On 29 June 2006, the Plaintiffs' premises and contents were damaged by fire. On 28 June 2012, the Plaintiffs commenced proceedings in the Supreme Court of New South Wales against the Defendant and two other parties alleging that they were significantly underinsured because of the negligence of their broker.
The Supreme Court proceedings were settled on 10 February 2015 for $1,375,000.00 plus costs and agreed or assessed pursuant to a deed of release dated 10 June 2015 and Short Minutes of Order entered the same day. [1]
The Defendant paid the agreed settlement amount. However, the question of costs proceeded to an assessment. That assessment was governed by the provisions of the Legal Profession Act 2004 (NSW) ('LPA'). The Costs Assessor issued the following certificates of determination:
1. An interim certificate of determination of costs on 22 December 2016 in the sum of $798,709.99. That certificate was issued by the Supreme Court under cover of a letter dated 12 January 2017. It was filed by the Plaintiffs in the registry of the Supreme Court on 23 January 2017 and a judgment was issued by the pursuant to section 368(5) of the LPA. [2] On 28 February 2017 the Defendant paid this costs judgment (first costs judgment). [3]
2. A certificate of determination and costs dated 7 April 2017 was issued in the sum of $1,280,079.52 which included the fee paid for the application of costs for costs assessment in substitution for the interim certificate dated 22 December 2016. That certificate was forwarded by the Supreme Court under the cover of a letter dated 17 May 2017. [4]
It is not in issue that both parties subsequently filed an application of review of determination of the Costs Assessor and by virtue of section 377(1) of the LPA, the operation of the Costs Assessors' determination was suspended.
The Costs Review Panel subsequently lifted part of the suspension of the Assessor's determination to the extent of $1,000,000.00. In so deciding, the Panel published its reasons on 19 September 2017, stating, inter alia:
6.1.8 On the basis of the material presently before the panel, it is unlikely that the costs issue will settle. A significant amount is involved. The panel invited the parties to consider settlement and the costs of reviewing its letter of 16 August 2017. So far as the panel is aware, there is no realistic prospective of settlement;
6.1.9 Brief review of all the relevant material, the panel is presently of the view that it is unlikely that the costs arrived at on the view would be less than $1,000,000.00.
The Costs Review Panel took into account:
1. The fact that there had already been a payment made on behalf of the Defendant which represented 62% of the amount determined by the assessor;
2. The relevant court proceedings to which the costs order related were commenced prior to 2015 and there is no interest on costs ordered or on the costs assessed by the assessor; and further
3. In light of the competing position of the parties, it would be a long time before a review was determined. [5]
On 27 October 2017 the Plaintiffs obtained a further judgment in the Supreme Court in the sum of $201,290.01 by filing a certificate of determination issued by the Costs Assessor following a decision of the Costs Review Panel to lift part of the suspension of the assessor's determination for a total amount of $1,000,000.00 while the review process was completed (second costs judgment). [6]
On 20 November 2017 the Defendant paid the said sum of $201,290.01. [7]
On 26 September 2018 the Costs Review Panel wrote to the parties advising that the Panel had completed the review and the Manager of Costs Assessment would send a certificate and reasons on payment of costs amounting to $14,283.63. The letter further sought payment of costs from any party without indicating who would be liable. [8]
On 3 October 2018 the Defendant received the tax invoice for $14,283.63 issued by the Supreme Court. [9] The Solicitor for the Plaintiff Ms Joanne Scott gave evidence that she understood that the Plaintiffs solicitors had arranged for the payment of $14,283.63 to be paid to the Supreme Court during November 2018 and consequently on or around 22 November 2018, the Manager of Costs Assessment sent to the parties the certificates which had been issued by the Cost Review Panel on 26 September 2018, namely a certificate of review by substitution for the sum of $1,178,551.62 and a certificate of determination of the review panel in the sum of $14,283.63. [10]
Under cover of the letter dated 22 November 2018, the Supreme Court forwarded the certificate of determination of review, the certificate of the determination of the costs review panel, the costs review reasons and the notice to costs assessment parties sent by the manager of costs assessment to the parties. Ms Scott deposed that the Defendant received the certificates on 26 November 2018. [11]
On 28 November 2018 the Supreme Court sent out a further letter attaching an amended certificate of determination of Review Panel costs as the initial certificate wrongly indicated that the Defendant had paid the amount certified in the certificate. This was received by the Defendant on 3 December 2018. [12]
On 17 December 2018, Mr Christopher Clancy, solicitor for the Plaintiff wrote to the Manager of Costs Assessment requesting a copy of the marked bill of costs referred to in the reasons of the Review Panel's determination. [13]
On 17 December 2018, the Plaintiffs' solicitors provided details of their trust account and requested payment of the $14,238.63 in respect of the review Panel decision. [14]
Thereafter, on the same day the Defendant paid to the Plaintiff's solicitors the costs of the review in the sum of $14,283.63. [15]
On 18 December 2018, the solicitor for the Plaintiffs again wrote to the Manager of Costs Assessment requesting a copy of the marked up bill. [16]
On 19 December 2018, the Plaintiffs' solicitors sent an email to the Defendant's solicitors attaching a letter of 18 December 2018. That letter read as follows:
We refer to the certificate of the review panel dated 22 November 2018 and note that the marked bill of 743 pages was not attached.
Our client is prejudiced by the failure of that document to be attached, as indicated, to the certificate of determination. We note that by our reckoning any appeal must be lodged on our behalf before 22 December 2018. We will be filing an appeal today. We put your client on notice however, that we have reserved our client's position in relation to the filing of an amended notice of appeal once the above documentation has been received from the Court and we have had the opportunity of allowing a costs consultant and counsel to consider the documentation. In those circumstances, we do not propose to serve the notice of appeal as we may seek to amend the grounds. [17]
In response to that correspondence, Ms Scott, solicitor, wrote to the Plaintiffs' solicitors the same day stating:
If a notice of appeal is filed then we request that it be served, regardless of whether you intend to later amend the grounds. [18]
The summons commencing an appeal in this Court was filed on 19 December 2018. [19]
On 21 December 2018 the Plaintiffs replied by way of email to the Defendant's solicitor's response to the email of 19 December 2018. That email was written by a Ms Linda Dickenson, and stated:
Firstly, I apologise for the delay in responding to you. As we pointed out in our letter of 18 December 2018 there is really no point in serving the document until it is amended. Once we have filed an amended summons, it will immediately be served upon you. [20]
On the same day, Ms Scott wrote to the Plaintiff's solicitors stating:
We reserve our rights should our client suffer any prejudice as a result of your firm's refusal to serve us with a copy of the summons which it has filed. [21]
Pursuant to UCPR 50.3(1)(a), it is not in issue that the summons commencing the appeal needed to be filed within 28 days of the material date. The Defendant contended that, that would be either 21 or 24 December 2018. [22] During his evidence Mr Clancy indicated that as the determinations were amended and received by him in the middle of January then time may run from that time. [23]
On 8 January 2019, the Manager of Costs Assessment sent a further amended certificate of determination of review dated 8 January 2019, a further amended certificate determination of the cost review panel dated 8 January 2019, and a further copy of the cost review reasons dated 26 September 2018 and two folders of documents containing the Plaintiff's bill of costs with hand written notations. These folders of documents had not been earlier included with the certificates. [24]
It is not in issue that the summons filed 19 December 2019 had not been served upon the Defendant as required by UCPR 6.2(b)(ii) and UCPR 10.1(1).
In accounting for the failure on the part of the Plaintiff's solicitor to serve the summons as required, Mr Clancy stated:
17. I did not serve the Summons filed 19 December 2018 because that Summons was drafted by me in the absence of the marked Bill and I expected that he grounds therein would undoubtedly change when the Costs Consultant and Counsel had the opportunity to inspect the marked Bill of the original Costs Assessor and the marked amendments made by the Costs Review Panel. At that time I expected the documents from the Manager Costs Assessment to be forthcoming in a short space of time so that the material could be forwarded to Counsel enabling the Summons to be amended and filed by mid-January 2019 or discontinued, depending upon Counsel's advice. I did not wish to serve the Summons and cause the Defendant to incur costs defending a Summons which may not proceed at all or which might proceed on a different basis or on an additional basis to that pleaded in the Summons. I did not wish the Defendant to be required to attend Court until the Summons was in final form. [25]
In the course of cross examination Mr Clancy responded to question as follows:
Q. I'll give your Honour and Mr Clancy time to read that paragraph yourself rather than listen to my voice.
A. Yes.
Q. They're the reasons. Are you aware of UCPR rule 10.1?
A. Off the top of my head, no. Is it in here?
Q. No.
A. Off the top of my head, no.
Q. No, okay, so you're not aware off the top of your head that a party that files a document must as soon as practicable serve copies of the document on each other active party? You're not aware of that as a practitioner?
