – 39, citing from Northern Health, 33.
It is also well established that an amendment will not be allowed if it is “so obviously futile that it be struck out if it appeared in an original pleading”. [21]
[21]Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283, 25.
Further, a Court will not engage in an examination of the merits of the case foreshadowed by the proposed amendment, but where that amendment introduces patently hopeless issues for determination then its inclusion will be futile and that will be a significant, and probable decisive, matter in the exercise of the Court’s discretion.[22]
[22]Ibid citing Matthews v SPI Electricity Pty Ltd (Ruling No 6) [2012] VSC 70, 33.
A real question in controversy between the plaintiffs and Carmelli relates to the existence and terms of the retainer agreement. I accept the amended defences at paragraphs 5, 5A, 5B, 6, 6A, 6B, 6C, 7, 7A, 7B, 8, 8A, 9, 9B, 9C, 13, 18, 20 (Trichardt) and 10, 11, 11A, 11B, 12, 14, 19, 20 (Hardinge) plead additional material facts to support the original ‘no agreement’ defence and is therefore a real question in the proceeding.[23]
[23]Amended defences dated 14 November 2022.
I will grant leave to amend in respect of those paragraphs.
Paragraph 9D purports to raise an estoppel pleading but does not plead the requisite material facts, namely, detrimental reliance and unconscionability. Further, no evidence is led in support of such a defence. Accordingly, leave is not granted for paragraph 9D.
Paragraph 15 relates to the 16 December 2021 Email and is relevant. On that basis, the amendment will be allowed.
In the alternative pleading, paragraphs 9A, 16 16A, 16B and 16C, raise non-compliance with s 174(1)(b) of the Uniform Law. I also accept these paragraphs raise a real controversy as to whether:
(a) there was ‘any significant change to anything previously disclosed’ in the plaintiffs’ costs agreements; and
(b) whether information disclosing the significant change was provided to Carmelli pursuant to ss 174(1)(b) and 175(2) of the Uniform Law.
I will therefore allow those amendments.
Whenever there is a significant change to total legal costs that will be payable by a client, this must be disclosed to the client in writing, with information about rights and sufficient information to make an informed decision about the future conduct of the matter.[24]
[24]Lissenden v Dellios [2021] VSC 520, 53
The basis of the real controversy is set out further below in relation to the plaintiffs’ summary judgment application against Carmelli.
Paragraph 12A pleads an implied term that fees rendered by Hardinge under the costs agreement would be reasonable proportionate to the work required to be undertaken and completed. [25] In my view, whether such a term is implied is a question for full argument at trial. Leave will be granted for paragraph 12A.
[25]Implied by Civil Procedure Act 2010, s 24.
As to paragraphs 17A, 17B and 17C, I do not consider Carmelli’s alternative defence based on s 174(1)(b) is arguable. In relation to Hardinge’s claim, her costs disclosure estimate was relevantly 4 days (or 40 hours) and $10,000 to ‘draft and settle application and affidavits’. Her invoice claims $10,770.83. Particulars of the work performed include:
(a) Conferences with Trichardt, Karafili and Carmelli;
(b) Reviewing documents and relevant authorities;
(c) Drafting affidavit of D burgess and written submissions; and
(d) Preparation of minutes of conferences.
Carmelli submits that Hardinge’s work of settling the application and affidavits was incomplete and the amount charged exceeded the estimate. The combination of those factors constituted a ‘significant change’ within the meaning of s 174(1)(b).
However, Hardinge’s estimate also included an estimate for drafting written submissions (3 days or $7,500). This increases Hardinge’s estimate to $17,500. In those circumstances, I do not consider an increase of $770 constitutes a significant change in ‘anything previously disclosed’.
Further, Hardinge’s involvement in the matter ceased after 31 January 2022.[26] No amount is claimed for work after this date. The fact that the matter continued after that date, in my view, does not require Hardinge to provide a further update on account of a ‘significant change’. Her involvement had ceased. The work claimed on her invoice is consistent with the estimate she had provided.
[26]Affidavit of Hardinge sworn 16 November 2022, 13.
Accordingly, leave to amend in respect of 17A(ii) and (iii) and 17B to 17C will be refused.
As to case management considerations, there is no prejudice to the plaintiffs if the above amendments are permitted. The matter has not yet been set down for trial. Whilst the state of the pleadings has slowed the course of the litigation to some degree, I do not consider the delay militate against the amendments. The proceeding was commenced approximately four months ago, and discovery and mediation have been completed.
