Attard v James Legal Pty Ltd

CATCHWORDS: COSTS - orders - vary orders application to - notice of motion

LEGISLATION CITED: Uniform Civil Procedure Rules 2005

CASES CITED: Attard v James Legal Pty Ltd [2010] NSWCA 311 Cachia v Isaacs (1985) 3 NSWLR 366

Alfred Attard Michael Henry Glowmint Pty Limited PARTIES: Elzac Properties Pty Limited Construction Management Group Pty Limited James Legal Pty Limited Peter Richard James

COUNSEL: 1,2,3,4,5 App: C R Newlinds SC / P Newtown 1, 2 Resp: M Southwick

SOLICITORS: 1, 2, 3, 4, 5 App: Lazarus Legal Group 1, 2 Resp: James Legal Pty Ltd

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40367/09 SC 20044/04

BEAZLEY JA GILES JA TOBIAS JA

17 December 2010 ALFRED ATTARD & ORS v JAMES LEGAL PTY LTD & ANOR (NO.2) Judgment on the papers 1 BEAZLEY JA: I agree with Tobias JA. 2 GILES JA: I agree with Tobias JA. 3 TOBIAS JA: On 23 November 2010 the Court made the following orders in Attard v James Legal Pty Ltd [2010] NSWCA 311 (the principal judgment):

(b) Set aside Order 2 made by Simpson J on 4 September 2009.

(c) In lieu thereof, subject to Order (d), order pursuant to UCPR 20.14 that the amount due and owing by the first and second cross-defendants to the cross-claimants pursuant to the cross-claim be referred to a referee experienced in the assessment of legal costs and disbursements for assessment as to the fairness and reasonableness of the costs claimed by the cross-claimants in their cross-claim upon condition that the first and second cross-defendants pay to the cross-claimants 60% of the amounts referred to in the said Order 2 within 28 days of the date of this order.

(d) Direct that the parties submit within 21 days of the date of these orders, an order for reference in accordance with Order (c) to an agreed referee which order will be made in chambers.

(e) Stay Orders 3 and 4 made by Simpson J on 4 September 2009 until the said reference has been completed and any report of the referee has been adopted or otherwise dealt with by the Court pursuant to UCPR 20.24.

(f) The appellants to pay 75% of the respondents' costs of the appeal.

(g) The costs of the reference referred to in Order (b) above be reserved to the trial judge when dealing with the referee's report pursuant to UCPR 20.24.

(h) Grant liberty to the parties to apply for variation of these orders by notice of motion accompanied by written submissions to be filed and served within 7 days of the date of these orders. 4 Pursuant to Order (h), both the appellants and the respondents filed Notices of Motion on 30 November 2010 and 6 December 2010 respectively. Both sought a variation of the orders made by the Court on 23 November 2010. In the Notice of Motion filed on behalf of the appellants, variations were sought to Orders (b), (c), (f) and (g). I set out a marked up version of the orders as sought to be varied: "(b) Set aside Order 2 and 6 made by Simpson J on 4 September 2009.

(c) In lieu thereof, subject to Order (d), order pursuant to UCPR 20.14 that the amount due and owing by the first and second cross-defendants to the cross-claimants pursuant to the cross-claim be referred to a referee experienced in the assessment of legal costs and disbursements for assessment as to the fairness and reasonableness of the costs claimed by the cross-claimants in their cross-claim upon condition that the first and second cross-defendants pay to the cross-claimants the sum of $250,000 on or before 15 February, 2011 60% of the amounts referred to in the said Order 2 within 28 days of the date of this order .

(f) The appellants to pay 75% of the respondents' costs of the appeal as agreed or assessed .

(g) The costs of the reference referred to in Order (b) above and of the proceedings in the court below be reserved to the trial judge when dealing with the referee's report pursuant to UCPR 20.24." 5 Order 6 made by Simpson J on 4 September was an order that the appellants pay the respondents' costs of the proceedings and the cross-claim. 6 The respondents also sought a variation of the orders made on 23 November 2010. With respect to Order (b) I set out a marked up version of the order sought: "(b) Stay Set aside Order s 2 , 3 and 4 made by Simpson J on 4 September 2009 for a period of 28 days ." 7 The respondents sought to combine Orders (c), (d) and (e) by the making of the following order: "3. Conditionally upon the payment by the first and second cross-defendants to the cross-claimants 60% of the amounts referred to in the said Order 2 within 28 days of the date of this Order: a. In lieu of the said order 2, subject to Order (b), order pursuant to UCPR20.14 that the amount due and owing by the first and second cross defendants to the cross-claimants pursuant to the cross claim be referred to a referee experienced in the assessment of legal costs and disbursements for assessment as to the fairness and reasonableness of the costs claimed by the cross-claimants in their cross-claim. b. Direct that the parties submit within 21 days of the date of these orders, an order for reference in accordance with Order 3a. to an agreed referee which Order will be made in chambers. c. Further stay Orders 3 and 4 made by Simpson J on 4 September 2009 until the said reference has been completed and any report of the referee has been adopted or otherwise dealt with by the Court pursuant to UCPR20.24." 8 A consequential amendment was sought in respect of Order (g) by the deletion of the words "Order (b)" and the insertion in lieu thereof by the words "Order 3". 9 In response to the orders proposed and the submissions made by the respondents, the appellants then revised the variations they proposed in the following marked up terms: "(b) Upon condition that the first and second cross defendants pay to the cross claimants the sum of $250,000 on or before 15 February, 2011, set aside Order 2 made by Simpson J on 4 September 2009 ; and .