A. I'm aware of that general rule.
Q. Just not that it's 10.1?
A. Yeah, yeah, a similar one.
Q. But, nevertheless in this instance you decided, without seeking any particular, at this point, leave of the Court, you decided that you'd ignore that rule?
A. Yes, I suppose I did. I didn't decide to ignore it, but I didn't comply with it, that's certainly the case. I set out my reasons in the emails why I was - basically, I didn't want - there had already been a lot of costs in this matter and I didn't want to add to costs unnecessarily with an appeal which may not go ahead. [26]
On 21 January 2019, the Plaintiff filed an amended certificate of determination with the Supreme Court in the sum of $178,551.62, being the balance owing following the payment of the earlier two judgments (the third costs judgement). [27]
On 22 January 2019, the Plaintiff served a copy of the amended certificate of determination filed on 21 January 2019 with a demand for payment on the solicitor for the Defendant. The relevant letter requested payment into the Plaintiffs' solicitors' trust account, the details of which were provided. [28]
On 31 January 2019, the summons was returnable before the District Court.
In his affidavit, Mr Clancy stated that he advised Letherbarrow SC DCJ of various matters. During cross examination Mr Clancy conceded that contrary to his reference to using the Court Record to describe what he did on the day in question, he in fact used his notes.
Mr Clancy was challenged as to the accuracy of that account. After looking at the transcript he conceded that contrary to what he asserted in his affidavit he did not tell His Honour that:
1. the Costs determination was initially handed down on 22 November;
2. nor that he might withdraw the appeal;
3. that a further certificate of determination was received by him on 10 January 2019;
4. that on 12 January the marked bill consisting of 743 pages was received by the plaintiffs. One page was missing and had been requested from the Manager, Costs Assessments.
Mr Clancy explained that he swore his affidavit on 3 June 2019 he consulted his notes and tried to recollect looking backwards what he told the Court. [29]
According to the transcript, Letherbarrow SC DCJ enquired as to whether an appearance on behalf of the Defendant was expected. Mr Clancy replied "no, we haven't served the summons as yet and there's a…". In the course of the discussion, Mr Clancy stated that the Court did not send out a bill of costs as amended by the Costs Assessor or by the Costs Review Panel, it having been received about 2 weeks previously when he was on leave. Mr Clancy stated that the summons was filed within time, even though they didn't have the documents and the Plaintiff desired to look at those documents and "…amend the appeal slightly". He again reiterated that he had not served the summons, although he had "…advised the other side that it has been filed".
Letherbarrow SC DCJ stated:
I note that the relevant summons has not been served, and the Plaintiff wished to file and serve an amended summons. I'll direct the Plaintiff to file and serve an amended summons by 14 March next, and I'll list the matter for directions on 21 March next, and direct the Plaintiff to advise the Defendant of such directions, hearing date, and serving the amended summons". [30]
Ms Scott gave evidence that as she had not received any further correspondence from the Plaintiffs' solicitors with respect to the proceedings on 31 January 2019, she undertook an online NSW registry search of court lists by the party name "Ahern". That search indicated the District Court proceedings with case number 2018/00390039 had been listed for directions that day at 9:30am before Letherbarrow SC DCJ. She indicated that she could not access further information online about the status of the proceedings and that the Plaintiff had not served any court documents, and accordingly, the Defendant had not filed any appearance in the proceedings. [31]
Thereafter, Ms Scott wrote to the Plaintiffs' solicitors on 31 January 2019 at 11:06am in the following terms:
It has just come to our attention through review of today's online court list that your client has commenced district court proceedings against our client and these proceedings are listed for directions this morning before Judge Letherbarrow at 9:30am.
As AON was never advised of this listing, please advise immediately what orders were made. We assume that you informed the Court that there was no appearance for AON because no documents have been served and we were never advised of the listing? Please confirm.
If the proceedings were not dismissed or discontinued today, please serve us with the originating process without further delay. [32]
Ms Scott did not receive a response to that email.
In his affidavit of 3 June 2019, Mr Clancy gave reasons for not serving the original summons or advising the Defendant of the directions hearing on 31 January 2019 as follows:
28 As the amended summons had not been finalised and had not been filed or served I did not serve the original summons or advise the Defendants of the Directions Hearing on 31/01/19 for the following reasons:-
(i) On 21 December 2018, I had advised the Defendant that the Amended Summons would be served as soon as it was filed;
(ii) The Court had directed the Plaintiffs to notify the Defendant of the Directions Hearing date when serving the Amended Summons;
(iii) I had not yet filed and served the Amended Summons;
(iv) I did not wish the Defendant to be obliged to incur costs on defending a summons which might not proceed or might proceed on a different basis and for which the Plaintiff might become liable.
On 1 February 2019, the Plaintiffs' solicitors having discovered that page 491 of the bill was missing from the marked bill wrote to the Manager of Costs Assessment seeking a copy of that page. [33]
On 5 February 2019, the Manager of Costs Assessment wrote to the Plaintiffs' solicitors (but not to the Defendant) informing that he did not have a copy of the missing page and the request had been forwarded to the Review Panel. [34]
On 12 February 2019, solicitors for the Defendant again wrote to the Plaintiffs' solicitors. In this letter, Ms Scott stated:
We refer to our email dated 31 January 2019 to which we have not received a response. We note that you client commenced proceedings against our client in the District Court in 2018. Rule 10.1 of the Uniform Civil Procedure Rules 2005 states that unless the Court otherwise orders, the party that files a document must as soon as practicable serve copies of the document on each other active party. We further note that rule 6.2(4)(b)(ii) requires your client to serve any originating process within one month after the date it was filed.
Accordingly, unless otherwise ordered, the originating process cannot now be validly served on our client.
Please advise if proceedings have been discontinued or dismissed or alternatively, clarify whether your client intends to pursue the proceedings. [35]
Mr Clancy stated that he did not believe that he responded to that letter. [36]
Mr Clancy was cross examined as to whether he turned his mind to the need to file a notice of motion seeking an extension of time in which to serve the summons. His evidence was as follows:
Q. Moving on, at 12 January you had everything, but you weren't in a position to finalise it, did you turn your mind to the need to file a notice of motion seeking an extension of time in which to serve the summons, so that it did not go stale?
A. No, not, not - I didn't do that until after the first mention date.
Q. In fact, you never filed a notice of motion seeking an extension of time until we filed a motion to have the proceedings struck out, correct?
A. What was - just go back to that, sorry. Just go back to your previous question, what was your previous question? Because I understood you to be saying, you know, I, I didn't turn my mind to needing an extension of time.
Q. My question was, did you turn your mind to filing as the formal process of applying by way of a notice of motion--
A. No, I never turned my mind to that - to that specifically--
Q. Your evidence earlier--
A. --I did turn my mind at some point after receiving Joanne's letter, to asking the Court again for a - you know, an extension of time.
Q. That's because until you got Joanne's letter, consistent with your earlier evidence, you hadn't turned your mind to the fact that there was a one month limit?
A. Yeah, that's correct. [37]
On 13 February 2019, the Defendant paid the third cost judgment in the sum of $178,551.62. Relevant to that payment, Ms Scott had written to the Plaintiffs' solicitors on 11 December 2018, instructing with respect to the balance of $178,511.62 that their client would arrange payment once it takes the form of a judgment pursuant to section 36(5) of the LPA. [38]
On 22 January 2019 the solicitor for the Plaintiffs forwarded a copy of the third cost judgment in the sum of $178,551.62. [39]
On 13 February 2019 the solicitors for the Defendant transferred to the Plaintiffs' solicitor's trust account the sum of $178,551.62, satisfying the debt to which it related. [40]
On payment of that amount, it is not in issue that the Defendant had paid to the Plaintiffs the entire sum of $1,178,551.62, being the amount that the Costs Review Panel assessed as being payable as a result of the order of the Supreme Court on 10 February 2015. It is also not in issue that at that time, the Defendant had not been served with either the summons or the amended summons. [41]
Mr Clancy accounted for the delay in his affidavit as follows:
29. On 21 March 2019, I informed the Court as follows:
(i) I was in breach of Court order as I had not filed or served the Amended Summons, for which I apologised. The reason for not complying was that the Amended Summons was nearly ready but not quite ready and was awaiting settling by Counsel and further advice form the Costs Consultant.
(ii) The marked Bill is 2 lever arch volumes and contains markings of the original assessor and the Costs review Panel, neither of which we had seen previously.