Accordingly, I will grant leave to Carmelli to file the amended defence in accordance with these reasons.
Karafili – nature and importance of the proposed amendments
The proposed amendments allege that, if the 16 December Email was enforceable, Karafili became an associated third party payer within the meaning of the Uniform Law. The amendments are as follows:
[15]. Karafili denies that he gave any enforceable guarantee or indemnity to the plaintiffs and further to his denial Karafili refers to and relies on the matters pleaded in paragraphs 15A-15E below.
15A. Further or in the alternative, if Karafili gave an enforceable indemnity to the plaintiffs, which is denied:
(a) Karafili became an associated third party payer for the purposes of section 176 of the Legal Profession Uniform Law (‘the Uniform Law’).
(b) Upon receiving Karafili’s email sent on 16 December 2021 at 8:59 AM, the plaintiffs and each of them were required by section 176 of the Uniform Law to provide Karafili with a disclosure in writing under sections 174 or 175 of the Uniform Law of matters relevant to Karafili which related to the costs to be payable by Karafili in respect of legal services provided to Lifestyle.
15B. Neither of the plaintiffs complied with their obligations under section 176 of the Uniform Law to provide Karafili with disclosure of their costs.
15C. By reason of the matters pleaded in paragraphs 15A & 15B, pursuant to section 178 of the Uniform Law, the plaintiffs are barred from commencing proceedings for the recovery of their fees until the plaintiffs’ fees have been assessed or any costs dispute has been determined by the Legal Services Commission.
15D. There has been no assessment of the plaintiffs’ costs nor has there been the determination of a costs dispute between the plaintiffs and Karafili by the Legal Services Commissioner.
15E. By reason [sic] the matters pleaded in paragraphs 15A-15D above, Karafili is entitled to an order that the proceedings herein be dismissed with costs.
Relevant provisions of the Uniform Law include:
171 Third party payers
(1) For the purposes of this Law—
a. a person is a “third party payer”, in relation to a client of a law practice, if the person is not the client and –
i. is under a legal obligation to pay all or any part of the legal costs for legal services provided to the client; or
ii. has already paid all or a part of those legal costs under such an obligation; and
b. a third party payer is an associated third party payer if the legal obligation referred to in paragraph (a) is owed to the law practice, whether or not it is also owed to the client or another person; and
c. a third party payer is a non-associated third party payer if the legal obligation referred to in paragraph (a) is owed to the client or another person but not the law practice.
(2) The legal obligation referred to in subsection (1) can arise by or under contract or legislation or otherwise.
(3) A law practice that retains another law practice on behalf of a client is not on that account a third party payer in relation to that client.
(4) The Uniform Rules may provide that particular references in this Law to a client include references to an associated third party payer.
175 Disclosure obligations if another law practice is to be retained
(1) If a law practice (the first law practice ) intends to retain another law practice (the second law practice ) on behalf of a client, the first law practice must disclose to the client the details specified in section 174(1) in relation to the second law practice, in addition to any information required to be disclosed to the client under section 174.
(2) If a law practice (the first law practice ) retains or intends to retain another law practice (the second law practice ) on behalf of a client, the second law practice is not required to make a disclosure to the client under section 174, but must disclose to the first law practice the information necessary for the first law practice to comply with subsection (1)
176 Disclosure obligations of law practice regarding associated third party payers
(1) If a law practice is required to make a disclosure to a client of the law practice under section 174 or 175, the law practice must, in accordance with subsection (2), also make the same disclosure to any associated third party payer for the client, but only to the extent that the details or matters disclosed are relevant to the associated third party payer and relate to costs that are payable by the associated third party payer in respect of legal services provided to the client.
(2) A disclosure under subsection (1) must be made in writing—
a. at the time the disclosure to the client is required; or
b. if the law practice only afterwards becomes aware of the legal obligation of the associated third party payer to pay legal costs of the client — as soon as practicable after the practice became aware of the obligation. [27]
[27]Uniform Law.
Submissions
The plaintiffs oppose the amendments for reasons similar to those advanced against Carmelli’s application.
In addition, the plaintiffs submit that the proposed amendments are futile for the following reasons:
(a) First, Karafili is not an associated third party payer;
(b) Alternatively, if Karafili was an associated third party payer:
(x) for Carmelli (which is denied) then all information and documents provided by the plaintiffs to Carmelli were also provided to Karafili; or
(xi)for Lifestyle, Carmelli’s client (which is denied) there would be an obligation by Carmelli, not the plaintiffs, to make disclosure to Karafili as well as to her client, Lifestyle.