(c) In lieu thereof, subject to Order (d), order pursuant to UCPR 20.14 that the amount due and owing by the first and second cross-defendants to the cross-claimants pursuant to the cross-claim be referred to a referee experienced in the assessment of legal costs and disbursements for assessment as to the fairness and reasonableness of the costs claimed by the cross-claimants in their cross-claim upon condition that the first and second cross-defendants pay to the cross-claimants 60% of the amounts referred to in the said Order 2 within 28 days of the date of this order .

(e) Stay Orders 3 and 4 made by Simpson J on 4 September 2009 until the said reference has been completed and any report of the referee has been adopted or otherwise dealt with by the Court pursuant to UCPR 20.24. If after any report of the referee has been adopted or otherwise dealt with by the Court, the amount due and owing to the cross claimants pursuant to the cross claim is found to be $500,000 or less, grant liberty to the first and second cross defendants to apply for a variation and/or further stay or orders 3, 4 and 6 made by Simpson J.

(f) The appellants to pay 75% of the respondents' costs of the appeal as agreed or assessed .

(g) The costs of the reference referred to in Order (b) above and any variation of orders 3, 4 and 6 made by Simpson J pursuant to the liberty granted in Order (3) above be reserved to the trial judge when dealing with the referee's report pursuant to UCPR 20.24." 10 As a consequence of the revised orders sought by the appellants, the dispute between the parties was narrowed to the following issues:

(a) whether the condition proposed in original Order (b) should be varied to reduce the amount to be paid by the appellants and to increase the time for payment;

(b) whether the original Order (d) should be a further condition of the order for reference;

(c) whether liberty should be granted to the appellants to apply for a variation of Orders 3, 4 and 6 made by Simpson J on 4 September 2009 in the event that the amount due and owing to the respondents pursuant to their cross-claim is found to be $500,000 or less; and