(iii) The marked Bill of the Costs Assessor also needed to be considered, increasing the workload.
(iv) The actual file was enormous amounting to approximately 400 lever arch folders.
In fact, when the matter came before Letherbarrow DCJ on 21 March 2019, the transcript records the following:
CLANCY: Your Honour, the plaintiff is in breach of your Honour's last order. This is the second time the matter is in the list. This is a costs appeal.
HIS HONOUR: On the last occasion it was before me on 31 January, and I noted that a summons hadn't been served and the plaintiff wanted to file an amended summons, which I directed them to do so, by 14 March and stood it over to today. They didn't appear.
CLANCY: They haven't been served and just to put your Honour into the picture there's a very large costs matter, there's an enormous amount of material and where the counsel has been briefed for the entire period. There's two things, we don't want to proceed with the appeal until we know there are good grounds. Counsel accepts that there's reasonable prospects, but we just want to and then the second thing is that counsel hasn't yet been we're trying to limit the number of issues. There's a broad number of mistakes we think have been made but we're trying to jettison various issues and then stick to three issues, and then if we can then proceed.
HIS HONOUR: Are you mentioning this for the defendant?
CLANCY: I'm not. They haven't been served because we were ready to serve the amended summons and that hasn't come back from counsel yet. So, I'd be seeking another week to allow counsel to finalise that document and me to obtain instructions from the client and then serve it and then bring it back a week thereafter.
HIS HONOUR: What I'll do Mr Clancy is that I'll note that the amended summons, that neither the original or I'll note that the original that neither the original nor the amended summons doesn't exist yet.
CLANCY: No, it doesn't. And if I could just remind your Honour what happened on the last occasion, I think it was on the last occasion, we'd only just received the material from the Supreme Court, because none of it was served with the determination, and the material is too voluminous, and then we received that but then some of it was missing. We still haven't received all of it, because of the volume of material that's before the cost assessors there's 12 lever arch volumes and the file is 400 lever arch volumes long.
It's just that's why we're trying to narrow and there's I don't know, there's 7,000 items in the bill, and all the rest. It's just a very and we're just trying to narrow it. But we filed the summons on the best we could on the determination but without all the backing material, and the reasons for the decisions.
HIS HONOUR: What I'll do then is, I'll note that the Court is informed by Mr Clancy for the plaintiff, that the file contains approximately 400 lever arch folders and that the proposed amended summons has not yet been finalised by counsel. I'll also note that the original summons was never served as the plaintiff wished to serve an amended summons. I'll direct the plaintiff to file and serve, I'll extend the time for the plaintiff to file and serve an amended summons, until when? Mr Clancy how long do you want?
CLANCY: I think one week should be enough.
HIS HONOUR: I'll give you two just in case. By 4 April next, I'll list the matter for directions on 15 April next, and I will direct the plaintiff's solicitors to advise the defendant of these orders as soon as possible.
ADJOURNED TO MONDAY 15 APRIL 2019 FOR DIRECTIONS
On 4 April 2019 the Plaintiffs' filed and served an amended summons. The relevant grounds cited the amended summons were:
1. The review panel erred in:
a. failing to give reasons or adequate reasons for affirming the decision of the costs assessor to reduce the hourly rates;
b. deciding that the costs assessor's reasons for the reduction to hourly rates were adequate and in adopting them.
…
3. The review panel erred by misconstruing its function as being to determine the applications for review by making its own reassessment rather than substituting "such determination as in their opinion should have been made by the costs assessor who made the determination" [(as required by s 375(1)(b) Legal Profession Act NSW (2004)]
4. The review panel erred in reviewing the costs of the negotiation and assessment process in:-
a. failing to give reasons or adequate reasons for reducing the costs of the costs assessment those costs; and
b. assessing those costs on a global basis. [42]
On 12 April 2019 the Defendant's solicitors wrote to the Plaintiff's solicitors pointing out that the summons was not served within time and inviting the Plaintiffs to file a notice of discontinuance on terms that each party pay their own costs and the Plaintiff not commence any proceedings in future in respect of the costs assessment. [43]
The Defendant filed a notice of motion on 15 April 2019 seeking various orders:
1. Pursuant to UCPR 12.11 (1) (e), discharging any order extending the validity for service of the Summons filed on 19 December 2018 and/or Amended Summons filed on 4 April 2019.
2. Pursuant to t UCPR 12.11 (1) (a) setting aside the Summons and the Amended Summons;
3. Pursuant to UCPR 12.11 (h) declining to exercise jurisdiction in the proceedings.
4. Pursuant to UCPR 12.11 (i) such further or other order as the Court thinks fit;
5. Further or in the alternative to prayers (1) to (4) an order pursuant to UCPR 13.4(1) dismissing the proceedings or pursuant to UCPR 14.38(1) striking out the Summons and Amended Summons
When the matter was mentioned before me on 20 September 2019 for the purposes of fixing a further hearing date, the Defendant sought leave to rely on an amended notice of motion. This was not objected to and in the circumstances, leave was granted although at this point in time the Defendant had substantially advanced its submissions.
Pursuant to the amended notice of motion, a further or alternative order was sought to prayers (1) to (4) as follows:
6. An order, pursuant to s 67 of the Civil Procedure Act 2005, that the proceedings be stayed pending the payment into Court by the Plaintiffs of the sum;
(i) $178,551.62 being the amount of the judgement of the Supreme Court of New South Wales dated 21 January 2017, bearing case number 2019/00021562 which judgment will have to be set aside in the event the plaintiff are successful in their appeal; and/or
(ii) $201,2890.01 being the amount of the judgement of the Supreme Court of New South Wales dated 27 January 2017, bearing case number 2019/00021562 which judgement will have to be set aside in the event the plaintiff are successful in their appeal; and/or
(iii) $798,709.99 being the amount of the judgement of the Supreme Court of New South Wales dated 23 January 2017, bearing case number 2019/00021562 which judgment will have to be set aside in the event the plaintiff are successful in their appeal.
In the course of argument on 27 September 2019 the solicitors for the Defendant indicated that they were only seeking a stay of the proceedings in respect of payment into Court of the sum set out in [6a] of their amended motion, acknowledging that the cost review panel had previously lifted the suspension in relation to $1,000,000.00 of the proposed costs order previously made by the Assessor.
During the course of the submissions it also became apparent that the Defendant to alternatively rely upon UCPR 36.15 as a basis to set aside any order previously granted extending time for service of the summons asserting that it was an order entered irregularly, illegally or against good faith.
The Plaintiffs also filed their own motion on 30 May 2019 on the assumption that the summons/amended summons was served out of time and seeking orders as follows:
1. The time for the Plaintiff to serve the Amended Summons filed 4 April 2019 be extended pursuant to UCPR 1.12 to 4 April 2019 or other such date as the Court thinks fit.
2. The time for the Plaintiff to serve the Summons filed 18 December 2018 be extended until seven (7) days pursuant to UCPR 1.12 after the determination of this motion or such other date as this Court determines.
3. Further in the alternative, the Court extend the time for the Plaintiff to file a fresh Summons under UCPR 50.3(1)(c)
4. Any such other order as this honourable Court deems fit
[2]
Estoppel Point
It is convenient to firstly consider the Defendant's claim that the Plaintiffs are estopped from appealing the Cost Review Panel's decision. This is said to be so as the Plaintiff made an election to take the benefit of the determination by taking the positive step of registering it as a judgment of the Supreme Court. The Defendant argued that this was an optional act, that could occur within any time within 12 years from the date of the order for costs. [44]
The Defendant submitted that the circumstances were different from those of an appeal from a judgment arising from a decision of a Court, or indeed from a judgment arising from the registration of a certificate of determination of costs by the respondent to an appeal from a decision of a Costs Assessor or a Review Panel. This, it was said was because a judgment delivered by a Court and subsequent satisfaction pending an appeal does not involve deliberate election.
Relying on Doyle v Hall Chadwick, [45] the Defendant contended that the judgment obtained through the registration of the certificate of determination was of a different species of judgment and was not based on any decision of a Court but, like some other judgments (eg consent judgments), had some other basis and thus such judgments may be set aside or varied if that basis is defeated or varied.
It was contended that where a party elects to consent to a judgment (with full knowledge and of their free will), or as here, to register a certificate of determination to obtain judgment of the Court, it has made an election to take the benefits of the certificate rather than to challenge the certificate. The Defendant relied on United Australia Ltd v Barclays Bank Ltd [46] and Elders Trustees and Executor Company Ltd v Commonwealth Homes Investment Co Ltd, [47] to contend that where a person has with full knowledge done an unequivocal act showing the choice of one of two inconsistent rights, he cannot afterwards pursue the other inconsistent right and that the purpose of the election is to prevent a person from taking up inconsistent positions.