The plaintiffs’ position may be summarised as follows:
When I provided my first costs agreement and disclosure statement to Ms Carmelli, she emailed me, copying in Mr Karafili and Mr Harrison (see paragraph 44 of the 15 Nov 22 Trichardt Affidavit), to say that the agreement had to be with Mr Harrison. I had a telephone conversation with her, as set out in paragraph 44 of the 15 Nov 22 Trichardt Affidavit and then emailed her as set out in paragraph 45 of the 15 Nov 22 Trichardt Affidavit. By reason of Mr Karafili being copied in on Ms Carmelli’s email and my discussion with him about the costs agreement being with Ms Carmelli, Mr Karafili was aware of same.
Ms Carmelli and Mr Karafili are domestic partners, share offices at 103 Lygon Street, East Brunswick, acted in the Lifestyle matter in accordance with the Arrangement set out in paragraph 36 of the 15Nov22 Trichardt Affidavit, and, as is apparent from emails exhibit in APT-1, worked together to provide documents to Ms Hardinge and me in the Lifestyle matter, even documents pertaining to the Main Lifestyle Proceeding. Pursuant to the Arrangement set out in paragraph 36 of my 15Nov22 Affidavit, Mr Karafili was the main point of contact in the Lifestyle matter.
At the time, neither Mr Karafili nor Ms Carmelli informed me that Mr Karafili was under a legal obligation to pay all or part of Lifestyle’s legal costs in the Lifestyle matter. As a matter of fact, neither one of them said to me at any stage that Mr Karafili was under a legal obligation to pay Lifestyle’s legal costs in the Lifestyle matter. In any event, my understanding is that Lifestyle was Ms Carmelli’s client, and if Mr Karafili was under a legal obligation to pay Lifestyle’s legal costs in the Lifestyle matter, it was an obligation to Ms Carmelli, Lifestyle being her client, and accordingly, Ms Carmelli, and not me, was under a disclosure obligation towards Mr Karafili. Or, to put it in the wording of the Uniform Law, if Mr Karafili were an ‘associated third party payer’ for Lifestyle, Ms Carmelli’s client, then Ms Carmelli had a disclosure obligation in respect of details or matters that were and are relevant to Mr Karafili and relate to costs that were and are payable by Mr Karafili in respect of legal services provided to Lifestyle. In the circumstances, I had no obligation to provide Mr Karafili with a costs agreement and disclosure statement. My understanding is and was, that if Ms Carmelli was aware of became aware of Mr Karafili’s legal obligation to pay legal costs of Lifestyle, her client, then Ms Carmelli had to comply with her disclosure obligations to Mr Karafili under the Uniform Law.
Mr Karafili voluntarily and independently, and being aware of my costs agreements with Ms Carmelli and that she was the solicitor and Lifestyle her client, provided an indemnity to me (and Ms Hardinge) on 16 December 2021 as set out in paragraph 77 of the 15Nov22 Trichardt Affidavit where he said in his email (page 501 of exhibit APT-1 to the 15Nov22 Trichardt Affidavit) that Ms Hardinge and I should proceed with the second application and that he would take responsibility for our fees (Indemnity). Mr Karafili did not say to us, and there is no indication, that the Indemnity was as a result of any legal obligation he had to pay Lifestyle’s [sic] in the Lifestyle matter or because he had payment obligation to Ms Carmelli. Mr Karafili’s Indemnity to us is an independent obligation to keep Ms Hardinge and me harmless against the non-payment of our fees by Ms Carmelli. [28]
[28]Affidavit of Trichardt sworn 21 November 2022, 9(b) - 9(e).
The references to the earlier affidavit included the following:
After the First Lifestyle Meeting, I emailed Ms Carmelli the costs agreements and disclosure statements as stated in the Carmelli Affidavit, she emailed me to say that the costs agreement had to be with Mr Harrison. In this regard, I refer to Ms Carmelli’s emails dated 20 October 2021, the first of which was copied to Mr Karafili and Mr Harrison (see pages 339 and 340). I had a telephone conversation with Ms Carmelli and said to her that the costs agreement had to be with her because it was not a direct brief matter and that my agreement had to be with her as instructing solicitor, that Mr Harrison had not been a party in the previous application for the removal of the Caveat, and would not be party in the event of a second application.
Subsequently, I also emailed Ms Carmelli at 11:36am pointing out that Mr Karafili had said at the First Meeting that she would be the solicitor in the Lifestyle matter. [29]
[29]Affidavit of Trichardt sworn 15 November 2022, 44 - 45.