(d) whether the costs order made by this Court with respect to the costs of the appeal should be varied to add the words " as agreed or assessed ". 11 As to issue (d), the respondents do not appear to object to the additional words, although I do not consider that they add anything to the order originally made. The suggestion in the appellants' submissions that the variation is to make clear that the respondents' entitlement to the costs of the appeal is not with respect to all of the costs claimed by the respondents but only those agreed or assessed is without merit. The additional words are unnecessary and, therefore, I do not consider that Order (f) should be varied to add them. 12 As to issue (a), the appellants submitted first, that they needed time to pay the monies; second, that the proposed order should take into account the fact that the costs are yet to be assessed; third, that in the "inevitable event" that the costs claimed by the respondents are reduced on assessment, then interest will also be reduced; and, fourth, having regard to the "findings" of the Court, the sum of $250,000 is a fair and just amount. 13 In further support of this variation, the appellants submitted that they have already paid, according to the primary judge, some $543,345.82 as well as counsel's fees in amount of approximately $773,156 and disbursements in the amount of $477,272.71 in connection with the matters in which the respondents acted. All these figures were known to this Court when it made its orders in the principal judgment and, in my view, they do not require reconsideration of so much of Order (c) that requires the appellants to pay the respondents 60% of the amounts referred to in Order 2 made by Simpson J. 14 It was then submitted that this Court had found Mr James negligent in failing to advise Messrs. Attard and Henry that, amongst other things, FCL's cross-claim against CMG in the Orlando proceedings was stayed and, second, that an application made by FCL for a grant of leave to proceed with its cross-claim against CMG would have been denied. As a consequence the stay of FCL's cross-claim would have remained and the costs incurred by the appellants in respect of that litigation would have been avoided. 15 Relying upon the statement of Kirby P in Cachia v Isaacs (1985) 3 NSWLR 366 at 371, it was submitted that on assessment a solicitor may not recover fees for services provided in the very proceedings in which he has been found negligent unless he can show that despite his negligence, some real advantage accrued to the client from those services. 16 In the present case at [109] of the principal judgment, I referred to Mr James' negligence in failing to advise Messrs. Attard and Henry in their capacity as directors of CMG as to the application of a stay to FCL's cross-claim. It was also made clear that Mr James was protected by advocate's immunity. Accordingly, it followed that he was not liable in negligence to the appellants. 17 Although we have not heard argument on the point and it was not raised during the course of the appeal, there must be considerable doubt as to whether the principle expounded by Kirby P in Cachia has any application to a case such as the present. As the present notice of motion is not an appropriate vehicle for determining such an issue, I do not regard the appellants' submissions with respect to it as carrying any weight insofar as reliance is placed upon it for the purpose of reducing the amount which this Court in the principal judgment required the appellants to pay as a condition of there being a reference to an appropriately experienced assessor of the amount of costs alleged to be due and owing by the appellants to the respondents. 18 In my view the requirement that the appellants pay to the respondents 60% of the amounts referred to in Order 2 made by Simpson J should remain, although the time within which that sum is to be paid should now be extended. Given the time of the year I would be prepared to vary Order (c) by requiring the condition referred to be satisfied on or before 15 February 2011. 19 As to issue (b), it was submitted that as the payment of the amount of $250,000 or, for that matter, 60% of the amount referred to in Order 2 made by Simpson J, was wholly within the control of the appellants, it should be the only condition on the order for reference and that Order (c) should not be subject to Order (d) which requires the parties to agree on a referee. It was submitted that it would be unfair if the order for reference was not given effect due to something beyond the appellants' control such as, I envisage, an inability of the parties to agree the identity of the referee. 20 Of course the 21 days since 23 November 2010 has passed but, nevertheless, I see no reason why the original Order (c) should be varied in the manner proposed. The only variation that should be effected is to Order (d) by extending the date within which the parties are to submit an order for reference in accordance with Order (c) to an agreed referee to 5pm on 4 February 2011. In the event of there being disagreement as to the referee, then liberty should be granted to the parties to apply prior to 31 January 2011 to the Registrar of the Common Law Division of the Supreme Court for that officer to determine an appropriate referee to undertake the reference. 21 As to issue (c), it was asserted that in or about early March 2006 that the appellants had made a "without prejudice" offer to pay an unidentified sum of money to the respondents. It was therefore submitted that in the event that the costs found to be due and owing to the respondents is found to be $500,000 or less, such a finding would justify an application for a variation and/or further stay of Orders 3, 4 and 6 made by Simpson J on 4 September 2009. The clear inference is that the "without prejudice" offer was to pay the sum of $500,000 in full satisfaction of the respondents' claim. 22 In my view there is some substance in this submission although ultimately it will be a matter for the judge who deals with the referee's report to determine whether that offer, in the light of the referee's assessment, justifies any variation or stay sought. However, without that variation to the orders, this Court's finding that her Honour's order that the appellants pay the respondents' costs of the cross-claim should not be disturbed, might be considered beyond recall and that would not necessarily be fair if a legitimate offer of compromise was made but rejected. Of course, that would depend upon the circumstances at the time upon which I make no comment. In my view, the variation sought by the appellants to Order (e) should be made. 23 So far as the costs of the Notices of Motion are concerned, each party has had some success on the motion that they have filed. In these circumstances, in my view each party should bear their own costs of their respective Notices of Motion. 24 It follows from the foregoing that I would propose the following variations to the orders made on 23 November 2010:

(1) Vary Order (c) by deleting therefrom the words "within 28 days of the date of this order" and substituting therefor the words "on or before 5pm on 15 February 2011".

(2) Vary Order (d) by deleting the words "within 21 days of the date of these orders" and substituting therefor the words "on or before 5pm on 4 February 2011".

(3) Delete Order (e) and substitute therefor the following order: "Stay Orders 3, 4 and 6 made by Simpson J on 4 September 2009 until the said reference has been completed and any report of the referee has been adopted or otherwise dealt with by the Court pursuant to UCPR 20.24. If after any report of the referee has been adopted or otherwise dealt with by the Court, the amount due and owing to the cross claimants pursuant to the cross claim is found to be $500,000 or less, grant liberty to the first and second cross defendants to apply for a variation to the trial judge who deals with the report of the referee for a variation and/or further stay of Orders 3, 4 and 6 made by Simpson J on 4 September 2009."

(4) Delete Order (g) and substitute therefor the following order: "The costs of the reference referred to in Order (c) above and of any variation of Orders 3, 4 and 6 made by Simpson J pursuant to the liberty granted in Order (e) above be reserved to the trial judge when dealing with the referee's report pursuant to UCPR 20.24."

(5) Delete Order (h) and substitute therefor the following order: "In the event that the parties cannot agree on a referee for the purposes of Order (d), grant liberty to the parties to apply to the Registrar of the Common Law Division of the Supreme Court on or before 5pm on 31 January 2011 for his determination of a referee who meets the requirements of Order (c)."

(6) Each party to pay their and/or its own costs of the Notices of Motion filed on 30 November 2010 and 6 December 2010. **********

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