Abbatangelo v Aleckson [2019] NSWDC 461 | Case summary

District Court of NSW|2019-09-06

Solicitors: Hall & Wilcox (Defendant) Slater & Gordon (Respondent to Motion) File Number(s): 2015/240507

Introduction

The defendant sought an order against the respondent, the plaintiff's former solicitor, pursuant to s 99 of the Civil Procedure Act 2005 (NSW). By a judgment delivered on 23 August 2019 I dismissed the defendant's Notice of Motion filed on 27 February 2018 - Abbatangelo v Aleckson [2019] NSWDC 430.
I ordered the defendant to pay the costs of the respondent Donald Stuart Cameron of the Notice of Motion. I granted leave to approach my Associate if there was to be any application for a different costs order.
The respondent did not wish to seek a different costs order. The defendant sought an order that the defendant and the respondent should pay their own costs of the Notice of Motion. The parties agreed that the issue of costs could be dealt with on the papers, after consideration of written submissions.
Counsel for the defendant provided written submissions dated 29 August 2019 (MFI 4). Counsel for the respondent provided written submissions dated 2 September 2019 (MFI 5).

Submissions for the Defendant

The defendant acknowledged that the starting point for any consideration of costs is that costs should follow the event. This was the order made on 23 August 2019. The defendant sought an order that each party should pay his own costs of the motion for the following reasons.
Firstly, it was submitted that the respondent ceased to act for the plaintiff on the Friday prior to the trial commencing on the following Monday, because he then held the view that the matter did not have reasonable prospects of success. The defendant submitted that it had formally communicated such a concern to the respondent two years earlier by letter dated 20 March 2016. I reject this submission as a reason for making a different costs order. In my earlier judgment, I noted that the respondent had two signed statements from witnesses who supported the plaintiff's version of events, and knew that two other potential witnesses did not harm the plaintiff's case. It was only after the plaintiff's two witnesses (one of whom was his son) went to ground and ceased to co-operate with the respondent, that he formed the view that the plaintiff did not have reasonable prospects of success. This was a sensible course of action to take, and while it is unfortunate that this took place on the Friday prior to the trial being due to commence, the respondent acted perfectly properly and reasonably in continuing to represent the plaintiff until that point in time, while making renewed attempts to contact the witnesses to obtain their co-operation.
Secondly, the defendant submitted that the List Judge was concerned about the timing of the application by the respondent for leave to cease to act, and specifically reserved the question of whether the costs thrown away by the adjournment should be paid by the plaintiff or the respondent. Such concern, and such order, was understandable in the context of the List Judge raising the issue of a personal costs order, without in any way having a view as to whether or not it was appropriate. In any event, the defendant was able to ventilate its application for a personal costs order before me, but that was unsuccessful for the reasons set out in my earlier judgment.
Thirdly, the defendant submits that while the court found that there was no serious neglect, incompetence or misconduct by the respondent, the motion was not without merit given the factual background and it was appropriately pursued by the defendant in the circumstances. That is correct, but I cannot see that it provides a reason to make an order other than costs following the event. If it were a reason for a different costs order, it would be an order made in every case where there is an arguable contest to be determined by a trial judge.
Fourthly, the defendant submits that, as a statutory CTP insurer, it was in a difficult position. How or why its position was different to any other litigant was not explained. It had a costs order against the plaintiff in respect of the adjournment and it was understandably reluctant to pursue its rights against the plaintiff personally, when he was a person who had allegedly suffered a serious brain injury in the accident and had no financial means of satisfying any costs order. Of course, that would have been the defendant's position, even if it had run and won the case at a full hearing. While the defendant submits that there was a "serious and legitimate question of whether such costs should be more properly borne by the Respondent", the defendant has had its day in court and lost on that issue. The defendant was pursuing its own interests in seeking a personal costs order against the respondent, rather than being satisfied with a costs order against the plaintiff, which probably would produce no result. In running litigation against the respondent, it took the risk that it might lose.
Fifthly, the defendant points out that the plaintiff wished to participate in the motion. However, the plaintiff filed no evidence at all on the motion, did not appear when the motion was called for hearing, and had made no application for his evidence or participation to be by way of video or audio link. The defendant does not point to any additional material which the plaintiff could have put before the court on the defendant's motion.
Sixthly, the defendant points out that it did not have access to the respondent's voluminous file until the morning of the hearing of the motion. That is so, but the defendant was offered the opportunity to read the file. It took that opportunity. The defendant did not indicate, on the hearing of the motion, that it needed an adjournment, or more time to consider the file. The production of the file on the morning of the hearing is not a reason to make a different order to that made in the earlier judgment. After the plaintiff's claim resolved in March 2019, the defendant did little to overcome the problem created by privilege being claimed over the file, until just before the hearing of the Motion. It could have resolved this issue much earlier.
Seventhly, the defendant's submissions refer to a "purported offer of settlement dated 26 July 2019 in the sum of $10,000" made by Mr Cameron. I deal with that below.
My conclusion is that for the reasons set out above, the original costs order should stand.

Submissions for the Respondent

Counsel for the respondent submitted that the factors which the defendant pointed to in support of his application for each party to pay their own costs of the motion, were largely the same factors upon which the defendant failed on the hearing of the motion. That is so. Counsel accepts that an additional factor raised by the defendant concerns the subpoena for production issued to the respondent Mr Cameron. I have already dealt with that matter above, unfavourably to the defendant.
Counsel submitted that if the defendant's application for variation failed, then such application was so weak as to warrant an order for indemnity costs on this application. There is some merit in that. When I granted leave to the parties to approach my Associate if either party sought a different costs order, I had in mind that there may have been an Offer of Compromise served. I did not anticipate that, having made no submissions whatsoever on the hearing of the motion about costs of the motion, the defendant would come along and try to belatedly argue that each party should bear their own costs of the motion, even though the defendant lost.
Counsel for the respondent also submitted that, while the respondent did not initially wish to agitate an order for indemnity costs based upon an offer to settle in the sum of $10,000, since that matter was raised by the defendant, it now wished to make an application for indemnity costs based upon that offer.
Until the defendant raised the offer dated 26 July 2019, the court had no knowledge of it. Nor was the respondent seeking a different costs order, based upon that offer. Having opened the gates and dragged that particular wooden horse into the city, the defendant then fought a rear-guard action when the respondent sought to rely upon the offer. This resulted in the defendant having the matter re-listed for further directions, filing further written submissions, filing a 50-page affidavit, and then cancelling the further directions hearing.
I do not think that these parties should be encouraged to litigate this matter any further. I decline to even consider the respondent's application, as it was not one made pursuant to the grant of leave. As tempting as it is to impose indemnity costs of this application upon the defendant, I decline to do so. I do not want to give these parties any opportunity to fall into further dispute.

Conclusion and Orders

My orders are: 1. Dismiss the defendant's application for an order that the defendant and the respondent pay their own costs of the Notice of Motion. 2. Confirm the costs order made on 23 August 2019, that the defendant pay the costs of the respondent Donald Stuart Cameron of the Notice of Motion filed on 27 February 2018. 3. Order the defendant to pay the respondent's costs of this application for a different costs order.

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Abbatangelo v Aleckson

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