The 20 October 2021 email from Trichardt to Carmelli provides:
Hi
Mitch said yesterday that you will be the solicitor in the matter. The matter is likely to be litigious and thus it is not a direct access matter. So the costs agreement has to be with your firm. [30]
[30]Ibid, Exhibit APT-1, 347.
Hardinge broadly supports Trichardt’s summary set out in the previous two paragraphs.[31]
[31]Affidavit of Hardinge affirmed 21 November 2022, 10.
Furthermore, the plaintiffs emphasise that Karafili has not applied for leave to withdraw the admissions deemed by r 35.03(2) of the Rules yet is seeking leave to amend his defence.
The plaintiffs submit that a party should not be permitted to withdraw an admission without good cause, particularly where the truth of the relevant fact is not the subject of a genuine dispute.[32] These principles apply even to deemed admissions.[33]
[32]Gregorich v Khouri [2020] VSC 5, 10.
[33] Permanent Trustee Company Ltd v Gulf Import and Export Company [2006] VSC 110,
10; Chan v Valmorbida (No 3) [2020] VSC 633, 3.
Accordingly, the Court must examine the deemed admissions to consider whether there is a genuine dispute.
The Notice to Admit Facts sets out the following items concerning Karafili:
10. On 19 October 2021, the First Defendant attended a meeting with the Second Defendant and the Plaintiffs in the Lifestyle Matter (First Meeting) at the First Plaintiff’s then chambers at 1424, Level 14, Owen Dixon Chambers West, 525 Lonsdale St, Melbourne (First Plaintiff’s Chambers)
11. At the First Meeting, it was agreed between the Defendants and the Plaintiffs that the arrangement in respect of the conduct of the Lifestyle Matter would be that:
a. it would be up to the First Defendant whether she would be attending meetings with the Plaintiffs in the Lifestyle Matter as was the case in the matter of Scott North and AMP; and
b. the Second Defendant would attend meetings with the Plaintiffs, have telephone discussions with the Plaintiffs, and give instructions and provide documents and information to the Plaintiffs, and generally attend to matters in the conduct of the Lifestyle Matter (Arrangement).
12. The First Defendant attended a further meeting with the Plaintiffs and the Second Defendant on 26 October 2021 at the First Plaintiff’s Chambers.
13. On 1 November 2021 the First Defendant attended a meeting with the Plaintiffs, the Second Defendant, Mr Dale Harrison and Mr David Burgess, both of Lifestyle, at the First Plaintiff’s Chambers.
17. The First Plaintiff performed the work as set out in:
a. Invoice INVAPT616 dated 21 January 2022 (First Plaintiff’s First Invoice) provided by Young’s List, the First Plaintiff’s Barristers’ Clerks; and
b. Invoice INVAPT621 dated 4 March 2022 (First Plaintiff’s Second Invoice) provided by Young’s List.
18. The Second Plaintiff performed the work as set out in invoice INVMFH46 dated 9 March 2022 provided by Young’s List, the Second Plaintiff’s Barristers’ Clerks (Second Plaintiff’s Invoice).
19. On 16 December 2021, the Second Defendant in writing undertook the responsibility of paying the Plaintiff’s fees.
20. The First Defendant and/or Second Defendant –
a. made payments in respect of the First Plaintiff’s First Invoice but an amount of $24,040 plus interest remains outstanding, and is due and payable; and
b. made no payment in respect of the First Plaintiff’s Second Invoice and an amount of $22,220 plus interest remains outstanding and is due and payable.
21. The First Defendant and/or the Second Defendant have not made any payment in respect of the Second Plaintiff’s Invoice, and an amount of $10,770.83 plus interest remains outstanding and is due and payable.
22. The Second Defendant is not and never has been a legal practitioner admitted in Victoria.
23. The Second Defendant charged fees for his work in the Lifestyle matter. [34]
Determination
[34]Notice to Admit dated 7 September 2022.
In my view, the real controversy between Karafili and the plaintiffs relates to whether:
(a) Karafili made a binding promise to pay for the plaintiffs’ fees on behalf of:
(xii) Lifestyle;
(xiii) Carmelli;
(xiv) or alternatively, indemnified the plaintiffs for any loss.
(b) Karafili is a third party payer under s 171 of the Uniform Law;
(c) the plaintiffs or Carmelli were required to provide disclosure under s 176 of the Uniform Law; and
(d) Karafili has received the appropriate written costs disclosure under s 176 of the Uniform Law.