The Defendant contended that the situation here was distinguishable from the factual circumstances in Doyle v Hall Chadwick, where the Court held that an appeal is able to proceed after a judgment has been obtained through the registration of the certificate of determination. It pointed out that the challenger in that case, Hall Chadwick, was obliged by the certificate and the subsequent judgment to pay the sum in question but the registration of the judgment in that case was by Dr Doyle. In these circumstances, it was said that Hall Chadwick did not make an election to proceed one way and then attempt to proceed in another.
The Defendant submitted that the Plaintiffs, by registering the certificate and obtaining the judgment (which the Defendant was then obliged to meet), took an unequivocal step which indicated that they accepted the validity of the certificate of determination. It would therefore be unfair and contrary to principle for the Plaintiffs to be able to have a right of appeal from a decision of the Review Panel in circumstances where:
1. At the time of registering the amended certificate of determination and serving the third judgment on the Defendant, the Plaintiffs had not informed the Defendant that appeal proceedings had been commenced and the summons had not been served;
2. The solicitor for the Defendant, prior to the registration of the third judgment, expressly requested service of the summons;
3. The time for bringing an appeal had elapsed one month before the Plaintiffs registered and served the third judgment; and
4. More than two months had elapsed before the Plaintiffs informed the Defendant through the service of the amended summons that the appeal had in fact been commenced.
The Plaintiffs contended that the estoppel point was contrary to authority and did not take into account the fact that it was the Defendant who required the certificates to be filed before it paid the money the subject of them. They contended that the Defendant sought to invoke the doctrine of election in circumstances where the Plaintiffs did not seek to deprive themselves of the benefit of the judgments entered, but rather to seek by the appeal, to obtain a higher determination of fair and reasonable costs.
The Plaintiffs contended that there was a valid parallel between that situation where a party in litigation is awarded damages and takes the benefit of the judgment but appeals the inadequacy. [48] The Plaintiffs submitted election was a doctrine involving inconsistent rights, but the right to appeal a determination of a Cost Review Panel under the LPA exists regardless of whether the determination has been filed as a judgment or not. Furthermore, the Plaintiffs contended that the construction put forward by the Defendant was inconsistent with Doyle v Hall Chadwick.
In Doyle v Hall Chadwick, Hodgson JA (Mason P and Campbell JA agreeing) declined to follow a decision of Master Harrison in Katingal Pty Ltd v Amor, [49] in which the Master dismissed a summons seeking to appeal from a decision of a Costs Assessor, on the ground that the appeal was filed after a judgment had been obtained. Hodgson JA stated:
48 The 1987 Act discloses a plain legislative intention that there be an appeal to the Supreme Court in a Division against decisions of costs assessors; and in my opinion it was plainly not the intention of the legislature either that the possibility of such an appeal should be wholly lost if a judgment was obtained under s.208J, because the certificate then merges into the judgment and can no longer be set aside; or that there would have to be also an application for leave to appeal to the Court of Appeal pursuant to s.101 of the Supreme Court Act.
49 Accordingly, in my opinion the clear legislative intention is that an appeal to the Supreme Court should be able to proceed after a judgment has been obtained under s.208J. Further, in my opinion, there is no difficulty in giving effect to this legislative intention. It is well recognised that there are judgments that are not based on any decision of the Court of which they are taken to be judgments, but have some other basis; and such judgments may be set aside or varied if that basis is defeated or varied.
The decision in Doyle v Chadwick was based on statutory construction. I see no basis for distinguishing its application in the way the Defendant contends.
It is furthermore consistent with the principles set out in Lissenden v CAV Bosch Ltd, [50] adopted by the High Court of Australia in Agricultural Rural Finance Pty Ltd v Gardener. [51]
The Defendant sought to distinguish Lissenden by relying on obiter comments expressed by Lord Atkin referring to the difference between an award made under the Arbitration Act 1889 and an award made under the Workmen's Compensation Act 1925 in that jurisdiction. Referring to the later His Lordship stated from line 427:
It would be quite impossible to apply the Act and the right to appeal if the order was not treated as divisible. It is unnecessary to emphasize the essential differences between an "award" made in these conditions and the award in an ordinary arbitration. In the latter there is no appeal, the only right is to set aside the award, e.g., for misconduct of the arbitrator, or error in law on the face of the award, or defects in not awarding in full or in awarding in excess of the submission. In these cases the whole award goes: there is no power in any court to affirm part and disaffirm part. In these circumstances it may be right to say that if a party takes a benefit under an award he cannot afterwards be heard to say that it was entirely invalid, for, if so, he would have had no right to the benefit he took. I do not propose to decide what the law is in such a case. It may be that even then the question is merely one of restitution. But I am quite clear that such a case has no kind of analogy to the present class of case.
The Defendant argued that bearing in mind the relief which was sought by the Plaintiffs in the summons involving the setting aside the certificate of review and the certificate of the Cost Review Panel on the grounds contended, the Court would be inclined to view the decision of the Panel determination was not divisible in the same way as Lord Atkin intimated in Lissenden in the case of ordinary arbitration.
This submission overlooks that one of the orders sought by the Plaintiffs included a prayer that the Court make such a determination in relation to the application as in the Court's opinion should have been made by the Costs Assessor. Such a power derives from section 384(2)(a) of the LPA.
The Plaintiff had already registered two earlier judgments it obtained without any suggestion at that time that it had abandoned its right to appeal.
Recognising this, the Defendant alternatively sought that a stay be granted under section 67 of the Civil Procedure Act 2005 (NSW). As noted earlier this application was ultimately only advanced in respect of the third costs judgment.
The Plaintiffs' entitlements to costs arise from the order made in the Supreme Court. The issuance of certificates relate to a process of assessment to quantify the debt. The relief sought in relation to the determination of the Review Panel will need to be determined in accordance with law. To the extent that any remittal may result in a decrease, that would result from the Review Panel issuing a certificate of determination which reflected that fact and corrected the sum that the Plaintiffs pay to the Defendant as the appropriate sum. No evidence has been presented which indicates that the Plaintiff would not be in a position to pay any such sum. Nor was any explanation provided as to why the Defendant did not seek a stay after judgment was entered on amended certificates, pending the expiration of the appeal period. Counsel for the Defendant acknowledged that it paid the sum now the subject of its application in circumstances where it knew that there was still the potential of an appeal. [52]
In essence, what the Defendant seeks is for the proceedings to be stayed pending payment into Court of amounts which it refused to pay unless the certificate judgment was obtained; in the hypothetical event that the result of any remitter resulted in an amount that is less. It advanced no argument to suggest that this was in any way likely.
In my view there is no basis for such a stay to be granted.
[3]
Invalid Proceedings
The Defendant contended that neither the order made on 21 January 2019 or 21 March 2019 extended the time for service of the summons under UCPR 1.12 and accordingly the proceedings were invalid.
To the extent that the orders were ambiguous, it contended that it could not be implied that there was an intention to extend the time for service of the summons.
The Plaintiffs argued that the Court would imply such an intention in the case of the order of 31 January 2019, as it is clear from the exchange that the Plaintiffs' solicitor had informed the Court of the reason for delay in serving the summons and stating "I have not served it; I've advised the other side that it has been filed." The Plaintiffs argued:
It is clear from the exchanges set out that his Honour was aware that the summons had not been served, was asked to permit it to be served by 14 March, required an explanation of why he should grant that order, considered the explanation and then exercised his discretion. [53]
In respect of the order of 21 March 2019, the Plaintiffs argued that the words used by Letherbarrow SC DCJ and the formal order was "Extend the time of the plaintiff to file and serve until 4 April 2019", clearly extended the time under UCPR 1.12(1)(e).
The terms of the order of 31 January 2019 did not provide for any such extension. Nor can it be inferred in circumstances where:
1. The order merely directed the Plaintiff to file and serve an amended summons;
2. No application for an extension of time was sought by the Plaintiffs' solicitor;
3. The solicitor for the Plaintiffs' conceded that at that point he was not aware that the summons was stale and it was necessary to seek an extension of time; and
4. The arguments put before Letherbarrow SC DCJ could not be seen to address the requirement of good reason for such an extension consistent with Arthur Anderson Corporation Finance Pty Ltd v Buzzle Operations Pty Ltd (in liquidation). [54]
In respect of the order made on 21 March 2019, Letherbarrow DCJ specifically provided for an extension of time for the Plaintiff to file and serve an amended summons to 4 April 2019. The Court's intention is to be ascertained from the language of the orders made. [55] I see nothing in the language of the order that is ambiguous. In my view the words are not capable of any interpretation other than to refer to the summons in its amended form.