I do not accept that the issues raised in Karafili’s amendments are futile or patently hopeless.
First, the characterisation of the 16 December Email is disputed. Even on the plaintiffs’ submissions and evidence, there are multiple interpretations posited.[35]
[35]Plaintiff’s submissions dated 22 November 2022, 45(g) and (h); Affidavit of Trichardt of 21 November 2022, 9(b) - (f).
Accordingly, there is a dispute as to whether Karafili is an associated third party payer within the meaning of ss 171 and 176 of the Uniform Law.
Secondly, on the present state of the evidence and submissions, I consider there is a live issue as to whether:
(a) the plaintiffs or Carmelli were required to provide disclosure under s 176; and
(b) Karafili has received the appropriate written costs disclosure under s 176 of the Uniform Law.
As to the disclosure obligation, that involves the construction of ss 171, 174, 175 and 176 of the Uniform Law. Karafili’s position is that the plaintiffs were obliged to provide compliant costs disclosure to him as a third party payer.
Disclosure under s 176 extends to disclosure under either s 174 (first law practice to a client) or s 175 (being a second law practice to the first law practice).[36] If such disclosure is required, the law practice is also required to make ‘the same disclosure to any associated third party payer for the client’.
[36]Uniform law.
Such disclosure must be in writing as soon as practicable after the law practice becomes aware of the legal obligation of the associated third party payer to pay legal costs of the client.
On the facts of this proceeding, the relevant date was 16 December 2021. It is therefore arguable that s 176 requires a barrister (second law practice) to make the same disclosure under s 175 to an associated third party payer. [37]
[37]Utility Services Corporation Ltd v SPI Electricity Pty Ltd (2012) 35 VR 628, 7 – 8 (Beach AJA).
Thirdly, I consider there is a real controversy as to whether the required costs disclosure was in fact provided. Trichardt relies upon the 20 October 2021 Carmelli email, discussions with Karafili concerning the updated costs agreement, and shared knowledge between Carmelli and Karafili obtained whilst working of the Lifestyle Matter.
From the face of 20 October 2021 email, it is apparent that no costs agreement or disclosure statement was attached. This may be contrasted with Trichardt’s email of 20 October 2021 at 11:21am which includes the attachment “20211020_101838.pdf”.
On 27 October 2021, Hardinge sent her costs agreement and disclosure statement to Carmelli. There is no suggestion that she provided written disclosure to Karafili.
As to oral conversations about costs disclosure, this is not sufficient to satisfy the disclosure requirements under s 176, which must be in writing.[38] Similarly, whilst there may be a degree of common knowledge shared between Carmelli and Karafili, that is a matter which requires further examination at trial.
[38]Johnston v Dimos Lawyers [2019] VSC 462, 19 - 20.
Nor, in my view, do the admissions impede Karafili’s proposed amendments. [39] Karafili does not deny sending the 16 December Email. Rather, paragraph 15 of the amended defence denies any ‘enforceable guarantee or indemnity to the plaintiffs’. That characterisation of the 16 December Email is a matter of both fact and law.
[39]Both deemed and admitted in Karafili’s pleading.
Furthermore, Karafili admits his firm made payments to Trichardt in the sum of $24,040.[40] At paragraphs 15A to 15E, Karafili alleges non-compliance with s 176 of the Uniform Law. Such a pleading is not inconsistent with a liability to pay the Fees.[41] In Burrows v Macpherson and Kelley Lawyers (Sydney) Pty Ltd, Justice Leeming described the operation of s 178 of the Uniform law as follows:
The evidence established work done… That gives rise to either a contractual or quasi-contractual liability on the part of the client. Of course, that entitlement may be subject to statute, and if there were non-compliance with the costs disclosure obligations in ss 174-177 of the Uniform Law, then s 178 provided that the client was not required to pay the costs, and the law practice was forbidden to commence or maintain proceedings to recover the costs, until those costs had first been assessed. [42]
[40]Amended defence dated 14 November 2022, 18.
[41]Karafili denies this liability.
[42][2021] NSWCA 148, 69 (Leeming JA).
For the foregoing reasons, I will give leave to Karafili to file the amended defence.
Plaintiffs’ application for summary judgment
The plaintiffs submit that judgment should be entered against Carmelli. The relevant legal principles are not in dispute.[43]
[43]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 35.
The test for summary judgment is whether the respondent has a ‘real’ as opposed to ‘fanciful’ chance of success. There may be cases in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success.
At the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried.