In these circumstances the proceedings are valid. The issue for determination is whether the Defendant's motion to discharge the order granting an extension should be granted.
[4]
Extension of Time
The order made on 21 March 2019 extending time was made ex parte. This is consistent with the approach described by Barrett J in Onefone Australia Pty Ltd v One Tel Limited. [56] As was recently acknowledged in Smith v Shilkin (No 2), [57] by Hallen J in reference to UCPR 12.11(1)(e):
228 Thus, the rule gives, to a defendant, a right to be heard retrospectively in all cases where renewal is granted. Whilst the application by the plaintiff may be made ex parte, an order extending the time for service of a statement of claim made on an ex parte basis must be regarded as provisional pending any application made by the defendants to set aside the ex parte order.
As the order made by Letherbarrow SC DCJ is in effect a provisional one, the question before this Court is whether on the evidence before me there are good reasons for that order. [58] In this respect, the Defendant's arguments for discharge were principally advanced under UCPR 12.11(1) (e).
The Plaintiff's criticism of the power to discharge the order in circumstances where an order has been made by another judge overlooks the legal basis underpinning this procedure. [59]
The legal principles relevant to such an application were discussed by Ipp JA Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in Liq):
41 There are a number of principles "developed by judicial decision" relating to the exercise of a discretionary decision under a rule such as UCPR r 1.12 when dealing with an application to renew a statement of claim nunc pro tunc. These may be seen from the remarks of Bray CJ in Victa Limited v Johnson, as approved in Van Leer Australia Pty Ltd and Foxe v Brown. When dealing with the relationship between a statute of limitations and a rule providing discretionary power to renew a stale writ, Bray CJ said:
"It is not correct to say that the defendant has acquired an absolute right to immunity when a writ issued within the limitation period is not served within twelve months of its issue and the limitation period has in the mean time expired. What has expired is in reality not the limitation period but the period which would have been the limitation period if no writ had ever been issued. What the failure to serve a writ within twelve months gives the defendant is no more than a right to contend that the Court in the exercise of its discretion should not renew the writ. The efficacy of the writ does not expire absolutely at the end of the twelve months, it only expires if and in so far as the Court sees fits not to renew it.
The Rule first directs the Court to inquire whether reasonable efforts have been made to serve the defendant. If they have, it seems to me that the Court should renew the writ. If not, the Court has to consider whether other good reasons exist for the renewal. I will not attempt an exhaustive category of such reasons. That would probably be impossible and would certainly be undesirable. Prominent, however, amongst the matters for the consideration of the Court, apart from whatever attempts have been made at service, will be the length of the delay, the reasons for the delay, the conduct of the parties and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it."
42 In Van Leer Australia Pty Ltd Stephen J concluded that, on a proper exercise of discretion, the writ in that case should not have been renewed. His Honour (at 350) took account of the long delay in its service. He said:
"[The delay] bears at least three aspects: first, it involved a very considerable period, secondly, it was quite deliberate, there being no question of mishap or oversight; thirdly, no notice was given to the defendant in this case … ."
43 Accordingly, the Court should consider, when exercising a discretion such as that under UCPR r 1.12, the attempts that have been made at service, the length of the delay, the reasons for the delay, whether the delay was deliberate, whether notice was given to the defendant, the conduct of the parties generally, and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it. [60]
These principles were restated and expanded upon by Sackville AJ in Weston in Capacity as Special Purpose Liquidator of One.Tel Ltd (in liquidation) v Publishing and Broadcasting Ltd:
[20] (1) The principles relevant to an application to extend time for service under r 1.12 also apply to a motion pursuant to r 12.11(1)(e) to discharge orders for extension.
(2) In exercising the discretion conferred by r 12.11(1)(e), the court should consider:
'the attempts that have been made at service, the length of the delay, the reasons for the delay, whether the delay was deliberate, whether notice was given to the defendant, the conduct of the parties generally and the hardship or prejudice caused to the plaintiff by [discharging the orders] or to the defendant [by refusing to discharge the order].'
(3) The discretion is to be exercised in the context of, and by reference to, the statute by which it is conferred. Consequently, in New South Wales, ss 56-59 of the Civil Procedure Act 2005 ('CP Act') require a judge exercising the discretion to have regard to whether the relevant party has:
(a) diligently pursued the object of disposing of the proceedings in a timely way;
(b) used, or could reasonably have used, available opportunities under the rules or otherwise, to avoid delay; and
(c) reasonably implemented the practice and procedure of the court with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination: Buzzle, at [36].
(4) The court must take into account the policy considerations underlying the relevant limitations statute. Thus, defendants or potential defendants should be made aware of claims against them within a reasonable time and liquidators who do not commence proceedings until just before expiry of the limitation period should be especially diligent in pursuing prompt service: Buzzle, at [37] - [39]; cited with approval in Kirk, at 410 [98] - [99].
(5) It is for the court and not one of the litigants to determine whether there should effectively be a stay of proceedings. Accordingly, it is generally:
'Inappropriate to allow an extension of time for the service of a ... statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court's duty to exercise, alone, the discretion conferred upon it.'
Buzzle, at [82] cited with approval in Kirk, at 411 [101].
(6) Ordinarily, it is not a good reason for delay that a plaintiff wishes to hold up proceedings while some other case is tried: Buzzle, at [90]. However, this is not an inflexible rule: Kirk, at 411 [102].
(7) If a defendant knows that claims have been made against him or her and understands the nature of the claims that have been made, that may mitigate the prejudice the defendant might otherwise suffer by reason of a delay in service: Kirk, at 415 [123].
...
[21] In Buzzle, Ipp JA referred (at [32]) with approval, to IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2006] QCA 407; [2007] 1 Qd R 148 ('IMB'). In IMB, Keane JA (with whom McMurdo P and Cullinane J agreed), observed (at 160 [54]) that no case had held that the Queensland rules or their equivalents authorise renewal of a claim in favour of a party who:
'chooses not to serve a claim where the facts of the case sufficient to enable the claim to be pleaded are known to the plaintiff.'
This observation was made having regard to the requirement in the Queensland rules that a party impliedly undertakes to the Court and to the other parties to proceed in an expeditious way. In Buzzle, Ipp JA pointed out that (at [35]) the provisions of the CP Act are 'akin to (and, in some aspects, go further than) the Queensland ... rules'. In Kirk, Tobias JA distinguished IMB on the facts, but cast no doubt on the applicability of the reasoning in that case in New South Wales. [61]
Accepting that the Court did in fact order an extension of time as indicated, the Defendant argued that it was liable to be set aside for the following reasons:
i. the Court was not asked to extend the time for service of and did not consider whether the circumstances for the granting of an extension of time had been made out;
ii. the solicitor for the plaintiffs incorrectly informed the Court on 31 January 2019 that he had advised the defendant that the summons had been filed, when in fact at no time did the plaintiffs' solicitor advise the defendant of this fact;
iii. at the directions hearing on 31 January 2019 the solicitor for the plaintiffs blamed the delay for service of the Summons on the delay in receipt of the marked bill, which bill had been received two weeks earlier and in any event the delay in receipt of the bill, per se, did not prevent the Summons being served;
iv. the plaintiffs failed to comply with the Court's orders made on 31 January 2019;
v. at the directions hearing on 21 March 2019, being over 13 weeks since the marked bill of costs had been received by the solicitor for the plaintiffs, the solicitor for the plaintiff blamed the delay for service of the Summons on:
1. counsel having to settle the Amended Summons;
2. suggested that "some of the material was missing" and that they "still haven't received all of it", when in fact only one page of the marked up was missing; and
3. suggested that it was necessary to review 12 lever arch volumes provided to the costs assessors and 400 lever arch volumes comprising the solicitors' file, in order to finalise the Amended Summons, when the appeal is an appeal as to a matter of law in the review proceeding and no issue of fact is raised in the putative appeal;
vi. the solicitor for the defendant twice requested the solicitors for the plaintiffs to serve any filed summons, and put the solicitors on notice that the plaintiffs would be responsible for any prejudice suffered by the defendant as a result of the solicitor's refusal to serve the Summons, but her requested were ignored; and
vii. the plaintiff's failed to comply with orders made by the Court on 21 March 2019 as to notification to the defendant of the Court's orders.
I turn to consider the matters raised.
[5]
Attempts at Service
In this case there was no attempt at service before the Amended Summons was served on 4 April 2019
[6]
Delay
The initiating summons was filed on 19 December 2018 and went stale on 19 January 2019. Outside an extension of time being granted, filing an amended summons does not of itself extend the time for service. [62] Accordingly, the extent of the delay is from 19 January 2019 until 4 April 2019. Whilst I have borne in mind that the certificate of determination was amended on 8 January 2019 that does not redefine the time for service of the summons. Rather it is part of the circumstances that the Court may consider under reasons for delay.
[7]
Reason for the Delay
Much of the delay in this case rested on the actions of the Plaintiff's solicitor. In considering this question, delay occasioned by a solicitor can visited on a client. [63] Neither party submitted in the context of the present case that it should be otherwise although it was also not suggested that the Plaintiffs themselves were complicit in the approach Mr Clancy took.
The reason for the delay was a desire on the part of the Plaintiffs' solicitor to prevent the Defendant incurring costs in responding to the original summons in circumstances where he anticipated that there would be either an amendment or discontinuance after obtaining further information from the Supreme Court and Counsel's advice.
I note in passing that appeals to this Court from decisions of the Costs Review Panel do not allow time for extended review in a way provided for elsewhere in the UCPR. [64]
It is not in issue that additional material was provided by the Supreme Court on 8 January 2019 including an amended certificate for determination.
Mr Clancy conceded that as a general rule he knew service needed to be effected as soon as possible. At least by 12 February 2019 when Ms Scott wrote drawing attention to UCPR 6.2(4)(b)(ii) and UCPR 10.1, Mr Clancy specifically became aware that the initiating process was stale. Mr Clancy stated that until he received Ms Scott's letter he did not turn his mind to needing an extension. In this sense the failure to effect service was certainly deliberate and involved what might be described as a level of wilful blindness.
This circumstance persisted until Letherbarrow SC DCJ made his orders on 21 March 2019.
The Defendant expressed some criticism of Mr Clancy's statements to the Court, particularly on 21 March 2019, describing them as lacking the candour expected of an ex parte application.
Although this is a de novo hearing, the relevance of what may have told to the Court may be relevant to the exercise of discretion in accordance with s 58 of the Civil Procedure Act 2005 (NSW) ('CPA'). However the Court is ultimately required to determine whether or not on the information before it that there are good reasons for the order extending time to stand. I will proceed on the basis that the Defendant's arguments are pertinent.
The Defendant asserts that the Plaintiffs blamed the delay for service of the summons on 31 January 2019 due to a delay in receipt of the marked bill, which had been received 2 weeks earlier on 8 January 2019. As noted earlier, the further amended certificate of determination of the review panel costs, and the further cost review reasons and the folders of documents containing the bill of costs was sent on 8 January 2019. At that point one page was still missing.
Before Letherbarrow SC DCJ on 31 January 2019 Mr Clancy referred to the fact that the material had been received two weeks previously while he was on leave and sought time to go through the material and perhaps make slight amendments. At the time of the orders made on 31 January 2019 the summons had already gone stale and the time for service had not been extended.
The solicitor for the Plaintiffs accounted for the delay thereafter in his affidavit by reference to his recollection of what he informed the Court on 21 March 2019. The transcript records that Mr Clancy accounted for the failure to advance that matter pursuant to the earlier direction in somewhat different terms.
Firstly Mr Clancy in his affidavit referred to the volume of material and a desire to narrow the grounds and that the Plaintiffs didn't want to proceed until he knew that there were good grounds. He informed the Court "Counsel accepts that there are reasonable prospects but we just want to…." [65]
In cross examination Mr Clancy stated:
Q. We're about to have a look at this, but would you accept that you told Judge Letherbarrow when you returned to court on the 21st that in fact counsel had given - "counsel accepts there's reasonable prospects". So in fact you really had at that point determined that you would proceed. Correct?
A. No, not really. I mean, counsel thought there was reasonable prospects, but let's didn't - anyway, didn't have yet a firm view about how good they were. Subsequently they firmed up a lot, but at that time I think it wasn't - there was, there was reasonable prospects, but the question was how strong were the prospects. You know, if it was a 50:50 or whatever - 55, 50 - we wouldn't, we would have not proceeded. If it's, you know, if it was 60:40 we wouldn't have probably proceeded. But yeah, so that's roughly where we were going with that. [66]
It was not suggested in giving this account Mr Clancy was being misrepresenting his position. Whilst the transcript did not record an expressed apology or reference to a costs consultant as Mr Clancy intimated in his affidavit, it is clear on both accounts that Counsel's advice was being awaited and a large volume of material was being reviewed. Mr Clancy indicated to His Honour that the Plaintiff did not want to proceed until there are good grounds as distinct from reasonable prospects.
The transcript before me records:
Q. You say by 21 March the amended summons had been prepared but not completely settled by counsel. What does that mean exactly? What had been prepared, and who had done the preparing?
A. The counsel had - the documents had been sent off to counsel by that stage.
Q. When you say the documents, what had been sent?
A. All - sorry. The documents that had been received, so the, the two volumes of the marked up bill, plus the balance of the - the whole of the reasons for determination. You remember that originally the reasons given were incomplete, 20 pages or something missing, so gone to that. Counsel at that stage was wrestling with those sections you referred to before, 384 and 385, because the summons at that stage was seeking leave to appeal and then, you know, in its form, and there were still a series of, there were still a series of what I'd call factual appeals, you know, from the decisions of the, of the mistakes made. So it hadn't been settled as to what we were doing, and in the end we got a second opinion in on one particular issue, and then it was settled.
Q. I see, so counsel - and which counsel was that then, that had prepared what you say here, "the amended summons had been prepared". Who did that?
A. Michelle Castle.
Q. All right, and you're saying that Michelle Castle had prepared it but not completely settled, cause you got a second opinion.
A. No. That was one of the aspects of it. She just - it hadn't been finished then. She hadn't managed to get it done completely. There had, there was a, a draft if, if, if that makes sense, which was - you know, she said, "Look, I've got to give this some further thought.
Q. So who was
A. I mean, I, you know
Q. Who was the second opinion obtained from?
A. The second barrister was Andrew Fernon or Vernon - Andrew Fernon, yeah.
Q. He gave a second opinion?
A. On a particular point, yeah. [67]
Mr Clancy informed Letherbarrow SC DCJ that he had previously advised the Court that he had only just received that material from the Supreme Court that the material was voluminous and "then some of the material went missing." He was challenged as to the material that he asserted was missing.
Mr Clancy at first said that this was a reference to 20 pages of the reasons for the determination. He subsequently stated it was a reference to 12 lever arch folders that were before the costs assessors and costs review panel. At one point he conceded that he had copies of these documents in storage before recanting and saying "I honestly don't know if we had a copy at all." [68] He stated that he did not receive those documents. [69] Finally he acknowledged in respect of these documents that he "thought counsel might need it but counsel said 'No , we don't need that'" [70]
Mr Clancy accepted that he had the marked bill that was two lever arches thick for a period of nine and a half weeks by the time of 21 March 2019.
To the extent of what he stated in his affidavit, was not reflected in the transcript. Mr Clancy stated that what he wrote was based on his notes of what he intended to say. He said they were more extensive but the judge took over by asking questions in the context of a long list.
I accept that the matter was one of some complexity. Mr Clancy informed Letherbarrow SC DCJ as much.
Mr Clancy's recollection as to what he meant by referring to the document(s) that were "missing" was in some respects unsatisfactory. However this was not explored on 21 March 2019. The capacity to do so was said to be constrained by the pressure of the long list in which the proceedings were conducted. Certainly at least one page was then missing
The explanation was otherwise accepted by the Court and an extension granted.
In summary Mr Clancy filed the summons to preserve the Plaintiffs' position in circumstances where not all the information required was in his possession nor had it been fully reviewed. He refrained from serving the summons resulting in it going stale in order to contain costs in the event that he did not proceed or required the summons to be amended and did not turn his mind to time limit for service until he received Ms Scott's letter although he knew what he described as "the general rule" as timely service
[8]
Compliance with UCPR
In considering the question of delay the Court needs to bear in mind the provisions of sections 56, 57, 58 and 59 of the Civil Procedure Act 2005 (NSW). [71]
At [36] of Buzzle, Ipp JA stated:
36 Sections 56, 57, 58 and 59 require a judge, exercising a discretion under UCPR r 1.12, to have regard to whether a party, seeking the exercise of the discretion in its favour, has:
(a) diligently pursued the object of disposing of the proceedings in a timely way;
(b) used, or could reasonably have used, available opportunities under the rules or otherwise, to avoid delay; and
(c) reasonably implemented the practice and procedure of the court with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination
In this case counsel for the Plaintiff's' counsel conceded that there was a lack of timeliness on the Plaintiffs' solicitor's behalf. However it contended that setting the order extending time aside would be disproportionate in the circumstances.