In addition, s 64 of the Civil Procedure Act provides:
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.[44]
[44]Civil Procedure Act (2010), s 64.
The plaintiffs’ submissions were as follows:
(a) Carmelli alleged that she did not provide instructions, attend any meetings or had no knowledge of discussions between the plaintiffs and Karafili were untrue;
(b) Carmelli attended meetings on at least three occasions, namely 19 October 2021, 26 October 2021 and 1 November 2021;[45]
[45]Hardinge Affidaivt, 9. See also Trichardt 15 November affidavit, 33, 49, and 61.
(c) Carmelli sent documents to the plaintiffs on several occasions, and vice-versa without demur;[46]
[46]Trichardt affidavit dated 15 November 2022, 57, 64, 66, 67, 69, 102, 104, 105, 114, 115, 120 - 128.
(d) Trichardt explained to Carmelli that as the matter was likely to be litigious his fee agreement would have to be her with her firm;[47]
[47]Ibid, 44 and 45; APT-1, exhibit 347.
(e) The draft court documents relating to the proposed application to remove a caveat show MCK Legal as the solicitor on the record;[48]
[48]Ibid, 102 and 104; APT-1, 588, 633 and 660.
(f) As to Carmelli’s denial of a binding costs agreement:
(xv) the plaintiffs’ costs agreements provided for them to be binding even though not signed by Carmelli if she continued to give instructions;[49]
[49]APT-1, 8 (Costs agreement).
(xvi) in the only other matter in which the plaintiffs were instructed by Carmelli, she did not sign and return the plaintiffs’ costs agreement, and no objections were raised by her;
(xvii) in 2012, Carmelli had herself sued a client for fees in the Victorian Civil and Administrative Tribunal. The Senior Member held in her favour despite the failure of the client to sing the costs agreement.
Carmelli deposes that she did not take instructions from Lifestyle. She admits sending documents to the plaintiffs but says they were in relation to two Supreme Court proceedings involving Lifestyle and were sent at Karafili’s request.
As to the Trichardt costs agreement, Carmelli relies upon the following:
(a) By email sent by Carmelli to Trichardt on 20 October 2021 at 11:30 am, Carmelli informed Trichardt that any Costs Agreement for work in the matter should not be with her but with Dale Harrison;
(b) Carmelli did not write to Trichardt indicating her acceptance of the Agreement;
(c) Carmelli did not return a signed copy of the document proffered by Trichardt;
(d) Subsequent to receiving the said document, Carmelli gave no instructions to Trichardt in the matter;
(e) After the 20 October 2021 email, Carmelli gave no instructions to Trichardt; and
(f) Trichardt’s invoices dated 21 January 2022 and 4 March 2022 were addressed to Karafili.
As to Hardinge’s costs agreement, Carmelli relies upon the following:
(a) by email sent to Hardinge on 27 October 2021, Carmelli informed Hardinge that she would be forwarding Hardinge’s Disclosure & Costs Agreement to the client for consent; [50]
[50]Carmelli affidavit sworn 2 November 2022, Exhibit MC-7.
(b) Carmelli thereafter did not inform Hardinge of the client’s consent to the Costs Agreement;
(c) Carmelli did not write to Hardinge indicating her acceptance of the Agreement;
(d) Carmelli did not return the signed copy of the document proffered by Hardinge; and
(e) Subsequent to receiving the said document, Carmelli gave no instructions to Hardinge in the matter.
There is plainly a dispute as to the whether Carmelli is bound by the plaintiffs’ costs agreement despite not signing the document. It is well settled that a party may accept a costs agreement “by continuing to provide instructions in the matter”.[51] Acceptance may be inferred from conduct.[52]
[51]Trichardt’s costs agreement, cl 10; Hardinge’s costs agreement, cl 7.
[52]Brogden v Metropolitan Railway Co (1877) 2 App Cas 666; Empirnall Holdings Pty Ltd v Machon Paull Partners (1988) 14 NSWLR 523, 528 - 531.
For conduct to amount to an acceptance of an offer, the character and circumstances of the conduct must indicate unambiguously that the parties intended to contract and that “no explanation can be given of it unless it refers to the contract in question”.[53]
[53]Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44, 5 - 6 (Macfarlan JA).
I do not consider Carmelli’s defence has no reasonable prospect of success. As set out above, there is conflicting evidence as to whether Carmelli’s conduct constituted acceptance of the costs agreements. Upon receipt of both agreements, Carmelli wrote back indicating something other than unequivocal consent. Then, there is a further dispute as whether Carmelli continued to provide instructions to the plaintiffs and how her conduct should be characterised.