[9]
Conduct of the Parties
The Defendant in this respect drew attention to the following acts of the Plaintiffs and or their solicitors:
1. Not responding to the Defendant's solicitor's correspondence;
2. Not serving the Summons with a request to the Defendant not to act upon it pending further notice, consistent with what it described as common practice
3. Not serving the summons as soon as practical as required by UCPR 10.1
4. Misrepresenting matters to the Court, expressly or by omission;
5. And not complying with Court's orders;
These matters have been discussed in the context of reasons for delay. I will discuss the failure by Mr Clancy to refer to the expiration of the appeal time period below.
I have borne in mind that the solicitor for the Defendant twice requested the solicitor for the Plaintiffs to serve the filed summons and put them on notice, but these requests were not responded to.
One further matter raised in the context of (iii) however, was that Mr Clancy incorrectly informed the Court on 31 January 2019 that he advised the Defendant that the summons had been filed when in fact at no time did he do so. I do not accept this contention.
On 19 December 2019 the Plaintiffs' solicitor informed the Defendant that an appeal would be filed. Although the Plaintiffs' solicitor's email of 21 December 2018 did not explicitly state that the summons had been filed in my view it is implicit that it had been. Moreover, the Defendant's response on 21 December 2018 appears predicated on the presumption that there had been a filing. Such an assumption is reinforced by the fact that the time for bringing an appeal expired on or around that date.
I accept that the Plaintiffs' solicitor failed to exercise the necessary diligence. To some extent as described earlier these matters were out of his hand. He did not specifically seek to extend the time for service on either occasion that he appeared before Letherbarrow SC DCJ.
However I do not accept that Mr Clancy misrepresented matters as claimed before his Honour. It also follows that to the extent that UCPR 36.15 may be applicable, I do not consider that the grounds specified therein has been demonstrated.
The Defendant was aware during the period of the delay that a summons to appeal had been filed. Although it was not aware of the grounds of appeal, its own proposal that service be effected in accordance with what was described to be "common practice" would hardly have left it in any more advantageous position.
[10]
Expiration of Appeal Period at the Time Service was Extended
At the time that the order extending service was made, the time for filing the appeal notice had expired. The fact that it had expired had not been specifically drawn to Letherbarrow DCJ's attention. The Defendant argued that this was fatal to the application and relying on the following statement by Ipp JA in Arthur Anderson Corporation Finance Pty Ltd v Buzzle Operations Pty Ltd (in liquidation): [72]
8 Some four months later, on 21 March 2007, the registrar, on Buzzle's ex parte application, extended the time for service of the statement of claim until 15 June 2007. In obtaining this order, no disclosure was made to the registrar that the limitation period had expired. It is not in dispute that, on this ground alone, that order should be set aside.
Firstly, Ipp JA in Buzzle was referring to the fact that the limitation period had expired rather than its non-disclosure on the ex parte application. This must be so as the hearing before the primary judge was accepted to be de novo. [73]
Secondly, the limitation period referred to in Buzzle was a limitation period for a cause of action of three years. So much is clear from the following:
37 In addition, in my opinion, when exercising the discretion conferred by UCPR r 1.12 regard must be had to the policy behind the limitation statute applicable. This point was made by Hodgson JA in Tolcher v Gordon [2005] NSWCA 153; 53 ACSR 442 (at [3], 443):
"Although the 3-year period is a limit for the commencement of such proceedings, not service of the proceedings, in my opinion an important aspect of the public policy behind the limitation period is that potential defendants should be made aware of claims against them within a reasonable time; so that in my opinion, delay in service of such proceedings, in contravention of the rules, is particularly serious if it occurs after the expiration of the 3-year limitation period. A liquidator who does not commence proceedings until just before expiry of the limitation period should in my opinion be especially diligent in pursuing prompt service of the proceedings."
38 In the judgment of Tobias JA (with which I agreed) in that case, his Honour said (at [98], 461):
"I do consider that it was irrelevant for the primary judge to take into consideration the public policy behind the 3-year limitation period … ."
Thirdly, acknowledging that the delay in the case before him was deliberate, Ipp JA went on to state:
92 The judge did not take into account the fact that Mr Wily made a deliberate decision to delay proceedings. In Itek Graphix Pty Limited v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207, with the concurrence of Spigelman CJ and Sheller JA, I observed at ([91], 225):
"A deliberate decision to allow a statutory limitation period to expire would be a powerful factor against the grant of leave. Were a deliberate decision to allow the period to expire has been made, ordinarily it would be difficult to provide an explanation for that decision sufficiently cogent to warrant the grant of leave."
93 In my opinion, for the reasons set out in Itek Graphix Pty Limited, a deliberate decision to allow a writ to become stale after a limitation period had expired would be a powerful factor against the grant of the order sought (see also Van Leer at 350). Any prejudice suffered, in such circumstances, were the writ not to be extended, would be self-inflicted.
94 Mr Sheahan drew attention to the fact that in Tolcher, Tobias JA (at [50]) considered that the deliberate decision by the liquidator in that case not to attempt service of the statement of claim until "the litigation funding was in place" was "appropriate, prudent and responsible and not a decision for which the liquidator can be justifiably criticised". Two points can be made in this regard. First, a deliberate decision to delay is not a factor that has an absolute effect on the discretion to be exercised. Each decision depends on its own circumstances. I would add that the delay in Tolcher was far shorter than that in the present case and the circumstances differed, substantially. Secondly, Rothman J's error is his omission to take into account Mr Wily's deliberate decision to delay in the particular circumstances that obtained. His error is not that he attached incorrect weight to that decision but that he ignored it. (emphasis added)
In the present case, the time for filing an appeal was provided for under the UCPR.
There is an obvious distinction in allowing a statement of claim to lapse where the limitation for a cause of action to commence a proceeding would expire, as opposed to the time for the lapsing of a summons where the time for an appeal has expired.
The first instance relates to a trial yet to be heard, with a long time for commencement of proceeding and six months for service of the initiating proceedings. In the second it involves a period of one month from the material date to file an appeal, where the court is being asked to consider a question of law. Whilst the policy that underpins these limits reflects the differing circumstances, the differing time limits involved is not irrelevant.
[11]
Merit of the Proceedings
During argument counsel for the Plaintiff stated:
MCDONALD: But, as I'll get to, that is in fact one of the burdens that falls on my friends to show to your Honour what actually will be achieved by this appeal such that they should now be let back in to agitate it. At the moment they've articulated some grounds, but they're completely unquantified. What if these grounds effectively amount to a hundred bucks? Should we go to all of this expense, and would they be given that leave-- [74]
Reliance was placed on comments made by McCallum J at first instance in Wakim v Coleman as follows:
53 In any event, the fact that the plaintiff will be deprived of the possibility of successfully pursuing his claim is not an exceptional or compelling circumstance. It is a necessary consequence of the application of the staleness rule".
In Wakim the Statement of Claim became stale 6 months after it was issued on 13 June 2006. It ultimately came to be served on 28 November 2007. That delay cannot be equated with a delay in the instant case.
Beyond that the reference by McCallum J in Wakim v Coleman did not on my reading suggest that the deprivation of the opportunity to present a case was an irrelevant consideration. Indeed, in the paragraph preceding this statement her Honour indicates the opposite.
As noted earlier, in examining prejudice the Court is required to consider the hardship or prejudice caused to the Plaintiffs by refusing the renewal or to the Defendant by granting it.
In this case the Plaintiff would be precluded from advancing its appeal.
The Costs Review Panel decision was annexed to Ms Scott's affidavit. The grounds raised in the Plaintiffs' amended summons and the complexity of the matter are such that it is not possible to assess their strength in the absence of detailed argument. Neither party on this application sought to do so
In considering this matter I bear in mind in mind the caution that should be exercised in assessing the strength or weakness of a case in an interlocutory hearing. In another statutory context Macrossan CJ stated in Wood v Glaxo Australia Pty Ltd:
If a general observation is permissible at this point it can be said that applicants for extension of limitation periods are not intended by the legislation to be placed in the position where they must establish an entitlement to recover on two occasions, first on the hearing of the application and once more at the trial of the action. Although the requirements of the legislation must be complied with if an extension is to be granted, the extent to which an applicant must show a case on the hearing of the application to extend time will frequently depend on the impression on the judge's mind of the material which the applicant presents or the existence of which he demonstrates or points to. It is nevertheless recognised as wrong to place potential plaintiffs in anything like a situation where they must on the probabilities show that it is likely they will succeed in their actions. A judge may harbour a feeling that there is a strong chance that particular applicants will fail at trial but, in my opinion, he should not act on the basis of this impression both because that is a question reserved for another occasion and because he cannot know and should not insist on being able to see in all of its ramifications the full strength of the case which will eventually be presented at trial. There are some resemblances in this to the situation of a defendant who resists a summary judgment application. The Court should be cautious in shutting out a party from the opportunity to make his case at the appropriate time. In any situation where proof of a case is difficult and very far from straightforward, it would be very expensive to require a party applying to extend time to demonstrate his case with any high degree of elaboration. [75]
From the Defendant's perspective the only prejudice advanced is that it has paid out the amounts determined by the Costs Review Panel in full. The circumstances in which it did so has been earlier considered.