In my view, determining whether Carmelli’s conduct amounts to an acceptance will also require consideration of the totality of the parties’ conduct from 20 October 2021 onwards. Accordingly, the dispute is of such a nature that only a full hearing on the merits is appropriate.[54] Such a conclusion applies equally to Trichardt and Hardinge’s claims.
[54]Civil Procedure Act 2010, s 64(1)(b).
Further, I do not consider that Carmelli’s s 174(1)(b) defence to the Trichardt claim has no reasonable prospect of success. As to the obligation to provide updated cost estimates:
The Uniform Law requires an initial estimate (that is, of total future costs) as soon as practicable after instructions are initially given and an update of significant change to that initial estimate or any updated estimate.
The Uniform Law requires the initial estimate and updated estimates to be given in writing… The Uniform Law requires updated estimates of total legal costs in writing as soon as practicable after there is significant change to information previously disclosed, that is, estimates of total future costs.[55]
[55]Bennett v Farrar Gesini Dunn Pty Ltd [2019] VSC 744, 44 - 45.
The Trichardt costs disclosure provided an estimate of $39,200 for:
(a) a review of the brief;
(b) advice;
(c) preparation for and meetings with Karafili and the client; and
(d) and settling application and affidavits.
The balance of the costs disclosure in the sum of $36,000 was in relation to:
(a) settling written submissions in lifting of caveat application and also proposed amended statement of claim application;
(b) review of respondent’s affidavits;
(c) settling reply affidavits;
(d) preparation of both applications; and
(e) appearance to argue applications.
Trichardt raised two invoices for a total of $73,260. The particulars of the invoices approximated to the stages identified at paragraph 78(a) to (d) above. As it happened, no application to remove the caveat was commenced and the work on the matter ceased in or around late February 2021.
On 3 November 2021, Trichardt prepared a memorandum requesting further information and/or documents.[56] An updated memorandum was sent by Trichardt on 4 November 2021. At 2:31 pm, Karafili responded with ‘we are working on it now and hopefully you will get late today or early tomorrow’.[57]
[56]ATP-1, 389.
[57]ATP-1, 416.
On 10 November 2021, Hardinge wrote an email to Karafili and Carmelli, copied to Trichardt, entitled “Lifestyle- further materials and information needed”. The email contained approximately 20 bullet points of requested further information. [58]
[58]ATP-1, 429-30.
The requested documents were not immediately forthcoming.
On 18, 25 and 30 November 2021, Trichardt wrote an email to Karafili following up on the collection of information/documents to settle the application to lift the caveat.[59]
[59]ATP-1, 438, 464 and 500.
On 16 December 2021, Karafili instructed the plaintiffs to proceed with drafting the caveat removal application.
On 21 December 2021, Karafili wrote to Trichardt and Hardinge advising that ‘we’ve collated all the information you have requested and it’s ready to be onforwarded to you’.[60]
[60]ATP-1, 513.
On 12 January 2022, Karafili wrote to Trichardt advising that he had spoken with Dale Harrison and David Burgess, who both agreed to proceed in making the caveat removal application. [61]
[61]ATP-1, 517.
On the same day, Hardine wrote to Karafili and forwarded the request for further materials/information dated 10 November 2021. On 13 January 2022, ‘Amritaa from Mitch Karafili & Co’ wrote an email to Hardinge and Trichardt enclosing some of the documents requested. [62]
[62]ATP-1, 521.
On 17 January 2022, Trichardt emailed Karafili and Hardinge advising that “[Hardinge] and I will prepare the application (including the affidavit and submissions)”.
On 21 January 2021, Trichardt, by his clerk, sent the first invoice to Karafili. Karafili responded “by the time we end in court it will cost over $100k”. Trichardt responded “Ok, what do you propose?”.
In late January 2021, the email correspondence records that Karafili and Lifestyle were re-evaluating their position and ‘considering all options’. [63] Some confusion then arose as to whether Lifestyle’s instructions had changed. By email dated 27 January 2022, Trichard wrote to Karafili and Hardinge:
Two things – we need to urgently meet to discuss the matter and the apparent change in instructions and also please just provide us with the information and documents requested, surely that cannot be too difficult… Neither Monique not [sic] I have seen the requested documents…[64]
[63]ATP-1, 550 (email dated 27 January 2022).
[64]ATP-1, 546.
On 31 January 2022, Hardinge circulated minutes of a meeting held that day between herself, Trichardt, Karafili and Amritaa Singh.
On 8 February 2022, documents were forwarded to Trichardt who commenced reviewing them. Trichardt requested further information/documents by email and schedule dated 11 February 2022.
On 14 February 2022, Trichardt forwarded a draft affidavit to Karafili and a draft summons on 15 February 2022.[65]
[65]ATP-1, 609.
A further conference between Karafili, Trichardt and Dale Harrison occurred on 17 February 2022 which resulted in a note setting out Trichardt’s understanding of the matter.[66]
[66]ATP-1, 621.
On 22 February 2022, Trichardt sent a further draft of affidavit of David Burgess to Karafili and Carmelli.[67]
[67]ATP-1, 632
From the brief outline set out above, it is apparent that settling the application and supporting affidavit took far longer than was anticipated. The costs associated with completing stages 78(a) to (d) were ultimately more than the estimate provided. In those circumstances, it is arguable that these matters constitute a ‘significant change’ within the meaning of s 174(1)(b). Ultimately, that is matter to be heard at trial.
Plaintiff’s application for judgment on admissions
Rule 35.04 provides as follows:
Judgment on admissions
(1) Where a party makes admissions of fact in a proceeding, whether by that party’s pleading or otherwise, the Court may, on the application of any other party, give the judgment or make the order to which the applicant is entitled on those admissions.
(2) The Court may exercise its powers under paragraph (1) without waiting for the determination of any other question in the proceeding.[68]
[68]Rules, r 35.04.
In Moon v Mun, Barrett JA emphasised two key points in relation to the power under r 35.04. First, the admissions must be ‘clear and unambiguous’, and second, that the power is discretionary. His Honour continued:
The power to award judgment on admissions on the pleadings is properly exercisable only where the court can see that a clear and unanswerable case is advanced on the pleadings, with the position so decisively depicted and the correct outcome so unambiguously obvious that there is simply no need for any issue to go to trial. The evaluative question relevant to exercise of the discretion is whether it is just to award judgment without regard to the merits of the parties’ contentions. [69]
[69][2013] NSWCA 217 at [40]; cited with approval by Connock J in ACT International Investment Pty Ltd v Li [2019] VSC 759 at [24].
As set out above, leave will be granted to Karafili to amend his defence to allege a contravention of the Uniform Law. In those circumstances, I consider Karafili’s amended defence raises an arguable issue that should proceed to trial.
I will therefore dismiss the plaintiffs’ summons dated 30 September 2022.
Defendants’ application to stay the proceedings.
Rules 23.01 of the Rules provides as follows:
(1) If a proceeding generally or any claim in a proceeding –
(a) is scandalous, frivolous or vexatious; or
(b) is an abuse of the process of the Court—
the Court may upon the application of a defendant who has field a defence stay the proceeding generally or in relation to any claim or given judgment for the defendant in the proceeding generally or in relation to any claim.[70]
[70]Rules, r 23.01.
Both defendants rely upon s 178 of the Uniform Law. That section provides:
178 Non-compliance with disclosure obligations
(1) If a law practice contravenes the disclosure obligations of this Part –
(a) the costs agreement concerned (if any) is void; and
(b) the client or any associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and
(c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation… [71]
[71]Uniform Law, s 178.
In accordance with s 178 of the Uniform Law, this Court must stay the proceeding if it is satisfied that a law practice have contravened the disclosure obligations under Part 4.3.
As to Carmelli’s claim, I have found that there is a triable issue as to whether Carmelli is bound by the plaintiffs’ costs agreements. In such circumstances, Carmelli, through her counsel, advised that she would not press her application as to do so would be inconsistent with her ‘no agreement’ defence.[72]
[72]There being no obligation under Part 4.3 if Carmelli is not bound by the costs agreements.
Karafili’s alleged contravention is related to s 176. For the reasons at paragraphs [52] to [64], I consider that defence is arguable. However, at this preliminary stage, I cannot be satisfied that such a contravention in fact occurred. In my view, there is a real question as to whether Karafili was provided with costs disclosure in the unique work circumstances of this case.
Conclusion
In the premises:
(a) the defendants’ application for leave to amend their defences are allowed to the extent set out above;
(b) the plaintiffs’ application for judgment on admissions against Karafili is dismissed;
(c) the plaintiffs’ application for summary judgment against Carmelli is dismissed; and
(d) the defendants’ application pursuant to r 23.01 are dismissed.
I will hear the parties on the question of costs and consequential orders.
MAGISTRATE GREENWAY
6 December 2022
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