[12]
Conclusion
I am required to act in accordance with the dictates of justice having regard to the matters in s 58(2) of the CPA.
The delay in this matter is relatively short between 19 January 2019 and 4 April 2019. I bear in mind the difficulties that Mr Clancy had in finalising the decision to appeal and determining whether it should be prosecuted. As noted to some extent these matter were outside his control. Nevertheless he did not act diligently in pursuit of seeking an extension in circumstances described. To the contrary he acted with wilful disregard of the limits as to time ignoring the Defendant's solicitor's requests. Whilst the Plaintiffs' solicitor's conduct may be regarded as deliberate and misconceived I do not consider Mr Clancy misrepresented the position when the ex parte order extending time was made.
The Defendant was aware of the fact that a summons had been filed and that the Plaintiffs proposed to amend it once able to do so. The Defendant did not contend that it would be prejudiced were the order granting the extension of time to remain, beyond the fact that the existing judgment amount had been satisfied.
As Ipp JA made clear in Buzzle at [94] a deliberate decision does not have an absolute effect on discretion and each decision depends on its circumstances. Here the delay itself was relatively short and occurred in the context of rules providing a short time to lodge an appeal and short time to serve a summons. It also partly coincided with the Christmas and New Year break, and when Mr Clancy was on leave and Counsel's opinion was sought. Further, the matter was complex and additional material was awaited from the Court which ultimately led to an amended certificate of determination to be issued after the summons had been filed.
Were the Defendant's application to be granted, the Plaintiff on the other hand would be precluded from advancing its case in circumstances where it has not been submitted that the matter is otherwise unmeritorious.
Taking all matters into consideration, not without some hesitation, I have formed the view on balance that having regards to the dictates of justice, good reason has been demonstrated. It follows that the order extending time for service should stand.
In the circumstances I would order as follows:
1. The Plaintiff's Notice of Motion filed 30 April 2019 be dismissed;
2. The Defendant's Notice of Motion filed 15 April 2019 be dismissed;
3. The order of the Court made 21 March 2019 extending the time for service of the summons is to remain.
4. I will hear the parties as to costs.
.
[13]
Endnotes
Affidavit of Joanne Scott dated 1 May 2019 at [2.3].
Affidavit of Joanne Scott dated 1 May 2019 at [5.4]; Exhibit JBS 12.
Affidavit of Joanne Scott dated 1 May 2019 at [5.6]; Exhibit JBS 17.
Affidavit of Joanne Scott dated 1 May 2019 at [3(b)]; Exhibit JBS 3.
Exhibit JBS 5, p 55.
; Affidavit of Joanne Scott dated 1 May 2019 at [5.7]; Exhibit JBS 18.
Affidavit of Joanne Scott dated 1 May 2019 at [5.9]; Exhibit JBS 25.
Affidavit of Joanne Scott dated 1 May 2019 at [4.4]; Exhibit JBS 6.
Affidavit of Joanne Scott dated 1 May 2019 at [4.5]; Exhibit JBS 7.
Affidavit of Joanne Scott dated 1 May 2019 at [4.6].
Affidavit of Joanne Scott dated 1 May 2019 at [4.6]; Exhibit JBS 8.
Affidavit of Joanne Scott dated 1 May 2019 at [4.7]; Exhibit JBS 9.
Affidavit of Christopher Clancy dated 3 June 2019 at [12].
Affidavit of Joanne Scott dated 1 May 2019 at [5.11(b)]; Exhibit JBS 28.
Affidavit of Joanne Scott dated 1 May 2019 at [4.8]; Exhibit JBS 10.
Affidavit of Joanne Scott dated 1 May 2019 at [6.3]; Exhibit JBS 34; Affidavit of Christopher Clancy dated 3 June 2019 at [12].
Affidavit of Joanne Scott dated 1 May 2019 at [6.1]; Exhibit JBS 32.
Affidavit of Joanne Scott dated 1 May 2019 at [6.2]; Exhibit JBS 33.
Exhibit A1, Tab 3.
Affidavit of Joanne Scott dated 1 May 2019 at [6.5]; Exhibit JBS 36.
Affidavit of Joanne Scott dated 1 May 2019 at [6.6]; Exhibit JBS 37.
Defendant's submissions at [10(l)].
T 45.01-.30
Affidavit of Joanne Scott dated 1 May 2019 at [4.9]; Exhibit JBS 11.
Affidavit of Christopher Clancy dated 3 June 2019 at [17].
T 30.22-.49
Affidavit of Joanne Scott dated 1 May 2019 at [5.10-.11]; Exhibit JBS 26; Affidavit of Christopher Clancy dated 3 June 2019 at [20].
Affidavit of Joanne Scott dated 1 May 2019 at [5.10-.11]; Exhibit JBS 30.
T 39.36-40.09.
Exhibit A1, Tab 8, p 272.
Affidavit of Joanne Scott dated 1 May 2019 at [6.8-.9]; Exhibit JBS 38.
Affidavit of Joanne Scott dated 1 May 2019 at [6.10]; Exhibit JBS 39.
Affidavit of Christopher Clancy dated 3 June 2019 at [23]-[24].
Affidavit of Christopher Clancy dated 3 June 2019 at [26].
Affidavit of Joanne Scott dated 1 May 2019 at [6.12]; Exhibit JBS 40.
T 59.32.
T 35.32-36.05.
Affidavit of Joanne Scott dated 1 May 2019 at [5.11(a)]; Exhibit JBS 27.
Affidavit of Joanne Scott dated 1 May 2019 at [5.11(d)]; Exhibit JBS 30.
Affidavit of Joanne Scott dated 1 May 2019 at [5.12]; Exhibit JBS 31.
Affidavit of Joanne Scott dated 1 May 2019 at [5.13].
Exhibit A1, p 18-19.
Affidavit of Joanne Scott dated 1 May 2019 at [7.10]; Exhibit JBS 45.
See the Limitations Act 1969 (NSW) s 17.
[2007] NSWCA 159 at [49-[52].
[1941] AC 1.
(1941) 65 CLR 603.
See Port Stevens Shire Council v Telmasist Pty Ltd [2004] NSWCA 353.
[2004] NSWSC 36.
[1940] AC 412, 417-9.
(2008) 138 CLR 570; [2008] HCA 57 at [57].
T 14.26-.48
Plaintiff's written submissions at [23].
[2009] NSWCA 104 at [43].
NSW Insurance Ministerial Corporation v Anderson (unreported, NSWCA, 14 June 1994 per Gleeson CJ, Kirby P and Priestly JA agreeing); cited at first instance by McCallum J and on appeal in Wakim v Coleman [2010] NSWCA 221 at [11].
[2007] NSWSC 1320 at [9]-[12].
[2019] NSWSC 969.
Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in Liq) [2009] NSWCA 104 at [43] and Wakim v Coleman [2010] NSWCA 221 at [25].
Plaintiff's written submissions at [43]. See Rich v Long [2008] NSWSC 487 at [11]-[31].
[2009] NSWCA 104 at [41]-[43] (Tobias and McColl JJA agreeing).
[2012] NSWCA 79 at [20]-[21] (Campbell and Young JJA agreeing).
Wakim v Coleman [2010] NSWCA 221 at [17].
Coal & Allied Operation Pty Ltd t/a Hunter Valley Operations (Howik) Mine v Stringer [2003} NSWCA 271 Ipp JA at [35]-[36] and State of New South Wales v Judd [2003] NSWCA 355 Handley JA at [43]-[44] (Santow and Gyles JJA agreeing)
See UCPR 51.9.
T 68.05-.12.
T 61.33-.43
T 59.47-60.14.
T 64.17-.20.
T 64.05.
T 64.47-.09.
the 'CPA Act'
[2009] NSWCA 104 (emphasis added).
At [14]
T 84.45.50.
[1994] 2 Qd R 431 at 434.
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Decision last updated: 15 October 2019